Exhibit 4.6
DYNAVAX TECHNOLOGIES CORPORATION
SERIES R PREFERRED STOCK
PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE NO.
Section 1. Agreement To Sell And Purchase............................................................1
1.1 AUTHORIZATION OF SHARES................................................................1
1.2 SALE AND PURCHASE......................................................................1
Section 2. Closing, Delivery, Payment, Assignment....................................................2
2.1 CLOSING................................................................................2
2.2 DELIVERY...............................................................................2
2.3 ASSIGNMENT.............................................................................2
Section 3. Representations And Warranties Of The Company.............................................2
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION..........................................2
3.2 CAPITALIZATION; VOTING RIGHTS..........................................................2
3.3 AUTHORIZATION; BINDING OBLIGATIONS.....................................................3
3.4 FINANCIAL STATEMENTS...................................................................4
3.5 AGREEMENTS; ACTION.....................................................................4
3.6 OBLIGATIONS TO RELATED PARTIES.........................................................5
3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC.............................................5
3.8 PATENTS AND TRADEMARKS.................................................................6
3.9 COMPLIANCE WITH OTHER INSTRUMENTS......................................................6
3.10 LITIGATION.............................................................................6
3.11 TAX RETURNS, PAYMENTS AND ELECTIONS....................................................7
3.12 EMPLOYEES..............................................................................7
3.13 REGISTRATION RIGHTS....................................................................8
3.14 COMPLIANCE WITH LAWS; PERMITS..........................................................8
3.15 OFFERING VALID.........................................................................8
3.16 ENVIRONMENTAL REQUIREMENTS.............................................................9
3.17 FULL DISCLOSURE........................................................................9
Section 4. Representations And Warranties Of The Purchaser..........................................10
4.1 REQUISITE POWER AND AUTHORITY.........................................................10
4.2 INVESTMENT REPRESENTATIONS............................................................10
4.3 TRANSFER RESTRICTIONS.................................................................11
Section 5. Conditions To Closing....................................................................11
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING..................................11
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY..............................................13
Section 6. Registration Rights......................................................................13
6.1 DEFINITIONS...........................................................................13
6.2 PIGGYBACK REGISTRATIONS...............................................................14
6.3 FORM S-3 REGISTRATION.................................................................15
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6.4 EXPENSES OF REGISTRATION..............................................................16
6.5 OBLIGATIONS OF THE COMPANY............................................................17
6.6 TERMINATION OF REGISTRATION RIGHTS....................................................18
6.7 DELAY OF REGISTRATION; FURNISHING INFORMATION.........................................18
6.8 INDEMNIFICATION.......................................................................18
6.9 ASSIGNMENT OF REGISTRATION RIGHTS.....................................................20
6.10 AMENDMENT OF REGISTRATION RIGHTS......................................................21
6.11 "MARKET STAND-OFF"AGREEMENT...........................................................21
6.12 RULE 144 REPORTING....................................................................21
Section 7. Miscellaneous............................................................................22
7.1 GOVERNING LAW.........................................................................22
7.2 SURVIVAL..............................................................................22
7.3 SUCCESSORS AND ASSIGNS................................................................22
7.4 ENTIRE AGREEMENT......................................................................22
7.5 SEVERABILITY..........................................................................23
7.6 AMENDMENT AND WAIVER..................................................................23
7.7 DELAYS OR OMISSIONS...................................................................23
7.8 NOTICES...............................................................................23
7.9 EXPENSES..............................................................................23
7.10 ATTORNEYS'FEES........................................................................23
7.11 TITLES AND SUBTITLES..................................................................23
7.12 COUNTERPARTS..........................................................................24
7.13 BROKER'S FEES.........................................................................24
7.14 PRONOUNS..............................................................................24
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SERIES R PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES R PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement")
is entered into as of March 7, 2000, by and among Dynavax Technologies
Corporation, a California corporation (the "Company") and Aventis ▇▇▇▇▇▇▇
▇.▇. (Formerly Pasteur Merieux Serums & Vaccins S.A.) (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of four hundred thirty thousand one hundred eight (430,108) shares of
its Series R Preferred Stock (the "Shares");
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein with the right to assign one half of the shares or
two hundred fifteen thousand fifty four (215,054) shares (the "Assigned Shares")
to Genavent (the "Assignee"); and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser
and to permit assignment of one half of the shares to the Assignee all on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
SECTION 1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized (i) the sale
and issuance to Purchaser of the Shares and (ii) the issuance of such shares
of Common Stock to be issued upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Amended and
Restated Articles of Incorporation of the Company, as amended, in the form
attached hereto as Exhibit A (the "Amended and Restated Articles").
1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Company hereby agrees to
issue and sell to Purchaser, and Purchaser agrees to purchase from the
Company, the Shares, at a purchase price of four dollars sixty-five cents
($4.65) per share, it being acknowledged that Purchaser shall have the right
to assign two hundred fifteen thousand fifty four (215,054) Shares to
Genavent, a capital risk group, during the one hundred and twenty day period
after the Closing Date.
SECTION 2. CLOSING, DELIVERY, PAYMENT, ASSIGNMENT
2.1 CLOSING. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m.
Pacific time on the date hereof or as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions to Closing set
forth herein, at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other time or place as the Company
and Purchasers may mutually agree (such date is hereinafter referred to as
the "Closing Date").
2.2 DELIVERY. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to Purchaser certificates
representing the number of Shares to be purchased at the Closing by
Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company, cancellation of
indebtedness or any combination of the foregoing.
2.3 ASSIGNMENT. Following the Closing, Purchaser may assign
the Assigned Shares to Assignee subject to Assignee's execution of an
agreement in form as attached hereto as Exhibit B (the "Assignment
Agreement") and the Company shall also execute the agreement in such form.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. The Company has all
requisite corporate power and authority to carry on its business as now
conducted, to execute and deliver this Agreement and the Assignment
Agreement, to issue and sell the Shares and the Conversion Shares and to
carry out the provisions of this Agreement, the Assignment Agreement and the
Amended and Restated Articles. The Company is not qualified to transact
business as a foreign corporation in any jurisdiction and such qualification
is not now required. The Company does not own or control, directly or
indirectly, any interest in any other corporation, limited liability company,
partnership, association or similar entity. The Company is not a participant
in any joint venture, partnership or similar arrangement.
3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital
stock of the Company, immediately prior to the Closing, will consist of
thirty nine million, seven hundred ninety one thousand three hundred thirty
two (39,791,332) shares, twenty two million three hundred fifty eight
thousand five hundred forty six (22,358,546) shares of which shall be Common
Stock (the "Common Stock") and seventeen million four hundred thirty two
thousand seven hundred eighty six (17,432,786) shares of which shall be
Preferred Stock (the "Preferred Stock"). Of the Preferred Stock, six million
seven hundred thousand (6,700,000) shares are designated "Series A Preferred
Stock" (the "Series A Preferred"), nine million thirty two thousand seven
hundred eighty six (9,032,786) shares are designated "Series B Preferred
Stock" (the "Series B Preferred"),
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five hundred thousand (500,000) shares are hereby designated "Series S-1
Preferred Stock" (the "Series S-1 Preferred") and four hundred thirty
thousand one hundred eight (430,108) shares are designated "Series R
Preferred Stock" (the "Series R Preferred"). On the date hereof, three
million six hundred thirty three thousand sixteen (3,633,016) shares of
Common Stock are issued and outstanding, six million seven hundred thousand
(6,700,000) shares of Series A Preferred Stock are issued and outstanding,
nine million thirty two thousand seven hundred eighty six (9,032,786) shares
of Series B Preferred Stock are issued and outstanding, and two hundred
thousand (200,000) shares of Series S-1 Preferred Stock are outstanding. All
issued and outstanding shares of the Company's capital stock (i) have been
duly authorized and validly issued, (ii) are fully paid and nonassessable,
and (iii) were issued in compliance with all applicable state and federal
laws concerning the issuance of securities. The rights, preferences,
privileges and restrictions of the Shares are as stated in the Amended and
Restated Articles. The Conversion Shares have been duly and validly reserved
for issuance. Other than options to acquire one million five hundred sixty
three thousand, six hundred thirty (1,563,630) shares of Common Stock held by
officers, employees and consultants of the Company, and First Amended
Investor Rights Agreement between the Company, certain holders of its Common
Stock, and the holders of its Series A Preferred Stock and Series B Preferred
Stock, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
shareholder agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities. When issued in
compliance with the provisions of this Agreement and the Amended and Restated
Articles, the Shares and the Conversion Shares will be validly issued, fully
paid and nonassessable, and will be free of any liens or encumbrances;
provided, however, that the Shares and the Conversion Shares may be subject
to restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer is
proposed. Except as may be set forth in the Amended and Restated Articles,
the Company has no obligation to repurchase any of its stock.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action
on the part of the Company, its officers, directors and shareholders
necessary for the authorization of this Agreement, the performance of all
obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and
the Conversion Shares pursuant to the Amended and Restated Articles has been
taken or will be taken prior to the Closing. This Agreement, when executed
and delivered, will be a valid and binding obligation of the Company
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; (ii) general
principles of equity that restrict the availability of equitable remedies;
and (iii) to the extent that the enforceability of the indemnification
provisions of Section 6.8 of this Agreement may be limited by applicable
laws. The sale of the Shares and the subsequent conversion of the Shares into
Conversion Shares are not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.
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3.4 FINANCIAL STATEMENTS. The Company has delivered to
Purchaser its audited financial statements for the year ended December 1,
1998 and its unaudited financial statements as of September 30, 1999
(collectively, the "Financial Statements"). The Financial Statements are
true, correct and complete in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except that the unaudited
financial statements do not contain all footnote disclosures required by
generally accepted accounting principles). The Financial Statements fairly
and accurately set out and describe the financial condition and operating
results of the Company as of the dates and during the periods indicated
therein. Except as set forth in the Financial Statements, the Company has no
liabilities, contingent or otherwise, whether due or to become due, other
than (a) liabilities incurred in the ordinary course of business subsequent
to September 30, 1999 and (b) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in the Financial Statements,
which in both cases, individually or in the aggregate, do not have a material
adverse effect on the Company or its business, assets, properties or
financial condition.
3.5 AGREEMENTS; ACTION.
(a) Except for agreements explicitly contemplated hereby
and agreements between the Company and its employees with respect to the sale
of the Company's Common Stock, there are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates or any affiliate thereof.
(b) There are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company is a party or to its knowledge by which it is
bound which may involve (i) obligations (contingent or otherwise) of, or
payments to, the Company in excess of fifty thousand dollars ($50,000) (other
than obligations of, or payments to, the Company arising from agreements
entered into in the ordinary course of business or to support research being
conducted at the University of California, San Diego), or (ii) the license of
any patent, copyright, trade secret or other proprietary right to or from the
Company (other than licenses arising from the purchase of "off the shelf" or
other standard products) and licenses of certain patents from the Regents of
the University of California, or (iii) provisions restricting or affecting
the development, manufacture or distribution of the Company's products or
services, or (iv) indemnification by the Company with respect to
infringements of proprietary rights (other than indemnification obligations
arising from purchase or sale agreements entered into in the ordinary course
of business).
(c) The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) incurred any indebtedness for
money borrowed or any other liabilities (other than with respect to dividend
obligations, distributions, indebtedness and other obligations incurred in
the ordinary course of business) individually in excess of one hundred
thousand dollars ($100,000) and in excess of two hundred fifty thousand
dollars
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($250,000) in the aggregate, (iii) made any loans or advances to any person,
other than ordinary advances for travel expenses, or (iv) sold, exchanged or
otherwise disposed of any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above,
all indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities the Company has reason to believe are
affiliated therewith) shall be aggregated for the purpose of meeting the
individual minimum dollar amounts of such subsections.
(e) The Company has not engaged in any discussion (i)
with any representative of any corporation or corporations regarding the
consolidation or merger of the Company with or into any such corporation or
corporations, (ii) with any corporation, partnership, association or other
business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company, or a
transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Company is disposed of, or (iii)
regarding any other form of acquisition, liquidation, dissolution or winding
up of the Company.
3.6 OBLIGATIONS TO RELATED PARTIES. There are no obligations
of the Company to officers, directors, shareholders, or employees of the
Company other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of the Company and
(iii) for other standard employee benefits made generally available to all
employees (including stock option agreements outstanding under any stock
option plan approved by the Board of Directors of the Company). No officer,
director or shareholder, or any members of their immediate families, is,
directly or indirectly, interested in any material contract with the Company
except contracts entered into in connection herewith (other than such
contracts as relate to any such person's ownership of capital stock or other
securities of the Company). The Company is not a guarantor or indemnitor of
any indebtedness of any other person, firm or corporation.
3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company
has good and marketable title to its properties and assets, including the
properties and assets reflected in the most recent balance sheet included in
the Financial Statements, and good title to its leasehold estates, in each
case subject to no mortgage, pledge, lien, lease, encumbrance or charge,
other than (i) those resulting from taxes which have not yet become
delinquent, (ii) minor liens and encumbrances which do not materially detract
from the value of the property subject thereto or materially impair the
operations of the Company, and (iii) those that have otherwise arisen in the
ordinary course of business. With respect to the property and assets it
leases, the Company is in compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest free of any liens, claims, or
encumbrances subject to claims (i)-(iii) above. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by
the Company are in good operating condition and repair, ordinary wear and
tear excepted, and are reasonably fit and useable for the purposes to which
they are being put.
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3.8 PATENTS AND TRADEMARKS. The Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade
names, copyrights, trade secrets, information and other proprietary rights
and processes necessary for its business as now conducted and as proposed to
be conducted, without any known infringement of the rights of others. There
are no outstanding options, licenses or agreements of any kind relating to
the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information
and other proprietary rights and processes of any other person or entity
other than such licenses or agreements arising from the purchase of "off the
shelf" or standard products. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees or
consultants is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with his or her duties to the Company or that would conflict with the
Company's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the Company's business by
the employees of the Company, nor the conduct of the Company's business as
proposed, will, to the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any employee is now
obligated. The Company does not believe that it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any of
its employees or consultants made prior to their employment or engagement by
the Company, except for inventions, trade secrets or proprietary information
that have been assigned to or licensed by the Company.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any term of its Amended and Restated Articles or
Bylaws, or of any provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is party or by which it is bound or of any
judgment, decree, order, writ or, to its knowledge, any statute, rule or
regulation applicable to the Company which would materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company. The execution, delivery, and performance of and
compliance with this Agreement and the Assignment Agreement, the adoption of
the Amended and Restated Articles and the issuance and sale of the Shares
pursuant hereto and of the Conversion Shares pursuant to the Amended and
Restated Articles, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit license, authorization or approval applicable to
the Company, its business or operations or any of its assets or properties.
3.10 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that
questions the validity of this
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Agreement, or the right of the Company to enter into any of such agreements
or to consummate the transactions contemplated hereby or thereby, or which
might result, either individually or in the aggregate, in any material
adverse change in the assets, condition, affairs or prospects of the Company,
financially or otherwise, or any change in the current equity ownership of
the Company, nor is the Company aware that there is any basis for the
foregoing. The foregoing includes, without limitation, actions pending or
threatened (or any basis therefor known to the Company) involving the prior
employment of any of the Company's employees, their use in connection with
the Company's business of any information or techniques allegedly proprietary
to any of their former employers, or their obligations under any agreements
with prior employers. There is no action, suit, proceeding or investigation
by the Company currently pending or which the Company intends to initiate.
The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.
3.11 TAX RETURNS, PAYMENTS AND ELECTIONS. The Company has
timely filed all tax returns and reports as required by law. These returns
and reports are true and correct in all material respects. The Company has
paid all taxes and other assessments due except in any such case as would not
have a material adverse effect on the Company. The provision for taxes of the
Company as shown in the Financial Statements is adequate for taxes due or
accrued as of the date hereof. The Company has not elected pursuant to the
Internal Revenue Code of 1986, as amended ("Code"), to be treated as an S
corporation or a collapsible corporation pursuant to Section 1362(a) or
Section 341(f) of the Code, nor has it made any other elections pursuant to
the Code (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material effect on the
business, properties, prospects, or financial condition of the Company. The
Company has never had any tax deficiency proposed or assessed against it and
has not executed any waiver of any statute of limitations on the assessment
or collection of any tax or governmental charge. None of the Company's
federal income tax returns and none of its state income or franchise tax or
sales or use tax returns has ever been audited by governmental authorities.
Since the date of the Financial Statements, the Company has made adequate
provisions on its books of account for all taxes, assessments, and
governmental charges with respect to its business, properties, and operations
for such period. The Company has withheld or collected from each payment made
to each of its employees the amount of all taxes, including, but not limited
to, federal income taxes, Federal Insurance Contribution Act taxes and
Federal Unemployment Tax Act taxes required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.
3.12 EMPLOYEES. The Company has no collective bargaining
agreements with any of its employees. There is no labor union organizing
activity pending or, to the Company's knowledge, threatened with respect to
the Company. To the best of the Company's knowledge, no employee of the
Company, nor any consultant with whom the Company has contracted, is in
violation of any term of any employment contract, proprietary information
agreement, patent disclosure agreement or any other agreement relating to the
right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the
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Company; and to the best of the Company's knowledge, the continued employment
by the Company of its present employees, and the performance of the Company's
contract with its independent contractors, will not result in any such
violation. The Company has not received any written notice alleging that any
such violation has occurred. No employee of the Company has been granted the
right to continued employment by the Company or to any material compensation
following termination of employment with the Company. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any officer, key
employee, or group of key employees.
3.13 REGISTRATION RIGHTS. Except as required pursuant to the
First Amended Investors' Rights Agreement and the Company's Series S-1
Preferred Stock Purchase Agreement, the Company is presently not under any
obligation, and has not granted any rights, to register any of the Company's
presently outstanding securities or any of its securities that may hereafter
be issued. Other than a right to request that the Company initiate a
registration of securities, the registration rights provided to the holders
of the Company's Series A Preferred Stock and Series B Preferred Stock in the
First Amended Investor Rights Agreement are substantially identical to those
provided in Section 6 of this Agreement.
3.14 COMPLIANCE WITH LAWS; PERMITS. The Company is not in
violation of any applicable statute, rule, regulation, order or restriction
of any domestic or foreign government or any instrumentality or agency
thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects
of the Company. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the issuance of the Shares or the Conversion
Shares, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the Closing. The Company has
all franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or
financial condition of the Company and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.
3.15 OFFERING VALID. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Section 4.2
hereof, the offer, sale and issuance of the Shares and the Conversion Shares
will be exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act") and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. Neither the Company nor any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Shares to any person or persons so as to
bring the sale of such Shares by the Company within the registration
provisions of the Securities Act.
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3.16 ENVIRONMENTAL REQUIREMENTS.
(a) To the best of the Company's knowledge, the Company
has not caused or allowed, nor has the Company contracted with any party for,
the generation, use, transportation, treatment, storage or disposal of any
Hazardous Substances (as defined below) in connection with the operations of
its business or otherwise, other than cleaning, maintenance and similar
supplies used in the ordinary course of business.
(b) To the best of the Company's knowledge, the Company,
the operations of its business, and any real property that the Company owns,
leases, or otherwise occupies or uses (the "Premises") are in substantial
compliance with all applicable Environmental Laws (as defined below) and
orders or directives of any governmental authorities having jurisdiction
under such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances.
(c) The Company has not received any citation,
directive, letter or other communication, written or oral, or any notice of
any proceedings, claims or lawsuits, from any person, entity or governmental
authority arising out of the ownership or occupation of the Premises, or the
conduct of its operations, nor is it aware of any basis thereof.
(d) To the best of the Company's knowledge, the Company
has obtained and is maintaining in full force and effect all necessary
permits, licenses and approvals required by any Environmental Laws, if any,
applicable to the Premises and the business operations conducted thereon
(including operations conducted by tenants on the Premises) and is in
substantial compliance with all such permits, licenses and approvals.
(e) The Company has not caused, or allowed a release, or
a threat of release, of any Hazardous Substance into, nor to the best of the
Company's knowledge has the Premises or any property at or near the Premises
ever been subject to a release, or a threat of a release, of any Hazardous
Substance.
(f) For purposes of this Section 3.16, the term,
"Environmental Laws" shall mean any federal, state or local law, ordinance or
regulation pertaining to the protection of human health or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq., Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et seq.,
and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et
seq.
For purposes of this Section 3.16, the term, "Hazardous Substance" includes oil
and petroleum products, asbestos, polychlorinated biphenyls and urea
formaldehyde, and any other materials classified as hazardous or toxic under any
Environmental Laws.
3.17 FULL DISCLOSURE. This Agreement, the Exhibits hereto,
and all other documents delivered by the Company to Purchaser or its
attorneys or agents in
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connection herewith or therewith or with the transactions contemplated hereby
or thereby, when taken as a whole, neither contain any untrue statement of a
material fact nor omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all
necessary power and authority under all applicable provisions of law to
execute and deliver this Agreement and to carry out its provisions. All
actions on Purchaser's part required for the lawful execution and delivery of
this Agreement have been or will be effectively taken prior to the Closing.
Upon their execution and delivery, this Agreement will be a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors'
rights, and (ii) general principles of equity that restrict the availability
of equitable remedies, and (iii) to the extent that the enforceability of the
indemnification provisions of Section 6.8 of this Agreement may be limited by
applicable laws.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act. Purchaser also understands that the Shares are being offered
and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Purchaser's representations contained in
the Agreement. Purchaser hereby represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company
and has the capacity to protect its own interests. Purchaser must bear the
economic risk of this investment indefinitely unless the Shares (or the
Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available. Purchaser understands that the
Company has no present intention of registering the Shares, the Conversion
Shares or any shares of its Common Stock. Purchaser also understands that
there is no assurance that any exemption from registration under the
Securities Act will be available and that, even if available, such exemption
may not allow Purchaser to transfer all or any portion of the Shares or the
Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring
the Shares and the Conversion Shares for Purchaser's own account for
investment only, and
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not with a view towards their distribution, except as regards assignment of
the Assigned Shares to the Assignee.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser
represents that by reason of its, or of its management's, business or
financial experience, Purchaser has the capacity to protect its own interests
in connection with the transactions contemplated in this Agreement and
Assignee has similar capacity to protect its own interests. Further,
Purchaser is aware of no publication of any advertisement in connection with
the transactions contemplated in the Agreement.
(d) ACCREDITED INVESTOR. Purchaser represents that it is
and Assignee is an accredited investor within the meaning of Regulation D
under the Securities Act.
(e) COMPANY INFORMATION. Purchaser has had an
opportunity to discuss the Company's business, management and financial
affairs with directors, officers and management of the Company and has had
the opportunity to review the Company's financial statements, operations and
facilities. Purchaser has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of this investment.
(f) RULE 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available, as for assignment of the
Assigned Shares to Assignee. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the
resale occurring not less than one year after a party has purchased and paid
for the security to be sold, the sale being through an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended) and the number
of shares being sold during any three-month period not exceeding specified
limitations.
4.3 TRANSFER RESTRICTIONS. The Purchaser acknowledges and
agrees that the Shares and, if issued, the Conversion Shares are subject to
restrictions on transfer as set forth in the Amended and Restated Articles.
SECTION 5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING.
Purchaser's obligations to purchase the Shares at the Closing are subject to
the satisfaction, at or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in
Section 3
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hereof shall be true and correct in all material respects as of the Closing
Date with the same force and effect as if they had been made as of the
Closing Date, and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
the Closing.
(b) CONSENTS, PERMITS, AND WAIVERS. The Company shall
have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the
Agreement (except for such as may be properly obtained subsequent to the
Closing).
(c) FILING OF AMENDED AND RESTATED ARTICLES. The Amended
and Restated Articles substantially in the form attached hereto as Exhibit A
shall have been filed with the Secretary of State of the State of California.
(d) RESERVATION OF CONVERSION SHARES. The Conversion
Shares issuable upon conversion of the Shares shall have been duly authorized
and reserved for issuance upon such conversion.
(e) STOCK CERTIFICATES. The stock certificates
representing the Shares shall have been delivered to the Secretary of the
Company and shall have had appropriate legends placed upon them.
(f) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall
be reasonably satisfactory in substance and form to the Purchaser, and the
Purchaser shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request.
(g) CONTINUED EFFECTIVENESS. This Agreement and other
agreements contemplated hereby shall continue to be in full force and effect.
(h) CERTIFICATE OF PRESIDENT. The Purchaser shall have
received a certificate of the President of the Company dated such Closing
Date to the effect that (i) the representations and warranties made by the
Company in Article 3 hereof are true and correct in all material respects as
of the Closing with the same force and effect as if they had been made as of
the Closing, except those made as to a particular date which shall be true as
of such date.
(i) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares shall be legally permitted by all laws and regulations
to which the Purchaser and the Company are subject.
(j) LEGAL OPINION. The Purchaser shall have received
from legal counsel to the Company a favorable opinion addressed to the
Purchaser, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Purchaser.
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(k) NO VIOLATIONS. The purchase of and payment for the
Shares to be purchased by the Purchaser on the Closing Date on the terms and
conditions herein provided shall not violate any applicable law or
governmental regulation.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
satisfaction, on or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by Purchaser in Section 4 hereof shall be
true and correct in all material respects at the date of the Closing, with
the same force and effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed and complied with all agreements and conditions herein required to
be performed or complied with by Purchaser on or prior to the Closing.
(c) CONSENTS, PERMITS, AND WAIVERS. The Company shall
have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the
Agreement (except for such as may be properly obtained subsequent to the
Closing).
SECTION 6. REGISTRATION RIGHTS.
6.1 DEFINITIONS. As used in this Section 6, the following
terms shall have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means any person owning of record Shares or Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 6.9 hereof.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (i) Common Stock of the Company issued
or issuable upon conversion of the Shares; (ii) Common Stock of the Company
issued or issuable upon conversion of the Series A, Series B, Series S-1 and
Series R Preferred
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Stock of the Company; (iii) Common Stock of the Company issued or issuable
either directly, or upon conversion of any other Series of Preferred Stock,
the holders of which are granted registration rights by the Company, and (iv)
any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, such above-described securities. Notwithstanding the
foregoing, Registrable Securities shall not include any securities either
sold by a person to the public pursuant to a registration statement or Rule
144 or sold in a private transaction in which the transferor's rights under
Section 2 of this Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 6.2 and 6.3 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
fees and disbursements of additional counsel for any of the Holders, which fees
and disbursements shall be the obligations of such Holders, and excluding the
compensation of regular employees of the Company, which compensation shall be
paid in any event by the Company).
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Shares pursuant to the Agreement or the
Purchase Agreement.
"SHARES" shall mean the Company's Series R Stock issued pursuant to
this Purchase Agreement.
6.2 PIGGYBACK REGISTRATIONS. The Company shall notify all
Holders in writing at least thirty (30) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions
under Rule 145 of the Securities Act), either for its own account or for the
account of a security holder or security holders, and the Company will afford
each such Holder an opportunity to include in such registration statement all
or part of such Registrable Securities held by such Holder. Each Holder
desiring to include in any such registration statement all or
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any part of the Registrable Securities held by it shall, within fifteen (15)
days after the above-described notice from the Company, so notify the Company
in writing. Such notice shall state the intended method of disposition of the
Registrable Securities by such Holder. If a Holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(a) UNDERWRITING. If the registration statement under
which the Company gives notice under this Section 6.2 is for an underwritten
offering, the Company shall so advise the Holders. In such event, the right
of any such Holder to be included in a registration pursuant to this Section
6.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of this Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the
Holders on a pro rata basis based on the total number of Registrable
Securities proposed to be included by each Holder in the underwriting; and
third, to any shareholder of the Company (other than a Holder) on a pro rata
basis. No such reduction shall reduce the securities being offered by the
Holders to less than 50% of the securities proposed to be sold by them in the
offering unless all such shares other than shares held by Holders exercising
a demand registration right are excluded. In no event will shares of any
other selling shareholder be included in such registration which would reduce
the number of shares which may be included by Holders without the written
consent of Holders of not less than a majority of the Registrable Securities
proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it
under this Section 6.2 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The Registration Expenses of such withdrawn registration shall
be borne by the Company in accordance with Section 6.4 hereof.
6.3 FORM S-3 REGISTRATION. In case the Company shall receive
from any Holder or Holders a written request or requests that the Company
effect a registration on Form S-3 (or any successor to Form S-3) or any
similar short-form registration statement and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned
by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and
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(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice
from the Company; provided, however, that the Company shall not be obligated
to effect any such registration, qualification or compliance pursuant to this
Section 6.3:
(i) if Form S-3 (or any successor or similar form)
is not available for such offering by the Holders, or
(ii) if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than one
million dollars ($1,000,000), or
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors or the President
of the Company stating that in the good-faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its shareholders for such Form S-3 Registration to be effected at such
time, in which event the Company shall have the right to defer the filing of
the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section
6.3; provided, that such right to delay a request shall be exercised by the
Company not more than twice in any twelve (12) month period, or
(iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 6.3, or
(v) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification
or compliance.
(c) Subject to the foregoing, the Company shall file a
Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders.
6.4 EXPENSES OF REGISTRATION. All expenses of registration
(exclusive of underwriting discounts and commissions) including, without
limitation, the fees and expenses of one special counsel, if any, for the
selling shareholders for the demand, piggyback and S-3 registrations shall be
borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.
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6.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect
the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use all reasonable
efforts to cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to
one hundred twenty (120) days or, if earlier, until the Holder or Holders
have completed the distribution related thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its reasonable best efforts to register and
qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter(s) of such offering.
Each Holder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Furnish, at the request of any Holder participating
in the registration, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with
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respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering and reasonably satisfactory to such Holder
requesting registration, addressed to the underwriters, if any, and to such
Holder requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to such Holder requesting registration,
addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the Holders requesting registration of Registrable
Securities.
6.6 TERMINATION OF REGISTRATION RIGHTS. All registration
rights granted under this Section 6 shall terminate and be of no further
force and effect after the earlier of (i) three (3) years after the date of
the Company's Initial Offering, or (ii) the date when the Company has
completed its Initial Offering and is subject to the provisions of the
Exchange Act and (a) all Registrable Securities held by and issuable to such
Holder may be sold during any ninety (90) day period and (b) such Holder or
any assignee of such Holder holds less than one half of one percent (0.5%) of
the Company's outstanding stock under Rule 144(k) (or successor rule
promulgated by the SEC).
6.7 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation
or implementation of this Section 6.
(b) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to Sections 6.2 or 6.3 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
6.8 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under Sections 6.2 or 6.3:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors
and legal counsel of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
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prospectus contained therein or any amendments or supplements thereto, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the offering covered by such
registration statement; and the Company will reimburse each such Holder,
partner, officer or director, underwriter or controlling person for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section
6.8(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably withheld, nor
shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by such Holder, partner, officer, director, underwriter or controlling person
of such Holder.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within
the meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, directors or officers or any person who controls such
Holder, against any losses, claims, damages or liabilities (joint or several)
to which the Company or any such director, officer, legal counsel,
controlling person, underwriter or other such Holder, or partner, director,
officer or controlling person of such other Holder may become subject under
the Securities Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, legal counsel, controlling person, underwriter or other
Holder, or partner, officer, director or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was
such a Violation; provided, however, that the indemnity agreement contained
in this Section 6.8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided further, that in no event shall any indemnity under this
Section 6.8 exceed the net proceeds from the offering received by such Holder.
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(c) Promptly after receipt by an indemnified party under
this Section 6.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 6.8,
deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate
therein, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 6.8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 6.8.
(d) If the indemnification provided for in this Section
6.8 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Holder hereunder
exceed the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under
this Section 6.8 shall survive completion of any offering of Registrable
Securities in a registration statement. No indemnifying party, in the defense
of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
6.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 6 may
be assigned by
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a Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, general partner, limited partner or retired partner of a
Holder, (ii) is a Holder's family member or trust for the benefit of an
individual Holder, or (iii) acquires at least fifty thousand (50,000) shares
of Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (A) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned and (B) such transferee shall agree to
be subject to all restrictions set forth in this Agreement.
6.10 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Section 6 may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders
of at least two-thirds (66 2/3%) of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
6.10 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 6, Holders of Registrable Securities hereby agree
to be bound by the provisions hereunder.
6.11 "MARKET STAND-OFF" AGREEMENT. If requested by the
Company or the representative of the underwriters of Common Stock (or other
securities) of the Company, each Holder shall not sell or otherwise transfer
or dispose of any Common Stock (or other securities) of the Company held by
such Holder (other than those included in the registration) for a period
specified by the representative of the underwriters not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act; and such Holder shall enter into
a reasonable, written lock-up agreement to that effect if requested by the
Company or the representative of the underwriters; provided that:
(i) such agreement shall apply only to the Company's
Initial Offering; and
(ii) all officers and directors of the Company and
holders of at least one percent (1%) of the Company's voting securities enter
into similar agreements.
(iii) The obligations described in this Section 6.11
shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms that may be promulgated in the
future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms that may be promulgated in the
future. The Company may impose stop-transfer instructions with respect to the
shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period.
6.12 RULE 144 REPORTING. With a view to making available to
the Holders the benefits of certain rules and regulations of the SEC which
may permit the
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sale of the Registrable Securities to the public without registration, the
Company agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144 or any similar or analogous
rule promulgated under the Securities Act, at all times after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) file with the SEC, in a timely manner, all reports
and other documents required of the Company under the Exchange Act; and
(c) so long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
of the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements); a copy of the most recent
annual or quarterly report of the Company; and such other reports and
documents as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.
SECTION 7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and performed entirely
in California.
7.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by
or on behalf of a party pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by
such party hereunder solely as of the date of such certificate or instrument.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by
each person who shall be a holder of the Shares from time to time.
7.4 ENTIRE AGREEMENT. This Agreement, any and all exhibits
and schedules hereto and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and no party shall be liable or
bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.
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7.5 SEVERABILITY. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
7.6 AMENDMENT AND WAIVER. This Agreement may be amended,
modified or waived only upon the written consent of the Company and Purchaser.
7.7 DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon
any breach, default or noncompliance by another party under this Agreement
shall impair any such right, power or remedy, nor shall it be construed to be
a waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval
of any kind or character on Purchaser's part of any breach, default or
noncompliance under this Agreement or any waiver on such party's part of any
provisions or conditions of the Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.
7.8 NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then
on the next business day; (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or
(iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt.
All communications shall be sent to the Company at its address as set forth
on the signature page hereof and to Purchaser at its address set forth on the
signature page hereof, or at such other address as the Company or Purchaser
may designate by ten (10) days advance written notice to the other parties
hereto.
7.9 EXPENSES. The Company and Purchaser shall each pay all
costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of the Agreement.
7.10 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party
or parties in such dispute shall be entitled to recover from the losing party
or parties all fees, costs and expenses of enforcing any right of such
prevailing party or parties under or with respect to this Agreement,
including without limitation, such reasonable fees and expenses of attorneys
and accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.
7.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
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7.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
7.13 BROKER'S FEES. Each party hereto represents and warrants
that no agent, broker, investment banker, person or firm acting on behalf of
or under the authority of such party hereto is or will be entitled to any
broker's or finder's fee or any other commission directly or indirectly in
connection with the transactions contemplated herein. Each party hereto
further agrees to indemnify each other party for any claims, losses or
expenses incurred by such other party as a result of the representation in
this paragraph being untrue.
7.14 PRONOUNS. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.
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IN WITNESS WHEREOF, the parties hereto have executed the SERIES R
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASER:
DYNAVAX TECHNOLOGIES AVENTIS ▇▇▇▇▇▇▇ ▇.▇.
CORPORATION
By: /s/ Dino Dina By: /s/ ▇▇▇▇▇▇▇ Mousserin-Hervy
-------------------------------- --------------------------------
President & CEO ▇▇▇▇▇▇▇ Mousserin-Hervy
Attorney-In-Fact
ADDRESS: ADDRESS:
Dynavax Technologies Corporation Aventis ▇▇▇▇▇▇▇ ▇.▇.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 58, Avenue ▇▇▇▇▇▇▇ - BP7046
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 69348 ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇