Exhibit 10.3
EXECUTION COPY
SCRIPTGEN PHARMACEUTICALS, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
AGREEMENT, dated the 19th day of April, 1995, by and among SCRIPTGEN
PHARMACEUTICALS, INC., a Delaware corporation (the "Company") with its principal
place of business at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and each
of the entities and individuals severally listed on the Schedule of Initial
Purchasers attached hereto (collectively, the "Initial Purchasers" and
individually, an "Initial Purchaser"), such other entities as become party to
this Agreement pursuant to Section 10.1 hereto (collectively, the "Subsequent
Purchasers," and individually, a "Subsequent Purchaser", and together with the
Initial Purchasers, collectively the "Purchasers", and individually, a
"Purchaser"), and for purposes of Sections 7.12 and 8.3 only, Xxxxxx X. Xxxxxxx
("Bologna") and Xxxxx Xxxxxxxx ("Xxxxxxxx").
WHEREAS, the Company desires to issue and sell, and the Purchasers desire
to purchase, certain securities of the Company, upon the terms and conditions
set forth herein; and
WHEREAS, included in such securities are securities to be issued by the
Company as a result of the extension to the Company by certain of the Initial
Purchasers of an aggregate of $2,500,000 principal amount of bridge loans (the
"Bridge Loans") between September 7, 1994 and February 27, 1995.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
conditions herein contained, the parties hereto agree as follows:
SECTION I
Authorization and Sale of the Shares
1.1. Authorization of the Shares. The Company has, or before the Initial
Closing (as hereinafter defined) will have, authorized the sale and issuance of
9,700,000 shares of its Series B Preferred Stock, par value $.01 per share (the
"Series B Preferred Stock"), such class of stock having the rights,
restrictions, privileges and preferences as set forth in the Restated
Certificate of Incorporation of the Company (the "Certificate of Incorporation")
attached to this Agreement as Exhibit 1.1. The 6,579,086 shares of Series B
Preferred Stock being sold to the Purchasers hereunder, including the 2,500,000
shares of Series B Preferred Stock being issued to certain of the Initial
Purchasers in repayment of the principal amount of the Bridge Loans and the
79,086 shares of Series B Preferred Stock being issued to such Initial
Purchasers in repayment of the interest accrued on the Bridge Loans, are
referred to herein as the "Series B Preferred Shares", or the "Shares".
1.2. Initial Closing. Subject to the terms and conditions hereof and in
reliance upon the representations, warranties and agreements contained herein,
the Company will issue and sell to each of the Initial Purchasers, severally and
not jointly, and each of the Initial Purchasers will purchase from the Company
at the Initial Closing (as defined below), the number of shares of Series B
Preferred Stock set forth opposite such Initial Purchaser's name on the Schedule
of Initial Purchasers attached hereto (the "Schedule of Initial Purchasers")
under the column labeled "Shares of Series B Preferred Stock", for the aggregate
purchase price set forth opposite such Initial Purchaser's name on the Schedule
of Initial Purchasers under the column labeled "Total Investment." The closing
of the purchase and sale of the Series B Preferred Shares to the Initial
Purchasers (the "Initial Closing"), including the delivery to the Initial
Purchasers by the Company of the certificates evidencing all Series B Preferred
Shares being purchased, shall take place immediately following the execution and
delivery of this Agreement at the office of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("Ropes & Xxxx'x Offices") on April 19, 1995,
or at such other time and place as shall be mutually agreed upon by the parties
(the "Initial Closing Date").
1.3. Subsequent Closings. Subject to the terms and conditions hereof and
in reliance upon the representation and warranties and agreements contained
herein, the Company will issue and sell to each Subsequent Purchaser, severally
and not jointly, and each Subsequent Purchaser will purchase from the Company,
the number of shares of Series B Preferred Stock, (which in the aggregate shall
not exceed 2,500,000 shares of Series B Preferred Stock) set forth below each
Subsequent Purchaser's name on the counterpart of this Agreement executed by
such Subsequent Purchaser. The purchase and sale of Series B Preferred Stock to
the Subsequent Purchasers shall occur at one or more closings (each a
"Subsequent Closing", together with the Initial Closing, the "Closings" and each
a "Closing") to be held at Ropes & Gray's Offices at a time and on a date to be
agreed upon by the Company and the Subsequent Purchasers participating in such
Subsequent Closing (each a "Subsequent Closing Date", and together with the
Initial Closing Date, each a "Closing Date").
1.4. Delivery. At each Closing, the Company shall deliver to each
Purchaser certificates in such denominations and registered on the books of the
Company in such names as such Purchaser requests, representing the number of
Series B Preferred Shares to be purchased by such Purchaser from the Company,
against payment at the Closing, in the case of the Initial Purchasers, of the
amount set forth opposite such Initial Purchaser's name in the column labeled
"Total Investment" on the Schedule of Initial Purchasers, and, in the case of
the Subsequent Purchasers, of an amount equal to the number of Series B Shares
to be purchased multiplied by $1.00. Payment for certain of the Series B
Preferred Shares shall be made by the cancellation of the Bridge Loan
indebtedness (both principal and accrued interest), if any, of the Company to
such Purchaser, as set forth under the column labeled "Bridge Loan Conversion"
on the Schedule of Initial Purchasers and, at the option of the Purchaser, by
check or wire transfer, or any combination thereof, for the remainder of any
amount to be paid to the Company.
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SECTION 2
Representations and Warranties of the Company
Except as provided herein or as set forth on the "Schedule of Exceptions"
delivered to each Purchaser prior to the execution hereof and attached hereto
(such Schedule of Exceptions to be updated prior to each Closing), the Company
hereby represents and warrants to each Purchaser as follows:
2.1. Organization and Standing: Articles and By-Laws. The Company is a
corporation duly organized and validly existing and in good standing under the
laws of its state of organization and is qualified to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification, except where the failure to so qualify
would not have a material adverse effect upon the business, operations or
prospects of the Company. The Company has the requisite corporate power to own
properties owned by it and to conduct business as now being conducted by it and
as contemplated by it and possesses all governmental and other permits, licenses
and other authorizations to own its properties as now owned and to conduct its
business as now conducted. The Company has furnished counsel to the Purchasers
with true, correct and complete copies of its Certificate of Incorporation,
By-Laws and all amendments to each to date.
2.2. Corporate Power. The Company has all requisite corporate power to
enter into this Agreement and each of the Exhibits hereto, and will have at each
Closing Date all requisite corporate power to sell the Series B Preferred Shares
and to carry out and perform its obligations under the terms of this Agreement.
2.3. Subsidiaries. The Company has no subsidiaries and does not own of
record or beneficially any capital stock or equity interest or investment in any
corporation, association or business entity.
2.4. Capitalization. Immediately prior to the Closing, the Company's
authorized capital stock will consist of (a) 20,000,000 shares of Common Stock,
$.01 par value ("Common Stock"), of which (i) 3,419,171 shares will be issued
and outstanding immediately prior to the Closing, (ii) 6,403,325 shares has been
reserved for issuance upon conversion of the outstanding shares of the Company's
Series A Preferred Stock, $.01 par value (the "Series A Preferred Stock"), (iii)
153,000 shares are set aside for issuance upon the exercise of warrants and
other stock purchase rights for Series A Preferred Stock and the conversion
thereof into Common Stock, (iv) 6,579,086 shares will be reserved for issuance
upon conversion of the Series B Preferred Shares to be issued hereunder, (v)
920,579 shares are set aside for issuance upon exercise of stock options and
other stock purchase rights, heretofore or hereafter to be granted, (vi)
2,579,086 shares for issuance upon conversion of the Convertible Promissory
Notes evidencing the Bridge Loans, (which notes will be repaid pursuant to
section 1.1), and (vii) 1,285,250 shares are set aside for issuance upon
exercise of other stock options and purchase rights which may be granted
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to employees and consultants of the Company, as approved by the Company's Board
of Directors, and (b) 16,400,000 shares of Preferred Stock, (1) 6,700,000 of
which have been designated Series A Preferred Stock, of which 6,403,325 are
outstanding as of the Closing, and (2) 6,579,086 of which have been designated
Series B Preferred Stock and will be outstanding after consummation of the
transactions contemplated hereby. All the aforesaid issued and outstanding
shares of Series A Preferred Stock and Common Stock has been, duly authorized
and validly issued, fully paid and nonassessable, and owned of record and
beneficially by the stockholders of the Company and in the amounts set forth in
the Schedule of Exceptions, and has been offered, issued, sold and delivered by
the Company in compliance with applicable Federal and state securities laws. The
Schedule of Exceptions sets forth a complete and accurate list of all holders of
the capital stock of the Company, including options and warrants to purchase
shares of the Company's capital stock, and the class and number of shares, or
shares issuable upon exercise, as the case may be, held by each such holder.
There are no outstanding preemptive, conversion or other rights or agreements
granted or issued by or binding on the Company for the purchase or acquisition
of, or with respect to, any shares of its capital stock. No stockholder has
granted the Company options or other rights to purchase any shares of capital
stock of the Company from such stockholder. Neither the offer, issuance or sale
of the Series B Preferred Shares nor the consummation of any transaction
contemplated hereby will result in a change in the price or number of any
securities of the Company outstanding at the Closing under anti-dilution
provisions contained in or affecting any such securities. The Company holds no
shares of its capital stock in its treasury.
2.5. Authorization. All corporate action on the part of the Company, its
directors and stockholders necessary for the authorization, execution, delivery
and performance by the Company of this Agreement and each of the Exhibits
hereto, and the consummation of the transactions contemplated herein and
therein, and for the authorization, issuance and delivery of the Series B
Preferred Shares and the shares of Common Stock issuable upon conversion of the
Series B Preferred Shares has been taken or will be taken prior to the Closing.
This Agreement and each of the Exhibits hereto are valid and binding obligations
of the Company, enforceable against the Company in accordance with its
respective terms. The execution, delivery and performance by the Company of this
Agreement and each of the Exhibits hereto and compliance herewith and therewith
and the issuance and sale of the Series B Preferred Shares and the issuance of
Common Stock upon conversion of the Series B Preferred Shares will not (a)
result in any violation of, and will not conflict with, or result in a breach of
any of the terms of, or constitute a default under, the Company's Certificate of
Incorporation or By-Laws, as amended, any mortgage, indenture, agreement,
instrument, judgment, decree, order, rule or regulation or other restriction to
which the Company is a party or by which it, or any of its assets is bound or
(relying in part on the Purchaser's representations and warranties as set forth
in Section 4) any provision of state or Federal law to which the Company is
subject, or (b) result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company
pursuant to any such term or (c) result in the suspension, revocation,
impairment, forfeiture or non-renewal of any permit, license, authorization or
approval applicable to the Company's operations or any of its assets or
properties. The Series B Preferred Shares, when
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issued in compliance with the provisions of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable; will be free of any
liens or encumbrances; and will have the rights, privileges and preferences as
set forth in the Certificate of Incorporation. The shares of Common Stock
issuable upon conversion of the Series B Preferred Shares have been duly and
validly reserved and are not subject to any preemptive rights or rights of first
refusal and, upon issuance, will be duly authorized, validly issued, fully paid
and nonassessable.
2.6. Financial Information. Attached hereto as Exhibits 2.6A, 2.6B and
2.6C, respectively, are true copies of: (a) the audited balance sheet of the
Company as at December 31, 1993, together with audited statements of
operations, shareholders equity and cash flows of the Company for the year then
ended (collectively, the "Audited Financial Statements"); and (b) the unaudited
balance sheet of the Company as at December 31, 1994, and the unaudited balance
sheet of the Company as at February 28, 1995 (the "Balance Sheet"), together
with unaudited statements of operations, shareholders' equity and cash flows of
the Company for the 12-month and two-month periods then ended (collectively, the
"Unaudited Financial Statements", and together with the Audited Financial
Statements, the "Financial Statements"). Each of the Audited Financial
Statements and the Unaudited Financial Statements present fairly the financial
position and results of operations of the Company at the dates and for the
periods to which they relate, in accordance with generally accepted accounting
principles consistently applied throughout and across the periods involved
(except as may otherwise be disclosed in the Audited Financial Statements and
the Unaudited Financial Statements) and show all liabilities of the Company
required to be recorded thereon in accordance with generally accepted accounting
principles as at the dates thereof, subject, in the case of the Unaudited
Financial Statements, to normal year-end adjustments.
2.7. Absence of Undisclosed Liabilities. The Company has no material
liabilities (fixed or contingent, including without limitation any tax
liabilities due or to become due) which are not fully reflected or provided for
on the Balance Sheet. The Company does not know of any such material liability
of any nature, direct or indirect, contingent or otherwise, or in any amount not
adequately reflected or reserved against in the Balance Sheet.
2.8. Absence of Certain Changes. At all times since December 31, 1994 up
to and including the Closing, there has not been any event or condition of any
character which has materially adversely affected the Company's business,
operations or financial condition, including but not limited to:
(a) any material adverse change in the condition, operating results, assets,
liabilities or business of the Company from that shown on the Financial
Statements;
(b) any damage, destruction or loss of any of the properties or assets of the
Company (whether or not covered by insurance) materially adversely affecting the
assets, properties, financial condition, operating results, prospects, business
or plans of the Company;
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(c) any waiver by the Company of a valuable right or of a debt owed to it;
(d) any material change or material amendments to a contract or arrangement by
which the Company or any of its assets or properties is bound or subject;
(e) any declaration, setting aside or payment or other distribution in respect
of any of the Company's capital stock, or any direct or indirect redemption,
purchase or other acquisition of any of such stock by the Company; or
(f) any labor trouble.
2.9. Taxes. The Company has filed or will file within the time prescribed
by law (including extensions of time approved by the appropriate taxing
authority) all tax returns and reports required to be filed with the United
States Internal Revenue Service and with The Commonwealth of Massachusetts and
the State of Delaware and (except to the extent that the failure to file would
not have a material adverse effect on the condition or operations of the
Company) with all other jurisdictions where such filing is required by law; and
the Company has paid, or made adequate provision in the Financial Statements for
the payment of, all taxes, interest, penalties, assessments or deficiencies (i)
shown to be due or claimed to be due on or in respect of such tax returns and
reports or (ii) on the income, profits, property or business of the Company. The
Company knows of (i) no other tax returns or reports which are required to be
filed which have not been so filed and (ii) no unpaid assessment for additional
taxes for any fiscal period or any basis therefor. The Company's Federal income
tax returns have not been audited by the Internal Revenue Service.
2.10. Outstanding Debt. Except for the Bridge Loans and as reflected on
the Balance Sheet, the Company has no outstanding indebtedness for borrowed
money and is not a guarantor or otherwise contingently liable for any
indebtedness for borrowed money (including, without limitation, liability by way
of agreement, contingent or otherwise, to purchase, provide funds for payment,
supply funds or otherwise invest in any debtor or otherwise to insure any
creditor against loss). There exists no default under the provisions of any
instrument evidencing any such indebtedness or otherwise or of any agreement
relating thereto, including, without limitation, those included or referred to
in the Schedule of Exceptions and Balance Sheet. No officer, director or
stockholder of the Company or any of their relatives or affiliates, is indebted
to the Company in an amount in excess of $5,000 per person or entity.
2.11. Contracts: Insurance. The Company has no currently existing
contract, obligation, agreement, plan, arrangement, commitment or the like
(written or oral) of any material nature (involving more than $10,000 in any
year or $50,000 over the life of such contract, obligation, agreement, plan,
arrangement, or commitment, either individually or in the aggregate if such
contracts, obligations, agreements, plans, arrangements or commitments are of a
similar nature or with the same party) including without limitation the
following:
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(a) Employment, bonus or consulting agreements, pension, profit sharing,
deferred compensation, stock bonus, retirement, stock option, stock purchase,
phantom stock or similar plans, including agreements evidencing rights to
purchase securities of the Company and agreements among stockholders and the
Company;
(b) Loan or other agreements, notes, indentures, or instruments relating to or
evidencing indebtedness for borrowed money, or mortgaging, pledging or granting
or creating a lien or security interest or other encumbrance on any of the
Company's property or any agreement or instrument evidencing any guaranty by the
Company of payment of performance by any other person;
(c) Agreements with dealers, sales representatives, brokers or other
distributors, jobbers, advertisers or sales agencies;
(d) Agreements with any labor union or collective bargaining organization or
other labor agreements;
(e) Any contract or series of contracts with the same person for the furnishing
or purchase of machinery, equipment, goods or services, including, without
limitation, agreements with processors and subcontractors;
(f) Any indenture, agreement, or other document (including private placement
brochures) relating to the sale or repurchase of shares of the Company's capital
stock;
(g) Any joint venture contract or arrangement or other agreement involving a
sharing of profits or expenses to which the Company is a party;
(h) Agreements expressly limiting the freedom of the Company to compete in any
line of business or in any geographic area or with any person;
(i) Agreements providing for disposition of the business, assets or shares of
the Company, agreements of merger or consolidation to which the Company is a
party or letters of intent with respect to the foregoing;
j) Letters of intent or agreements with respect to the acquisition of the
business, assets or shares of any other business;
(k) Insurance policies;
(l) Assignments, licenses or other agreements with respect to any intangible
property (including, without limitation, any patent, trademark, trade name,
copyright, know-how, trade secret, proprietary right or confidential
information);
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(m) Any other contract, instrument, commitment, plan, agreement or arrangement,
a copy of which would be required to be filed with the Securities and Exchange
Commission (the "Commission") as an exhibit to a registration statement on Form
S-1 if the Company were registering securities under the Securities Act of
1933, as amended (the "Securities Act").
The Company has complied with all the material provisions of all said
contracts, obligations, agreements, plans, arrangements, and commitments and
there does not exist any event of default with respect to the Company under any
such agreement or any event which, after notice or lapse of time or both, would
constitute an event of default with respect to the Company under such agreement.
There is no action, suit, proceeding or investigation pending or, to the best of
the Company's knowledge and belief, threatened against the Company before any
court or before any governmental or administrative agency for the renegotiation
of or any other adjustment of any such agreement.
2.12. Litigation and Bankruptcy Proceedings.
(a) There is neither pending nor, to the best of the Company's knowledge and
belief, threatened any action, suit, proceeding or claim or, to the best of the
Company's knowledge, any basis therefor, whether or not purportedly on behalf of
the Company, to which the Company is or may be named as a party or to which its
property is or may be subject or to which any officer, key employee or principal
stockholder of the Company is subject, and (i) in which an unfavorable outcome,
ruling or finding in any such matter or for all such matters taken as a whole
might have a material adverse effect on the condition, financial or otherwise,
prospects or operations of the Company, or (ii) in which a third party seeks
damages from the Company based on the Company's previous use of name
"Scriptech"; and the Company has no knowledge of any unasserted claim, the
assertion of which is likely and which, if asserted, will seek damages, an
injunction or other legal, equitable, monetary or nonmonetary relief, which
claim individually or collectively with other such unasserted claims if granted
would have a material adverse effect on the condition, financial or otherwise,
business or operations of the Company.
(b) The Company has not admitted in writing its inability to pay its debts
generally as they become due, filed or consented to the filing against it of a
petition in bankruptcy or a petition to take advantage of any insolvency act,
made an assignment for the benefit of creditors, consented to the appointment of
a receiver for itself or for the whole or any substantial part of its property,
or had a petition in bankruptcy filed against it, been adjudicated a bankrupt,
or filed a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws or any other similar law or statute of the United States
of America or any other jurisdiction.
2.13. Consents. No consent, approval, qualification, order or
authorization of, or filing with, any governmental authority, including the
Secretary of State of the State of Delaware, is required in connection with the
Company's valid execution, delivery or performance of this Agreement or any of
the Exhibits hereto, or the offer, sale or issuance of the Series B Preferred
Shares by the Company, the issuance of Common Stock upon the conversion of the
Series B
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Preferred Shares and for the Series A Preferred Stock, or the consummation of
any other transaction contemplated on the part of the Company hereby or pursuant
to any such Exhibit, except for such filings as have been made prior to the
Closing.
2.14. Title to Properties; Liens and Encumbrances; Leases. The Company
owns no real property. The Company has good and marketable title to and a valid
and indefeasible ownership interest in all the property and assets owned by it,
free from all mortgages, pledges, liens, security interests, conditional sale
agreements, encumbrances or charges (collectively referred to herein as
"Liens").
Set forth on the Schedule of Exceptions is a correct and complete list
(including the amount of rents called for and a description of the leased
property) of all leases under which the Company is a lessee. The Company enjoys
peaceful and undisturbed possession under all such leases, all of such leases
are valid and subsisting and the Company is not in default under any of such
leases in any material respect.
2.15. Business of the Company. There is no pending or, to the best of the
Company's knowledge and belief, threatened claim or litigation against or
affecting the Company contesting its right to perform any of the services
presently conducted by or proposed to be conducted by the Company or to produce,
manufacture, sell or use any product, process, method, substance, part or other
material presently produced, manufactured, sold or used or planned to be
produced, manufactured, sold or used by the Company in connection with the
business and operations of the Company. The Company has no knowledge or belief
that (i) there exists, or there is pending or planned, any patent, invention,
device, application or principle, or any statute, rule, law, regulation,
standard or code which would materially adversely affect the condition,
financial or otherwise, operations or prospects of the Company; (ii) there is
any other factor (other than fire, flood, accident, act of war or civil
commotion, or any other cause or event beyond the control of the Company) which
materially adversely affects the condition, financial or otherwise, business or
the operations of the Company.
2.16. Permits, Franchises, Licenses, Trademarks, Patents and Other Rights.
The Company has, or when required will have, all permits, licenses and other
similar authority necessary in any material respect for the conduct of its
business as now being conducted by it and as planned to be conducted by it, and
the Company is not in default under any of such permits, licenses or other
similar authority. The Schedule of Exceptions includes a list of all patents
owned by or which are licensed to the Company. The Company possesses all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, copyrights, trade secrets, information, proprietary rights and processes
necessary to conduct its business in any material respect as now being conducted
and as planned to be conducted without, to the best of the Company's knowledge
and belief, conflict with, or infringement upon, any valid rights of others, and
with respect to such patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, copyrights, trade secrets, information, proprietary
rights and processes has not received any notice of infringement upon or
conflict with the rights of others.
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There are no outstanding options, license or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any option,
license or agreement of any kind with respect to the patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights, trade
secrets, information, proprietary rights and processes of any other person or
entity. No stockholder, director, officer or employee of the Company has any
interest in any such patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, copyrights, trade secrets, information, proprietary
rights and processes.
2.17. Issuance Taxes. All taxes imposed by law in connection with the
issuance, sale and delivery of the Series B Preferred Shares shall have been
fully paid, and all laws imposing such taxes shall have been fully complied with
in all material respects, prior to the Closing Date.
2.18. Offering. Subject in part to the truth and accuracy of the
Purchasers' representations set forth in this Agreement, the offer, sale and
issuance of the Series B Preferred Shares and the issuance of Common Stock upon
conversion of the Series B Preferred Shares as contemplated by this Agreement
are exempt from the registration requirements of the Securities Act and from the
registration or qualification requirements of the laws of any applicable state,
and neither the Company nor anyone acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.19. Compliance with Other Instruments. The Company is not in violation
of any term of its Certificate of Incorporation or By-Laws, as amended. The
Company is not in violation of any term of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation to
which the Company is subject and a violation of which would have a material
adverse effect on the condition, financial or otherwise, operations or prospects
of the Company.
2.20. Employees. To the best of the Company's knowledge and belief, no
employee or consultant of the Company, is, or is now expected to be, in
violation of any term of any employment contract, patent, disclosure agreement,
non-competition agreement, proprietary information and inventions agreement or
any other contract or agreement or any restrictive covenant or any other common
law obligation to a former employer relating to the right of any such employee
to be employed by the Company because of the nature of the business conducted or
to be conducted by the Company or to the use of trade secrets or proprietary
information of others, and the employment of the Company's employees does not
subject the Company or any Purchaser to any liability to a third party. There is
neither pending nor, to the best of the Company's knowledge and belief,
threatened, any actions, suits, proceedings or claims, or, to its knowledge, any
basis therefor or threat thereof with respect to any contract, agreement,
covenant or obligation referred to in the preceding sentence. The Company does
not have any collective bargaining agreement covering any of its employees.
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To the best knowledge of the Company, after due inquiry, neither Xxx nor
Green, nor any Ph.D. qualified employee nor any officer of the Company
(collectively, "key persons"), has any present intention of terminating his
employment or consulting arrangement with the Company, and the Company has no
present intention of terminating such employment or consulting arrangement.
2.21. Employee Benefit Plan Obligations. The Company does not have any
collective bargaining, labor, profit sharing, pension, retirement, stock option,
incentive, benefit or other similar contract, plan or arrangement. The Company
does not sponsor, nor is it obligated to contribute to, any employee benefit
plan (as such term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")).
2.22. Environmental Matters; Hazardous Waste. There have been no past and
there are no existing violations of Federal, state or local laws or regulations
relating to environmental protection or to the storage or disposal of hazardous
waste (including, but not limited to, asbestos, polychlorinated biphenyls and
petroleum products), relating to the Company or any of its businesses or
operations or assets. No inspection or investigation by the Environmental
Protection Agency or OSHA, or any other federal, state or local agency has
resulted in a letter demanding cleanup of hazardous substances or waste,
citation, complaint or notice of violation, pursuant to any law, rule,
regulation, ordinance, judgment, decree, order, injunction or decision of any
court or governmental authority in regard to the Company or any of its
businesses or operations or any of its assets and no such citation, complaint,
notice or demand letter is pending or, to the best of the Company's knowledge
and belief, threatened.
To the best of the Company's knowledge and belief, there is no condition
or state of affairs existing on or about any real property owned, leased,
operated or used by the Company or any real property previously owned, leased,
operated or used by the Company (but only to the extent that such condition or
state of affairs existed on the date the Company ceased to own, lease, operate
or use such real property or was attributable to the Company's ownership,
leasing, operation or use of such real property) that would now or in the
immediate future require a closure under the provisions of the Resource,
Conservation and Recovery Act, or remedial or other action under the provisions
of the Resource, Conservation and Recovery Act or the Comprehensive
Environmental Response, Compensation and Liability Act, or the regulations
promulgated under such Acts, or that would constitute a nuisance or violation of
any environmental legislation or regulation under the law of the state in which
such property is located.
2.23. Ability to Comply; Burdensome Restrictions. The Company has the
ability and is presently in a position, legally and otherwise, to comply with
the terms of and perform all its obligations under this Agreement and each of
the Exhibits hereto; and the Company has no present knowledge of or any present
reason to believe that the Company will not have such ability and be in such a
position for so long as any shares of Series B Preferred Stock are outstanding.
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The Company is not presently obligated under any contract or agreement or
subject to any charter or other corporate restriction which (i) materially and
adversely affects, or may, in the reasonable opinion of the Company, be expected
to materially and adversely affect, its business, properties, assets or
condition (financial or otherwise) or (ii) will legally or contractually
restrict or impair the ability of the Company to pay any dividends on or make
other distributions with respect to the Series B Preferred Shares pursuant to
the provisions of the Certificate of Incorporation.
2.24. Material Relationships. Except for investments held by entities
affiliated with Xxxxx Xxxxxxxx or Xxxxxxxx, to the best of the Company's
knowledge and belief, none of the officers, directors or key persons of the
Company, or their respective spouses, or relatives, owns directly or indirectly,
individually or collectively, a material interest in any entity which is a
competitor, customer or supplier of (or has any existing contractual
relationship with) the Company. For purposes of this Section 2.24, there may be
disregarded any purely passive economic interest which arises solely from the
ownership of less than a 2% equity interest in any such entity.
2.25. Registration Rights. Except as provided in this Agreement, the
Company is not under any obligation to register any of its currently outstanding
securities or any of its securities which may hereafter be issued.
2.26. Brokers' and Finders' Fees. The Company has retained no broker or
finder in connection with the transactions contemplated by this Agreement and
has no liability for any commission or compensation in the nature of an agent's
fee to any broker or finder or any other person.
2.27. Patents, Copyrights and Trademarks. The Company owns and possesses
or is licensed under all patents, patent applications, licenses, trademarks,
trade names, brand names, inventions and federally registered copyrights
necessary for the operation of its business as now conducted and as proposed to
be conducted, including without limitation, the United States patents listed in
the Schedule of Exceptions, in each case, the Company is not obligated or under
any liability whatsoever to make any payments by way of royalties, fees or
otherwise to any owner, licensor of, or other claimant to any patent, trademark,
trade name, copyright or other intangible asset, with respect to the use thereof
or in connection with the conduct of its business (as now conducted and as
proposed to be conducted), or otherwise; and there have been no claims made, or,
to best knowledge of the Company after due inquiry, threatened, against the
Company for the assertion of the invalidity, abuse, misuse or unenforceability
of any of its patent, trademark, copyright, trade secret or other proprietary
rights and there are no grounds for the same.
2.28. Proprietary Information of Third Parties. No third party has
claimed, has reason to claim or has requested information to suggest that any
person employed by or affiliated with the
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Company has (a) violated or may be violating any of the terms or conditions of
his employment, consulting, non-competition or non-disclosure 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 employees. To the
best knowledge of the Company, after due inquiry, 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 other person in
connection with the conduct of the Company's business (as now conducted and as
proposed to be conducted).
SECTION 3
Representations and Warranties of Purchasers
Each Purchaser, severally and not jointly, represents and warrants with
respect to such Purchaser to the Company as follows:
3.1. Experience. It (or, in the event any such Purchaser has been formed
for the specific purpose of acquiring the securities of the Company, each of the
equity owners of such Purchaser) has such knowledge and experience in financing
and business matters that it is capable of evaluating the merits and risks of an
investment in the Series B Preferred Shares and of making an informed decision.
It (or, in the event any such Purchaser has been formed for the specific purpose
of acquiring the securities of the Company, each of the equity owners of such
Purchaser) is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.
3.2. Investment. It is acquiring the Series B Preferred Shares, and will
be acquiring the shares of Common Stock issuable upon conversion of the Series B
Shares, for investment for its own account and not with the view to, or for
resale in connection with, any distribution thereof. It understands that the
Series B Preferred Shares and the shares of Common Stock issuable upon
conversion of the Series B Preferred Shares have not been registered under the
Securities Act by reason of a specified exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of its investment intent as expressed herein.
3.3. Restrictions On Transfers. It understands and agrees as follows:
(a) The certificates evidencing the Series B Preferred Shares (and the
Common Stock issuable upon conversion of the Series B Preferred Shares), and
each certificate issued in transfer of the foregoing, will bear the following
legend (or substantially similar legend):
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR
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QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT SUCH
REGISTRATION OR THE DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
DISPOSITION WILL NOT REQUIRE REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFICATION UNDER ANY
STATE SECURITIES LAWS."
(b) It will not offer, sell, transfer or otherwise dispose of any of the Series
B Preferred Shares or any Common Stock issuable upon conversion of the Series B
Preferred Shares, unless (i) an effective registration under the Securities Act
covers the disposition of such securities or (ii) it has delivered to the
Company an opinion of counsel, reasonably satisfactory to the Company, that such
offer, sale, transfer or other disposition will not require registration of such
securities under the Securities Act or qualification under any state securities
laws.
Upon request of a holder of Series B Preferred Shares (or Common Stock
issued upon conversion of Series B Preferred Shares), the Company shall remove
any such legend from each certificate evidencing such Series B Preferred Shares
(or such Common Stock), or shall issue to such holder a new certificate or
certificates for such Series B Preferred Shares (or such Common Stock), which
certificate or certificates shall be free of such transfer legend, provided that
with such request, the Company shall have received an opinion of counsel, which
opinion is reasonably satisfactory to the Company, to the effect that such
legend is no longer necessary or required (including, without limitation,
because of the availability of the exemption afforded by Rule 144 promulgated
under the Securities Act).
3.4. Rule 144. It acknowledges that the Series B Preferred Shares and the
shares of Common Stock issuable upon conversion of the Series B Preferred Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144, which permits limited resale
of shares purchased in a private placement subject to the satisfaction of
certain conditions, and understands that such Rule may not become available for
resale of the Series B Preferred Shares or the shares of Common Stock issuable
upon conversion of the Series B Preferred Stock.
3.5. Access to Data. It has had an opportunity to discuss the Company's
business, management and financial affairs with its management and has had the
opportunity to review the Company's books, records and facilities.
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3.6. Authorization. If applicable, all corporate or partnership action on
the part of such Purchaser and its directors and stockholders or partners
necessary for the authorization, execution, delivery and performance by such
Purchaser of this Agreement and the Exhibits hereto and the consummation of the
transactions contemplated herein and therein, has been taken or will be taken
prior to the Closing. This Agreement and each of the Exhibits hereto to which
such Purchaser is a party is a valid and binding obligation of such Purchaser,
enforceable in accordance with its terms. The execution, delivery and
performance by such Purchaser of this Agreement and each of the Exhibits hereto
to which such Purchaser is a party and compliance herewith and therewith will
not result in any violation of and will not conflict with, or result in a breach
of any of the terms of, or constitute a default under, such Purchaser's charter
or By-Laws or Agreement of Limited Partnership, as applicable, or any judgment,
decree, order, rule or regulation to which such Purchaser is bound.
3.7. Brokers' and Finders' Fees. It, individually or with any person, has
retained no broker or finder in connection with the transactions contemplated by
the Agreement and has no liability for any commission or compensation in the
nature of an agent's fee to any broker or finder or any other person.
SECTION 4
Conditions to Closing of Purchasers
The obligation of each Purchaser to purchase the Series B Preferred Shares
to be purchased at a Closing is subject to the fulfillment to such Purchaser's
reasonable satisfaction on or prior to the relevant Closing Date of each of the
following conditions:
4.1. Representations and Warranties Correct. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
4.2. Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with in all material
respects.
4.3. Completion of Due Diligence. The Purchasers or their representatives
shall have completed their due diligence investigation including but not limited
to discussions with the Company's management concerning the Company's business,
management and financial affairs and inspection of the Company's books, records
and facilities.
4.4. Opinion of Company's Counsel and Accountants. The Purchasers shall
have received from Xxxxxx, XxXxxxxxx & Fish, counsel to the Company, an opinion
addressed to the
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Purchasers, dated the Closing Date, and in substantially the form attached as
Exhibit 4.4 hereto (appropriately updated for each Subsequent Closing).
4.5. Legal Investment. At the time of the Closing, the purchase of the
Series B Preferred Shares to be purchased by the Purchasers hereunder shall be
legally permitted by all laws and regulations to which the Purchasers and the
Company are subject.
4.6. Compliance Certificate. The Company shall have delivered to the
Purchasers a certificate of the President of the Company, dated the Closing
Date, certifying on behalf of the Company to the fulfillment of the conditions
specified in Sections 4.1 and 4.2 of this Agreement.
4.7. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Purchasers and their counsel.
4.8. Securities Law Compliance. All such actions and steps necessary to
assure compliance with applicable Federal and state securities laws, including
all authorizations, approvals or permits, if any, of any governmental authority
or regulatory body in any states where the Series B Preferred Shares are being
sold, that are required in connection with the lawful issuance and sale of the
Series B Preferred Shares pursuant to this Agreement, the conversion of the
Series B Preferred Shares into Common Stock and the issuance of such Common
Stock upon such conversion shall have been duly obtained and shall be effective
at and as of the Closing.
4.9. Interim Stockholders' Agreement. The Company, the Purchasers', each
other holder of the Company's Series A Preferred Stock, and Xxx and Green shall
have executed the Interim Stockholders' Agreement agreement (the "Interim
Stockholders' Agreement") in substantially the form attached hereto as Exhibit
4.9.
4.10. Key-Man Insurance Trust. The Company and CW Group (the "Trustee")
shall have executed and delivered an Amended and Restated Trust Agreement
substantially in the form of Exhibit 4.10A hereto. Each of the Purchasers and
the Trustee shall have executed and delivered an Amended and Restated Trust
Option Agreement substantially in the form of Exhibit 4.10B hereto.
4.11. Legal Fees. The Company shall have paid the legal fees and the
disbursements and office expenses of Ropes & Xxxx, counsel to the Purchasers,
with respect to this Agreement and the transactions contemplated hereby in
accordance with the provisions of Section 10.9 of this Agreement.
4.12. Election of Director. Xxxxx Fisherman shall have been elected to the
Board of Directors of the Company.
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SECTION 5
Conditions to Closing of Company
The Company's obligation to sell the Series B Preferred Shares to be
purchased at each Closing is subject to the fulfillment to its satisfaction on
or prior to the relevant Closing Date of each of the following conditions:
5.1. Representations. The representations made by each of the Purchasers
pursuant to Section 3 hereof shall be true and correct when made and shall be
true and correct on the relevant Closing Date.
5.2. Legal Investment. At the time of the Closing, the conditions set
forth in Sections 4.8 and 4.9 shall have occurred and the purchase of the Series
B Preferred Shares to be purchased by the Purchasers hereunder shall be legally
permitted by all laws and regulations to which the Purchasers and the Company
are subject.
SECTION 6
Covenants of the Company
The Company hereby covenants and agrees, so long as any Purchaser owns
Series B Preferred Shares, to take or refrain from taking any of the actions
specified in this Section 6, without the prior written consent of the holders of
75% of the issued and outstanding Series B Preferred Shares:
I. Affirmative Covenants.
6.1. Basic Financial Information. The Company will furnish the following
reports to the Purchasers (or their representatives):
(a) As soon as practicable after the end of each fiscal year of the Company, and
in any event within one hundred twenty (120) days thereafter, a consolidated
balance sheet of the Company and its subsidiaries, if any, as at the end of such
fiscal year, and consolidated statements of income and retained earnings and of
statement of cash flows of the Company and its subsidiaries, if any
(collectively with the balance sheet, the "Investment Financial Statements"),
for such year, prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
certified by independent public accountants of nationally recognized standing
selected by and reporting to the Board of Directors of the Company and approved
by the Purchasers, and including a Company prepared comparison to budget.
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(b) As soon as practicable after the end of each month and each of the first,
second and third quarterly accounting periods in each fiscal year of the
Company, and in any event within thirty (30) days thereafter, consolidated
Investment Financial Statements of the Company and its subsidiaries, if any, for
such period, prepared in accordance with generally accepted accounting
principles consistently applied, subject to changes resulting from year-end
audit adjustments, and setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year, certified by the principal
financial or accounting officer of the Company.
(c) If the Company becomes subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act", which term
shall include any successor federal statute), it may in lieu of the financial
information required pursuant to Sections 6.1 (a) and (b) hereof provide copies
of its annual reports on Form 10-K and its quarterly reports on Form 10-Q,
respectively, or other then-equivalent report form.
(d) Immediately upon any officer of the Company obtaining actual knowledge of
the occurrence of any material violation or default by the Company or any of its
subsidiaries in the performance of (i) its agreements or covenants contained
herein, (ii) its material agreements or covenants contained in any other
agreement to which the Company or any of its subsidiaries is a party or (iii)
its agreements or covenants contained in the Certificate of Incorporation or of
the occurrence of any condition, event or act which, with or without notice or
lapse of time, or both, would constitute a material violation or an event of
default, a written notice specifying the nature and status thereof and, what
action the Company has taken, is taking and proposes to take with respect
thereto.
(e) Annually, but in any event no later than sixty (60) days after the
commencement of each fiscal year of the Company, the yearly budget and operating
plan of the Company, in such manner and form reasonably acceptable to the
Purchasers and as approved by the Board of Directors of the Company, which plan
shall include a projection of income and projected Investment Financial
Statements as of the end of such fiscal year. Any material changes in such plan
shall be submitted as promptly as practicable after such changes have been
approved by the Board of Directors of the Company.
(f) As soon as practicable after transmission or occurrence and in any event
within ten (10) days thereof, (i) copies of any reports or communications
delivered to any of the Company's securityholders (in their capacity as such),
any governmental entity (excluding ordinary permit applications or similar types
of correspondence and documentation in connection therewith), any financial
institution or member of the financial community (other than correspondence and
documents delivered to such financial institutions or members in the ordinary
course of business which do not materially adversely impact on the Purchaser's
investment in the Company) or to any other individual or entity who may receive
such information by law or pursuant to a contract or other agreement with the
Company (except in the ordinary course of business), including any filings by
the Company, or by any of its officers or directors relating to the Company,
with any securities exchange or the Commission or the National Association of
Securities Dealers, Inc.,
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(ii) notice of any event which has a material adverse effect on the Company's
business, prospects or condition, financial or otherwise, or on the ability of
the Company to perform its obligations under this Agreement, or under any other
agreement, or on the Purchasers' investment in the Series B Preferred Shares or
in the Common Stock issuable upon conversion of the Series B Preferred Shares,
and (iii) notice of material breach or failure to comply with any
representation, warranty, covenant or agreement of the Company contained herein,
including the Exhibits hereto.
(g) Immediately upon any principal officer of the Company or any other officer
of the Company involved in its financial administration obtaining knowledge of
the occurrence of any (i) "reportable event", as such term is defined in section
4043 of ERISA, other than any such event with respect to which the statutory
30-day notice requirement has been waived by regulation, or (ii) "prohibited
transaction", as such term is defined in section 4975 of the Code, in connection
with any plan or any trust created thereunder, a written notice specifying the
nature thereof, what action the Company has taken, is taking and proposes to
take with respect thereto, and, when known, any action taken or threatened by
the Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect thereto.
(h) With reasonable promptness, such other information and data with respect to
the Company and its subsidiaries, if any, as the Purchasers may from time to
time reasonably request.
(i) The provisions of this Section 6.1 and Section 6.2 shall not be in
limitation of any rights which the Purchasers may have to inspect the books and
records of the Company and its subsidiaries, or to inspect their properties or
discuss their affairs, finances and accounts; and, in the event that the Company
is unable to comply with the provisions of Section 6.1 or 6.2, the Board of
Directors of the Company shall, by resolution duly adopted, authorize and cause
a firm of independent public accountants of nationally recognized standing in
the United States to prepare promptly and furnish such information to the
Purchasers at the Company's expense.
6.2. Visitation. The Company will permit the Purchasers (or
representatives of the Purchasers) to visit and inspect any of the properties of
the Company, including its books of account and other records (and make copies
thereof and take extracts therefrom), and to discuss its affairs, finances and
accounts with the Company's directors, officers, senior employees and its
independent public accountants, all at such reasonable times and as often as any
such person may reasonably request. Subject to the provisions of Section 6.15
hereof, any expenses incurred by a Purchaser in connection with any such
visitation and inspection shall be borne by such Purchaser; provided, however,
in the event such visitation is necessitated by or is a result of a material
default hereunder or under the terms of a material contract or arrangement on
the part of the Company, all such expenses shall be borne by the Company.
6.3. Prompt Payment of Taxes, etc. The Company will promptly pay and
discharge, or cause to be paid and discharged, when due and payable, all lawful
taxes, assessments and governmental charges or levies imposed upon the income,
profits, property or business of the
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Company or any subsidiary; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
bonded or set aside on its books adequate reserves with respect thereto; and
provided, further, that the Company will pay all such taxes, assessments,
charges or levies, or otherwise take any action which has the effect of
preventing a foreclosure, forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor. The Company
will promptly pay or cause to be paid when due all other indebtedness incident
to operations of the Company; provided, however, that any such indebtedness need
not be paid if the validity thereof shall currently be contested in good faith
by appropriate proceedings and if the Company shall have bonded or set aside on
its books adequate reserves with respect thereto; and provided, further, that
the Company will pay all such indebtedness on or prior to the time when failure
to pay would materially adversely affect the Company.
6.4. Maintenance of Properties and Leases. The Company will keep its
properties and those of its subsidiaries, if any, in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto; and the Company and its subsidiaries, if any, will at all times comply
with each provision of all leases to which any of them is a party or under which
any of them occupies property if the breach of such lease would have a material
adverse effect on the condition, financial or otherwise, prospects or operations
of the Company.
6.5. Insurance. The Company shall maintain adequate insurance, by
financially sound and reputable insurers, on its properties and assets and the
properties and assets of its subsidiaries, if any, which are of an insurable
character and in such amounts and on such terms usually insured by corporations
engaged in the same or similar business and similarly situated, against loss or
damage by fire, explosion and other risks customarily insured against by such
corporations which amounts shall be sufficient to prevent the Company or any
such subsidiary from becoming a co-insurer and not in any event less than 100%
of the insurable value of the property and assets insured; and the Company will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons, property and assets, including
without limitation insurance against claims for personal injury, death or
property damage occurring upon, in, about or in connection with the use of any
of the properties or assets of it or any subsidiary, and in such amounts and on
such terms usually insured by corporations engaged in the same or similar
business and similarly situated, which amounts shall be sufficient to prevent
the Company or any subsidiary from becoming a co-insurer; and the Company will
maintain such other insurance as may be required by law or other agreements to
which the Company is or shall become a party.
6.6. Key Person Life Insurance. The Company shall use its best efforts to
obtain, as soon as possible but in no event later than 30 days from the Closing
Date, with financially sound and reputable insurers acceptable to the
Purchasers, key person term life insurance on the life of Bologna in the amount
of $1,000,000, and shall assign such $1,000,000 policy to the Trust
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created under the Amended and Restated Trust Agreement and cause such policy to
be made payable to the Trustee thereunder. The Company will cause to be
maintained, and shall contribute to the Trust an amount sufficient to pay all
premiums in connection with, such policy and the $ 1,000,000 term life insurance
policies currently insuring the life of each of Xxxxx X. Xxx ("Xxx") and Xxxxxxx
X. Xxxxx ("Green") so long as any Series B Preferred Shares remain outstanding.
6.7. Accounts and Records. The Company will keep true records and books of
account in which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
6.8. Independent Accountants. The Company will retain independent public
accountants of nationally recognized standing who shall certify the Company's
financial statements at the end of each fiscal year. In the event the services
of the independent public accountants, so selected, or any firm of independent
public accountants hereafter employed by the Company are terminated, the Company
will promptly thereafter notify the Purchasers and will request the firm of
independent public accountants whose services are terminated to deliver to the
Purchasers a letter of such firm setting forth the reasons for the termination
of their services. In the event of such termination, the Company will promptly
thereafter engage another accounting firm of similar quality. In its notice to
the Purchasers the Company shall state whether the change of accountants was
recommended or approved by the Board of Directors of the Company.
6.9. Compliance with Requirements of Governmental Authorities. The
Company and all its subsidiaries, if any, shall duly observe and conform in all
material respects to all valid requirements of governmental authorities relating
to the conduct of their businesses or to their properties or assets.
6.10. Maintenance of Corporate Existence, etc. The Company shall maintain
and shall cause each subsidiary, if any, to maintain in full force and effect
(i) its corporate existence, rights and franchises and all licenses, privileges
and other rights in or to use patents, processes, licenses, trademarks, trade
names or copyrights owned or possessed by it or any subsidiary and shall obtain
and maintain any such right, franchise, license or privilege deemed by the
Company to be necessary on the date hereof or in the future to the conduct of
their business without any conflict with any business in or rights of others to
use such patents, processes, licenses, trademarks, trade names or copyrights and
(ii) its qualification to do business in each jurisdiction in which the
character of its properties (owned, leased or licensed) or the nature of its
business requires such qualification, except where the failure to so qualify
would not have a material adverse effect upon the business or operations of the
Company or such subsidiary, as the case may be.
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6.11. Availability of Common Stock for Conversion and Exercise. The
Company will keep such number of shares of Common Stock unissued and available
for issuance in order to permit conversion of all the then outstanding shares of
Series B Preferred Stock.
6.12. Notice of Record Dates. In the event of any taking by the Company of
a record of the holders of any class of securities (other than the Series B
Preferred Stock) for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, the Company shall mail
to the Purchasers at least ten (10) days prior to such record date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution.
6.13. Proprietary Information and Inventions Agreement. The Company will
cause each person currently or hereafter employed by it or any subsidiary with
access to confidential information to enter into a proprietary information and
inventions agreement in substantially the form attached hereto as Exhibit 6.13.
6.14. [Intentionally Omitted]
6.15. Directors; Meetings of the Board of Directors; and Director's and
Officer's Insurance. The Company shall not give less than ten (10) business days
(72 hours in the case of special meetings) notice of each Board of Directors'
meeting to the designees of the Series A Purchasers (as defined in the
Stockholders' Agreement), the designee of the Advent Series B Purchasers (as
defined in the Stockholders' Agreement) and the designee of Xxx and Green, and
shall permit, in addition to such directors, each Purchaser (or its designee)
and Green and Xxx (or their respective designees) to attend meetings of the
Board and committees thereof. In the event any such designee shall be unable to
attend a meeting of the Board, the Purchasers designating such designee or such
designated director shall in lieu thereof be entitled to designate a substitute
representative to attend and, to the extent permitted by applicable law, to vote
at such meeting. All reasonable travel and out-of-pocket expenses incurred by
the directors designated by the Purchasers (or such directors' designees) in
connection with attending the meetings and any special meetings called by the
Company will be paid by the Company. The Company will obtain and maintain, on
reasonable business terms, director's and officer's insurance for directors of
the Company providing coverage for each director of at least $1,000,000 per
occurrence, provided that such insurance can be obtained on commercially
reasonable terms as determined by the Board of Directors. The Purchasers
acknowledge that as of the date of the Initial Closing, the Company has not
obtained directors' and officers' insurance.
6.16. Meetings of Stockholders. The Purchasers shall be entitled to call
for a stockholders' meeting upon five days notice to the Company.
6.17. Compliance with ERISA. The Company will file or caused to be filed
on a timely basis each and every return, report, statement, notice, declaration
and other document required by any governmental agency, federal, state or local
authority (including, without limitation, the
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Xxxxxxxx Xxxxxxx Service, the Department of Labor, the Pension Benefit Guaranty
Corporation and the Commission) with respect to any plan maintained by the
Company.
6.18. Environmental Matters. The Company agrees to comply in all material
respects with, and abide by, all federal, state and local laws or regulations
relating to environmental protection or to the storage or disposal of hazardous
waste (including, but not limited to, asbestos, polychlorinated byphenyls and
petroleum products) in connection with or relating to the Company or any of its
businesses, operations or assets.
6.19. Amended and Restated Stockholders' Agreement. The Company agrees to
use reasonable efforts to have all holders of (i) the Company's capital stock,
and (ii) any other securities of the Company which are excercisable for, or
convertible into, shares of the Company's capital stock execute and deliver the
Amended and Restated Stockholders' Agreement substantially in the form of
Exhibit 6.19.
II. Restrictive Covenants.
6.20. Dividends; Share Repurchases. The Company will not pay or declare
any cash dividend or distribution on any shares of capital stock of the Company,
other than the Series A Preferred Stock and the Series B Preferred Stock, or
apply any of the Company's assets to the redemption, retirement, purchase or
other acquisition, directly or indirectly, through subsidiaries or otherwise, of
any shares of Common Stock of the Company, or any rights, options or warrants to
purchase, or securities convertible into, Common Stock of the Company except for
(i) any repurchase of shares by the Company pursuant to any stock option or
restricted stock agreement with an employee of, or consultant to the Company
entered into by the Company and approved by the Board of Directors of the
Company, and (ii) the redemption of any shares of Series B Preferred Stock.
6.21. Sales of Securities. The Company will not (i) create or issue any
securities of the Company which have equity features and which rank on a parity
with or senior to the Series B Preferred Stock with respect to the payment of
dividends or upon liquidation or other distribution of assets or with a
conversion price lower than that of the Series B Preferred Stock or terms more
favorable than those of the Series B Preferred Stock or (ii) sell or issue any
shares of Common Stock of the Company for which the consideration is other than
cash, except as contemplated herein with respect to the conversion of the Series
A and B Preferred Stock into Common Stock.
6.22. Foreign Subsidiaries. Except in the ordinary course of business, the
Company will not directly or through any subsidiary create or acquire any
subsidiary or any interest in any corporation, partnership, limited partnership,
joint venture or similar entity located outside, or formed pursuant to the laws
of other than, the United States of America, its territorial possessions or any
political subdivision of any thereof.
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6.23. Merger, Consolidation, Sale of Assets. The Company will not merge,
consolidate or dispose of all or substantially all its assets, except a merger
or consolidation pursuant to which the Company is the surviving corporation.
This section shall not in any way limit the ability of the Company (i) to sell
inventory or (ii) to sell other assets, each in the ordinary course of business.
6.24. Transactions with Officers, Directors and Stockholders. The Company
will not furnish or sell services or products to or acquire or purchase services
or products from any corporation, partnership, proprietorship, association,
joint venture or other person or entity in which any officer, director, or 5%
stockholder of the Company, or any affiliate (as such term is defined in Rule
405 under the Securities Act) of any such officer, director, or 5% stockholder
has a material interest or enter into any material contract or arrangement
(excluding employment or option agreements with an employee approved by the
Board of Directors of the Company) with any such officer, director, 5%
stockholder or affiliate which is less than an arms-length transaction or which
transaction has or reasonably can be expected to have a material adverse effect
on the Company. For purposes of this Section 6.24, there may be disregarded any
interest which arises solely from the ownership of less than a 2% equity
interest in a corporation whose voting securities are regularly traded in any
national securities exchange or in the over-the-counter market. The provisions
of this Section 6.24 shall not prohibit any Purchaser from providing any
consulting, legal, accounting, investment banking, managerial, investment
advisory and/or other services to the Company.
6.25. Investments, Loans, Guarantees, Joint Ventures and Subsidiaries. The
Company will not, (i) directly or through any subsidiary create or acquire any
interest in any partnership, limited partnership, joint venture or similar
entity and will not create or acquire any interest in any subsidiaries of which
it does not own all the capital stock or (ii) make any investments in or loans
or advances to or endorse, guarantee or become surety for the obligations of any
person, corporation or other entity except that the Company may endorse checks
for collection or deposit in the ordinary course of business.
6.26. Certificate of Incorporation and By-Law Amendments. The Company may
not amend its Certificate of Incorporation or By-Laws so as to affect adversely
the Series B Preferred Stock.
6.27. Impairment of Dividends. The Company may not enter into any contract
or agreement which by its terms restricts the Company's ability to pay dividends
on the Series B Preferred Stock or which may otherwise restrict the Company's
ability to comply with and perform the terms of this Agreement or any of the
Exhibits hereto.
6.28. Compliance with ERISA. The Company will not:
(i) engage in any transaction in connection with which the Company
or any of its subsidiaries could be, to the knowledge of the Company or
any of its subsidiaries could
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be, to the knowledge of the Company, subject to either a civil penalty
assessed pursuant to section 502(i) of ERISA or a tax imposed by section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"), based
on existing regulations or published interpretations in effect from time
to time;
(ii) terminate any plan in a manner, or take any other action,
including withdrawal from any plan that is a multiemployer plan, which
could result in any material liability of the Company or any of its
subsidiaries to the Pension Benefit Guaranty corporation or to such plan;
(iii) fail to make full payment when due of all amounts which, under
the provisions of any plan, the Company or any of its subsidiaries is
required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency, whether or not waived, with respect to any
plan; or
(iv) permit the current value of all vested accrued benefits under
all plans which are subject to Title IV of ERISA to exceed the current
value of the assets of such plans allocable to such vested accrued
benefits.
As used in this Section 6.28 the term "accumulated funding deficiency" has the
meaning specified in section 302 of ERISA and section 412 of the Code, the term
"accrued benefit" has the meaning specified in section 3 of ERISA and the term
"current value" has the meaning specified in section 4062(b)(1)(A) of ERISA and
the term "multiemployer plan" has the meaning specified in section 4001(a)(3) of
ERISA.
6.29. Borrowings. Neither the Company nor any of its subsidiaries will
incur, create, assume, become or be liable in any manner with respect to, or
permit to exist, any indebtedness for borrowed money, or any other indebtedness
evidenced by, or liability evidenced by notes, bonds, debentures or similar
obligations or either directly or indirectly guarantee, endorse or become surety
for, or otherwise in any manner become responsible for the obligations of any
other person (collectively, the "Indebtedness"), other than indebtedness with
respect to trade and operating obligations and other normal accruals in the
ordinary course of business (which the Company covenants will be paid in
accordance with customary trade practice) or with respect to which it is
contesting in good faith the amount or validity thereof by appropriate
proceedings, and then only to the extent it has set aside on its books adequate
reserves therefor.
6.30. Capital Expenditures; Commitments. The Company shall not, and shall
cause each of its subsidiaries, if any, not to, (i) incur capital expenditures
or make commitments for capital expenditures, services or product development in
excess of the greater of $100,000 or 110% of the amount budgeted in the yearly
budget and operating plan of the Company referred to in Section 6.1(e) hereof,
for any such expenditure or commitment.
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6.31. Employee Stock Purchase Arrangements. The Company will not issue any
of its capital stock, or grant an option or right to subscribe for, purchase or
acquire any of its capital stock, to any employee, consultant, director or
officer of the Company or a subsidiary thereof, except as provided in Section
7.14 of the Series A Purchase Agreement (as defined below), without giving
effect to any amendment thereto.
III. Termination
6.32. Termination Event. The provisions of this Section 6 shall terminate
as to any Purchaser at such time as such Purchaser owns less than twenty-five
percent (25%) of the Series B Preferred Shares purchased by it pursuant to this
Agreement.
SECTION 7
Registration of Securities
7.1. Certain Definitions. As used in this Section 7, the following terms
shall have the following respective meanings:
"Registrable Securities" shall mean (i) shares of Common Stock issued or
issuable pursuant to the conversion of the Series B Preferred Shares, (ii)
shares of Common Stock issued or issuable pursuant to the conversion of the
Series A Preferred Stock (the "Series A Preferred Shares") issued pursuant to
the Stock Purchase Agreement dated September 16, 1993 among the Company, certain
of the Purchasers and the other individuals named therein (the "Series A
Purchase Agreement"), (iii) shares of Common Stock issued pursuant to the Bridge
Loans (as that term is defined in the Series A Purchaser Agreement), (iv) shares
of Common Stock issued pursuant to the Bridge Loans (as defined herein) and (v)
any Common Stock issued in respect of the securities issued pursuant to the
conversion of the Series A Preferred Shares and the Series B Preferred Shares,
upon any stock split, stock dividend, recapitalization or similar event.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the Company in
compliance with Sections 7.2, 7.3 and 7.5 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, reasonable fees and
disbursements of one counsel for all the selling Holders (as hereinafter
defined) and other security holders for a "due diligence" examination of the
Company, and the expense of any special audits incident to or required by any
such registration
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(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of securities and all fees and disbursements
of counsel for any Holder (other than the fees and disbursements of counsel
included in Registration Expenses).
"Holder" shall mean any holder of Registrable Securities which have not
been sold to the public.
7.2. Requested Registration.
(a) Request for Registration. If the Company shall receive from the Holders of
at least fifty percent (50%) or more of the then-outstanding Registrable
Securities, at any time or times, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(i) promptly give written notice of the proposed registration to all
other Holders; and
(ii) as soon as practicable, use its diligent best efforts to effect
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request given within thirty (30) days after
receipt of such written notice from the Company; provided that the Company
shall not be obligated to effect, or to take any action to effect, any
such registration pursuant to this Section 7.2, (x) after the Company has
effected two such registrations pursuant to this Section 7.2(a) and such
registrations have been declared or ordered effective by the Commission
and the sale of such Registrable Securities shall have closed or (y) prior
to the earlier to occur of (i) September 16, 1997, and (ii) three months
after the closing of an initial registered public offering of the
Company's securities. Subject to the foregoing limitation, the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Holders.
The Company may include in the registration statement filed pursuant to
the request of the Holders, subject to the provisions of Section 7.2(b) below,
other securities of the Company which are held by officers, including the Chief
Executive Officer of the Company or such person
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acting in that capacity, or directors of the Company, by Xxx and Green, or by
other persons who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration (all the foregoing, except the
Holders, collectively referred to herein as the "Other Stockholders"), but the
Company shall have no right to include any of its securities in any such
registration.
(b) Underwriting. If the Holders intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to Section 7.2 and the Company
shall include such information in the written notice referred to in Section
7.2(a)(i) above. The right of any Holder to registration pursuant to Section 7.2
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Holders and
such Holder with respect to such participation and inclusion) to the extent
provided herein. A Holder may elect to include in such underwriting all or a
part of the Registrable Securities held by such Holder.
If Other Stockholders shall request inclusion in any registration pursuant
to Section 7.2, the Holders shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance together with the Holders so participating of the further applicable
provisions of this Agreement. The Company shall (together with all Holders and
Other Stockholders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or representative of the underwriters selected for such underwriting
by a majority in interest of the Holders and reasonably acceptable to the
Company. Notwithstanding any other provision of this Section 7.2, if the
underwriters advise the Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, the Holders shall so
advise all Other Stockholders whose securities would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Securities and other
securities that may be included in the registration and underwriting shall be
allocated in the following manner. The securities of the Company held by Other
Stockholders (other than Registrable Securities) shall be excluded from such
registration and underwriting to the extent required by such limitation and if a
limitation of the number of shares is still required, the number of shares of
Registrable Securities that may be included in the registration shall be
allocated among all such Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other securities which they had
requested to be included in such registration at the time of filing the
registration statement. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. In the event that the number
of shares of Registrable Securities of any Holder to be included in any
registration is reduced below 50% of the shares requested to be included in such
registration as a result of allocations pursuant to this Section 7.2(b), then
such registration shall not be deemed a registration for purposes of Section
7.2(a)(ii). If any Holder of Registrable Securities or Other Stockholder who has
requested inclusion in such registration as provided above disapproves of the
terms of the underwriting, such person may elect to withdraw therefrom by
written notice to
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the Company, the underwriter and the Holders. The securities so withdrawn shall
also be withdrawn from registration.
7.3. Company Registration.
(a) If the Company shall determine to register any of its securities either for
its own account or the account of a security holder or holders exercising their
respective demand registration rights, other than a registration relating solely
to employee benefit plans, or a registration relating solely to a Commission
Rule 145 transaction, or a registration on any registration form which does not
permit secondary sales, the Company will:
(i) promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other
state securities laws); and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests made by any Holder within thirty (30) days after receipt of the
written notice from the Company described in clause (i) above, except as
set forth in Section 7.3(b) below. Such written request may specify all or
a part of a Holder's Registrable Securities to be included in such
registration.
(b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
7.3(a)(i). In such event the right of any Holder to registration pursuant to
Section 7.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected by the Company, which underwriters shall be reasonably
acceptable to a majority in interest of the participating Holders.
Notwithstanding any other provision of this Section 7.3, if the underwriter
advises the Company in writing that marketing factors require a limitation on
the number of shares to be underwritten, the underwriter may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting. The Company shall so advise
all holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following manner. The securities of the Company held
by Other Stockholders (other than Registrable Securities) shall be excluded from
such registration and underwriting to the extent required by such limitation,
and if a limitation on the number of shares is still required, the number of
shares of Registrable
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Securities that may be included in the registration shall be allocated among all
such Holders in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities which each Holder had requested to be included in such
registration at the time of filing and which have not already been included in
the registration statement; provided, however, that, except with respect to the
initial public offering of the Company's securities, the number of shares of
Registrable Securities included in the registration shall not constitute less
than 30% of the total securities included in the offering. If any Holder of
Registrable Securities or any Other Stockholder disapprove of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
7.4. Expenses of Registration. The Company shall bear all Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Agreement. All Selling Expenses shall be borne by
the holders, including the Company, of the securities so registered pro rata on
the basis of the number of their shares so registered.
7.5. Registration on Form S-2 or Form S-31. The Company shall use its best
efforts to qualify for registration on Form S-2 and Form S-3 or any comparable
or successor form or forms; and to that end the Company shall register (whether
or not required by law to do so) the Common Stock under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), in accordance with the provisions
of the Exchange Act following the effective date of the first registration of
any securities of the Company on Form S-1 or Form S-18 or any comparable or
successor form or forms. After the Company has qualified for the use of either
Form S-2 or Form S-3 or both, in addition to the rights contained in the
foregoing provisions of this Agreement, the Holders of not less than 20% of the
then outstanding Registrable Securities, having a value of not less than
$500,000, shall have unlimited rights to request from time to time registrations
on Form S-2 or Form S-3 (such requests shall be in writing, shall state the
number of shares of Registrable Securities to be disposed of and the intended
methods of disposition of such shares by such Holder or Holders and shall be at
the Company's sole expense).
7.6. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will keep each Holder,
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Company will:
(a) Keep such registration effective for a period of six months or until the
Holder or Holders have completed the distribution described in the registration
statement relating thereto, whichever first occurs; provided, however, that in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such six-month period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed basis; and provided further that
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applicable rules under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (y) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (z) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (y) and
(z) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement;
(b) Prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of securities covered by such
registration statement;
(c) Furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as a Holder from
time to time may reasonably request;
(d) Notify each seller of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in the
light of the circumstances then existing, and at the request of any such seller,
prepare and furnish to such seller a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchaser of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances than existing;
(e) Cause all such Registrable Securities to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed;
(f) Provide a transfer agent and registrar for all Registrable Securities and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration;
(g) Make available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney or accountant retained by any such seller or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers and directors to
supply all information reasonably requested by any such seller, underwriter,
attorney or accountant in connection with such registration statement; provided,
however, that such seller, underwriter, attorney or accountant shall agree to
hold in confidence and trust all information so provided;
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(h) Furnish to each selling Holder a signed counterpart, addressed to the
selling Holder, of
(i) an opinion of counsel for the Company, dated the effective date
of the registration statement, and
(ii) "comfort" letters signed by the Company's independent public
accountants who have examined and reported on the Company's financial
statements included in the registration statement, to the extent permitted
by the standards of the AICPA or other relevant authorities, covering
substantially the same matters with respect to the registration statement
(and the prospectus included therein) and (in the case of the accountants'
"comfort" letters) with respect to events subsequent to the date of the
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities;
(i) Furnish to each selling Holder a copy of all documents filed with and all
correspondence from or to the Commission in connection with any such offering
other than non-substantive cover letters and the like;
(j) Otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first
month after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
and
(k) In connection with any underwritten offering pursuant to a registration
statement filed pursuant to Section 7.2 or 7.3 hereof, the Company will enter
into any underwriting agreement reasonably necessary to effect the offer and
sale of Common Stock.
7.7. Indemnification.
(a) The Company will indemnify each Holder, each of its respective officers,
directors and partners, and each person controlling such Holder, with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter, and their respective counsel against all claims, losses, damages
and liabilities (or actions, proceedings or settlements in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to
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the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its respective officers, directors and
partners, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses as are reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder, officer, director and Other Stockholder will, if securities
held by him or it are included in the securities as to which such registration,
qualification or compliance is being effected (collectively, an "Including
Stockholder"), indemnify the Company, each of its directors and officers (in
their capacity as such) and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of the Securities Act and the
rules and regulations thereunder, each other such Holder and Including
Stockholder and each of their officers, directors and partners, and each person
controlling such Holder or Including Stockholder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holders,
Including Stockholders, directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder or Including Stockholder and stated to
be specifically for use therein; provided, however, that the obligations of such
Holders and Including Stockholders hereunder shall be limited to an amount equal
to the net proceeds to each such Holder or Including Stockholder of securities
sold under such registration statement, prospectus, offering circular or other
document as contemplated herein.
(c) Each party entitled to indemnification under this Section 7.7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
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Indemnifying Party of its obligations under this Section 8.7, unless such
failure to notify shall prove to have been prejudicial to the Indemnifying
Party's ability to defend such an action. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7.8. Information by Holder. Each Holder of Registrable Securities and each
other holder of securities included in any registration, shall furnish to the
Company such information regarding such Holder or other holder and the
distribution proposed by such Holder or other holder as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this
Agreement.
7.9. Limitations on Registration of Issues of Securities. From and after
the date of this Agreement, the Company shall not enter into any agreement with
any holder or prospective holder of any securities of the Company giving such
holder or prospective holder a right (i) to require the Company to initiate any
registration of any securities of the Company or (ii) to require the Company,
upon any registration of any of its securities, to include, among the securities
which the Company is then registering, securities owned by such holder; which
right is superior to the rights given hereunder to the holders of Series A
Preferred Shares and Series B Preferred Shares.
7.10. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company shall
agree to:
(a) Make and keep public information available as those terms are understood and
defined in Rule 144 under the Securities Act, at all times from and after ninety
(90) days following the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
(b) File with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act at any
time after it has become subject to such reporting requirements; and
(c) So long as a Holder owns any Registrable Securities, furnish to the Holder
forthwith upon request a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 (at any time from and after ninety
(90) days following the effective date of the first registration statement filed
by the Company for an offering of it securities to the general public), and of
the Securities Act and the Exchange Act (at any time after it has become subject
to such
-34-
reporting requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as the Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Holder to sell any such securities without registration.
7.11. Transfer or Assignment of Registration Rights. The rights to cause
the Company to register securities granted to the Purchasers and holders of
Registrable Securities under Sections 7.2, 7.3 and 7.5 may be transferred or
assigned by a holder to a transferee or assignee of any Registrable Securities,
provided that the Company is given written notice at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned, and provided
further that the transferee or assignee of such rights assumes the obligations
of such Holder under this Section 7.
7.12. Termination of Registration Rights Set Forth In Series A Purchase
Agreement. The Company, Bologna and Xxxxxxxx, and such of the Purchasers as are
party to the Series A Purchase Agreement, constituting all of the parties to the
Series A Purchase Agreement and the holders of all of the securities issued
pursuant thereto, hereby amend the Series A Purchase Agreement by deleting
therefrom Section 8 in its entirety. Any and all registration rights granted by
the Company to such Purchasers, Bologna and Xxxxxxxx are as set forth in this
Section 7.
SECTION 8
Right of First Offer
8.1. Right of First Offer Upon Issuance of New Securities.
(a) The Company hereby grants to the Purchasers the right of first offer to
purchase any or all "New Securities" (as hereinafter defined) on a proportionate
basis as defined in Section 8.1 (b). For purposes of this Section 8.1, "New
Securities" shall mean any capital stock of the Company whether now authorized
or not, and rights, options or warrants to purchase capital stock, and
securities of any type whatsoever that are, or may become, convertible into
capital stock and any borrowings, direct or indirect, from financial
institutions or other persons by the Company, whether or not presently
authorized, including any type of loan or payment endorsed by any type of debt
instrument, but only to the extent such borrowings contain any equity features,
but "New Securities" shall not include (i) securities issued to employees of, or
consultants to, the Company as permitted by Section 7.14 of the Series A
Purchase Agreement, (ii) shares of capital stock issued upon conversion of the
Series A or Series B Preferred Shares, (iii) securities issued as part of the
purchase price in connection with the closing of an acquisition by the Company
of all or substantially all the assets or stock of another entity or person,
approved by the Company's Board of Directors, (iv) warrants issued in connection
with business transactions, including corporate partnerships, approved by the
Company's Board of Directors or securities issued pursuant to such warrants and
(v) the sale of Series B Preferred Shares pursuant to this Agreement.
-35-
(b) In the event the Company proposes to undertake an issuance of New
Securities, it shall give the Purchasers written notice of its intention,
describing the type of New Securities, the price and the general terms upon
which the Company proposes to issue the same. Each Purchaser shall have thirty
(30) days from the date such notice is given to agree to purchase any or all of
the New Securities up to such Purchaser's proportionate share, for the price and
upon the general terms specified in the notice by giving written notice to the
Company and stating the quantity of New Securities to be purchased. As used in
this Section 8.1, and except as otherwise provided, the term "proportionate
share" shall mean, with respect to each Purchaser who is entitled to receive the
particular offer, the total number of New Securities proposed to be issued,
multiplied by a fraction, the numerator of which shall be the sum of (i) the
total number of shares of Common Stock owned by such Purchaser (prior to such
contemplated issuance), but excluding the Common Shares (as defined in the
Series A Purchase Agreement), if any, owned by such Purchaser and (ii) the total
number of shares of Common Stock into which the shares of Series A Preferred
Stock, Series B Preferred Stock or other convertible securities of the Company,
if any, held by such Purchaser (prior to such contemplated issuance) are
convertible, and the denominator of which shall be the sum of (i) the total
number of shares of Common Stock owned by all Purchasers (prior to such
contemplated issuance), but excluding the Common Shares (as defined in the
Series A Purchase Agreement), if any, owned by all Purchasers and (ii) the total
number of shares of Common Stock into which the Shares of Series A Preferred
Stock, Series B Preferred Stock, or other convertible securities of the Company
held by all Purchasers (prior to such contemplated issuance) are convertible.
(c) Each Purchaser shall have a right of over-allotment such that if any
Purchaser fails to exercise such Purchaser's right hereunder to purchase such
Purchaser's full proportionate share of the New Securities proposed to be issued
(the "Incomplete Purchasers"), the Purchasers purchasing their full respective
proportionate share of such New Securities (the "Complete Purchasers") may
purchase the portion of such New Securities which has not been purchased by the
Incomplete Purchasers as hereinafter provided. The Complete Purchasers shall
have fifteen (15) days from the date notice is given by the Company to the
Complete Purchasers that such Incomplete Purchasers have rejected or failed to
accept their right to purchase their proportionate share of New Securities, to
agree to purchase up to such Complete Purchaser's proportionate share of such
New Securities not purchased by the Incomplete Purchasers. Notwithstanding
anything in Section 8.1 (b) to the contrary, as used in this Section 8.1 (c)
with respect to the Complete Purchasers only, each Complete Purchaser's
"proportionate share" shall be calculated by excluding from the denominator of
the fraction the total number of shares of Common Stock of any Incomplete
Purchaser and the total number of shares of Common Stock of any Incomplete
Purchaser and the total number of shares of Common Stock into which the shares
of such Incomplete Purchaser's Series A and Series B Preferred Stock or other
convertible securities, if any, are convertible.
(d) In the event the Purchasers fail to exercise the right of first offer and
right of over-allotment within said forty-five (45) day period for the full
amount of New Securities proposed to be
-36-
issued, the Company shall have sixty (60) days thereafter to sell or enter into
an agreement (pursuant to which the sale of New Securities covered thereby shall
be closed, if at all, within sixty (60) days from the date of said agreement) to
sell the New Securities respecting which the Purchasers' options were not
exercised, at a price and upon general terms no more favorable to the purchasers
thereof than specified in the Company's notice to the Purchasers. In the event
the Company has not sold within said 60-day period or entered into an agreement
to sell the New Securities within said 60-day period (or sold and issued New
Securities in accordance with the foregoing within sixty (60) days from the date
of said agreement), the Company shall not thereafter issue or sell any New
Securities, without first offering such securities to the Purchasers in the
manner provided above.
(e) The right of first offer granted under this Section 8.1 shall expire upon,
and shall not be applicable to, the first sale of Common Stock of the Company to
the public in an underwritten public offering, effected pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act covering the offer and sale of
Common Stock for the account of the Company to the public at a public offering
price of at least $5.00 which results in net proceeds to the Company of not less
than $10,000,000.
8.2. Termination of Rights of First Offer. If in connection with an
offering of New Securities in which the Purchasers have the right, pursuant to
Section 8.1 above, to purchase their proportionate share of such New Securities,
any Purchaser declines to purchase such Purchaser's full proportionate share of
such New Securities, then such Purchaser's rights pursuant to Section 8.1 shall
terminate as to any subsequent offering of New Securities.
8.3. Termination of Section 9.1 of the Series A Purchase Agreement. The
Company, Bologna, Xxxxxxxx and such of the Purchasers as are party to the Series
A Purchase Agreement (together with Bologna and Xxxxxxxx, the "Series A
Purchasers"), constituting all of the parties to the Series A Purchase
Agreement, hereby amend the Series A Purchase Agreement by deleting therefrom
Section 9.1 in its entirety. Except as specifically set forth in Section 7.12
above and this Section 8.3, the Series A Purchase Agreement shall remain in full
force and effect. In addition, each Series A Purchaser hereby waives any
preemptive right it may have to purchase the Series B Preferred Shares to be
issued pursuant hereto.
SECTION 9
Confidentiality
9.1. Agreement to Hold in Confidence and Not Disclose Confidential
Information. Notwithstanding any other provision of this Agreement, and except
as otherwise provided in Section 9.2 below, each Purchaser shall hold in
confidence and not disclose to any other person or entity any Confidential
Information (as defined in subsection 9.3 below) of the Company without the
prior written consent of the Company.
-37-
9.2. Permitted Disclosure of Confidential Information. Notwithstanding
Section 9.1 above, a Purchaser may disclose Confidential Information to a
Purchaser Representative, the term "Purchaser Representative" being defined to
mean an affiliate of such Purchaser, or any partner, officer, employee, advisor,
legal counsel, consultant or other agent or representative of or to such
Purchaser or such affiliate. The Company hereby acknowledges that the Purchaser
regularly send investment reports and updates to their respective partners,
which reports and updates contain information concerning the investments made by
such Purchaser. Prior to or simultaneously with any such disclosure to a
Purchaser Representative, a Purchaser shall use its good faith efforts to give
the Purchaser Representative a copy of this Section 9 under cover of a letter or
memo addressed to the Purchaser Representative, or otherwise indicate to the
Purchaser Representative that the information being disclosed is confidential
and subject to restrictions.
9.3. Definition of "Confidential Information". The term "Confidential
Information" means any information of the Company in any medium or media marked
"confidential" or indicated to be confidential in writing or orally at the time
of disclosure, or which a Purchaser or Purchaser Representative knew to be
confidential, and shall include, without limitation, (i) technical, engineering
and other scientific information that has been created, discovered or developed
for, or assigned or entrusted to, the Company which relates to its products,
processes, operations and/or technologies; (ii) inventions, improvements,
materials, articles, equipment, processes, designs and techniques whether or not
patented or patentable, and expressions protected or protectable by copyright,
made or conceived or reduced to practice or learned by the Company, or by any
person for or on behalf of it, which relate to the business of the Company;
(iii) personal privacy data concerning any employees, consultants or other
service providers or testing or survey subjects of the Company; (iv) financial
records, business plans, customer lists and other books and records of the
Company; provided, however, notwithstanding the foregoing, Confidential
Information shall not include information which: (a) was in a Purchaser's or
Purchaser Representative's possession or knowledge or was known to the public or
in published literature prior to the Company's disclosure or making available of
such Confidential Information to such Purchaser, or (b) subsequent to the time
of the Company's disclosure or making available of such Confidential Information
to a Purchaser, becomes known to the public or finds its way into the published
literature through no fault of any Purchaser or Purchaser Representative, or (c)
is lawfully acquired by a Purchaser from a third party who is not under a
confidentiality agreement with the Company with respect to such information (and
who is not a Purchaser, a Purchaser Representative or an affiliate of any
thereof).
9.4. Injunctive Relief. The parties acknowledge and agree that, without
limiting any other rights and remedies they may have, the Company shall be
entitled to immediate injunctive and other equitable relief to prevent or remedy
a breach of any of the provisions of this Section 9 relating to protection of
Confidential Information of the Company, and to obtain the enforcement of such
provisions, and, if any such injunctive or other equitable relief is sought, the
Purchasers will not raise as a defense that there is an adequate remedy at law.
-38-
9.5. Survival. The provisions of this Section 9 relating to protection of
Confidential Information of the Company shall survive, with respect to each
Purchaser, the termination of such Purchaser's interest in the Company under
this Agreement and shall survive the termination of this Agreement.
SECTION 10
Miscellaneous
10.1. Additional Parties. Any other person or entity desiring to purchase
shares of Series B Preferred Stock hereunder may, with the written consent of
the Company and the Board of Directors of the Company, become a party to this
Agreement by executing a counterpart of this Agreement indicating the number of
shares of Series B Preferred Stock such entity intends to purchase, whereby such
entity agrees, subject to the terms and conditions of this Agreement, to
purchase such shares of Series B Preferred Stock, and to be bound as a
Subsequent Purchaser to all of the terms and conditions of this Agreement, as
this Agreement may be amended from time to time in accordance with its terms,
and thereafter such Subsequent Purchaser shall have all the rights and
obligations of a Subsequent Purchaser hereunder.
10.2. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed in all respects by the laws of The Commonwealth of Massachusetts.
10.3. Survival. The representations and warranties made herein shall
survive the Closing Date indefinitely, and all such representations and
warranties and all covenants and agreements made herein shall be deemed to be
material and to have been relied upon by the parties hereto, notwithstanding any
investigation hereto or hereafter made by them, or on their respective behalf.
Each of the covenants, agreements and indemnifications contained herein shall
survive indefinitely, unless otherwise expressly provided herein.
10.4. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto; provided, however, that any successor, assignee or other such
transferee shall assume the obligations of such assignor or transferor
hereunder; and provided, further, that the Company may not assign its rights
hereunder.
10.5. Entire Agreement; Amendment. This Agreement (including the Schedules
and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated, except by a
written instrument signed by the Company and Purchasers holding not less than
75% of the outstanding Series B Preferred Shares held by Purchasers.
-39-
10.6. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, return receipt requested, or delivered either by hand or by
messenger, or sent by overnight courier, addressed (a) if to a Initial
Purchaser, at the address set forth for such Initial Purchaser on the Schedule
of Purchasers attached hereto or at such other address as such Initial Purchaser
shall have furnished to the Company in writing, with a copy to Ropes & Xxxx, Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X'Xxxxx,
Esq., or (b) if to any other holder of Series B Preferred Shares or any Common
Stock issued upon conversion of Series B Preferred Shares at such address as
such holder shall have furnished the Company in writing, or, until any such
holder so furnishes an address to the Company, then to and at the address of the
last holder thereof who has so furnished an address to the Company, or (c) if to
the Company, at its address set forth at the beginning of this Agreement, or at
such other address as the Company shall have furnished to the Purchasers and
each such other holder in writing, with a copy to Xxxxxx, XxXxxxxxx & Fish, Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxxxxx
Xxxxxxxxx, Esq.
10.7. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to (i) any Purchaser or holder of any Series B
Preferred Shares, upon any breach or default of the Company under this Agreement
or (ii) the Company, upon any breach or default of a Purchaser or holder of any
Series B Shares under this Agreement, shall impair any such right, power or
remedy of such holder or the Company nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder or the Company of any breach or default
under this Agreement, or any waiver on the part of any holder or the Company of
any provisions or conditions of this Agreement must be made in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder or the Company, shall be cumulative and not alternative.
10.8. Separability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
10.9. Expenses. The Company shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby, and the Company will pay, at the Closing, the legal fees
and the disbursements and office expenses, including secretarial charges, of
Ropes & Xxxx, counsel to the Purchasers, with respect to this Agreement and the
transactions contemplated hereby, up to a maximum of $15,000.
10.10. Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
-40-
10.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all material of which
together shall constitute one instrument.
10.12. Remedies. In the event of a breach of the representations and
warranties set forth in Section 2 above which has the effect of materially and
adversly affecting the Company's business, operations or financial condition as
represented in said Section 2, each Purchaser shall, in addition to any other
remedy available under applicable law, be entitled to rescind such Purchaser's
purchase of the Series B Preferred Shares hereunder.
-41-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date above written.
SCRIPTGEN PHARMACEUTICALS, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, President
PURCHASERS:
CW VENTURES II, L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL IV L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL INVESTORS '93 L.P.
By:
----------------------------------
Title:
-------------------------------
Title:
-------------------------------
-42-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date above written.
SCRIPTGEN PHARMACEUTICALS, INC., a
Delaware corporation
By:
----------------------------------
Xxxxxx X. Xxxxxxx, President
PURCHASERS:
CW VENTURES II, L.P.
By City Partners III, L.P.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Print Name: Xxxxx Xxxxxxxx
--------------------------
Title: General Partner
-------------------------------
ACCEL IV L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL INVESTORS '93 L.P.
By:
----------------------------------
Title:
-------------------------------
Title:
-------------------------------
-42-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date above written.
SCRIPTGEN PHARMACEUTICALS, INC., a
Delaware corporation
By:
----------------------------------
Xxxxxx X. Xxxxxxx, President
PURCHASERS:
CW VENTURES II, L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL IV L.P.
By: /s/ Xxxx Xxxxx
----------------------------------
Print Name: Xxxx Xxxxx
--------------------------
Title: General Partner
-------------------------------
ACCEL INVESTORS '93 L.P.
By:
----------------------------------
Title:
-------------------------------
Title:
-------------------------------
-42-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date above written.
SCRIPTGEN PHARMACEUTICALS, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, President
PURCHASERS:
CW VENTURES II, L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL IV L.P.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
ACCEL INVESTORS '93 L.P.
BY: /s/ [illegible]
---------------------------------
GENERAL PARTNER
-00-
XXXXX XXXXX L.P.
BY: ACCEL JAPAN ASSOCIATES L.P.
ITS GENERAL PARTNER
BY: /s/ [illegible]
------------------------------------
GENERAL PARTNER
ACCEL KEIRETSU L.P.
BY: ACCEL PARTNERS & CO., INC.
ITS GENERAL PARTNER
BY: /s/ [illegible]
------------------------------------
Xxxxxxx X. Xxxxxxxxx Partners
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Xxxxxx X. Xxxxxxxxx
General Partner
PROSPER PARTNERS
BY: /s/ [illegible]
------------------------
ATTORNEY-IN-FACT
ATLAS VENTURE FUND II, L.P.
By:
------------------------
Print Name:
----------------
Title:
---------------------
-00-
XXXXX XXXXX L.P.
By:
------------------------
Print Name:
----------------
Title:
---------------------
ACCEL KEIRETSU L.P.
By:
------------------------
Print Name:
----------------
Title:
---------------------
XXXXXXX X. XXXXXXXXX PARTNERS
By:
------------------------
Print Name:
----------------
Title:
---------------------
PROSPER PARTNERS
By:
------------------------
Print Name:
----------------
Title:
---------------------
ATLAS VENTURE FUND II, L.P.
by Atlas Venture Associates II, L.P., its general
partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Print Name: Xxxxx X. Xxxxxxxx
-------------------
Title: General Partner
------------------------
-00-
XXX XXXXXXXXXX ASSOCIATES 5
By: /s/ Xxxxx Xxxxxx
------------------------
Print Name: Xxxxx Xxxxxx
----------------
Title: General Partner
---------------------
VENROCK ASSOCIATES
By:
------------------------
Print Name:
----------------
Title:
---------------------
ROVENT II LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By:
------------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
-44-
NEW ENTERPRISE ASSOCIATES 5
By:
------------------------
Print Name:
----------------
Title:
---------------------
VENROCK ASSOCIATES
By: /s/ Xxxxxxx X. Envin
-------------------------
Print Name: Xxxxxxx X. Envin
-----------------
Title: General Partner
----------------------
ROVENT II LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By:
------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
-44-
NEW ENTERPRISE ASSOCIATES 5
By:
------------------------
Print Name:
----------------
Title:
---------------------
VENROCK ASSOCIATES
By:
-------------------------
Print Name:
-----------------
Title:
----------------------
ROVENT II LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By: /s/ J.S. Fisherman
------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
-00-
XXXXXX XXXX DEVELOPMENT AND
INVESTMENT LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By: /s/ J.S. Fisherman
------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
ADVENT INTERNATIONAL INVESTORS
II LIMITED PARTNERSHIP
By: Advent International Corporation,
its General Partner
By: /s/ J.S. Fisherman
------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
SCRIPT PARTNERS LIMITED PARTNERSHIP
By:
------------------------
Print Name:
----------------
Title:
---------------------
SUBSEQUENT PURCHASER:
Name:
By:
------------------------
Title:
--------------------
Address:
--------------------
Shares of Series B Preferred Stock to be purchased
at Subsequent Closing:
-00-
XXXXXX XXXX DEVELOPMENT AND
INVESTMENT LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By:
--------------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
ADVENT INTERNATIONAL INVESTORS
LIMITED PARTNERSHIP
By: Advent International Corporation,
its General Partner
By:
--------------------------------------
Xxxxx X. Fisherman, Senior Investment
Manager
SCRIPT PARTNERS LIMITED PARTNERSHIP
By: /s/ Ansbert X. Xxxxxxx
------------------------
Print Name: Ansbert X. Xxxxxxx
----------------
Title: President
---------------------
SUBSEQUENT PURCHASER:
Name:
By:
------------------------
Title:
-------------------
Title:
---------------------
Shares of Series B Preferred Stock to be purchased
at Subsequent Closing:
-45-
For purposes of Section 7.12 and 8.3 only:
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
-46-
For purposes of Section 7.12 and 8.3 only:
-----------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxx
-----------------------------
Xxxxx Xxxxxxxx
-46-
