EXHIBIT 10.38
AASTROM BIOSCIENCES, INC.
SUBSCRIPTION AGREEMENT
AASTROM Biosciences, Inc.
Domino's Farms, Lobby L
24 Xxxxx Xxxxx Xxxxxx Xxxxx
X.X. Xxx 000
Xxx Xxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxxxxxx, Ph.D.
Gentlemen:
1. Subscription. The undersigned (the "undersigned" or the
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"Purchaser"), hereby agrees and subscribes to purchase from AASTROM Biosciences,
Inc., a Michigan corporation (the "Company"), 1,250,000 shares (the "Shares") of
the Series D Preferred Stock of the Company (the "Series D Stock") at a purchase
price of $4.00 per Share, for an aggregate purchase price of $5,000,000 (the
"Purchase Price"). This subscription is submitted to you in accordance with and
subject to the terms and conditions described in this Subscription Agreement,
the Memorandum (as defined in Section 5.c.) and the Articles (as defined in
Section 5.c.) relating to the offering (the "Offering") by the Company of up to
2,500,000 shares of Series D Stock.
2. Subscription and Payment. The undersigned is returning to
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the Company two signed and completed copies of this Subscription Agreement,
together with payment of the Purchase Price. Payment of the Purchase Price is
being made by delivery to the Company of a check payable to the order of the
Company, or by wire transfer of the Purchase Price to the Company. Subject to
the satisfaction of the conditions in Section 8, a closing (the "Closing") for
the purchase and sale of shares of Series D Stock will be held on May 26, 1995.
As soon as practicable after the Closing, the Company shall issue and deliver to
the undersigned a stock certificate or certificates, registered in the name of
the undersigned, representing the Shares being purchased.
3. Acceptance of Subscription. The undersigned understands and
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agrees that the Company in its sole discretion reserves the right to accept or
reject this subscription for the Shares. The Company shall have no obligation
hereunder until the Company shall execute and deliver to the undersigned an
executed copy of this Subscription Agreement. This Subscription Agreement shall
continue in full force and effect to the extent this subscription was accepted.
4. Stock Registration Rights. The undersigned shall have the
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stock registration rights as have been granted pursuant to Sections 2.4 through
2.14 of that certain Amended and Restated Investors' Rights Agreement dated
April 7, 1992 by
and among the Company and certain investors and shareholders of the Company,
attached hereto as Exhibit A.
5. Representations and Warranties of Purchaser. In order to
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induce the Company to sell the Shares to the undersigned, the undersigned hereby
acknowledges, represents, warrants and agrees as follows:
a. None of the Shares of Series D Stock are (and the
shares of common stock, no par value ("Common Stock") issuable upon conversion
thereof ("Conversion Shares") will not be) registered under the Securities Act
of 1933 (as amended, the "Securities Act") or any state securities laws. The
undersigned understands that the sale of the Shares is intended to be exempt
from registration under Section 4(2) of the Securities Act and/or the provisions
of Regulation D promulgated thereunder, based, in part, upon the
representations, warranties and agreements contained in this Subscription
Agreement;
b. Neither the Securities and Exchange Commission nor
any state securities commission has approved any of the Shares or passed upon or
endorsed the merits of this transaction;
c. Prior to its execution of this Subscription
Agreement, the undersigned has received from the Company (i) the Confidential
Private Placement Memorandum of the Company dated April 5, 1995 (together with
any exhibits thereto, the "Memorandum"), which supersedes in its entirety the
draft Memorandum previously delivered to the undersigned, (ii) a copy of the
amendment to the Restated Articles of Incorporation of the Company (the
"Articles"), for the purpose of creating the Series D Stock, and (iii) the
audited financial statements of the Company for the years ended June 30, 1994,
1993 and 1992, the unaudited financial statements of the Company for the month
ended January 31, 1995 (the "Most Recent Financial Statements"), and the
unaudited balance sheet of the Company at February 28, 1995 (collectively, the
"Financial Statements").
d. The undersigned acknowledges that all documents,
records and books pertaining to the investment in the Shares, including the
Memorandum, have been made available for inspection by the undersigned, or by
its attorney, accountant, purchaser representative and/or tax advisor
(collectively, the "Advisors") and that the undersigned and/or its Advisors have
completed such review as they deem to be necessary to make the decision to
purchase the Shares. Notwithstanding the foregoing, the parties acknowledge and
agree that the Purchaser is relying solely on the representations and warranties
set forth in Section 6 hereof, which reference the documents set forth in
Section 5.c;
e. The undersigned has reviewed the merits and risks
of an investment in the Shares. The undersigned and the Advisors have had a
reasonable opportunity to ask questions of and receive answers from members of
management
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of the Company concerning the offer and sale of the Shares and all such
questions have been answered to the full satisfaction of the undersigned;
f. In evaluating the suitability of an investment in
the Company, the undersigned has not relied upon any representation or other
information (oral or written) other than as contained in documents or answers to
questions so furnished to the undersigned or its Advisors by the Company;
g. No oral or written representations have been made
or oral or written information furnished to the undersigned or its Advisors in
connection with the Offering which were in any way inconsistent with the
information provided to the undersigned or its Advisors, including the
Memorandum.
h. The undersigned, together with the Advisors, have
such knowledge and experience in financial, tax and business matters so as to
enable each of them to utilize the information made available to each of them in
connection with the purchase of the Shares to evaluate the merits and risks of
an investment in the Shares and to make an informed investment decision with
respect thereto;
i. The undersigned is not relying on the Company with
respect to the tax and other economic considerations of an investment in the
Shares, and the undersigned has relied on the advice, or has consulted with,
only its own Advisors concerning tax matters;
j. The undersigned is acquiring the Shares solely for
its own account, for investment, and not with a view to or for subdivision,
resale or distribution, in whole or in part, and no other person has or will
have a direct or indirect beneficial interest in the Shares, other than for any
partner or shareholder owners of the undersigned, if any;
k. The undersigned must bear the economic risk of the
investment indefinitely because none of the Shares of Series D Stock (or
Conversion Shares) may be sold, hypothecated or otherwise disposed of unless (i)
subsequently registered under the Securities Act and applicable state securities
laws, or (ii) an exemption from registration is available. Legends shall be
placed on the Shares (and the Conversion Shares) to the effect that they have
not been registered under the Securities Act or applicable state securities laws
and appropriate notations thereon will be made in the Company's stock books;
l. The undersigned has adequate means of providing
for the undersigned's current financial needs and foreseeable contingencies and
the undersigned can accept the fact that an investment in the Shares will not be
liquid;
m. The undersigned is aware that an investment in the
Shares involves a number of very significant risks and, in particular,
acknowledges that the Company is in the development stage. The undersigned
understands that the risks
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associated with an investment in the Shares could result in, and the undersigned
can sustain, a complete loss of its investment;
n. The undersigned is an "accredited investor" as
such term is defined in the regulations promulgated under the Securities Act;
o. The undersigned represents that it has full power
and authority to execute and deliver this Subscription Agreement and all other
related agreements and certificates and to carry out the provisions hereof and
thereof and to purchase and hold the Shares, and this Subscription Agreement is
a legal, valid and binding obligation of the undersigned. The execution and
delivery of this Subscription Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
undersigned is a party or by which it is bound;
p. The undersigned represents to the Company that the
information contained herein may be relied upon by the Company in determining
the availability of an exemption from registration under federal and state
securities laws. The undersigned further represents and warrants that it will
notify the Company immediately upon the occurrence of any material change to the
information contained herein occurring prior to the Company's issuance of the
Shares;
q. The undersigned is unaware of, and in no way
relying on, any form of general solicitation or general advertising in
connection with the offer and sale of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that:
6.01 Organization, Qualifications and Corporate Power.
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The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Michigan and is duly licensed or
qualified to transact business as a foreign corporation and is in good standing
in each other jurisdiction in which the nature of the business transacted by it
or the character of the properties owned or leased by it requires such licensing
or qualification. The Company has the corporate power and authority to own and
hold its properties and to carry on its business as now conducted and as
proposed to be conducted, to execute, deliver and perform this Subscription
Agreement, to issue, sell and deliver the Series D Stock, and to issue and
deliver the Conversion Shares as provided in the Articles.
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6.02 Authorization of Agreement.
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(a) The execution and delivery by the Company of this
Subscription Agreement, the performance by the Company of its obligations
hereunder, the issuance, sale and delivery of the Series D Stock and the
issuance and delivery of the Conversion Shares have been duly authorized by all
requisite corporate action and will not violate any provision of law, any order
of any court or other agency of government, the Articles or the Bylaws of the
Company (the "Bylaws"), or any provision of any indenture, agreement or other
instrument to which the Company or any of its properties or assets is bound, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge, restriction, claim
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.
(b) The Series D Stock has been duly authorized and,
when issued in accordance with this Subscription Agreement, will be validly
issued, fully paid and nonassessable shares of the Company with no personal
liability attaching to the ownership thereof and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company except as set forth herein. The Conversion Shares have been duly
reserved for issuance upon conversion of the Series D Stock and, when so issued,
will be duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock with no personal liability attaching to the ownership thereof and
so long as the Series D Stock tendered for conversion is free and clear of liens
or encumbrances, will be free and clear of all liens, charges, restrictions,
claims and encumbrances imposed by or through the Company except as set forth
herein. Neither the issuance, sale or delivery of the Series D Stock nor the
issuance or delivery of the Conversion Shares is subject to any preemptive right
of stockholders of the Company or to any right of first refusal or other right
in favor of any person which right has not been waived.
6.03 Validity.
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This Subscription Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms.
6.04 Authorized Capital Stock.
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The authorized capital stock of the Company consists
of 8,540,000 shares of Preferred Stock, and 17,000,000 shares of Common Stock.
Immediately prior to the Closing, 2,592,610 shares of Common Stock and 6,790,001
shares of Preferred Stock will be validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the ownership thereof. The
stockholders of record and holders of subscriptions, warrants, options,
convertible securities, and other rights (contingent or other), if any, to
purchase or otherwise acquire equity
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securities of the Company prior to the Closing Date (the "Original
Shareholders") and the number of shares of Common Stock and the number of such
subscriptions, warrants, options, convertible securities, and other such rights,
if any, held by each, are as set forth in the Memorandum. The designations,
powers, preferences, rights, qualifications, limitations and restrictions in
respect of each class of authorized capital stock of the Company are as set
forth in the Articles, a copy of which has previously been delivered to each
Purchaser, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws. Except as set forth in the attached
Schedule 6.04 or in the Memorandum, (a) no person owns of record or is known to
the Company to own beneficially any share of Common Stock, (b) no subscription,
warrant, option, convertible security, or other right (contingent or other) to
purchase or otherwise acquire equity securities of the Company is authorized or
outstanding and (c) there is no commitment by the Company to issue shares,
subscriptions, warrants, options, convertible securities, or other such rights
or to distribute to holders of any of its equity securities any evidence of
indebtedness or asset. Except as provided for in the Articles or as set forth
herein, the Company has no obligation (contingent or other) to purchase, redeem
or otherwise acquire any of its equity securities or any interest therein or to
pay any dividend or make any other distribution in respect thereof. Except as
set forth herein or in the Memorandum, there are no voting trusts or agreements,
stockholders agreements, pledge agreements, buy-sell agreements, rights of first
refusal, preemptive rights or proxies relating to any securities of the Company
(whether or not the Company is a party thereto). All of the outstanding
securities of the Company were issued in compliance with all applicable Federal
and state securities laws.
6.05 Litigation.
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(a) The Company is aware of a possible claim against
it by Software Publishers Association, relating to the alleged use of
unregistered software on the Company's PCs. The Company is in negotiations with
such association and believes the matter can be resolved without material
adverse consequence to the Company. Except for such action, there is no (a)
action, suit, claim, proceeding or investigation pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or its
directors, officers, or management, at law or in equity, or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (b) arbitration
proceeding relating to the Company pending under collective bargaining
agreements or otherwise or (c) governmental inquiry pending or, to the best of
the Company's knowledge, threatened against or affecting the Company (including
without limitation any inquiry as to the qualification of the Company to hold or
receive any license or permit), and, to the best knowledge of the Company, there
is no basis for any of the foregoing. Without waiving any applicable attorney-
client privilege, the Company has not received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or disadvantage
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which may be material to its business, prospects, financial condition,
operations, property or affairs. To the best knowledge of the Company, the
Company is not in default with respect to any order, writ, injunction or decree
known to or served upon the Company of any court or of any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
(b) The Company has written letters to a former
employee, Xxxxxxx X. Xxxxxxxx, Ph.D. and Xx. Xxxxxxxx'x new employer, SyStemix,
(i) reminding them of Xx. Xxxxxxxx'x duty to maintain strict confidentiality as
to the Company's trade secrets; and (ii) asking if there has been any breach of
this confidentiality obligation; and (iii) commenting that a new invention by
Systemix's appears to be derived from the Company's trade secrets. Systemix and
Xx. Xxxxxxxx have denied any use of the Company's trade secrets. The Company has
reserved its rights in this matter, but does not presently contemplate pursuing
this potential claim in the near future.
6.06 Financial Statements.
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The Company has furnished to the Purchasers the
Financial Statements. The Financial Statements are true and correct in all
material respects and have been prepared in accordance with generally accepted
accounting principles. The balance sheets included in the respective Financial
Statements accurately reflects the financial condition and all assets and
liabilities of the Company at the times referred to therein. The statements of
income and cash flows accurately reflect the operations of the Company for the
periods referred to therein. There are no undisclosed liabilities in the
Financial Statements.
6.07 No Convictions.
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During the past ten (10) years, none of the
directors, officers, or management of the Company have been arrested or
convicted of any material crime, including any felony (whether material or not),
have been indicted, have been bankrupt or an officer or director of a bankrupt
company (except for directors designated by venture capital investors), nor have
any of them been restricted in any way from bidding on contracts with the
government of the United States.
6.08 Brokers.
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Except for a fee payable to Key Investments, Inc., an
affiliate of Society Bank of Michigan, the Company has no knowledge of any
brokerage or finders fee due in conjunction with the transactions contemplated
by this Subscription Agreement.
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6.09 Subsidiaries.
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The Company has no subsidiaries. The Company does not
(i) own of record or beneficially, directly or indirectly: (A) any shares of
capital stock or securities convertible into capital stock of any corporation;
or (B) any participating interest in any partnership, joint venture or other
non-corporate business enterprise; or (ii) control, directly or indirectly, any
other entity.
6.10 Directors and Officers.
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The Memorandum sets forth the names of the directors
and officers of the Company, together with the title of each such person.
6.11 No Material Adverse Change.
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Since the date of the Most Recent Financial
Statements, (a) there has been no change in the assets, liabilities or financial
condition of the Company from that reflected in the Most Recent Financial
Statements, except for changes in the ordinary course of business which in the
aggregate have not been materially adverse and (b) none of the business,
prospects, financial condition, operations, property or affairs of the Company
has been materially adversely affected by any occurrence or development,
individually or in the aggregate, whether or not insured against.
6.11 Taxes.
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The Company has filed all tax returns, Federal,
state, county and local, required to be filed by it, and the Company has paid
all taxes shown to be due by such returns as well as all other taxes,
assessments and governmental charges which have become due or payable, including
without limitation all taxes which the Company is obligated to withhold from
amounts owing to employees, creditors and third parties. All such taxes with
respect to which the Company has become obligated pursuant to elections made by
the Company in accordance with generally accepted practice have been paid and
adequate reserves have been established for all taxes accrued but not yet
payable. The Federal income tax returns of the Company have never been audited
by the Internal Revenue Service. No deficiency assessment with respect to or
proposed adjustment of the Company's Federal, state, county or local taxes is
pending or, to the best of the Company's knowledge, threatened. There is no tax
lien, whether imposed by any Federal, state, county or local taxing authority,
outstanding against the assets, properties or business of the Company. Neither
the Company nor, to the Company's knowledge, any of its stockholders, has ever
filed consent pursuant to Section 341(f) of the Code, relating to collapsible
corporations.
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6.13 Employee Benefit Plans.
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To the knowledge of the Company, each of the
Company's employee benefit plans (and each related trust or insurance contract)
complies in form and in operation in all respects with the applicable
requirements of the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986, as amended. To the knowledge of the Company, all
required reports and descriptions have been filed or distributed appropriately
with respect to each employee benefit plan. There have been no prohibited
transactions with respect to any employee benefit plan. No fiduciary has any
liability for breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any employee
benefit plans. No charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand with respect to the administration or the
investment of the assets of any employee benefit plan (other than routine claims
for benefits) is pending or, to the Company's knowledge, threatened. The Company
and its directors and officers (and employees with responsibility for employee
benefits matters) have no knowledge of any basis for any such charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand.
6.14 Title to Properties.
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The Company has good and marketable title to its
properties and assets reflected in the Financial Statements or acquired by its
since the date of the Financial Statements (other than properties and assets
disposed of in the ordinary course of business since the date of the Financial
Statements), and all such properties and assets are free and clear of mortgages,
pledges, security interests, liens, charges, claims, restrictions and other
encumbrances, except for liens to secure payment of obligations reflected in the
Financial Statements and for current taxes not yet due and payable and minor
imperfections of title, if any, not material in nature or amount and not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company.
6.15 Leasehold Interests.
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Each lease or agreement to which the Company is a
party under which it is a lessee of any property, real or personal is a valid
and enforceable agreement without any material default of the Company thereunder
and, to the best of the Company's knowledge, without any default by the Company
of any material term thereunder; the Company has not been notified of any
default and has no reason to believe that it is in default of any term
thereunder. To the best of the Company's knowledge, no other party to any such
lease or agreement is in default of a material term thereunder. No event has
occurred and is continuing which, with due notice or lapse of time or both,
would constitute a default or event of default by the Company under any such
lease or agreement or, to the best of the Company's
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knowledge, by any other party thereto. The Company's possession of such
property has not been disturbed and, to the best of the Company's knowledge, no
claim has been asserted against the Company adverse to its rights in such
leasehold interests.
6.16 Insurance.
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The Company maintains as to its properties and
business, with financially sound and reputable insurers, insurance against such
casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated.
6.17 Other Agreements.
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With respect to each material contract to which the
Company is a party, the Company and, to the best of the Company's knowledge,
each other party thereto, have in all material respects performed all the
obligations required to be performed by them to date, have received no notice of
default and are not in default (with due notice or lapse of time or both) under
any material lease, agreement or contract now in effect to which the Company is
a party or by which it or its property may be bound. The Company has no present
expectation or intention of not fully performing all its obligations under each
such material lease, contract or other agreement and the Company has no
knowledge of any breach or anticipated breach by the other party to any contract
or commitment to which the Company is a party.
6.18 Patents, Trademarks, Etc.
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(a) Schedule 6.18, attached hereto, accurately sets
forth all material patents, patent rights, patent applications, trademarks,
trademark applications, service marks, service xxxx applications, trade names
and copyrights, and all material applications for such which are in the process
of being prepared, owned by or registered in the name of the Company, or of
which the Company is a licensor or licensee or in which the Company has any
right, and in each case a brief description of the nature of such right. The
Memorandum contains an accurate and complete description of all material
licenses. The Company is in compliance in all material respects with each of
such licenses. The Company owns or possesses adequate licenses or other rights
to use all patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets and know how (collectively, "Intellectual
Property") necessary to the conduct of its business as conducted, and no claim
is pending or, to the best of the Company's knowledge, threatened to the effect
that the operations of the Company infringe upon or conflict with the asserted
rights of any other person under any Intellectual Property, and, to the best
knowledge of the Company, there is no basis for any such claim (whether or not
pending or threatened). No claim is pending or threatened to the effect that any
such Intellectual Property owned or licensed by the Company, or which the
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Company otherwise has the right to use, is invalid or unenforceable by the
Company, or that the Company is not in compliance with any term or condition of
a license, and there is no basis for any such claim (whether or not pending or
threatened). The Company has not granted or assigned to any other person or
entity any right to manufacture, have manufactured, assemble or sell the
products or proposed products or to provide the services or proposed services of
the Company except as set forth in the Memorandum and Schedule 6.18.
(b) The Company has taken reasonable security
measures to protect the secrecy, confidentiality, and value of the Company's
trade secrets; any of their employees and any other persons who, either alone or
in concert with others, developed, invented, discovered, derived, programmed, or
designed these secrets, or who have knowledge of or access to information
relating to them, have entered into agreements protecting the confidentiality
thereof.
6.19 Proprietary Information of Third Parties.
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Except as set forth herein and in Section 6.05, to
the best of the Company's knowledge, no third party has claimed or has reason to
claim that any person employed by or affiliated with the Company has (a)
violated or may be violating any of the terms or conditions of his employment,
non-competition or nondisclosure agreement with such third party, (b) disclosed
or may be disclosing or utilized or may be utilizing any trade secret or
proprietary information or documentation of such third party or (c) interfered
or may be interfering in the employment relationship between such third party
and any of its present or former employees. No third party has requested
information from the Company which suggests that such a claim might be
contemplated. To the best of the Company's knowledge, no person employed by or
affiliated with the Company has employed or proposes to employ any trade secret
or any information or documentation proprietary to any former employer, and to
the best of the Company's knowledge, no person employed by or affiliated with
the Company has violated any confidential relationship which such person may
have had with any third party, in connection with the development, manufacture
or sale of any product or proposed product or the development or sale of any
service or proposed service of the Company, and the Company has no reason to
believe there will be any such employment or violation. To the best of the
Company's knowledge, none of the execution or delivery of this Subscription
Agreement, or the carrying on of the business of the Company as officers,
employees or agents by any officer, director or key employee of the Company, or
the conduct or proposed conduct of the business of the Company, will conflict
with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument under which any
such person is obligated.
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6.20 Compliance With Law.
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The Company has complied with all laws, rules,
regulations and orders applicable to its business, operations, properties,
assets, products and services, the violation of which would have a material
adverse effect upon the Company, and the Company has all necessary permits,
licenses and other authorizations required to conduct its business as it is now
conducted. There is no existing law, rule, regulation or order, and the Company
after due inquiry is not aware of any proposed law, rule, regulation or order,
whether Federal or state, which would prohibit or restrict the Company from, or
otherwise materially adversely affect the Company in, conducting its business,
in which it is now conducting business or in which it proposes to conduct
business, other than the customary governmental approvals required for medical
products. Without limiting the foregoing in any manner, the Company has complied
in all material respects with all applicable laws relating to the employment of
labor, including provisions relating to wages, hours, equal opportunity,
collective bargaining and the payment of Social Security and other taxes, with
the Employee Retirement Income Security Act of 1974, as amended, with the
Occupational Health and Safety Act, and with the Americans With Disabilities
Act. The Company is in full compliance with the Immigration Reform and Control
Act of 1986, as amended, and, to the best of the Company's knowledge, all key
employees who are not United States citizens are currently authorized under
United States immigration laws to hold United States employment and will
continue to have such employment authorization throughout the term of the Series
D Stock investment, and are otherwise in compliance with United States
immigration laws.
6.21 Loans and Advances.
------------------
The Company does not have any outstanding loans or
advances to any person and is not obligated to make any such loans or advances,
except as reflected on the Financial Statements, and except, in each case, for
advances to employees of the Company in respect of reimbursable business
expenses anticipated to be incurred by them in connection with their performance
of services for the Company.
6.22 Assumptions, Guaranties, Etc. of Indebtedness of
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Other Persons.
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Except as disclosed in the Financial Statements, the
Company has not assumed, guaranteed, endorsed or otherwise become directly or
contingently liable on any indebtedness of any other person (including, without
limitation, liability by way of agreement, contingent or otherwise, to purchase,
to provide funds for payment, to supply funds to or otherwise invest in the
debtor, or otherwise to assure the creditor against loss), except for guaranties
by endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.
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6.23 Governmental Approvals.
----------------------
Subject to the accuracy of the representations and
warranties of the Purchaser set forth in Section 5, no registration or filing
with, or consent or approval of or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance by the Company of this Agreement, the
issuance, sale and delivery of the Series D Stock or, upon conversion of the
Series D Stock, the issuance and delivery of the Conversion Shares, other than
(a) filings pursuant to state securities laws (all of which filings have been or
will be made by the Company) in connection with the sale of the Series D Stock
and (b) with respect to the Registration Rights as set forth in Exhibit A, the
registration of the shares covered thereby with the Commission and filings
pursuant to state securities laws.
6.24 Disclosure.
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The Company's Private Placement Memorandum dated
April 5, 1995 with respect to the Series D Stock (the "Memorandum"), contains
only true and accurate facts and representations, and does not contain any
untrue information and does not omit any material fact necessary to make the
statements contained therein not misleading. Neither this Subscription
Agreement, nor any Schedule or Exhibit to this Agreement, contains an untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading. None of the statements,
documents, certificates or other items prepared or supplied by the Company with
respect to the transactions contemplated hereby contains an untrue statement of
a material fact or omits a material fact necessary to make the statements
contained therein not misleading. As of the date hereof, no facts have come to
the attention of the Company which would, in its opinion, require the Company to
revise or amplify the Memorandum.
6.25 Offering of Shares.
------------------
The Offering is being made by the Company pursuant to
an exemption from the registration requirements of the Securities Act.
6.26 Transactions With Affiliates.
----------------------------
Except as set forth in the Memorandum, no director,
officer, employee or stockholder of the Company, or member of the family of any
such person, or any corporation, partnership, trust or other entity in which any
such person, or any member of the family of any such person, has a substantial
interest in or is an officer, director, trustee, partner or holder of more than
5% of the outstanding capital stock thereof, is a party to any transaction with
the Company, including any contract, agreement or other arrangement providing
for the employment of, furnishing of services by, rental of real or personal
property from or otherwise requiring payments to any such person or firm.
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6.27 Obsolescence.
------------
To the best of the Company's knowledge, there are no
new products, inventions, procedures, or methods of manufacturing or processing
that any competitors or other third parties have developed and which reasonably
could be expected to supersede or make obsolete any of the Company's products or
processes.
7. Compliance with Regulation D and Applicable State Securities
------------------------------------------------------------
Laws. The undersigned understands and agrees that the following restrictions
----
and limitations are applicable to its purchase of the Shares and any resales,
mortgages, pledges, hypothecations, or other transfers thereof, pursuant to
Regulation D under the Securities Act and applicable state securities laws:
a. The undersigned agrees that the Shares may not be
sold, mortgaged, pledged, hypothecated or otherwise transferred unless the
Shares are registered under the Securities Act and applicable state securities
laws or are exempt from registration thereunder.
b. A legend in substantially the following form will
be placed on the certificate(s) evidencing the Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, OR UNLESS AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
c. FOR CALIFORNIA RESIDENTS ONLY: THE SALE
-----------------------------
OF THE SECURITIES THAT IS THE SUBJECT OF THIS SUBSCRIPTION AGREEMENT HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS
AN EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO
THIS SUBSCRIPTION AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED OR AN EXEMPTION THEREFROM BEING AVAILABLE.
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8. Conditions to Obligations of the Purchasers. The
-------------------------------------------
following conditions have been satisfied:
a. The Restated Articles of Incorporation of the
Company, in the form previously delivered to each Purchaser, have been filed
with the Secretary of State of the State of Michigan;
b. The Company has received from other Purchasers
$5,000,004 for the purchase of Series D Shares;
c. The Company has delivered to the Purchaser the
opinion of counsel attached hereto as Exhibit B.
9. Board Observer Rights. Purchasers of Series D Preferred
---------------------
Stock who were not previously holders of capital stock of the Company ("New
Investors") shall have the following rights: a majority in interest of New
Investors shall have the right from time to time to designate one
representative, who shall be entitled to attend all meetings of the Board of
Directors, in a nonvoting observer capacity only. The Company will include such
representative in oral reports given by the Board and give such representative
copies of all materials that it provides to its directors including but not
limited to all materials delivered to directors outside of meetings; provided,
however, that such representative shall be reasonably acceptable to the Company
and shall enter into a confidentiality agreement acceptable to the Company.
Additionally, the New Investors shall have the rights to
information and inspection set forth in Sections 3.1 through 3.3 of the Amended
and Restated Investors Rights Agreement dated April 7, 1992 by and among the
Company and certain investors and shareholders of the Company.
10. Additional Sales of Series D Preferred Stock. The Company
--------------------------------------------
hereby agrees that following the completion of the Offering, it will not issue
and sell additional shares of Series D Stock at a purchase price per share of
less than the applicable conversion price then in effect with respect to the
Series D Stock.
11. Irrevocability; Binding Effect. The undersigned hereby
------------------------------
acknowledges and agrees that the subscription hereunder is irrevocable by the
undersigned, except as required by applicable law, and that this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors, legal representatives, and permitted assigns.
12. Modification. This Subscription Agreement shall not be
------------
modified or waived except by an instrument in writing signed by the party
against whom any such modification or waiver is sought.
13. Notices. A notice or other communication required or
-------
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail,
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return receipt requested, or delivered against receipt to the party to whom it
is to be given (a) if to the Company, at the address set forth above, or (b) if
to the undersigned, at the address set forth on the signature page hereof (or,
in either case, to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 13). Any notice or
other communication shall be deemed given at the time it is received at the
party's address.
14. Assignability. This Subscription Agreement and the rights,
-------------
interests and obligations hereunder are not transferable or assignable by the
undersigned, except to an affiliate of the undersigned who qualifies as an
"accredited investor," and the undersigned further agrees that the transfer or
assignment of the Shares shall be made only in accordance with all applicable
laws.
15. Applicable Law. This Subscription Agreement shall be
--------------
governed by and construed in accordance with the internal laws of the state of
Michigan without regard to its conflicts of laws principles.
16. Blue Sky Qualification. The undersigned's right to purchase
----------------------
Shares under this Subscription Agreement is expressly conditioned upon the
exemption from qualification of the offer and sale of the Shares from applicable
federal and state securities laws. The Company shall not be required to qualify
this transaction under the securities laws of any jurisdiction and, should
qualification be necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale contracted, in the
jurisdiction.
17. Confidentiality. The undersigned acknowledges and agrees
---------------
that any information or data it has acquired from or about the Company, not
otherwise properly in the public domain, was received in confidence. The
undersigned agrees not to divulge, communicate or disclose, except as may be
required by law or for the performance of this Subscription Agreement, or use to
the detriment of the Company or for the benefit of any other person or persons,
or misuse in any way, any confidential information of the Company, including any
scientific, technical, trade or business secrets of the Company and any
scientific, technical, trade or business materials that are treated by the
Company as confidential or proprietary, including, but not limited to, ideas,
discoveries, inventions, developments and improvements belonging to the Company
and confidential information obtained by or given to the Company about or
belonging to third parties.
18. Miscellaneous.
-------------
a. This Subscription Agreement, together with the
Supplemental Agreement dated March 29, 1995, and the Articles and the attached
stock registration rights, constitutes the entire agreement between the
undersigned and the Company with respect to the purchase and sale of the Series
D Shares, and supersedes all prior oral or written agreements and
understandings, if any, relating thereto. The terms and provisions of this
Subscription agreement may be waived, or
-16-
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.
b. The undersigned's representations and warranties
made in this Subscription Agreement shall survive the execution and delivery
hereof and of the Shares.
c. Each of the parties hereto shall pay its own fees
and expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such party) in connection with this Subscription Agreement and
the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
d. All pronouns and any variations thereof used
herein shall be deemed to be to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons referred to may require.
e. This Subscription Agreement may be executed in one
or more counterparts each of which shall be deemed an original, but all of which
shall together constitute one and the same instrument. Signatures may be
transmitted by facsimile.
f. Each provision of this Subscription Agreement
shall be considered separable and if for any reason any provision or provisions
hereof are determined to be invalid or contrary to applicable law, such
invalidity shall not impair the operation of or affect the remaining portions of
this Subscription Agreement, so long as the material economic benefits remain
enforceable.
g. Paragraph titles are for descriptive purposes only
and shall not control or alter the meaning of this Subscription Agreement as set
forth in the text.
IN WITNESS WHEREOF, the parties have executed and delivered this
Subscription Agreement.
COBE Laboratories, Inc.,
a Colorado Corporation
0000 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Fed. Taxpayer Identification No: 952403584
---------
Dated: May 26, 1995 By: /s/ Xx Xxxx
__________________ __________________________
Name: Xx Xxxx
________________________
Title: President, COBE BCT
_______________________
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SUBSCRIPTION ACCEPTED AND AGREED
this 30 day of May, 1995
__ ___
AASTROM BIOSCIENCES, INC.
By: /s/ R. Xxxxxxx Xxxxxxxxx
_________________________________________
R. Xxxxxxx Xxxxxxxxx, Ph.D.,
President and Chief Executive Officer
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