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Exhibit 10.2
SERIES A AND B PREFERRED STOCK PURCHASE AGREEMENT
MYCO PHARMACEUTICALS INC.
One ▇▇▇▇▇▇▇ Square
Building 300 - Third Floor
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of January 11, 1994
To the Persons listed on Exhibit 1.01 hereto
Re: Series A and Series B Preferred Stock
Ladies and Gentlemen:
Myco Pharmaceuticals Inc. (the "Company"), a Delaware
corporation, agrees with each of you as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.01. THE PREFERRED SHARES. The Company has authorized the issuance,
sale and exchange of 976,284 units, each unit consisting of two shares of its
authorized but unissued shares of Series A Preferred Stock, $.01 par value (the
"Series A Preferred Stock"), at a purchase price of $1.00 per share and one
share of its authorized but unissued shares of Series B Preferred Stock, $.01
per share (the "Series B Preferred Stock") at a purchase price of $1.50 per
share (the Series A Preferred Stock and the Series B Preferred Stock are
referred to collectively as the "Preferred Stock" or the "Preferred Shares") to
the persons (collectively, the "Purchasers" and, individually, a "Purchaser")
and in the respective amounts set forth in Exhibit 1.01A hereto. The
designation, rights, preferences and other terms and provisions of the Preferred
Stock are set forth in Exhibit A hereto.
1.02. THE CONVERSION SHARES. The Company has authorized and has
reserved and covenants to continue to reserve, free of preemptive rights and
other similar contractual rights of shareholders, a sufficient number of its
authorized but unissued shares of Common Stock to satisfy the rights of
conversion of the holders of the Preferred Shares. Any shares of Common Stock
issuable upon conversion of the Preferred Shares (and such shares when issued)
are herein referred to as the "Conversion Shares". The Preferred Shares and
Conversion Shares are sometimes collectively referred to as the "Shares".
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1.03. PURCHASE PRICE AND CLOSING.
(a) CLOSING. The Company agrees to issue, sell and exchange to
the Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally but not jointly, agree to purchase, that number of the
Preferred Shares set forth opposite their respective names in Exhibit 1.01A. The
aggregate purchase price of the Preferred Shares being acquired by each
Purchaser is set forth opposite such Purchaser's name in Exhibit 1.01A. The
closing of the purchase, sale and exchange of the Preferred Shares to be
acquired by the Purchasers from the Company under this Agreement shall take
place at the offices of Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m. on January 11, 1994, or at such time and
date thereafter as the Purchasers and the Company may agree (the "Closing"). At
the Closing, the Company will deliver to each Purchaser certificates for the
number and series of Preferred Shares set forth opposite its name in Exhibit
1.01A registered in such Purchaser's name (or its nominee), against delivery of
a check or checks payable to the order of the Company, or a transfer of funds to
the account of the Company by wire transfer, representing the net cash
consideration set forth opposite each such Purchaser's name on Exhibit 1.01A,
and the cancellation of an aggregate of $440,070 of principal of indebtedness of
the Company to certain Purchasers as so set forth on Exhibit 1.01A, as payment
in full of the purchase price of the Shares. At the Closing, certain Purchasers
will deliver to the Company (i) the Promissory Notes marked "paid in full," made
by the Company to the respective orders of such Purchasers, in lieu of the
payment of $440,070, as described in Exhibit 1.01A and (ii) the Company will
deliver to such Purchasers by check all accrued interest therein through the
date of Closing.
(b) ADDITIONAL SHARES AND CLOSING(S). At any time and from
time to time between the date hereof and sixty (60) days from the date hereof,
the Company may, in its discretion, issue and sell up to an additional
$4,000,000 of Preferred Shares on the same terms and conditions set forth in
this Agreement, to the Purchasers and/or Persons who are not parties to this
Agreement, provided that such purchasers shall become parties to this Agreement
by an amendment to this Agreement to increase the number of Preferred Shares to
be purchased and sold, to add such purchasers, and to appropriately update the
provisions of this Agreement to take into account such additional shares and
closing(s) and to provide for the mechanics of such closing(s). Each Purchaser
consents to such amendment(s) and such issuances and sales and agrees to take
such actions as are reasonably requested by the Company to facilitate such
transactions, including executing consents or proxies to vote at a meeting to
enable the Company to amend its Restated Certificate of
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Incorporation to authorize the additional shares of Series A Preferred Stock and
Series B Preferred Stock which would be required in connection with such
transactions.
1.04. USE OF PROCEEDS. The Company shall use the cash proceeds from the
sale of the Preferred Shares for working capital and general corporate purposes,
including the repayment of bridge loans to an affiliate of Technology Leaders
L.P. in the principal amount of $159,930.
1.05. REPRESENTATIONS BY THE PURCHASERS.
(a) INVESTMENT REPRESENTATIONS. Each of the
Purchasers represents severally, but not jointly, that it is its
present intention to acquire the Shares to be acquired by it for its
own account (and it will be the sole beneficial owner thereof) and that
the Shares are being and will be acquired by it for the purpose of
investment and not with a view to distribution or resale thereof except
pursuant to registration under the Securities Act or exemption
therefrom. The acquisition by each Purchaser of the Preferred Shares
acquired by it shall constitute a confirmation of this representation
by each such Purchaser. Each Purchaser is purchasing with its own funds
and not with the funds of any pension or employee benefit plan. Each of
the Purchasers further represents that it understands and agrees that,
until registered under the Securities Act or transferred pursuant to
the provisions of Rule 144 or Rule 144A as promulgated by the
Commission, all certificates evidencing any of the Shares, whether upon
initial issuance or upon any transfer thereof, shall bear a legend,
prominently stamped or printed thereon, reading substantially as
follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or applicable
state securities laws. These securities have been acquired for
investment and not with a view to distribution or resale.
These securities may not be offered for sale, sold, delivered
after sale, transferred, pledged or hypothecated in the
absence of an effective registration statement covering such
shares under the Act and any applicable state securities laws,
or the availability, in the opinion of counsel satisfactory to
the Company, of an exemption from registration thereunder."
(b) SOPHISTICATION AND KNOWLEDGE. Each Purchaser or
his representative has such knowledge and experience in
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financial and business matters that it is capable of evaluating the
merits and risks of the purchase of the Preferred Shares. Each
Purchaser can bear the economic risks of this investment and can afford
a complete loss of his investment.
(c) TRANSFER RESTRICTIONS IMPOSED BY SECURITIES LAWS.
Each Purchaser understands that: no state or governmental authority has
made any finding or determination relating to the fairness of the terms
of the investment in the Company proposed hereunder and the Shares have
not been registered under the Securities Act and applicable state
securities laws, and, therefore, cannot be resold unless they are
subsequently registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration is
available; each Purchaser is and must be purchasing the Shares for
investment for the account of such Purchaser and not for the account or
benefit of others, and not with any present view toward resale or other
distribution thereof. Each Purchaser agrees not to resell or otherwise
dispose of all or any part of the Shares purchased by him, except as
permitted by law, including, without limitation, any regulations under
the Securities Act and applicable state securities laws; the Company
does not have any present intention and is under no obligation to
register the Shares under the Securities Act and applicable state
securities laws, except as provided in Article V hereof; and Rule 144
or Rule 144A under the Securities Act may not be available as a basis
for exemption from registration of the Shares thereunder.
(d) LACK OF LIQUIDITY. Each Purchaser has no present
need for liquidity in connection with his purchase of the Preferred
Shares.
(e) SUITABILITY AND INVESTMENT OBJECTIVES. The
purchase of the Preferred Shares by each Purchaser is consistent with
the general investment objectives of the Purchaser. The Purchaser
understands that the purchase of the Preferred Shares involves a high
degree of risk in view of the fact that, among other things, the
Company is a development stage enterprise, and there may never be an
established market for the Company's capital stock.
(f) ACCREDITED INVESTORS STATUS. Each Purchaser
except for those listed on Exhibit 1.05 is an "Accredited Investor" as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act.
(g) ACCESS TO INFORMATION. Each Purchaser has had the
opportunity to ask questions and receive answers from the officers and
other employees of the Company
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regarding the terms and conditions of this Agreement, the transactions
contemplated hereby (including, without limitation, its acquisition of
Shares), as well as the affairs of the Company and related matters, and
it has obtained such information and has had the opportunity to obtain
additional information necessary to verify the accuracy of all
information so obtained.
(h) CORPORATE AND PARTNERSHIP REPRESENTATION. If a
Purchaser is a corporation, partnership, trust or other entity, it
represents and warrants that (i) the individual executing this
Agreement on its behalf has been duly authorized to execute and deliver
this Agreement; (ii) the signature of such individual is binding upon
such partnership, corporation, trust or other entity; (iii) the
Purchaser is duly organized, validly existing and in good standing in
its jurisdiction of incorporation or organization and has all requisite
power and authority to execute and deliver this Agreement; and (iv) the
execution and delivery of this Agreement and the purchase of the Shares
hereunder will not result in the violation of, constitute a breach or
default under, or conflict with, any term or provision of the charter,
bylaws or other governing document of the Purchaser or, to its
knowledge, material breach or default under any material agreement,
judgment, decree, order, statute or regulation by which it is bound or
applicable to it.
(i) ADDITIONAL REPRESENTATIONS. Each Purchaser
understands that the Company is a research and development stage
enterprise with limited resources. The Company is engaged and intends
to engage in research activities which will require substantial funds
which may not be available. For this and other reasons, the Company's
prospects are highly speculative. Accordingly, each Purchaser
acknowledges that he, she or it may lose her, his or its entire
investment in the Company. Each of the Bessemer Purchasers is relying
on the information provided by Bessemer Venture Partners L.P. with
respect to its investment in the Company. Bessemer Venture Partners
L.P. represents that it has provided to each of such purchasers access
to all of the information which it has regarding the Company.
ARTICLE II
CONDITIONS TO PURCHASERS' OBLIGATION
The obligation of each Purchaser to purchase and pay for the Preferred
Shares to be purchased by it at the Closing is subject to the following
conditions (all of which shall be deemed satisfied or waived by the Purchasers
at or prior to the Closing
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in the event all of the transactions contemplated to be effected at the Closing
are consummated and all or any of which in any case may be waived by the
Purchasers prior to a Closing):
2.01. REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true,
accurate and correct on the date of the Closing.
2.02. DOCUMENTATION AT CLOSING. The Purchasers shall have received
prior to or at the Closing all of the following materials, each in form and
substance reasonably satisfactory to the Purchasers and their special counsel,
and each of the following events shall have occurred, or each of the following
documents shall have been delivered, prior to or simultaneous with the Closing:
(a) A copy of the Certificate of Incorporation of the
Company, as amended or restated to date, together with such evidence as
is satisfactory to the Purchasers of the filing thereof; a copy of the
resolutions of the Board of Directors providing for the approval of the
Restated Certificate of Incorporation of the Company in the form
attached as Exhibit A, the approval of this Agreement, the issuance of
the Preferred Shares, such amendment of the By-laws of the Company as
may be reasonably requested by the Purchasers, and all other agreements
or matters contemplated hereby or executed in connection herewith; a
copy of a consent of stockholders of the Company approving the Restated
Certificate of Incorporation of the Company; and a copy of the By-laws
of the Company, all of which have been certified by the Secretary of
the Company to be true, complete and correct in every particular; and
certified copies of all documents evidencing other necessary corporate
or other action and governmental approvals, if any, required to be
obtained at or prior to the Closing with respect to this Agreement and
the issuance of the Preferred Shares.
(b) The favorable opinion of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Company, in the form
set forth in Exhibit 2.02(b).
(c) A certificate of the Secretary or an Assistant
Secretary of the Company which shall certify the names of the officers
of the Company authorized to sign this Agreement, the certificates for
the Preferred Shares and the other documents, instruments or
certificates to be delivered pursuant to this Agreement by the Company
or any of its officers, together with the true signatures of such
officers.
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(d) A certificate of the President and the Treasurer
of the Company stating that the representations and warranties of the
Company contained in Article III hereof are true and correct as of the
time of the Closing and that all conditions required to be performed by
the Company prior to or at the Closing have been performed as of the
Closing.
(e) The Company shall have obtained any consents or
waivers necessary to be obtained at or prior to the Closing to execute
and deliver this Agreement, the Preferred Shares and the other
agreements and instruments executed and delivered by the Company in
connection herewith and to carry out the transactions contemplated
hereby and thereby, and such consents and waivers shall be in full
force and effect at the Closing. All corporate and other action and
governmental filings necessary to effectuate the terms of this
Agreement, the Preferred Shares and the other agreements and
instruments executed and delivered by the Company in connection
herewith shall have been made or taken.
(f) The Certificate of Incorporation of the Company
shall have been amended and restated in the form set forth in Exhibit A
attached hereto.
(g) A Certificate of the Secretary of State of the
State of Delaware as to the due incorporation and good standing of the
Company and a certificate of the Secretary of State of each
jurisdiction in which the Company is required to qualify to do business
as a foreign corporation shall have been provided to the Purchasers and
their special counsel.
(h) Payment for the costs, attorneys' fees, expenses,
taxes and filing fees identified in Section 8.04.
(i) Each of the employees listed on Exhibit 2.02(i)
shall have entered into Nondisclosure and Assignment of Inventions
Agreements in the form attached as Exhibit B1 and Exhibit B2 hereto
(the "Nondisclosure Agreement") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall have
entered into an Employment and Non-Competition Agreement in the form
attached to Exhibit 2.02 hereto (the "Non-Competition Agreement") and
copies thereof shall have been delivered to counsel for the Purchasers.
(j) Each of the Purchasers, the Company and the other
shareholders thereto shall have entered into an Amended and Restated
Voting and Co-Sale Agreement in the form attached as Exhibit C hereto
(the "Voting and Co-Sale Agreement").
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(k) The members of the Board of Directors of the
Company (the "Board") immediately following the Closing shall consist
of five (5) members, which members shall include ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
M.D., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Ph.D., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Ph.D. (for so long as he is an officer, employee or otherwise
materially involved with the Company as determined by the Board of
Directors, including the Investor Directors and ▇▇▇▇▇ ▇. ▇▇▇▇▇.
(l) This Agreement shall have been executed by
Purchasers that are obligated to purchase an aggregate of at least
$3,000,000 of Preferred Shares at the Closing in the amounts set forth
in Exhibit 1.01A and such Purchasers shall have delivered to the
Company the full purchase price for such Preferred Shares.
(m) A Scientific Advisory Board of the Company
composed of individuals acceptable to the Purchasers in their sole
discretion shall have been constituted.
(n) Each Purchaser (other than the Bessemer
Purchasers and the Company Friends) shall have simultaneously with the
other Purchasers (other than the Bessemer Purchasers and the Company
Friends) purchased the Preferred Shares at the Closing that such
Purchaser is obligated to purchase hereunder and shall have paid the
full purchase price therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants as follows:
3.01. ORGANIZATION AND STANDING OF THE COMPANY. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority for
the ownership and operation of its properties and for the carrying on of its
business as now conducted and as now proposed to be conducted and to execute and
deliver this Agreement, the Voting and Co-Sale Agreement and any other agreement
to which it is a party hereunder, to issue, sell and deliver the Preferred
Shares and to issue and deliver the Conversion Shares and to perform its other
obligations pursuant hereto and thereto. The Company is duly licensed or
qualified and in good standing as a foreign corporation authorized to do
business in all jurisdictions wherein the character of the property owned or
leased or the nature of the activities conducted by it makes such licensing or
qualification necessary, except where the failure to be so
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licensed or qualified would not have a material adverse effect on the business,
operations or financial condition of the Company.
3.02. CORPORATE ACTION. This Agreement, the Voting and Co-Sale
Agreement and any other agreement to which it is a party hereunder have been
duly authorized, executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
3.03. GOVERNMENTAL APPROVALS. Except for the filing of any notice
prior or subsequent to the Closing that may be required under applicable state
and/or Federal securities laws, and the filing of the Restated Certificate of
Incorporation (which, if required, shall be filed on a timely basis), no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution and delivery by the Company of this
Agreement, for the offer, issue, sale, execution or delivery of the Preferred
Shares, or for the performance by the Company of its obligations under this
Agreement.
3.04. LITIGATION. There is no litigation or governmental proceeding
or investigation pending or, to the knowledge of the Company, threatened against
the Company affecting any of its properties or assets, or, to the knowledge of
the Company, against any officer, Key Employee or the holder of more than ten
percent (10%) of the capital stock of the Company relating to the Company or its
business, nor, to the knowledge of the Company, has there occurred any event or
does there exist any condition on the basis of which it is reasonably likely
that any such litigation, proceeding or investigation might properly be
instituted. There are no actions or proceedings pending or, to the Company's
knowledge, threatened (or any basis therefor known to the Company) which might
result, either in any case or in the aggregate, in any material adverse change
in the business, operations, Intellectual Property Rights, affairs or financial
condition of the Company or in any of its properties or assets, or which might
call into question the validity of this Agreement, any of the Preferred Shares,
or any action taken or to be taken pursuant hereto or thereto.
3.05. CERTAIN AGREEMENTS OF OFFICERS AND EMPLOYEES. To the Company's
knowledge, no officer, employee or consultant of the Company is, or is now or is
expected to be, in violation of any material term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, nonsolicitation agreement, confidentiality agreement, or any other
similar contract or agreement or any restrictive covenant, relating to the right
of any such officer, employee, or
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consultant to be employed or engaged by the Company because of the nature of the
business conducted or to be conducted by the Company or relating to the use of
trade secrets or proprietary information of others, and to the Company's
knowledge and belief, the continued employment or engagement of the Company's
officers, employees or consultants does not subject the Company or any Purchaser
to any material liability with respect to any of the foregoing matters.
3.06. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is in compliance
in all respects with the terms and provisions of this Agreement and of its
Certificate of Incorporation and By-laws, each as amended and/or restated to
date, and in all respects with the terms and provisions of all mortgages,
indentures, leases, agreements and other instruments by which it is bound or to
which it or any of its properties or assets are subject where noncompliance
would have a material adverse affect on the business, assets, operations, or
financial condition of the Company. The Company is in compliance in all respects
with all judgments, decrees, governmental orders, laws, statutes, rules or
regulations by which it is bound or to which it or any of its properties or
assets are subject where noncompliance with which would have a material adverse
affect on the business, assets, operations, or financial condition of the
Company. Neither the execution, issuance and delivery of this Agreement, the
Voting and Co-Sale Agreement, or the Preferred Shares, nor the consummation of
any transaction contemplated hereby or thereby, has constituted or resulted in
or will constitute or result in a default or violation of any term or provision
of any of the foregoing documents, instruments, judgments, agreements, decrees,
orders, statutes, rules and regulations where noncompliance with which would
have a material adverse affect on the business, assets, operations, or financial
condition of the Company.
3.07. TITLE TO ASSETS, PATENTS. The Company has good and marketable
title in fee to such of its fixed assets as are real property and purported to
be owned, and good and merchantable title to all of its other assets, tangible
and intangible, free of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except those indicated in Exhibit 3.07. The
Company enjoys peaceful and undisturbed possession under all leases under which
it is operating, and all said leases are valid and subsisting and in full force
and effect. All of such assets and leases are listed in Exhibit 3.07.
The Company owns or has a valid right to use the Intellectual
Property Rights being used to conduct its business (i) as now operated and (ii)
as now proposed to be operated (a complete list of licenses, contract rights and
registrations of such Intellectual Property Rights is attached hereto as Exhibit
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3.07); and the conduct of its business as now operated and as now proposed to be
operated does not and is not expected to conflict with or infringe upon the
intellectual property rights of others. Except as set forth on Exhibit 3.07, no
claim is pending or threatened against the Company and/or, to the Company's
knowledge, its officers, employees and consultants to the effect that any such
Intellectual Property Right owned or licensed by the Company, or which the
Company otherwise has the right to use, is invalid or unenforceable by the
Company or subject to any claim of infringement. Except pursuant to the terms of
any licenses specified on Exhibit 3.07, the Company has no obligation to
compensate any Person for the use of any such Intellectual Property Rights and
the Company has not granted any Person any license or other right to use any of
the Intellectual Property Rights of the Company or otherwise has licensed from
others the intellectual property rights of third parties, whether requiring the
payment of royalties or not.
The Company has taken reasonable measures in accordance with
industry standards to protect and preserve the security, confidentiality and
value of its Intellectual Property Rights, including its trade secrets and other
confidential information. All employees and consultants of the Company involved
in the design, review, evaluation or development of inventions or Intellectual
Property Rights have executed nondisclosure and assignment of inventions
agreements in the forms attached as Exhibits B1 and B2. To the best knowledge of
the Company, all trade secrets and other confidential information of the Company
are presently valid and protectible and are not part of the public domain or
knowledge, nor, to the best knowledge of the Company, have they been used,
divulged or appropriated for the benefit of any person other than the Company or
otherwise to the detriment of the Company. To the best of the Company's
knowledge, no employee or consultant of the Company has used any trade secrets
or other confidential or proprietary information or techniques of any other
person in the course of their work for the Company or is expected to use such
secrets or information or techniques when conducting the business which the
Company presently intends to conduct. The Company is the exclusive owner of all
right, title and interest in its Intellectual Property Rights as purported to be
owned by the Company, and such Intellectual Property Rights are valid and in
full force and effect. Neither the Company, nor any of its employees or
consultants has received notice of, and to the best of the Company's knowledge
after reasonable investigation, there are no claims that the Company's
Intellectual Property Rights or the use or ownership thereof by the Company
infringes, violates or conflicts with any such right of any third party. No
university, hospital, government agency (whether federal or state) or other
organization which sponsored research and development conducted by the Company
has any claim of right to or ownership of or other
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encumbrance upon the Intellectual Property Rights of the Company except as
disclosed in Exhibit 3.07.
3.08. TRANSACTIONS WITH AFFILIATES. Except as set forth in Exhibit 3.08
there are no loans, leases, royalty agreements or other continuing transactions
between (a) the Company or, to the Company's best knowledge, any of its
customers or suppliers, and (b) any officer, employee, consultant or director of
the Company or any Person owning five percent (5%) or more of the capital stock
of the Company, or to the Company's knowledge, any member of the immediate
family of such officer, employee, consultant, director or stockholder or any
corporation or other entity controlled by such officer, employee, consultant,
director or stockholder, or a member of the immediate family of such officer,
employee, consultant, director or stockholder.
3.09. INDEBTEDNESS; ASSUMPTIONS OR GUARANTIES OF INDEBTEDNESS OF OTHER
PERSONS. The Company has no Indebtedness except as set forth in Exhibit 3.09.
The Company has not assumed, guaranteed, endorsed or otherwise become directly
or contingently liable on (including, without limitation, liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor or otherwise to assure the
creditor against loss), any Indebtedness of any other Person except as set forth
in Exhibit 3.09.
3.10. INVESTMENTS IN OTHER PERSONS. Except as set forth in Exhibit
3.10, the Company has not made any loans or advances in excess of $10,000 in the
aggregate to any Person which is outstanding on the date of this Agreement, nor
is it committed or obligated to make any such loan or advance, nor does the
Company own any capital stock, assets comprising the business of, obligations
of, or any interest in, any Person. The Company does not have, and has not since
its incorporation had, any Subsidiaries.
3.11. SECURITIES ACT OF 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Preferred Shares hereunder. Neither the Company
nor anyone authorized to act on its behalf has or will sell, offer to sell or
solicit offers to buy the Preferred Shares or similar securities to, or solicit
offers with respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any Person, so as to bring the issuance and
sale of the Preferred Shares under the registration provisions of the Securities
Act and applicable state securities laws.
3.12. DISCLOSURE. Neither this Agreement, nor any other agreement or
statement, furnished to any of the Purchasers or their special counsel by or on
behalf of the Company in
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connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances in which made, not misleading. Projections made in the Business
Plan are not considered to be facts for the purpose of this Section. Such
projections were prepared in good faith on the basis of reasonable assumptions.
There is no fact within the knowledge of the Company or any of its executive
officers which has not been disclosed herein or in writing by them to the
Purchasers and which materially adversely affects, or in the future in their
opinion may, insofar as they can now foresee, materially adversely affect the
business, operations, properties, Intellectual Property Rights, assets or
condition, financial or other, of the Company. Without limiting the foregoing,
the Company has no knowledge that there exists, or there is pending or planned,
any patent, invention, device, application or principle or any statute, rule,
law, regulation, standard or code which would materially adversely affect the
business, prospects, operations, Intellectual Property Rights, affairs or
financial condition of the Company.
3.13. CAPITALIZATION; STATUS OF CAPITAL STOCK. As of the Closing, the
Company will have a total authorized capitalization consisting of (i) 12,000,000
shares of Common Stock, $.001 par value and (ii) 7,200,000 shares of Preferred
Stock, $.01 par value, of which 6,200,000 shares will be designated as Series A
Preferred Stock and 1,000,000 shares will be designated as Series B Preferred
Stock. As of the Closing, 1,506,000 shares of Common Stock will be issued and
outstanding. A complete list of the capital stock of the Company which has been
previously issued and the names in which such capital stock is registered on the
stock transfer book of the Company is set forth in Exhibit 3.13 hereto. All the
outstanding shares of capital stock of the Company have been duly authorized,
and are validly issued, fully paid and non-assessable. The Shares when issued
and delivered in accordance with the terms hereof, and the Conversion Shares,
when issued and delivered upon conversion of the Preferred Shares, will be duly
authorized, validly issued, fully-paid and non-assessable. Except for 2,112,000
shares of Common Stock that are reserved for issuance upon exercise of stock
options, 177,083 shares of Series A Preferred Stock that have been reserved for
issuance upon exercise of Warrants issued or to be issued to Comdisco (the
"Comdisco Leasing Warrants") and the shares of Common Stock reserved for
issuance upon the conversion of the currently outstanding Series A Preferred
Stock and the Series A Preferred Stock which may be issued upon exercise of the
Comdisco Leasing Warrants, all as further set forth in Exhibit 3.13, no options,
warrants, subscriptions or purchase rights of any nature to acquire from the
Company, or commitments of the Company to issue, shares of capital stock or
other securities are authorized, issued or outstanding, nor is
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14
the Company obligated in any other manner to issue shares or rights to acquire
any of its capital stock or other securities except as contemplated by this
Agreement. None of the Company's outstanding securities or authorized capital
stock or the Preferred Stock are subject to any rights of redemption,
repurchase, rights of first refusal, preemptive rights or other similar rights,
whether contractual, statutory or otherwise, for the benefit of the Company, any
stockholder, or any other Person, except pursuant hereto and the Voting and
Co-Sale Agreement or as set forth on Exhibit 3.13. Except as set forth in
Exhibit 3.13, there are no restrictions on the transfer of shares of capital
stock of the Company other than those imposed by relevant federal and state
securities laws and as otherwise contemplated by this Agreement. The offer and
sale of all capital stock and other securities of the Company issued before the
Closing complied with or were exempt from all applicable federal and state
securities laws and no stockholder has a right of rescission or damages with
respect thereto.
3.14. MATERIAL AGREEMENTS. Except as set forth in Exhibit 3.14 the
Company is not a party to any material written or oral contract, instrument,
agreement, commitment, obligation, plan or arrangement, or any other material
agreement which could adversely affect the business, assets, liabilities,
Intellectual Property Rights, financial condition or operations of the Company.
The Company, and to the best of the Company's knowledge, each other party
thereto have in all material respects performed all the obligations required to
be performed by them to date, have received no notice of default and are not in
default in any material respect under any lease, agreement or contract now in
effect to which the Company is a party or by which it or its property may be
bound. Each of the contracts or agreements listed in Exhibit 3.14 is in full
force and effect with no default, anticipated or threatened material default or
material failure of performance or observance of any obligations or conditions
contained therein, and none of the foregoing parties nor the Company has
provided any notice of default or of its intention to terminate these
agreements.
3.15. ABSENCE OF CERTAIN DEVELOPMENTS. The Company is not a party to
any written or material oral contract or instrument or other corporate
restriction which individually or in the aggregate is reasonably likely to
adversely affect the business, prospects, financial condition, operations,
Intellectual Property Rights, property or affairs of the Company. The Company
has no liability or obligation, whether absolute, contingent, or otherwise as
set forth in Exhibit 3.15, except for those incurred in the ordinary course.
3.16. ENVIRONMENTAL AND SAFETY LAWS. To the best of the Company's
knowledge after due investigation, it is not in violation of any applicable
statute, law or regulation relating
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15
to the environment or occupational safety and health in any material respect,
and to the best of its knowledge after due investigation, no material
expenditures will be required in order to comply with any such statute, law or
regulation except in the ordinary course of doing business.
3.17. U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not now
and has never been a "United States Real Property Holding Corporation" as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the
Regulations promulgated by the Internal Revenue Service.
ARTICLE IV
COVENANTS OF THE COMPANY
4.01. AFFIRMATIVE COVENANTS OF THE COMPANY OTHER THAN REPORTING
REQUIREMENTS. Without limiting any other covenants and provisions hereof, and
except to the extent the following covenants and provisions of this Section 4.01
are waived in any instance by either (i) a majority of the Investor Directors or
(ii) the holders of at least 60% of the outstanding shares of Preferred Stock,
the Company covenants and agrees that until the consummation of a Qualified
Public Offering, it will perform and observe the following covenants and
provisions, and will cause each Subsidiary, if and when such Subsidiary exists,
to perform and observe such of the following covenants and provisions as are
applicable to such Subsidiary:
(a) MAINTENANCE OF KEY MAN INSURANCE. Maintain term
life insurance on the life of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the amount of
$1,000,000, for so long as such person remains an officer or employee
of the Company, the proceeds of which are payable to the Company. The
Company will add Technology Leaders L.P., Technology Leaders Offshore
C.V. and Bessemer Venture Partner II L.P. as a notice party to such
policy and will request that the issuer of such policy provide such
party with at least twenty (20) days' notice before such policy is
modified or terminated (for failure to pay premium or otherwise) or
assigned, or before any change is made in the designation of the
beneficiary thereof.
(b) BUDGETS APPROVAL. At least thirty (30) days prior
to the commencement of each fiscal year, prepare and submit to, and
obtain in respect thereof the approval of two-thirds of the members of
the Board of Directors, a business plan and monthly operating budget in
detail for each fiscal year, monthly operating expenses and profit and
loss projections, quarterly cash flow projections and a capital
expenditure budget for the fiscal year, and including a summary of
proposed research and development
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activities for the forthcoming year, the status and proposed activities
for any joint venture or other licensing arrangements with third
parties, including pharmaceutical companies, universities, hospitals
and others.
(c) NEW DEVELOPMENTS. Cause all technological
developments, patentable or unpatentable inventions, discoveries or
improvements by the Company's or any Subsidiary's employees or
consultants to be documented in accordance with industry practice and,
where possible and appropriate, to file and prosecute United States and
foreign patent, copyright, trademark, or other Intellectual Property
Right applications relating to and protecting the Company's inventions,
discoveries or developments on behalf of the Company or any Subsidiary.
(d) AGREEMENTS OF OFFICERS AND EMPLOYEES. Cause each
employee of the Company or any Subsidiary now or hereafter employed to
execute and deliver a Nondisclosure and Assignment of Inventions
Agreement (or agreement otherwise approved by the Board of Directors of
the Company, including a majority of the Investor Directors and cause
each Key Employee of the Company or any Subsidiary hereafter employed
to execute and deliver a Non-Competition Agreement, Nondisclosure and
Assignment of Inventions (or an agreement otherwise approved by the
Board of Directors of the Company, including a majority of the Investor
Directors), and use its best efforts to cause all consultants of the
Company involved in the design, review, evaluation or development of
inventions or Intellectual Property Rights to execute and deliver a
Nondisclosure and Assignment of Inventions Agreement (or an agreement
otherwise approved by the Board of Directors, including a majority of
the Investor Directors). The Company shall not amend or waive any of
the material provisions of such Agreements.
(e) BY-LAWS; MEETINGS AND INDEMNIFICATION. The
Company shall at all times cause its By-laws to provide that, (A)
unless otherwise required by the laws of the state of its
incorporation, (i) any two directors or (ii) any holder or holders of
at least 25% of the outstanding shares of Preferred Stock, voting as a
separate class, shall have the right to call a meeting of the Board of
Directors or stockholders, respectively, and (B) a quorum for a meeting
of the Board of Directors or any Committee hereof of which an Investor
Director is a member shall require the attendance of at least two
Investor Directors. The Company shall at all times maintain provisions
in its By-laws or Certificate of Incorporation indemnifying all
directors against liability to the maximum extent permitted under the
laws of the state of its incorporation.
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17
(f) EXPENSES OF DIRECTORS. Promptly reimburse in full
each director of the Company for all of his reasonable out-of-pocket
expenses incurred in attending each meeting of the Board of Directors
of the Company or any Committee thereof.
(g) SIZE OF BOARD. Fix and maintain the number of
Directors on the Board of Directors of the Company at no more than six
(6) members, including one (1) representative of the holders of Common
Stock, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, three (3) representatives of the Purchasers
and one (1) member designated by the chief executive officer of the
Company.
(h) RULE 144A INFORMATION. At all times during which
the Company is neither subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to
Rule 12g3-2(b) under the Exchange Act, the Company will provide as
promptly as practicable (in any event not later than twenty (20) days
after initial request) in written form, upon the written request of any
Purchaser or a prospective buyer of Shares from any Purchaser, all
information required by Rule 144A(d)(4)(i) of the General Regulations
promulgated by the Commission under the Securities Act ("Rule 144A
Information"). The Company further covenants, upon written request, as
promptly as practicable (in any event not later than twenty (20) days
after initial request) to cooperate with and assist any Purchaser or
any member of the National Association of Securities Dealers, Inc.
system for Private Offerings Resales and Trading through Automated
Linkage ("PORTAL") in applying to designate and thereafter maintain the
eligibility of the Shares for trading through PORTAL. The Company's
obligations under this Section 4.01(h) shall at all times be contingent
upon the relevant Purchaser's obtaining from a prospective purchaser an
agreement to take all reasonable precautions to safeguard the Rule 144A
Information from disclosure to anyone other than a person who will
assist such purchaser in evaluating the purchase of the Shares.
(i) STOCK PLAN. The Company has created a stock
option plan and has reserved an aggregate of 2,112,000 options for the
purchase of Common Stock for issuance to employees, officers and
consultants of the Company and to members of the Company's Scientific
Advisory Board. All options to be granted (or stock issued directly)
under any Stock Plan or otherwise shall vest and become exercisable in
equal annual installments over a four-year period and be subject to a
right of refusal of the Company, unless otherwise approved by a
majority of the Board of Directors including a majority of the Investor
Directors.
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(j) MEETINGS OF DIRECTORS AND COMMITTEES. Hold
meetings of the Company's Board of Directors not less than on a
quarterly basis; if the Company appoints an Executive Committee of the
Board of Directors, such committee shall be composed of at least three
(3) Directors, including at least three (3) Investor Directors; and
appoint and maintain a Stock Option/Compensation Committee of the Board
of Directors composed of at least three (3) Directors, including at
least three (3) Investor Directors.
4.02. NEGATIVE COVENANTS OF THE COMPANY. The Company covenants and
agrees that until the consummation of a Qualified Public Offering, it will
comply with and observe the following negative covenants and provisions, and
will cause each Subsidiary to comply with and observe such of the following
covenants and provisions as are applicable to such Subsidiary, if and when such
Subsidiary exists, and will not without (i) the written consent or written
waiver of the holders of at least 60% of the outstanding shares of the Preferred
Stock or (ii) a majority of the members of the Board of Directors including a
majority of the Investor Directors:
(a) DEALINGS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any loans or extensions of
credit or other agreements with any employee, consultant, officer or
director of the Company or any Subsidiary or holder of five percent
(5%) of any class of capital stock of the Company or any Subsidiary, or
any member of their respective immediate families or any corporation or
other entity directly or indirectly controlled by one or more of such
employees, consultants, officers, directors or 5% stockholders or
members of their immediate families, on terms less favorable to the
Company or any Subsidiary than it would obtain in a transaction between
unrelated parties except in the case of any transaction or series of
transactions entered into in the ordinary course of business, so long
as these are approved by the disinterested members of Board of
Directors (including a majority of the Investor Directors). The Company
has entered into certain agreements with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and with
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ set forth on Exhibit 4.02; which are hereby
ratified.
(b) ISSUANCE OF EQUITY SECURITIES. Authorize or
issue, or obligate itself to issue, any additional shares or capital
stock of the Company of any class (including any options, warrants or
other rights to purchase capital stock), provided, however, that the
provisions of this Section 4.02(b) shall not apply to the issuance of:
(i) the Conversion Shares; or (ii) up to 2,112,000 shares of Common
Stock or options, warrants or other rights exercisable therefor, issued
on or after the date hereof to directors,
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officers, employees or consultants of the Company and any Subsidiary
(including members of the Scientific Advisory Board) pursuant to any
qualified or non-qualified stock option plan or agreement, employee
stock ownership plan, employee benefit plan, stock purchase agreement,
stock plan, stock restriction agreement, or consulting agreement or
such other options, equity arrangements, agreements or plans approved
by two-thirds of the members of the Board of Directors of the Company
(including a majority of the Investor Directors); or (iii) shares
issued upon conversion of the outstanding shares of Series A Preferred
Stock; or (iv) the Comdisco Leasing Warrants, shares of Series A
Preferred Stock issued upon exercise thereof or shares of Common Stock
issued upon conversion of shares of Series A Preferred Stock issued
upon exercise of the Comdisco Leasing Warrants; or (v) issuing the
shares identified on Exhibit 3.13.
(c) TRANSFERS OF TECHNOLOGY. Transfer, sell, dispose
of, encumber, pledge, ▇▇▇▇▇ ▇ ▇▇▇▇ on or security interest in, assign,
lease, license or donate any ownership or interest in, or material
rights relating to, any of its technology, or other Intellectual
Property Rights to any person or entity which is not a member of the
"consolidated group" of the Company and its Subsidiaries; provided,
however, that this Section shall not apply to licenses of technology or
Intellectual Property Rights accomplished in the ordinary course of the
Company's business.
(d) RESTRICTIONS ON INDEBTEDNESS. The Company
covenants that it will not, and will not permit any of its Subsidiaries
to, incur, create, or assume any Indebtedness other than trade debt,
loans to employees in an annual aggregate amount not to exceed $50,000
and property leases, all as approved by the Board of Directors,
including a majority of the Investor Directors.
(e) ASSUMPTIONS OR GUARANTIES OF INDEBTEDNESS OF
OTHER PERSONS. Assume, guarantee, endorse or otherwise become directly
or contingently liable on, or permit any Subsidiary to assume,
guarantee, endorse or otherwise become directly or contingently liable
on (including, without limitation, liability by way of agreement,
contingent or otherwise, to purchase, to provide funds for payment, to
supply funds to or otherwise invest in the debtor or otherwise to
assure the creditor against loss) any Indebtedness of any other Person,
except for guaranties by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
(f) AMENDMENTS. Amend the Certificate of
Incorporation or By-laws of the Company.
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4.03. REPORTING REQUIREMENTS. Until the consummation of the Initial
Public Offering, the Company will furnish the following to each Person who is
the holder of not less than 5% of the Shares issued pursuant to this Agreement:
(a) MONTHLY REPORTS: as soon as available and in any
event within 45 days after the end of each calendar month, balance
sheets, statements of income and retained earnings and a summary
statement of monthly cash flow and expenses of the Company and its
Subsidiaries for such month and for the period commencing at the end of
the previous fiscal year and ending with the end of such month, setting
forth in each case in comparative form the corresponding figures for
the corresponding period of the preceding fiscal year, and including
comparisons to the monthly budget or business plan and an analysis of
the variances from the budget or plan, prepared in accordance with
generally accepted accounting principles consistently applied;
(b) ANNUAL REPORTS: as soon as available and in any
event within 120 days after the end of each fiscal year of the Company,
a copy of the annual audit report for such year for the Company and its
Subsidiaries, including therein consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of the end of such fiscal
year and consolidated and consolidating statements of income and
retained earnings and of changes in financial position of the Company
and its Subsidiaries for such fiscal year, setting forth in each case
in comparative form the corresponding figures for the preceding fiscal
year, all such consolidated statements to be duly certified by the
chief financial officer of the Company and an independent public
accountant of recognized national standing approved by the Board of
Directors including a majority of the Investor Directors;
(c) BUDGETS AND OPERATING PLAN: as soon as available
and in any event at least 30 days before the beginning of each fiscal
year of the Company, a business plan and monthly and quarterly
operating budgets for the forthcoming fiscal year, and as soon as
available and in any event within 30 days after the end of each
calendar month, monthly comparisons against the business plan and
monthly operating budgets (including a summary of proposed research and
development activities, and the status and proposed activities for any
joint venture or other licensing arrangements with any third party).
(d) NOTICE OF ADVERSE CHANGES: promptly after the
occurrence thereof and in any event within five (5) business days after
it becomes aware of each occurrence, notice of any material adverse
change in the business,
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assets, Intellectual Property Rights, management, licensing
activities, operations or financial condition of the
Company; and
(e) REPORTS AND OTHER INFORMATION: promptly upon
receipt, publication, commencement or occurrence provide to each
Purchaser copies of all material consulting reports, notices of all
material actions, suits or proceedings, copies of all accountant's
reviews, and reports to management, and such other information as the
Company shall make available to its directors or stockholders or the
Purchasers shall reasonably request.
ARTICLE V
REGISTRATION RIGHTS
5.01. "PIGGY-BACK" REGISTRATIONS. If at any time the Company shall
determine to register for its own account or the account of others under the
Securities Act (including pursuant to the Qualified Public Offering, the Initial
Public Offering or a demand for registration of any stockholder of the Company
other than the Purchasers) any of its equity securities, other than on Form S-8
or Form S-4 or their then equivalents or otherwise relating to shares of Common
Stock to be issued solely in connection with any acquisition of any entity or
business or shares of Common Stock issuable in connection with stock option or
other employee benefit plans, it shall send to each holder of Registrable
Shares, including each holder who has the right to acquire Registrable Shares,
written notice of such determination and, if within ten (10) business days after
receipt of such notice, such holder shall so request in writing, the Company
shall use its best efforts to include in such registration statement all or any
part of the Registrable Shares such holder requests to be registered.
If, in connection with any offering involving an underwriting, the
managing underwriter shall impose a limitation on the number of shares of such
Common Stock which may be included in the registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such registration statement
only such limited portion (which may be none) of the Registrable Shares with
respect to which such holder has requested inclusion pursuant hereto as may
reasonably be determined by the managing underwriters; provided, however, as
between the Company, other stockholders holding contractual registration rights,
and the holders of Registrable Shares, in no event shall the Registrable Shares
included in such offering be limited to less than twenty-five percent (25%) of
the aggregate shares offered. Any inclusion of Registrable Shares in the
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offering, when the managing underwriter has so limited the number of Registrable
Shares that may be included in the offering, shall be allocated pro rata among
the holders of Registrable Shares (or their permitted assigns) seeking to
include such shares and the holders of other registration rights seeking to
include their shares, in proportion to the number of Registrable Shares (whether
or not such shares are sought to be included in such offering) held by such
persons. No incidental right under this Section 5.01 shall be construed to limit
any registration required under Section 5.02. The obligations of the Company
under this Section 5.01 may be waived at any time upon the written consent of
holders of sixty percent (60%) in interest of the Conversion Shares who are
participating in the offering and shall expire on the seventh anniversary
following the consummation of an Initial Public Offering or, if earlier, as set
forth in Section 5.15. The Company shall have the right to withdraw any
registration initiated by it pursuant to Section 5.01.
5.02. REQUIRED REGISTRATIONS. If on any one occasion (providing the
offering is consummated) one or more holders of at least 60% of the Registrable
Shares shall notify the Company in writing that it or they desire to offer or
cause to be offered for public sale at least thirty percent (30%) of the
Registrable Shares, the Company will so notify all holders of Registrable
Shares, including all holders who have a right to acquire Registrable Shares.
Upon written request of any holder given within fifteen (15) days after the
receipt by such holder from the Company of such notification, the Company will
use its best efforts to cause such of the Registrable Shares as may be requested
by any holder thereof (including the holder or holders giving the initial notice
of intent to offer) to be registered under the Securities Act as expeditiously
as possible on Form S-1 or Form SB-2 or their respective successor registration
statement forms. The Company shall not be required to effect more than one
registration pursuant to this Section 5.02 (providing the offering is
consummated). If the Company determines to include shares to be sold by it or by
other selling shareholders in any registration request pursuant to this Section
5.02, such registration shall be deemed to have been a "piggy back" registration
under Section 5.01, and not a "demand" registration under this Section 5.02 if
the holders of Registrable Shares are unable to include in any such registration
statement eighty-five percent (85%) of the Registrable Shares initially
requested for inclusion in such registration statement. The Company shall not be
required to effect a registration pursuant to this Section 5.02 unless the
minimum market value of any offering and registration of Registrable Shares made
pursuant thereto is at least $3,000,000, before calculation of underwriting
discounts and commissions. The holders of Registrable Shares may not exercise
their rights under this Section 5.02 until the earlier to occur of (i)
twenty-six (26) months following the date of the
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Closing or (ii) 180 days after the effectiveness of any registration statement
covering the Initial Public Offering. No request for registration under this
Section 5.02 may be made within the one hundred and eighty day period after the
effective date of a registration statement filed by the Company or while the
Company is in the process of preparing a registration statement. The Company
shall have the right to delay any registration under this section for up to 90
days if the Company's Board of Directors reasonably determines such delay is
necessary in view of the Company's current circumstances.
5.03. REGISTRATIONS ON FORMS S-2 OR S-3. In addition to the rights
provided the holder of Registrable Shares in Sections 5.01 and 5.02 above, if
the registration of Registrable Shares under the Securities Act can be effected
on Forms S-2 or S-3 (or any similar form promulgated by the Commission), then
upon the written request of one or more holders of a majority of the Registrable
Shares, the Company will so notify each holder of Registrable Shares, including
each holder who has a right to acquire Registrable Shares, and then will, as
expeditiously as possible, use its best efforts to effect qualification and
registration under the Securities Act on Forms S-2 or S-3 of all or such portion
of the Registrable Shares as the holder or holders shall specify; provided,
however, the Company shall not be required to effect a registration pursuant to
this Section 5.03 unless the market value of the Registrable Shares to be sold
in any such registration shall be estimated to be at least $1,000,000 at the
time of filing such registration statement, and further provided that the
Company shall not be required to effect more than two (2) registrations during
any twelve (12) month period pursuant to this Section 5.03 and five (5)
registrations in the aggregate under this Section 5.03. No request for
registration under this Section 5.03 may be made within the one hundred and
eighty day period after the effective date of a registration statement filed by
the Company or while the Company is in the process of preparing a registration
statement.
5.04. EFFECTIVENESS. The Company will use its best efforts to
maintain the effectiveness for up to 90 days (or such shorter period of time as
the underwriters need to complete the distribution of the registered offering,
or six months in the case of any registration relating to Registrable Shares
pursuant to Section 5.02 or 5.03) of any registration statement pursuant to
which any of the Registrable Shares are being offered, and from time to time
will amend or supplement such registration statement and the prospectus
contained therein to the extent necessary to comply with the Securities Act and
any applicable state securities statute or regulation. The Company will also
provide each holder of Registrable Shares with as many copies of the prospectus
contained in any such registration statement as it may reasonably request. For a
period not to exceed 60 days, the
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Company shall not be obligated to prepare and file, or be prevented from
delaying or abandoning, a registration statement pursuant to this Agreement at
any time when the Company, in its good faith judgment with advice of counsel,
reasonably believes
(a) that the filing thereof at the time requested, or
the offering of Registrable Shares pursuant thereto, would materially
and adversely affect (a) a pending or scheduled public offering of the
Company's securities, (b) an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction by or of the
Company, (c) pre-existing and continuing negotiations, discussions or
pending proposals with respect to any of the foregoing transactions, or
(d) the financial condition of the Company in view of the disclosure of
any pending or threatened litigation, claim, assessment or governmental
investigation which may be required thereby; and
(b) that the failure to disclose any material
information with respect to the foregoing would cause a violation of
the Securities Act or the Exchange Act.
5.05. INDEMNIFICATION OF HOLDER OF REGISTRABLE SHARES. In the event
that the Company registers any of the Registrable Shares under the Securities
Act, the Company will indemnify and hold harmless each holder and each
underwriter of Registrable Shares (including their officers, directors,
affiliates and partners and including any broker or dealer through whom
Registrable Shares may be sold in such registration) and each Person, if any,
who controls such holder or any such underwriter within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them become
subject under the Securities Act, applicable state securities laws or under any
other statute or at common law or otherwise, as incurred, and, except as
hereinafter provided, will reimburse each such holder, each such underwriter and
each such controlling Person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, as incurred, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or the registration statement
or prospectus as from time to time amended or supplemented by the Company) or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation
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promulgated under the Securities Act or any state securities laws applicable to
the Company and relating to action or inaction required of the Company in
connection with such registration, unless (i) such untrue statement or alleged
untrue statement or omission or alleged omission was made in such registration
statement, preliminary or amended preliminary prospectus or final prospectus in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by any such holder of Registrable Shares (in the
case of indemnification of such holder), any such underwriter (in the case of
indemnification of such underwriter) or any such controlling Person (in the case
of indemnification of such controlling person) expressly for use therein, or
unless (ii) in the case of a sale directly by such holder of Registrable Shares
(including a sale of such Registrable Shares through any underwriter retained by
such holder of Registrable Shares to engage in a distribution solely on behalf
of such holder of Registrable Shares), such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus copies of which were
delivered to such holder of Registrable Shares or such underwriter on a timely
basis, and such holder of Registrable Shares failed to deliver a copy of the
final or amended prospectus at or prior to the confirmation of the sale of the
Registrable Shares to the person asserting any such loss, claim, damage or
liability in any case where such delivery is required by the Securities Act.
Promptly after receipt by any holder of Registrable Shares,
any underwriter or any controlling Person of notice of the commencement of any
action in respect of which indemnity may be sought against the Company, such
holder of Registrable Shares, or such underwriter or such controlling person, as
the case may be, shall notify the Company in writing of the commencement thereof
(provided, that failure to so notify the Company shall not relieve the Company
from any liability it may have hereunder, except to the extent prejudiced by
such failure) and, subject to the provisions hereinafter stated, the Company
shall be entitled to assume the defense of such action (including the employment
of counsel, who shall be counsel reasonably satisfactory to such holder of
Registrable Shares, such underwriter or such controlling Person, as the case may
be) and the payment of expenses insofar as such action shall relate to any
alleged liability in respect of which indemnity may be sought against the
Company.
Such holder of Registrable Shares, any such underwriter or any
such controlling Person shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel subsequent to any assumption of the defense by the Company shall
not be at the expense of the Company unless the employment of
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such counsel has been specifically authorized in writing by the Company;
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred. At any
time, any holder of Registrable Shares may select separate counsel and assume
its own legal defense with the expenses and fees of such separate counsel and
other expenses related to such separate counsel to be borne by such holder
electing separate counsel. The Company shall not be liable to indemnify any
Person for any settlement of any such action effected without the Company's
written consent. The Company shall not, except with the approval of each party
being indemnified under this Section 5.05, 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 the parties being so
indemnified of a release from all liability in respect to such claim or
litigation.
In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which any holder of
Registrable Shares exercising rights under this Article V, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 5.05 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 5.05
provides for indemnification in such case, then, the Company and such holder
will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the holder of Registrable Shares on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the holder of Registrable Shares on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or by the holder of Registrable Shares on the other, and each party's
relative intent, knowledge, access to
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27
information and opportunity to correct or prevent such statement or omission;
provided, however, that, in any such case, (A) no such holder will be required
to contribute any amount in excess of the public offering price of all such
Registrable Shares offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
The indemnities provided in this Section 5.05 shall survive the
transfer of any Registrable Shares by such holder.
5.06. INDEMNIFICATION OF COMPANY. In the event that the Company
registers any of the Registrable Shares under the Securities Act, each holder of
the Registrable Shares so registered will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed or
otherwise participated in the preparation of the registration statement, each
underwriter of the Registrable Shares so registered (including any broker or
dealer through whom such of the shares may be sold) and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages, expenses or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, applicable state securities laws or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling Person for
any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any actions whether or not resulting
in any liability, insofar as such losses, claims, damages, expenses, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement, in any
preliminary or amended preliminary prospectus or in the final prospectus (or in
the registration statement or prospectus as from time to time amended or
supplemented) or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, but only insofar as any
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company in connection therewith by such
holder of Registrable Shares expressly for use therein; provided, however, that
such holder's obligations hereunder shall be limited to an amount equal to the
proceeds received by such holder of Registrable Shares sold in such
registration.
Promptly after receipt of notice of the commencement of
any action in respect of which indemnity may be sought against
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such holder of Registrable Shares, the Company shall notify such holder of
Registrable Shares in writing of the commencement thereof (provided, that
failure to so notify such holder shall not relieve such holder from any
liability it may have hereunder, except to the extent prejudiced by such
failure), and such holder of Registrable Shares shall, subject to the provisions
hereinafter stated, be entitled to assume the defense of such action (including
the employment of counsel, who shall be counsel reasonably satisfactory to the
Company) and the payment of expenses insofar as such action shall relate to the
alleged liability in respect of which indemnity may be sought against such
holder of Registrable Shares. The Company and each such director, officer,
underwriter or controlling Person shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel subsequent to any assumption of the defense by
such holder of Registrable Shares shall not be at the expense of such holder of
Registrable Shares unless employment of such counsel has been specifically
authorized in writing by such holder of Registrable Shares. Such holder of
Registrable Shares shall not be liable to indemnify any Person for any
settlement of any such action effected without such holder's written consent.
In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which the Company, its
officers, directors or controlling persons ("Company Indemnitees") exercising
its rights under this Article V, makes a claim for indemnification pursuant to
this Section 5.06, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding that this
Section 5.06 provides for indemnification, in such case, then, the Company
Indemnitees and such holder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion as is appropriate to reflect the relative fault of
the Company Indemnitees on the one hand and of the holder of Registrable Shares
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company Indemnitees on the
one hand and of the holder of Registrable Shares on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company Indemnitees on the
one hand or by the holder of Registrable Shares on the other, and each party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
(A) no such holder will be required to
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29
contribute any amount in excess of the public offering price of all such
Registrable Shares offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
5.07. EXCHANGE ACT REGISTRATION. If the Company at any time shall list
any class of equity securities of the type which may be issued upon the
conversion of the Preferred Stock on any national securities exchange and shall
register such class of equity securities under the Exchange Act, the Company
will, at its expense, simultaneously list on such exchange and maintain such
listing of, the Common Stock. If the Company becomes subject to the reporting
requirements of either Section 13 or Section 15(d) of the Exchange Act, the
Company will use its best efforts to timely file with the Commission such
information as the Commission may require under either of said Sections ; and in
such event, the Company shall use its best efforts to take all action as may be
required as a condition to the availability of Rule 144 or Rule 144A under the
Securities Act (or any successor exemptive rule hereinafter in effect) with
respect to such Common Stock. The Company shall furnish to any holder of
Registrable Shares forthwith upon request (i) a written statement by the Company
as to its compliance with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Company as filed with the
Commission, and (iii) such other reports and documents as a holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a holder to sell any such Registrable Securities without
registration. After the occurrence of the Initial Public Offering, the Company
agrees to use its best efforts to facilitate and expedite transfers of the
Shares pursuant to Rule 144 under the Securities Act, which efforts shall
include timely notice to its transfer agent to expedite such transfers of
Shares.
5.08. DAMAGES. The Company recognizes and agrees that the holder of
Registrable Shares will not have an adequate remedy if the Company fails to
comply with this Article V and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holder of Registrable Shares or any other
Person entitled to the benefits of this Article V requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Article V.
5.09. FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the preceding
Sections of this Article V, the Company is
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required hereunder to register Registrable Shares, it agrees that it shall also
do the following:
(a) Furnish to each selling holder such copies of
each preliminary and final prospectus and such other documents as said
holder may reasonably request to facilitate the public offering of its
Registrable Shares;
(b) Use its best efforts to register or qualify the
Registrable Shares covered by said registration statement under the
applicable securities or "blue sky" laws of such jurisdictions as any
selling holder may reasonably request; provided, however, that the
Company shall not be obligated to qualify to do business in any
jurisdictions where it is not then so qualified or to take any action
which would subject it to the service of process in suits other than
those arising out of the offer or sale of the securities covered by the
registration statement in any jurisdiction where it is not then so
subject;
(c) Furnish to each selling holder a signed
counterpart, addressed to the selling holders, of
(i) opinions of counsel for the Company,
dated the effective date of the registration statement, and covering
such matters as are required by the Securities Act and such matters as
may reasonably be requested by the underwriters, and
(ii) "comfort" letters signed by the
Company's independent public accountants who have examined and reported
on the Company's financial statements included in the registration
statement, to the extent permitted by the standards of the American
Institute of Certified Public Accountants, as the Company is required
to deliver or cause the delivery of to the underwriters in an
underwritten public offering of securities;
(d) Permit each selling holder of Registrable Shares
who holds not less than 5% of the Registrable Shares or his counsel or
other representatives to inspect and copy such corporate documents and
records as may reasonably be requested by them, after reasonable
advance notice and without undue interference with the operation of the
Company's business;
(e) Furnish to each selling holder of Registrable
Shares a copy of all documents filed with and all correspondence from
or to the Commission in connection with any such offering of
securities;
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(f) Use its best efforts to insure the obtaining of
all necessary approvals from the National Association of Securities
Dealers, Inc; and
(g) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earning
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month after the
effective date of the registration statement covering the Initial
Public Offering, which earning statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder.
Whenever under the preceding Sections of this Article V the
holders of Registrable Shares are registering such shares pursuant to any
registration statement, each such holder agrees to (i) timely provide to the
Company, at its request, such information and materials as it may reasonably
request in order to effect the registration of such Registrable Shares, (ii)
convert all shares of Preferred Stock included in any registration statement to
shares of Common Stock, such conversion to be effective at the closing of such
offering pursuant to such registration statement, and (iii) if the offering is
underwritten, execute an underwriting agreement containing customary conditions.
5.10. EXPENSES. In the case of each registration effected under
Section 5.01, 5.02 or 5.03, the Company shall bear all reasonable costs and
expenses of each such registration on behalf of the selling holders of
Registrable Shares, including, but not limited to, the Company's printing, legal
and accounting fees and expenses, Commission and NASD filing fees and "Blue Sky"
fees and expenses and the reasonable fees and disbursements (such fees not to
exceed $25,000 for any registration) of one counsel for the selling holders of
Registrable Shares in connection with the registration of their Registrable
Shares; provided, however, that the Company shall have no obligation to pay or
otherwise bear any portion of the underwriters' commissions or discounts or
transfer taxes attributable to the Registrable Shares being offered and sold by
the holders of Registrable Shares, or the fees and expenses of more than one
counsel for the selling holders of Registrable Shares in connection with the
registration of the Registrable Shares. The Company shall pay all expenses of
the holders of the Registrable Shares in connection with any registration
initiated pursuant to this Article V which is withdrawn, delayed or abandoned by
the Company, except if such withdrawal, delay or abandonment is caused by the
fraud, material misstatement or omission of a material fact by a holder of
Registrable Shares to be included in such registration.
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5.11. APPROVAL OF UNDERWRITER. Any managing underwriter engaged in any
registration made pursuant to Section 5.02 shall be a nationally recognized firm
requiring the approval in writing of the holders of 60% of the Registrable
Shares requesting such registration.
5.12. TRANSFERABILITY. For all purposes of Article V of this Agreement,
the holder of Registrable Shares shall include not only the Purchasers named in
Exhibit 1.01 hereof but (i) any assignee or transferee of the Registrable Shares
who acquires at least ten percent (10%) of the Registrable Shares and who is not
a competitor of the Company, or (ii) any general or limited partner or any
officer or director of any Purchaser or their affiliates, including, but not
limited to, their immediate family, irrevocable trusts for estate planning
purposes and personal representatives; provided, however, that such assignee or
transferee agrees in writing at the time it acquires such shares to be bound by
all of the provisions of this Agreement, including, without limitation, Section
5.13 hereof.
5.13. "LOCK-UP" AGREEMENT.
(a) Each holder of Registrable Shares agrees, if so
requested by the Company and an underwriter of Common Stock or other
securities of the Company, not to sell, grant any option or right to
buy or sell, or otherwise transfer or dispose of in any manner, whether
in privately-negotiated or open-market transactions, any Common Stock
or other securities of the Company held by it during the 90-day period
following the effective date of a registration statement filed pursuant
to the Initial Public Offering, provided that:
(i) Such agreement shall apply only to the
Initial Public Offering; and
(ii) All holders of Registrable Shares, any
other security holders whose securities are included in such
registration statement, and all officers, directors and Key Employees
of the Company shall also enter into similar agreements.
Such "lock-up" agreement shall be in writing and in form and
substance satisfactory to the Company and such underwriter. The Company may
impose stop-transfer instructions with respect to the shares subject to the
foregoing restrictions until the end of said 90-day period. No holder of
Registrable Shares shall be so restricted unless all holders are similarly and
proportionately restricted.
5.14. MERGERS, ETC. The Company shall not, directly or indirectly,
enter into any merger, consolidation or
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33
reorganization in which the Company shall not be the surviving corporation
unless the proposed surviving corporation shall, prior to such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under Article V of this Agreement, and for that purpose references
hereunder to Registrable Shares shall be deemed to be references to the
securities which the Purchasers would be entitled to receive in exchange for
Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Section 5.14 shall not apply in
the event of any merger, consolidation, or reorganization in which the Company
is not the surviving corporation if all stockholders are entitled to receive in
exchange for their Registrable Shares consideration consisting solely of (i)
cash, (ii) securities of the acquiring corporation which may be immediately sold
to the public without registration under the Securities Act, or (iii) securities
of the acquiring corporation which the acquiring corporation has agreed to
register within 90 days of completion of the transaction for resale to the
public pursuant to the Securities Act.
5.15. TERMINATION; FURTHER REGISTRATION RIGHTS. Notwithstanding any
other term or provision of this Article V, at such time as any Purchaser or
transferee owning less than 2% of the outstanding Common Stock of the Company
(on an as-converted basis) is free to sell the Registrable Shares without
registration pursuant to Rule 144(k) of the Securities Act, all rights of such
Purchaser as to such Registrable Shares under Sections 5.01, 5.02 and 5.03 of
this Article V shall terminate. The Company shall not grant to any third party
any registration rights so long as any of the registration rights under this
Agreement remains in effect without the consent of the holders of 60% of the
then outstanding Registrable Shares.
ARTICLE VI
RIGHT OF FIRST REFUSAL
6.01. RIGHT OF FIRST REFUSAL. Before the Company shall issue, sell or
exchange, agree or obligate itself to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, any (i) shares of Common Stock, (ii) any
other equity security of the Company, including without limitation, shares of
Preferred Stock, (iii) any convertible debt security of the Company, including
without limitation, any debt security which by its terms is convertible into or
exchangeable for any equity security of the Company, (iv) any security of the
Company that is a combination of debt and equity, or (v) any option, warrant or
other right to subscribe for, purchase or otherwise acquire any interest
relating to such equity or debt security of the Company, the Company shall, in
each case, first offer to sell such securities (the "Offered Securities") to
those Purchasers then
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holding capital stock of the Company as follows: The Company shall offer to sell
to each Purchaser (a) that portion of the Offered Securities as the number of
shares of Preferred Stock (on an as-converted basis) and Conversion Shares then
held by a Purchaser bears to the total number of outstanding shares of capital
stock of the Company including the shares issuable upon conversion of the
Preferred Stock (the "Basic Amount"), and (b) such additional portion of the
Offered Securities as such Purchaser shall indicate it will purchase should the
other Purchasers subscribe for less than their Basic Amounts (the
"Undersubscription Amount"), at a price and on such other terms as shall have
been specified by the Company in writing delivered to the Purchasers (the
"Offer"), which Offer by its terms shall remain open and irrevocable for a
period of twenty (20) days from receipt of the Offer. This right of first
refusal shall only apply to Purchasers who hold at least 5% of the then total
outstanding shares of Preferred Stock or Conversion Shares, to the Company
Friends provided that they continue to own the Preferred Shares owned by them as
of the date hereof and after giving effect to the transactions contemplated
hereby and to the Bessemer Purchasers holding in the aggregate at least 5% of
the then outstanding shares of Preferred Stock or Conversion Shares.
6.02. NOTICE OF ACCEPTANCE. Notice of each Purchaser's intention to
accept, in whole or in part, any Offer made pursuant to Section 6.01 shall be
evidenced by a writing signed by such Purchaser and delivered to the Company
prior to the end of the 20-day period of such offer, setting forth such of the
Purchaser's Basic Amount as such Purchaser elects to purchase and, if such
Purchaser shall elect to purchase all of its Basic Amount, such
Undersubscription Amount as such Purchaser shall elect to purchase (the "Notice
of Acceptance"). If the Basic Amounts subscribed for by all Purchasers are less
than the total Offered Securities, then each Purchaser who has set forth
Undersubscription Amounts in its Notice of Acceptance shall purchase, in
addition to the Basic Amounts subscribed for, all Undersubscription Amounts it
has subscribed for; provided, however, that should the Undersubscription Amounts
subscribed for exceed the difference between the Offered Securities and the
Basic Amounts subscribed for (the "Available Undersubscription Amount"), each
Purchaser who has subscribed for any Undersubscription Amount shall purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Purchaser bears to the total
Undersubscription Amounts subscribed for by all Purchasers, subject to rounding
by the Board of Directors to the extent it reasonably deems necessary.
6.03. CONDITIONS TO ACCEPTANCES AND PURCHASE.
(a) PERMITTED SALES OF REFUSED SECURITIES. In the
event that Notices of Acceptance are not given by the
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Purchasers in respect of all the Offered Securities, the Company shall
have ninety (90) days from the end of said 20-day period to sell any
such Offered Securities as to which a Notice of Acceptance has not been
given by the Purchasers (the "Refused Securities") to the Person or
Persons specified in the Offer, but only for cash and otherwise in all
respects upon terms and conditions, including, without limitation, unit
price and interest rates, which are no more favorable, in the
aggregate, to such other Person or Persons or less favorable to the
Company than those set forth in the Offer.
(b) REDUCTION IN AMOUNT OF OFFERED SECURITIES. In the
event the Company shall propose to sell less than all of the Refused
Securities (any such sale to be in the manner and on the terms
specified in Section 6.03(a) above), then each Purchaser shall reduce
the number of shares or other units of the Offered Securities specified
in its respective Notices of Acceptance to an amount which shall be not
less than the amount of the Offered Securities which the Purchaser
elected to purchase pursuant to Section 6.02 multiplied by a fraction,
(i) the numerator of which shall be the amount of Offered Securities
which the Company actually proposes to sell, and (ii) the denominator
of which shall be the amount of all Offered Securities. In the event
that any Purchaser so elects to reduce the number or amount of Offered
Securities specified in its respective Notices of Acceptance, the
Company may not sell or otherwise dispose of more than the reduced
amount of the Offered Securities until such securities have again been
offered to the Purchasers in accordance with Section 6.01.
(c) CLOSING. Upon the closing, which shall include
full payment to the Company, of the sale to such other Person or
Persons of all or less than all the Refused Securities, the Purchasers
shall purchase from the Company, and the Company shall sell to the
Purchasers, the number of Offered Securities specified in the Notices
of Acceptance, as reduced pursuant to Section 6.03(b) if the Purchasers
have so elected, upon the terms and conditions specified in the Offer.
The purchase by the Purchasers of any Offered Securities is subject in
all cases to the preparation, execution and delivery by the Company and
the Purchasers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the
Purchasers and their respective counsel.
6.04. FURTHER SALE. In each case, any Offered Securities not purchased
by the Purchasers or other Person or Persons in accordance with Section 6.03 may
not be sold or otherwise disposed of until they are again offered to the
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Purchasers under the procedures specified in Sections 6.01, 6.02 and 6.03.
6.05. TERMINATION AND WAIVER OF RIGHT OF FIRST REFUSAL. The rights of
the Purchasers under this Article VI may be waived only upon the prior written
consent of the holders of 60% of the outstanding shares of Preferred Stock and
shall terminate immediately prior to the effectiveness of the registration
statement with respect to the Initial Public Offering, but expressly conditioned
on the consummation of the Initial Public Offering.
6.06. EXCEPTION. The rights of the Purchasers under this Article VI
shall not apply to:
(a) Common Stock issued as a stock dividend to
holders of Common Stock or upon any subdivision or combination of
shares of Common Stock;
(b) Preferred Stock issued as a dividend to holders
of Preferred Stock upon any subdivision or combination of shares of
Preferred Stock;
(c) the Conversion Shares or shares issued upon
conversion of currently outstanding shares of Series A Preferred Stock;
(d) up to 2,112,000 shares of Common Stock, or
options or warrants exercisable therefor (including 1,239,250 granted
prior to the date hereof), issued on or after the date hereof to
directors, officers, employees or consultants of the Company and any
Subsidiary (including members of the Scientific Advisory Board)
pursuant to any qualified or non-qualified stock option plan or
agreement, employee stock ownership plan, employee benefit plan, stock
purchase agreement, stock plan, stock restriction agreement, or
consulting agreement or such other options, warrants, equity
arrangements, agreements or plans approved by two-thirds of the members
of the Board of Directors of the Company (including a majority of the
Investor Directors);
(e) up to 177,083 shares of Series A Preferred Stock
issued pursuant to the Comdisco Leasing Warrants, and shares of Common
Stock issued upon conversion of such shares; or
(f) shares of capital stock or options or warrants
therefor, to be issued to equipment leasing organizations in connection
with any equipment leasing arrangements to which the Company is a party
and which have been approved by the Board of Directors including a
majority of the Investor Directors; or
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(g) shares of capital stock issued in connection with
a merger or acquisition approved by the Board of Directors including a
majority of the Investor Directors; or
(h) shares issued in accordance with Section 1.03(b)
of this Agreement, or shares issued upon conversion of such shares; or
(i) shares of capital stock set forth on Exhibit
3.13.
Each of the foregoing numbers shall be subject to equitable
adjustment in the event of any stock dividend, stock split, combination,
reorganization, recapitalization, reclassification or other similar event.
In addition to amendments pursuant to Section 8.02, the
provisions regarding Notice of Offer, Notice of Acceptance and all other
provisions provided for in Section 6.01 through 6.03 and 6.06 may be waived or
amended by those Purchasers holding at least 60% of the Preferred Shares who
have elected to exercise their rights under this Article VI to participate in
any financing with respect to a transaction effected under this Article for the
purpose of effecting a transaction on a more expeditious basis.
ARTICLE VII
DEFINITIONS AND ACCOUNTING TERMS
7.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACCREDITED INVESTOR" shall have the meaning assigned to that
term in Rule 501 under the Securities Act.
"AGREEMENT" means this Preferred Stock Purchase Agreement as
from time to time amended and in effect between the parties, including all
Exhibits hereto.
"BASIC AMOUNT" shall have the meaning assigned to that term in
Section 6.01.
"BESSEMER PURCHASERS" shall mean those Purchasers other than
Technology Leaders L.P., Technology Leaders Offshore C.V., Bessemer Venture
Partners II L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ventures, Comdisco, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇.
- 37 -
38
"BOARD OF DIRECTORS" means the board of directors of the
Company as constituted from time to time.
"CLOSING" shall have the meaning assigned to that term in
Section 1.03.
"COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act or Exchange
Act.
"COMMON STOCK" includes (a) the Company's Common Stock, .001
par value, as authorized on the date of this Agreement, (b) any other capital
stock of any class or classes (however designated) (except for Preferred Stock)
of the Company, authorized on or after the date hereof, the holders of which
shall have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingencies or in the
absence of any provision to the contrary in the Company's Certificate of
Incorporation, be entitled to vote for the election of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (c) any other securities into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
"COMPANY" means Myco Pharmaceuticals Inc., a Delaware
corporation, and its successors and assigns.
"COMPANY FRIENDS" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ and J. ▇▇▇▇▇▇ ▇▇▇▇▇, Inc. in their capacity as Purchasers under this
Agreement.
"CONSOLIDATED" and "CONSOLIDATING" when used with reference to
any term defined herein mean that term as applied to the accounts of the Company
and its Subsidiaries consolidated in accordance with generally accepted
accounting principles consistently applied throughout reporting periods.
"CONVERSION SHARES" shall have the meaning assigned to that
term in Section 1.02 of this Agreement and shall also include Common Stock
issued upon conversion of the currently outstanding shares of Series A Preferred
Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
- ▇▇ -
▇▇
"▇▇▇▇▇▇▇▇ ▇▇▇" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission (or of any other Federal agency then administering the Exchange Act)
thereunder, all as the same shall be in effect at the time.
"INDEBTEDNESS" means (i) any liability for borrowed money or
evidenced by a note or similar obligation given in connection with the
acquisition of any property or other assets (other than trade accounts payable
incurred in the ordinary course of business); (ii) all guaranties, endorsements
and other contingent obligations, in respect of Indebtedness of others, whether
or not the same are or should be reflected in the Company's balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business, and (iii) the present value of any lease payments due under leases
required to be capitalized in accordance with applicable Statements of Financial
Accounting Standards, determined by discounting all such payments at the
interest rate determined in accordance with applicable Statements of Financial
Accounting Standards.
"INITIAL PUBLIC OFFERING" means the first underwritten public
offering of Common Stock of the Company and offered on a "firm commitment" basis
pursuant to an offering registered under the Securities Act with the Commission
on Form S-1, Form S-18 or their then equivalents.
"INTELLECTUAL PROPERTY RIGHTS" means any and all, whether
domestic or foreign, patents, patent applications, patent rights, trade secrets,
confidential business information, formula, biological or chemical processes,
compounds, cell lines, fungi, yeast, laboratory notebooks, algorithms,
copyrights, mask works, claims of infringement against third parties, licenses,
permits, license rights to or of technologies, contract rights with employees,
consultants or third parties, trademarks, trademark rights, inventions and
discoveries, and other such rights generally classified as intangible,
intellectual property assets in accordance with generally accepted accounting
principles.
"INVESTOR DIRECTORS" mean those directors of the Company who
are representatives of the Purchasers, initially ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇.
"KEY EMPLOYEE" means and includes the Chairman, President,
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, any
Vice President or Director of any functional area such as research and
development, engineering, technology, sales and marketing, finance and
administration or
- 39 -
40
any other individual so designated by the Board of Directors of the Company or
by including a majority of the Investor Directors.
"NON-COMPETITION AGREEMENT" shall have the meaning assigned to
that term in Section 2.02(i).
"NONDISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT" shall
have the meaning assigned to that term in Section 2.02(j).
"NOTICE OF ACCEPTANCE" shall have the meaning assigned to that
term in Section 6.02.
"OFFER" shall have the meaning assigned to that term in
Section 6.01.
"OFFERED SECURITIES" shall have the meaning assigned to that
term in Section 6.01.
"PERSON" means an individual, corporation, partnership, joint
venture, trust, university, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"PREFERRED SHARES" shall have the meaning assigned to that
term in Section 1.01 and shall also include the currently outstanding shares of
Series A Preferred Stock.
"PREFERRED STOCK" shall have the meaning assigned to that term
in Section 1.01 and shall also include the currently outstanding shares of
Series A Preferred Stock.
"PURCHASER" and "PURCHASERS" shall have the meaning assigned
to that term in Section 1.01 of this Agreement and shall include the original
Purchasers and also any other permitted transferee.
"QUALIFIED PUBLIC OFFERING" means a fully underwritten, firm
commitment public offering pursuant to an effective registration under the
Securities Act covering the offer and sale by the Company of its Common Stock in
which the aggregate gross proceeds to the Company exceed $9,000,000 and in which
the price per share of such Common Stock equals or exceeds $4.50 (such price
subject to equitable adjustment in the event of any stock split, stock dividend,
combination, reorganization, reclassification or other similar event).
"REFUSED SECURITIES" shall have the meaning assigned to that
term in Section 6.03.
"REGISTRABLE SHARES" shall mean and include (i) the Conversion
Shares; (ii) shares of Common Stock which are or may be acquired by any
Purchaser upon conversion of Series A
- 40 -
41
Preferred Stock currently held by the Purchasers and (iii) the shares of capital
stock of the Company acquired by the Purchasers pursuant to Article VI hereof or
any shares of capital stock of the Company acquired after the date hereof by any
such Purchaser, including shares of Common Stock issuable on the conversion of
other securities acquired by the Purchasers pursuant to Article VI hereof or
otherwise; provided, however, that shares of Common Stock which are Registrable
Shares shall cease to be Registrable Shares upon the consummation of any sale
pursuant to a registration statement, Section 4(1) of the Securities Act or Rule
144 under the Securities Act or upon any transfer other than as permitted under
Section 5.12 hereof. Wherever reference is made in this Agreement to a request
or consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include the Conversion Shares even if
such conversion has not yet been effected.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
(or of any other Federal agency then administering the Securities Act)
thereunder, all as the same shall be in effect at the time.
"SERIES A PREFERRED STOCK" means the Series A Preferred Stock
of the Company, $.01 par value, having the rights, powers, privileges and
preferences set forth in Exhibit A2 hereto.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock
of the Company, $.01 par value, having the rights, powers, privileges and
preferences set forth in Exhibit A2 hereto.
"SHARES" means, collectively, the Preferred Shares and the
Conversion Shares.
"SUBSIDIARY" or "SUBSIDIARIES" means any Person of which the
Company and/or any of its other Subsidiaries (as herein defined) directly or
indirectly owns at the time at least fifty percent (50%) of the outstanding
voting shares of every class of such corporation or trust other than directors'
qualifying shares.
"UNDERSUBSCRIPTION AMOUNT" shall have the meaning assigned to
that term in Section 6.01.
7.02. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
ARTICLE VIII
- 41 -
42
MISCELLANEOUS
8.01. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part
of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
8.02. AMENDMENTS, WAIVERS AND CONSENTS. Any provision in the
Agreement to the contrary notwithstanding, and except as hereinafter provided,
changes in, termination or amendments of or additions to this Agreement may be
made, and compliance with any covenant or provision set forth herein may be
omitted or waived, if the Company (i) shall obtain consent thereto in writing
from the holder or holders of at least 60% of the outstanding shares of
Preferred Stock and/or Conversion Shares issued upon conversion thereof and (ii)
shall deliver copies of such consent in writing to any holders who did not
execute such consent; provided that no consents shall be effective to reduce the
percentage in interest of the Shares the consent of the holders of which is
required under this Section 8.02. Any waiver or consent may be given subject to
satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
8.03. ADDRESSES FOR NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and delivered to each applicable party at the address set forth
in Exhibit 1.01 hereto or at such other address as to which such party may
inform the other parties in writing in compliance with the terms of this
Section , it being understood only one notice is required to be provided to the
Bessemer Purchasers at the following address or at such other address as to
which such party may inform the other parties in writing in compliance with the
terms of this Section :
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to any other holder of the Shares: at such holder's address
for notice as set forth in the register maintained by the Company, or, as to
each of the foregoing, at the addresses set
- 42 -
43
forth in Exhibit 1.01 hereto or at such other address as shall be designated by
such Person in a written notice to the other parties complying as to delivery
with the terms of this Section.
If to the Company: at the address set forth on page 1 hereof,
or at such other address as shall be designated by the Company in a written
notice to the other parties complying as to delivery with the terms of this
Section.
All such notices, requests, demands and other communications
shall be considered to be delivered when actually delivered at the foregoing
address of the party to be notified.
8.04. COSTS, EXPENSES AND TAXES. As a condition precedent to the
closing, the Company agrees to pay at the Closing in connection with the
preparation, execution and delivery of this Agreement and the issuance of the
Preferred Shares at the Closing, the reasonable legal fees, not to exceed
$10,000 (unless any increase thereto is agreed to by the Company), and other
reasonable out-of-pocket expenses of Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
counsel for the Purchasers. In addition, the Company shall pay any and all
stamp, or other similar taxes payable or determined to be payable in connection
with the execution and delivery of this Agreement, the issuance of the Preferred
Shares and the other instruments and documents to be delivered hereunder or
thereunder, and agrees to save the Purchasers harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
8.05. BINDING EFFECT; ASSIGNMENT. Except as provided in Section 5.12,
this Agreement shall be binding upon and inure to the benefit of the Company and
the Purchasers and their respective heirs, successors and assigns, except that
the Company shall not have the right to delegate its obligations hereunder or to
assign its rights hereunder or any interest herein without the prior written
consent of the holders of at least 60% of the outstanding Preferred Shares.
8.06. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Agreement, the Shares, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
8.07. PRIOR AGREEMENTS. This Agreement, the terms of the Preferred
Stock, and the other agreements executed and delivered herewith constitute the
entire agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof including, without limitation,
that certain Series A Preferred Stock Purchase
- 43 -
44
Agreement dated as of February 25, 1992, and those certain agreements between
the Company and Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, each of which is hereby
terminated.
8.08. SEVERABILITY. The provisions of this Agreement, the Voting and
Co-Sale Agreement and the terms of the Preferred Stock are severable and, in the
event that any court of competent jurisdiction shall determine that any one or
more of the provisions or part of a provision contained in this Agreement, the
Voting and Co-Sale Agreement, or the terms of the Preferred Stock 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 provision
or part of a provision of this Agreement, the Voting and Co-Sale Agreement, or
the terms of the Preferred Stock; but this Agreement, the Voting and Co-Sale
Agreement, and the terms of the Preferred Stock shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of a
provision, had never been contained herein, and such provisions or part reformed
so that it would be valid, legal and enforceable to the maximum extent possible.
8.09. CONFIDENTIALITY. Each Purchaser agrees that it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Purchaser may obtain from the Company pursuant to
financial statements, reports and other materials submitted by the Company to
such Purchaser pursuant to this Agreement, or pursuant to visitation or
inspection rights granted hereunder, unless such information is known, or until
such information becomes known through no fault of such Purchaser, to the
public; provided, however, that a Purchaser may disclose such information (i) on
a confidential basis to its attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection
with its investment in the Company, (ii) to any prospective purchaser of any
Preferred Shares or Conversion Shares from such Purchaser as long as such
prospective purchaser agrees in writing to be bound by the provisions of this
Section 8.09, (iii) to any affiliate or partner of such Purchaser on a "need to
know basis" and (iv) as required by applicable law. If a Purchaser is required
in any legal or administrative or other governmental proceeding to disclose any
of such information, such Purchaser shall give the Company timely notice of the
pending requirement and use its best efforts to provide the Company an
opportunity to obtain protective provisions against further disclosure.
8.10. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with the General Corporation Law of the State of Delaware as to
matters within the scope thereof and as to all other matters shall be governed
by and construed in accordance with the internal laws of the Commonwealth of
- 44 -
45
Massachusetts, without giving effect to choice of laws provisions.
8.11. HEADINGS. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
8.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.13. FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.
8.14. ADDITIONAL PREFERRED STOCK. If the Company issues after the date
hereof any other class or series of Preferred Stock, such class or series may,
upon the written consent of 60% of the outstanding Shares, become entitled to
the rights and preferences and be bound by the obligations under this Agreement,
and all references to Preferred Stock shall be expressly modified to include
within the meaning of the term Preferred Stock, the class or series of Preferred
Stock so issued in any financing.
***************
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES IMMEDIATELY FOLLOW]
- 45 -
46
IN WITNESS WHEREOF, the parties hereto have caused this Series A and
Series B Preferred Stock Purchase Agreement to be executed as of the date first
above written.
MYCO PHARMACEUTICALS INC.
By:
---------------------------------
President
TECHNOLOGY LEADERS L.P.
By: Technology Leaders Management,
Inc. (General Partner)
By:
---------------------------------
Title:
TECHNOLOGY LEADERS OFFSHORE C.V.
By: Technology Leaders Management,
Inc. (General Partner)
By:
---------------------------------
Title:
BESSEMER VENTURE PARTNERS II L.P.
By:
---------------------------------
General Partner
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUND II, L.P.
By: its general partner,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners II L.P.
By:
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: General Partner
- 46 -
47
GILDE INVESTMENT FUND B.V.
By:
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇. general
partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Partners II L.P.
COMDISCO, INC.
By:
-----------------------------
Title:
BRIMSTONE ISLAND CO., L.P.
By:*
----------------------------
Title:
*
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
*
--------------------------------
Neill ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
*
--------------------------------
G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
*
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
*
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
*
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- 47 -
48
*
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
*
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
*
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
*
---------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
*
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
*
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, signing
as Attorney-in-Fact for each
of the individuals beside whose
name an asterisk appears
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇
J. ▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
By:
----------------------------
Title:
-------------------------
- 48 -
49
EXHIBITS TO MYCO PHARMACEUTICALS INC. SERIES A
AND SERIES B PREFERRED STOCK PURCHASE AGREEMENT
Exhibit A
Restated Certificate of Incorporation
Exhibit B1
Form of Nondisclosure and Assignment of Inventions Agreement
Exhibit B2
Form of Noncompetition Agreement
Exhibit C
Form of Amended and Restated Voting and Co-Sale Agreement
Exhibit 1.01A
Purchasers' Ownership of Preferred Shares at Closing
Exhibit 1.05
Unaccredited Investors
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit 2.02(b)
Opinion of Counsel to Company
50
Exhibit B1
CONFIDENTIALITY AGREEMENT
This confidentiality agreement is made as of this ___ day of _____________
19__, by and between Myco Pharmaceuticals Inc., a Delaware corporation
("Company") , and _________________________("Consultant").
WITNESSETH:
WHEREAS, the Company desires to retain Consultant as a consultant to
the Company and Consultant wishes to be retained by the Company as a consultant
to the Company (the written arrangement of such consultancy to be referred to as
the "Consulting Agreement");
WHEREAS, the Company has developed, and the Company and/or Consultant
may continue to develop during the period Consultant is so retained by the
Company, certain Proprietary Information, Inventions and Intellectual Property
(as those terms are hereinafter defined), that the Company wishes to protect and
maintain as confidential;
WHEREAS, the Company from time to time has received, and may continue
to receive during the period Consultant is so retained by the Company, the
Proprietary Information of others, and the Company wishes to maintain the
confidentiality of such Proprietary Information; and
WHEREAS, the Company has developed, and will continue to develop during
the period Consultant is so retained by the Company, goodwill by, among other
things, substantial expenditure of money and effort;
NOW, THEREFORE, in consideration of the premises set forth below and
the mutual covenants and undertakings contained in this agreement, and for other
good and valuable consideration, receipt and sufficiency of which are hereby
mutually acknowledged, IT IS AGREED:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Agreement means this confidentiality agreement, including
all exhibits, schedules and annexations, as all may be amended from time to time
in the manner provided in this Agreement.
(b) Consultancy means the current or anticipated or
subsequent retention of Consultant by the Company as a part-time consultant or
otherwise, or any other period during which
51
Consultant receives compensation from the Company in any capacity.
(c) Intellectual Property means any Invention, writing, trade
name, trademark, service ▇▇▇▇ or any other material registered or otherwise
protected or protectible under state, federal, or foreign patent, trademark,
copyright, or similar laws.
(d) Inventions includes ideas, discoveries, inventions,
developments and improvements, whether or not reduced to practice and whether or
not patentable or otherwise within the definition of Intellectual Property.
(e) Proprietary Information includes any scientific,
technical, trade or business secrets of the Company and any scientific,
technical, trade or business materials that are treated by the Company as
confidential or proprietary, including, but not limited to, Inventions belonging
to the Company and confidential information obtained by or given to the Company
about or belonging to its suppliers, licensors, licensees, partners, affiliates,
customers, potential customers or others.
The definition of "Proprietary Information" herein shall not include
Proprietary Information which (i) was known by Consultant prior to its
disclosure by the Company; (ii) is publicly known through publication or
otherwise through no wrongful act of Consultant; (iii) is received from a third
party who rightfully discloses it to Consultant without restriction on its
subsequent disclosure; or (iv) is disclosed pursuant to the lawful requirement
of a governmental agency or by order of court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or
judicial protection available for like material.
2. Consultant Acknowledgements. The Company has developed and will
develop its Proprietary Information and Intellectual Property over a substantial
period of time and at a substantial expense, and its Proprietary Information and
Intellectual Property are integral to the goodwill of the Company. During the
course of consultancy to the Company, Consultant may develop or become aware of
Proprietary Information and/or Intellectual Property. Protection of the
Proprietary Information and Intellectual Property is necessary to conduct the
Company's business, and the Company is and shall at all times remain the sole
owner of the Company's Proprietary Information and Intellectual Property.
3. Confidentiality. Consultant shall at all times, both during and
after any termination of Consultant's consultancy to the Company by either the
Company or Consultant, maintain in confidence and not utilize the Proprietary
Information or the
- 2 -
52
Intellectual Property of the Company, and/or technology or proprietary
information of others under confidential evaluation by the Company except in
performing services for the Company under the Consulting Agreement. Maintaining
such Proprietary Information and Intellectual Property in confidence shall
include refraining from disclosing such Proprietary Information or Intellectual
Property to any third party (except when duly and specifically authorized in
writing to do so for purpose of furthering the business of the Company), and
refraining from using such Proprietary Information or Intellectual Property for
the account of Consultant or for any other person or business entity. Consultant
will not file patents based on the Company's technology or confidential
information, nor seek to make improvements thereon, without the Company's
written approval. Consultant agrees not to make any copies of the Proprietary
Information or Intellectual Property of the Company (except when appropriate for
the furtherance of the business of the Company or duly and specifically
authorized to do so) and promptly upon request, whether during or after the
period of consultancy to the Company, to return to the Company any and all
documentary, machine-readable or other elements or evidence of such Proprietary
Information, Intellectual Property, and any copies of either that may be in
Consultant's possession or under Consultant's control.
4. Rights to Inventions and Intellectual Property. In connection with
Consultant's consultancy to the Company, or by use of the resources of the
Company, whether or not Consultant is then retained by the Company, Consultant
may produce, develop, create, invent, conceive or reduce to practice Inventions
and Intellectual Property related to the business of the Company. Consultant
shall maintain and furnish to the Company complete and current records of all
such Inventions and Intellectual Property and disclose to the Company in writing
any such Inventions and Intellectual Property. Consultant agrees that all such
Inventions and Intellectual Property are and shall be the exclusive property of
the Company, and that the Company may use or pursue them without restriction or
additional compensation. Consultant: (i) hereby assigns, sets over and transfers
to the Company all of his right, title and interest in and to such Inventions
and Intellectual Property; (ii) agrees that Consultant and his agents shall,
during and after the period Consultant is retained by the Company, cooperate
fully in obtaining patent, trademark, service ▇▇▇▇, copyright or other
proprietary protection for such Inventions and Intellectual Property, all in the
name of the Company (but only at Company expense), and, without limitation,
shall execute all requested applications, assignments and other documents in
furtherance of obtaining such protection or registration and confirming full
ownership by the Company of such Inventions and Intellectual Property; and (iii)
shall, upon leaving the Company, provide to the Company in writing a full,
signed statement of all Inventions and
53
Intellectual Property in which Consultant participated prior to termination of
the consultancy to the Company. Consultant hereby designates the Company as its
agent, and grants to the Company a power of attorney with full substitution,
which power of attorney shall be deemed coupled with an interest, for the
purposes of effecting the foregoing assignments from the Consultant to the
Company.
5. Non-Solicitation. Consultant shall not during the term of the
Consulting Agreement or at any time during the five (5) years following
termination of the Consulting Agreement solicit any person who is employed by or
a consultant to the Company or any affiliate or subsidiary of the Company either
during Consultant's period of consultancy or during such five (5) year period,
to terminate such person's employment by or consultancy to the Company, such
affiliate or subsidiary. As used herein, the term "solicit" shall include,
without limitation, requesting, encouraging, assisting or causing, directly or
indirectly, any such employee or consultant to terminate such person's
employment by or consultancy to the Company, affiliate or subsidiary.
6. Continued Obligations. Consultant's obligations under this Agreement
shall not be affected: (i) by any termination of Consultant's consultancy,
including termination upon the Company's initiative; nor (ii) by any change in
Consultant's position, title or function with the Company; nor (iii) by any
interruption in consultancy during which Consultant leaves and then rejoins the
Company for any period within a period of one year and for any reason. Nothing
herein shall be construed as constituting an employment agreement or an
undertaking by the Company to retain Consultant's services for any stated period
of time.
7. No Conflicting Agreements. Consultant represents and warrants that
execution and performance of this Agreement does not and will not violate,
conflict with, or constitute a default under any contract, commitment,
agreement, understanding, arrangement, or restriction, or any adjudication,
order, injunction or finding of any kind by any court or agency to which
Consultant may be a party or by which Consultant may be bound.
8. Remedies. In the event of any breach by Consultant of any of the
provisions of this Agreement, the Company shall be entitled, in addition to
monetary damages and to any other remedies available to the Company under this
Agreement and at law, to equitable relief, including injunctive relief, and to
payment by Consultant of all costs incurred by the Company in enforcement
against Consultant of the provisions of this Agreement, including reasonable
attorneys' fees.
9. General Provisions.
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(a) No Waiver. Waiver of any provision of this Agreement, in
whole or in part, in any one instance shall not constitute a waiver of any other
provision in the same instance, nor any waiver of the same provision in another
instance, but each provision shall continue in full force and effect with
respect to any other then-existing or subsequent breach.
(b) Notice. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered personally or by overnight courier with a
receipt obtained therefor or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Consultant, to:
----------------------------
----------------------------
If to the Company, to: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Myco Pharmaceuticals Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as either party may furnish to the other in writing in
accordance with this Section, except that notices of changes of address shall be
effective upon receipt.
(c) Severability. If any provision of this Agreement shall be
found to be invalid, inoperative or unenforceable in law or equity, such finding
shall not affect the validity of any other provisions of this Agreement, which
shall be construed, reformed and enforced to effect the purposes of this
Agreement to the fullest extent permitted by law.
(d) Miscellaneous. This Agreement: (i) may be executed in any
number of counterparts, each of which, when executed by both parties to this
Agreement shall be deemed to be an original, and all of which counterparts
together shall constitute one and the same instrument; (ii) shall be governed by
and construed under the law of the Commonwealth of Massachusetts, without
application of principles of conflicts of laws; (iii) along with the Consulting
Agreement, constitute the entire agreement of the parties with respect to the
subject matter hereof, superseding all prior oral and written communications,
proposals, negotiations, representations, understandings, courses of dealing,
agreements, contracts, and the like between the parties in such respect; (iv)
may be amended, modified, or terminated, and any right under this Agreement may
be waived in whole or in part, only by a writing signed by both parties; (v)
contains headings only for convenience, which headings do not
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55
form part, and shall not be used in construction, of this Agreement; (vi) shall
bind and inure to the benefit of the parties and their respective legal
representatives, successors and assigns, except that no party may delegate any
of its or his obligations under this Agreement, or assign this Agreement,
without the prior written consent of the other party, except the Company may
assign this Agreement in connection with the merger, consolidation, or sale of
all or substantially all assets of the Company; and (vii) be enforced only in
courts located within the Commonwealth of Massachusetts and the parties hereby
agree that such courts shall have venue and exclusive subject matter and
personal jurisdiction, and consent to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
Executed under seal as of the date first above written.
COMPANY:
By:
----------------------------------
Title
CONSULTANT
-------------------------------------
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Exhibit B2
FORM OF NONCOMPETITION AGREEMENT
MYCO PHARMACEUTICALS INC.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Date], 1992
[Name of Consultant or Employee]
-----------------------------
-----------------------------
Dear [Name of Consultant or Employee]:
This letter is to confirm our understanding with respect to (i) your
agreement not to compete with the Company and (ii) your agreement to protect and
preserve information and property which is confidential and proprietary to the
Company or other third parties with whom the Company does business (the terms
and conditions agreed to in this letter shall hereinafter be referred to as the
"Agreement"). In consideration of the mutual promises and covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, we have agreed as follows:
1. Prohibited Competition. We have discussed, and you recognize and
acknowledge the competitive and proprietary nature of the Company's business
operations.
You acknowledge and agree that a business will be deemed competitive
with the Company if it performs any of the services, manufactures or sells any
of the products provided or offered by the Company or is involved in the
research, or development of processes, products or techniques in the Company's
Field of Interest (such business to be referred to as a "competitive business").
The term Company's "Field of Interest" currently means the development of
products or processes as anti-infective therapeutics or diagnostics with an
initial emphasis on anti- fungals and commercial use of fungis or yeasts in drug
screening, production, development or testing. The Company may modify the
definition of its Field of Interest by written notice to you based on the
activities in which the Company is then engaged or in which the Company then
proposes to be engaged.
57
You further acknowledge and agree that during the course of performing
services for the Company as a [consultant/employee], the Company will furnish,
disclose or make available to you confidential and proprietary information
related to the Company's business and that the Company may provide you with
unique and specialized training. You also acknowledge that such confidential
information and the training to be provided by the Company have been developed
and will be developed by the Company and others with whom the Company has a
relationship through the expenditure by the Company and others of substantial
time, effort and money and that all such confidential information and training
could be used by you to compete with the Company.
Accordingly, you hereby agree in consideration of the Company's
agreement to engage you as a [consultant/employee] and your compensation thereof
and in view of the confidential position to be held by you, the unique and
specialized training which the Company may provide you and the confidential
nature and proprietary value of the information which the Company may share with
you, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, as follows:
During the period during which you perform services for or at the
request of the Company (the "Term") and for a period of one year following the
expiration or termination of the Term (the "Restricted Term"), whether such
termination is voluntary or involuntary, you shall not, without the prior
written consent of the Company:
(i) For yourself or on behalf of any other, directly or
indirectly, either as principal, agent, stockholder, employee, consultant,
representative or in any other capacity, own, manage, operate or control,
or be concerned, connected or employed by, or otherwise associate in any
manner with, engage in or have a financial interest in any business which
is directly or indirectly competitive with the business of the Company
within the World (the "Restricted Territory"), except that nothing
contained herein shall preclude you from purchasing or owning stock in any
such business if such stock is publicly traded, and provided that your
holdings do not exceed three (3%) percent of the issued and outstanding
capital stock of such business.
(ii) Either individually or on behalf of or through any third
party, solicit, divert or appropriate or attempt to solicit, divert or
appropriate, for the purpose of competing with the Company or any present
or future parent, subsidiary or other affiliate of the Company which is
engaged in a similar business as the Company, any customers or patrons of
the Company, or any prospective customers or patrons with
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respect to which the Company has developed or made a sales presentation (or
similar offering of services), located within the Restricted Territory.
(iii) Either individually or on behalf of or through any third
party, directly or indirectly, solicit, entice or persuade or attempt to
solicit, entice or persuade any other employees of or consultants to the
Company or any parent or future parent or affiliate of the Company to leave
the services of the Company or any parent or future parent or affiliate for
any reason.
[IF APPLICABLE - NOTWITHSTANDING THE ABOVE, WE ACKNOWLEDGE AND AGREE
THAT THIS AGREEMENT SHALL NOT PROHIBIT YOU FROM_______________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________.]
You further recognize and acknowledge that (i) the types of employment
which are prohibited by this paragraph are narrow and reasonable in relation to
the skills which represent your principal salable asset both to the Company and
to your other prospective employers, and (ii) the specific but broad
geographical scope of the provisions of this paragraph is reasonable, legitimate
and fair to you in light of the Company's need to market its services and sell
its products in a large geographic area in order to have a sufficient customer
base to make the Company's business profitable and in light of the limited
restrictions on the type of employment prohibited herein compared to the types
of employment for which you are qualified to earn your livelihood.
If any part of this section should be determined by a court of
competent jurisdiction to be unreasonable in duration, geographic area, or
scope, then this section is intended to and shall extend only for such period of
time, in such area and with respect to such activity as is determined to be
reasonable.
2. Protected Information. Upon execution of this Agreement, you shall
execute and deliver a Confidentiality Agreement in the form attached hereto as
Annex A.
3. Continuing Obligations. Your obligations under this Agreement other
than the provisions of this Agreement shall not be affected: (i) by any
termination of your consulting or employment arrangement, including termination
upon the Company's initiative; nor (ii) by any change in your position, title or
function with the Company; nor (iii) by any interruption in the consulting or
employment arrangement during which you leave and rejoin the Company.
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4. Records. Upon termination of your relationship with the Company, you
shall deliver to the Company any property of the Company which may be in your
possession including products, materials, memoranda, notes, records, reports, or
other documents or photocopies of the same.
5. No Conflicting Agreements. You hereby represent and warrant that you
have no commitments or obligations inconsistent with this Agreement and you
hereby agree to indemnify and hold the Company harmless against any claim based
upon circumstances alleged to be inconsistent with such representation and
warranty.
6. No Employment Created. This Agreement does not constitute, and shall
not be construed as constituting, an undertaking by the Company to hire you as
an employee or consultant of the Company.
7. Waiver of Provisions. Failure of any party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted hereunder or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by or on behalf of the waiving party.
8. Notices. Any notice or other communication required or permitted
hereunder shall be deemed sufficiently given if sent by registered or certified
mail, postage and fees prepaid, addressed to the party to be notified as
follows: if to the Company to its address set forth above, with a copy to ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esquire, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and if to you to your address set forth
above, or in each case to such other address as either party may from time to
time designate in writing to the other. Such notice or communication shall be
deemed to have been given as of the date deposited with the United States Postal
Service.
9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts,
without application of the conflicts of law provisions thereof.
10. Entire Agreement. This Agreement, together with Annex A hereto,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement of any kind not set forth in this Agreement shall affect, or be used
to interpret, change or restrict, the express terms and provisions of this
Agreement.
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60
11. Invalidity. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby, but rather shall be construed, reformed and enforced to the
greatest extent permitted by law.
12. Injunctive Relief. You hereby expressly acknowledge that any breach
or threatened breach of any of the terms and/or conditions set forth in this
Agreement will result in substantial, continuing and irreparable injury to the
Company. Therefore, you hereby agree that, in addition to any other remedy that
may be available to the Company, the Company shall be entitled to injunctive or
other equitable relief by a court of appropriate jurisdiction in the event of
any breach or threatened breach of the terms of this Agreement.
13. Assignment. The Company may assign its rights and obligations
hereunder to any person or entity who succeeds to all or substantially all of
the Company's business or that aspect of the Company's business in which you are
principally involved. Your rights and obligations under this Agreement may not
be assigned without the prior written consent of the Company.
14. Expenses. Should any party breach this Agreement, in addition to
all other remedies available at law or in equity, such party shall pay all of
any other party's costs and expenses resulting therefrom and/or incurred in
enforcing this Agreement, including legal fees and expenses.
15. Modification and Amendment. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf of the parties
hereto.
16. Parties Benefitted. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company and any parent,
subsidiary or other affiliate of the Company, and their respective successors
and assigns, and shall be binding upon and inure to the benefit of you and your
heirs, executors and administrators.
17. Headings. Section and other headings contained in this Agreement
are for reference purposes only and are in no way intended to define, interpret,
describe or otherwise limit the scope, extent or intent of this Agreement or any
of its provisions each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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18. Counterparts. This Agreement may be executed in one or more
counterparts each of which will be deemed an original, but all of which together
shall constitute one and the same instrument.
If the foregoing accurately sets forth our agreement, please so
indicate by signing and returning to us the enclosed copy of this letter.
Very truly yours,
MYCO Pharmaceuticals Inc.
_______________________________
Accepted and Approved
_____________________________
[Name of Consultant/Employee]
Dated: ______________________
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ANNEX A
CONFIDENTIALITY AGREEMENT
This confidentiality agreement is made as of this ______ day of
_______________________________________ 19__, by and between Myco
Pharmaceuticals Inc., a Delaware corporation ("Company"), and _______________
___________________ ("Consultant" ).
W I T N E S S E T H:
WHEREAS, the Company desires to retain Consultant as a consultant to
the Company and Consultant wishes to be retained by the Company as a consultant
to the Company (the written arrangement of such consultancy to be referred to as
the "Consulting Agreement");
WHEREAS, the Company has developed, and the Company and/or Consultant
may continue to develop during the period Consultant is so retained by the
Company, certain Proprietary Information, Inventions and Intellectual Property
(as those terms are hereinafter defined), that the Company wishes to protect and
maintain as confidential;
WHEREAS, the Company from time to time has received, and may continue
to receive during the period Consultant is so retained by the Company, the
Proprietary Information of others, and the Company wishes to maintain the
confidentiality of such Proprietary Information; and
WHEREAS, the Company has developed, and will continue to develop during
the period Consultant is so retained by the Company, goodwill by, among other
things, substantial expenditure of money and effort;
NOW, THEREFORE, in consideration of the premises set forth below and
the mutual covenants and undertakings contained in this agreement, and for other
good and valuable consideration, receipt and sufficiency of which are hereby
mutually acknowledged, IT IS AGREED:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Agreement means this confidentiality agreement, including
all exhibits, schedules and annexations, as all may be amended from time to time
in the manner provided in this Agreement.
(b) Consultancy means the current or anticipated or
subsequent retention of Consultant by the Company as a part-time consultant or
otherwise, or any other period during which
63
Consultant receives compensation from the Company in any capacity.
(c) Intellectual Property means any Invention, writing, trade
name, trademark, service ▇▇▇▇ or any other material registered or otherwise
protected or protectable under state, federal, or foreign patent, trademark,
copyright, or similar laws.
(d) Inventions includes ideas, discoveries, inventions,
developments and improvements, whether or not reduced to practice and whether or
not patentable or otherwise within the definition of Intellectual Property.
(e) Proprietary Information includes any scientific,
technical, trade or business secrets of the Company and any scientific,
technical, trade or business materials that are treated by the Company as
confidential or proprietary, including, but not limited to, Inventions belonging
to the Company and confidential information obtained by or given to the Company
about or belonging to its suppliers, licensors, licensees, partners, affiliates,
customers, potential customers or others.
The definition of "Proprietary Information" herein shall not include
Proprietary Information which (i) was known by Consultant prior to its
disclosure by the Company; (ii) is publicly known through publication or
otherwise through no wrongful act of Consultant; (iii) is received from a third
party who rightfully discloses it to Consultant without restriction on its
subsequent disclosure; or (iv) is disclosed pursuant to the lawful requirement
of a governmental agency or by order of court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or
judicial protection available for like material.
2. Consultant Acknowledgements. The Company has developed and will
develop its Proprietary Information and Intellectual Property over a substantial
period of time and at a substantial expense, and its Proprietary Information and
Intellectual Property are integral to the goodwill of the Company. During the
course of consultancy to the Company, Consultant may develop or become aware of
Proprietary Information and/or Intellectual Property. Protection of the
Proprietary Information and Intellectual Property is necessary to conduct the
Company's business, and the Company is and shall at all times remain the sole
owner of the Company's Proprietary Information and Intellectual Property.
3. Confidentiality. Consultant shall at all times, both during and
after any termination of Consultant's consultancy to the Company by either the
Company or Consultant, maintain in confidence and not utilize the Proprietary
Information or the
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Intellectual Property of the Company, and/or technology or proprietary
information of others under confidential evaluation by the Company except in
performing services for the Company under the Consulting Agreement. Maintaining
such Proprietary Information and Intellectual Property in confidence shall
include refraining from disclosing such Proprietary Information or Intellectual
Property to any third party (except when duly and specifically authorized in
writing to do so for purpose of furthering the business of the Company), and
refraining from using such Proprietary Information or Intellectual Property for
the account of Consultant or for any other person or business entity. Consultant
will not file patents based on the Company's technology or confidential
information, nor seek to make improvements thereon, without the Company's
written approval. Consultant agrees not to make any copies of the Proprietary
Information or Intellectual Property of the Company (except when appropriate for
the furtherance of the business of the Company or duly and specifically
authorized to do so) and promptly upon request, whether during or after the
period of consultancy to the Company, to return to the Company any and all
documentary, machine-readable or other elements or evidence of such Proprietary
Information, Intellectual Property, and any copies of either that may be in
Consultant's possession or under Consultant's control.
4. Rights to Inventions and Intellectual Property. In connection with
Consultant's consultancy to the Company, or by use of the resources of the
Company, whether or not Consultant is then retained by the Company, Consultant
may produce, develop, create, invent, conceive or reduce to practice Inventions
and Intellectual Property related to the business of the Company. Consultant
shall maintain and furnish to the Company complete and current records of all
such Inventions and Intellectual Property and disclose to the Company in writing
any such Inventions and Intellectual Property. Consultant agrees that all such
Inventions and Intellectual Property are and shall be the exclusive property of
the Company, and that the Company may use or pursue them without restriction or
additional compensation. Consultant: (i) hereby assigns, sets over and transfers
to the Company all of his right, title and interest in and to such Inventions
and Intellectual Property; (ii) agrees that Consultant and his agents shall,
during and after the period Consultant is retained by the Company, cooperate
fully in obtaining patent, trademark, service ▇▇▇▇, copyright or other
proprietary protection for such Inventions and Intellectual Property, all in the
name of the Company (but only at Company expense), and, without limitation,
shall execute all requested applications, assignments and other documents in
furtherance of obtaining such protection or registration and confirming full
ownership by the Company of such Inventions and Intellectual Property; and (iii)
shall, upon leaving the Company, provide to the Company in writing a full,
signed statement of all Inventions and
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65
Intellectual Property in which Consultant participated prior to termination of
the consultancy to the Company. Consultant hereby designates the Company as its
agent, and grants to the Company a power of attorney with full substitution,
which power of attorney shall be deemed coupled with an interest, for the
purposes of effecting the foregoing assignments from the Consultant to the
Company.
5. Non-Solicitation. Consultant shall not during the term of the
Consulting Agreement or at any time during the five (5) years following
termination of the Consulting Agreement solicit any person who is employed by or
a consultant to the Company or any affiliate or subsidiary of the Company either
during Consultant's period of consultancy or during such five (5) year period,
to terminate such person's employment by or consultancy to the Company, such
affiliate or subsidiary. As used herein, the term "solicit" shall include,
without limitation, requesting, encouraging, assisting or causing, directly or
indirectly, any such employee or consultant to terminate such person's
employment by or consultancy to the Company, affiliate or subsidiary.
6. Continued Obligations. Consultant's obligations under this Agreement
shall not be affected: (i) by any termination of Consultant's consultancy,
including termination upon the Company's initiative; nor (ii) by any change in
Consultant's position, title or function with the Company; nor (iii) by any
interruption in consultancy during which Consultant leaves and then rejoins the
Company for any period within a period of one year and for any reason. Nothing
herein shall be construed as constituting an employment agreement or an
undertaking by the Company to retain Consultant's services for any stated period
of time.
7. No Conflicting Agreements. Consultant represents and warrants that
execution and performance of this Agreement does not and will not violate,
conflict with, or constitute a default under any contract, commitment,
agreement, understanding, arrangement, or restriction, or any adjudication,
order, injunction or finding of any kind by any court or agency to which
Consultant may be a party or by which Consultant may be bound.
8. Remedies. In the event of any breach by Consultant of any of the
provisions of this Agreement, the Company shall be entitled, in addition to
monetary damages and to any other remedies available to the Company under this
Agreement and at law, to equitable relief, including injunctive relief, and to
payment by Consultant of all costs incurred by the Company in enforcement
against Consultant of the provisions of this Agreement, including reasonable
attorneys' fees.
9. General Provisions.
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(a) No Waiver. Waiver of any provision of this Agreement, in
whole or in part, in any one instance shall not constitute a waiver of any other
provision in the same instance, nor any waiver of the same provision in another
instance, but each provision shall continue in full force and effect with
respect to any other then-existing or subsequent breach.
(b) Notice. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered personally or by overnight courier with a
receipt obtained therefor or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Consultant, to:
______________________________
______________________________
If to the Company, to: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Myco Pharmaceuticals Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as either party may furnish to the other in writing in
accordance with this Section, except that notices of changes of address shall
be effective upon receipt.
(c) Severability. If any provision of this Agreement shall be
found to be invalid, inoperative or unenforceable in law or equity, such finding
shall not affect the validity of any other provisions of this Agreement, which
shall be construed, reformed and enforced to effect the purposes of this
Agreement to the fullest extent permitted by law.
(d) Miscellaneous. This Agreement: (i) may be executed in any
number of counterparts, each of which, when executed by both parties to this
Agreement shall be deemed to be an original, and all of which counterparts
together shall constitute one and the same instrument; (ii) shall be governed by
and construed under the law of the Commonwealth of Massachusetts, without
application of principles of conflicts of laws; (iii) along with the Consulting
Agreement, constitute the entire agreement of the parties with respect to the
subject matter hereof, superseding all prior oral and written communications,
proposals, negotiations, representations, understandings, courses of dealing,
agreements, contracts, and the like between the parties in such respect; (iv)
may be amended, modified, or terminated, and any right under this Agreement may
be waived in whole or in part, only by a writing signed by both parties; (v)
contains headings only for convenience, which headings do not
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67
form part, and shall not be used in construction, of this Agreement; (vi) shall
bind and inure to the benefit of the parties and their respective legal
representatives, successors and assigns, except that no party may delegate any
of its or his obligations under this Agreement, or assign this Agreement,
without the prior written consent of the other party, except the Company may
assign this Agreement in connection with the merger, consolidation, or sale of
all or substantially all assets of the Company; and (vii) be enforced only in
courts located within the Commonwealth of Massachusetts and the parties hereby
agree that such courts shall have venue and exclusive subject matter and
personal jurisdiction, and consent to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
Executed under seal as of the date first above written.
COMPANY:
By: __________________________
Title
CONSULTANT
______________________________
-6-
68
EXHIBIT 1.01A
SCHEDULE OF PURCHASERS - PREFERRED STOCK
Aggregate
Purchase Indebtedness Number of Number of
Price of of Company Shares of Shares of
Preferred to be Net Series A Series B
Shares Cancelled Cash Due Preferred Preferred
Name and Address at Closing at Closing at Closing Stock Stock
---------------- ---------- ---------- ---------- ----- -----
Technology Leaders L.P. $ 466,900.00 $ 140,070.00 $ 326,830 266,800 133,400
800 The Safeguard Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Technology Leaders Offshore C.V $ 533,099.00 0 $ 533,099.00 304,628 152,314
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Bessemer Venture Partners II L.P. $ 893,917.50 $ 300,000.00 $ 593,917.50 510,810 255,405
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Fund II, L.P. $1,237,498.50 0 $1,237,498.50 707,142 353,571
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gilde Investment Fund B.V $ 12,498.50 0 $ 12,498.50 7,142 3,571
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Comdisco, Inc. $ 99,998.50 0 $ 99,998.50 57,142 28,571
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 15,001.00 0 $ 15,001.00 8,572 4,286
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Brimstone Island Co. L.P. $ 15,001.00 0 $ 15,001.00 8,572 4,286
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- 49 -
69
EXHIBIT 1.01A
SCHEDULE OF PURCHASERS - PREFERRED STOCK
Aggregate
Purchase Indebtedness Number of Number of
Price of of Company Shares of Shares of
Preferred to be Net Series A Series B
Shares Cancelled Cash Due Preferred Preferred
Name and Address at Closing at Closing at Closing Stock Stock
---------------- ---------- ---------- ---------- ----- -----
Neill ▇. ▇▇▇▇▇▇▇▇▇▇ $ 9,999.50 0 $ 9,999.50 5,714 2,857
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 2,999.50 0 $ 2,999.50 1,714 857
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 9,999.50 0 $ 9,999.50 5,714 2,857
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $32,000.50 0 $32,000.50 18,286 9,143
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 2,499.00 0 $ 2,499.00 1,428 714
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,998.50 0 $ 1,998.50 1,142 571
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- 50 -
70
EXHIBIT 1.01A
SCHEDULE OF PURCHASERS - PREFERRED STOCK
Aggregate
Purchase Indebtedness Number of Number of
Price of of Company Shares of Shares of
Preferred to be Net Series A Series B
Shares Cancelled Cash Due Preferred Preferred
Name and Address at Closing at Closing at Closing Stock Stock
---------------- ---------- ---------- ---------- ----- -----
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $3,335.50 0 $3,335.50 1,906 953
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ $ 749.00 0 $ 749.00 428 214
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇ $5,001.50 0 $5,001.50 2,858 1,429
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 500.50 0 $ 500.50 286 143
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $1,998.50 0 $1,998.50 1,142 571
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- 51 -
71
EXHIBIT 1.01A
SCHEDULE OF PURCHASERS - PREFERRED STOCK
Aggregate
Purchase Indebtedness Number of Number of
Price of of Company Shares of Shares of
Preferred to be Net Series A Series B
Shares Cancelled Cash Due Preferred Preferred
Name and Address at Closing at Closing at Closing Stock Stock
---------------- ---------- ---------- ---------- ----- -----
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 1,998.50 0 $ 1,998.50 1,142 571
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,999.50 0 $ 2,999.50 1,714 857
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bessemer Venture Partners
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 40,001.50 0 $ 40,001.50 22,858 11,429
One ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 5,999.00 0 $ 5,999.00 3,428 1,714
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ $ 5,999.00 0 $ 5,999.00 3,428 1,714
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
J. ▇▇▇▇▇▇ ▇▇▇▇▇, Inc. $ 15,001.00 0 $ 15,001.00 8,572 4,286
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$3,416,994.00 $440,070.0 $2,976,924.00 1,952,568 976,284
- 52 -
72
Exhibit 2.02(i)
Employees/Nondisclosure Agreements
All employees of the Company are required to enter into
Nondisclosure and Assignment of Inventions Agreements in
substantially the form of Exhibit B1.
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has entered into an Employment
Agreement and Noncompetition Agreement in the form attached
hereto.
************
Exhibit 3.07
Title to Assets, Patents
At December 30, 1993, the Company has title to tangible assets
in these approximate amounts:
Leasehold improvements $ 567,000
Laboratory Equipment 741,000
Office Equipment and Computers 163,000
Office Furniture 30,000
----------
Purchase Price $1,501,000
Book Depreciation 84,000
----------
$1,417,000
The Company also has the right to use intangible property
pursuant to and subject to the terms of the agreements listed in
Exhibit 3.14.
The Company has acquired most of the above furnishings,
equipment and leasehold improvements subject to an equipment lease with
Comdisco Venture Group. The original principal balance of the lease
related to the above Purchase Price of the assets was $1,200,000
against which principal payments approximating $40,000 have
subsequently been made.
See Exhibit 3.14.
Exhibit 3.08
Transactions with Affiliates
The Company has entered into the following agreements with
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: (i) Employment and Noncompetition Agreement; (ii)
Confidentiality Agreement, and (iii) Stock Purchase and Repurchase
Agreement. The Company has also
73
entered into Stock Option Agreements, an Employment Agreement and
Noncompetition and Confidentiality Agreement with ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇. Pursuant to the Employment Agreement, the Company has
loaned ▇▇. ▇▇▇▇▇▇▇▇▇▇ the principal amount of $100,000, and the Company
has a second mortgage on certain real property held by ▇▇. ▇▇▇▇▇▇▇▇▇▇.
Interest on the loan is charged at the prime rate, and any bonus
awarded may be used to pay this loan. In any year in which ▇▇.
▇▇▇▇▇▇▇▇▇▇ is not awarded a bonus, no principal payment is due.
See Exhibit 3.10
Exhibit 3.09
Guaranties of Indebtedness
The Company has leased 12,500 square feet of space from
MYCORT, Inc., a sublessee of Old Cambridge Realty Trust. The sub-lessor
has financed $576,310 improvement work for office and laboratory at
these facilities.
As described in Exhibit 3.07, the Company has acquired assets
subject to an equipment lease with Comdisco. The lease provides a total
commitment of up to $4,500,000, with the first tranche being in the
amount of approximately $1,500,000 with a forty-eight month term and a
10% interest rate, plus warrants. Copies of the lease documentation are
available at the offices of the Company.
The Company has borrowed an aggregate of approximately $600,000 from
Technology Leaders L.P. and its affiliates and Bessemer Venture Partners L.P.
which is being repaid in connection with the closing of the transactions
contemplated by this Agreement.
Exhibit 3.10
Investments
As described in Exhibit 3.08, the Company has an outstanding
loan of $100,000 to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
74
Exhibit 3.13
Capitalization/Restrictions on Transfer
OUTSTANDING CAPITAL STOCK
As of the date hereof the Company has 1,506,000 issued and outstanding
shares of Common Stock and 4,024,000 issued and outstanding shares of Series A
Preferred Stock which are issued to the persons set forth on attachment A to
Exhibit 3.13. 860,000 shares of Common Stock issued to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Ph.D,
are subject to a vesting arrangement.
OPTIONS TO PURCHASE CAPITAL STOCK
The Company has granted options to purchase a total of 1,239,250 shares
of Common Stock of the Company to the persons listed in the Attachment to this
Exhibit 3.13.
The Company has issued a warrant to Comdisco, Inc. for the purchase of
up to 106,250 shares of the Company's Series A Preferred Stock and agreed to
issue to Comdisco warrants to purchase up to an aggregate of 177,083 shares of
the Company's Series A Preferred Stock (including the warrant already issued) in
connection with certain equipment leasing transactions.
COMMITMENTS TO ISSUE CAPITAL STOCK
The Company is a party to the Series A Preferred Stock purchase
Agreement dated as of February 25, 1992 and certain agreements with Messrs.
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, pursuant to which the Company has issued a total
of 4,024,000 shares of Series A Preferred Stock and committed to issue
additional shares of the Company's Series A Preferred Stock. These agreements
are being terminated in connection with this Agreement.
Exhibit 3.14
Material Agreements
See Exhibits 3.08, 3.13 and the attached list of agreements.
Exhibit 4.02
See Exhibit 3.08.
75
Attachment A To Exhibit 3.13
MYCO PHARMACEUTICALS INC.
STOCKHOLDERS LIST
NAME CERTIFICATE DATE NUMBER OF
---- NUMBER ---- SHARES
----------- ---------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ C001 1-13-92 336,000
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ C0002 2-19-92 860,000
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ C0003 2-20-92 60,000
Dr. ▇▇▇▇ ▇▇▇▇▇▇ C0004 2-20-92 60,000
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ph.D C0005 2-20-92 30,000
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ C0006 2-20-92 20,000
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ C0007 2-20-92 20,000
N. ▇▇▇ ▇▇▇▇▇▇ C0008 2-20-92 5,000
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ C0009 2-20-92 5,000
Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ C0010 2-20-92 5,000
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ C0011 2-20-92 5,000
▇▇. ▇▇▇▇▇ ▇▇▇▇ C0012 2-20-92 100,000
TOTAL COMMON 1,506,000
76
Attachement A To Exhibit 3.13
Series A Preferred
NAME CERTIFICATE DATE NUMBER OF
---- NUMBER ---- SHARES
----------- ---------
Technology Leaders, L.P. SP0001 2-25-92 370,000
Technology Leaders Offshore SP0002 2-25-92 630,000
C.V
Bessemer Venture Partners, SP0003 2-25-92 893,916
II, L.P.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0004 2-25-92 15,000
Brimstone Island Co., L.P. SP0005 2-25-92 15,000
Neill ▇. ▇▇▇▇▇▇▇▇▇▇ SP0006 2-25-92 10,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ SP0007 2-25-92 3,000
G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SP0008 2-25-92 10,000
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SP0009 2-25-92 32,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0010 2-25-92 2,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0011 2-25-92 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ SP0012 2-25-92 3,334
▇▇▇▇▇▇ ▇. ▇▇▇▇ SP0013 2-25-92 ▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ 2-25-92 5,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0015 2-25-92 500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0016 2-25-92 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0017 2-25-92 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0018 2-25-92 3,000
-2-
77
Attachment A To Exhibit 3.13
Series A Preferred
CERTIFICATE NUMBER OF
NAME NUMBER DATE SHARES
---- ----------- ---- ---------
Technology Leaders, L.P. SP0019 1-27-93 370,000
Technology Leaders Offshore SP0020 1-27-93 630,000
C.V
Bessemer Venture Partners, SP0021 1-27-93 893,916
II, L.P.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0022 1-27-93 15,000
Brimstone Island Co., L.P. SP0023 1-27-93 15,000
Neill ▇. ▇▇▇▇▇▇▇▇▇▇ SP0024 1-27-93 10,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ SP0025 1-27-93 3,000
G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SP0026 1-27-93 10,000
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SP0027 1-27-93 32,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0028 1-27-93 2,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0029 1-27-93 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ SP0030 1-27-93 3,334
▇▇▇▇▇▇ ▇. ▇▇▇▇ SP0031 1-27-93 750
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. SP0032 1-27-93 5,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ SP0033 1-27-93 500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0034 1-27-93 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0035 1-27-93 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ SP0036 1-27-93 3,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 1-29-93 12,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CPA SP0038 1-29-93 12,000
Profit Sharing Plan
TOTAL ISSUED 4,024,000
-3-
78
Attachment B To Exhibit 3.13
MYCO PHARMACEUTICALS INC.
STOCK OPTIONS GRANTED
DECEMBER 31, 1993
INDIVIDUAL HOLDER
OPTION EMPLOYEE # OF OPTION VESTING % OF OPTIONS
DATE SAB/CONSULTANT SHARES PRICE SCHEDULE AWARDED
--------- -------------------------------- --------- ------ -------- ------------
01-Jan-92 ▇▇▇▇ 200,000 $0.20 * 16.14%
01-Jan-92 KOLTIN 120,000 $0.20 * 9.68%
01-Jan-92 ▇▇▇▇▇▇ 120,000 $0.20 * 9.68%
01-Jan-92 ▇▇▇▇▇▇▇▇ 60,000 $0.20 * 4.84%
01-Jan-92 TIMBERLAKE 40,000 $0.20 * 3.23%
01-Jan-92 ▇▇▇▇▇▇▇ 40,000 $0.20 * 3.23%
01-Jan-92 ▇▇▇▇▇▇ 10,000 $0.20 * 0.81%
14-Jun-93 ▇▇▇▇▇▇ 2500 $0.20 # 0.20%
01-Jan-92 ▇▇▇▇▇▇▇ 10,000 $0.20 * 0.81%
14-Jun-93 ▇▇▇▇▇▇▇ 2500 $0.20 # 0.20%
01-Jan-92 DIAMOND 10,000 $0.20 * 0.81%
14-Jun-93 Diamond 2500 $0.20 # 0.20%
01-Jan-92 NAKANISHI 10,000 $0.20 * 0.81%
02-Jan-92 ▇▇▇▇▇▇, ▇. ▇. 8,000 $0.20 ** 0.65%
▇▇-▇▇▇-▇▇ ▇▇▇▇▇▇ 3,750 $0.20 * 0.30%
14-Jun-93 ▇▇▇▇▇▇ 1875 $0.20 # 0.15%
14-Jun-93 ▇▇▇▇▇▇ 1875 $0.20 ? 0.15%
19-Oct-92 ▇'▇▇▇▇▇▇ 50,000 $0.20 # 4.03%
01-Jan-93 ▇▇▇▇▇▇▇ 15,000 $0.20 * 1.21%
01-Jan-93 STANKIS 1,000 $0.20 # 0.08%
14-Jun-93 Stankis 4000 $0.20 # 0.32%
01-Mar-93 TIMBERLAKE 240,000 $0.20 ## 19.37%
01-Mar-93 TIMBERLAKE 200,000 $0.20 ## 16.14%
14-Jun-93 ▇▇▇▇▇▇, T. V. 15,000 $0.20 # 1.21%
14-Jun-93 ▇▇▇, ▇▇▇▇▇▇ 1,000 $0.20 # 0.08%
14-Jun-93 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 15,000 $0.20 # 1.21%
14-Jun-93 Koltin, Yagal 30,000 $0.20 @ 2.42%
14-Jun-93 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 750 $0.20 # 0.06%
21-Jun-93 ▇▇▇▇▇▇, ▇▇▇▇▇▇ 1,000 $0.20 # 0.08%
23-Jun-93 ▇▇▇▇▇, ▇▇▇▇▇▇▇ 1,000 $0.20 # 0.08%
07-Jul-93 ▇▇▇▇▇▇, ▇▇▇▇▇ 1,000 $0.20 # 0.08%
02-Aug-93 ▇▇▇▇▇, ▇▇▇▇▇▇▇ 10,000 $0.20 # 0.81%
11-Aug-93 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 750 $0.20 # 0.06%
23-Aug-93 Shu, Nvngi 500 $0.20 # 0.04%
27-Sep-93 ▇▇, ▇▇▇▇ 1,000 $0.20 # 0.08%
15-Nov-93 ▇▇▇▇, ▇▇▇▇▇▇ 500 $0.20 # 0.04%
01-Dec-93 Chen, Yanni 750 $0.20 # 0.06%
02-Jan-93 ▇▇▇▇▇▇, ▇.▇. & Chviauk, T.A. 8,000 $0.20 ** 0.65%
--------- ---------
STOCK OPTION PLAN-GRANTS 1,239,250 1
STOCK OPTION PLAN-AVAIL. 872,750
---------
STOCK OPTION PLAN-TOTAL AUTH. 2,112,000
=========
* Options vest at 25% per year
** Options vested 12/31/92
# Options vest at 20% per year
? Options vest based on attainment of a milestone to be agreed upon by
employee and supervisor within 6 months.
## Options vest at the rate of 100,000 for each event for (1) approval of an IND
and the launch of clinical trials in humans for a Myco compound, and/or
(2) demonstration of safety and efficacy of a Myco compound in Phase II
clinical trials. Option expires 12/31/95.
@ Options vest over 5 years based on attainment of yearly milestones for
division. Milestones to be agreed upon by the Company and YK prior to the
start of each year.
79
Attachment to Exhibit 3.14
In addition to the matters discussed in Exhibit 3.13, at December 28, 1993, the
Company has entered into the following agreements:
Approximate
Annual
Description Contract Term Amount
----------- ------------- -----------
CFO Services (▇▇▇▇▇▇/Chvisuk) 1/01/94-12/31/94 $ 24,000
Comdisco Venture Group equipment lease 6/93 - 5/97 $ 360,000
MYOCRT, Inc. real estate lease 7//93- 6/2004 $ 350,000
LICENSE/RESEARCH AGREEMENTS
[ See Attachment to Exhibit 3.14 in Exhibit 10.5 ]