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EXHIBIT 10.12
MANAGEMENT SUBSCRIPTION AGREEMENT
This Management Subscription Agreement (the "Agreement") is entered into as
of December 12, 1988 between Toxi-Lab, Inc., a California corporation (the
"Company"), and the person listed on Schedule I hereto (the "Purchaser")
(together with the Company, the "Parties").
RECITALS
A. The Company was recently incorporated for the purpose of acquiring the
assets and business of the Analytical Systems Division of Xxxxxx Laboratories,
Inc. (the "Acquisition"). In connection with the Acquisition, the Company is
selling shares of its common stock, par value $.01 per share (the "Common
Stock") for a purchase price of $1.00 per share (the "Per Share Price") to a
limited number of key employees, to provide incentive for such key employees to
remain employed by the Company and to exert added efforts towards its growth and
success.
B. The Purchaser desires to subscribe for and purchase from the Company,
and the Company desires to sell to the Purchaser, the number of shares of Common
Stock set forth opposite the Purchaser's name on Schedule I attached hereto (the
"Management Common Stock") at the Per Share Price.
C. Simultaneously with the execution of this Agreement, the Company is
executing other Management Subscription Agreements which are identical to this
Agreement, except as to the number of shares of Common Stock covered thereby
(the "Other Purchaser Agreements") with other purchasers who will be key
employees of the Company (collectively, the "Other Purchasers"). The sale of
Management Common Stock to the Purchaser and the Other Purchasers are to be
separate sales, and this Agreement and the Other Purchase Agreements are to be
separate agreements, but references to this "Agreement" shall include the Other
Purchase Agreements where the context so permits, together with all
modifications hereof and thereof. In addition, the Company has entered into an
agreements with First Interstate Capital, Inc., a California corporation
("FICI") and Birch Street Partners, a California general partnership ("BSP")
providing for, among other things, the purchase of shares of Series A Redeemable
Preferred Stock, par value $.01 per share (the "Redeemable Preferred Stock"),
and Series B Convertible Preferred Stock, par value $.01 per share (the
"Convertible Preferred Stock") of the Company by FICI and BSP.
AGREEMENT
In order to implement the foregoing and in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties agree as
follows:
I. DEFINITIONS
The following terms shall have the meanings ascribed to such terms in the
Sections set forth below:
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Term Section
---- -------
Acquisition Recitals
Act 3.1
Agreement Recitals
BSP Recitals
Closing 2.2
Common Stock Recitals
Company Recitals
Convertible Preferred Stock Recitals
Exchange Act 5.2
Fair Market Value 4.2(d)
FICI Recitals
"for cause" 4.2(a)
For Cause Repurchase Event 4.2(a)
Investor Demand 6.1
Involuntary Repurchase Event 4.2(b)
Management Common Stock Recitals
Offer 4.1
Offeror 4.1
Other Purchasers Recitals
Other Purchase Agreements Recitals
Parties Recitals
Per Share Price Recitals
Piggyback Registration 6.1
Public offering 4.1
Purchaser Recitals
Purchase Price 2.1
Purchaser's Trust 3.2(e)
Purchaser's Estate 3.2(c)
Redeemable Preferred Stock Recitals
Registration Rights Agreement 5.1(d)
Repurchase Closing 4.2(e)
Rule 144 3.4(d)
Transfer 3.1
Transferee 3.2(d)
Transferee's Trust 3-2(f)
Transferee's Estate 3.2(d)
Unvested Management Common Stock 2.4(a)
Vested Management Common Stock 2.4(a)
Voluntary Repurchase Event 4.2(c)
II. SUBSCRIPTION FOR AND PURCHASE OF MANAGEMENT COMMON STOCK.
2.1. Purchase of Management Common Stock. Subject to the terms and
conditions hereinafter set forth, the Purchaser hereby subscribes for and agrees
to purchase, and the Company hereby agrees to sell to the Purchaser, that number
of shares of Management Common Stock set forth opposite the Purchaser's name on
Schedule I attached hereto, at a purchase price
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per share equal to the Per Share Price, for a total purchase price (the
"Purchase Price") in the amount set forth opposite the Purchaser's name on
Schedule I attached hereto.
2.2. The Time and Place of the Closing. The closing of the transactions
provided for in this Agreement (the "Closing") shall be held at 10:00 a.m.,
local time, on December 12, 1988, at the offices of Xxxxxx & Xxxxxxx, 000 Xxxx
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, or at such other
place as the parties shall agree.
2.3. Closing of the Purchase of the Management Common Stock. The Purchaser
shall deliver to the Company at the Closing the Purchase Price in immediately
available funds and in consideration of and upon receipt of the Purchase Price,
payable in accordance with this Section 2.3, the Company will deliver to the
Purchaser a certificate, in Purchaser's name, evidencing Purchaser's ownership
of the Management Common Stock.
2.4. Vesting of the Management Common Stock.
(a) A portion of the shares of Management Common Stock acquired
pursuant to this Agreement, will become "Vested Management Common Stock" on each
of the first five anniversaries of the Closing, if, in each case, the Purchaser
is still employed by the Company, any direct or indirect subsidiaries of the
Company or any corporation which owns 100% of the outstanding voting stock of
the Company on such anniversary. The portion of the shares of Management Common
Stock which will become Vested Management Common Stock on each of the first five
anniversaries of the Closing, if, in each case, the Purchaser is still employed
by the Company, any direct or indirect subsidiaries of the Company or any
corporation which owns 100% of the outstanding voting stock of the Company on
such anniversary shall be equal to the percentages of the total number of shares
of Management Common Stock purchased by the Purchaser at the Closing set forth
below opposite such anniversary:
Anniversary Percentage
----------- ----------
First 10%
Second 15
Third 20
Fourth 25
Fifth 30
Until such time as any of the Management Common Stock becomes
Vested Management Common Stock, it shall remain "Unvested Management Common
Stock."
(b) If prior to the fifth anniversary of the Closing, all or
substantially all of the assets of the Company are sold, or the Common Stock of
the Company is sold to any person (other than in accordance with Article III
hereof) who, after giving affect to such sale would own more than 50% of the
outstanding Common Stock after such sale, all Unvested Management Common Stock
held by the Purchaser, his spouse or immediate family member or the Purchaser's
Trust on the date of such sale shall immediately become Vested Management Common
Stock.
(c) Unless the Purchaser shall be required to pledge his shares of
Unvested Management Common Stock to Security Pacific National Bank in connection
with his guarantee
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of certain indebtedness of the Company relating to the Acquisition, the
Purchaser shall deposit with the Company certificates representing the Unvested
Management Common Stock, together with a duly executed stock assignment separate
from certificate in blank, which shall be held by the Secretary of the Company
pending the vesting of such Unvested Management Common Stock, pursuant to this
Section 2.4.
(d) Notwithstanding anything to the contrary in this Agreement, the
Purchaser shall, subject to the transfer restrictions and other rights and
obligations contained herein, have full rights of ownership in all shares of
Unvested Management Common Stock, including the right to vote and receive
dividends, if and when declared, with respect to such shares of Unvested
Management Common Stock, to the sane extent as with respect shares of Vested
Management Common Stock.
2.5. Conditions to the Obligations of the Parties Hereunder. The
obligations of each of the Parties hereto shall be subject to the following
conditions:
(a) Simultaneously with the sale to the Purchaser of the Management
Common Stock, the Company shall have received the proceeds of the additional
equity and debt financing contemplated by, and necessary to consummate, the
Acquisition;
(b) The representations and warranties made by the other Party in
this Agreement shall be true and correct in all material respects at and as of
the date of the Closing; and
(c) The Purchaser and the Company shall have entered into a
Proprietary Information Agreement, substantially in the form attached hereto as
Exhibit A.
III. PURCHASER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
3.1. No Resales. The Purchaser hereby represents and warrants that he is
acquiring the Management Common Stock for investment solely for his own account
and not with a view to, or for resale in connection with, the distribution or
other disposition thereof. Except as otherwise provided in Section 3.2 hereof,
the Purchaser agrees and acknowledges that he will not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of
(hereinafter "Transfer") any shares of the Vested Management Common Stock.
Except as otherwise provided in Section 3.2 hereof, the Purchaser agrees and
acknowledges that he will not Transfer any shares of the Vested Management
Common Stock unless such Transfer complies with Section 4.1 of this Agreement
and (i) the Transfer is pursuant to an effective registration statement under
the Securities Act of 1933, as amended and the rules and regulations in effect
thereunder (the "Act") and complies with any applicable state securities laws,
or (ii) counsel for the Purchaser (which counsel shall be acceptable to the
Company) shall have furnished the Company with an opinion, satisfactory in form
and substance to the Company, to the effect that no such registration is
required because of the availability of an exemption from registration under the
Act and that the Transfer is exempt from any applicable state securities laws.
No transfer of any Management Common Stock in violation of this Agreement shall
be made or recorded on the books of the Company, and any such Transfer shall be
void and of no effect.
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3.2. Certain Permitted Transfers. Notwithstanding the general prohibition
on Transfers contained in Section 3.1 hereof, the Company acknowledges and
agrees that any of the following Transfers are deemed to be in compliance with
the Act, state securities laws and this Agreement and no opinion of counsel is
required in connection therewith:
(a) Transfer made by the Purchaser of all or any portion of his
Management Common Stock to the Company pursuant to Article IV thereof;
(b) A Transfer made by the Purchaser of all or any portion of his
Vested Management Common Stock to one of the Other Purchasers, including,
without limitation, the Vice President of Marketing of the Company; provided,
however, that no such Transfer shall be of any force or effect or shall be given
effect on the books of the Company unless such Other Purchaser shall deliver to
the Company a written agreement agreeing to be bound by the terms of this
Agreement;
(c) A Transfer upon the death of the Purchaser of all or any portion
of his Vested Management Common Stock to his executors, administrators,
testamentary trustees, legatees or beneficiaries (the "Purchaser's Estate");
provided, however, that no such Transfer shall be of any force or effect or
shall be given effect on the books of the Company unless the Purchaser's Estate
shall deliver to the Company a written agreement agreeing to be bound by the
terms of this Agreement;
(d) Transfer to the executors, administrators, testamentary trustees,
legatees or beneficiaries of a person who has become a holder of all or any
portion of Purchaser's Vested Management Common Stock in accordance with the
terms of this Agreement (a "Transferee"); provided, however, that no such
Transfer shall be of any force or effect or shall be given effect on the books
of the Company unless the Transferee's executors, administrators, testamentary
trustees, legatees or beneficiaries (the "Transferee's Estate") shall deliver to
the Company a written agreement agreeing to be bound by the terms of this
Agreement;
(e) A Transfer made by the Purchaser of all or any portion of the
Management Common Stock made after the date hereof in compliance with the Act
and any applicable state securities laws to the Purchaser's spouse or any member
of his immediate family (father, mother, brother, sister, children or
grandchildren); provided, however, that no such Transfer shall be of any force
or effect or shall be given effect on the books of the Company unless the
Purchaser's spouse or such member of the Purchaser's immediate family shall
deliver to the Company a written agreement agreeing to be bound by the terms of
this Agreement;
(f) A Transfer made by a Transferee of all or any portion of the
Purchaser's Vested Management Common Stock made after the date hereof in
compliance with the Act and any applicable state securities laws to the
Transferee's spouse or any member of his immediate family (father, mother,
brother, sister, children or grandchildren); provided, however, that no such
Transfer shall be of any force or effect or shall be given effect on the books
of the Company unless the Transferee's spouse or such member of the Transferee's
immediate family shall deliver to the Company a written agreement agreeing to be
bound by the terms of this Agreement;
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(g) A Transfer made by the Purchaser of all or any portion of the
Management Common Stock made after the date hereof in compliance with the Act
and any applicable state securities laws to a trust or custodianship the
beneficiaries of which include only the Purchaser, his spouse or his lineal
descendants (a "Purchaser's Trust"); provided, however, that no such Transfer
shall be of any force or effect or shall be given effect on the books of the
Company unless the Purchaser's Trust shall deliver to the Company a written
agreement agreeing to be bound by the terms of this Agreement;
(h) A Transfer made by a Transferee of all or any portion of the
Purchaser's Vested Management Common Stock made after the date hereof in
compliance with the Act and any applicable state securities laws to a trust or
custodianship the beneficiaries of which include only a Transferee, the
Transferee's spouse or the Transferee's lineal descendants (a "Transferee's
Trust"); provided, however, that no such Transfer shall be of any force or
effect or shall be given effect on the books of the Company unless the
Transferee's Trust shall deliver to the Company a written agreement agreeing to
be bound by the terms of this Agreement; and
(i) A Transfer made by the Purchaser of all or any portion of the
Purchaser's Management Common Stock to Security Pacific National Bank pursuant
to that certain Guaranty and Security Agreement, dated as of December 12, 1988,
between Security Pacific National Bank and the Purchaser.
From and after the effective date of any Transfer permitted by this
Section 3.2, the Other Purchaser, the Purchaser's Estate, the Transferee's
Estate, the Purchaser's or any Transferee's spouse or immediate family member,
the Purchaser's Trust or the Transferee's Trust, as the case may be, shall be
the Purchaser for all purposes of this Agreement unless the content otherwise
requires.
3.3. Legend. Each certificate representing shares of Management Common
Stock shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). IN ADDITION, THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS
AND TRANSFER RESTRICTIONS SET FORTH IN THAT CERTAIN MANAGEMENT SUBSCRIPTION
AGREEMENT (THE "AGREEMENT") DATED AS OF DECEMBER 12, 1988 (A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY) AND MAY BE SUBJECT TO
REPURCHASE BY THE COMPANY, UNDER THE TERMS OF THE AGREEMENT. THEY MAY NOT
BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE AGREEMENT. EXCEPT AS
OTHERWISE PROVIDED IN THE AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF ANY VESTED SHARES REPRESENTED BY THIS
CERTIFICATE (A 'TRANSFER') MAY BE MADE UNLESS SUCH TRANSFER COMPLIES WITH
SECTION 4.1 OF THE
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AGREEMENT AND (A) SUCH TRANSFER IS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT') AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (B) THE COMPANY HAS BEEN FURNISHED
WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER IS
EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT, THE RULES AND
REGULATIONS IN EFFECT THEREUNDER AND ANY APPLICABLE STATE SECURITIES LAWS."
3.4. Securities Unregistered. The Purchaser acknowledges that he has been
advised that:
(a) the Management Common Stock has not been registered under the Act
or qualified under the applicable securities laws of any state;
(b) the Management Common Stock must be held indefinitely and the
Purchaser must continue to bear the economic risk of the investment in the
Management Common Stock unless it is subsequently registered under the Act
and qualified under applicable state securities laws or an exemption from
such registration or qualification is available;
(c) it is not anticipated that there will be any public market for
the Management Common Stock;
(d) Rule 144 promulgated under the Act ("Rule 144") is not presently
available with respect to the sales of any securities of the Company, and
the Company has made no covenant to make Rule 144 available (except as
provided in Section 5.2 hereof);
(e) when and if shares of the Management Common Stock may be disposed
of without registration in reliance on Rule 144, such disposition can be
made only in limited amounts in accordance with the terms and conditions of
Rule 144;
(f) if the Rule 144 exemption is not available, public sale without
registration will require compliance with Regulation A promulgated under
the Act or some other exemption under the Act and compliance with
applicable state securities laws;
(g) a restrictive legend in the form heretofore set forth shall be
placed on the certificates representing the Management Common Stock; and
(h) a notation shall be made in the appropriate records of the
Company indicating that the Management Common Stock is subject to
restrictions on transfer and, if the Company should at some time in the
future engage the services of a stock transfer agent, appropriate stock
transfer restrictions will be issued to such transfer agent with respect to
the Management Common Stock.
3.5. Compliance with Rule 144. If any of the shares of the Management
Common Stock are disposed of in accordance with Rule 144 under the Act, the
Purchaser shall deliver to the Company at or prior to the time of such
disposition an executed copy of Form 144 (if
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required by Rule 144) and such
other documentation as the Company may reasonably require in connection with
such sale.
3.6. Standstill Agreement. The Purchaser agrees that, if any shares of the
capital stock of the Company are offered to the public pursuant to an effective
registration statement under the Act, the Purchaser will not effect any public
sale or distribution of any shares of Management Common Stock (including a sale
pursuant to Rule 144) not covered by such registration statement during the
ten-day period prior to, and the 90-day period beginning on, the effective date
of such registration statement (and the Company agrees to cause each holder of
its shares of Common Stock purchased from the Company other than in a public
offering to so agree).
3.7. Additional Representations. The Purchaser further represents and
warrants that:
(a) he has been given the opportunity to obtain any information or
documents and to ask questions and receive answers about such documents, the
Company and the business and prospects of the Company which he deems necessary
to evaluate the merits and risks related to his investment in the Management
Common Stock;
(b) his financial condition is such that he can afford to bear the
economic risk of holding the unregistered Management Common Stock for an
indefinite period of time and has adequate means for providing for his current
needs and personal contingencies;
(c) he can afford to suffer a complete loss of his investment in the
Management Common Stock;
(d) all information which he has provided to the Company concerning
himself and his financial position is correct and complete as of the date of
this Agreement and, if there should be any material change in such information
prior sale to the Closing, the Purchaser will immediately furnish such revised
or corrected information to the Company;
(e) he understands and has taken cognizance of to all risk factors
related to the purchase of the Management of Common Stock;
(f) either (i) he has a "preexisting personal or business
relationship" with the Company or any of its officers, directors or controlling
persons, or (ii) by reason of his business or financial experience or the
business or financial experience of his "professional advisors" who are
unaffiliated with, and who are not compensated by, the Company or any affiliate
of the Company, he has the capacity to protect his own interests in connection
with the investment in the Management Common Stock.
For purposes of this Section 3.7(f), a "preexisting personal or
business relationship" includes any relationship consisting of personal or
business contacts of a nature and duration such as would enable a reasonably
prudent person to be aware of the character, business acumen and general
business and financial circumstances of the person with whom such relationship
exists and a "professional advisor" is (a) a person who, as a regular part of
that person's business, is customarily relied upon by others for investment
recommendations or decisions and who is customarily compensated for those
services, (b) an attorney, or (c) a
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certified public accountant. The Purchaser must advise the Company of his
designated "professional advisor" in order to rely upon the "professional
advisor" in making the representation set forth in this Section 3.7(f).
(g) This Agreement has been executed and delivered by the Purchaser
and is the valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except for (i) the 710 effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the rights of creditors generally,
and (ii) limitations imposed by federal or state law or equitable principles
upon the specific enforceability of any of the remedies, covenants or other
provisions of this Agreement and upon the availability of injunctive relief or
other equitable remedies.
(h) The Purchaser is an officer or key employee of the Company and as
such has a high degree of familiarity with the business, operations, financial
condition and prospects of the Company.
3.8. Covenant Not to Compete. Except as hereinafter provided, if the
Purchaser's employment with the Company is voluntarily terminated, including
resignation, the Purchaser shall not for a period of five years following the
date of the purchase of Purchaser's Unvested Management Common Stock pursuant to
the provisions of Section 4.2(c) hereof, alone or as an employee, creditor,
investor or any entity, directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control of, or
work for, any business or activity in any county, territory or area where the
Company then conducts its business which is competitive with the business of the
Company as conducted on the date of the purchase of the Purchaser's Unvested
Management Common Stock pursuant to the provisions of Section 4.2(c) hereof.
IV. THE COMPANY'S REPURCHASE RIGHTS AND OBLIGATIONS.
4.1. Right of First Refusal on Management Common Stock. If at any time
after the Closing and prior to any sale of the shares of the Company's Common
Stock pursuant to a registration statement under the Act which has been declared
effective by the Securities Exchange Commission (other than a registration
statement on Form S-8 or any other such form) (a "Public Offering"), the
Purchaser receives a bona fide offer to purchase any or all of his Vested
Management Common Stock (an "Offer") from a third party other than one of the
other Purchasers, including, without limitation, the Vice President of Marketing
of the Company (the "Offeror") which the Purchaser wishes to accept, the
Purchaser shall cause the Offer to be reduced to writing and shall notify the
Company in writing of his wish to accept the offer. The Purchaser's notice shall
contain an irrevocable offer to sell such Vested Management Common Stock to the
Company (in the manner set forth below) at a purchase price equal to the price
contained in, and on the same terms and conditions of, the Offer and shall be
accompanied by a true copy of the offer (which shall identify the Offeror). At
any time within 60 days after the date of the receipt by the Company of the
Purchaser's notice, the Company shall have the right and option to purchase all
of the Vested Management Common Stock covered by the Offer either (A) at the
same price and on the same terms and conditions as the offer or (B) if the Offer
includes any consideration other than cash, then, at the sole option of the
Company, at the equivalent all cash price, determined in good faith by the
Company's Board of Directors, by delivering a
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certified bank check or checks in the appropriate amount to the Purchaser
against delivery of certificates or instruments representing the Vested
Management Common Stock so purchased, free and clear of all claims, liens and
encumbrances, appropriately endorsed by the Purchaser. In the event that the
Company is not permitted to purchase all of the Vested Management Common Stock
covered by the Offer as a result of the limitations set forth in Section 7.8
hereof, then, if the Company elects to exercise its right of first refusal as
set forth in this Section 4.1, the Company shall purchase the greatest number of
shares of Vested Management Common Stock covered by the Offer that the Company
can purchase pursuant to Section 7.8 hereof within 60 days after the date of
receipt by the Company of the Purchaser's notice and, in the event the Offeror
is not willing to purchase the remaining shares of Vested Management Common
Stock covered by the Offer, the Company shall purchase such remaining shares at
such time as the provisions of Section 7.8 no longer limit its ability to do so.
Subject to Section 3.1 hereof, if at the end of such 60-day period the
Company has not tendered the purchase price for such shares in the manner set
forth above, the Purchaser may during the succeeding 45-day period sell all of
the Vested Management Common Stock covered by the Offer which the Company has
not elected to purchase pursuant to this Section 4.1 to the Offeror on terms no
less favorable to the Purchaser than those contained in the Offer. No sale may
be made to any Offeror unless the Offeror agrees in writing with the Company to
be bound by the provisions of this Agreement. Promptly after such sale, the
Purchaser shall notify the Company of the consummation thereof and shall furnish
such evidence of the completion and time of completion of such sale and of the
terms thereof as may reasonably be requested by the Company. If, at the end of
45 days following the expiration of the 60-day period for the Company to
purchase the Vested Management Common Stock, the Purchaser has not completed the
sale of such shares as aforesaid, all the restrictions on Transfer contained in
this Agreement shall again be in effect with respect to such Vested Management
Common Stock.
From and after the effective date of any Transfer permitted by this
Section 4.1, the Offeror shall be the Purchaser for all purposes of this
Agreement, other than Section 4.2 hereof.
4.2. Repurchase of the Management Common Stock Upon Termination of
Purchaser's Employment.
(a) Repurchase Upon Involuntary Termination for Cause. Subject to
Section 7.8 hereof, if the Purchaser's active employment with the Company is
involuntarily terminated "for cause" (as hereinafter defined) (a "For Cause
Repurchase Event"), the Company shall (i) be required to repurchase all of the
Unvested Management Common Stock held by the Purchaser, his spouse or immediate
family members or the Purchaser's Trust on the date of the For Cause Repurchase
Event as determined pursuant to Section 2.4 hereof and (ii) have the right and
option, at any time within 60 days of the For Cause Repurchase Event to purchase
all, but not less than, all of the Vested Management Common Stock held by the
Purchaser, his spouse or immediate family members, or the Purchaser's Trust on
the date of such For Cause Repurchase Event, in each case, at a price per share
equal to the Per Share Price.
For purposes of this Section 4.2, a termination "for cause" shall mean
any termination by the Company of the Purchaser's active employment for any of
the following reasons: (i) the Purchaser's conviction of a crime substantially
detrimental to the Company's
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business; (ii) the Purchaser's intentional or willful damage of the Company's
business, properties or labor relations; or (iii) the Purchaser's continued
inadequate performance of his duties after receiving written notice thereof from
the Company as determined by a vote of the majority of the Company's directors.
(b) Repurchase Upon Involuntary Termination Without Cause. Subject to
Section 7.8 hereof, if the Purchaser's active employment with the Company is
involuntarily terminated for any reason (other than a termination "for cause"),
including retirement, death, disability or termination without cause (an
"Involuntary Repurchase Event"), the Company shall be required to repurchase (i)
all of the Unvested Management Common Stock held by the Purchaser, his spouse or
immediate family members or the Purchaser's Trust on the date of the Involuntary
Repurchase Event as determined pursuant to Section 2.4 hereof at a price per
share equal to the Per Share Price, and (ii) all, but not less than all, of the
Vested Management Common Stock held by the Purchaser, his spouse and immediate
family members or the Purchaser's Trust on the date of the Involuntary
Repurchase Event as determined pursuant to Section 2.4 hereof at a price per
share equal to the Fair Market Value thereof (as hereinafter defined).
(c) Repurchase Upon Voluntary Termination. Subject to Section 7.8
hereof, if the Purchaser's active employment with the company is voluntarily
terminated, including resignation (a "Voluntary Repurchase Event"), the Company
shall (i) be required to repurchase all of the Unvested Management Common Stock
held by the Purchaser, his spouse or immediate family members or the Purchaser's
Trust on the date of the Voluntary Repurchase Event as determined pursuant to
Section 2.4 hereof at a price per share equal to the Per Share Price and (ii)
have the right and option at any time within 60 days of the Voluntary Repurchase
Event to purchase all, but not less than all, of the Vested Management Common
Stock held by the Purchaser, his spouse or immediate family members or the
Purchaser's Trust on the date of the Voluntary Repurchase Event as determined
pursuant to section 2.4 hereof at a price per share equal to the Fair Market
Value thereof.
(d) Fair Market Value. For purposes of this Section 4.2, the "Fair
Market Value" of each share of Vested Management Common Stock means the value of
such share as agreed to by the Company and the Purchaser. In the event the
Parties cannot in good faith agree on such Fair Market Value within 60 days
following the Involuntary Repurchase Event or the Voluntary Repurchase Event, as
the case may be, the Fair Market Value of each share of Vested Management Common
Stock shall mean the amount per share which would be received with respect to
the Common Stock to be transferred in a sale of all the outstanding Common Stock
in a single transaction to a third party, without deduction for any transfer or
other restrictions on the Common Stock and without regard to the fact that less
than all the outstanding Common Stock is being purchased or sold in the
transaction for which Fair Market Value is to be determined. Such Fair Market
Value shall be based upon an appraisal by an independent appraiser or
independent investment banker selected by the Board of Directors of the Company.
(e) Procedures for Repurchase. The closing of the repurchase of the
any Management Common Stock pursuant to this Section 4.2 (the "Repurchase
Closing") shall take place on the date designated by the Company in a written
notice to the Purchaser, his spouse or immediate family members or the
Purchaser's Trust, as the case may be, which date shall not be
12
more than sixty (60) days after the For Cause Repurchase Event, the Involuntary
Repurchase Event or the Voluntary Repurchase Event, as the case may be. The
Company will pay for the Management Common Stock to be purchased pursuant to
this Section 4.2 by check payable to the Purchaser, his spouse or immediate
family members, or the Purchaser's Trust, as the case may be; provided, however,
that in the case of a purchase of Vested Management Common Stock pursuant to
clause (ii) of Section 4.2(b) or 4.2(c) hereof, the Company will pay for the
Vested Management Common Stock to be purchased in three equal, annual
installments, commencing on the date of the Repurchase Closing. Any unpaid
balance of the purchase price shall bear interest from the date of the
Repurchase Closing at the lowest rate necessary in order to avoid the imputation
of interest or the creation of original issue discount under the applicable
provisions of the Internal Revenue Code of 1986, as amended from time to time,
and shall be evidenced by an installment note of the Company payable to the
order of Purchaser, his spouse or immediate family members, or the Purchaser's
Trust, as the case may be, in form and substance reasonably satisfactory to the
Company. The Purchaser will deliver certificates or instruments representing the
Management Common Stock so purchased free and clear of all claims, liens and
encumbrances, appropriately endorsed by the Purchaser, his spouse or immediate
family member or the Purchaser's Trust, as the case may be.
(f) Any Management Common Stock purchased by the Company pursuant to
the provisions of this Section 4.2 shall be issued to other members of the
management and key employees of the Company.
V. THE COMPANY'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
5.1. The Company's Representations and Warranties. The Company represents
and warrants to the Purchaser that:
(a) Organization, Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California; has all requisite power and authority to own or
lease and operate its properties and to carry on its business as now conducted
and as proposed to be conducted; and is duly qualified or licensed to do
business as a foreign corporation in good standing in all jurisdictions in which
it owns or leases property or in which the conduct of its business requires it
to so qualify to be licensed, except for such jurisdictions where the failure to
so qualify or be licensed would not have a material adverse effect on the
business or financial condition of the Company.
(b) Authority. The Company has all requisite power and authority to
enter into and perform all of the its obligations under this Agreement, to issue
the shares of Management Common Stock and to carry out the transactions
contemplated hereby.
(c) Due Authorization. The Company has taken all corporate actions
necessary to authorize it to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This Agreement
is the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except for (i) the effect upon this Agreement of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the rights of creditors generally,
and (ii) limitations imposed by federal or state laws or equitable principles
upon the specific
13
enforceability of any of the remedies, covenants or other provisions of this
Agreement and upon the availability of injunctive relief or other equitable
remedy.
(d) Capitalization. The authorized capital stock of the Company on
the date hereof consists of 4,000 shares of Redeemable Preferred Stock, 14,000
shares of Convertible Preferred Stock and 766,283 shares of Common Stock. Prior
to the issuance of the Management Common Stock described herein, 100 shares of
Common Stock and no shares of either series of Preferred Stock were issued and
outstanding. When certificates evidencing the Management Common Stock to be
purchased by the Purchaser have been delivered against payment therefor as
provided herein, such shares shall be duly authorized, validly issued, fully
paid and nonassessable.
Except for the Convertible Preferred Stock, the Warrant, dated
December 12, 1988, in favor of Security Pacific National Bank, the Warrant
Purchase Agreement, dated as of December 12, 1988, between the Company and
Security Pacific National Bank and the Option Agreement, dated as of December
22, 1988, between Xxxxxx X. Xxxxx, M.D. and Xxxxx X. Xxxxx, (i) there are no
outstanding subscriptions, warrants, options, calls or commitments of any
character relating to or entitling any person to purchase or otherwise acquire
any capital stock of the Company, and (ii) there are no obligations or
securities convertible into or exchangeable or exercisable for shares of any
capital stock of the Company or any commitments of any character relating to or
entitling any person to purchase or otherwise acquire any such obligations or
securities. Except pursuant to that certain Registration Rights Agreement, dated
as of December 12, 1988, between the Company, FICI, BSP and Security Pacific
National Bank (the "Registration Rights Agreement") and Section 6 of this
Agreement, the Company has not entered into any agreement to register its
securities under the Act.
5.2. Rule 144. The Company agrees that if and after it has filed a
registration statement pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") relating to any
class of equity securities of the Company, it will use its best efforts to file
in a timely manner all reports required to be filed by it pursuant to the
Exchange Act and, upon the request of the Purchaser, will furnish Purchaser with
such information as may be necessary to enable the Purchaser to effect routine
sales pursuant to Rule 144 under the Act or any similar rule or regulation
hereafter adopted by the Securities and Exchange Commission. Notwithstanding
anything to the contrary contained in this Section 5.2, the Company may
deregister under Section 12 of the Exchange Act if it is then permitted to do so
pursuant to the Exchange Act and the rules and regulations thereunder.
VI. "PIGGYBACK" REGISTRATION RIGHTS
6.1. Right to Piggy-Back for Vested Management Common Stock. If at any time
the Company proposes to file a registration statement under the Act with respect
to its Common Stock or securities convertible or exchangeable into its Common
Stock (other than a registration statement (i) on Form S-8 or any successor form
to such Form or (ii) filed in connection with an exchange offer or an offering
of its Common Stock or of securities convertible or exchangeable into its Common
Stock made solely to its existing stockholders in connection with a rights
offering or solely to employees of the Company), whether or not for its own
account including pursuant to a demand registration under the Registration
Rights Agreement (an "Investor
14
Demand"), then the Company shall give written notice of such proposed filing to
the Purchaser at least 15 days before the anticipated filing date. Such notice
shall offer the Purchaser the opportunity to register such amount of Vested
Management Common Stock as the Purchaser may request (a "Piggyback
Registration"). Subject to Section 6.2 hereof, the Company shall include in each
such Piggyback Registration all Vested Management Common Stock of the Purchaser
with respect to which the Company received a written request for inclusion
therein within 10 days after notice has been duly given the Purchaser.
6.2. Priority on Piggyback Registrations. The Company shall cause the
managing underwriter or underwriters of a proposed underwritten offering to
permit the Purchaser to include all Vested Management Common Stock requested to
be included in the Piggyback Registration in such offering on the same terms and
conditions as the other Common Stock of the Company included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
such offering deliver(s) a written opinion to the Purchaser that the total
number of securities which the Purchaser, the Company, and any other persons or
entities having registration rights, intend to include in such offering is such
as to materially and adversely affect the success of such offering, then (i) if
the Piggyback Registration is an Investor Demand the Registration Expenses (as
defined in the Registration Rights Agreement) for which are being paid by the
Company, the number of securities to be offered in the Piggyback Registration
for the account of all persons and entities, including the Company (other than
the FICI, BSP and Security Pacific National Bank) shall be reduced or limited
pro rata in proportion to the respective number of securities requested to be
included in such registration to the extent necessary to reduce the total number
of securities to be included in such offering to the number recommended by such
managing underwriter or underwriters and (ii) in all other cases, the number of
securities to be offered in the Piggyback Registration for the account of all
persons and entities (other than the Company) shall be reduced or limited pro
rata in proportion to the respective number of securities required to be
registered to the extent necessary to reduce the total number of securities to
be included in such offering to the number recommended by such managing
underwriter or underwriters.
VII. MISCELLANEOUS
7.1. Purchaser's Employment by Company. Nothing contained in this Agreement
or in any other agreement entered into by the Company and the Purchaser
contemporaneously with the execution of this Agreement (i) obligates the Company
to employ the Purchaser in any capacity whatsoever or (ii) prohibits or
restricts the Company from terminating the employment, if any, of the Purchaser
at any time or for any reason whatsoever, with or without cause, and the
Purchaser hereby acknowledges and agrees that neither the Company nor any other
person has made any representations or promises whatsoever to the Purchaser
concerning the Purchaser's employment or continued employment by the Company.
7.2. State Securities Laws. The Company hereby agrees to use its best
efforts to comply with all state securities or "blue sky" laws which might be
applicable to the sale of the Management Common Stock. Notwithstanding the
foregoing, this Agreement shall have no force or effect if the Company is unable
to comply with such laws.
15
7.3. Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective heirs, legal
representatives, successors and assigns.
7.4. Amendment. This Agreement may be amended only by a written instrument
signed by the Parties hereto which specifically states that it is amending this
Agreement.
7.5. Applicable Law. The laws of the state of California shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be implied under principles of conflicts of
law.
7.6. Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid, to the Party to whom it is directed:
(a) If to the Company, to it at:
2 Goodyear
Xxxxxx, XX 00000
Attention: Secretary
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
(b) If to the Purchaser, to him at the address set forth below under
his signature; or at such other address as either Party shall have specified by
notice in writing to the other.
7.7. Payment for Management Common Stock by the Company. If at any time the
Company purchases Management Common Stock from the Purchaser hereunder and the
Purchaser is indebted to the Company or otherwise has any liquidated or
unliquidated liability of any nature whatsoever to the Company in any amount
whatsoever, the Company may, at its sole election, apply all (or part of) such
indebtedness or liability, including any interest accrued thereon, to the
purchase price of the shares of Management Common Stock.
7.8. Limitations on Exercisability of the Company's Repurchase Rights and
Obligations. Notwithstanding anything to the contrary contained in Article IV,
the Company may not purchase shares of Management Common Stock from the
Purchaser if at such time there exists or is continuing a default by the Company
under any mortgage, indenture or instrument
16
under which there may be secured or evidenced any indebtedness of the Company or
any other material agreements of the Company, or if such purchase would result
in a default by the Company under any such agreement, an impairment of the
capital of the Company, the capital of the Company is then impaired or such
purchase would otherwise violate the California Corporations Code.
7.9. Rights to Negotiate Purchase Price. Nothing in this Agreement shall be
deemed to restrict or prohibit the Company from purchasing shares of Management
Common Stock from the Purchaser, at any time, upon such terms and conditions,
and for such price, as may be mutually agreed upon between the Parties, whether
or not at the time of such purchase circumstances exist which specifically grant
the Company the right, or obligate the Company, to purchase shares of Management
Common Stock under the terns of this Agreement.
7.10. Covenant Regarding 83(b) Election. Purchaser hereby covenants and
agrees that he will make the election provided pursuant to Treasury Regulation
1.83-2 with respect to the Management Common Stock; and Purchaser further
covenants and agrees that he will furnish the Company with copies of the forms
of election the Purchaser files within 30 days after the date hereof, and with
evidence that each such election has been filed in a timely manner.
7.11. Notice of Change of Beneficiary. Immediately prior to any Transfer of
Management Common Stock to a Purchaser's Trust or a Transferee's Trust, the
Purchaser or the Transferee, as the case may be, shall provide the Company with
a copy of the instruments creating the Purchaser's Trust or the Transferee's
Trust, as the case may be, and with the identity of the beneficiaries of the
Purchaser's Trust or the Transferee's Trust, as the case may be. The Purchaser
or Transferee, as the case may be, shall notify the Company immediately prior to
any change in the identity of any beneficiary of the Purchaser's Trust or the
Transferee's Trust, as the case may be; provided, however, that no such change
in the identity of any beneficiary shall be permitted unless a Transfer to the
Purchaser's Trust or the Transferee's Trust, as the case may be, containing such
new beneficiary would be permitted by Section 3.2 hereof.
7.12. Expiration of Agreement. This Agreement shall terminate and be of no
further force or effect with respect to any shares of Management Common Stock
sold by the Purchaser pursuant to an effective registration statement filed by
the Company pursuant to Article VI hereof or in compliance with Rule 144.
7.13. Recapitalizations, etc. The provisions of this Agreement shall apply,
to the full extent set forth herein with respect to the Management Common Stock,
to any and all shares of capital stock of the Company or any capital stock,
partnership units or any other security evidencing ownership interests in any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Management Common Stock, by reason of any stock dividend,
split, reverse split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
7.14. Assignment. No Party shall have the right, without the prior written
consent of the other Party to sell, assign, mortgage, pledge or otherwise
transfer any interest or right created hereby; provided, however, that the
Company shall have the right to assign its rights or
17
obligations to purchase any of the Management Common Stock under Article IV
hereof to one or more persons or entities without the consent of the Purchaser
or any other person. This Agreement is made solely for the benefit of the
Parties hereto, and no other person shall acquire or have any right under this
Agreement.
SIGNATURE PAGE
IN WITNESS HEREOF, the Parties have executed this Agreement as of the date
first above written.
The Company: TOXI-LAB, INC.
By: /s/ C. Xxxxxxx X'Xxxxxxx
------------------------------------
Its: President
------------------------------------
The Purchaser: XXXXXXX XXXXX
/s/
------------------------------------
Address of Purchaser:
00000 Xxxxxxxxxxxxx Xx.
----------------------------------------
Xxxx Xxxxx, XX 00000
----------------------------------------
Consent and Ratification of Spouse
The undersigned, the spouse of __________________, a party to the attached
Management Subscription Agreement (the "Agreement"), dated as of December 12,
1988, hereby consents to the execution of the Agreement by such party; and
ratifies, approves, confirms and adopts the Agreement, and agrees to be bound by
each and every term and condition thereof as if the undersigned had been a
signatory to the Agreement, with respect to the Management Common Stock (as
defined in the Agreement) made the subject of the Agreement in which the
undersigned has an interest, including any community property interest.
Date:
------------------------ ----------------------------------------
18
SCHEDULE I
Number of Aggregate
Shares Purchase Price
--------- --------------
Xxxxxxx Xxxxx 33,793 $33,793
19
PROPRIETARY INFORMATION AGREEMENT
This Proprietary Information Agreement (the "Agreement") is entered into
this _____ day of ____________, 1998_ , between Toxi-Lab, Inc., a California
corporation (the "Company"), and ______________________________ ("Employee").
RECITALS
A. Employee desires to be employed by the Company and the Company desires
to employ Employee.
B. Employee will be employed by the Company in a capacity in which
Employee will receive or have access to information which Employee and the
Company acknowledge is confidential and not generally known outside the Company.
Employee and the Company also expect Employee, as part of his or her job duties
with the Company, to develop or contribute to new ideas and improvements which
will be confidential, not generally known outside the Company, and Proprietary
Information (as hereinafter defined) owned solely by the Company.
C. Employee understands that by entering into this Agreement and/or
working for the Company, Employee will learn of, have access to, or develop
confidential and Proprietary Information of the kind referred to generally in
paragraph B, above.
D. Employee further understands that by accepting the benefits of
employment with the Company, Employee assumes the obligations set forth herein
and recognizes that those obligations apply not only to the period of employment
with the Company but also after the employment relationship has ended. Employee
understands that such continuing obligations right limit Employee's ability to
obtain employment with other employers who engage in businesses similar to that
of the Company and who would employ Employee in a capacity that would undermine
or threaten the confidentiality of the proprietary and confidential information
referred to in this Agreement.
WHEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and Employee understand and agree to the following:
I
DEFINITION
In this Agreement, the terms listed below shall have the following
meanings:
1.1 "Company" means Toxi-Lab, Inc., a California corporation, and any
other business entity owning, owned by, or otherwise affiliated with Toxi-Lab,
Inc.
1.2 "Employee" has the meaning assigned to such term in the recitals
hereto.
1.3 "Proprietary Information" means all information disclosed to Employee
or known by Employee as a consequence of or through Employee's employment by the
company (including information belonging to third parties in the Company's
possession and information
20
EXHIBIT A
conceived, originated, discovered or developed by Employee), whether or not in
Employee's primary field of professional interest, not generally known in the
trade or industry in which such information is used, about the Company's (or
third parties') products, processes, services and customers, including, without
limitation, information relative to research, development, Inventions,
manufacture, purchasing, engineering, and business studies, practices, and
finances. It shall not include any information which is in the possession of
Employee from a source other than the Company as established by the written
records of Employee.
1.4 "Inventions" means inventions, discoveries, plans, sketches, drawings,
models, figures, work-in-progress, concepts and ideas, whether patentable or
not, and whether or not protected by copyright or trade secret, including but
not limited to processes, methods, formulas, and techniques, as well as
improvements thereof or know-how related thereto.
II
GENERAL
2.1 Employee understands that this Agreement is a condition to his or her
employment with the Company, and that the sole consideration for his or her
obligations under this Agreement is his or her salary and other benefits of
employment with the Company. Employee agrees never to assert any claim for other
or different consideration for performance of his obligations under this
Agreement. Employee understands that his or her employment with the Company is
terminable at will unless otherwise provided in writing, and that this Agreement
is not intended to be an agreement of employment.
2.2 Employee understands that his or her employment involves a high degree
of trust and confidence, that he or she is employed for the purpose of making
Inventions and improvements in the Company's products, processes and operations,
that in executing this Agreement Employee undertakes obligations in addition to
those obligations which are imposed or implied by law, and certifies that he or
she knowingly or voluntarily undertakes the obligations set forth in this
Agreement.
III
INVENTIONS
3.1 With respect to (i) Inventions made or conceived by Employee, whether
or not during Employee's hours of employment or with the use of the Company's
equipment, facilities, materials, trade secrets or personnel, either solely or
jointly with another or others, during the period of Employee's employment with
the Company which (w) have any applicability to any aspect of the work engaged
in by Employee as an Employee of the Company, (x) were derived from Proprietary
Information which Employee received from the Company, as determined by the
Company, (y) have been incorporated or utilized or may hereafter be incorporated
or utilized by the Company in the manufacture, use or sale of the Company's
products or (z) relate to the business of the Company or to the Company's actual
or demonstrably anticipated research or development, and (ii) inventions made or
conceived by Employee solely or jointly after
21
termination of Employee's employment based on or related to Proprietary
information, without royalty or any other consideration to Employee therefor:
(a) Employee shall inform officials designated by the Company to
receive disclosures promptly and fully of such Inventions by a written report,
setting forth in detail necessary to permit the Company to understand said
Inventions and practice then without the exercise of further inventive skill,
the procedures employed and the results achieved. A report will be submitted by
Employee upon completion of any and all studies or research projects undertaken
on the Company's behalf, whether or not in Employee's opinion a given project
has resulted in an Invention.
(b) Employee shall apply, at the Company's request and expense, for
United States and foreign letters patent either in Employee's name or otherwise
as the Company shall desire.
(c) Employee shall assign and hereby does assign to the Company all
of Employee's rights to such Inventions, and to applications for United States
and/or foreign letters patent and to United States and/or foreign letters patent
granted upon such Inventions.
(d) Employee shall acknowledge and deliver promptly to the Company
without charge to the Company (beyond Employee's regular salary or, if after
employment, at a rate equal thereto), but at the Company's expense such written
instruments and shall do such other lawful acts, such as giving testimony in
support of inventorship, as may be necessary in the opinion of the company to
obtain and maintain United States and/or foreign letters patent and to vest the
entire right and title thereto in the Company.
3.2 Employee shall grant and hereby grants the Company the royalty-free
right to use in its business, to keep as a trade secret of the Company, and to
use, make and sell products, processes, and/or services derived from any
Inventions, conceived or made by Employee during the period of Employee's
employment with the Company, which are not within the scope of Inventions
described in Section 3.1 hereof, but which are conceived or made by Employee (i)
during the hours which Employee is employed or retained by Company or (ii) with
the use or assistance of the Company's facilities, materials, or personnel.
3.3 For purpose of this Article III, an Invention is deemed to have been
made during the period of Employee's employment with the Company if, during such
period, the Invention was conceived or first actually reduced to practice.
Employee agrees that any patent application filed within a year after
termination of his or her employment shall be presumed to relate to an Invention
which was made during the period of his or her employment with the Company
unless he or she provides evidence to the contrary.
3.4 Notwithstanding anything in this Article III to the contrary, this
Agreement does not apply to any Invention that qualifies fully under the
provisions of the California Labor Code Section 2870, which reads in pertinent
part as follows:
"Any provision in an employment agreement which provides that an
employee shall assign or offer to assign any of his or her
22
rights in an invention to his or her employer shall not apply to an
invention for which no equipment, supplies, facility, or trade secret
information of the employer was used and which was developed entirely
on the employee's own time, and (a) which does not relate (1) to the
business of the employer or (2) to the employer's actual or
demonstrably anticipated research or development, or (b) which does
not result from any work performed by the employee for the employer."
IV
PROPRIETARY INFORMATION
4.1 Except as required in Employee's duties to the Company, or as
authorized in writing by the management of the Company or its designated
representative, Employee shall never during or after his or her employment,
directly or indirectly, or otherwise use, disseminate, disclose, lecture upon or
publish articles concerning any Proprietary Information, or use for Employee's
or another's benefit or deliver to another any document, record, notebook, file,
computer program, sketch or similar repository of or containing Proprietary
Information, unless or until such Proprietary Information may become a matter of
public knowledge through no fault of Employee or unless otherwise required to
comply with law or with a request of a governmental or regulatory agency.
4.2 Upon termination of Employee's employment with the Company, all
documents, records, notebooks, files, computer programs, sketches and similar
repositories of or containing Proprietary Information, including all copies
thereof, then in Employee's possession or control whether prepared by Employee
or others, will be left with or returned to the Company.
V
CONTINUING OBLIGATIONS AND PRIOR INVENTIONS
5.1 Except as listed by annexation to this Agreement, Employee has no
outstanding obligations to any party, and Employee shall not assert any rights
under any Inventions, as having been made or acquired by Employee prior the
commencement of Employee's period of employment with the Company or since then,
and not otherwise covered by the terms of this Agreement.
5.2 Employee understands that he or she is expected to honor any prior
obligations Employee may have with respect to Proprietary Information which
Employee possesses and Employee agrees not to disclose to the Company or use any
proprietary Information or trade secrets belonging to any third party.
VI
CONTINUITY OF OBLIGATIONS
23
All of Employee's obligations under this Agreement shall be binding upon
Employee's heirs, assigns, and legal representatives.
VII
INJUNCTIVE RELIEF
7.1 Employee acknowledges that the Company would not have any adequate
remedy at law for the material breach of any one or more of the provisions set
forth in this Agreement by Employee or these affiliated with Employee.
7.2 In addition to other remedies which the Company may have under this
Agreement, Employee agrees that in the event a breach of this Agreement is
threatened or takes place the Company shall be entitled to obtain a temporary
restraining order and preliminary and permanent Injunction against Employee to
restrain such breach or threatened breach.
VIII
APPLICABLE LAW AND SEVERABILITY
8.1 This Agreement shall be construed in accordance with and governed for
all purposes by the law of the State of California applicable to contracts made
and to be performed in that state, excluding any choice of law principles which
direct the application of the laws of another jurisdiction.
8.2 In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. If, moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to time,
duration, activity or subject, it shall be construed, by limiting and reducing
it, so as to be enforceable to the extent compatible with the applicable law as
it shall then appear.
IX
ASSIGNMENT
This Agreement shall be assignable by the Company to any successor or to
any other Company owned or controlled by the Company, and shall be binding upon
Employee. This Agreement, being personal to the Employee, shall not be
assignable by the Employee.
X
AUTHORITY
24
Employee represents and warrants to the Company that Employee has full
right and authority to enter into this Agreement and has no legal obligations
inconsistent with the terms of this Agreement.
XI
MODIFICATION
This Agreement constitutes the full and complete understanding and
agreement between the parties relating to the subject matter contained herein
and supersedes and replaces any existing Agreement, written or otherwise,
entered into between the parties relating generally to the same subject matter.
The terms set forth in this Agreement may not be modified in any way except by a
written agreement signed by Employee and by an authorized representative of the
Company which expressly states the intention of the parties to modify the terms
of this Agreement.
XII
NON WAIVER OF RIGHTS
All waivers hereunder must be made in writing, and failure at any time to
require the other party's performance of any obligation under this Agreement
shall not affect the right subsequently to require performance of that
obligation. Any waiver of any breach of any provision of this Agreement shall
not be construed as a waiver of any continuing or succeeding breach of such
provision or as a waiver or modification of the provision.
XIII
FURTHER ASSURANCES
The parties hereto shall each perform such acts, execute and deliver such
instruments and documents, and do all such other things as may be reasonably
necessary to accomplish the purposes of this Agreement.
XIV
SUBJECT HEADINGS
The subject headings of this Agreement are included for the purposes of
convenience only, and shall not affect the construction or interpretation of any
of its provisions.
XV
EXECUTION
This Agreement supersedes and replaces any existing agreement, written or
otherwise, entered into by me relating generally to the same subject matter.
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TOXI-LAB, INC.
By:
---------------------------------- ----------------------------------------
Title: ----------------------------------------
PRIOR INVENTIONS
Annex a complete list of all Inventions which are to be excluded from the
obligations of this Agreement.
Number of pages annexed hereto: ____ (____________________)
Initials of Employee
26
FIRST AMENDMENT TO MANAGEMENT SUBSCRIPTION AGREEMENT
This First Amendment to Management Subscription Agreement is made
and entered into to as of the 23rd day of March, 1992, between Toxi-Lab, Inc., a
California corporation ("Toxi-Lab" or the "Company") and the persons whose
signatures appear below (the "Shareholders").
RECITALS
A. The Shareholders constitute all the current shareholders of
the Company who are parties to that certain Management Subscription Agreement
dated December 12, 1988 by and among the Company and such shareholders, as
amended (the "Management Subscription Agreement").
B. The Company is in the process of obtaining a loan from
Greyhound Financial Corporation, a Delaware corporation ("GFC") in the aggregate
principal amount of approximately $2,500,000 (the "Loan").
C. As a condition to the making of the Loan, GFC has required a
pledge by the Shareholders of 100% of the voting common stock of the Company
held or acquired in the future by the Shareholders.
D. The parties hereto desire to amend the Management Subscription
Agreement in order to permit the Shareholders to pledge their stock as security
for the Loan and to enter into and perform such other documents and agreements
as may be necessary or advisable in facilitating the Loan.
27
AGREEMENT
NOW THEREFORE, in order to implement the foregoing and in consideration of
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties agree as follows:
1. Paragraph 3.2(i) is deleted in its entirety and in its place is
inserted the following:
"(i) A Transfer made by the Purchaser of all or any portion of the
Purchaser's Management Common Stock, or any interest therein, to GFC pursuant to
that certain Pledge Agreement dated as of March __, 1992 between GFC and the
Purchaser."
2. Except as expressly amended and modified herein, the Company and the
Shareholders ratify and confirm the Management Subscription Agreement, as
amended, in its entirety.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
TOXI-LAB, INC., a California
corporation
----------------------------------------
X. Xxxxx
By:
---------------------------------
----------------------------------------
Its: Xxxxxxx X. Xxxxxxxxxx
---------------------------------
-------------------------------------- ----------------------------------------
C. Xxxxxxx X'Xxxxxxx Xxxxxxx Xxxxxxxxxx
-------------------------------------- ----------------------------------------
X. Xxxxx Xxxxx X. Xxxxxx
2
28
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared C. Xxxxxxx X'Xxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared X. Xxxxx, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their authorized signature(s) on the instrument the person(s), or the
entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
3
29
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared X. Xxxxx, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their authorized signature(s) on the instrument the person(s), or the
entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
4
30
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx Xxxxxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxx X. Xxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
5
31
SECOND AMENDMENT TO MANAGEMENT SUBSCRIPTION AGREEMENT
This Second Amendment to Management Subscription Agreement is
made and entered into to as of the 27th day of October, 1993, between Ansys,
Inc., a California corporation (formerly Toxi-Lab, Inc., a California
corporation) ("Ansys" or the "Company"), and the persons whose signatures appear
below (the "Shareholders").
RECITALS
A. The Shareholders constitute all the current shareholders of the Company
who are parties to that certain Management Subscription Agreement dated December
12, 1988 by and among the Company and such shareholders, as amended (the
"Management Subscription Agreement").
B. The Company is in the process of obtaining a loan from Independence One
Bank of California, a federally chartered stock savings bank ("Lender") in the
aggregate principal amount of approximately $1,500,000 (the "Loan").
C. As a condition to the making of the Loan, Lender has required a pledge
by the Shareholders of 100% of the voting common stock of the Company held or
acquired in the future by the Shareholders.
D. The parties hereto desire to amend the Management Subscription Agreement
in order to permit the Shareholders to pledge their stock as security for the
Loan and to enter into and perform such other documents and agreements as may be
necessary or advisable in facilitating the Loan.
32
AGREEMENT
NOW THEREFORE, in order to implement the foregoing and in consideration of
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties agree as follows:
1. Paragraph 3.2(i) is deleted in its entirety and in its place is
inserted the following:
"(i) A Transfer made by the Purchaser of all or any portion of the
Purchaser's Management Common Stock, or any interest therein, to secure
indebtedness of the Company."
2. Except as expressly amended and modified herein, the Company and the
Shareholders ratify and confirm the Management Subscription Agreement, as
amended, in its entirety.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
----------------------------------------
ANSYS, INC., a California Xxxxxxx X. Xxxxx
corporation
----------------------------------------
By: Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Its: ----------------------------------------
--------------------------------- Xxxxxxx Xxxxxxxxxx
------------------------------------- ----------------------------------------
C. Xxxxxxx X'Xxxxxxx Xxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
0
00
XXXXX XX XXXXXXXXXX )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared C. Xxxxxxx X'Xxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
3
34
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
4
35
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx Xxxxxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxx X. Xxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
5
36
THIRD AMENDMENT TO MANAGEMENT SUBSCRIPTION AGREEMENT
This Third Amendment to Management Subscription Agreement is made and
entered into to as of the 17th day of August, 1998, between Ansys Diagnostics,
Inc., a California corporation (formerly Ansys, Inc., a California corporation,
and Toxi-Lab, Inc., a California corporation) ("Ansys" or the "Company"), and
the persons whose signatures appear below (the "Shareholders").
RECITALS
A. The Shareholders constitute all the current shareholders of the
Company who are parties to that certain Management Subscription Agreement dated
December 12, 1988 by and among the Company and such shareholders, as amended
(the "Management Subscription Agreement"), and who are currently employed by the
Company.
B. The parties hereto desire to amend the Management Subscription
Agreement in order to modify the circumstances under which the Company is
obligated to purchase and the Shareholders are obligated to sell their common
stock in the Company.
AGREEMENT
NOW THEREFORE, in order to implement the foregoing and in consideration of
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties agree as follows:
1. Section 4.2 of the Management Subscription Agreement is hereby
deleted in its entirety.
37
2. Except as expressly amended and modified herein, the Company and the
Shareholders ratify and confirm the Management Subscription Agreement, as
amended, in its entirety.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
ANSYS DIAGNOSTICS, INC., a
California corporation
By:
----------------------------------
Xxxxxxx X. Xxxxxxxxxx
Its: President
By:
----------------------------------
Xxxxxxx Xxxxx
Its: Secretary
-------------------------------------
Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxxx
2
38
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxxxx X. Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
3
39
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ___________________________, before me, ________________________, Notary
Public, personally appeared Xxxxx X. Xxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their authorized signature(s) on the instrument the person(s),
or the entity on behalf of which the person(s) acted, executed the instrument.
----------------------------------------
NOTARY PUBLIC
(seal)
4
