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EXHIBIT 10.16
March 27, 2000
Motorola, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Common Stock Purchase Agreement
Ladies and Gentlemen:
The purpose of this letter (the "Agreement") is to confirm in writing
the agreement of Motorola, Inc. ("Motorola") to purchase shares of Common Stock
of Genometrix Incorporated ("Genometrix"), a Delaware corporation, pursuant to
the terms set forth herein.
Motorola is currently the record and beneficial owner of 706,714 shares
of Genometrix Series D Convertible Preferred Stock and 2,666,667 shares of
Genometrix Series E Convertible Preferred Stock, which are convertible
automatically into shares of Common Stock of Genometrix upon the completion of a
qualified initial public offering by Genometrix, into an aggregate of 3,373,381
shares of Common Stock (collectively, "Motorola Common Stock Equivalents").
Reference is made to the Stock Purchase Agreement (the "Series D Agreement")
dated December 28, 1998 and the Series E Stock Purchase Agreement (the "Series E
Agreement") dated as of July 6, 1999, each entered into by and between
Genometrix Incorporated, now a wholly-owned subsidiary of Genometrix and
currently known as Genometrix Genomics Incorporated ("Genometrix Sub"), and
Motorola and the First Amended and Restated Registration Rights Agreement
("Registration Rights Agreement") dated as of July 6, 1999, entered into by and
between Genometrix Sub and Motorola. Genometrix and Motorola agree that
Genometrix shall hereby become a party to the Series D Agreement, the Series E
Agreement and the Registration Rights Agreement and shall, effective
immediately, have all the obligations and rights of Genometrix Sub as set forth
in each such agreement.
On March 15, 2000, Genometrix filed with the United States Securities
and Exchange Commission ("SEC") a Registration Statement on Form S-1
("Registration Statement") (No. 333-32584) with respect to an initial public
offering of shares of its Common Stock (the "Genometrix IPO"). Motorola
acknowledges that it has received a copy of the Genometrix Form S-1, without
exhibits, that it has access to the Registration Statement, with exhibits, over
the Internet, and that it has had access to such officers of, and information
from, Genometrix as it deems prudent. Genometrix has advised Motorola that the
Genometrix IPO is contemplated to be underwritten by Xxxxxx Brothers and Chase
H&Q as co-managing underwriters and Xxxx Xxxxxxxx Xxxxxxx and Xxxxxx Xxxxxx
Partners as co-underwriters (collectively, the "Underwriters").
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Contemporaneously with the Closing of the Genometrix IPO (as defined
below), Motorola shall purchase and Genometrix shall issue and sell to Motorola
at the Per-Share Purchase Price (as defined below) such number of shares of the
Common Stock of Genometrix (the "Purchased Common Shares") as shall equal, to
the nearest whole number, the lesser of (a) the sum of $10,000,000 divided by
the per share offering Price to Public set forth on the cover page of the final
Prospectus, as defined below (the "Per-Share Purchase Price"), and (b) that
number of shares such that the Purchased Common Shares equal fifteen percent
(15%) of the total number of shares of Common Stock issued in the Genometrix IPO
in the first closing (i.e. exclusive of the shares sold in connection with the
exercise of the Underwriters' over allotment option) (collectively, "Motorola
Stock Purchase Commitment"). The term "Prospectus" as used herein shall mean the
prospectus, as amended, on file with the SEC at the time the Registration
Statement becomes effective, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A, if
applicable, except that if the prospectus filed by Genometrix pursuant to Rule
424(b) differs from the prospectus on file at the time the Registration
Statement becomes effective, the term "Prospectus" shall refer to the Rule
424(b) Prospectus from and after the time it was filed with the SEC or
transmitted to the SEC for filing. The "Closing" as used herein shall mean the
first date upon which Genometrix receives from the Underwriters the proceeds of
the Genometrix IPO, less underwriting discount and commissions.
Genometrix represents to Motorola that:
1. As of the date of the underwriting agreement entered into with
the Underwriters of the Genometrix IPO (the "Underwriting
Agreement"), the representations and warranties set forth in
such Underwriting Agreement will be true and correct in all
respects and incorporated by reference herein.
2. Genometrix is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
Genometrix has full power and authority to own and operate its
properties and assets, and to carry on its business as
presently conducted. Genometrix is duly qualified, is
authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions,
in the aggregate, in which failure to do so would not have a
material adverse effect on Genometrix or its business.
3. All corporate action on the part of Genometrix, its officers,
directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, for the sale and
issuance of the Purchased Common Shares pursuant hereto and
for the performance of Genometrix's obligations hereunder has
been taken or will be taken prior to the Closing. This
Agreement, when executed and delivered, will be a valid and
binding obligation of Genometrix enforceable in accordance
with its terms. The sale of the Purchased Common Shares is not
and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied
with.
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4. The execution, delivery and performance of and compliance with
this Agreement and the issuance and sale of the Purchased
Common Shares pursuant hereto will not (i) materially conflict
with, or result in a material breach or violation of, or
constitute a material default under, or result in the creation
or imposition of any material lien, (ii) violate, conflict
with or result in the breach of any material terms of, or
result in the material modification of, any material contract
or otherwise give any other contracting party the right to
terminate a material contract, or constitute (or with notice
or lapse of time both constitute) a material default under any
material contract to which Genometrix is a party or by or to
which it or any of its assets or properties may be bound or
subject or (iii) result in any violation, or be in conflict
with or constitute a default under any term, of its Articles
of Incorporation or bylaws.
5. The Purchased Common Shares which will be purchased by
Motorola hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration
expressed herein, will be duly and validly authorized and
issued, fully paid and nonassessable, and will be free of any
liens or encumbrances.
6. There is no action, suit, proceeding nor, to Genometrix'
knowledge, any investigation pending or currently threatened
against Genometrix, that questions the validity of this
Agreement or the right of Genometrix to enter into such
agreements, or which might result, either individually or in
the aggregate, in any material adverse change in the assets,
condition, affairs or prospects of Genometrix, financial or
otherwise.
7. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority on the
part of Genometrix is required in connection with the valid
execution, delivery, and performance of this Agreement or the
offer, sale or issuance of the Purchased Common Shares, or the
consummation of any other transaction contemplated by this
Agreement except certain filings as may be required under the
Securities Act and state securities laws and regulations,
which filings will be made timely in accordance with the
applicable law or regulation.
The Motorola Stock Purchase Commitment is conditioned on the following:
1. As of the Closing, there shall be no material adverse change
in the financial condition or operations of Genometrix since
December 31, 1999, such determination to be made, in part, on
any changes set forth in the final Prospectus;
2. The Closing shall occur concurrently with the closing of the
Motorola Stock Purchase Commitment;
3. The representations made by Genometrix set forth above shall
be true and correct as of the Closing and Motorola shall have
received a Certificate of the Chief Executive Officer and
Corporate Secretary of Genometrix to that effect;
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4. Genometrix shall have caused to be delivered an opinion of
counsel to Motorola in form and substance customary for a
transaction of this nature, and Motorola shall have received
such further documents and assurances as are customary and
prudent in a transaction of this nature;
5. Notwithstanding anything else in this Agreement, if the sale
and issuance of the Purchased Common Shares is subject to the
premerger notification requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), it shall be a condition to the Motorola Stock Purchase
Commitment that any waiting period under the HSR Act
applicable to the purchase of the Purchased Common Shares
shall have expired or been terminated and any approvals
required thereunder shall have been obtained, and the parties
shall cooperate in promptly filing premerger reports and in
taking all steps reasonably necessary to obtain early
termination of any applicable HSR Act waiting periods. If any
such waiting period shall not have expired or been subject to
early termination on or before the date ninety (90) days from
the date of this Agreement, either party may terminate this
Agreement by giving written notice to the other.
6. If the Closing does not occur by September 30, 2000, Motorola
in its discretion may elect to terminate this Agreement by
providing written notice to Genometrix at any time thereafter.
Effective upon the purchase by Motorola of the Purchased Common Shares,
(i) the Registration Rights Agreement shall be, without further action by
Motorola or Genometrix, be deemed to be amended such that the term "Registrable
Securities", as defined therein, shall further include the Purchased Common
Shares, and Motorola shall be entitled to all the rights with respect to the
registration of the Purchased Common Shares with the SEC as are set forth in the
Registration Rights Agreement; and (ii) the Lock-Up Letter Agreement from
Motorola to the Underwriters, dated March 15, 2000, would, by the terms set
forth herein, include the Purchased Common Shares.
Motorola represents to Genometrix that:
1. Motorola is an "accredited investor" as such term is defined
in Rule 501 of Regulation D under the Securities Act and is a
sophisticated investor and has such knowledge and experience
in financial, tax, business matters, securities and
investments including, without limitation, experience in
investments such as the purchase of the Purchased Common
Shares, as to enable Motorola to utilize the information made
available to it in connection with the sale of the Purchased
Common Shares, to evaluate the merits and risks of an
investment in the Purchased Common Shares and to make an
informed investment decision with respect thereto;
2. Motorola understands that the issuance and sale of the
Purchased Common Shares have not been, and except as provided
in the Registration Rights Agreement, will not be, registered
under the Securities Act of 1933, as amended (the "Securities
Act") or
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any state securities laws;
3. Motorola is acquiring the Purchased Common Shares solely for
its own account for investment and not with a view to resale
or distribution and has no present intention of transferring
the Purchased Common Shares to any other person or entity,
except, at Motorola's election, to a majority-owned subsidiary
of Motorola;
4. Motorola understands that it must bear the economic risk of
the investment indefinitely because none of the Purchased
Common Shares have been registered under applicable securities
laws and therefore, none of the Purchased Common Shares may be
sold, hypothecated or otherwise disposed of unless
subsequently registered under the Securities Act and
applicable state securities laws or an exemption from
registration is available and, accordingly, that a legend
shall be placed on the certificate(s) representing the
Purchased Common Shares in substantially the following form;
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN TAKEN
FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1)
EITHER (A) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SHARES SHALL BE EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) GENOMETRIX SHALL HAVE RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT IS THEN AVAILABLE, AND (2) THERE SHALL HAVE
BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS."
5. The representations of Motorola contained herein are accurate
and may be relied upon by Genometrix in determining the
availability of an exemption from registration under the
Securities Act and state securities laws in connection with
the offering and sale of the Purchased Common Shares;
6. Motorola has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions
contemplated hereby, and thereby and has taken all necessary
corporate action to authorize the execution, delivery and
performance of this Agreement, and this Agreement will
constitute the valid and binding obligations of Motorola
enforceable against Motorola.
This Agreement shall be governed in all respects by the laws of the
State of Delaware. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by Motorola and the closing of
the transactions contemplated hereby. This Agreement may be amended or modified
only upon the written consent of the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one instrument.
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Genometrix agrees that the material terms of this Agreement will be no
less favorable to Motorola than the terms given to other investors (including
investors that may enter into such agreements after the date hereof, if any)
that are purchasing shares of Genometrix capital stock in private placements
that are closing concurrently with the Closing.
If the foregoing is in conformity with your understanding and agreed
to, please sign below where indicated.
GENOMETRIX INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
Its: Chief Executive Officer
The foregoing is in conformity with our understanding and agreed to as
of this twenty-seventh day of March, 2000.
MOTOROLA, INC.
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Its: Executive Vice President and President of Global
Strategy and Corporate Development
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