Exhibit 10.1
SHARE AND WARRANT PURCHASE AGREEMENT
BETWEEN
GRYPHON PHARMACEUTICALS, INC.,
and
OSIRIS THERAPEUTICS, INC.
---------------------------
Dated as of December 23, 1994
SHARE AND WARRANT PURCHASE AGREEMENT
THIS SHARE AND WARRANT PURCHASE AGREEMENT (this "Agreement"), dated as of
December 23, 1994, is made by and between Gryphon Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and Osiris Therapeutics, Inc., a Delaware
corporation ("Osiris" or the "Investor").
RECITALS
A. The Investor desires to acquire from the Company, and the Company
desires to issue and sell to the Investor, in the manner and on the terms and
conditions hereinafter set forth, shares of Series A Convertible Preferred Stock
("Preferred Shares") of the Company.
B. In connection with the Investor's purchase of the Preferred Shares,
the Company and the Investor desire to establish certain rights and obligations
between themselves.
AGREEMENTS
NOW, THEREFORE, the Company and the Investor agree as follows:
SECTION l. DEFINITIONS
The following terms when used in this Agreement shall have the following
respective meanings:
"Affiliate" means with respect to any Person, any (i) officer, director, or
holder of more than 10% of the outstanding shares or equity interests of such
Person, (ii) any Relation of such Person or any Affiliate of such Person, or
(iii) any other Person which directly or indirectly controls, is controlled by,
or is under common control with such Person. A Person shall be deemed to
control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
"controlled" Person, whether through ownership of voting securities, by
contract, or otherwise.
"Amended Certificate" means the Amended and Restated Certificate of
Incorporation of the Company as on file with the Secretary of State of the State
of Delaware on the date hereof, a copy of which is attached as Exhibit A hereto.
"By-Laws" means the Amended and Restated By-Laws of the Company, a copy of
which is attached as Exhibit B hereto.
"Certificate of Incorporation" means the Certificate of Incorporation of
the Company on file with the Secretary of State
of the State of Delaware immediately prior to the filing of the Amended
Certificate.
"Closing" shall have the meaning set forth in Section 3.1 hereof.
"Closing Date" shall have the meaning set forth in Section 3.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Shares" means shares of the Common Stock, par value $.00l per
share, of the Company.
"Contract" means any contract, agreement, undertaking or commitment
(written or oral) to which the Company or any of its Subsidiaries is a party or
by which the Company, any of its Subsidiaries, or any of their respective assets
are bound.
"Founder Stockholders" means each of the Xxxx X. Xxxxx, M.D. ("Xx. Xxxxx")
and Xxxxxx Xxxxx, M.D., Ph.D ("Dr. Small").
"Governmental Authority" means the United States, any state or
municipality, the government of any foreign country, any subdivision of any of
the foregoing, or any authority, department, commission, board, bureau, agency,
court, or instrumentality of any of the foregoing.
"Gryphon Business" means the research, development and commercialization of
novel stem cell and progenitor cell populations, their genes and gene products,
including, but not limited to, growth factor receptors, protein kinases and
other signal transduction molecules involved in the self-renewal, proliferation
or inhibition and differentiation of hematopoietic stem/progenitor cells and the
resulting biopharmaceuticals.
"Indebtedness" of any Person means (i) indebtedness for borrowed money;
(ii) indebtedness for the deferred purchase price of property or services; (iii)
obligations under a lease which is capitalized on the balance sheet of such
Person; (iv) obligations under direct or indirect guaranties of indebtedness or
obligations of others of the type referred to in clause (i), (ii) or (iii)
above; and (v) nonrecourse indebtedness secured by a Lien on the property of
such Person.
"Investment Documents" means this Agreement, the Amended Certificate, the
Stockholders Agreement, the Stock Purchase Warrant and the Registration Rights
Agreement.
"JHU" means The Xxxxx Xxxxxxx University.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
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"1933 Act" means the Securities Act of 1933, as amended.
"Organizational Proceedings" shall mean (a) the transfer of technology by
JHU to the Company pursuant to the License Agreement, (b) the purchase of Common
Shares by each of the Founder Stockholders and JHU pursuant to subscription
agreements, and (c) the Founder Stockholders entering into Consulting Agreements
with the Company.
"Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization, or Governmental Authority.
"Preferred Shares" means shares of the Series A Convertible Preferred
Stock, par value $.001 per share ("Series A Preferred Shares"), of the
Company.
"Registration Rights Agreement" means the Registration Rights Agreement
between the Company and the Stockholders in the form attached as Exhibit C
hereto.
"Relation" shall mean with respect to any Person, such Person's spouse and
the parents, grandparents, brothers and sisters, children, and grandchildren of
such Person or of such Person's spouse.
"SEC" means the Securities and Exchange Commission.
"Second Round Financing" means the receipt by the Company of proceeds from
the sales of its equity securities, whether pursuant to a venture capital
investment or a corporate collaboration or other similar transaction, after the
date of this Agreement (and not to include any amounts payable by the Investor
under this Agreement) in a gross aggregate amount equal to or greater than
$5,000,000.
"Shares" means the Preferred Shares and Common Shares collectively.
"Stock Purchase Warrant" means the Stock Purchase Warrant entered into
between the Company and the Investor in the form attached as Exhibit F hereto.
"Stockholders" shall mean Osiris, the Founder Stockholders and JHU.
"Stockholders Agreement" means the Stockholders Agreement among the
Company, the Investor, the Founder Stockholders and JHU in the form attached as
Exhibit D hereto.
"Subsidiary" means any Person or business in which the Company owns,
directly or indirectly, an equity interest representing at least a majority of
the voting stock or voting interests of such Person or business.
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"License Agreement" means the Research and License Agreement entered into
between the Company and JHU in the form attached as Exhibit E hereto.
SECTION 2. PURCHASE AND SALE OF SHARES
2.1 Issuance of Preferred Shares. At the Closing, the Company shall issue
and sell to the Investor, and the Investor shall purchase from the Company, (a)
3,000,000 Preferred Shares and (b) a Stock Purchase Warrant exercisable for
1,000,000 Common Shares, for an aggregate consideration consisting of (i)
1,000,000 Common Shares presently held by Investor, (ii) certain cash payments
and reimbursements as set forth below, (iii) the provision of certain services
and equipment as set forth below and (iv) the offer to provide the R&D Loan (as
defined below), such consideration being valued in the aggregate at $3,000,000
(the "Consideration").
2.2 Payment of Consideration The Consideration shall be payable as
follows:
(a) Start Up Funding. The Investor shall pay the Company $45,000
($25,000 of which is paid herewith and an additional $20,000 of which will be
paid on May 30, 1995) to permit it to (i) pay JHU licensing fees and annual
maintenance fees under the License Agreement, (ii) reimburse JHU for its past
patent costs with respect to the technology that is the subject of the License
Agreement, and (iii) reimburse JHU for up to $5,000 of legal fees incurred in
connection with the negotiation of this Agreement and the related transactions.
(b) Research Funding. Commencing as of July 1, 1994, the Investor
shall provide a total of $1,200,000 ($60,000 of which has been provided to
date) to be used by the Company to fund research at JHU with respect to the
Business ("Research Funding"). The timing of the payment of such funds shall
be as follows:
During the twelve-month period commencing July 1, 1994: $87,500 per
calendar quarter
During the twelve-month period commencing July 1, 1995: $100,000 per
calendar quarter
During the twelve-month period commencing July 1, 1996: $112,500 per
calendar quarter
Such quarterly payments of the Research Funding shall be made on the first
business day of the applicable calendar quarter, commencing January 2, 1995,
with such January 2, 1995 payment to consist of a payment in arrears for the
immediately preceding two calendar quarters less the amounts prepaid by the
Investor through such date.
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(c) Equipment and Technician. The Investor shall make available to
the Company, for use by the Company and the Founder Stockholders in their
laboratories at JHU, during the period commencing on the date hereof through
June 30, 1997, an oligonucleotide synthesizer (of a model mutually agreeable
to the Founder Stockholders and the Investor) (the "Synthesizer") under the
Investor's Master Equipment Lease Agreement with Dominion Ventures, Inc. In
addition, until December 31, 1997, the Investor shall provide the Company (i)
reasonable salary support (direct, indirect and fringe benefits) for a
technician to operate the Synthesizer, (ii) a service agreement covering
the Synthesizer and (iii) up to $25,000 per year in supplies to operate and
maintain the Synthesizer.
(d) "In-Kind" Support. The Investor shall provide to the Company
certain legal, administrative, accounting, facility and equipment utilization
services and certain related funding (the "In-Kind Services") until the earlier
of (i) the consummation of Second Round Financing or (ii) October 1, 1997. Such
services shall include:
(i) usual and customary organizational, legal and accounting
expenses (such as expenses attributable to the initial capitalization of the
Company, the technology transfers, customary legal agreements) and related
management services;
(ii) start-up and organizational Chief Executive Officer
services (which shall be provided by Xxxxx Xxxxx or another individual
reasonably acceptable to the Founder Stockholders) and administrative and
general support (such as strategic development and business plan
preparation);
(iii) business and patent strategy consulting services;
(iv) monitoring and reviewing of scientific progress;
(v) wet lab and administrative space at the Investor's facility
in Baltimore, Maryland (the "Osiris Facility");
(vi) access to certain common equipment at the Osiris Facility
(such as ultra centrifuge, tissue culture facilities, incubators, cold room, and
refrigerators);
(vii) services relating to the recruitment of a full-time
Chief Executive Officer and senior scientific personnel;
(viii) arranging and negotiating the Second Round Financing;
and
(ix) reimbursement for the costs incurred by the Company to
obtain and preserve any necessary or desirable U.S. and
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foreign patents for the Company's technology (as described in the License
Agreement).
In the event of any dispute between the Company and the Investor with respect
to the Investor's satisfaction of its obligation to provide In-Kind Services,
such dispute shall be considered by the members of the Company's Board of
Directors who have not been designated solely by the Investor. In the event
such dispute is not resolved to the satisfaction of such Directors, it shall
be submitted to an arbitration to be conducted in accordance with the rules
of the American Arbitration Association.
(e) DNA Instrument. The Investor shall make available to the Company
an automated DNA sequencing instrument, reasonably satisfactory to the Founder
Stockholders, for use at the Osiris Facility. Use of such sequencing instrument
by the Company will be on an equal-time basis with the Investor. A reagent
budget for the sequencer will also be provided to the Company by the Investor
for use by the Founder Stockholders in an amount not to exceed $75,000 per year.
Commencing on October 4, 1994 and continuing until a sequencing instrument is
operational at the Osiris Facility, the Investor will reimburse the Company for
sequencing services provided at JHU's facilities which are requested by the
Founder Stockholders, up to an annual amount of $75,000.
(f) Scientist Funding. Commencing on or before January 1, 1996,
and until the earlier of such time as the Company consummates the Second
Round Financing and October 1, 1997, the Investor shall provide to the
Company an amount equal to annual salary and fringe benefit support necessary
to enable the Company to retain a full-time scientist at the Ph.D. level and
two full-time technicians selected by the Founder Stockholders specifically
for Company projects. In the event the Second Round Financing is
consummated, the Investor shall be repaid one-half of the amount provided for
such salary and fringe benefits from the funds raised in the Second Round
Financing.
(g) R&D Loan. The Investor, at the election of the Company, shall
loan to the Company $1,000,000 (the "R&D Loan") if the Second Round Financing
has not been consummated on or before July 1, 1997. The R&D Loan will be
provided in quarterly installments of $125,000 commencing on July 1, 1997.
The Company shall repay the R&D Loan from the proceeds received by the
Company in the Second Round Financing or, if such financing is not
consummated by March 31, 1998, then the Investor shall be entitled to proceed
pursuant to Section 6.9 of this Agreement. The outstanding principal amount
of such R&D Loan shall bear interest at a rate equal to the greater of 10%
per annum or the Citibank prime rate, and shall be secured by the technology
and other assets of the Company.
(h) Surrender of Investor Common Stock. On the Closing Date the
Investor shall surrender to the Company for cancellation the 1,000,000 Common
Shares held by the Investor.
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2.3 Failure of Consideration. (a) In the event the Investor fails to
provide any of the Research Funding other than as a result of an Event of
Default and such failure continues for a period of 30 days, the Company may,
by written notice delivered to the Investor, accelerate and declare due and
payable the remaining Research Funding. In the event the Investor does not
provide the Company with the remaining Research Funding within 15 days after
receipt of notice from the Company, (i) the Investor shall surrender to the
Company a number of the Preferred Shares equal to the product of 1,200,000
and a fraction, the numerator of which is the aggregate amount of the
payments of the Research Funding that have not been made and the denominator
of which is $1,200,000 and (ii) the provisions of Sections 6.4, 6.7 and
6.9(b) of this Agreement, Sections 2.2 and 6 of the Stockholders' Agreement
and Section 1 of the Registration Rights Agreement shall be deemed null and
void, and the Investor shall consent to the filing with the Secretary of
State of Delaware of an amendment to the Amended Certificate which removes
the redemption rights contained in Article FOURTH, Section 3 of the Amended
Certificate, and the special voting rights contained in Article FOURTH,
Sections 5(b) (ii) and (iv) of the Amended Certificate, (iii) the Investor
shall no longer be required to provide the R&D Loan, (iv) the Investor shall
thereafter be entitled to appoint only one director to the Company's Board of
Directors pursuant to Section 2.1(a) of the Stockholder's Agreement, (v) JHU
shall have the right to appoint a majority of the Company's Board of
Directors and (vi) the Investor shall surrender and assign the Stock Purchase
Warrant to the Company. The foregoing remedies shall be the sole remedies of
the Company in the event the Investor fails to make any payment required
under Section 2.2 (b).
(b) In the event the arbitrator appointed under Section 2.2
determines that the Investor failed to provide any of the In-Kind Services, the
Investor shall surrender to the Company a number of Preferred Shares equal to
the product of 1,200,000 and a fraction, the numerator of which is the portion
of the Applicable Year Aggregate Services represented by such In-Kind Services
determined by the arbitrator not to have been provided and the denominator of
which is $1,200,000. For the purposes of this paragraph (b), the term
"Applicable Year Aggregate Services" shall mean (i) $660,000 for the period
ended June 30, 1995, (ii) $300,000 for the 12 month period ended June 30, 1996
and (iii) $240,000 for the 12 month period ended June 30, 1997. The foregoing
surrender of Preferred Shares shall be the sole remedy of the Company in the
event the Investor fails to provide the In-Kind Services as determined by an
arbitrator pursuant to Section 2.2(d) hereof.
SECTION 3. THE CLOSING
3.1 Closing. The closing of the issuance and sale of the Preferred Shares
pursuant to Section 2.1 hereof and certain of the other transactions
contemplated hereby (the "Closing") shall take place at the offices of JHU -
Office of Technology Licensing,
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Baltimore, Maryland at 10:00 a.m. on December 23, 1994 (the "Closing Date"),
or at such other time or place as the parties shall mutually agree.
3.2 Deliveries by the Company. At the Closing, the Company shall, as a
condition to the Closing, deliver or cause to be delivered to the Investor the
following items (in addition to any other items required to be delivered to the
Investor pursuant to any other provision of this Agreement):
(a) certificates representing the Preferred Shares being issued and sold
by the Company to the Investor pursuant to Section 2.1 hereof, duly recorded on
the books of the Company in the name of the Investor, together with such other
supporting documents as may in the opinion of the Investor's counsel be
reasonably necessary to permit the Investor to acquire title to the Preferred
Shares free of any adverse claim;
(b) the Certificate of Designation of Series A Convertible Preferred Stock
certified by the Secretary of State of the State of Delaware as of a date within
ten days prior to the Closing Date;
(c) a certificate of the Secretary of State of the State of Delaware as to
the good standing of the Company dated within ten days prior to the Closing
Date;
(d) a certificate of the Secretary of the Company, in form and substance
satisfactory to counsel for the Investor, certifying that attached thereto are
true and correct copies of (i) the By-Laws of the Company, and (ii) resolutions
duly and validly adopted by the Board of Directors of the Company authorizing
the execution and delivery of the Investment Documents and the consummation of
the transactions contemplated hereby and thereby;
(e) a counterpart of the Stockholders Agreement, duly executed by the
Company and each of the Stockholders;
(f) a counterpart of the Registration Rights Agreement, duly executed by
the Company and each of the Stockholders; and
(g) a counterpart of the Stock Purchase Warrant duly executed by the
Company and the Investor.
3.3 Deliveries by the Investor. At the Closing, the Investor shall, as a
condition to the Closing, deliver or cause to be delivered to the Company the
following items (in addition to any other items required to be delivered to the
Company pursuant to any other provision of this Agreement):
(a) a counterpart of the Stockholders Agreement, duly executed by the
Investor; and
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(b) a counterpart of the Registration Rights Agreement, duly executed by
the Investor;
(c) a counterpart of the Stock Purchase Warrant duly executed by the
Investor; and
(d) the certificate representing the Common Shares held by the Investor
prior to the Closing Date and endorsed to the Company.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. In order to induce the
Investor to purchase the Preferred Shares, the Company represents and warrants
to the Investor as follows (each of which shall be deemed to have been made
after giving effect to the Organizational Proceedings):
(a) Organization and Standing. The Company is duly incorporated and
validly existing under the laws of the State of Delaware and has all requisite
corporate power and authority to own or lease its properties and assets and to
conduct the Gryphon Business as it is presently being conducted. The Company
was incorporated on August 22, 1994, and is not a successor to any other
corporation, partnership or other entity. The Company does not own any equity
interest, directly or indirectly, in any other Person or business enterprise,
has never owned any such equity interest, and has never operated as a subsidiary
or a division of any other Person. Attached as Exhibit A and Exhibit
B are true, correct and complete copies of the Amended Certificate and By-Laws
of the Company as currently in effect.
(b) Capitalization. The authorized capital of the Company consists of (i)
15,000,000 shares of Common Stock, of which 2,650,000 shares are issued and
outstanding, and (ii) 7,500,000 shares of Preferred Stock, none of which are
outstanding. Except as provided on Schedule 4.1(b), the Company has no other
equity securities of any class issued, reserved for issuance or outstanding.
Except as provided to the Investor in this Agreement and the Stock Purchase
Warrant, there are (x) no outstanding options, offers, warrants, conversion
rights, Contracts, or other rights to subscribe for or to purchase from the
Company, or Contracts obligating the Company to issue, transfer, or sell
(whether formal or informal, written or oral, firm or contingent), shares of
capital stock or other securities of the Company (whether debt, equity, or a
combination thereof) or obligating the Company to grant, extend, or enter into
any such Contract and (y) no Contracts or other understandings (whether formal
or informal, written or oral, firm or contingent) which require or may require
the Company to repurchase any of its Common Shares. Except as provided to
holders of Preferred Shares under the Stockholders Agreement, there are no
preemptive or similar rights with respect to the Company's capital stock.
Except as
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provided in the Stockholders Agreement, the Company is not a party to, and
no stockholder of the Company is a party to, any voting agreements, voting
trusts, proxies or any other agreements, instruments or understandings with
respect to the voting of any shares of the capital stock of the Company, or
any agreement with respect to the transferability, purchase or redemption of
any shares of the capital stock of the Company.
(c) Stockholders of the Company. The persons set forth on Schedule 4.1(c)
hereto own of record on the date hereof the number of Shares of the Company set
forth opposite their names, and collectively constitute all the holders of
record of the capital stock of the Company.
(d) Capacity of the Company; Consents; Execution of Agreements. The
Company has all requisite power, authority, and capacity to enter into each of
the Investment Documents and to perform the transactions and obligations to be
performed by it hereunder and thereunder. Except for state and federal
securities law filings, no consent, authorization, approval, license, permit or
order of, or filing with, any Person or Governmental Authority is required in
connection with the execution and delivery of or the performance by the Company
of the transactions and obligations contemplated hereby and thereby. The
execution and delivery of each of the Investment Documents by the Company, and
the performance by the Company of the transactions and obligations contemplated
hereby and thereby, including, without limitation, the issuance and delivery of
the Preferred Shares to the Investor hereunder, have been duly authorized by all
requisite action of the Company. Each of the Investment Documents have been
duly executed and delivered by a duly authorized officer of the Company and
constitute valid and legally binding agreements of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws, both state and federal, affecting the enforcement of creditors' rights or
remedies in general from time to time in effect and the exercise by
courts of equity powers or their application of principles of public policy.
(e) Status of and Preferred Shares; Reservation of Common Shares.
The Preferred Shares to be issued and purchased hereunder, when issued by the
Company to the Investor pursuant to the terms of this Agreement, will (i) be
duly authorized, validly issued, fully paid and nonassessable, (ii) based on
such Investor's representations in Section 4.2, have been issued in
compliance with all federal and state securities laws, (iii) have the rights and
preferences set forth in the Amended Certificate, and (iv) be free and clear of
all liens and adverse claims caused by the Company. The Company has reserved
sufficient authorized but unissued Common Shares for issuance upon the
conversion of the Preferred Shares in accordance with the Amended Certificate.
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(f) Compliance with Laws. The Company is not in violation of, nor do any
of its operations violate in any respect, any term of the Amended Certificate,
or By-Laws or in any material respect, any term or provision of any contract,
agreement or instrument to which the Company is a party, or any statute, law, or
regulation of any Governmental Authority applicable to the Company, any of its
assets, or the conduct of its business ("Applicable Laws"), the violation of
which could have a material adverse effect upon the Company's assets,
properties, financial condition results of operations, business or prospects,
and no material expenditures are or, based on present requirements, will be
required of the Company in order for it to comply or remain in compliance with
any Applicable Laws.
(g) Litigation. There are no actions, suits, claims, investigations, or
proceedings pending at law or in equity or before or by any Governmental
Authority, or, to the best of the Company's knowledge, threatened, against the
Company or any of its assets or properties or the transactions contemplated by
this Agreement, and to the best of the Company's knowledge, there exist no facts
or circumstances which reasonably could be anticipated to result in any such
action, suit, claim, investigation, or proceeding; and no Person has asserted,
and, to the best of the Company's knowledge, no Person has a valid basis upon
which to assert, any claims against the Company or any of its affiliates that
would materially and adversely affect the transactions contemplated by the
Investment Documents, or result in or form the basis of any such action, suit,
claim, investigation or proceeding.
(h) Patents and Other Intellectual Property Rights.
(i) "Intellectual Property" shall mean (A) patents, patent
applications, patent disclosures and the ideas, inventions and improvements
thereto and all reissues, continuations, continuations-in-part, divisions and
reexaminations thereof; (B) trademarks, service marks, trade names, trade dress,
logos and registrations and applications for registrations thereof; and all
renewals and extensions thereof; (C) copyrights and maskworks, and all
registrations and applications for registration thereof; (D) computer software,
data, data bases, and user documentation and audio-visual and text materials;
(E) all trade secret and confidential information (including, but not limited
to, manufacturing processes, research and development materials, know-how,
drawings and designs, technical data, marketing financial and business plans,
and customer lists); and (F) copies and tangible embodiments of the foregoing
(in whatever form or medium).
(ii) Schedule 4.1(h) hereto sets forth a complete and correct list of
all United States and foreign patents and patent applications, trade names,
trademarks and service marks, trademark and service xxxx registrations,
applications for trademark and service xxxx registrations, copyright
registrations
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and applications for copyright registrations, that form a part of the
Intellectual Property owned by the Company or, where not owned, expressly
licensed for use by the Company in the Gryphon Business, and all licenses or
other agreements under which the Company obtained or licenses the right to
use Intellectual Property. Except as expressly set forth on Schedule 4.1(h)
hereto, the Company is the sole owner of the entire right, title, and
interest in and to all Intellectual Property used in the Gryphon Business as
currently conducted (the "Company Intellectual Property"). The Company
Intellectual Property comprises all of the patents, patent applications,
trademarks, trade names, copyrights, inventions, and discoveries, of every
type and description, presently used in the conduct of the Gryphon Business.
Except as provided on Schedule 4.1(h) the Company has not granted any express
license or other rights to the Company Intellectual Property, and is not
liable or obligated under any Contract for its use of any Company
Intellectual Property, whether for royalties or otherwise.
(iii) Except as set forth on Schedule 4.1(h), no claim by any Person
contesting the validity, enforceability, use or ownership of any of the Company
Intellectual Property has been made, is currently outstanding or is threatened,
against the Company or, to the knowledge of the Company, any other Person,
and there are no facts or circumstances which could reasonably be anticipated to
result in any such claim or which could reasonably lead the Company to conclude
that the continued operation and conduct of any aspect of the Gryphon Business
could result in any such claim. To the knowledge of the Company, there are
no facts or circumstances which would indicate a likelihood of any infringement
or misappropriation upon, or other conflict with, any Company Intellectual
Property or right of any Person. The transactions contemplated by this
Agreement will have no adverse effect on any Company Intellectual Property.
Except as set forth in Schedule 4.1(h), neither the Company nor any of the
Company's officers, employees or consultants have any agreements or arrangements
with former employers of such officers, employees or consultants relating to
confidential information or trade secrets of such employers, the assignment of
inventions of such employers, or such officer's, employee's or consultant's
engagement in activities competitive with such employers. The activities of
such officers, employees and consultants on behalf of the Company do not
violate any agreements or arrangements known to the Company which any such
officers, employees and consultants have with former employers.
(i) Consultants; No Conflicting Agreements. Except and to the extent
set forth in that certain consulting agreement dated May 1, 1994 between Xx.
Xxxxx and Immunicon Corporation and that certain letter agreement dated June 18,
1992 between Xx. Xxxxx and Cellco., Inc., and pursuant to the terms of the
employment of each of the Founding Stockholders with JHU, neither of the Founder
Stockholders is obligated under any contract (including licenses, covenants or
commitments of any nature) or other oral or written
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agreement, or subject to any judgment, decree or order of any court,
administrative or governmental agency, that would conflict with his
obligation to use his best efforts to promote the Company's business as
currently conducted and proposed to be conducted. The carrying on of the
Company's business as consultants by such Persons as such business is
currently conducted and proposed to be conducted, will not conflict with or
result in the breach of the terms, conditions or provisions of, or constitute
a default under, any contract, covenant, agreement or instrument under which
either Founder Stockholder is now obligated. Each Founder Stockholder has
previously delivered to the Investor copies of each and every written
employment agreement, policy, covenant or commitment of any nature to which
he is a party or by which he is bound or was bound that was required to be
executed by such persons as a condition of employment at any firm, entity,
university, governmental body or other business association. The Company
acknowledges that the Founder Stockholders may continue to receive funding
from Cellco., Inc. pursuant to that certain Research Agreement dated March
23, 1994 provided that research conducted under such Research Agreement shall
not be in violation of any terms and conditions of this agreement
4.2 Representations and Warranties of the Investor. The Investor hereby
represents and warrant to the Company that:
(a) Investment Intent. The preferred Share to be purchase by the
Investor hereunder (and any Common Shares that may be issued upon conversion of
the Preferred Shares) are being purchase for its own account and not with the
view to, or for resale in connection with, any disritbution or public offering
thereof within the meaning of the 1933 Act. It understands that the
Preferred Shares (and any Common Shares that may be issued upon conversion of
the Preferred Shares) have not been registered under the 1933 Act by reason of
their issuance in transactions exempt from the registration and prospectus
delivery requirements of the 1933 Act pursuant to Section 4(2) there of and
agrees to deliver to the Company, if requested by the Company, an investment
letter in customary form. If further understands that the certificates
representing the Preferred Shares (and any Common Shares that may be issued upon
conversion of the Preferred shares) will bear the following legend and agrees
that it will hold such Shares subject thereto:
THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY SHARES THAT MAY BE
ISSUED UPON THE CONVERSION OF SUCH SHARES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY PORTION HEREOF OR INTEREST HEREIN MAY
BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE
SAME IS REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
13
DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE
EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION REASONABLY
SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
(b) Capacity of the Inventor; Execution of Agreement. The Investor has all
requisite power, authority, and capacity to enter into this Agreement, and to
perform the transactions and obligations to be performed by it hereunder. This
Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws, both state and
federal, affecting the enforcement of creditors' rights or remedies in general
from time to time in effect and the exercise by courts of equity powers or their
application of principles of public policy.
(c) Accredited Investor. The Investor is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.
(d) Suitability and Sophistication. (i) The Investor has such knowledge
and experience in financial and business matters that it is capable of
independently evaluating the risks and merits of purchasing the Preferred
Shares; (ii) it has independently evaluated the risk and merits of purchasing
the Preferred Shares and has independently determined that the Preferred Shares
are a suitable investment for it; and (iii) it has sufficient financial
resources to bear the loss of its entire investment in the Preferred Shares.
(e) Capacity of the Investor; Consents Execution of Agreements. The
Investor has all requisite power, authority, and capacity to enter into the
Investment Documents to which it is a party and to perform the transactions and
obligations to be performed by it hereunder and thereunder. Except for state
and federal securities law filings, no consent, authorization, approval,
license, permit or order of, or filing with, any Person or Governmental
Authority is required in connection with the Investor's execution and delivery
of the Investment Documents or the performance by the Investor of the
transactions and obligations contemplated hereby and thereby. The execution and
delivery of the Investment Documents by the Investor, and the performance by the
Investor of the transactions and obligations contemplated hereby and thereby,
have been duly authorized by all requisite action of the Investor. The
Investment Documents have been duly executed and delivered by a duly authorized
officer of the Investor and constitute valid and legally binding agreements of
the Investor, enforceable in accordance with their respective
14
terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws, both state and federal,
affecting the enforcement of creditors' rights or remedies in general from
time to time in effect and the exercise by courts of equity powers or their
application of principles of public policy.
(f) Compliance with Laws. To the best knowledge of the Investor, the
Investor is not in violation of, nor do any of its operations violate in any
respect, any statute, law, or regulation of any Governmental Authority
applicable to the Investor, any of its assets, or the conduct of its business
("Applicable Laws"), the violation of which could have a material adverse
effect upon the Investor's assets, properties, financial condition, results of
operations orbusiness.
(g) Litigation. There are no actions, suits, claims, investigations, or
proceedings pending at law or in equity or before or by any Governmental
Authority, or, to the best of the Investor's knowledge threatened, against the
Investor or any of its assets or properties or the transactions contemplated by
this Agreement.
SECTION 5. INDEMNIFICATION
5.1 Indemnification by the Company. Notwithstanding anything in this
Agreement to the contrary, but subject to the other provisions of this Section
5, the Company shall indemnify, defend, and hold the Investor, each of the
Investor's respective directors, stockholders, officers and Affiliates, and each
of such Affiliates' officers, directors, partners, employees, representatives
and Affiliates, (collectively, the "Investor Indemnitees") harmless from and
against, and shall reimburse them for, any and all demands, claims, losses,
liabilities, damages, costs, and expenses whatsoever (including, without
limitation, any fines, penalties, reasonable fees and disbursements of counsel
incurred by the Investor Indemnities in investigating or defending any of the
foregoing, and other reasonable expenses incurred investigating or defending any
of the foregoing or enforcing this Agreement) (individually a "Loss" and
collectively "Losses") sustained or incurred by an Investor Indemnitee resulting
from or arising in connection with any breach of the representations or
warranties of the Company set forth in paragraph (g), (h) or (i) of Section
4.1 of this Agreement or the corresponding Schedules or Exhibits hereto or in
the documents relating to such paragraphs delivered to the Investor pursuant to
this Agreement (other than inaccuracies or breaches resulting from actions taken
by or on behalf of the Investor or of which the Investor had actual knowledge
as of the Closing), but only if the Company or the Gryphon Business, with
respect to the subject matter of such representations and warranties, is
materially and adversely different from the Company as represented in such
representations and warranties which have been breached, in each case whether or
not such Loss results from a third party claim.
15
5.2 Indemnification by the Investor. Notwithstanding anything in this
Agreement to the contrary, but subject to the other provision of this section
5, the Investor shall indemnify, defend, and hold the Company and its officers,
directors, employees, consultants, representatives and Affiliates, and each of
the Company's Affiliates' officers, directors, employees, consultants, partners,
representatives and Affiliates (collectively, the "Company Indemnitees")
harmless from and against, and shall reimburse them for, any and all Losses
sustained or incurred by a Company Indemnitee resulting or arising from any
material inaccuracy in or breach of any of the Investor's respective
representations or warranties set forth in Section 4.2 of this Agreement, in
each case whether or not such Loss results from a third party claim.
5.3 Indemnification Notice. (a) In the event that (i) an event occurs
which gives a Person a right to indemnification hereunder or (ii) any third
party claim is asserted against a Person with respect to which such Person is
entitled to indemnification hereunder, such Person (the "indemnified party")
shall, within 60 days of the later of the occurrence of the event giving rise to
the claim or the date that the indemnified party learned of such claim
(provided, however, that if a claim arises by virtue of litigation, then in no
event less than 10 days prior to the date in which an appearance or answer is
due, whichever is earlier), notify the Person obligated to indemnify it (the
"indemnifying party") of such claim by delivery of a written notice describing
the claim and indicating the basis for indemnification hereunder. The
indemnifying party shall have the right, upon written notice to the indemnified
party within 10 days after receipt from the indemnified party of notice of such
claim, to conduct at its expense the defense against such claim in its own name,
or if necessary in the name of the indemnified party. In the event that the
indemnifying party fails to give such notice, it shall be deemed to have elected
not to conduct the defense of the subject claim, and in such event the
indemnifying led party shall have the right to conduct such defense and, only
with the prior written consent of the indemnifying party which shall not be
unreasonably withheld, to compromise and settle the claim. In the event that
the indemnifying party does elect to conduct the defense of the subject claim,
the indemnifying party shall cooperate with and make available to the
indemnifying party such assistance and materials as may be reasonably requested
by it, all at the expense of the indemnifying party and the indemnified party
shall have the right at its expense to participate in the defense, provided that
the indemnified party will have the right to compromise and settle the claim
only with the prior written consent of the indemnifying party, which consent
shall not be unreasonably withheld. Any settlement to which the indemnifying
party shall have consented in writing shall conclusively be deemed to be an
obligation with respect to which the indemnified party is entitled to
indemnification hereunder.
16
SECTION 6. COVENANTS OF THE COMPANY
The Company covenants and agrees with the Investor as follows:
6.1 Furnishing of Financial Statements and Information. The Company shall
deliver to the Investor:
(a) within five days of their completion, but in any event within 30 days
after the close of each month commencing with December 1994, unaudited
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such month, together with the related unaudited consolidated statements of
income and retained earnings for such month and for the period from the
beginning of the fiscal year to the end of such month (which shall also set
forth any budgeted figures) and cash flows, all in reasonable detail;
(b) within five days of their completion, but in any event within 150 days
after the end of each fiscal year, the audited consolidated balance sheets of
the Company and its Subsidiaries, as of the end of such fiscal year, together
with the related consolidated statements of income and retained earnings and
cash flows for such fiscal year, setting forth in comparative form figures for
the previous fiscal year, all in reasonable detail and duly certified by a firm
of independent public accountants of national or regional standing reasonably
acceptable to the Investor, which accountants shall have given the Company an
opinion, unqualified as to the scope of the audit, regarding such statements;
(c) within five days after the Company learns of the commencement or
threatened commencement of any material claim or suit, legal or equitable, or of
any material administrative, arbitration, or other similar proceeding against
the Company or any of its Subsidiaries, or any of their respective businesses,
assets, or properties, written notice of the nature and extent of such suit or
proceeding;
(d) within five days after the Company learns of any circumstance or event
which reasonably can be expected to have a material adverse effect on the
assets, properties, financial condition, result of operations, business, or
prospects of the Company, written notice of the nature and extent of such
circumstance or event;
(e) not less than 30 days following to the end of each fiscal year,
commencing with the fiscal year beginning January 1 1996, an annual budget for
the Company and each of its Subsidiaries for the next succeeding fiscal year,
prepared in good faith and submitted to the Board of Directors of the Company
(an "Annual Budget"), which Annual Budget shall include monthly capital and
operating expense budgets, cash flow statements,
17
capital expenditure budgets, profit and loss projections, and employee hiring
projections;
(f) within five days after transmission thereof, copies of all financial
statements, proxy statements, reports and any other general written
communications which the Company sends to its shareholders and copies of all
registration statements and all regular, special or periodic reports which it
files with the SEC or with any securities exchange on which any of its
securities are then listed, and copies of all press releases and other
statements made available generally by the Company to the public
concerning material developments in the Company's businesses; and
(g) within 20 business days after the Investor makes a reasonable request
therefor, such other data relating to the business, affairs and financial
condition of the Company or any of its Subsidiaries.
6.2 Inspection. The Company shall, upon receipt of reasonable notice,
permit the Investor and any of its representatives to visit and inspect any of
the properties of the Company or any Subsidiary during normal business hours,
including, without limitation, their respective books and records (and to
make extracts therefrom and copies thereof; provided, however, that the
Investor or its representative shall advise the Company of any copies made and
shall agree that he or it will not use or disseminate such information except as
reasonably required in connection with the Investor's rights and benefits under
this Agreement and the Stockholders Agreement) and to discuss the Company's
affairs, finances and accounts with its officers, employees and independent
public accountants.
6.3 Dividends on or Redemption of Shares. Except for dividends and
redemptions required under the express terms of the Preferred Shares, the
Company shall not, directly or indirectly, declare or pay any dividend or make
any other distribution with respect to any of its capital shares, or directly or
indirectly purchase, redeem, or otherwise acquire for any consideration any
shares of its capital stock or other equity securities (including without
limitation any warrants or options) without the prior written consent of the
Investor.
6.4 Indebtedness. Except for the R&D Loan, the Company shall not, and
shall not permit any of its Subsidiaries to, without the prior written consent
of the Investor, incur, assume or suffer to exist any Indebtedness except (i)
Indebtedness to banks or other financial institutions of up to $50,000 in the
aggregate, (ii) purchase money Indebtedness representing or evidencing the
principal amount of the deferred purchase price of equipment or other personal
property used in the Company's business and (iii) Indebtedness arising from
capitalized lease obligations of up to $100,000 in the aggregate. This covenant
shall expire upon the consummation of the Second Round Financing.
18
6.5 Registration Rights. The Investor shall have the rights to
registration under the 1933 Act with respect to the Common Shares it may hold
upon conversion of the Preferred Shares as set forth in the Registration Rights
Agreement.
6.6 Further Assurances. The Company shall cure promptly any defects in
the creation and issuance of the Preferred Shares, and in the execution and
delivery of any of the Investment Documents. The Company, at its expense,
shall promptly execute and deliver to the Investor upon reasonable request
all such other and further documents, agreements and instruments in compliance
with or pursuant to its covenants and agreements herein, and shall make any
recordings, file any notices, and obtain any consents as may be reasonably
necessary or appropriate in connection therewith.
6.7 Issuance of Securities. Except as otherwise set forth in the
Stockholders Agreement, the Company shall not, without the prior written consent
of the Investor, authorize or issue, or obligate itself to authorize or issue,
any shares of its capital stock which are senior to or on parity with the
Preferred Shares as to liquidation preferences, dividend rights, conversion
rights, redemption rights, preemptive rights or otherwise, or other securities
exchangeable for or convertible into any such shares, or grant any options or
other rights which are exercisable for or convertible into any such shares.
6.8 Conflicting Agreements. The Company shall not, and shall not permit
any of its Subsidiaries to, enter into or become subject to any Contract or
instrument which by its terms would (under any circumstances) restrict the
Company's right to perform any of the provisions of the Investment Documents.
6.9 Failure of Second Round Financing. (a) In the event the Second Round
Financing has not been consummated by October 1 1997, JHU shall have until
March 31, 1998 to assist the Company in consulting the Second Round Financing.
If JHU provides such assistance and the Second Round Financing is consummated by
March 31, 1998, the Investor shall assign all of its right, title and interest
in and to the Stock Purchase Warrant to JHU.
(b) In the event the Second Round Financing has not been consummated by
March 31, 1998, the Investor shall be entitled to purchase all of the assets,
properties and rights then owned or held by the Company (including rights under
any technology license agreements then in effect) for an aggregate
purchase price equal to the fair market value of such assets, properties and
rights (the "Fair Market Value"). The Company agrees that any Contracts it
enters into after the date of this Agreement shall expressly provide the Company
with the right to assign such Contract to the Investor. In the event the
Investor elects to purchase the assets, properties and rights to the Company
pursuant to this Section 6.9, the Investor agrees to notify JHU and each of the
19
Founder Stockholders in writing (the "Investor Notice"). Fair Market Value
shall be determined by an appraisal conducted as follows:
(i) Each of JHU and the Founder Stockholders on the one hand, and the
Investor on the other hand, shall select an experienced independent third party
business or technology appraiser and shall notify the other party of the
identity of such appraiser on or before thirty (30) days after receipt of the
Investor Notice (the "Notice Date").
(ii) Each appraiser selected pursuant to clause(i) shall deliver its
report on Fair Market Value to all other parties and to the other appraisers
within 60 days after the Notice Date. If the lesser of the Fair Market Values
determined by the appraisers is not more than 10% less than the greater of the
Fair Market Values, then the final Fair Market Value shall be equal to the sum
of the Fair Market Values determined by the appraisers divided by two. If the
lesser of the Fair Market Values is more than 10% less than the greater of the
two Fair Market Share Values then the appraisers shall agree on an independent
appraiser within 75 days after the Notice Date.
(iii) The independent appraiser selected pursuant to clause (b)
shall determine the Fair Market Value within 100 days after the Notice Date,
provided, however, that the independent appraiser shall not designate any Fair
Market Value other than one which is not less than the lower of, or greater than
the higher of, those determined by the other appraisers, and the Fair Market
Value so designated shall be final and binding upon the Investor and JHU.
(iv) The costs of each appraisal performed pursuant to clause (ii)
shall be borne by the party who obtained such appraisal, and the cost of the
appraisal performed pursuant to clause (iii) shall be borne equally by the
Investor and JMU. The Company shall cooperate fully with each appraiser and
shall fully disclose any and all information (including, without limitation, any
business plans or forecasts) which is reasonably requested by any appraiser. In
the event the Investor, or the Founder Stockholders and JHU fails to select an
appraiser pursuant to clause (i) or otherwise prevents the procedure described
in clauses (i) through (iii) from being carried out, the Fair Market Value shall
be the amount determined by the appraisers selected by the other party pursuant
to clause (i) through (iii) and such determination shall be final and binding
on the holders.
(c) In the event the Second Round Financing has not been consummated by
March 31, 1998, and the Investor chooses to purchase The assets held by the
Company pursuant to Section 6.9(b) above, the Investor shall receive a credit
against the purchase price determined above for any unpaid principal and
accrued interest remaining on the R&D Loan.
20
6.10 Other business. The Company shall not, and shall not permit any of
its Subsidiaries to, enter into the ownership, management or operation of any
business other than the Gryphon Business without the prior written consent of
the Investor.
6.11 Expiration of Covenants. Upon the date on which the Investor ceases
to own Preferred Shares, the covenants of the Company contained in this Section
6 shall expire.
SECTION 7. DEFAULT
7.1 Events of Default. The following events shall be Events of Default
for purposes of this Agreement and the Amended Certificate:
(a) any representation or warranty made by the Company in paragraph (g),
(h) or (i) of Section 4.1 of this Agreement or any of the Schedules related
thereto shall prove to have been untrue or incorrect in any material respect as
of the closing Date and the Investor shall have not had actual knowledge of same
as of the Closing (other than an untrue or incorrect representation or warranty
resulting from actions taken by or on behalf of the Investor) but only if the
Company or the Gryphon Business, with respect to the subject matter of such
representations and warranties which have been breached, is materially and
adversely different from the Company as represented in such representations and
warranties;
(b) the Company or any of its Subsidiaries shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against the
Company or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or debts, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property (and, in the case of any such proceeding instituted against the Company
or any of its Subsidiaries (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or similar official for, it or for any substantial part of its
property shall occur), or the Company or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection; or
(c) any of the Founder Stockholders or JHU shall fail in any material
respect to perform or observe any of their respective agreement or covenants in
the Stockholders Agreement
21
and such failure has a material adverse effect on the Company or the Gryphon
Business or the Company's prospects and such failure has not been cured
within 30 days after such failure first occurs.
7.2 Remedies Upon An Event of Default. Upon the occurrence of an Event of
Default then, unless such Event of Default shall have been waived in the manner
provided in Section 8.1 of this Agreement, the inventor, in addition to all
other remedies that may be available to them at law or in equity in accordance
with Section 7.4 hereof, shall be entitled to designate a majority of the Board
of Directors of the Company and/or exercise its redemption rights as provided
for in the Amended Certificate (as the same may be amended from time to time)
and the Stockholders Agreement.
7.3 Notice of Default. When any Event of Default has occurred or exists,
the Company shall give written notice to the Investor within five business days
after which the Company becomes aware of an event of Default has occurred or
begun to exist. When in the judgment of the Investor an Event of Default has
occurred, the Investor shall so notify the Company with reasonable promptness
provided, however, that any failure to give such notice shall not be a waiver by
the Investor of any or its rights hereunder.
7.4 Suits for Enforcement. The parties hereto agree that upon an event of
Default a remedy at law may not be adequate. In case any one or more Events of
Default shall have occurred and be continuing, unless such events of Default
shall have been waived in the manner provided in Section 8.1 hereof , the
Investor may proceed to protect and enforce their rights under this Section 7 by
suit in equity or action at law, including, without limitation, by suit for
specific performance or injunctive relief. It is agreed that if the Investor
prevails in any such action, the Investor shall be entitled to receive from the
Company all reasonable fees, costs, and expenses incurred by it, including,
without limitation, such reasonable fees and expenses of attorneys (whether or
not litigation is commenced) and reasonable fees, costs, and expenses of
appeals.
7.5 Remedies Cumulative. No specific right, power, or remedy conferred by
this Agreement shall be exclusive, and each such right, power, or remedy shall
be cumulative and in addition to every other right, power, or remedy, whether
conferred hereby or by any security of the Company or flow or hereafter
available, at law or in equity, by statute or otherwise.
7.6 Remedies Not Waived. No course of dealing between the Company and the
Inventor and no delay in exercising any right, power, or remedy conferred hereby
or by any security issued the Company, or now or hereafter available at law or
in equity, by statute or otherwise, shall operate as a waiver of or otherwise
prejudice any such right, power, or remedy.
22
SECTION 8. MISCELLANEOUS
8.1 Waivers and Amendments. This Agreement may be amended or modified in
whole or in part only by a writing which makes reference to this Agreement
executed by the Company and the Investor. The obligations of any party
hereunder may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the party or
parties to whom the obligation is owed; provided, however, that any waiver by
any party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be construed as,
or constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any other provision of this Agreement
or any other agreement provided for herein.
8.2 Entire Agreement. The Investment Documents and the other agreements
and instruments expressly provided for herein arid therein, together set forth
the entire understanding of the parties hereto and supersede in their entirety
all prior contracts, agreements, arrangements, communications, discussions,
representations, and warranties, whether oral or written, among the parties.
8.3 Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with the internal substantive laws of the State of
Delaware without giving effect to the principles of conflicts of law thereof.
8.4 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and be deemed to have been duly given
(a) when personally delivered or sent by facsimile transmission (the receipt of
which is confirmed in writing), (b) one business day after being sent by a
nationally recognized overnight courier service or (c) three business days after
being sent by registered or certified mail, return receipt requested, postage
prepaid, to the parties at their respective addresses set forth below.
If to the Company: Gryphon Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
With a copy to; The Xxxxx Xxxxxxx University
School of Medicine
Office of Technology Licensing
0000 X. Xxxxxxxx Xxxxxx, Xxxxx 0-000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to Osiris: Osiris Therapeutics, Inc.
The Wearn Building - 4th Floor
00000 Xxxxxx Xxxxxx
00
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx X. XxXxxxxxxx, Esq.
Any party by written notice to the others may change the address of the persons
to whom notices or copies thereof shall be directed.
8.5 Counterparts. This Agreement may be executed in any number of
counterparts,each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
8.6 Successors and Assignees. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns except that the Company may not assign or transfer its rights
hereunder without the prior written consent of the Investor. Subject to the
provisions of the Stockholders Agreement, the Investor shall be entitled to
assign all of its rights, benefits and obligations hereunder to any Person that
acquires Preferred Shares from the Investor without the prior consent of any
party and such Person shall become an Investor and be entitled to all right and
benefits of an Investor hereunder; provided, however, the Investor shall not
assign the obligation to provide the Research Funding or the In-Kind Services to
a third party or parties without the prior written consent of JHU, which consent
shall not be unreasonably withheld or delayed. Promptly following any
assignment, the Investor shall provide the Company with written notice of such
assignment
8.7 Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person or entity
other than the parties hereto any rights or remedies under or by reason of this
Agreement.
8.8 Schedules and Exhibits. The schedules and exhibits attached to this
Agreement are incorporated herein and shall be part of this Agreement for all
purposes.
8.9 Headings. The headings in this Agreement are solely for convenience
of reference and shall not be given any effect in the construction or
interpretation of this Agreement.
8.l0 Independent Counsel. Each of the parties hereto acknowledges and
agrees that the law firm of Xxxxx, Day, Xxxxxx & Xxxxx has acted solely as the
special counsel for the Investor in reparation of this Share Purchase Agreement
and related agreements, notwithstanding the fact that Xxxxx, Day, Xxxxxx &
Xxxxx has prepared certain corporate documentation for the benefit
24
of the Company. By executing this Agreement, the Company acknowledges that
it has been advised by Xxxxx, Day, Xxxxxx & Xxxxx to engage independent
counsel to review this Agreement and related agreements, and has had the
opportunity to present this Agreement and the related agreements to
independent counsel for review and comment and hereby consents to the
representation of the Company by Xxxxx, Day, Xxxxxx & Xxxxx on specified
corporate matters concurrent with its representation of the Investor
hereunder, notwithstanding any potential conflict of interest.
25
IN WITNESS WHEREOF, the parties have duly executed, or have caused their
duly authorized officer or representative to execute, this Share Purchase
Agreement as of the date first above written.
GRYPHON PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Title: President & CEO
----------------
OSIRIS THERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx, President and CEO
26
