Exhibit 10.19
LIGHT SCIENCES ONCOLOGY, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated
as of October 6, 2005, is executed by and between LIGHT SCIENCES ONCOLOGY, INC.,
a Washington corporation (the "COMPANY"), LIGHT SCIENCES CORPORATION, a
Washington corporation ("LSC"), and the persons and entities listed on Schedule
A (collectively, the "PURCHASERS").
RECITALS
WHEREAS, each Purchaser desires to purchase, and the Company desires to
issue and sell to each Purchaser, the number of shares of Series A Preferred
Stock set forth opposite such Purchaser's name on Schedule A hereto (all such
shares for all Purchasers, collectively the "SHARES"), with the rights,
preferences, privileges, restrictions and limitations as set forth in the form
of Amended and Restated Articles of Incorporation of the Company, as amended,
attached hereto as Exhibit A (the "RESTATED ARTICLES"), at a purchase price of
$5.00 per Share (the "PURCHASE PRICE");
WHEREAS, prior to the Initial Closing (defined below) LSC is the sole owner
of the Company, and will derive a substantial indirect benefit from the
transaction contemplated by this Agreement; and
WHEREAS, the Company, LSC and Purchasers are entering into this Agreement
to reflect the terms and conditions with respect to the Purchasers' investment
in the Company represented by the Shares.
NOW, THEREFORE, in respect of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
SECTION 1. PURCHASE OF SHARES
1.1 On or prior to the Initial Closing Date (defined below), the Company
shall have authorized the sale and issuance of the Shares and the transactions
contemplated by this Agreement.
1.2 Subject to the terms and conditions of this Agreement, the Company
agrees to sell to the Purchasers at the Closing (defined below), and each
Purchaser agrees to purchase, severally and not jointly, from the Company at the
Closing, that number of Shares set forth opposite such Purchaser's name on
Schedule A for the purchase price of $5.00 per Share.
1.3 The Company will use the proceeds from the sale of the Shares for
general corporate purposes and transaction expenses and fees.
SECTION 2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closing. The closing of the sale and purchase of the Shares (the
"INITIAL CLOSING") shall take place at 10:00 a.m. Seattle Time on October 6,
2005, at the offices of Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx, or at such other time or place as the Company and the
Purchasers may mutually agree (such time and date are referred to as the
"INITIAL CLOSING DATE"). In the event there is more than one closing, the terms
"CLOSING" and "CLOSING DATE" shall apply to each such closing unless otherwise
specified.
After the Initial Closing, the Company may sell, on the same terms and
conditions as those contained in this Agreement, up to 2,955,011 additional
shares of Series A Preferred Stock (the "ADDITIONAL SHARES"), to one or more
purchasers (the "ADDITIONAL PURCHASERS") reasonably acceptable to the Company
and the Purchasers holding at least 50% of the then outstanding Shares, provided
that (i) such subsequent sale (or sales) is consummated prior to 45 days after
the Initial Closing Date, and (ii) each Additional Purchaser shall become a
party to this Agreement and the Ancillary Agreements, as defined below, by
executing and delivering a counterpart signature page to each of those
agreements. Exhibit A to this Agreement shall be updated to reflect the number
of Additional Shares purchased at each such Closing and the parties purchasing
such Additional Shares.
2.2 Delivery. At the Closing, subject to the terms and conditions hereof,
the Company will deliver to each Purchaser a certificate representing the number
of Shares to be purchased by such Purchaser, against payment of the purchase
price therefor in good funds by check, wire transfer made payable to the order
of the Company, cancellation of indebtedness or any combination of the
foregoing. In the event that payment by a Purchaser is made, in whole or in
part, by cancellation of indebtedness, then such Purchaser shall surrender to
the Company for cancellation at the Closing any evidence of indebtedness and
shall execute an instrument of cancellation in form and substance acceptable to
the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule (the "DISCLOSURE SCHEDULE")
furnished to each Purchaser identifying the section(s) hereof to which such
exception is applicable, which exceptions shall be deemed to be a part of the
representations and warranties as if made hereunder, the Company and LSC hereby
jointly and severally represent and warrant to each Purchaser as of the date of
this Agreement that:
3.1 Organization and Standing. The Company is a corporation duly organized
and validly existing under the laws of the State of Washington and has full
corporate power and authority to conduct its business as presently conducted and
to enter into and perform this Agreement and the Rights Agreement (as defined in
Section 6.1), the Voting Agreement (as defined in Section 6.1) and the ROFR
Agreement (as defined in Section 6.1) (collectively, the "ANCILLARY AGREEMENTS")
and to carry out the transactions contemplated by this Agreement and the
Ancillary Agreements. The Company is duly qualified or otherwise authorized to
do business as a foreign corporation or other organization and is in good
standing as such in every jurisdiction in which the failure so to qualify would
have a material adverse effect on the business, assets, liabilities (contingent
or otherwise), operations or results of operations of the
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Company (a "COMPANY MATERIAL ADVERSE EFFECT"). The Company has made available to
counsel for the Purchasers complete and accurate copies of the Articles of
Incorporation and By-laws of the Company, each as amended to date and presently
in effect, and the Company is not in default under, or in violation of, any
provision of such documents.
3.2 Subsidiaries, Etc. The Company does not have any Subsidiary and does
not own or control, directly or indirectly, any shares of capital stock of any
other corporation or any interest in any partnership, limited liability company,
joint venture or other non-corporate business enterprise. As used in this
Agreement, "SUBSIDIARY" means any corporation, partnership, trust, limited
liability company or other entity (i) in which the Company directly or
indirectly through one or more of its subsidiaries holds stock or other
ownership interests representing (a) more than 50% of the voting power of all
outstanding stock or ownership interests of such entity or (b) the right to
receive more than 50% of the net assets of such entity available for
distribution to the holders of outstanding stock or ownership interests upon a
liquidation or dissolution of such entity, or (ii) with respect to which the
Company directly or indirectly through one or more of its subsidiaries has the
right, pursuant to agreement or otherwise, to appoint 50% or more of the members
of the board of directors (or similar governing body).
3.3 Capitalization.
(A) The authorized capital stock of the Company (immediately
prior to the Initial Closing) consists of (i) 45,000,000 shares of
common stock, $0.001 par value per share (the "COMMON STOCK"), of
which 7,743,040 shares are issued, and (ii) 15,000,000 shares of
Preferred Stock, $0.001 par value per share, (x) 10,000,000 of which
were designated Series A Preferred Stock, none of which are issued or
outstanding, and (y) 5,000,000 of which remain undesignated. The
rights, preferences, privileges and restrictions of the Common Stock
and Series A Preferred Stock shall be as stated in the Restated
Articles.
(B) Section 3.3(B) of the Disclosure Schedule includes a
complete and accurate list, as of the date of this Agreement, of the
holders of capital stock of the Company (immediately prior to the
Initial Closing), showing the number of shares of capital stock, and
the class or series of such shares, held by each shareholder. All of
the issued and outstanding shares of capital stock of the Company (i)
have been duly authorized and validly issued and are fully paid and
nonassessable, (ii) have not been issued in violation of preemptive
rights, voting agreements or rights of first offer or refusal
applicable to the Company's capital stock (collectively, "PREEMPTIVE
RIGHTS") and (iii) have been offered, issued and sold by the Company
in compliance with all applicable federal and state securities laws.
(C) Section 3.3(C) of the Disclosure Schedule includes a
complete and accurate list, as of the date of this Agreement of: (i)
all stock option plans and other stock or equity-related plans of the
Company (the "COMPANY STOCK PLANS"), indicating for each Company Stock
Plan the number of shares of Common Stock issued to date under such
Plan, the number of shares subject to outstanding
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options under such Plan and the number of shares reserved for future
issuance under such Plan; and (ii) all holders of warrants or other
rights ("COMPANY WARRANTS") to purchase or acquire shares of capital
stock of the Company (other than outstanding options to purchase
shares of Common Stock under the Company Stock Plans ("COMPANY STOCK
OPTIONS")), indicating with respect to each Company Warrant the number
of shares of capital stock, and the class or series of such shares,
subject to such Company Warrant, the exercise price, the date of
issuance and the expiration date thereof. The Company has made
available to counsel for the Purchasers complete and accurate copies
of all Company Stock Plans, forms of all stock option agreements
evidencing Company Stock Options and all Company Warrants.
(D) Except as disclosed in Section 3.3(D) of the Disclosure
Schedule, (i) no subscription, warrant, option, convertible security
(including convertible debt), participation right or other right
(contingent or otherwise) to purchase or acquire any shares of capital
stock of the Company is authorized or outstanding, (ii) the Company
has no obligation (contingent or otherwise) to issue any subscription,
warrant, option, convertible security (including convertible debt) or
other such right, or to issue or distribute to holders of any shares
of its capital stock any evidences of indebtedness or assets of the
Company, (iii) the Company has no obligation (contingent or otherwise)
to purchase, redeem or otherwise acquire any shares of its capital
stock or any interest therein or to pay any dividend or to make any
other distribution in respect thereof, and (iv) there are no
outstanding or authorized stock appreciation, phantom stock or similar
rights with respect to the Company.
(E) Except for the Ancillary Agreements, there is no
agreement, written or oral, between the Company and any holders of its
securities, or, to the Company's knowledge, any written agreement
among any holders of its securities, relating to Preemptive Rights or
the sale or transfer (including without limitation agreements relating
to rights of first refusal, co-sale rights or "drag-along" rights),
registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or voting, of the capital stock of the Company.
3.4 Issuance of Shares. The issuance, sale and delivery of the Shares in
accordance with this Agreement, and the issuance and delivery of the shares of
Common Stock issuable upon conversion of the Shares (the "CONVERSION SHARES"),
have been duly authorized by all necessary corporate action on the part of the
Company. The Shares when issued, sold and delivered in accordance with the
provisions of this Agreement, and the Conversion Shares when issued in
accordance with the provisions of the Restated Articles, will be duly and
validly issued, fully paid and nonassessable, and will not be issued in
violation of any Preemptive Rights. On or prior to the Initial Closing, the
Company shall have reserved a sufficient number of shares of Common Stock for
issuance upon conversion of the Shares.
3.5 Authority for Agreement. The Company has full corporate power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party, and to perform its obligations hereunder and
thereunder. The execution, delivery and
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performance by the Company of this Agreement and each of the Ancillary
Agreements to which it is a party (including the issuance of the Conversion
Shares) have been duly authorized by all requisite corporate action by the
Company and, when executed and delivered by the Company, this Agreement and each
of the Ancillary Agreements will be the valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms.
3.6 No Conflict. The execution, delivery and performance of this Agreement
and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby by the Company will not (a) violate any
provision of the Restated Articles or Bylaws of the Company, (b) require on the
part of the Company any filing with, or any permit, order, authorization,
consent or approval of, any court, arbitrational tribunal, administrative agency
or commission or other governmental or regulatory authority or agency (each of
the foregoing is hereafter referred to as a "GOVERNMENTAL ENTITY"), except such
filings as shall have been made prior to and shall be effective on and as of the
Closing, and such filings required to be made after the Closing under applicable
federal and state securities laws, (c) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other arrangement to which
the Company is a party or by which the Company is bound or to which its assets
are subject, (d) result in the imposition of any Security Interest upon any
assets of the Company or (e) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or any of its properties
or assets. For purposes of this Agreement, "SECURITY INTEREST" means any
mortgage, pledge, security interest, encumbrance, charge, lien or similar right
(whether arising by contract or by operation of law).
3.7 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
Governmental Entity is required on the part of the Company in connection with
the offer, issuance, sale and delivery of the Shares, the issuance and delivery
of the Conversion Shares or the other transactions to be consummated at the
Closing, as contemplated by this Agreement and the Ancillary Agreements, except
such filings as shall have been made prior to and shall be effective on and as
of the Closing, and such filings required to be made after the Closing under
applicable federal and state securities laws. Based in part on the
representations made by each of the Purchasers in Section 4 of this Agreement,
the offer and sale of the Shares to each of the Purchasers will be in compliance
with applicable federal and state securities laws.
3.8 Litigation; Compliance. There is no action, suit or proceeding, or
governmental inquiry or investigation, pending, or, to the Company's knowledge,
any threat thereof, against the Company. There is no action, suit or proceeding,
or governmental inquiry or investigation, pending, or, to the Company's
knowledge, any threat thereof, against the Company, or any of its employees by
reason of the past employment relationships of any employees, in connection with
or arising from the past or presently proposed activities or business affairs of
the Company, or negotiations by the Company with possible investors in the
Company. The Company is not subject to any outstanding judgment, order or
decree. The Company has, in all material respects, complied with all laws,
regulations and orders applicable to its present business, including
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Pharmaceutical Laws, and has all material permits and licenses required thereby.
For purposes of this Agreement, "PHARMACEUTICAL LAW" shall mean any federal,
state, local or foreign law, statute, rule or regulation relating to the
development, commercialization and sale of pharmaceutical and biotechnology
products and devices, including all applicable regulations of the U.S. Food and
Drug Administration and comparable applicable foreign regulatory authorities.
3.9 Financial Statements. The Company has furnished to each of the
Purchasers a complete and true copy of (i) the unaudited balance sheet (the
"BALANCE SHEET") of the Company at the date of the Initial Closing (reflecting
the assets and liabilities of the Company immediately prior to the Initial
Closing), and (ii) an unaudited accounting of the use of funds received by the
Company since its inception and through the Initial Closing, in form acceptable
to the Purchasers (together with the Balance Sheet, the "FINANCIAL STATEMENTS").
The Financial Statements are in accordance with the books and records of the
Company, present fairly the financial condition and use of funds of the Company
at the dates and for the periods indicated and have been prepared in accordance
with United States generally accepted accounting principles ("GAAP")
consistently applied, except that they may not be in accordance with GAAP solely
to the extent that they lack footnote disclosures and are subject to normal
year-end audit adjustments. The Company does not have any material liabilities
except for liabilities shown on the Balance Sheet.
3.10 Taxes. The amount shown on the Balance Sheet as provision for taxes is
sufficient in all material respects for payment of all accrued and unpaid
federal, state, county, local and foreign taxes for all periods through the
Initial Closing Date. The Company has filed or has obtained presently effective
extensions with respect to all federal, state, county, local and foreign tax
returns which are required to be filed by it, such returns are complete and
accurate and all taxes shown thereon to be due have been timely paid with
exceptions not material to the Company. Federal income tax returns of the
Company have not been audited by the Internal Revenue Service, and no
controversy with respect to taxes of any type is pending or, to the Company's
knowledge, threatened. The Company has withheld or collected from each payment
made to its employees the amount of all taxes required to be withheld or
collected therefrom and has paid all such amounts to the appropriate taxing
authorities when due (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act
taxes). The Company has no knowledge of any liability of any tax to be imposed
upon its properties or assets as of the Closing that is not adequately provided
for.
3.11 Property and Assets. The Company has good and marketable title to, or
a valid leasehold interest in, all of its material properties and assets,
including all properties and assets reflected in the Balance Sheet, and none of
such properties or assets is subject to any Security Interest. The Company does
not own, and has not ever owned, any real estate.
3.12 Intellectual Property.
(A) The term "INTELLECTUAL PROPERTY ASSETS" means all
intellectual property owned or licensed by the Company in which the
Company has a proprietary interest, including without limitation:
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(1) the name of the Company, all assumed fictional business
names, trademarks, service marks, trade dress, logos and trade names, whether or
not registered, including all common law rights, and registrations and
applications for registrations thereof (collectively, "MARKS");
(2) all patents and patent applications (including divisions,
continuations, continuations-in-part, reissues, reexaminations and extensions
thereof) either granted or pending with a domestic, international or foreign
patent office or other governing body (collectively, "PATENTS");
(3) all registered and unregistered copyrights in both published
works and unpublished works including the content of proprietary computer
software and internet web sites in which the Company has rights (collectively,
"COPYRIGHTS"); and
(4) all know-how, trade secrets, confidential or proprietary
information, customer lists, software, technical information, data, compounds,
compositions of matter, formulas, process technology, plans, drawings and blue
prints that are not part of the public knowledge or literature and, to the
knowledge of the Company, that have not been used, divulged or appropriated
either for the benefit of any person or entity or to the detriment of the
Company (collectively, "TRADE SECRETS"), which are not the subject of Marks,
Patents or Copyrights.
(B) Section 3.12(B) of the Disclosure Schedule contains a
complete and accurate list of all material contracts or agreements to
which the Company or LSC is a party relating to the Intellectual
Property Assets, including all research and development licenses and
material transfer agreements (but excluding (i) any license implied by
the sale of a product, and (ii) shrink-wrap, click-wrap or other such
licenses in the ordinary course of business). Section 3.12(B) of the
Disclosure Schedule also lists clinical, formulation and manufacturing
agreements, and associated regulatory consulting service agreements,
to which the Company or LSC is a party relating to the Company's
proposed products. There are no outstanding disputes or disagreements
with respect to any such contract or agreement, nor has the Company
received any written threat thereof.
(C) No contract or agreement listed or required to be listed
in Section 3.12(B) of the Disclosure Schedule contains any provision
that would cause the terms of any such contract or agreement to become
invalid, be breached, or terminate as a result of any of the
transactions contemplated by this Agreement.
(D) The Intellectual Property Assets are all those necessary
for the operation of the business of the Company as currently
conducted and, to the knowledge of the Company, currently proposed to
be conducted in the reasonably foreseeable future (for purposes of
clarification, as used in this Section 3.12 the term "knowledge" means
actual knowledge without conducting any special inquiry). To the
Company's knowledge, except as noted in Section 3.12(D) of the
Disclosure Schedule, the Company is the sole owner or exclusive
licensee of all right, title and interest in and to each of the
Intellectual Property Assets, free and
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clear of all Security Interests, and has the exclusive right to use
and practice without payment to a third party all of the Intellectual
Property Assets for the operation of the business of the Company as
currently conducted and as currently proposed to be conducted in the
reasonably foreseeable future, other than in respect of licenses
listed in Section 3.12(B) of the Disclosure Schedule. All former and
current employees of the Company (and all other agents, consultants
and contractors of the Company who contributed to or participated in
the conception or development of the Intellectual Property Assets for
the Company) have executed written contracts or agreements with the
Company that assign to the Company all rights to any inventions,
improvements, discoveries or information relating to the business of
the Company, including without limitation all Intellectual Property
Assets owned, controlled by or in the possession of the Company. To
the knowledge of the Company, there is no unauthorized use,
infringement or misappropriation of any of the Intellectual Property
Assets by any third party, employee or former employee.
(E) Section 3.12(E) of the Disclosure Schedule contains a
complete and accurate list of all Patents.
(1) To the knowledge of the Company, all of the Patents that the
Company owns, or to which it has rights to pursuant to license agreements with
third parties, are currently in compliance with formal legal requirements
(including payment of required filing, examination and maintenance fees and
filing of required proofs of working or use). To the knowledge of the Company,
all of the Patents that the Company owns, or to which it has rights pursuant to
license agreements with third parties, are valid and enforceable.
(2) Except as otherwise indicated in Section 3.12(E) of the
Disclosure Schedule, no Patent is now involved in any interference proceeding,
reissue proceeding, reexamination proceeding, or opposition proceeding. The
Company has not received any written notice of any interfering patent or patent
application of any third party with respect to the Patents. To the Company's
knowledge, all of the Patents that Company owns and all of the Patents that it
has rights to pursuant to license agreements with third parties are being
prosecuted in full compliance with the duty of candor and good faith required by
the United States Patent & Trademark Office as described under Section 1.56 of
Title 37 of the Code of Federal Regulations and any similar requirement of any
corresponding foreign agencies.
(3) To the knowledge of the Company, except as otherwise
indicated in Section 3.12(E) of the Disclosure Schedule, (a) no Patent within
the Intellectual Property Assets is infringed or has been challenged or
threatened in writing in any way, and (b) none of the products manufactured or
sold or currently contemplated to be manufactured or sold, or any process or
know-how used or currently contemplated to be used, by the Company infringes or
has been alleged in writing to infringe any patent or other proprietary right of
any other person or entity. Neither the Company nor LSC has received any written
notices or written threats of infringement or conflict with the intellectual
property right of any third party, and to the Company's knowledge there is no
pending Proceeding by others that include any claim or allegation that the
Company is infringing any intellectual property right of any third party. As
used in this Section 3.12, "PROCEEDING" means any action, arbitration, audit,
examination, investigation, hearing, litigation, or suit (whether civil,
criminal, administrative, judicial or
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investigative, whether formal or informal and whether public or private)
commenced, brought, conducted or heard by or before, or otherwise involving, any
governmental body or arbitrator.
(4) Except as otherwise indicated in Section 3.12(E) of the
Disclosure Schedule, all right, title and interest in the issued patents and
pending patent applications within the Patents have been assigned to the Company
or LSC, as appropriate. To the knowledge of the Company, except as otherwise set
forth in the Disclosure Schedule there is no other entity or individual that has
any right, title or interest in any of the issued patents and pending patent
applications within the Patents other than the Company and its licensors, as
appropriate.
(F) Section 3.12(F) of the Disclosure Schedule contains a
complete and accurate list of all Marks.
(1) Except as set forth in Section 3.12(F) of the Disclosure
Schedule, all Marks have been registered with the United States Patent and
Trademark Office and, to the knowledge of the Company, are currently in
compliance with all formal Legal Requirements (including the timely
post-registration filing of affidavits of use and incontestability and renewal
applications). To the knowledge of the Company, all of the Marks are valid and
enforceable.
(2) To the knowledge of the Company, no Xxxx within the
Intellectual Property Assets is now involved in any opposition proceeding,
invalidation proceeding, or cancellation proceeding, and the Company has not
received any written threat of such action with respect to any of the Marks.
(3) To the knowledge of the Company, there is no potentially
interfering trademark or trademark application of any other person or entity.
(4) The Company has not received any written notice of any
challenge or threat to any Xxxx within the Intellectual Property Assets. To the
knowledge of the Company none of the Marks within the Intellectual Property
Assets used by the Company infringes any trade name, trademark or service xxxx
of any other person or entity, nor has the Company received any written notice
of any alleged infringement. To the knowledge of the Company, no Xxxx is
infringed by any other person or entity.
(5) All products and materials containing a Xxxx xxxx the proper
federal registration notice where permitted by law except where failure to
include such a notice would not be expected to have a Company Material Adverse
Effect.
(G) Currently, the Company has no ownership interest in any
registered Copyrights. There are no Copyrights which are material to
the business of the Company as currently conducted or as currently
proposed to be conducted in the reasonably foreseeable future.
(H) With respect to each Trade Secret:
(1) The Company has taken all reasonable precautions to protect
the secrecy, confidentiality and value of its Trade Secrets (including the
enforcement by the Company of a policy requiring each employee or contractor of
the Company who has access to,
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or contributes to or participates in the conception or development of, the
Intellectual Property Assets to execute proprietary information and
confidentiality agreements substantially in its standard form (or such other
form or forms containing substantially similar proprietary information and
confidentiality obligations), and all current and former employees and
contractors of the Company who had access to, contributed to or participated in
the conception or development of the Intellectual Property Assets have executed
such an agreement).
(2) The Company has the right (but not necessarily exclusive
right) to use the Trade Secrets. To the knowledge of the Company, no Trade
Secret (i) is subject to any adverse claim, (ii) has been challenged or
threatened in writing in any way, or (iii) infringes any intellectual property
right of any other person or entity.
3.13 Insurance. The Company has in full force and effect workers'
compensation insurance and insurance with respect to its properties and business
of the kinds and in the amounts not less than is customarily obtained by
corporations engaged in the same or similar business and similarly situated,
including, without limitation, insurance against loss, damage, fire, theft,
public liability, clinical trial liability and other risks.
3.14 Material Contracts and Obligations. Section 3.14 of the Disclosure
Schedule sets forth the following agreements to which the Company is a party or
by which it is bound (the "MATERIAL CONTRACTS"): (a) any agreement which
requires future expenditures by the Company in excess of $100,000 or which might
result in payments to the Company in excess of $100,000; (b) any employment and
consulting agreements, employee benefit, bonus, pension, profit-sharing, stock
option, stock purchase and similar plans and arrangements; (c) any distributor,
sales representative or similar agreement; (d) any agreement with any current or
former shareholder, officer or director of the Company, or any "affiliate" or
"associate" of such persons (as such terms are defined in the rules and
regulations promulgated under the Securities Act), including without limitation
any agreement or other arrangement providing for the furnishing of services by,
rental of real or personal property from, or otherwise requiring payments to,
any such person or entity; (e) any agreement under which the Company is
restricted from carrying on any business anywhere in the world; (f) any
agreement relating to indebtedness for borrowed money; (g) any agreement for the
disposition of a material portion of the Company's assets (other than for the
sale of inventory in the ordinary course of business); (h) any agreement
concerning research, development or testing of any product by or for the
Company; and (i) any agreement for the acquisition of the business or securities
or other ownership interests of another party. The Company has made available to
counsel for the Purchasers copies of the Material Contracts. Each such agreement
and contract is a legal, valid, and binding obligation of the Company and is in
full force and effect. Neither the Company, nor, to the Company's knowledge, any
other party thereto, is in default of any of its obligations under any Material
Contract.
3.15 Compliance. The Company is not in violation of any term of any
mortgage, indenture, contract, agreement or instrument to which the Company is a
party or by which it is bound, or, to the Company's knowledge, of any provision
of any state, federal or foreign judgment, decree, order, statute, rule or
regulation applicable to or binding upon the Company, which violation has had or
is reasonably likely to have a Company Material Adverse Effect. To the Company's
knowledge, none of the employees of the Company is in violation of any term of
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any contract or covenant (either with the Company or with another entity)
relating to employment, patents, assignment of inventions, proprietary
information disclosure, non-competition or non-solicitation.
3.16 Employees.
(A) All current and former employees of the Company have
executed and delivered a Proprietary Information and Inventions
Agreement in substantially the form provided to counsel for the
Purchasers (a "PIIA") and all of such agreements are in full force and
effect. All current and former consultants of the Company that have
performed development work or provided technical services to the
Company or have otherwise had access to confidential or proprietary
information of the Company have executed and delivered a PIIA to the
Company, and all of such agreements are in full force and effect.
(B) The Company is not aware that any key employee of the
Company has plans to terminate his or her employment relationship with
the Company. The Company has complied in all material respects with
all applicable laws relating to wages, hours, equal opportunity,
collective bargaining, workers' compensation insurance and the payment
of social security and other taxes. None of the employees of the
Company is represented by any labor union, and there is no labor
strike or other labor trouble pending with respect to the Company or,
to the Company's knowledge, threatened. To the Company's knowledge, no
employee of the Company is obligated under any contract or subject to
any judgment, decree or administrative order that would conflict or
interfere with (i) the performance of the employee's duties as an
employee, director or officer of the Company, or (ii) the Company's
business as conducted or proposed to be conducted.
3.17 Books and Records. The minute books of the Company provided to counsel
to the Purchasers contain complete and accurate records of all corporate actions
of its shareholders and its Board of Directors and committees thereof, whether
taken at a meeting or by written consent. The stock ledger of the Company
provided to counsel to the Purchasers is complete and accurate and reflects all
issuances, repurchases and cancellations, and to the knowledge of the Company
all transfers, of shares of capital stock of the Company, other than the Shares.
3.18 Environmental Matters.
(A) The Company has complied with all applicable
Environmental Laws (as defined below). There is no pending or, to the
Company's knowledge, threatened civil or criminal litigation, written
notice of violation, formal administrative proceeding, or
investigation, inquiry or information request by any Governmental
Entity, relating to any Environmental Law involving the Company. For
purposes of this Agreement, "ENVIRONMENTAL LAW" shall mean any
federal, state, local or foreign law, statute, rule or regulation or
the common law relating to the environment or occupational health and
safety, including any statute, regulation, administrative decision or
order pertaining to (i) treatment, storage, disposal, generation and
transportation of industrial, toxic or hazardous materials or
11
substances or solid or hazardous waste; (ii) air, water and noise
pollution; (iii) groundwater and soil contamination; (iv) the release
or threatened release into the environment of industrial, toxic or
hazardous materials or substances, or solid or hazardous waste,
including emissions, discharges, injections, spills, escapes or
dumping of pollutants, contaminants or chemicals; (v) the protection
of wild life, marine life and wetlands, including all endangered and
threatened species; (vi) storage tanks, vessels, containers, abandoned
or discarded barrels and other closed receptacles; (vii) health and
safety of employees and other persons; and (viii) manufacturing,
processing, using, distributing, treating, storing, disposing,
transporting or handling of materials regulated under any law as
pollutants, contaminants, toxic or hazardous materials or substances,
or oil or petroleum products or solid or hazardous waste. As used
above, the terms "release" and "environment" shall have the meaning
set forth in the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA").
(B) To the knowledge of the Company, the Company has no
liabilities or obligations arising from the release of any Materials
of Environmental Concern (as defined below) into the environment. For
purposes of this Agreement, "MATERIALS OF ENVIRONMENTAL CONCERN" shall
mean any chemicals, pollutants or contaminants, hazardous substances
(as such term is defined under CERCLA), solid wastes and hazardous
wastes (as such terms are defined under the Resource Conservation and
Recovery Act), toxic materials, oil or petroleum and petroleum
products or any other material subject to regulation under any
Environmental Law.
(C) The Company is not a party to or bound by any court
order, administrative order, consent order or other agreement between
the Company and any Governmental Entity entered into in connection
with any legal obligation or liability arising under any Environmental
Law.
(D) The Company is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment,
storage or disposal facility that has been used by the Company.
3.19 No Solicitation or Advertisement. Neither the Company nor any person
acting on its behalf has engaged, in connection with the offering or sale of the
Shares, in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
3.20 Securities Act Registration. Assuming that the representations and
warranties of each of the Purchasers contained herein are true, it is not
necessary in connection with the offer, sale and delivery of the Shares in the
manner contemplated by this Agreement to register the Shares under the
Securities Act or under applicable state securities or Blue Sky laws regulating
the issuance or sale of securities.
3.21 United States Real Property Holding Company. The Company is not now
and has never been a "United States real property holding corporation," as
defined in Section 897(c)(2) of the
12
Internal Revenue Code of 1986, as amended, and Treasury Regulation Section
1.897-2(b), and the Company has filed with the Internal Revenue Service all
statements, if any, with its United States income tax returns, which are
required under Treasury Regulation Section 1.897-2(h).
3.22 Benefit Plans. Except as set forth in Section 3.22 of the Disclosure
Schedule, neither the Company nor any Plan Affiliate (as hereinafter defined)
has in the past five (5) years maintained, sponsored, adopted, made
contributions to or obligated itself to make contributions to or to pay any
benefits or grant rights under or with respect to any Employee Benefit Plan (as
hereinafter defined), whether written, oral, voluntary or pursuant to a
collective bargaining agreement or law, which could give rise to or result in
the Company or such Plan Affiliate having any debt, liability, claim or
obligation of any kind or nature, whether accrued, absolute, contingent, direct,
indirect, known, perfected or inchoate or otherwise and whether or not due or to
become due. Correct and complete copies (or, if oral, descriptions) of all
Employee Benefit Plans have been made available to counsel for the Purchasers.
As used herein, "PLAN AFFILIATE" means any person or entity with which the
Company constitutes all or part of a controlled group of corporations, a group
of trades or businesses under common control or an affiliated service group, as
each of those terms are defined in Section 414 of the Code. As used herein,
"EMPLOYEE BENEFIT PLAN" means collectively, each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, health or other medical, life, disability or other insurance, supplemental
unemployment benefit, profit sharing, pension, retirement, supplemental
retirement or other employee benefit plan, program, agreement or arrangement,
whether written or unwritten, formal or informal, maintained or contributed to
or required to be contributed to by any person for the benefit of any employee
or former employee of the Company or its affiliates or their dependants or
beneficiaries, as well as the compensation practices and policies regarding
vacations, sick leaves, leaves of absence and all perquisites of employment
other than those mandated by any legal requirement and shall include to the
extent applicable to Company, without limitation, "EMPLOYEE PENSION BENEFIT
Plans" (as defined in Section 3(2) of ERISA, "Employee Welfare Benefit Plan" (as
defined in Section 3(1) of ERISA) and "Multi-employer Plan" (as defined in
section 3(37) of ERISA) ), but shall exclude any such arrangements or
perquisites that do not exceed, individually or in the aggregate, $300 per month
per any particular person. As used herein, "ERISA" means the Employee Retirement
Income Security Act of 1974 and any law of any foreign jurisdiction of similar
import. The Company has made all "matching" contributions required pursuant to
the terms of the Company's 401(k) plan or promised to employees (in writing or
orally).
3.23 Foreign Corrupt Practices Act; Etc. The Company and its officers,
directors, employees and agents are in compliance with the Foreign Corrupt
Practices Act of 1977, as amended, or any rules and regulations thereunder, or
any similar laws of any foreign jurisdiction. To the Company's knowledge no
governmental or political official in any country is or has been employed by,
acted as a consultant to or held any beneficial ownership interest in the
Company. The Company and its officers, directors, employees and agents are in
compliance with and have not violated the U.S. money laundering laws or
regulations, the U.S. Bank Secrecy Act, as amended by the USA Patriot Act of
2001 (including any recordkeeping or reporting requirements thereunder), or the
anti-money laundering laws or regulations of any jurisdiction.
3.24 Certain Matters Related to Third Parties. The Company has never
intentionally aided, facilitated or furthered (whether by action or inaction),
nor intentionally participated in,
13
any effort, scheme or arrangement intended to (or having the foreseeable effect
of) misleading or defrauding any creditor or shareholder of the Company or any
creditor or shareholder of any third party. The Company has never received any
direct or indirect indication, whether written or oral, that the Securities and
Exchange Commission (or any other Governmental Entity) is investigating the
Company in connection with its role in any such effort, scheme or arrangement.
3.25 Brokers. Except as set forth in Section 3.25 of the Disclosure
Schedule, the Company has not engaged any brokers, finders or agents and has not
incurred, and will not incur, directly or indirectly, any liability for
brokerage or finder's fees or agents' commissions or any similar charges in
connection with this Agreement and the transactions contemplated hereby.
3.26 Disclosure. Neither this Agreement nor the Ancillary Agreements, the
schedules and exhibits hereto and thereto (including without limitation the
representations and warranties set forth herein and therein) or other written
statements or certificates made or delivered in connection herewith contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances in which they were made. Except as set forth in this
Agreement or the Schedules or Exhibits attached hereto, or in the due diligence
materials previously provided to special counsel for the Purchasers, there is no
fact which the Company has not disclosed to the Purchasers or their counsel in
writing and of which the Company is aware that has or could reasonably be
expected to have a Company Material Adverse Effect. The financial projections
and other estimates provided to the Purchasers were prepared by the Company's
management based on assumptions of fact and opinion as to future events which
management, at the date of the projections, believed to be reasonable.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby severally represents and warrants to the Company as
follows:
4.1 Investment. Such Purchaser is acquiring the Shares, and the Conversion
Shares, for his, her or its own account for investment, not as a nominee or
agent, and not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the same;
and, except as contemplated by this Agreement and the Exhibits hereto, such
Purchaser has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
Such Purchaser is an "accredited investor" as defined in Rule 501(a) under the
Securities Act.
4.2 Authority. Such Purchaser has full power and authority to enter into
and to perform this Agreement and the Ancillary Agreements in accordance with
their terms, and each such agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms. Any Purchaser which is a
corporation, limited liability company, partnership or trust represents that it
has not been organized, reorganized or recapitalized specifically for the
purpose of investing in the Company.
4.3 Experience. Such Purchaser has carefully reviewed the representations
concerning the Company contained in this Agreement, and has made detailed
inquiry concerning the Company, its business and its personnel; the officers of
the Company have made available to
14
such Purchaser any and all written information which he, she or it has requested
and have answered to such Purchaser's satisfaction all inquiries made by such
Purchaser; such Purchaser believes it has received all the information it
considers necessary or appropriate for deciding whether to purchase the Shares
and the Conversion Shares; and such Purchaser has sufficient knowledge and
experience in finance and business that he, she or it is capable of evaluating
the risks and merits of his, her or its investment in the Company and such
Purchaser is able financially to bear the risks thereof.
4.4 Restricted Shares. Such Purchaser understands that (a) the Shares and
the Conversion Shares have not been registered under the Securities Act by
reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 506
promulgated under the Securities Act, (b) the Shares and the Conversion Shares
must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration and (c) the Company
will make a notation on its transfer books to such effect. Such Purchaser
represents that it is familiar with Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
Such Purchaser acknowledges that the Shares have not been registered under the
Act or qualified under any applicable blue sky laws in reliance, in part, on the
representations and warranties herein.
4.5 Legends. Such Purchaser understands that any certificates evidencing
the Shares may bear the following legends, in addition to any legends required
by federal or state securities laws or any of the Ancillary Agreements:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE, INCLUDING A LOCK UP PERIOD IN THE EVENT OF A
PUBLIC OFFERING, AS SET FORTH IN AN INVESTORS RIGHTS AGREEMENT, A COPY OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH
RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES."
4.6 Brokers. Such Purchaser has not engaged any brokers, finders or agents
and has not incurred, and will not incur, directly or indirectly, any liability
for brokerage or finder's fees or agents' commissions or any similar charges in
connection with this Agreement and the transactions contemplated hereby.
4.7 Certain Purchasers. If any Purchaser is not a United States person,
such Purchaser hereby represents that such Purchaser is satisfied as to the full
observance of the laws of such Purchaser's jurisdiction in connection with any
invitation to subscribe for the Shares,
15
including without limitation (i) the legal requirements of such Purchaser's
jurisdiction for the offer, purchase and sale of the Shares, (ii) any foreign
exchange restrictions applicable to such offer, purchase and sale, (iii) any
governmental or other consents that may need to be obtained and (iv) the income
tax and other tax consequences, if any, which may be relevant to the offer,
purchase, holding, redemption, sale or transfer of the Shares. Such Purchaser's
exercise and payment for, and such Purchaser's continued beneficial ownership
of, the Shares will not violate any applicable securities or other laws of such
Purchaser's jurisdiction.
SECTION 5. INDEMNIFICATION
5.1 Indemnification. The Company and LSC shall jointly and severally
indemnify and hold the Purchasers and their respective Affiliates, successors
and assigns harmless from and against any and all liability, loss, damage or
expense (collectively, "LOSSES") suffered or incurred as a result of a breach of
the representations and warranties contained in Section 3. Each Purchaser,
severally and not jointly, shall indemnify and hold the Company and its
Affiliates, successors and assigns harmless from and against any and all
liability, loss, damage or expense suffered or incurred as a result of a breach
of such Purchaser's representations and warranties contained in Section 4. For
purposes of this Section 5.1, "Affiliates" means any Person (defined below) who
is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended; in addition, any partner
or member, as the case may be, of a Purchaser or an Affiliate of a Purchaser
shall be deemed to be an Affiliate of such Purchaser. For purposes of this
Section 5.1, "Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, governmental authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
5.2 Indemnification Limitations.
(A) The Company and LSC shall not be required to provide
indemnification under this Section 5 with respect to Losses otherwise
payable pursuant to Section 5.1 until such time as all such Losses, in
the aggregate for all claims, shall aggregate to more than $20,000
(but once such amount is exceeded the indemnitees shall be entitled to
recover from the first dollar without regard to such $20,000
deductible).
(B) The maximum liability of the Company and LSC
collectively under this Section 5 shall be the aggregate amount
received by the Company from the Purchasers pursuant to Section 1.2.
(C) The maximum liability of any Purchaser under this
Section 5 shall be the aggregate amount invested in the Company by
such Purchaser pursuant to Section 1.2.
(D) In seeking any claim for indemnification pursuant to
this Section 5, with respect to any breach of a representation or
warranty by the Company the Purchasers shall first seek recovery from
the Company, and the
16
Purchasers shall be permitted to bring any such claim against LSC only
after the Purchasers have reasonably exhausted such claims against the
Company.
(E) Except for equitable remedies and injunctive and other
judicial relief to enforce the provisions hereof or to preserve the
status quo pending resolution, and any claims of Losses involving
fraud, gross negligence or willful misconduct, the sole remedy of any
party with respect to any breach of a representation or warranty in
this Agreement shall be the indemnity provided in this Section 5.
SECTION 6. CONDITIONS TO CLOSING
6.1 The obligation of each of the Purchasers to purchase Shares at the
Closing is subject to the fulfillment, or the waiver by such Purchaser, of each
of the following conditions on or before such Closing:
(A) The representations and warranties contained in Section
3 shall be accurate on and as of the Closing Date, with the same
effect as though such representation and warranty had been made on and
as of that date.
(B) The Company shall have performed and complied in all
material respects with all agreements and conditions contained in this
Agreement required to be performed or complied with by the Company
prior to or at the Closing.
(C) The Purchasers participating in the Initial Closing
shall have received an opinion from Xxxxxxx Coie, LLP, counsel for the
Company, dated as of the Initial Closing Date only, addressed to the
Purchasers, and satisfactory in form and substance to Purchasers.
(D) The Company, each of the Purchasers and the other
parties identified therein shall have entered into the Investors
Rights Agreement in the form attached hereto as Exhibit B (the "RIGHTS
AGREEMENT").
(E) The Company, each of the Purchasers and the other
parties identified therein shall have entered into the Voting
Agreement in the form attached hereto as Exhibit C (the "VOTING
AGREEMENT") and, conditioned upon the Initial Closing, the Company and
its shareholder shall have elected to the Company's Board of Directors
the persons identified in the Voting Agreement as the initial
directors designated under such Voting Agreement.
(F) The Company, each "Founder" named therein and each
Purchaser shall have entered into a Right of First Refusal and Co-Sale
Agreement in the form attached hereto as Exhibit D (the "ROFR
AGREEMENT").
(G) The Company shall have delivered to the Purchasers
participating in the Initial Closing: (i) the Restated Articles, as in
effect as of the Initial Closing Date, certified by the Secretary of
State of the State of Washington;
17
(ii) certificates, as of a recent practicable date, as to the
corporate existence of the Company issued by the Secretary of State of
the State of Washington; (iii) a certificate of the Secretary or
Assistant Secretary of the Company, dated as of the Initial Closing
Date, certifying as to (a) the Bylaws of the Company, (b) the
signatures and titles of the officers of the Company executing this
Agreement or any of the Ancillary Agreements, and (c) resolutions of
the Board of Directors and shareholders of the Company, authorizing
and approving all matters in connection with this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and
thereby; and (iv) a certificate, executed by the President of the
Company, dated the Closing Date, certifying to the fulfillment of the
conditions specified in Section 6.1(A), (B), (L) and (M).
(H) All corporate and other proceedings in connection with
the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory in
substance and form to the Purchasers and their counsel, and the
Purchasers and their counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may
reasonably request.
(I) The Company will have paid or made adequate arrangements
for payment in accordance with the provisions of Section 7.3, the fees
and disbursements of Essex Woodlands Health Ventures VI, L.P ("ESSEX")
and its counsel at the Initial Closing.
(J) The Purchasers shall have committed to purchase at least
$35,000,000 of Shares in the aggregate at the Initial Closing.
(K) All authorizations, approvals, or permits, if any, of
any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance
and sale of the Shares shall be duly obtained and effective as of the
Closing Date.
(L) The Company, LSC and the other parties identified
therein shall have entered into and delivered (i) the Asset Transfer
Agreement, (ii) the Exclusive License Agreement, (iii) the Sublicense
Agreement, and (v) a letter agreement regarding occupancy of premises,
each in the forms attached hereto as Exhibit E (collectively, the
"ASSET AGREEMENTS"), and shall have entered into and delivered all
documents, agreements and instruments attached to the Asset Agreements
or required to be delivered thereunder (together with the Asset
Agreements, the "ASSET DOCUMENTS").
(M) All of the transfers and assignments of assets and
rights, and all grants of licenses, sublicenses, subleases and other
interests contemplated by the Asset Documents shall have been
completed in substance and form satisfactory to the Purchasers and
their counsel, and each Purchaser and its counsel shall have received
copies of the Asset Documents and related documentation as they may
request.
18
(N) Each person now employed by the Company with access to
confidential and proprietary information of the Company shall have
entered into a PIIA in substantially the form provided to counsel for
the Purchasers, and each of Xxxx Xxxxxxx, SyShi Wang and Xxx Xxxxxxx
shall have entered into a PIIA containing noncompetition and
nonsolicitation provisions in substance and form satisfactory to
counsel for the Purchasers.
6.2 The obligation of the Company to sell Shares to the Purchasers under
this Agreement is subject to fulfillment, or the waiver by the Company, of the
following condition on or before any Closing:
(A) The representations and warranties of the Purchasers
participating in such Closing contained in Section 4 shall be accurate
on and as of such Closing Date, with the same effect as though such
representations and warranties had been made on and as of that date.
(B) All documents and instruments incident to the
transactions contemplated by this Agreement shall be satisfactory in
substance and form to the Company and its counsel, and the Company and
its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably
request.
(C) All authorizations, approvals, or permits, if any, of
any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance
and sale of the Shares shall be duly obtained and effective as of the
Closing Date.
(D) The necessary parties other than the Company shall have
entered into the Rights Agreement, the Voting Agreement and the ROFR
Agreement.
(E) Each Purchaser participating in such Closing shall have
delivered the purchase price specified in Section 1.2.
SECTION 7. MISCELLANEOUS
7.1 This Agreement, and the rights and obligations of each Purchaser
hereunder, may be assigned by such Purchaser to (a) any person or entity to
which Shares held by such Purchaser are transferred by such Purchaser, or (b) to
any affiliate, partner, member, shareholder or subsidiary of such Purchaser,
and, in each case, such transferee shall be deemed a "Purchaser" for purposes of
this Agreement; provided, that such assignment of rights shall be contingent
upon the transferee providing a written instrument to the Company certifying its
status as an "accredited investor" and notifying the Company of such transfer
and assignment and agreeing in writing to be bound by the terms of this
Agreement and the Ancillary Agreements. As used herein, the term "affiliate"
means, as to the entity in question, any person or entity that directly or
indirectly controls, is controlled by or is under common control with the entity
in question, and the term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of an
entity whether through ownership of voting
19
securities, by contract, or otherwise. Neither the Company nor LSC may assign or
delegate its rights or obligations under this Agreement without the prior
written consent of the holders of at least a majority of the Shares then held by
all Purchasers. Except as otherwise provided herein, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the respective
successors, assigns, heirs, executors, and administrators of the parties hereto.
7.2 All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Closings of the transactions
contemplated hereby.
7.3 Each party to the Agreement will pay its own expenses in connection
with the transactions contemplated by this Agreement, whether or not the
transactions are consummated, provided, that if the transactions are consummated
the Company shall pay the fees and disbursements of Essex and its counsel in
connection with the due diligence, negotiation, drafting of, and closing of the
transactions contemplated by, this Agreement and the Ancillary Agreements, not
to exceed $200,000. In addition, after the Closing the Company will pay the
reasonable fees and disbursements (a) of a single counsel for the Purchasers in
connection with any subsequent amendment, waiver or consent of or under this
Agreement, the Ancillary Agreements or any related document or agreement
initiated by the Company, and (b) of any Purchaser's counsel in connection with
successful enforcement of this Agreement of any of the Ancillary Agreements or
any related document or agreement.
7.4 The Company, LSC and each Purchaser will indemnify and save the other
parties harmless from and against any and all claims, liabilities or obligations
with respect to investment banking, brokerage or finders' fees or commissions,
or consulting fees (collectively, "Fees") in connection with the transactions
contemplated by this Agreement asserted by any person on the basis of any
agreement, statement or representation alleged to have been made by such
indemnifying party. Notwithstanding the foregoing, the Company shall indemnify
and save LSC harmless from and against any and all claims, liabilities or
obligations with respect to Fees of Larkspur Capital in connection with the
issuance and sale of the Shares pursuant to this Agreement, up to the amount of
such Fees as is disclosed in Section 3.25 of the Disclosure Schedule..
7.5 The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. Any provision of this Agreement held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.
7.6 This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington and the laws of the United States applicable
therein (in each case without giving effect to any choice or conflict of laws
provision or rule that would cause the application of the laws of any other
jurisdiction) and shall be treated in all respects as a Washington contract. Any
action, suit or proceeding arising out of or relating to this Agreement shall be
brought in the state courts of the State of Washington located in King County,
or, if it has or can acquire jurisdiction, any Federal court located in such
State and County, and EACH OF THE PARTIES HERETO, AFTER CONSULTING WITH OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY SUBMITS TO THE
20
EXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES TRIAL BY JURY, IN EACH CASE IN
CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby in the courts of the State of Washington or the United
States of America, in each case located in King County, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such matter brought in any such court has been brought in an
inconvenient forum.
7.7 All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be deemed delivered (a) three business
days after being sent by registered or certified mail, return receipt requested,
postage prepaid, (b) one business day after being sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery or
(c) upon delivery when sent by facsimile (with confirmation of receipt), in each
case to the intended recipient as set forth below:
If to the Company:
Light Sciences Oncology, Inc.
00000 XX Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
or at such other address as may have been furnished in writing by the Company to
the other parties hereto, with a copy to:
Xxxxxxx Coie, LLP
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to LSC or a Purchaser, at its address set forth on its signature page or
Schedule A, as applicable, or at such other address as may have been furnished
in writing by such party to the Company, with a copy to its legal counsel set
forth on the signature page or Schedule A, if any.
Any party may give any notice, request, consent or other communication
under this Agreement using any other than set forth in clauses (a), (b) and (c)
above (including, without limitation, personal delivery, messenger service,
telecopy, first class mail or electronic mail), but no such notice, request,
consent or other communication shall be deemed to have been duly given unless
and until it is actually received by the party for whom it is intended. Any
party may change the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section.
21
7.8 This Agreement and the Ancillary Agreements (and the schedules and
exhibits hereto and thereto) contain the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings, written or oral.
7.9 This Agreement may be amended or terminated and the observance of any
term of this Agreement may be waived with respect to all parties to this
Agreement (either generally or in a particular instance and either retroactively
or prospectively), with the written consent of the Company and the holders of at
least a majority of the Shares then held by all Purchasers. Notwithstanding the
foregoing, this Agreement may not be amended or terminated and the observance of
any term hereunder may not be waived (a) with respect to any Purchaser without
the written consent of such Purchaser unless such amendment, termination or
waiver applies to all Purchasers in the same fashion, or (b) with respect to LSC
without the written consent of LSC. The Company shall give prompt written notice
of any amendment or termination hereof or waiver hereunder to any party hereto
that did not consent in writing to such amendment, termination or waiver. Any
amendment, termination or waiver effected in accordance with this Section 7.9
shall be binding on all parties hereto, even if they do not execute such
consent.
7.10 The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Except as set forth in this Agreement, no
failure or delay by any party in exercising any right, power, or privilege under
this Agreement will operate as a waiver of the right, power, or privilege, and
no single or partial exercise of any right, power, or privilege will preclude
any other or further exercise of the right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law (a) no claim or right arising out of this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing, (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given and (c)
no notice to or demand on one party will be deemed to be a waiver of any
obligation of that party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
7.11 Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural, and vice versa.
7.12 This Agreement may be executed in any number of counterparts,
including by facsimile copy, each of which shall be deemed to be an original,
and all of which shall constitute one and the same document.
7.13 The section headings are for the convenience of the parties and in no
way alter, modify, amend, limit or restrict the contractual obligations of the
parties. Any reference in this Agreement to a particular section or subsection
shall refer to a section or subsection of this Agreement, unless specified
otherwise.
7.14 No announcement regarding any Purchaser in a press release,
conference, advertisement, announcement, professional or trade publication, mass
marketing materials or otherwise to the general public may be made without the
prior consent of such Purchaser. No
22
announcement regarding the Company or LSC in a press release, conference,
advertisement, announcement, professional or trade publication, mass marketing
materials or otherwise to the general public may be made without the prior
consent of the Company or LSC, as applicable. Notwithstanding the foregoing, as
soon as practicable but in no event more than sixty days after the Closing, the
Company and LSC may issue a press release, and may at all times post a notice on
each of their respective websites, in each case disclosing that the Purchasers
and LSC have invested in the Company, provided, that (a) neither the release nor
the notice discloses any of the financing terms other than the aggregate
combined amount invested and the type of security issued, and (b) the final form
of the release and the notice is approved in advance in writing by the holders
of at least a majority of the Shares held by the Purchasers; provided that no
such press release or notice refer to Xxxxxxx & Xxxxxxx Development Corporation
("JJDC") except with the prior written consent of JJDC granted or withheld by
JJDC in the exercise of its sole discretion. Any Purchaser may at any time post
a notice on its website that includes information about the Company, LSC and/or
the financing that was or is contained in the press release or website notice of
the Company pursuant to the preceding sentence; provided that if such notice is
in a form different than the press release, it shall not include any reference
to JJDC except with the prior written consent of JJDC granted or withheld by
JJDC in the exercise of its sole discretion. All obligations under this Section
7.14 shall terminate upon the earlier of the effective date of a Qualified IPO
(as defined in the Rights Agreement) or the consummation of a Change of Control
(as defined in the Rights Agreement).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
23
IN WITNESS WHEREOF, the parties have executed this Series A Preferred Stock
Purchase Agreement as of the date first set forth above.
THE COMPANY: LIGHT SCIENCES ONCOLOGY, INC.,
a Washington corporation
By: /s/ Xxxx Xxxxxxx
------------------------------------
Its: CEO
LSC: LIGHT SCIENCES CORPORATION,
a Washington Corporation
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Its: CEO
PURCHASERS: ESSEX WOODLANDS HEALTH
VENTURES FUND VI, L.P.
By: Essex Woodlands Health Ventures VI,
L.P.
Its: General Partner
By: Essex Woodlands Health Ventures VI,
L.L.C.
Its: General Partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Xx. Xxxx Xxxxxxx, Managing Director
XXXXX STREET V, L.P.
By: Xxxxx Street Partners, LLC
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, Ph.D., Partner
XXXXXXX & XXXXXXX
DEVELOPMENT CORPORATION,
By: /s/ Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx, Vice President
Xxxxxxx & Xxxxxxx Development
Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx and Xxxxx Xxxxxxx
With a copy to:
Xxxxxxx & Xxxxxxx
Law Department
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxx
With a further copy to:
Ropes & Xxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxxxxx Xxxxx
CDIB CAPITAL INVESTMENT AMERICA, LTD.
By: /s/ Hsing-Xxxx Xx
------------------------------------
Hsing-Xxxx Xx, Director
/s/ Xxxxxx Xxxxxxxxx
----------------------------------------
XXXXXX XXXXXXXXX
/s/ Xxxx-Xxxxx Xxx
----------------------------------------
XXXX-XXXXX XXX
/s/ Xxxxx X. Xxxxxx
----------------------------------------
XXXXX X. XXXXXX
SCANDINAVIAN LIFE SCIENCE VENTURE TWO KB
By: /s/ Xxxxxx Xxxx Xxxxxxxx
------------------------------------
Its: Senior Partner
MEDICON VALLEY CAPITAL TWO KB
By: /s/ Xxxxxx Xxxx Xxxxxxxx
------------------------------------
Its: Senior Partner
MEDICON VALLEY CAPITAL II K/S
By: /s/ Xxxxxx Xxxx Xxxxxxxx
------------------------------------
Its: Senior Partner
NOVO A/S
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Its: Chief Executive Officer
NSV PARTNERS INSTITUTIONAL, LP
By: New Science Ventures, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. X. Xxxxx
------------------------------------
Its: Chief Financial Officer
NSV PARTNERS IX (LSO), LP
By: New Science Ventures, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. X. Xxxxx
------------------------------------
Its: Chief Financial Officer
/s/ Xxxxxxx Xxx
----------------------------------------
XXXXXXX XXX
SCHEDULE A
SCHEDULE OF PURCHASERS
FIRST CLOSING - OCTOBER 6, 2005
Number of Shares Aggregate Purchase
Purchaser Name and Address Purchased Price
-------------------------- ---------------- -----------------------
ESSEX WOODLANDS HEALTH VENTURES FUND VI, L.P. 3,200,000 $16,000,000
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to (which shall
not constitute notice):
Xxxxx & XxXxxxxx LLP
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
XXXXX X. XXXXXX 1,424,989 $750,000 in cash and
00000 Xxxxxxxxx 00xx Xx. conversion and
Bellevue, Wa. 98006 cancellation of all
convertible promissory
notes, in the aggregate
amount of $6,374,945
XXXXX STREET V, L.P. 1,000,000 $5,000,000
0 X Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Atttn: Xxxxx Xxxxxx
Fax: __________________
CHINA DEVELOPMENT INDUSTRIAL BANK, INC. 400,000 $ 2,000,000
Xx. 000, Xxxxxxx Xxxx Xxxx Xxxxxxx 0,
Xxxxxx 000, Xxxxxx
Attn: Ita Lu
Fax: x000.0.0000.0000
XXXXXX XXXXXXXXX 200,000 $ 1,000,000
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000 0000
XXXX-XXXXX XXX 20,000 $ 100,000
F3, No. 28, Xxxxx Xxxx North Road,
Xxxxxxx 0, Xxxx 00,
Xxxxxx 000 Xxxxxx
Fax: __________________
XXXXXXX & XXXXXXX DEVELOPMENT CORPORATION 800,000 $ 4,000,000
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx and Xxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to (which shall
not constitute notice):
Xxxxxxx & Xxxxxxx
Law Department
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
and a further copy to (which shall
not constitute notice):
Ropes & Xxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxx Xxxxx
Fax: (000) 000-0000
SECOND CLOSING - DECEMBER 8, 2005
Number of Shares Aggregate Purchase
Purchaser Name and Address Purchased Price
-------------------------- ---------------- -----------------------
SCANDINAVIAN LIFE SCIENCE VENTURE TWO KB 1,645,404 $ 8,227,020
Birger Xxxxxxxxxx 00
XX-000 00 Xxxxxxxxx
Xxxxxx
Attn: Xxxxxx Xxxx Xxxxxxxx
Fax: __________________
MEDICON VALLEY CAPITAL TWO KB 463,064 $ 2,315,320
Birger Xxxxxxxxxx 00
XX-000 00 Xxxxxxxxx
Xxxxxx
Attn: Xxxxxx Xxxx Xxxxxxxx
Fax: __________________
MEDICON VALLEY CAPITAL II K/S 231,532 $ 1,157,660
Birger Xxxxxxxxxx 00
XX-000 00 Xxxxxxxxx
Xxxxxx
Attn: Xxxxxx Xxxx Xxxxxxxx
Fax: __________________
THIRD CLOSING - DECEMBER 12, 2005
Number of Shares Aggregate Purchase
Purchaser Name and Address Purchased Price
-------------------------- ---------------- -----------------------
NOVO A/S 2,000,000 $10,000,000
Xxxxxxxxxxxx
0000 Xxxxxxxxx
Xxxxxxx
Attn: Xxxxxx Xxxxxxx
Fax: x00 0000 0000
NSV PARTNERS INSTITUTIONAL, LP 708,000 $ 3,540,000
New Science Ventures, LLC
000 Xxxxxxx Xxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx XX Xxxxx, CFO
NSV PARTNERS IX (LSO), LP 532,000 $ 2,660,000
New Science Ventures, LLC
000 Xxxxxxx Xxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx XX Xxxxx, CFO
ESSEX WOODLANDS HEALTH VENTURES FUND VI, L.P. 800,000 $ 4,000,000
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to (which shall
not constitute notice):
Xxxxx & XxXxxxxx LLP
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
XXXXXXX XXX 5,000 $ 25,000
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
EXHIBIT A
RESTATED ARTICLES
EXHIBIT B
RIGHTS AGREEMENT
EXHIBIT C
VOTING AGREEMENT
EXHIBIT D
ROFR AGREEMENT
EXHIBIT E
FORM OF ASSET AGREEMENTS
LIGHT SCIENCES ONCOLOGY, INC.
AMENDMENT NO. 1 TO
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this
"AMENDMENT") dated as of December 8, 2005, is executed by and among LIGHT
SCIENCES ONCOLOGY, INC., a Washington corporation (the "COMPANY"), LIGHT
SCIENCES CORPORATION, a Washington corporation ("LSC"), and the persons and
entities listed on Schedule A to the Agreement (defined below) (the
"PURCHASERS").
WHEREAS, the Company, LSC and the Purchasers have previously entered into
that Series A Preferred Stock Purchase Agreement (the "AGREEMENT") dated as of
October 6, 2005; and
WHEREAS, the Company, LSC and the Purchasers desire to amend the Agreement
to provide for the issuance and sale of additional shares of the Company's
Series A Preferred Stock through December 31, 2005.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the parties hereto agree as follows:
1. The second paragraph of Section 2.1 of the Agreement is hereby amended
and restated in its entirety to read as follows:
"After the Initial Closing, the Company may sell, on the same terms
and conditions as those contained in this Agreement, up to 6,955,011
additional shares of Series A Preferred Stock (the "ADDITIONAL SHARES"), to
one or more purchasers (the "ADDITIONAL PURCHASERS") reasonably acceptable
to the Company and the Purchasers holding at least 50% of the then
outstanding Shares, provided that (i) such subsequent sale (or sales) is
consummated prior to December 31, 2005, and (ii) each Additional Purchaser
shall become a party to this Agreement and the Ancillary Agreements, as
defined below, by executing and delivering a counterpart signature page to
each of those agreements. Exhibit A to this Agreement shall be updated to
reflect the number of Additional Shares purchased at each such Closing and
the parties purchasing such Additional Shares."
2. This Amendment shall be governed by and construed in accordance with the
laws of the State of Washington and the laws of the United States applicable
therein (in each case without giving effect to any choice or conflict of laws
provision or rule that would cause the application of the laws of any other
jurisdiction).
3. This Amendment may be executed in any number of counterparts, including
by facsimile copy, each of which shall be deemed to be an original, and all of
which shall constitute one and the same document.
4. In all respects not inconsistent with the terms and provisions of this
Amendment, the Agreement is hereby ratified, adopted, approved and confirmed.
5. If any term, provision, covenant or restriction of this Amendment is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment, and of the Agreement, shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
* * *
2
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
THE COMPANY: LIGHT SCIENCES ONCOLOGY, INC.,
a Washington corporation
By: /s/ Xxxx Xxxxxxx
------------------------------------
Its: CEO
LSC: LIGHT SCIENCES CORPORATION,
a Washington corporation
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Its: CEO
PURCHASERS:
ESSEX WOODLANDS HEALTH
VENTURES FUND VI, L.P.
By: Essex Woodlands Health Ventures VI,
L.P.
Its: General Partner
By: Essex Woodlands Health Ventures VI,
L.L.C.
Its: General Partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Xx. Xxxx Xxxxxxx, Managing Director
XXXXX STREET V, L.P.
By: Xxxxx Street Partners, LLC
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, Ph.D., Partner
SIGNATURE PAGE TO AMENDMENT NO. 1 TO
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
CHINA DEVELOPMENT
INDUSTRIAL BANK, INC.
By:
------------------------------------
Its:
-----------------------------------
/s/ Xxxxxx Xxxxxxxxx
----------------------------------------
XXXXXX XXXXXXXXX
/s/ Xxxx-Xxxxx Xxx
----------------------------------------
XXXX-XXXXX XXX
/s/ Xxxxx X. Xxxxxx
----------------------------------------
XXXXX X. XXXXXX
SIGNATURE PAGE TO AMENDMENT NO. 1 TO
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
