Exhibit 10.6
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT dated as of
February 28, 1997 between Genomica Corporation, a Delaware corporation (the
"Company"), and the several purchasers named in the attached Schedule I
(individually a "Purchaser" and collectively the "Purchasers").
WHEREAS, the Company wishes to issue and sell an aggregate of up to
4,980,100 shares (the "Preferred Shares") of the authorized but unissued Series
A Convertible Preferred Stock, $.001 par value, of the Company (the "Series A
Convertible Preferred Stock"); and
WHEREAS, the Purchasers, severally, wish to purchase some or all of the
Preferred Shares on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
SECTION 1. THE PREFERRED SHARES
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SECTION 1.1 Issuance, Sale and Delivery of the Preferred Shares. The
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Company agrees to issue and sell to each Purchaser, and each Purchaser hereby
agrees to purchase from the Company, the number of Preferred Shares set forth
opposite the name of such Purchaser under the heading "Number of Preferred
Shares to be Purchased" on Schedule I, at the aggregate purchase price set forth
opposite the name of such Purchaser under the heading "Aggregate Purchase Price
for Preferred Shares" on Schedule 1.
SECTION 1.2 Closing. The closing of the purchase and sale of Preferred
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Shares hereunder shall take place at the offices of Dechert Price & ▇▇▇▇▇▇,
Philadelphia, at 10:00 a.m., New York time, on February 28, 1997, or at such
other location, date and time as may be agreed upon between the Purchasers and
the Company (such closing being called the "Closing" and such date and time
being called the "Closing Date"). At the Closing, the Company shall issue and
deliver to each Purchaser a stock certificate or certificates in definitive
form, registered in the name of such Purchaser, representing the Preferred
Shares being purchased by it at the Closing. As payment in full for the
Preferred Shares being purchased by it under this Agreement, and against
delivery of the stock certificate or certificates therefor as aforesaid, on the
Closing Date each Purchaser shall (i) transfer to the account of the Company by
wire transfer the amount set forth opposite the name of such Purchaser under the
heading "Aggregate Purchase Price for Preferred Shares" on Schedule I, (ii) if
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applicable, deliver to the Company for cancellation promissory notes issued by
the Company in the amount of such sum or (iii) deliver or transfer such sum to
the Company by any combination of such methods of payments. Notwithstanding the
preceding sentence, a Purchaser may give written notice to the Company not later
than two (2) business days prior to the Closing Date, that such Purchaser
desires to deliver its consideration at such other time not later than sixty
(60) days following the Closing Date. Upon delivery of such notice, such
Purchaser shall be obligated, without any further condition, to deliver its
consideration no later than the date specified in the notice. The Company shall
not be obligated to deliver any stock certificates and such Purchaser shall have
no rights as a stockholder in the Company until such Purchaser delivers its
consideration to the Company.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company represents and warrants to the Purchasers that, as of the Closing
Date, except as set forth in the Disclosure Schedule attached as Schedule II:
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SECTION 2.1 Organization, Qualifications Corporate Power.
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(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and is duly
licensed or qualified to transact business as a foreign corporation and is in
good standing in the Commonwealth of Pennsylvania and in the State of New York
and each other jurisdiction in which the nature of the business transacted by it
or the character of the properties owned or leased by it requires such licensing
or qualification, except where failure to so qualify would not have a material
adverse effect on the business, affairs or prospects of the Company. The Company
has the corporate power and authority to own and hold its properties and to
carry on its business as now conducted and as proposed to be conducted, to
execute, deliver and perform this Agreement, to issue, sell and deliver the
Preferred Shares and to issue and deliver the shares of Common Stock issuable
upon conversion of the Preferred Shares (the "Conversion Shares").
(b) The Company has no subsidiaries. The Company does not (i) own of
record or beneficially, directly or indirectly, (A) any shares of capital stock
or securities convertible into capital stock of any other corporation or (B) any
participating interest in any partnership, joint venture or other non-corporate
business enterprise or (ii) control, directly or indirectly, any other entity.
SECTION 2.2 Authorization of Agreements, Etc.
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(a) The execution and delivery by the Company of this Agreement, the
performance by the Company of its obligations hereunder, the issuance, sale and
delivery of the Preferred Shares and the issuance and delivery of the Conversion
Shares have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation of the Company, as amended (the
"Charter") or the By-laws of the Company (the "By-Laws"), as amended, or any
provision of any indenture, agreement or other instrument to which the Company,
any of its subsidiaries or any of their respective properties or assets is
bound, or conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company or any of its subsidiaries. To the best of
the Company's knowledge, the execution, delivery and performance of this
Agreement does not violate, conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default by any other party under
any other indenture, agreement or instrument.
(b) The Preferred Shares have been duly authorized and, when issued
in accordance with this Agreement, will be validly issued, fully paid and
nonassessable shares of Series A Convertible Preferred Stock with no personal
liability attaching to the ownership thereof and will be free and clear of all
liens, charges, restrictions, claims and encumbrances
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imposed by or through the Company. The Conversion Shares have been duly reserved
for issuance upon conversion of the Preferred Shares and, when so issued, will
be duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock with no personal liability attaching to the ownership thereof and
will be free and clear of all liens, charges, restrictions, claims and
encumbrances imposed by or through the Company. Neither the issuance, sale nor
delivery of the Preferred Shares nor the issuance nor delivery of the Conversion
Shares is subject to any preemptive right of stockholders of the Company or to
any right of first refusal or other right in favor of any person which has not
been waived.
(c) Immediately after the Closing, the Purchasers shall have obtained
the same benefits as the purchasers of the Company's Series A Preferred Stock
pursuant to that certain Series A Convertible Preferred Stock Purchase Agreement
dated as of March 22, 1996 between the Company and the purchasers named therein
(the "Initial Purchase Agreement"), as if the Purchasers purchased the Preferred
Shares on such date, in and to the following: (i) that certain Registration
Rights Agreement dated as of March 22, 1996 by and among the Company and ▇▇▇▇▇▇
and ▇▇▇▇▇▇ Group, Inc. ("▇▇▇▇▇▇"), Falcon Technology Partners, L.P. ("Falcon"),
Cold Spring Harbor Laboratory ("CSH"), ▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("JRathmann"), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("MRathmann"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("SRathmann"), ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ("LRathmann"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("RRathmann"), ▇▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") (the "Registration Rights Agreement");
(ii) Sections 6, 7 and 9 through 19 of those certain Founders Agreements, each
dated as of March 22, 1996 by and between the Company and each of Marr, Salit,
▇▇▇▇▇ and ▇▇▇▇▇▇ (the "Founders Agreements"); (iii) Sections 2, 3 and 5 through
15 of those certain Stockholders Agreements, each dated as of March 22, 1996 by
and between the Company and each of CSH and ▇▇▇▇▇▇▇ (the "CSH Stockholders
Agreements"); and (iv) Sections 3 through 14 of that certain Stockholders
Agreement dated as of March 22, 1996 by and among the Company and JRathmann,
MRathmann, SRathmann, LRathmann and RRathmann (the "▇▇▇▇▇▇▇▇ Stockholders
Agreement") (each of the Registration Rights Agreement, the Founders Agreements,
the CSH Stockholders Agreements and the ▇▇▇▇▇▇▇▇ Stockholders Agreement, and
that certain Voting Agreement dated as of March 22, 1996 by and among Harris,
Falcon, CSH, ▇▇▇▇▇▇▇, JRathmann, MRathmann, SRathmann, LRathmann, RRathmann,
Marr, Salit, ▇▇▇▇▇ and ▇▇▇▇▇▇ (the "Voting Agreement") are hereinafter
collectively referred to as the "Transaction Agreements").
SECTION 2.3 Validity. This Agreement has been duly executed and delivered
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by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, and the Transaction
Agreements, when this Agreement is executed and delivered by the Consenting
Stockholders, will constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms (subject in each
case, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting the rights of
creditors generally and general principles of equity).
SECTION 2.4 Authorized Capital Stock. The authorized capital stock of the
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Company consists of (i) 18,000,000 shares of Preferred Stock, $.001 par value
(the "Preferred Stock"), all of which have been designated Series A Convertible
Preferred Stock, and (ii) 22,000,000 shares of Common Stock. Immediately prior
to the Closing, 3,320,400 shares of
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Series A Convertible Preferred Stock and 2,747,308 shares of Common Stock will
be validly issued and outstanding, fully paid and nonassessable with no personal
liability attaching to the ownership thereof, and 3,320,400 shares of Common
Stock reserved for issuance upon conversion of the Series A Preferred Stock.
Immediately after giving effect to the Closing, the stockholders of record and
holders of subscriptions, warrants, options, convertible securities, and other
rights (contingent or other) to purchase or otherwise acquire equity securities
of the Company, and the number of shares of Common Stock and the number of such
subscriptions, warrants, options, convertible securities, and other such rights
held by each, will be as set forth in the attached Schedule III. The
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designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class and series of authorized capital stock of
the Company are as set forth in the Charter, a copy of which is attached as
Exhibit A, and all such designations, powers, preferences, rights,
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qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws. Except as set forth in the attached
Schedule III, (i) no person owns of record or is known to the Company to own
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beneficially any share of Common Stock, (ii) no subscription, warrant, option,
convertible security, or other right (contingent or other) to purchase or
otherwise acquire equity securities of the Company is authorized or outstanding
and (iii) except as provided by this Agreement and the Charter, there is no
commitment by the Company to issue shares, subscriptions, warrants, options,
convertible securities, or other such rights or to distribute to holders of any
of its equity securities any evidence of indebtedness or asset. Except as
provided for in the Charter, the Company has no obligation (contingent or other)
to purchase, redeem or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof Except as provided for in the Charter, and the agreements set
forth on Schedule II, there are no voting trusts or agreements, pledge
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agreements, buy-sell agreements, rights of first refusal, preemptive rights or
proxies relating to any securities of the Company or any of its subsidiaries to
which the Company or any of its subsidiaries or, to the Company's knowledge, any
other person or entity, is a party. All of the outstanding securities of the
Company were issued in compliance with all applicable Federal and state
securities laws.
SECTION 2.5 Third Party Approvals. No registration or filing with, or
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consent or approval of or other action by any third party, including any
governmental entity, is or will be necessary for the valid execution, delivery
and performance by the Company of this Agreement, the Transaction Agreements,
the issuance, sale and delivery of the Preferred Shares or upon conversion
thereof, the issuance and delivery of the Conversion Shares, other than filings
pursuant to state securities laws (all of which filings have been made by the
Company, other than those which are required to be made after the Closing and
which will be duly made on a timely basis) in connection with the sale of the
Preferred Shares.
SECTION 2.6 Proprietary Information of Third Parties. To the best
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knowledge of the Company, no third party has claimed or has reason to claim that
any person employed by or affiliated with (or currently proposed to be employed
by or affiliated with) the Company has (a) violated or may be violating any of
the terms or conditions of his employment, non-competition or non-disclosure
agreement with such third party, (b) disclosed or may be disclosing or utilized
or may be utilizing any trade secret or proprietary information or documentation
of such third party or (c) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from the Company that
suggests that such a claim might be contemplated. To the best knowledge of
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the Company, no person employed by or affiliated with (or currently proposed to
be employed by or affiliated with) the Company has employed or proposes to
employ any trade secret or any information or documentation proprietary to any
former employer, and to the best knowledge of the Company, no person employed by
or affiliated with (or currently proposed to be employed by or affiliated with)
the Company has violated any confidential relationship which such person may
have had with any third party, in connection with the development, manufacture
or sale of any product or proposed product or the development or sale of any
service or proposed service of the Company, and the Company has no reason to
believe there will be any such employment or violation. To the best knowledge of
the Company, none of the execution or delivery of this Agreement, or the
carrying on of the business of the Company as officers, employees or agents by
any officer, director or key employee of the Company (or currently proposed to
be such an officer, director or key employee), or the conduct or proposed
conduct of the business of the Company, will conflict with or result in a breach
of the terms, conditions or provisions of or constitute a default under any
contract, covenant or instrument under which any such person is obligated.
SECTION 2.7 Material Agreements. The Company is not in default in the
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performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party that
may result in any material adverse change in the business, operations or
financial condition of the Company. The Company is not obligated under any
contract or agreement or subject to any charter or other corporate restriction
which materially adversely affects the Company's business, properties, assets,
prospects or condition (financial or otherwise).
SECTION 2.8 Patents, Trademarks, Etc.
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(a) Set forth in Schedule II is a list and brief description of all
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domestic and foreign patents, patent rights, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications, trade names
and copyrights, and all applications for such which are in the process of being
prepared, owned by or registered in the name of the Company, or of which the
Company is a licensor or licensee or in which the Company has any right, and in
each case a brief description of the nature of such right. The Company owns or
possesses adequate licenses or other rights to use all patents, patent
applications, trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names, copyrights, manufacturing processes, formulae, trade
secrets, customer lists and know how (collectively, "Intellectual Property")
necessary or desirable to the conduct of its business as conducted and as
proposed to be conducted, and no claim is pending or, to the best of the
Company's knowledge, threatened to the effect that the operations of the Company
as conducted and as proposed to be conducted infringe upon or conflict with the
asserted rights of any other person under any Intellectual Property, and to the
best of the Company's knowledge there is no basis for any such claim (whether or
not pending or threatened). No claim is pending or, to the best of the
Company's knowledge, threatened to the effect that any such Intellectual
Property owned or licensed by the Company, or which the Company otherwise has
the right to use, is invalid or unenforceable by the Company, and there is no
basis for any such claim (whether or not pending or threatened). To the best of
the Company's knowledge, all technical information developed by and belonging to
the Company that has not been patented has been kept confidential.
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(b) No person or entity has any right, title or interest of any kind
in or to any of the research and other work which has been performed prior to
the date hereof by or under the direction of the Founders with respect to the
business of the Company, except for (i) the parties to the Founders Agreements,
each of whom has executed either an Employee Nondisclosure and Developments
Agreement or a Nondisclosure Agreement (in the case of employees of CSH), (ii)
CSH, which has licensed its entire right, title and interest in and to all such
research and other work to the Company pursuant to a License Agreement dated as
of March 22, 1996, and (iii) the rights of any governmental agency as set forth
on Schedule II.
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SECTION 2.9 Financial Statements; Undisclosed Liabilities. The Company
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has furnished to the Purchasers the unaudited consolidated balance sheet of the
Company as of December 31, 1996 and the related unaudited consolidated
statements of operations, shareholders' equity (net capital deficiency), and
cash flows of the Company for the twelve-month period then ended, certified by
the principal financial officer of the Company. Such financial statements are
complete and correct, subject to final year-end and audit adjustments, have been
prepared in accordance with generally accepted accounting principles,
consistently applied ("GAAP"), and fairly present in all material respects the
consolidated financial position of the Company as of such respective dates, and
the consolidated results of its operations and cash flows for the respective
periods then ended. To the best knowledge of the Company, as of December 31,
1996, the Company had no liability or obligation of a nature required to be set
forth on balance sheet according to GAAP, except to the extent reflected as a
liability on the financial statements described in this Section 2.9.
SECTION 2.10 Litigation. There are no (a) actions, suits, proceedings or
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investigations at law or in equity or by or before any governmental
instrumentality or other agency now pending or to the Company's knowledge,
threatened against or affecting the Company, or (b) judgments, decrees,
injunctions or orders of any court, governmental department, commission, agency,
instrumentality or arbitrator against or affecting the Company.
SECTION 2.11 Events Subsequent to December 31, 1996. Since December 31,
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1996, there has not been any material adverse change in the assets, liabilities,
income, business, operations or prospects of the Company. Since December 31,
1996, except as set forth in Schedule II hereto or as contemplated hereby, the
Company has not (i) issued any stock, bonds or other securities, (ii) borrowed
any amount or incurred any liabilities (absolute or contingent), except current
liabilities incurred, and liabilities under contracts entered into, in the
ordinary course of business, (iii) discharged or satisfied any lien or incurred
or paid any obligation or liability (absolute or contingent other than current
liabilities shown on its balance sheet as of December 31, 1996 referred to in
Section 2.9 hereof and current liabilities incurred since that date; in the
ordinary course of business, (iv) declared or made any payment or distribution
to stockholders or purchased or redeemed any shares of its capital stock or
other securities or interests, (v) mortgaged, pledged or subjected to lien any
of its assets, tangible or intangible, other than liens of current real property
taxes not yet due and payable, (vi) sold, assigned or transferred any of its
tangible assets, except in the ordinary course of business, or canceled any
debts or claims, (vii) sold, assigned or transferred any patents, trademarks,
trade names, copyrights, trade secrets or other intangible assets, (viii) made
any changes in officer compensation, or (ix) entered into any transaction except
in the ordinary course of business.
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SECTION 2.12 Title to Properties. The Company has good and marketable
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title to all of its owned properties and assets, free and clear of all
mortgages, pledges, security interests, liens, charges and other encumbrances,
except for Permitted Encumbrances (as defined below). As of the Closing and
after giving effect to the transactions contemplated hereby, the Company will
have good and marketable title to all its properties and assets free and clear
of mortgages, pledges, security interests, liens, charges and other
encumbrances, except under for Permitted Encumbrances. As used herein,
"Permitted Encumbrances" means any mortgages, pledges, security interests,
liens, charges and other encumbrances (i) as described in Schedule II hereto,
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(ii) liens for current taxes, assessments and other governmental charges not
overdue, (iii) mechanic's, materialmen's and similar liens which may have arisen
in the ordinary course of business and which, in the aggregate, would not be
material to the financial condition of the Company, (iv) security interests
securing indebtedness not in default for the purchase price of or lease rental
payments on property purchased or leased under capital lease arrangements in the
ordinary course of business, and (v) minor imperfections of title, if any, not
material in amount and not materially detracting from the value or impairing the
use of the property subject thereto or impairing the operations or proposed
operations of the Company.
SECTION 2.13 Taxes. The Company has filed or caused to be filed all
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Federal, state, local and foreign tax returns that are required to be filed and
has paid or caused to be paid all taxes shown as due on all such returns or on
any assessment received by it.
SECTION 2.14 Insurance. All policies of liability, theft, fidelity,
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business interruption, life, fire, product liability, workmen's compensation,
health and other forms of insurance held by the Company are valid and
enforceable policies and are outstanding and duly in force and all premiums with
respect thereto are paid to date. The amounts of coverage under such policies
of insurance for the assets and properties of the Company are adequate against
risks usually insured against by persons operating similar businesses and
operating similar properties.
SECTION 2.15 Compensation Arrangements. Except as set forth in Schedule
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II hereto, (i) the Company is not a party to any employment or deferred
compensation agreements that require payments by the Company to any individual
in excess of $100,000, or in the aggregate, in excess of $500,000, in each case,
in any year (ii) the Company does not have any bonus, incentive or profit-
sharing plans that would require payments by the Company to any individual in an
amount equal to or exceeding $50,000 in any one year, and (iii) there are no
existing material arrangements or proposed material transactions between the
Company and any officer or director or holder of more than 5% of the capital
stock of the Company. Complete and correct copies of all written arrangements
described in the preceding sentence as in effect on the date hereof have been
delivered to Purchasers and shall be amended to the satisfaction of Purchasers
prior to the Closing.
SECTION 2.16 Securities Laws. Assuming the accuracy of the
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representations and warranties of each Purchaser set forth in Section 3 below
are true and correct, the issuance, sale and delivery of the Preferred Shares to
each Purchaser on the Closing Date, under the circumstances contemplated by this
Agreement, are exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act").
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SECTION 2.17 Environmental Matters. The Company has complied with each and
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is not in violation of any, federal, state or local law, regulation, permit,
provision or ordinance relating to the generation, storage, transportation,
treatment or disposal of hazardous, toxic or polluting substances, except where
such noncompliance or violation would not result in any material adverse effect
on the business, operations or financial condition of the Company, or its
properties or assets. The Company has obtained and adhered to all necessary
permits and other approvals necessary to store, dispose, and otherwise handle
hazardous, toxic and polluting substances, the failure of which to obtain or
adhere to would result in any material adverse effect on the business,
operations or financial condition of the Company, or its properties or assets.
The Company has reported, to the extent required by federal, state and local
law, all past and present sites where hazardous, toxic or polluting substances,
if any, from the Company have been treated, stored or disposed. The Company has
not transported any hazardous, toxic or polluting substances or arranged for the
transportation of such substances to any location which is the subject of
federal, state or local enforcement actions or other investigations which may
lead to claims against the Company for clean-up costs, remedial work, damages to
natural resources or for personal injury claims, including, but not limited to,
claims under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended which claims would result in a material
adverse effect on the business, operations or financial condition of the
Company, or its properties or assets.
SECTION 2.18 Employee Benefit Plans.
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(a) The Company has complied and currently is in compliance, both as
to form and operation, with the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the Internal Revenue
Codes of 1954 and/or 1986, as amended, respectively (the "Code"), with respect
to each "employee benefit plan" as defined under Section 3(3) of ERISA ("Plan")
which the Company (i) has ever adopted, maintained, established or to which the
Company has ever been required to contribute or to which the Company has ever
contributed or (ii) currently maintains or to which the Company currently
contributes or is required to contribute or (iii) currently participates in or
is required to participate in.
(b) The Company has never maintained, adopted or established,
contributed or been required to contribute to, or otherwise participated in or
been required to participate in, a "multi-employer plan" (as defined in Section
3(37) of ERISA). No amount is due or owing from the Company on account of a
"multi-employer plan" (as defined in Section 3(37) of ERISA) or on account of
any withdrawal therefrom.
(c) Notwithstanding anything else set forth herein, the Company has
not incurred any liability with respect to a Plan, including, without
limitation, under ERISA (including, without limitation, Title I or Title IV of
ERISA and other than liability for premiums due to the Pension Benefit Guaranty
Corporation), the Code or other applicable law, which has not been satisfied in
full, and no event has occurred, and there exists no condition or set of
circumstances which could result in the imposition of any liability with respect
to a Plan, including, without limitation, under ERISA (including, without
limitation, Title I or Title IV of ERISA), the Code or other applicable law with
respect to the Plan.
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(d) The Company has not committed itself, orally or in writing, to
(i) provide or cause to be provided to any person any payments or benefits in
addition to, or in lieu of, those payments or benefits set forth under any Plan,
or (ii) continue the payment of, or accelerate the payment of, benefits under
any Plan, except as expressly set forth thereunder.
(e) The Company has not committed itself, orally or in writing, to
provide or cause to be provided any severance or other post-employment benefit,
salary continuation, termination, disability, death, retirement, health or
medical benefit, or similar benefit to any person (including, without
limitation, any former or current employee) except as set forth under any Plan.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
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Each Purchaser severally represents and warrants to the Company that:
(a) it is an "accredited investor" within the meaning of Rule 501
under the Securities Act and was not organized for the specific purpose of
acquiring the Preferred Shares;
(b) it has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the
Company and it is able financially to bear the risks thereof;
(c) it has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management;
(d) the Preferred Shares being purchased by it are being acquired for
its own account for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof in violation of the Securities Act;
(e) it understands that (i) the Preferred Shares and the Conversion
Shares have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated
under the Securities Act, (ii) the Preferred Shares (and, upon conversion
thereof, the Conversion Shares) must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration, (iii) the Preferred Shares and Conversion Shares will bear a
legend to such effect and (iv) the Company will make a notation on its transfer
books to such effect; and
(f) if it sells any Conversion Shares pursuant to Rule 144A
promulgated under the Securities Act, it will take all necessary steps in order
to perfect the exemption from registration provided thereby, including (i)
obtaining information to enable it to establish a reasonable belief that the
purchaser is a qualified institutional buyer and (ii) advising such purchaser
that Rule 144A is being relied upon with respect to such resale.
-9-
SECTION 4. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS.
-----------------------------------------------
The obligation of each Purchaser to purchase and pay for the Preferred Shares
being purchased by it on the Closing Date is, at its option, subject to the
satisfaction, on or before the Closing Date, of the following conditions:
(a) Opinion of Company's Counsel. The Purchasers shall have received
----------------------------
from Dechert Price & ▇▇▇▇▇▇, counsel for the Company, an opinion dated the
Closing Date, in substantially the form attached as Exhibit B hereto.
---------
(b) Representations and Warranties to be True and Correct. The
-----------------------------------------------------
representations and warranties contained in Section 2 shall be true, complete
and correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
President and Treasurer of the Company shall have certified to such effect to
the Purchasers in writing.
(c) Performance. The Company shall have performed and complied with
-----------
all agreements contained herein required to be performed or complied with by it
prior to or at the Closing Date, and the President and Treasurer of the Company
shall have certified to the Purchasers in writing to such effect and to the
further effect that all of the conditions set forth in this Section 4 have been
satisfied.
(d) All Proceedings to be Satisfactory. All corporate and other
----------------------------------
proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchasers and their counsel, and the Purchasers and
their counsel shall have received all such counterpart originals or certified or
other copies of such documents as they reasonably may request.
(e) Supporting Documents. The Purchasers and their counsel shall
--------------------
have received copies of the following documents:
(i) (A) the Charter, certified as of a recent date by the
Secretary of State of the State of Delaware, and (B) a certificate of said
Secretary dated as of a recent date as to the due incorporation and good
standing of the Company, the payment of all franchise taxes by the Company and
listing all documents of the Company on file with said Secretary.
(ii) a certificate of the Secretary or an Assistant Secretary of
the Company dated the Closing Date and certifying: (A) that attached thereto is
a true and complete copy of the By-laws of the Company as in effect on the date
of such certification; (B) that attached thereto is a true and complete copy of
all resolutions adopted by the Board of Directors or the stockholders of the
Company authorizing the execution, delivery and performance of this Agreement,
the issuance, sale and delivery of the Preferred Shares and the reservation,
issuance and delivery of the Conversion Shares, and that all such resolutions
are in full force and effect and are all the resolutions adopted in connection
with the transactions contemplated by this Agreement; (C) that the Charter has
not been amended since the date of the last amendment referred to in the
certificate delivered pursuant to clause (i)(B) above; and (D) to the incumbency
and specimen signature of each officer of the Company executing this Agreement,
the stock certificates representing the Preferred Shares and any certificate or
instrument furnished pursuant
-10-
hereto, and a certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate referred to in
this clause (ii); and
(iii) such additional supporting documents and other information
with respect to the operations and affairs of the Company as the Purchasers or
their counsel reasonably may request.
(f) Charter. The Charter shall read in its entirety as set forth in
-------
Exhibit A.
---------
(g) By-Laws. The By-Laws shall read in their entirety as set forth
-------
in Exhibit C.
---------
(h) Transaction Agreements. The Transaction Agreements shall remain
----------------------
in full force and effect and the Company shall have obtained the necessary
consents of the parties (other than from ▇▇▇▇▇▇) to the Transaction Documents in
order to enable the Purchasers to obtain the rights and benefits to the
Transaction Documents (other than the Voting Agreement and other than with
respect to 67,708 shares of Common Stock held by ▇▇▇▇▇▇) as set forth in Section
2.2(c) above. The Purchasers hereby agree to be bound by the terms of the
Operative Documents, as amended as contemplated by the preceding sentence.
(i) Supplemental Voting Agreement. The Company, the Purchasers and
-----------------------------
the existing holders of the Series A Convertible Preferred Stock shall have
entered into a Supplemental Voting Agreement dated as of the date hereof in
substantially the form set forth in Exhibit D (the "Supplemental Voting
---------
Agreement").
SECTION 5. COVENANTS OF THE COMPANY.
------------------------
The Company covenants and agrees with each of the Purchasers that for so long as
any Series A Convertible Preferred Stock is outstanding:
SECTION 5.1 Financial Statements, Reports, Etc. The Company shall furnish
----------------------------------
to each Purchaser who holds at least 400,000 Preferred Shares:
(a) within ninety (90) days after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company and its subsidiaries as of
the end of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows for the fiscal year then ended, prepared in
accordance with generally accepted accounting principles and certified by a firm
of independent public accountants of recognized national standing selected by
the Board of Directors of the Company, provided that the Company's obligations
under this Section 5.1 (a) shall terminate upon (i) the registration of the
Company's securities under Section 12(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or (ii3 the registration of the Company's
securities under Section 1 2(g) of the Exchange Act and the admission to listing
of such securities on the Nasdaq Stock Market;
(b) within thirty days after the end of each month and each quarter in
each fiscal year (other than the last month in each fiscal year), a consolidated
balance sheet of the Company and its subsidiaries and the related consolidated
statements of income, stockholders' equity and cash flows, unaudited but
prepared in accordance with generally accepted accounting
-11-
principles and certified by the Chief Financial Officer of the Company, such
consolidated balance sheet to be as of the end of each month or quarter, as the
case may be, and such consolidated statements of income, stockholders' equity
and cash flows to be for such month or quarter, as the case may be, and for the
period from the beginning of the fiscal year to the end of such month or
quarter, as the case may be, in each case with comparative statements for the
prior fiscal year, provided that the Company's obligations under this Section
5.1 (b) shall terminate upon (i) the registration of the Company's securities
under Section 12(b) of the Exchange Act or (ii) the registration of the
Company's securities under Section 12(g) of the Exchange Act and the admission
to listing of such securities on the Nasdaq Stock Market;
(c) at the time of any delivery of each annual financial statement
pursuant to Section 5.1 (a), a certificate executed by the Chief Executive
Officer of the Company stating that such officer has caused this Agreement and
the Series A Convertible Preferred Stock to be reviewed and has no knowledge of
any default by the Company in the performance or observance of any of the
provisions of this Agreement or the Series A Convertible Preferred Stock or, if
such officer has such knowledge, specifying such default and the nature thereof,
(d) at the time of any delivery of each monthly and quarterly
statement pursuant to Section 5.1 (b), a management narrative report explaining
all material variances from forecasts and all material current developments in
staffing, marking, sales and operations;
(e) no later than sixty (60) days prior to the start of each fiscal
year, consolidated capital and operating expense budgets, cash flow projections
and income and loss projections for the Company and its subsidiaries in respect
of such fiscal year, all itemized in reasonable detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing;
(f) promptly following receipt by the Company, each audit response
letter, accountant's management letter and other written report submitted to the
Company by its independent public accountants in connection with an annual or
interim audit of the books of the Company or any of its subsidiaries;
(g) promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, investigations and inquiries of the type described
in Sections 2.6 or 2.8 that could materially adversely affect the Company or any
of its subsidiaries;
(h) promptly upon sending, making available or filing the same, (i)
all press releases, and (ii) all reports and financial statements that the
Company sends or makes available to its stockholders or directors or files with
the Securities and Exchange Commission; and
(i) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of the
Company and its subsidiaries as such Purchaser reasonably may request.
SECTION 5.2 Reserve for Conversion Shares. The Company shall at all times
-----------------------------
reserve and keep available out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of the Preferred Shares and
otherwise complying with the terms of this Agreement, such number of its duly
authorized shares of Common Stock as shall be
-12-
sufficient to effect the conversion of the Preferred Shares from time to time
outstanding or otherwise to comply with the terms of this Agreement. If at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of the Preferred Shares or otherwise to
comply with the terms of this Agreement, the Company will forthwith take such
corporate action as may be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes. The Company will obtain any authorization, consent, approval or other
action by or make any filing with any court or administrative body that may be
required under applicable state securities laws in connection with the issuance
of shares of Common Stock upon conversion of the Preferred Shares.
SECTION 5.3 Corporate Existence. The Company shall maintain and, except
-------------------
as otherwise permitted by Section 5.14 cause each of its subsidiaries to
maintain, their respective corporate existence, rights and franchises in full
force and effect.
SECTION 5.4 Properties, Business, Insurance. The Company shall maintain
-------------------------------
and cause each of its subsidiaries to maintain as to their respective properties
and business, with financially sound and reputable insurers, insurance against
such casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated, which insurance shall be deemed by
the Company to be sufficient.
SECTION 5.5 Inspection, Consultation and Advice. The Company shall permit
-----------------------------------
and cause each of its subsidiaries to permit each Purchaser and such persons as
such Purchaser may designate, at such Purchaser's expense, to visit and inspect
any of the properties of the Company and its subsidiaries, examine their books
and take copies and extracts therefrom (subject to the prior execution and
delivery to the Company of a confidentiality agreement in a reasonable form
provided by the Company from time to time), discuss the affairs, finances and
accounts of the Company and its subsidiaries with their officers, employees and
public accountants (and the Company hereby authorizes said accountants to
discuss with such Purchaser and such designees such affairs, finances and
accounts), and consult with and advise the management of the Company and its
subsidiaries as to their affairs, finances and accounts, all at reasonable times
and upon reasonable notice.
SECTION 5.6 Restrictive Agreements Prohibited. Neither the Company nor
---------------------------------
any of its subsidiaries shall become a party to any agreement which by its terms
restricts the Company's performance of this Agreement, any Transaction
Agreement, the By-Laws or the Charter.
SECTION 5.7 Transactions with Affiliates. Except for transactions
----------------------------
contemplated by this Agreement or as otherwise approved by the Board of
Directors, neither the Company nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of the
Company or any of its subsidiaries, member of the family of any such person, or
any corporation, partnership, trust or other entity in which any such person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof,
except for transactions on customary terms related to such person's employment
with the Company.
-13-
SECTION 5.8 Expenses of Directors. The Company shall promptly reimburse
---------------------
in full each director of the Company who is not an employee of the Company and
who was elected as a director solely or in part by the holders of Series A
Convertible Preferred Stock 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
SECTION 5.9 Use of Proceeds. The Company shall use the proceeds from the
---------------
sale of the Preferred Shares solely for working capital.
SECTION 5.10 Board of Directors Meetings. The Company shall use its best
---------------------------
efforts to ensure that meetings of its Board of Directors are held at least four
times each year and at least once each quarter. In addition to the rights of
the Purchasers set forth in the Supplemental Voting Agreement, the Company shall
permit each Purchaser owning at least 400,000 Preferred Shares to have one
representative attend each meeting of the Board of Directors of the Company and
each meeting of any committee thereof and to participate in all discussions
during each such meeting. The Company shall send to each Purchaser and each
such representative the notice of the time and place of such meeting in the same
manner and at the same time as it shall send such notice to its directors or
committee members, as the case may be; provided, however, that the Company shall
-------- -------
have no obligations with respect to notice or permitted attendance of a
nondirector Purchaser's representative under this Section 5.10 in the event of
any meeting of the Board of Directors, or portion thereof, as to which the Board
shall reasonably conclude (and shall have notified each Purchaser of such
conclusion) that the existence or potential existence of a significant conflict
of interest or the necessity of confidentiality in the best interests of the
Company and the stockholders precludes such notice or attendance. As a
condition to attendance at any Board of Directors meeting, each Purchaser agrees
that such Purchaser's representative may be required to sign and deliver to the
Company a confidentiality agreement in a reasonable form provided by the Company
from time to time. The Company shall also provide to each Purchaser and
designee copies of all notices, reports, minutes and consents at the time and in
the manner as they are provided to the Board of Directors or committee, except
for information reasonably designated as proprietary information by the Board of
Directors.
SECTION 5.11 By-Laws. The Company shall at all times maintain provisions
-------
in its Bylaws and/or Charter indemnifying all directors and officers against
liability (and providing for expense reimbursement thereof to the extent
contained therein on the date hereof) and absolving all directors from liability
to the Company and its stockholders to the maximum extent permitted under the
laws of the State of Delaware.
SECTION 5.12 Performance of Contracts. The Company shall not amend,
------------------------
modify, terminate, waive or otherwise alter, in whole or in part, any of the
Transaction Agreements with any person without the written consent of those
members of the Company's Board of Directors elected solely by the holders of
Series A Preferred Stock, if any.
SECTION 5.13 Vesting of Reserved Employee Shares. The Company shall not
-----------------------------------
grant to any of its directors, employees or consultants options to purchase
Common Stock which will become exercisable at a rate in excess of 20% per annum
from the date of such grant without the unanimous written consent of those
members of the Company's Board of Directors elected solely by the holders of
Series A Convertible Preferred Stock.
-14-
SECTION 5.14 Activities of Subsidiaries. Without the unanimous consent of
--------------------------
the Company's Board of Directors (or unanimous consent of a special committee of
the Board of Directors appointed by unanimous consent of the whole Board of
Directors): (i) the Company shall not permit any subsidiary to consolidate or
merge into or with or sell or transfer all or substantially all its assets,
except that any wholly-owned subsidiary may (A) consolidate or merge into or
with or sell or transfer assets to any other wholly-owned subsidiary, or (B)
merge into or sell or transfer assets to the Company; (ii) the Company shall not
sell or otherwise transfer any shares of capital stock of any subsidiary, except
to the Company or any wholly-owned subsidiary, or permit any subsidiary to
issue, sell or otherwise transfer any shares of its capital stock or the capital
stock of any subsidiary, except to the Company or any wholly-owned subsidiary;
or (iii) the Company shall not permit any subsidiary to purchase or set aside
any sums for the purchase of, or pay any dividend or make any distribution on,
any shares of its stock, except for dividends or other distributions payable to
the Company or any wholly-owned subsidiary.
SECTION 5.15 Compliance with Laws. The Company shall comply, and cause
--------------------
each subsidiary to comply, in all material respects with all applicable laws,
rules, regulations and orders.
SECTION 5.16 Keeping of Records and Books of Account. The Company shall
---------------------------------------
keep, and cause each subsidiary to keep, adequate and accurate records and books
of account in which complete entries will be made in accordance with generally
accepted accounting principles consistently applied, reflecting all financial
transactions of the Company and such subsidiary, and in which, for each fiscal
year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
SECTION 5.17 Change in Nature of Business. The Company shall not make, or
----------------------------
permit any subsidiary to make, any material change in the nature of its business
as contemplated on the date hereof.
SECTION 5.18 U.S. Real Property Interest Statement. The Company shall
-------------------------------------
provide prompt written notice to each Purchaser following any "determination
date" (as defined in Treasury Regulation Section 1.897-2(c)(i)) on which the
Company becomes a United States real property holding corporation. In addition,
upon a written request by any Purchaser, the Company shall provide such
Purchaser with a written statement informing the Purchaser whether such
Purchaser's interest in the Company constitutes a U.S. real property interest.
The Company's determination shall comply with the requirements of Treasury
Regulation Section 1.897-2(h)(1) or any successor regulation, and the Company
shall provide timely notice to the Internal Revenue Service, in accordance with
and to the extent required by Treasury Regulation Section 1.897-2(h)(2) or any
successor regulation, that such statement has been made. The Company's written
statement to any Purchaser shall be delivered to such Purchaser within ten (10)
days of such Purchaser's written request therefor. The Company's obligation to
furnish a written statement pursuant to this Section 5.18 shall continue
notwithstanding the fact that a class of the Company's stock may be regularly
traded on an established securities market.
SECTION 5.19 Rule 144A Information. The Company shall, at all times
---------------------
during which it is neither subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, nor
-15-
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide
in writing, upon the written request of any Purchaser or a prospective buyer of
Preferred Shares or Conversion 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 also
shall, upon the written request of any Purchaser, cooperate with and assist such
Purchaser or any member of the National Association of Securities Dealers, Inc.
PORTAL system in applying to designate and thereafter maintain the eligibility
of the Preferred Shares or Conversion Shares, as the case may be, for trading
through PORTAL. The Company's obligations under this Section 5.19 shall at all
times be contingent upon the relevant Purchaser's obtaining from the prospective
buyer of Preferred Shares or Conversion Shares a written agreement to take all
reasonable precautions to safeguard the Rule 144A Information from disclosure to
anyone other than a person who will assist such buyer in evaluating the purchase
of any Preferred Shares or Conversion Shares.
(a) Termination of Covenants. The covenants set forth in Sections
------------------------
5.18 and 5.19 shall terminate and be of no further force or effect as to each of
the Purchasers when such Purchaser no longer holds any shares of capital stock
of the Company. All of the other covenants set forth in this Section 5 shall
terminate and be of no further force or effect as to a Purchaser when such
Purchaser owns less than 50,000 Preferred Shares (appropriately adjusted to
reflect stock splits, stock dividends, combinations of shares and the like with
respect to the Series A Convertible Preferred Stock).
SECTION 6. SURVIVAL AND INDEMNIFICATION
----------------------------
SECTION 6.1 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of the Company contained in Section 2 hereof
shall survive the Closing, but shall expire upon the earlier of (i) two (2)
years from the Closing Date or (ii) three (3) months from the date that a
Purchaser reasonably knew of a breach of a representation, warranty or covenant
of the Company, except (a) with respect to and to the extent of any claim of
which written notice specifying, in reasonable detail, the nature and amount of
the claim has been given by a Purchaser to the Company prior to such expiration
and (b) the representations and warranties contained in Sections 2.2(a), 2.2(b)
and 2.4 shall survive indefinitely.
SECTION 6.2 Indemnification by the Company.
------------------------------
(a) Subject to Section 6.1, the Company hereby agrees to indemnify
and hold each Purchaser harmless from and against, and agrees promptly to defend
each Purchaser from and reimburse each Purchaser for, any and all actions,
suits, proceedings, losses, damages, costs, expenses, liabilities, obligations,
and claims of any kind or nature whatsoever which may be incurred by or asserted
against or involve a Purchaser, including, without limitation, reasonable
attorneys' fees and other legal costs and expenses ("Losses"), arising out of or
in any way relating to (i) any breach by the Company in any material respect of
any of the Company's representations or warranties set forth in Section 2; or
(ii) any failure by the Company to carry out, perform, satisfy and discharge any
covenants, agreements, undertakings, liabilities or obligations to be performed
by it pursuant to the terms of this Agreement of any of the documents delivered
by the Company pursuant to this Agreement.
-16-
(b) In the event of a claim against a Purchaser arises to which the
indemnity of Section 6.2(a) of this Agreement is applicable, notice shall be
given promptly by such Purchaser to the Company and the Company shall have the
right to control all settlements (unless such Purchaser agrees to assume the
cost of settlement) and to select lead counsel to defend any and all such claims
at the sole cost and expense of the Company. A Purchaser asserting a claim may
select counsel to participate in any such defense at the sole cost and expense
of such Purchaser. In connection with any such claim, action, or proceeding,
the parties shall cooperate with each other and provide each with access to
relevant books and records in their possession.
(c) The Purchasers may not make any claim for indemnification as to
any matter disclosed as an exception in Schedule II.
-----------
SECTION 7. MISCELLANEOUS
-------------
SECTION 7.1 Expenses. Each party hereto will pay its own expenses in
--------
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated provided, however, the Company will reimburse
the Purchasers for legal fees and expenses incurred in connection with this
transaction, up to a maximum of $15,000.
SECTION 7.2 Survival of Agreements. Except as otherwise specified herein,
----------------------
all covenants, agreements, representations and warranties made herein or in the
Transaction Agreements or any certificate or instrument delivered to the
Purchasers pursuant to or in connection with this Agreement shall survive the
execution and delivery of this Agreement and the issuance, sale and delivery of
the Preferred Shares, and the issuance and delivery of the Conversion Shares,
and all statements contained in any certificate or other instrument delivered by
the Company hereunder or thereunder or in connection herewith or therewith shall
be deemed to constitute representations and warranties made by the Company.
SECTION 7.3 Brokerage. Each party hereto will indemnify and hold harmless
---------
the others against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 7.4 Parties in Interest. All representations, covenants and
-------------------
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. Without limiting the
generality of the foregoing, all representations, covenants and agreements
benefiting the Purchasers shall inure to the benefit of any and all subsequent
holders from time to time of Preferred Shares or Conversion Shares.
SECTION 7.5 Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be delivered in person,
mailed by certified or registered mail, return receipt requested, or sent by
telecopier or telex, addressed as follows:
(a) if to the Company, c/o Falcon Technology Partners, L.P., ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: President, with a copy to: ▇▇▇▇▇ Nassau,
Esq., Dechert, Price
-17-
& ▇▇▇▇▇▇, 4000 ▇▇▇▇ Atlantic Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-
2793 (Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(b) if to any Purchaser, at the address of such Purchaser set forth
in Schedule I
----------
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
SECTION 7.6 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware.
SECTION 7.7 Entire Agreement. This Agreement, including the Schedules and
----------------
Exhibits hereto, constitutes the sole and entire agreement of the parties with
respect to the subject matter hereof. All Schedules and Exhibits hereto are
hereby incorporated herein by reference.
SECTION 7.8 Purchasers' Representations and Warranties Several and Not
----------------------------------------------------------
Joint. The Company acknowledges and agrees that the representations and
-----
warranties of each of the Purchasers set forth in Section 3 hereof are made
severally and not jointly, and any liability of a Purchaser for breach of such
representations and warranties made by such Purchaser shall be the sole
liability and obligation of such Purchaser and no other Purchaser shall be held
liable for such breach.
SECTION 7.9 Further Assurances. Each party hereto shall cooperate and
------------------
take such action as may be reasonably requested by another party in order to
carry out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
SECTION 7.10 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 7.11 Amendments. This Agreement may not be amended or modified,
----------
and no provisions hereof may be waived, except with the written consent of the
Company and the holders of Preferred Shares which are convertible into a number
of shares of Common Stock, and/or shares of Common Stock issued upon conversion
of Preferred Shares, constituting at least two-thirds of the outstanding shares
of Common Stock issued or issuable upon conversion of the Preferred Shares.
SECTION 7.12 Severability. If any provision of this Agreement shall be
------------
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.
SECTION 7.13 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
SECTION 7.14 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):
-18-
(a) "person" shall mean an individual, corporation, trust,
partnership, joint venture, unincorporated organization, government agency or
any agency or political subdivision thereof, or other entity.
(b) "subsidiary" shall mean, as to the Company, (i) any corporation of
which more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) or (ii) any partnership, limited liability company or similar
entity of which more than 50% of the ownership interests, or any percentage of
general partner or managing member interest, is at the time directly or
indirectly owned by the Company, or by one or more of its subsidiaries, or by
the Company and one or more of its subsidiaries.
-19-
IN WITNESS WHEREOF, the Company, and the Purchasers have executed this
Agreement as of the day and year first above written.
GENOMICA CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
[Corporate Seal]
PURCHASERS:
FALCON TECHNOLOGY II PARTNERS, L.P.
By: FALCON TECHNOLOGY MANAGEMENT CORPORATION,
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
ARCH VENTURE FUND III, L.P.
By: ARCH VENTURE PARTNERS, L.L.C., general
partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Managing Director
BOULDER VENTURES, L.P.
By: BV PARTNERS, L.L.C.
General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Manager
-20-
PEGASUS TECHNOLOGY VENTURES, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
THE ▇▇▇▇▇▇▇▇▇ FAMILY, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Manager
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Manager
-21-
SCHEDULE I
Aggregate Purchase Price
Number of Preferred for Preferred Shares at
Purchaser Shares to be Purchased $.6024 per share
--------- ---------------------- ------------------------
Falcon Technology Partners, L.P. 1,660,050 $1,000,000
ARCH Venture Fund III, L.P. 830,025 $ 500,000
Boulder Ventures, L.P. 581,017 $ 350,000
Pegasus Technology Ventures, L.L.C. 124,504 $ 75,000
The ▇▇▇▇▇▇▇▇▇ Family, L.L.C. 124,504 $ 75,000
3,320,100 2,000,000
-22-
SCHEDULE II
Section 2.8(a) Pursuant to a certain License Agreement between the Company and
Cold Spring Harbor Laboratory dated as of January 6, 1996, the Company is
licensee of the Patent Rights, Licensed Copyrights and Technical Information (as
such terms are defined in such agreement), subject to the rights of the Cold
Spring Harbor Laboratory and the federal government as set forth therein.
Section 2.15 Except for the Transaction Documents (as defined in the Agreement
to which this Schedule II is attached), there are no agreements with officers,
directors or 5% holders except for:
1. The License Agreement referred to in Section 2. 8(a) of this Schedule
II; and
2. A Letter Agreement dated October 28, 1996 between the Company and ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, whereby ▇▇. ▇▇▇▇ will become Chief Executive Officer of the Company
following completion of the transactions contemplated by this Agreement.
-23-
AMENDMENT TO SERIES A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
(the "Amendment") is entered into as of the ____ day of June 1997, by and among
Genomica Corporation, a Delaware corporation (the "Company"), and the persons
and entities listed on the Schedule of Purchasers attached hereto (the
"Purchasers").
WHEREAS, the Purchasers are parties to that certain Series A Convertible
Preferred Stock Purchase Agreement by and among the Company and such Purchasers,
dated as of February 28, 1997 (the "Agreement"); and
WHEREAS, the Company and the Purchasers desire to amend that Agreement.
NOW THEREFORE, in consideration of the foregoing, the Agreement is hereby
amended as follows:
1. Section 1.2 Closing This paragraph is amended in its entirety to read
-------
as follows:
SECTION 1.2 Closing
-------
(a) Closing. The closing of the purchase and sale of Preferred Shares
hereunder (the "Closing") shall take place at the offices of Dechert Price
& ▇▇▇▇▇▇, Philadelphia, at 10:00 a.m., New York time, on February 28, 1997
(the "First Closing Date"), or at such other location, date and time as may
be agreed upon between the Purchasers and the Company. At the Closing, the
Company shall issue and deliver to each Purchaser a stock certificate or
certificates in definitive form, registered in the name of such Purchaser,
representing the Preferred Shares being purchased by it at the Closing. As
payment in full for the Preferred Shares being purchased by it under this
Agreement, and against delivery of the stock certificate or certificates
therefor as aforesaid, on the Closing Date each Purchaser shall (i)
transfer to the account of the Company by wire transfer the amount set
forth opposite the name of such Purchaser under the heading "Aggregate
Purchase Price for Preferred Shares" on Schedule I, (ii) if applicable,
----------
deliver to the Company for cancellation promissory notes issued by the
Company in the amount of such sum or (iii) delivery or transfer such sum to
the Company by any combination of such methods of payment. Notwithstanding
the preceding sentence, a Purchaser may give written notice to the Company
not later than (2) business days prior to the Closing Date, that such
Purchaser desires to deliver its consideration at such time not later than
sixty (60) days following the Closing Date. Upon delivery of such notice,
such Purchaser shall be obligated, without any further condition, to
deliver its consideration no later than the date specified in the notice.
The Company shall not be obligated to deliver any stock certificates and
such Purchaser shall have no rights as a stockholder in the Company until
such Purchaser delivers its consideration to the Company.
1.
(b) Purchases and Sales Subsequent to the Closing. If less than all of the
Shares are sold on the First Closing Date, subject to the terms and conditions
of this Agreement, the Company may sell, on or before June 29, 1997 up to the
balance of the authorized but unissued Shares to such persons as the Company may
determine at the same price per share as the Shares purchased and sold on the
First Closing Date. Any such sale shall be upon the same terms and conditions as
those contained herein, may occur on one or more occasions and such persons or
entities shall become parties to this Agreement and shall have the rights and
obligations of a Purchaser hereunder. Such persons or entities may become
parties to such agreements (i) by appending additional signature pages to such
agreements containing their signatures and (ii) by appending additional pages to
or revising the Schedule I of each such agreement appropriately. In the event
there is more than one Closing, the term "Closing" shall apply to each such
Closing unless otherwise specified and the term "Shares" shall apply to all
shares of the Company's Series A Convertible Preferred Stock sold and issued at
each such closing.
2. Section 4(a) is amended to read as follows:
(a) Opinion of Company's Counsel. The Purchasers on First Closing Date
----------------------------
shall have received from Dechert Price & ▇▇▇▇▇▇, counsel for the Company, an
opinion dated the First Closing Date, in substantially the form attached as
Exhibit B hereto. Subsequent Purchasers shall not receive an opinion from
counsel for the Company.
3. Governing Law. This Amendment shall be governed by and construed under the
-------------
laws of the State of Colorado as applied to agreements among Colorado residents,
made and to be performed entirely within the State of Colorado.
4. Counterparts. This Amendment may be executed in two or more counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5. Continuing Effect. The Series A Convertible Preferred Stock Purchase
-----------------
Agreement, as amended hereby, shall remain in full force and effect.
2.
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as
of June __, 1997.
Gemonica Corporation, a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Falcon Technology II Partners, L.P.
By: Falcon Technology Management
Corporation, general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Arch Venture Fund III, L.P.
By: Arch Venture Partners, L.L.C., general
partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Managing Director
Boulder Ventures, L.P.
By: BV Partners, L.L.C., general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Manager
Pegasus Technology Ventures, L.L.C
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
The ▇▇▇▇▇▇▇▇▇ Family, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Manager
3.
Prior Stockholders:
Falcon Technology Partners, L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Partner
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Executive Vice
President
4.
SECOND AMENDMENT TO SERIES A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Amendment to the Series A Convertible Preferred Stock Purchase
Agreement (the "Second Amendment") is entered into as of the 6th day of October,
1997, by and among Genomica Corporation, a Delaware corporation (the "Company")
and the holders of shares of Series A Convertible Preferred Stock (individually,
a "Purchaser" and collectively, the "Purchasers").
Whereas, the Purchasers are parties to that certain Series A
Convertible Preferred Stock Purchase Agreement by and among the Company and such
Purchasers, dated as of February 28, 1997, as amended (the "Purchase
Agreement"); and
Whereas, the Company and the Purchasers desire to amend the Purchase
Agreement.
Now Therefore, in consideration of the foregoing, the Purchase
Agreement is hereby amended and restated as follows:
1. Subsection (b) of Section 1.2 is amended and restated to read in its
entirety as follows:
"(b) Purchases and Sales Subsequent to the Closing. If less than all
of the Shares are sold on the First Closing Date and the closing on June 14,
1997 (the "Second Closing Date"), subject to the terms and conditions of this
Agreement, the Company may sell, on or before October 31, 1997, up to the
balance of the authorized but unissued Shares to such persons as the Company may
determine at the same price per share as the Shares purchased and sold on the
First and Second Closing Dates. Any such sale shall be upon the same terms and
conditions as those contained herein, may occur on one or more occasions and
such persons or entities shall become parties to the Agreement and the Second
Amendment hereto dated as of October 6, 1997 (the "Second Amendment") and shall
have the rights and obligations of a Purchaser hereunder. Such persons or
entities may become parties to this Agreement (i) by appending additional
signature pages to the Second Amendment containing their signatures and (ii) by
appending additional pages to or revising the Schedule I of this Agreement
appropriately pursuant to the Second Amendment. In the event there is more than
one closing, the term "Closing" shall apply to each such closing unless
otherwise specified and the term "Shares" shall apply to all shares of the
Company's Series A Convertible Preferred Stock sold and issued at each such
closing."
2. Section 2.2(a) is amended and restated to read in its entirety as follows:
"(a) The execution and delivery by the Company of the Second
Amendment, the Second Amendment dated as of October 6, 1997 (the "Second Voting
Amendment") to the Supplemental Voting Agreement (as hereinafter defined), the
Amendment dated as of October 6, 1997 (the "Registration Rights Amendment") to
the Registration Rights Agreement (as hereinafter defined), and the Series A
Rights Agreement dated as of October 6, 1997 (the "Series A Rights Agreement")
(collectively, the "October Series A Documents") and the performance by the
Company of its obligations under this Agreement and under the Registration
1.
Rights Agreement, as amended to date, the Supplemental Voting Agreement, as
amended to date, and the Series A Rights Agreement, the issuance, sale and
delivery of the Preferred Shares and the issuance and delivery of the Conversion
Shares have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Restated Certificate of Incorporation of the Company, as amended
(the "Charter") or the By-laws of the Company (the "By-Laws"), as amended, or
any provision of any indenture, agreement or other instrument to which the
Company, any of its subsidiaries or any of their respective properties or assets
is bound, or conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company or any of its subsidiaries. To the best of
the Company's knowledge, the execution, delivery and performance of this
Agreement does not violate, conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default by any other party under
any other indenture, agreement or instrument."
3. Section 2.4 is amended and restated to read in its entirety as follows:
"SECTION 2.4 Authorized Capital Stock. The authorized capital stock of the
------------------------
Company consists of (i) 18,000,000 shares of Preferred Stock, $.001 par value
(the "Preferred Stock"), all of which have been designated Series A Convertible
Preferred Stock, and (ii) 22,000,000 shares of Common Stock. Immediately prior
to the Closing, 6,723,500 shares of Series A Convertible Preferred Stock and
2,747,308 shares of Common Stock will be validly issued and outstanding, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof, and 6,723,500 shares of Common Stock reserved for issuance upon
conversion of the Series A Preferred Stock. Immediately after giving effect to
the Closing, the stockholders of record and holders of subscriptions, warrants,
options, convertible securities, and other rights (contingent or other) to
purchase or otherwise acquire equity securities of the Company, and the number
of shares of Common Stock and the number of such subscriptions, warrants,
options, convertible securities, and other such rights held by each, will be as
set forth in the attached Schedule III. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of each class
and series of authorized capital stock of the Company are as set forth in the
Charter, a copy of which is attached as Exhibit A, and all such designations,
powers, preferences, rights, qualifications, limitations and restrictions are
valid, binding and enforceable and in accordance with all applicable laws.
Except as set forth in the attached Schedule III, (i) no person owns of record
or is known to the Company to own beneficially any share of Common Stock, (ii)
no subscription, warrant, option, convertible security, or other right
(contingent or other) to purchase or otherwise acquire equity securities of the
Company is authorized or outstanding and (iii) except as provided by this
Agreement and the Charter, there is no commitment by the Company to issue
shares, subscriptions, warrants, options, convertible securities, or other such
rights or to distribute to holders of any of its equity securities any evidence
of indebtedness or asset. Except as provided for in the Charter, the Company has
no obligation (contingent or other) to purchase, redeem or otherwise acquire any
of its equity securities or any interest therein or to pay any dividend or make
any other distribution in respect thereof. Except as provided for in the
Charter, and the agreements set forth on
2.
Schedule II, there are no voting trusts or agreements, pledge agreements, buy-
sell agreements, rights of first refusal, preemptive rights or proxies relating
to any securities of the Company or any of its subsidiaries to which the Company
or any of its subsidiaries or, to the Company's knowledge, any other person or
entity, is a party. All of the outstanding securities of the Company were issued
in compliance with all applicable Federal and state securities laws."
4. Sections 2.9, 2.10, 2.11, 2.12, 2.13 and 2.15 are hereby amended and
restated to read in their entirety as follows:
"SECTION 2.9 Financial Statements; Undisclosed Liabilities. The Company
---------------------------------------------
has furnished to the Purchasers the unaudited consolidated balance sheet of the
Company as of December 31, 1996 and August 31, 1997 and the related unaudited
consolidated statements of operations, shareholders' equity (net capital
deficiency), and cash flows of the Company for the respective twelve and eight
month periods then ended, certified by the principal financial officer of the
Company. Such financial statements are complete and correct, subject to final
year-end and audit adjustments, have been prepared in accordance with generally
accepted accounting principles, consistently applied ("GAAP"), and fairly
present in all material respects the consolidated financial position of the
Company as of such respective dates, and the consolidated results of its
operations and cash flows for the respective periods then ended. To the best
knowledge of the Company, as of August 31, 1997, the Company had no liability or
obligation of a nature required to be set forth on balance sheet according to
GAAP, except to the extent reflected as a liability on the financial statements
described in this Section 2.9."
"SECTION 2.10 Litigation. Other than as set forth on Schedule 2.10
----------
hereto, there are no (nor to the Company's knowledge is there any reasonable
basis for any) (a) actions, suits, proceedings or investigations at law or in
equity or by or before any governmental instrumentality or other agency now
pending or to the Company's knowledge, threatened against or affecting the
Company, or (b) judgments, decrees, injunctions or orders of any court,
governmental department, commission, agency, instrumentality or arbitrator
against or affecting the Company."
"SECTION 2.11 Events Subsequent to August 31, 1997. Since August 31,
------------------------------------
1997, there has not been any material adverse change, whether individually or in
the aggregate, in the assets, liabilities, income, business, operations or
prospects of the Company. Since August 31, 1997, except as set forth in
Schedule II hereto or as contemplated hereby, the Company has not (i) issued any
stock, bonds or other securities, (ii) borrowed any amount or incurred any
liabilities (absolute or contingent), including guarantees, except current
liabilities incurred, and liabilities under contracts entered into, in the
ordinary course of business, (iii) discharged or satisfied any lien or incurred
or paid any obligation or liability (absolute or contingent) other than current
liabilities shown on its balance sheet as of August 31, 1997 referred to in
Section 2.9 hereof and current liabilities incurred since that date in the
ordinary course of business, (iv) declared or made any payment or distribution
to stockholders or purchased or redeemed any shares of its capital stock or
other securities or interests, (v) mortgaged, pledged or subjected to lien any
of its assets, tangible or intangible, other than liens of current real property
taxes not yet due and payable, (vi) sold, assigned or transferred any of its
tangible assets, except in the
3.
ordinary course of business, or canceled any debts or claims, (vii) sold,
assigned or transferred any patents, trademarks, trade names, copyrights, trade
secrets or other intangible assets, (viii) made any changes in officer
compensation, or (ix) entered into any transaction except in the ordinary course
of business."
"SECTION 2.12 Title to Properties. The Company has good and marketable
-------------------
title to all of its owned properties and assets, free and clear of all
mortgages, pledges, security interests, liens, charges and other encumbrances,
except for Permitted Encumbrances (as defined below). As of the Closing and
after giving effect to the transactions contemplated hereby, the Company will
have good and marketable title to all its properties and assets free and clear
of mortgages, pledges, security interests, liens, charges and other
encumbrances, except under for Permitted Encumbrances. As used herein,
"Permitted Encumbrances" means any mortgages, pledges, security interests,
liens, charges and other encumbrances (i) as described in Schedule II hereto,
(ii) liens for current taxes, assessments and other governmental charges not
overdue, (iii) mechanic's, materialmen's and similar liens which may have arisen
in the ordinary course of business and which, in the aggregate, would not be
material to the financial condition of the Company, (iv) security interests
securing indebtedness not in default for the purchase price of or lease rental
payments on property purchased or leased under capital lease arrangements in the
ordinary course of business, and (v) minor imperfections of title, if any, not
material in amount and not materially detracting from the value or impairing the
use of the property subject thereto or impairing the operations or proposed
operations of the Company. The Company is in compliance with all of its leases
and, to its knowledge, holds a valid leasehold interest in all of its properties
free and clear of all liens, charges and other encumbrances."
"SECTION 2.13 Taxes. The Company has timely filed all tax returns
-----
(federal, state and local) required to be filed by it. All taxes shown to be
due and payable on such returns, any assessments imposed, and to the Company's
knowledge all other taxes due and payable by the Company on or before the
Closing have been paid or will be paid prior to the time they become delinquent.
The Company has not been advised (i) that any of its returns, federal, state or
other, have been or are being audited as of the date hereof, or (ii) of any
deficiency in assessment or proposed judgment to its federal, state or other
taxes. The Company has no knowledge of any liability of any tax to be imposed
upon its properties or assets as of the date of this Agreement that is not
adequately provided for."
"SECTION 2.15 Compensation Arrangements. Except as set forth in Schedule
-------------------------
II hereto, (i) the Company is not a party to any employment or deferred
compensation agreements that require payments by the Company to any individual
in excess of $100,000, or in the aggregate, in excess of $500,000, in each case,
(ii) the Company does not have any bonus, incentive or profit-sharing plans that
would require payments by the Company to any individual in an amount equal to or
exceeding $50,000 in any one year, and (iii) there are no existing material
arrangements or proposed material transactions between the Company and any
officer or director or holder of more than 5% of the capital stock of the
Company. Complete and correct copies of all written arrangements described in
the preceding sentence as in effect on the date hereof have been delivered to
Purchasers and shall be amended to the satisfaction of Purchasers prior to the
Closing."
4.
5. The following Sections 2.19 and 2.20 shall be added to read as follows:
"SECTION 2.19 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default of any provision of the Charter or By-laws or of any
instrument, judgment, order, writ, decree, or contract to which it is a party or
by which it is bound or, to its knowledge, of any provision of federal or state
statute, rule or regulation, license, or permit applicable to the Company which
would have a material adverse effect on the Company. The Company does not have
any knowledge of any termination or material breach or anticipated termination
or material breach by the other parties to any material contract or commitment
to which it is a party or to which any of its assets is subject. To the
Company's knowledge, there are no warranty claims or other uninsured claims
against the Company under completed contracts which might involve a material
monetary liability which is not reserved against in the Financial Statements."
"SECTION 2.20 Disclosure/Business Plan. The Company has fully provided
------------------------
each Investor with all the information which such Investor has requested for
deciding whether to purchase the Series A Preferred Stock sold hereunder and all
information which the Company believes is reasonably necessary to enable such
Investor to make such decision. Neither this Agreement, the Registration Rights
Agreement, the Voting Agreement, the Consent and Amendment Agreement dated as of
February 28, 1997, nor any other statements or certificates made or delivered in
connection herewith, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading."
6. Section 4(a) shall be amended and restated to read as follows:
"(a) Opinion of Company's Counsel. Invesco shall have received from Cooley
----------------------------
Godward LLP, counsel for the Company, an opinion dated as of the date of the
Closing, in substantially the form attached hereto as Exhibit B."
7. New Sections 4(j) and 4(k) shall be added to read as follows:
"(j) Minimum Sale. With respect to the October 1997 Closing, the Company
------------
shall have received subscriptions to invest at least $3,000,000 in shares of the
Company's Series A Convertible Preferred Stock at such Closing.
"(k) Execution of Agreements; Filing of Certificate. The October Series A
----------------------------------------------
Documents shall be executed by the parties thereto and the Certificate of
Amendment to the Charter to be filed in connection with the October 1997 Closing
shall be filed with the Secretary of State of Delaware."
8. The first sentence of Section 5 shall be amended and restated to read in
its entirety as follows:
"The Company covenants and agrees with each of the Purchasers that, until
the completion of a firmly underwritten public offering of the Company's Common
Stock at a price of at least $2.50 per share and which raises at least
$5,000,000 of gross proceeds to the Company, for so long as any Series A
Convertible Preferred Stock is outstanding:"
5.
9. Section 6.1 shall be amended and restated to read in its entirety as
follows:
"SECTION 6.1 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of the Company contained in Section 2 hereof
shall survive the Closing, but shall expire upon the earlier of (i) two (2)
years from the Closing Date or (ii) three (3) months from the date that a
Purchaser learned of a breach of a representation, warranty or covenant of the
Company, except (a) with respect to and to the extent of any claim of which
written notice specifying, in reasonable detail, the nature and amount of the
claim has been given by a Purchaser to the Company prior to such expiration and
(b) the representations and warranties contained in Sections 2.2(a), 2.2(b) and
2.4 shall survive indefinitely.
10. Section 7.1 shall be amended and restated to read in its entirety as
follows:
"SECTION 7.1 Expenses. Each party hereto will pay its own expenses in
--------
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated; provided, however, that the Company will
reimburse the reasonable fees and expenses of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special
counsel to Invesco Global Health Sciences Fund, in an aggregate amount not to
exceed $7,500."
11. Section 7.5 shall be amended and restated to read in its entirety as
follows:
"SECTION 7.5 Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be delivered in person,
mailed by certified or registered mail, return receipt requested, or sent by
telecopier or telex, addressed as follows:
(a) if to the Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President, with a copy to ▇▇▇▇▇ C. T. Linfield, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and
(b) if to any Purchaser, at the address of such Purchaser set forth
in Schedule I,
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. Such notice shall be
effective upon receipt, if hand delivered, five days after deposit in a U.S.
post office box if mailed, or upon confirmation of receipt if sent by telecopier
or telex.
12. Schedule I and the signature pages to the Purchase Agreement and the
Amendment are hereby amended by appending thereto the subscriptions or
additional subscriptions (as the case may be) set forth in the Addendum to
Schedule I attached hereto and the Closing Signature Pages attached hereto,
respectively.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6.
In Witness Whereof, the parties have executed this Amendment to be
effective as of the 6th day of October, 1997.
Genomica Corporation, a Delaware
corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
_______________________________
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇, President
Purchasers:
Falcon Technology II Partners, L.P.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Partner
Arch Venture Fund III, L.P.
By: Arch Venture Partners, L.L.C.,
general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________________
Managing Member
Boulder Ventures, L.P.
By: BV Partners, L.L.C., general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
________________________________
▇▇▇▇ ▇▇▇▇▇▇▇, Manager
Pegasus Technology Ventures, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
Second Amendment to Series A Stock Purchase Agreement
The ▇▇▇▇▇▇▇▇▇ Family, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Manager
▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
Second Amendment to Series A Stock Purchase Agreement
Genomica Corporation
Series A Convertible Preferred Stock Purchase Agreement
Signature Page
Invesco Global Health Sciences Fund
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________
Title: Treasurer
____________________________
Invesco Global Health Sciences Fund
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________
Title: Secretary
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Second Amendment to Series A Stock Purchase Agreement
Series A Convertible Preferred Stock Purchase Agreement
Addendum to Schedule I - Schedule of Purchasers
Purchaser Number of Shares Price
--------- ---------------- ----------
Invesco Global Health Sciences Fund 2,490,075 $1,500,000
Falcon Technology Partners, L.P. 1,660,050 $1,000,000
Arch Venture Fund III, L.P. 1,245,038 $ 750,000
Boulder Ventures, L.P. 249,008 $ 150,000
Pegasus Technology Ventures, L.L.C. 41,501 $ 25,000
▇▇▇▇▇▇▇▇▇ Family, L.L.C. 83,003 $ 50,000
Addendum to Schedule I