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EXHIBIT 10.2
PREFERRED STOCK PURCHASE AGREEMENT
(200,000 Shares of Series Z Preferred Stock)
By and Between
CombiChem, Inc.,
a California corporation
and
Dr. Xxxxxx Xxxxxxx
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TABLE OF CONTENTS
Page
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1. Sale of Preferred Stock..................................................... 1
2. Closing..................................................................... 1
3. Representations and Warranties by the Company............................... 2
(a) Organization and Standing; Articles and Bylaws....................... 2
(b) Capitalization....................................................... 2
(c) Authorization........................................................ 2
(d) Validity of the Shares............................................... 2
4. Representations and Warranties by the Purchaser............................. 2
(a) Authorization........................................................ 2
(b) Investment Intent.................................................... 3
(c) Reliance Upon the Purchaser's Representations........................ 3
(d) Restricted Securities................................................ 3
(e) Receipt of Information............................................... 3
(f) Investment Experience................................................ 4
(g) Limitations on Disposition........................................... 4
(h) Public Sale.......................................................... 4
(i) Legends.............................................................. 4
5. Company Right of First Refusal.............................................. 5
6. Market Standoff Agreement................................................... 5
7. Covenants of the Company.................................................... 5
(a) Delivery of Financial Statements..................................... 5
(b) Termination of Covenants............................................. 6
(c) Stock Registration................................................... 6
8. Defined Terms............................................................... 6
9. Miscellaneous............................................................... 6
(a) Further Instruments and Actions...................................... 6
(b) Notices.............................................................. 7
(c) Governing Law........................................................ 7
(d) Successors and Assigns............................................... 7
(e) Amendments and Waivers............................................... 7
(f) Counsel to the Company............................................... 7
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EXHIBITS
Exhibit A Technology List
Exhibit B Patent Assignment Agreement
Exhibit C Consent of Spouse
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PREFERRED STOCK PURCHASE AGREEMENT
(200,000 Shares of Series Z Preferred Stock)
THIS SERIES Z PREFERRED STOCK PURCHASE AGREEMENT ("Agreement") is made as
of October 12, 1994, by and between CombiChem, Inc., a California corporation
(the "Company"), and Dr. Xxxxxx Xxxxxxx (the "Purchaser," which term includes
Purchaser's heirs, executors, guardians, successors and assigns).
WHEREAS, the Purchaser is the owner of certain intellectual property
rights and other rights to technology as set forth on Exhibit A (the
"Technology");
WHEREAS, the Purchaser desires to transfer all of Purchaser's rights,
title and interest to the Technology to the Company as consideration for
obtaining a fixed number of shares of the Company's preferred stock; and
WHEREAS, the Company desires to obtain all of the Purchaser's right, title
and interest to the Technology and the Company is willing to sell a fixed number
of shares of the Company's preferred stock to Purchaser to obtain such rights
and stock.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
1. Sale of Preferred Stock. Subject to the terms and conditions of this
Agreement, the Purchaser hereby purchases, and the Company hereby sells to the
Purchaser, 200,000 shares of the Company's Series Z Preferred Stock (the
"Shares") at a price per share of fifty cents ($0.50). As consideration for the
Shares, the Purchaser hereby transfers and assigns to the Company all of the
Purchaser's right, title and interest in and to the Technology. The Parties
agree that the Technology has an aggregate value of one hundred thousand dollars
($100,000). The Purchaser also agrees to execute any additional agreements,
instruments or documents which the Company, in its absolute discretion, deems
necessary or appropriate to transfer the Technology to the Company.
2. Closing. The purchase and sale of the Shares shall take place at the
offices of the Company, simultaneous with the execution of this Agreement, or at
such other place and time as the Company and the Purchaser shall mutually agree,
either orally or in writing (the "Closing"). At the Closing, Purchaser shall
deliver to the Company such agreements, instruments and documents as may be
necessary to effect the transfer of the Technology to the Company, including,
but not limited to, six (6) duly executed patent assignment agreements
substantially in the form attached hereto as Exhibit B (individually a "Patent
Assignment Agreement"). Promptly following the Closing, Purchaser shall deliver
to the Company a duly executed Consent of Spouse agreement in the form attached
hereto as Exhibit C. Within ten (10) business days following the Closing, after
the Purchaser has delivered the Consent of Spouse agreement, the Company shall
deliver to the Purchaser a certificate, registered in the name the Purchaser
designates by notice
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to the Company, representing the Shares to be purchased by the Purchaser from
the Company, dated the date of the Closing.
3. Representations and Warranties by the Company.
The Company hereby represents and warrants to the Purchaser as
follows:
(a) Organization and Standing; Articles and Bylaws. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of California, and has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted. The Company has furnished the Purchaser or its
special counsel with copies of its Articles of Incorporation and its Bylaws.
Said copies are true, correct, and complete and contain all amendments through
the date of the Closing.
(b) Capitalization. The authorized capital stock of the Company,
immediately prior to the Closing, will consist of (a) 30,000,000 shares of no
par value Common Stock, 1,825,000 shares of which are issued and outstanding or
committed for issuance on the date hereof; and (b) 10,000,000 shares of no par
value Preferred Stock, of which: (i) 1,000,000 shares have been designated
Series A Preferred Stock, 1,000,000 shares of which are issued and outstanding
or committed for issuance on the date hereof; and (ii) 1,500,000 shares have
been designated Series Z Preferred Stock, 200,000 shares of which are being sold
and issued to Purchaser pursuant to this Agreement. All issued and outstanding
shares of the Company's capital stock have been duly authorized and validly
issued and are fully paid and nonassessable.
(c) Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
the Company's obligations under this Agreement and the Stock Registration Rights
Agreement, and for the authorization, issuance, sale and delivery of the Shares
and the Common Shares issuable upon conversion thereof ("Underlying Common
Shares") has been taken prior to the Closing. This Agreement, when executed and
delivered by the Company and the Purchasers, and the Stock Registration Rights
Agreement shall constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of
debtors.
(d) Validity of the Shares. The Shares and the Underlying Common
Shares will be validly issued, fully paid and nonassessable.
4. Representations and Warranties by the Purchaser.
The Purchaser hereby represents and warrants to the Company as
follows:
(a) Authorization. The Purchaser has the requisite legal power and
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authority to enter into this Agreement and that this Agreement when executed
shall constitute a valid and legally binding obligation of the Purchaser.
(b) Investment Intent. This Agreement is made with the Purchaser
in reliance upon Purchaser's representation to the Company, which by Purchaser's
execution hereof Purchaser confirms, that the Shares have been acquired with
Purchaser's own property (transfer of the Technology) for investment for an
indefinite period for Purchaser's own account, not as a nominee or agent, and
not with a view to the sale or distribution of any part thereof, and that
Purchaser has no present intention of selling, granting participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that Purchaser does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer, or grant
participations, to such person or to any third person, with respect to any of
the Shares.
(c) Reliance Upon the Purchaser's Representations. The Purchaser
understands (i) that the Shares are not, and the Underlying Common Shares
acquired on conversion thereof at the time of issuance may not be, registered
under the Securities Act or qualified under the California Corporate Securities
Law of 1968, as amended (the "LAW"), and (ii) that the Shares are being issued
to the Purchaser on the ground that the sale provided for in this Agreement and
the issuance of securities hereunder is exempt from registration under the
Securities Act pursuant to Section 4(2) thereof and/or Regulation D promulgated
thereunder and the exemption from qualification provided by Section 25102(f) of
the Law, and (iii) that the Company's reliance on such exemptions is predicated
on the Purchaser's representations set forth herein. The Purchaser realizes that
the basis for the exemptions may not be present if, notwithstanding such
representations, the Purchaser has in mind merely acquiring the Shares for a
fixed or determinable period in the future, or for a market rise, or for sale if
the market does not rise. The Purchaser does not have any such intention. These
exemptions only exempt the issuance of the Shares to the Purchaser and not any
sale or other disposition of the Shares or any interest therein by the
Purchaser.
(d) Restricted Securities. The Purchaser hereby confirms that the
Purchaser has been informed that the Shares are restricted securities under the
Securities Act and may not be resold or transferred unless the Shares are first
registered under the Federal securities laws or unless an exemption from such
registration is available. In addition, the Purchaser understands that any
resale or transfer must comply with applicable state securities laws.
Accordingly, the Purchaser hereby acknowledges that the Purchaser is prepared to
hold the Shares for an indefinite period, and that the Purchaser is familiar
with the provisions of Rule 144 of the Securities and Exchange Commission issued
under the Securities Act, and is aware that Rule 144 is not presently available
to exempt the sale of the Shares from the registration requirements of the
Securities Act.
(e) Receipt of Information. The Purchaser acknowledges that
Purchaser has received all the information Purchaser considers necessary or
appropriate for deciding whether to purchase the Shares. The Purchaser further
represents that Purchaser has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of
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the offering of the Shares and the business, properties, prospects, and
financial condition of the Company, and to obtain additional information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy or any
information furnished to Purchaser or to which Purchaser had access.
(f) Investment Experience. In connection with the investment
representations made herein the Purchaser represents that Purchaser has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of Purchaser's investment, has the ability to
bear the economic risks of Purchaser's investment and has been furnished with
and has had access to all of the information Purchaser considers necessary or
appropriate to evaluate the risks and merits of an investment in the Shares, and
has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management.
(g) Limitations on Disposition. The Purchaser agrees that in no
event will Purchaser make a disposition of any of the Shares, unless and until
(a) Purchaser shall have notified the Company of the proposed disposition and
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (b) Purchaser shall have furnished the
Company with an opinion of counsel satisfactory to the Company to the effect
that (i) such disposition will not require registration of such Shares under the
Securities Act, or (ii) that appropriate action necessary for compliance with
the Securities Act has been taken, or (c) the Company shall have waived,
expressly and in writing, its rights under clauses (a) and (b) of this
subparagraph. The opinion shall also indicate that the disposition is exempt
from, in compliance with, or qualified under all applicable state securities
laws.
(h) Public Sale. The Purchaser agrees not to make, without the
prior written consent of the Company, any public offering or sale of the Shares,
or of the Underlying Common Shares, although permitted to do so pursuant to Rule
144(k) promulgated under the Securities Act, until the earlier of (i) six months
after the date on which the Company effects its initial registered public
offering pursuant to the Securities Act, or (ii) five years after the date of
the Closing of this Agreement.
(i) Legends. All certificates representing any shares of Shares of
the Company subject to the provisions of this Agreement shall have endorsed
thereon customary legends regarding:
(1) Restrictions on transfer under the Federal Securities
Act of 1933.
(2) Market Standoff Agreement pursuant to Section 6 hereof.
(3) Rights of First refusal upon any resale of the Shares,
pursuant to Section 5 hereof.
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(4) Any legend required by state securities laws.
5. Company Right of First Refusal. Before any shares of the Company
registered in the name of the Purchaser may be sold or transferred (including
transfer by operation of law or other involuntary transfer, but excluding
transfers by gift, will or intestate succession of the Purchaser) such shares
shall first be offered to the Company in the manner and in accordance with the
procedures and terms as set forth in Article VI of the Company's Bylaws. This
right of first refusal shall terminate upon the closing of the Company's initial
public offering of the common shares of the Company.
6. Market Standoff Agreement.
(a) In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement
filed under the Securities Act, including the Company's initial public offering,
the Purchaser shall not sell, make any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to the Shares without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for one hundred eighty (180)
days from and after the effective date of such registration statement or such
longer time as may be required by the Company's underwriters. The limitations of
this Section 6 shall remain in effect for the two-year period immediately
following the effective date of the Company's initial public offering and shall
thereafter terminate and cease to have any force or effect.
(b) In the event any stock dividend, stock split, recapitalization
or other change affecting the Company's outstanding common shares is effected
without receipt of consideration, then any new, substituted or additional
securities distributed with respect to the Shares shall be immediately subject
to the provisions of this Section 6 to the same extent the Shares are at such
time covered by such provisions.
(c) In order to enforce the limitations of this Section 6, the
Company may impose stop-transfer instructions with respect to the Shares until
the end of the applicable stand-off period.
(d) The obligations in this Section 6 shall not apply to a
registration relating solely to employee benefit plan shares or to a Rule 145
transaction registered on Form S-4.
7. Covenants of the Company.
(a) Delivery of Financial Statements. The Company shall deliver to
the Purchaser:
(1) as soon as practicable after the end of each fiscal year
of the
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Company, audited financial statements for such fiscal year, prepared in
accordance with generally accepted accounting principles ("GAAP") together with
an annual report of the Company; and
(2) As soon as practicable after the end of each of the
first three (3) quarters of each fiscal year of the Company, unaudited financial
statements for such fiscal quarter.
(b) Termination of Covenants. The covenants set forth above in
this Section 7 shall terminate and be of no further force or effect upon the
consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the firm commitment
underwritten offering of its securities to the general public.
(c) Stock Registration. Simultaneous with entering into this
Agreement, the Company and the Purchaser are also entering into a Stock
Registration Rights Agreement which grants certain rights to the Purchaser to
have the Underlying Common Shares registered.
8. Defined Terms.
When used herein the following defined terms shall have the
respective definitions as set forth below:
Agreement shall have the meaning set forth in the first paragraph.
Closing shall have the meaning set forth in Section 2.
Company shall have the meaning set forth in the first paragraph.
GAAP shall have the meaning set forth in Section 7(a)(1).
Law shall have the meaning set forth in Section 4(c).
The Purchaser shall have the meaning set forth in the first paragraph.
Shares shall have the meaning set forth in Section 1.
Technology shall have the meaning set forth in the second paragraph.
Underlying Common Shares shall have the meaning set forth in Section 3(c).
9. Miscellaneous.
(a) Further Instruments and Actions. The parties agree to execute
such further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
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(b) Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to the other party hereto at
Purchaser's address hereinafter shown below Purchaser's signature or at such
other address as such party may designate by advance written notice to the other
party hereto.
(c) Governing Law. This Agreement has been negotiated, executed
and delivered in the State of California. The parties hereto agree that all
questions pertaining to the validity and interpretation of this Agreement shall
be determined in accordance with the laws of the State of California.
(d) Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon the Purchaser, Purchaser's heirs,
executors, administrators, guardians, successors and assigns.
(e) Amendments and Waivers. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all previous understandings, written or oral. This Agreement may only
be amended with the written consent of the parties hereto, or the successors or
assigns of the foregoing, and no oral waiver or amendment shall be effective
under any circumstances whatsoever.
(f) Counsel to the Company. The Purchaser acknowledges and agrees
that this Agreement has been prepared by Xxxx Xxxx Xxxx & Freidenrich, counsel
to the Company, which counsel has represented the interests of the Company and
not those of the Purchaser with respect to the transactions documented by this
Agreement. The Purchaser further acknowledges and agrees that the Purchaser has
been provided the opportunity and encouraged to consult with counsel of the
Purchaser's own choosing with respect to this Agreement. The Purchaser certifies
and acknowledges that the Purchaser has carefully read all of the provisions of
this Agreement and that the Purchaser fully understands and shall fully and
faithfully comply with such provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
CombiChem, Inc.,
a California corporation
By: /s/ XXXXXXXX XXXXXXX
----------------------------------------
Xxxxxxxx Xxxxxxx, President
Address: 00000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
THE PURCHASER:
/s/ XXXXXX XXXXXXX
--------------------------------------------
Dr. Xxxxxx Xxxxxxx
Address: 00X Xx. Xxxxxxx Xxxxxxx
Xxxxxxxxx XX0 0X0
Xxxxxxx
[Signature Page to Series Z Preferred Stock Purchase Agreement]
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EXHIBIT A
LIST OF TECHNOLOGY
See attached.
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EXHIBIT A
"PATENTS"
1. Xxxxxx Xxxxxxx, "Combinatorial libraries and methods for their use,"
US Patent Application Serial No. 07/978,646, filed November 19, 1992.
2. Xxxxxx Xxxxxxx, "Combinatorial libraries and methods for their use,"
US Patent Application Serial No. 08/168,966, filed December 15, 1993
(continuation in part of 07/978,646).
3. Xxxxxx Xxxxxxx, "Combinatorial libraries and methods for their use,"
US Patent Application Serial No. 08/281,195, filed July 26, 1994 (continuation
in part of 08/168,966).
4. Xxxxxx Xxxxxxx, "Multidimensional conduit combinatorial library
synthesis device," US Patent Application Serial No. 08/281,194, filed July 26,
1994.
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EXHIBIT B
PATENT ASSIGNMENT AGREEMENT
See attached.
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ASSIGNMENT
WHEREAS, I, XXXXXX XXXXXXX, hereinafter referred to as "ASSIGNOR,"
have invented certain new and useful improvements as described and set forth in
the below-identified application for United States Letters Patent:
Title of Invention: "Combinatorial libraries and methods for their
use."
Date of Execution: Filing Date: 11/19/92
Serial No.: 07/978,646.
WHEREAS, COMBICHEM, INC., hereinafter referred to as "ASSIGNEE", is
desirous of acquiring the entire right, title and interest in the said invention
and application and in any Letters Patent which may be granted on the same;
NOW, THEREFORE, TO ALL WHOM IT MAY CONCERN: Be it known that, for One
Dollar ($1.00) and other good and valuable considerations, receipt of which is
hereby acknowledged by Assignor, Assignor has sold, assigned and transferred,
and by these presents does sell, assign and transfer unto the said Assignee, and
Assignee's successors and assigns, all right, title and interest in and to the
said invention, said application for United States Letters Patent, and any
Letters Patent which may hereafter be granted on the same in the United States
and all countries throughout the world including any divisions, renewals,
continuations in whole or in part, substitutions, conversions, reissues,
prolongations or extensions thereof, said interest to be held and enjoyed by
said Assignee as fully and exclusively as it would have been held and enjoyed by
said Assignor had this assignment and transfer not been made, to the full end
and term of any such Letters Patent.
Assignor further agrees that he will, without charge to said Assignee, but
at Assignee's expense, cooperate with Assignee in the prosecution of said
application and/or applications, execute, verify, acknowledge and deliver all
such further papers, including applications for Letters Patent and for the
reissue thereof, and instruments of assignment and transfer thereof, and will
perform such other acts as Assignee lawfully may request, to obtain or maintain
Letters Patent for said invention and improvement in any and all countries, and
to vest title thereto in said Assignee, or Assignee's successors and assigns.
IN TESTIMONY WHEREOF, Assignor has hereunto signed his name to this
assignment on the date indicated below.
Dated: October 12, 1994 _____________________________________
XXXXXX XXXXXXX
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On October 12, 1994, before me, the undersigned Notary Public,
personally appeared XXXXXX XXXXXXX, personally known to me or proved to me on
the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument, and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
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CONSENT OF SPOUSE
I, May Xxxxx Xxxxxxx, spouse of Dr. Xxxxxx Xxxxxxx, have read and approve
the foregoing Series Z Stock Purchase Agreement dated October 12, 1994 (the
"Agreement"). I hereby appoint my spouse as my attorney-in-fact in respect to
the transfer or exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said
Agreement, the Technology transferred thereto as consideration for the Shares or
in the Shares issued pursuant thereto under the community property laws of the
State of California or similar laws relating to marital property in effect in
the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated: October 20, 1994
/s/ MAY XXXXX XXXXXXX
----------------------------------
May Xxxxx Xxxxxxx
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