ROSETTA INPHARMATICS, INC.
SERIES D PREFERRED STOCK
PURCHASE AGREEMENT
OCTOBER 1, 1999
TABLE OF CONTENTS
PAGE
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1. Definitions................................................................................................1
2. Authorization of Shares....................................................................................2
2.1 Authorization of Preferred Stock.................................................................2
2.2 Sale of Shares...................................................................................2
3. Closing Date; Delivery.....................................................................................2
3.1 Closing Date.....................................................................................2
3.2 Delivery.........................................................................................3
4. Right to Sell Additional Stock.............................................................................3
4.1 Put Right........................................................................................3
4.2 Exercise of Right................................................................................3
4.3 Expiration.......................................................................................3
4.4 Closing..........................................................................................4
4.5 Delivery.........................................................................................4
4.6 Purchase Documents...............................................................................4
5. Representations and Warranties of the Company..............................................................4
5.1 Organization and Standing........................................................................4
5.2 Corporate Power..................................................................................4
5.3 Subsidiaries.....................................................................................5
5.4 Capitalization...................................................................................5
5.5 Authorization....................................................................................6
5.6 Valid Issuance of Securities.....................................................................6
5.7 Title............................................................................................6
5.8 Compliance with Other Instruments................................................................6
5.9 Litigation.......................................................................................7
5.10 Employees; Proprietary Information..............................................................7
5.11 Registration Rights.............................................................................7
5.12 Governmental Consent............................................................................7
5.13 Patents and Trademarks..........................................................................8
5.14 Offering........................................................................................8
5.15 Financial Statements.............................................................................8
5.16 Changes..........................................................................................9
5.17 Material Contracts.............................................................................10
5.18 Insurance......................................................................................11
5.19 Finder's Fees..................................................................................11
5.20 Disclosure.....................................................................................11
5.21 No Conflict of Interest........................................................................11
5.22 Tax Returns, Payments and Elections............................................................12
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TABLE OF CONTENTS
(CONTINUED)
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5.23 Outstanding Indebtedness.......................................................................12
5.24 Year 2000......................................................................................12
6. Representations and Warranties of the Purchaser; Restrictions on Transfer.................................12
6.1 Representations and Warranties of the Purchaser.................................................12
6.2 Legends.........................................................................................14
6.3 Removal of Legends and Transfer Restrictions....................................................14
7. Conditions to Closing.....................................................................................14
7.1 Conditions to Purchaser's Obligations at Closing................................................15
7.2 Condition to Company's Obligations at Closing...................................................16
8. Covenants of the Company..................................................................................17
8.1 Financial Accounting Information................................................................17
8.2 Right of First Notification.....................................................................17
8.3 Observer Rights.................................................................................18
9. Confidentiality...........................................................................................18
10. Miscellaneous............................................................................................18
10.1 Waivers and Amendments.........................................................................18
10.2 Governing Law..................................................................................19
10.3 Survival of Warranties.........................................................................19
10.4 Successors and Assigns.........................................................................19
10.5 Entire Agreement...............................................................................19
10.6 Severability of this Agreement.................................................................19
10.7 Titles and Subtitles...........................................................................19
10.8 Delays or Omissions............................................................................19
10.9 Payment of Fees and Expenses...................................................................20
10.10 Notices.......................................................................................20
10.11 Counterparts..................................................................................20
EXHIBITS
Exhibit A Purchaser
Exhibit B Fifth Amended and Restated Certificate of Incorporation
Exhibit C Schedule of Exceptions
Exhibit D Fifth Amended Investors' Rights Agreement
Exhibit E Standstill Agreement
Exhibit F Opinion of Venture Law Group
Exhibit G Voting Agreement
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ROSETTA INPHARMATICS, INC.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
This Series D Preferred Stock Purchase Agreement (the "AGREEMENT") is
made as of the 1st day of October, 1999 by and between Rosetta Inpharmatics,
Inc., a Delaware corporation (the "COMPANY"), and Hewlett-Packard Company, a
Delaware corporation (the "PURCHASER") with the address set forth on EXHIBIT A.
RECITALS
A. The Purchaser and the Company have each determined that it is
in their respective best interests for the Purchaser to purchase from the
Company shares of the Company's Preferred Stock, which shall constitute an
investment in the Company of $12,000,000 for Series D Preferred Stock of the
Company (the "SERIES D PREFERRED").
B. On the Closing Date (as defined below), the Purchaser desires
to purchase and the Company desires to sell the Shares (as defined below) at the
Purchase Price (as defined below) (the "PURCHASE").
C. The Purchaser desires to grant the Company the right (the "PUT
RIGHT") to sell to the Purchaser an additional $10,000,000 of equity securities
on the terms set forth below.
NOW THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS The following terms, as used herein, have the
following meanings:
"ANCILLARY AGREEMENTS" means (i) the Gene Expression
Collaboration Agreement by and between the Company and the Purchaser of even
date herewith (the "COLLABORATION AGREEMENT"), (ii) the Fifth Amended Investors'
Rights Agreement by and among the Company, the Purchaser and a majority of the
Investors, as defined in the Fourth Amended and Restated Investors' Rights
Agreement, of even date herewith in the form attached hereto as EXHIBIT D (the
"INVESTORS' RIGHTS AGREEMENT"), (iii) the Standstill Agreement by and between
the Company and the Purchaser of even date herewith in the form attached hereto
as EXHIBIT E (the "STANDSTILL AGREEMENT") and (iv) the Voting Agreement by and
between the Company, the Purchaser and a majority of the Investors, as defined
in the Voting Agreement, of even date herewith in the form attached hereto as
EXHIBIT G.
"IPO" means an underwritten public offering by the Company of
shares of its Common Stock pursuant to a registration statement under the
Securities Act of 1933, as amended.
"PURCHASE PRICE" means $5.25 per share of Series D Preferred.
"PUT RIGHT PERIOD" means the period beginning on the Closing
and ending on the earlier of (i) the two-year anniversary of the Closing or (ii)
the closing of the IPO.
"PUT RIGHT PURCHASE PRICE" means (i) $5.75 per share, if the
Put Right is exercised prior to a Qualifying Equity Financing and prior to the
IPO, (ii) the purchase price paid by investors in a Qualifying Equity Financing,
if the Put Right is exercised concurrent with or after a Qualifying Equity
Financing (but before the IPO) or (iii) the price per share to the public in the
IPO, if the Put Right is exercised in connection with the IPO.
"PUT RIGHT SECURITY" means (i) Series D Preferred, if the Put
Right is exercised prior to a Qualifying Equity Financing and prior to the IPO,
(ii) the security purchased in a Qualifying Equity Financing, if the Put Right
is exercised concurrent with or after a Qualifying Equity Financing (but before
the IPO) or (iii) Common Stock, if the Put Right is exercised in connection with
the IPO.
"QUALIFYING EQUITY FINANCING" means an equity investment in
the Company (subsequent to the Closing) by one or more reputable institutional
or venture capital investors which results in gross proceeds to the Company of
at least $3,000,000 (excluding the proceeds from the Put Right).
"SECURITIES" means the Shares and the Common Stock issuable
upon conversion of the Shares (the "CONVERSION STOCK").
"SHARES" means 2,285,714 shares of Series D Preferred.
2. AUTHORIZATION OF SHARES
2.1 AUTHORIZATION OF SHARES. On or before the Closing, the
Company will have authorized the issuance and sale of the Shares and the Series
D Preferred will have the rights provided for in the Company's Fifth Amended and
Restated Certificate of Incorporation in the form attached hereto as EXHIBIT B
(the "RESTATED CERTIFICATE").
2.2 SALE OF SHARES. Subject to the terms and conditions of
this Agreement, at the Closing, the Purchaser agrees to purchase and the Company
agrees to sell and issue to the Purchaser, the Shares at an aggregate purchase
price of $12,000,000.
3. CLOSING DATE; DELIVERY
3.1 CLOSING DATE. The closing for the purchase and sale of the
Shares hereunder (the "CLOSING") will take place at 10:00 a.m. on October 1,
1999 (the "CLOSING DATE") at the offices of Venture Law Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other time and place as the Company
and the Purchaser shall agree upon.
3.2 DELIVERY. At the Closing, the Company will deliver to the
Purchaser a certificate registered in the Purchaser's name representing the
Series D Preferred to be purchased by the Purchaser at the Closing. At the
Closing, the Purchaser will pay the purchase price
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therefor, by check or wire transfer, at the option of the Purchaser, to the
Company's bank account.
4. RIGHT TO SELL ADDITIONAL STOCK.
4.1 PUT RIGHT. Subject to the terms and conditions hereof,
during the Put Right Period, the Company shall have the irrevocable (except as
set forth below in Section 4.3) and unconditional right to sell (by delivery of
Sale Notice (as defined below) to the Purchaser during the Put Right Period),
and the Purchaser shall have the irrevocable and unconditional obligation to
buy, Put Right Securities having an aggregate Put Right Purchase Price not to
exceed $10,000,000 (the "PUT RIGHT SHARES").
4.2 EXERCISE OF RIGHT. The Company shall give the Purchaser
written notice of the exercise of the Put Right (the "SALE NOTICE") specifying
the number of Put Right Shares to be purchased and the time and place of the
closing, which shall be 30 calendar days after the date of the Sale Notice (or
such earlier time as is mutually agreed in writing); PROVIDED, HOWEVER, that if
the Put Right is exercised in connection with the Company's IPO the closing
shall take place concurrently with the closing of the Company's IPO, which shall
not take place earlier than 30 calendar days after the date of the Sale Notice
unless mutually agreed in writing; and PROVIDED, FURTHER, the exercise of the
Put Right and the sale and issuance of shares pursuant thereto shall be
structured in such a way as to comply with federal and state securities laws and
the directives of the Securities and Exchange Commission.
4.3 EXPIRATION. The Company may give the Purchaser only one
Sale Notice (subject to the provisions set forth below), and the Put Right shall
expire if the Sale Notice has not been delivered by the Company to the Purchaser
prior to the expiration of the Put Right Period; PROVIDED, HOWEVER, if the Put
Right is exercised, and the Sale Notice provided by the Company, in connection
with the IPO or a Qualifying Equity Financing, and the IPO or the Qualifying
Equity Financing does not close for any reason whatsoever, the Company shall
retain the Put Right as if such Sale Notice had not been provided; PROVIDED,
FURTHER, if by performance of its obligations in connection with the exercise of
the Put Right by the Company, Purchaser would exceed the Threshold Percentage
(as defined in the Standstill Agreement) of Actual Voting Power (as defined in
the Standstill Agreement), then (i) the Put Right shall be deemed to have been
exercised for only such number of shares as shall cause Purchaser's Actual
Voting Power to equal the Threshold Percentage and the number of Put Right
Shares that the Company may require the Purchaser to purchase pursuant to the
exercise of such Put Right shall be reduced accordingly and (ii) the Company
shall retain the right to exercise, and the Purchaser shall remain obligated to
purchase (upon further exercise of the Put Right by the Company), the balance of
the Put Right during the remainder of the Put Right Period (the "RE-EXERCISE
RIGHT"). Notwithstanding the foregoing, the Company shall be entitled to
exercise the Re-exercise Right no more than three times (excluding the initial
exercise of the Put Right) and each exercise of the Re-exercise Right shall be
in the amount of at least $1,000,000, unless the Put Right Purchase Price
associated with all remaining Put Right Shares is less than $1,000,000 in which
case the Company shall be entitled to exercise the Re-Exercise Right
notwithstanding the foregoing.
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4.4 CLOSING. The closing of the purchase and sale of the Put
Right Shares (the "PUT RIGHT CLOSING") will take place at 10:00 a.m. on the date
specified in the Sale Notice (the "PUT RIGHT CLOSING DATE") at the offices of
Venture Law Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such
other time and place as the Company and the Purchaser shall agree upon.
4.5 DELIVERY. At the Put Right Closing, the Company will
deliver to the Purchaser a certificate registered in the Purchaser's name
representing the Put Right Shares to be purchased by the Purchaser at the Put
Right Closing. At the Put Right Closing, the Purchaser will pay the purchase
price therefor, by check or wire transfer, at the option of the Purchaser, to
the Company's bank account.
4.6 PURCHASE DOCUMENTS. At the Put Right Closing, the Company
and the Purchaser will enter into a stock purchase agreement and such ancillary
agreements as necessary on substantially the same terms as those contained in
this Agreement and the Ancillary Agreements (except the Collaboration Agreement
and the Standstill Agreement).
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set
forth on the Schedule of Exceptions attached hereto as EXHIBIT C, the Company
hereby represents and warrants to the Purchaser as follows:
5.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized and validly existing under, and by virtue of, the laws of
Delaware and is in good standing under such laws. The Company has the requisite
corporate power to own and operate its properties and assets, and to carry on
its business as presently conducted and as proposed to be conducted. The Company
is duly qualified to transact business and is validly in existence in the State
of Washington and is in good standing in each other jurisdiction in which the
failure to qualify would have a material adverse effect on its business or
properties. True and accurate copies of the Company's Certificate of
Incorporation and Bylaws, each as amended and in effect at the Closing, have
been delivered to the Purchaser.
5.2 CORPORATE POWER. The Company has and will have as of the
Closing Date all requisite legal and corporate power to execute and deliver this
Agreement and the Ancillary Agreements of even date herewith, to sell and issue
the Series D Preferred hereunder, to issue the Conversion Stock and to carry out
and perform its obligations under the terms of this Agreement and the Ancillary
Agreements, provided, however, that the Company's ability to perform the
indemnification provisions of the Investors' Rights Agreement may be limited by
public policy.
5.3 SUBSIDIARIES. The Company owns 100% of the outstanding
capital stock of Acacia Biosciences, Inc., a Delaware corporation ("ACACIA"),
and except for Acacia, the Company has no subsidiaries or affiliated companies
and does not otherwise own or control, directly or indirectly, or own any
securities of, any other corporation, association or business entity.
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5.4 CAPITALIZATION. The authorized capital stock of the
Company consists, or immediately prior to the Closing will consist, of:
(a) PREFERRED STOCK. 18,000,000 shares of Preferred
Stock, 6,225,000 shares of which have been designated Series A Preferred Stock
(the "SERIES A PREFERRED"), of which 4,462,500 shares are issued and outstanding
immediately prior to the Closing, 1,600,000 shares of Series B Preferred Stock
(the "SERIES B PREFERRED"), of which 1,387,298 shares are issued and outstanding
immediately prior to the Closing, 2,750,000 shares of Series C Preferred Stock
(the "SERIES C PREFERRED"), 2,019,452 of which are issued and outstanding
immediately prior to the Closing, 2,285,714 shares of which have been designated
Series D Preferred Stock (the "SERIES D PREFERRED"), none of which are issued as
outstanding immediately prior to the Closing, and 5,139,286 shares of
undesignated Preferred Stock. The rights, privileges and preferences of the
Preferred Stock are as stated in the Restated Certificate.
(b) COMMON STOCK. 36,000,000 shares of Common Stock,
5,075,044 shares of which are issued and outstanding, as of September 27, 1999.
The Company has reserved 6,225,000 shares of Common Stock for issuance upon
conversion of the Series A Preferred, 1,600,000 shares of Common Stock for
issuance upon conversion of the Series B Preferred and 2,750,000 shares of
Common Stock for issuance upon conversion of the Series C Preferred and
2,285,714 shares of Common Stock for issuance upon conversion of the Series D
Preferred. An additional 3,107,825 shares are reserved for issuance pursuant to
the Company's 1997 Stock Plan (the "PLAN") to Employees and Consultants (as
defined in the Plan), of which 324,131 shares have been issued pursuant to
option exercises, and 2,227,636 shares are subject to outstanding, unexercised
options, as of September 27, 1999.
(c) WARRANTS. Immediately prior to the Closing, there
were issued and outstanding warrants to purchase up to an aggregate of (a)
891,636 shares of Common Stock (the "COMMON STOCK WARRANTS"), (b) 254,823 shares
of Series A Preferred (the "SERIES A WARRANTS"), (c) 134,596 shares of Series B
Preferred (the "SERIES B WARRANTS") and (d) 54,949 shares of Series C Preferred
(the "SERIES C WARRANTS") (the Series A Warrants, the Series B Warrants, the
Series C Warrants and the Common Stock Warrants, collectively, the "ROSETTA
WARRANTS").
(d) All of the issued and outstanding shares of
Common Stock and Preferred Stock have been duly authorized and validly issued,
are fully paid and nonassessable and have been issued in compliance with
applicable federal and state securities laws. Except for (i) conversion
privileges of the Preferred Stock, (ii) the outstanding options issued pursuant
to the Plan and (iii) the Rosetta Warrants, and except as set forth in the
Investors' Rights Agreement, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, for or relating to the
purchase or acquisition from the Company of any shares of its capital stock. The
Company is not aware of any voting agreements among its stockholders.
5.5 AUTHORIZATION. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Ancillary
Agreements by the Company, the authorization, sale,
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issuance and delivery of the Securities, and the performance of the Company's
obligations hereunder and thereunder has been taken or will be taken prior to
the Closing. The Agreement and the Ancillary Agreements, when executed and
delivered by the Company, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject to: (i)
judicial principles respecting election of remedies or limiting the availability
of specific performance, injunctive relief, and other equitable remedies; (ii)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors' rights; and
(iii) limitations on the enforceability of the indemnification provisions of the
Investor Rights Agreement.
5.6 VALID ISSUANCE OF SECURITIES. The Series D Preferred that
is being issued to the Purchaser hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly issued, fully paid and nonassessable and free of liens,
encumbrances and restrictions on transfer other than restrictions on transfer
under this Agreement, the Investors' Rights Agreement and applicable state and
federal securities laws. Based in part upon the representations of the Purchaser
in this Agreement and subject to the provisions of Section 5.12 below, the
Series D Preferred will be issued in compliance with all applicable federal and
state securities laws. The Conversion Stock has been duly and validly reserved
for issuance, and upon issuance in accordance with the terms of the Restated
Certificate, shall be duly and validly issued, fully paid and nonassessable and
free of liens, encumbrances and restrictions on transfer other than restrictions
on transfer under this Agreement, the Investors' Rights Agreement, the Company's
Bylaws and applicable federal and state securities laws and will be issued in
compliance with all applicable federal and state securities laws. The sale of
the Series D Preferred and the subsequent conversion of the Series D Preferred
into Conversion Stock are not and will not be subject to any preemptive rights
or rights of first refusal.
5.7 TITLE. The Company and its subsidiary have good and
marketable title to its properties and assets, and has good title to all its
leasehold interests, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) the lien of current taxes not yet due and
payable and (b) such encumbrances and liens which arise in the ordinary course
of business and do not materially impair the Company's or its subsidiary's
ownership or use of such property or assets.
5.8 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation of any term of its Restated Certificate or Bylaws or in any material
respect of any term or provision of any mortgage, indenture, contract,
agreement, instrument, judgment or decree and, to its knowledge, is not in
violation of any order, statute, rule or regulation applicable to the Company,
the violation of which would have a material adverse effect on the Company's
business or properties. The execution, delivery and performance of and
compliance with this Agreement, the Ancillary Agreements, and the transactions
contemplated hereby and thereby, and the issuance of the Series D Preferred and
the Conversion Stock, have not resulted and will not result in any such
violation, or be in conflict with, or constitute, with or without the passage of
time or giving of notice, a default under, require any consent or waiver under
any such provision (other than any
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consents or waivers that have been obtained) or result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company.
5.9 LITIGATION. There are no actions, suits, proceedings or
investigations pending against the Company, its subsidiary or any of their
respective properties before any court or governmental agency (nor, to the
Company's knowledge, is there any threat or basis therefor). The foregoing
includes, without limitation, actions, suits, proceedings or investigations
pending or threatened against the Company (or any basis therefor known to the
Company) that questions the validity of this Agreement, the Voting Agreement,
the Investors Rights Agreement or the Standstill Agreement or the right of the
Company to enter into any of them, or to consummate the transactions
contemplated hereby or thereby. Neither the Company nor its subsidiary is a
party to any order, writ, injunction, judgment, or decree of any court or
governmental agency or instrumentality. There is no action, suit, proceeding, or
investigation by the Company or its subsidiary currently pending or that the
Company or its subsidiary presently intends to initiate.
5.10 EMPLOYEES; PROPRIETARY INFORMATION. To the Company's
knowledge after due inquiry, no employee or consultant of the Company or its
subsidiary is in violation of any term of any employment agreement, patent
disclosure agreement, information or technique allegedly proprietary to any
former employer or any other party, or any other contract or agreement relating
to the relationship of such employee with the Company or any other party because
of the nature of the business conducted or to be conducted by the Company. Each
officer, employee, or consultant of the Company has signed a proprietary
information agreement, each of which remains in full force and effect as of the
date hereof.
5.11 REGISTRATION RIGHTS. Except as set forth in the
Investors' Rights Agreement, the Company is not under any obligation to register
any of its presently outstanding securities or any of its securities which may
hereafter be issued.
5.12 GOVERNMENTAL CONSENT. No consent, approval or
authorization of, or designation, declaration or filing with, any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement and the Ancillary Agreements or the
offer, sale or issuance of the Series D Preferred and the Conversion Stock, or
the consummation of any other transaction contemplated hereby or thereby, except
(a) the filing of the Restated Certificate in the office of the Delaware
Secretary of State and (b) the qualification (or taking such action as may be
necessary to ensure an exemption from qualification, if available) of the offer
and sale of the Series D Preferred and the Conversion Stock under the Delaware
General Corporation Law, Regulation D of the Securities Act, and other
applicable state or federal securities laws, which filings and qualification, if
required, will be accomplished in a timely manner, as required by such laws.
5.13 PATENTS AND TRADEMARKS. To its knowledge, the Company and
its subsidiary have sufficient title, ownership or the right to use of all
trademarks, service marks, trade names, copyrights, trade secrets, information,
proprietary rights, processes, and patents in the United States, necessary for
its business as now conducted and as proposed to be conducted without any known
conflict with or infringement of the rights of others. Except as set forth on
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Schedule 5.17, there are no material outstanding options, licenses, or
agreements of any kind relating to the foregoing between the Company or its
subsidiary and any third party, nor is the Company or its subsidiary bound by or
a party to any material options, licenses or agreements of any kind with respect
to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information, proprietary rights and processes of any other
person or entity. The Company has not received any communications alleging that
the Company or its subsidiary has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business as proposed to be conducted. Neither the execution
nor delivery of this Agreement, nor the carrying on of the Company's business as
presently conducted by the employees of the Company, nor the conduct of the
Company's business as proposed, will, to the Company's knowledge after due
inquiry, conflict with or will result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees or consultants is now obligated.
5.14 OFFERING. Subject to the accuracy of the Purchaser's
representations in Section 5.4 hereof and in written responses to the Company's
inquiries, the offer, sale and issuance of the Series D Preferred to be issued
in conformity with the terms of this Agreement and the issuance of the
Conversion Stock, constitute transactions exempt from the registration
requirements of federal and state securities laws.
5.15 FINANCIAL STATEMENTS. Schedule 5.15 includes a true and
complete copy of the Company's and its subsidiary's audited financial statements
(balance sheet, statement of operations, statement of stockholders' equity and
statement of cash flows) as of December 31, 1998 and for the fiscal year ended
December 31, 1998 and their consolidated unaudited financial statements
(including balance sheet, income statement and statement of cash flows) as of
June 30, 1999 (collectively, the "ROSETTA FINANCIAL STATEMENTS"). The Rosetta
Financial Statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods indicated and with each other. The Rosetta Financial Statements fairly
present the financial condition and operating results of the Company and its
subsidiary as of the dates, and for the periods, indicated therein, subject to
normal year-end audit adjustments. The Company has maintained and will continue
to maintain a standard system of accounting established and administered in
accordance with GAAP. Neither the Company nor its subsidiary have any material
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (a) those set forth or adequately provided for in the
balance sheet as of June 30, 1999 (the "ROSETTA BALANCE SHEET"), (b) those
incurred in the ordinary course of business and not required to be set forth in
the Rosetta Balance Sheet under GAAP, (c) those incurred in the ordinary course
of business since the date of the Rosetta Balance Sheet and consistent with past
practice and (d) those incurred in connection with the execution of this
Agreement and the Ancillary Agreements.
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5.16 CHANGES . Since June 30, 1999, there has not been:
(a) any change in the assets, liabilities, financial
condition or operating results of the Company, except changes in the ordinary
course of business that have not been, in the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the business,
properties, prospects, or financial condition of the Company;
(c) any waiver or compromise by the Company of a
valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim,
or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and that is not material to the business,
properties, prospects or financial condition of the Company;
(e) any material change to a material contract or
agreement by which the Company or any of its assets is bound or subject;
(f) any material change in any compensation
arrangement or agreement with any employee of the Company;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets of the Company;
(h) any resignation or termination of employment of
any officer or key employee of the Company;
(i) any declaration, setting aside or payment or
other distribution in respect to any of the Company's capital stock, or any
direct or indirect redemption, purchase, or other acquisition of any of such
stock by the Company;
(j) to the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company, taken as
a whole; or
(k) any arrangement or commitment by the Company or
its subsidiary to do any of the things described in this Section 5.16.
5.17 MATERIAL CONTRACTS. Schedule 5.17 contains a list of all
contracts and agreements to which the Company and its subsidiary are a party and
that are material to the business, results of operations, or condition
(financial or otherwise), of the Company and its subsidiary taken as a whole
(such contracts, agreements and arrangements as are required to be set forth in
Schedule 5.17 being referred to herein collectively as the "ROSETTA MATERIAL
CONTRACTS") which shall be categorized in Schedule 5.17 as follows:
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(i) each contract and agreement (other than routine
purchase orders and pricing quotes in the ordinary course of business covering a
period of less than 1 year) for the purchase of equipment, inventory, spare
parts, other materials or personal property with any supplier or for the
furnishing of services to the Company or its subsidiary under the terms of which
the Company or its subsidiary: (A) paid or otherwise gave consideration of more
than Twenty-Five Thousand Dollars ($25,000) in the aggregate during the calendar
year ended December 31, 1998, (B) is likely to pay or otherwise give
consideration of more than Twenty-Five Thousand Dollars ($25,000) in the
aggregate during the calendar year ended December 31, 1999, (C) is likely to pay
or otherwise give consideration of more than Twenty-Five Thousand Dollars
($25,000) in the aggregate over the remaining term of such contract or (D)
cannot be canceled by the Company or its subsidiary without penalty or further
payment of less than Twenty-Five Thousand Dollars ($25,000);
(ii) all material agreements relating to the
Company's and its subsidiary's Intellectual Property or the Company's and its
subsidiary's employees;
(iii) all material management contracts with
independent contractors or consultants (or similar arrangements) to which the
Company or its subsidiary is a party;
(iv) all contracts and agreements (excluding
payroll, trade accounts payable or routine checking account overdraft agreements
involving ▇▇▇▇▇ cash amounts) under which the Company or its subsidiary have
created, incurred, assumed or guaranteed (or may create, incur, assume or
guarantee) indebtedness or under which the Company or its subsidiary have
imposed (or may impose) a security interest or lien on any of their respective
assets, whether tangible or intangible, to secure indebtedness;
(v) all contracts and agreements that limit
the ability of the Company or its subsidiary, to compete in any line of business
as currently conducted or with any person or in any geographic area or during
any period of time, or to solicit any customer or client; and
(vi) all other contracts or agreements which
are material to the Company or its subsidiary or the conduct of the Company's
business or its subsidiary's business as currently conducted.
5.18 INSURANCE. The Company has in full force and effect fire,
casualty and liability insurance policies, which to the best of the Company's
knowledge are in such amounts and with such coverage as are carried by companies
similar to the Company.
5.19 FINDER'S FEES. The Company represents and warrants that
it has retained no finder or broker in connection with the transactions
contemplated by this Agreement and hereby agrees to indemnify and to hold the
Purchaser harmless of and from any liability for commission or compensation in
the nature of a finder's fee to any broker or other person or firm (and the
costs and expense of defending against such liability or asserted liability) for
which the Company, or any of its employees or representatives, are responsible.
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5.20 DISCLOSURE. To the Company's knowledge, no statement by
the Company contained in this Agreement and the attached exhibits and any
written statement or certificate furnished or to be furnished to the Purchaser
pursuant to this Agreement or in connection with the transactions contemplated
hereby (when read together) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made, except that with respect to the financial projections and
forecasts delivered to the Purchaser, if any, the Company represents only that
such projection and forecasts were prepared in good faith and on what the
Company believes is a reasonable basis. The Company does not warrant that it
will achieve such projections. To its knowledge, the Company has provided the
Purchaser with all the information it has reasonably requested in connection
with its decision to purchase the Series D Preferred hereunder.
5.21 NO CONFLICT OF INTEREST. Neither the Company nor its
subsidiary are indebted, directly or indirectly, to any of their respective
officers, directors or common stockholders; none of said officers, directors or
common stockholders, or any members of their immediate families, are indebted to
the Company or its subsidiary, have entered into any transaction with the
Company or its subsidiary other than the purchase of common stock and consulting
agreements or have any direct or indirect ownership interest in any firm or
corporation with which the Company or its subsidiary are affiliated or with
which the Company or its subsidiary have a business relationship, or any firm or
corporation which competes with the Company or its subsidiary except that such
officers, directors and common stockholders of the Company and its subsidiary
may own less than two percent of the outstanding capital stock of publicly
traded companies which may compete with the Company. Neither the Company nor its
subsidiary are a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
5.22 TAX RETURNS, PAYMENTS AND ELECTIONS. The Company and its
subsidiary have filed all tax returns and reports as required by law. These
returns and reports are true and correct in all material respects. The Company
and its subsidiary have paid all taxes and other assessments due, except those
contested by it in good faith. The provision for taxes of the Company and its
subsidiary as shown in the Rosetta Balance Sheet is adequate for taxes due or
accrued as of the date thereof.
5.23 OUTSTANDING INDEBTEDNESS. The Company does not have any
indebtedness for borrowed money, or other liabilities (fixed or contingent),
which the Company has directly or indirectly created, incurred, assumed, or
guaranteed, or with respect to which the Company has otherwise become directly
or indirectly liable. The Company and its subsidiaries have no liability or
obligation, absolute or contingent, other than liabilities or obligations of
less than $100,000 or, in the aggregate, less than $250,000, incurred in the
ordinary course of business.
5.24 YEAR 2000. To the best of the Company's knowledge, all of
the Company's internal computer systems, including, without limitation, its
accounting systems, will record, store, process and calculate any information
dependent on or relating to dates in the same manner and with the same
functionality, data integrity and performance as the products record,
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store, process and calculate and present calendar dates on or before December
31, 1999, or calculate any information dependent on or relating to such dates.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER; RESTRICTIONS
ON TRANSFER
6.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby represents and warrants to the Company with respect to this
purchase of the Series D Preferred provided for herein as follows:
(a) All action on the part of the Purchaser for the
authorization, execution, delivery and performance by the Purchaser of this
Agreement has been taken. The Agreement and the Ancillary Agreements, when
executed and delivered by the Purchaser, will constitute valid and legally
binding obligations of the Purchaser, enforceable in accordance with their
terms, subject to: (i) judicial principles respecting election of remedies or
limiting the availability of specific performance, injunctive relief, and other
equitable remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect generally relating to or affecting
creditorS' rights; and (iii) limitations on the enforceability of the
indemnification provisions of the Investor Rights Agreement.
(b) The Purchaser is an accredited investor within
the meaning of Regulation D prescribed by the Securities and Exchange Commission
(the "COMMISSION") pursuant to the Securities Act.
(c) The Purchaser is acquiring the Securities for
investment for its own account and not with a view to, or for resale in
connection with, any distribution. The Purchaser understands that the Securities
to be purchased have not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
as expressed herein.
(d) The Purchaser acknowledges that the Securities
must be held indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. The Purchaser is aware
of the provisions of Rule 144 promulgated under the Securities Act which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, in case the Purchaser has held
the securities for less than two (2) years or is an affiliate of the Company,
among other things: the availability of certain current public information about
the Company, the resale occurring not less than one (1) year after the
securities were purchased from the Company or an affiliate of the Company, the
sale being through a "broker's transaction" or in transactions directly with a
"market maker," and the number of shares being sold during any three (3) month
period not exceeding specified limitations.
(e) The Purchaser understands that no public
market now exists for any of the securities issued by the Company and that there
can be no assurance that a public market will ever exist for the Securities.
-12-
(f) The Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs and the terms and
conditions of the offering of the Series D Preferred with the Company's
management.
(g) The Purchaser has not engaged any brokers,
finders, or agents and has not incurred, and will not incur, directly or
indirectly, any liability for brokerage or finder's fee or agents' commissions
or any similar charges in connection with this Agreement and the transactions
contemplated hereby and agrees to indemnify and to hold the Company harmless of
and from any liability for any commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which the
Purchaser, or any of its employees or representatives, is responsible.
(h) If the Purchaser is not a United States person
(as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), the Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Securities or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Securities, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the purchase, holding, redemption, sale, or transfer of the Securities. Such
Purchaser's subscription and payment for and continued beneficial ownership of
the Securities, will not violate any applicable securities or other laws of the
Purchaser's jurisdiction.
6.2 LEGENDS. Each certificate representing the Securities
shall be endorsed with the following legend (in addition to any legend required
by applicable state securities laws):
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED."
(b) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the shares represented
by the certificate so legended.
The Company will not register a transfer of Securities, unless the
conditions specified in the foregoing legend are satisfied, and the Company may
instruct its transfer agent not to register the transfer of any of the
Securities unless the conditions specified in the foregoing legend are
satisfied.
In addition to any other limitations on transferability imposed under
the Securities Act or applicable state securities laws, until such time as the
Common Shares are listed on a national
-13-
securities exchange or the Nasdaq National Market, the Purchaser agrees not to
offer for sale, sell, assign or otherwise dispose of all or any portion of the
Purchased Shares without the prior written consent of the Company, such consent
not to be unreasonably withheld. Notwithstanding the foregoing, the Purchaser
may, without the prior written consent of the Company but subject to the
Securities Act or applicable state securities laws, transfer all or any portion
of the Securities to (i) any entity that controls, is controlled by or is under
common control with the Purchaser or (ii) any entity which purchases all or
substantially all of the assets of the Purchaser or any entity which succeeds to
the assets and liabilities of the Purchaser as a result of any merger or
consolidation with or into the Purchaser; provided that in any such case the
Purchaser provides the Company with prior written notice of the transfer, giving
the name and particulars of the transfer, and the transferee agrees in writing
with the Company to be bound by and liable under the terms and conditions of
this Agreement, and any documents and agreements ancillary hereto, as fully as
if such transferee were a party to this Agreement.
6.3 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend
relating to the Securities Act endorsed on a stock certificate pursuant to
Section 6.2 of this Agreement and the stop transfer instructions with respect to
the Securities represented by such certificate shall be removed and the Company
shall issue a certificate without such legend to the holder of such Securities
if such Securities are registered under the Securities Act and a prospectus
meeting the requirements of Section 10 of the Securities Act is available or if
such holder provides to the Company an opinion of counsel for such holder of the
Securities reasonably satisfactory to the Company, or a no-action letter or
interpretive opinion of the staff of the Commission to the effect that a public
sale, transfer or assignment of such Securities may be made without registration
and without compliance with any restriction such as Rule 144.
7. CONDITIONS TO CLOSING
7.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING. The
Purchaser's obligation to purchase the Shares at the Closing is subject to the
fulfillment on or prior to the Closing Date of the following conditions, any of
which may be waived in writing in whole or in part by the Purchaser:
(a) The representations and warranties made by the
Company herein shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as it they had been
made on and as of the same date; and the Company shall have performed all
obligations and conditions herein required to be performed or observed by it on
or prior to the Closing Date.
(b) The Company shall have obtained all consents,
permits and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement which need to be obtained prior to
the Closing.
(c) The Company shall have filed the Restated
Certificate in the form attached as EXHIBIT B with the Delaware Secretary of
State.
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(d) At the Closing, the purchase of the Series D
Preferred by the Purchaser hereunder shall be legally permitted by all laws and
regulations to which the Purchaser or the Company are subject.
(e) The Company shall have delivered to the
Purchaser a certificate executed by the Chief Financing Officer of the Company,
dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a) and (b) of this Section 7.1.
(f) The Purchaser shall have received from Venture
Law Group, counsel to the Company, an opinion letter addressed to the Purchaser,
dated as of the Closing Date, substantially in the form attached hereto as
EXHIBIT F.
(g) The Company, the Purchaser and a majority of the
Investors (as defined in the Fourth Amended Investors' Rights Agreement) shall
have entered into the Investors' Rights Agreement substantially in the form
attached hereto as EXHIBIT D.
(h) A total of $12,000,000 of Series D Preferred
shall be subscribed for at the Closing.
(i) The Company and the Purchaser shall have
entered into the Collaboration Agreement.
(j) The Company and the Purchaser shall have
entered into the Standstill Agreement substantially in the form attached hereto
as EXHIBIT E.
(j) The Company, the Purchaser and a majority of the
Investors (as defined in the Voting Agreement) shall have entered into the
Voting Agreement substantially in the form attached hereto as EXHIBIT G.
(k) The Company's Bylaws shall provide for a Board
of Directors consisting of 12 members. As of the Closing Date, all necessary
corporate action shall have been taken such that, effective upon the Closing,
the Board of Directors shall consist of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Svenillson, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇. A representative designated by the Purchaser will
be appointed to the Board of Directors within a reasonable period of time
following the Closing.
7.2 CONDITION TO COMPANY'S OBLIGATIONS AT CLOSING. The
Company's obligation to sell and issue the Shares at the Closing is subject to
the fulfillment to the Company's satisfaction on or prior to the Closing Date of
the following conditions, any of which may be waived in writing in whole or in
part by the Company:
(a) The representations and warranties made by the
Purchaser herein shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of the same date, and the Purchaser
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shall have performed all obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date.
(b) The Company shall have obtained all consents,
permits and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement which need to be obtained prior to
the Closing Date.
(c) The Company shall have filed the Restated
Certificate in the form attached as EXHIBIT B with the Delaware Secretary of
State.
(d) At the Closing, the purchase of the Series D
Preferred by the Purchaser hereunder shall be legally permitted by all laws and
regulations to which the Purchaser or the Company are subject.
(e) The Company, the Purchaser and a majority of the
Investors (as defined in the Investors' Rights Agreement) shall have entered
into the Investors' Rights Agreement substantially in the form attached hereto
as EXHIBIT D.
(f) The Purchaser shall have delivered to the
Company a certificate executed by the Chief Financing Officer of the Purchaser,
dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in subsection (a) of this Section 7.2.
(g) A total of $12,000,000 of Series D Preferred
shall be subscribed for at the Closing.
(h) The Company and the Purchaser shall have
entered into the Collaboration Agreement.
(i) The Company and the Purchaser shall have entered
into the Standstill Agreement substantially in the form attached hereto as
EXHIBIT E.
(j) The Company, the Purchaser and a majority of the
Investors (as defined in the Voting Agreement) shall have entered into the
Voting Agreement substantially in the form attached hereto as EXHIBIT G.
8. COVENANTS OF THE COMPANY
8.1 FINANCIAL ACCOUNTING INFORMATION. Beginning on the date
hereof, to the extent reasonably requested by the Purchaser, the Company shall,
and shall use reasonable commercial efforts to cause its employees, independent
public accountants and other representatives to, provide information regarding
the Company to, and otherwise cooperate with, the Purchaser so as to enable the
Purchaser to prepare financial statements in accordance with accounting
principles generally accepted in the United States and to comply with its
reporting, requirements and other disclosure obligations under applicable United
States securities laws and regulations; PROVIDED, HOWEVER, that (i) the Company
reserves the right to exclude such information if the Company believes upon
advice of counsel that such exclusion is reasonably
-16-
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons; (ii) any such
information shall be deemed to be Confidential Information (as defined in the
Collaboration Agreement) of the Company; and (iii) Purchaser shall not use, and
hereby covenants not to use, such information in violation of applicable state
and federal securities laws.
8.2 RIGHT OF FIRST NOTIFICATION. Provided the Company has
exercised the Put Right and Purchaser has acquired on exercise of the Put Right
at least $5,000,000 of Put Right Shares, then beginning on the date the Put
Right has been so exercised and ending on the second anniversary of the closing
of the IPO:
(i) if the Company decides to commence discussions
with any third party acquiror (an "ACQUIROR") with respect to any transaction
which would result in a change in control of the Company, whether through a
merger, stock exchange or sale of all or substantially all of its assets (a
"TRANSACTION"), then the Company shall promptly provide the Purchaser with a
written notice of such decision and shall not enter into any definitive
agreement with respect to a Transaction with an Acquiror third party until at
least thirty (30) days after delivery of such notice (the "THIRTY DAY PERIOD"),
and during the Thirty Day Period the Company shall not enter into any agreement
with an Acquiror that either (A) precludes it from negotiating with the
Purchaser with respect to a Transaction or (B) provides for a break-up fee in
the event of such a negotiation with the Purchaser; and
(ii) if the Company receives a proposal from an
Acquiror with respect to a Transaction (an "ACQUISITION PROPOSAL"), the Company
shall promptly provide the Purchaser with a written notice of the receipt of
such proposal and, to the extent permissible under the terms of the Acquisition
Proposal, a copy of the Acquisition Proposal, and the Company shall not enter
into any definitive agreement with respect to a Transaction with an Acquiror
until the earlier of ten (10) days after delivery of such notice or the
expiration of the Thirty Day Period (if the Acquisition Proposal is received
during the Thirty Day Period) (such period of time being referred to as the
"EXCLUSIVE PERIOD"), and during the Exclusive Period the Company shall not enter
into any agreement with an Acquiror that either (A) precludes it from
negotiating with the Purchaser with respect to a Transaction or (B) provides for
a break-up fee in the event of such a negotiation with the Purchaser.
8.3 OBSERVER RIGHTS. Beginning on the date hereof and ending
on the earlier of (i) the second anniversary of the closing of the IPO, (ii) the
termination of the Collaboration Agreement or (iii) the termination of the
Standstill Agreement, if Purchaser is not represented on the Company's Board of
Directors, the Company shall invite a representative of Purchaser to attend all
meetings of its Board of Directors in a nonvoting observer capacity (the
"OBSERVER RIGHT") and, in this respect, shall give such representative timely
copies of all notices, minutes, consents, and other material that it provides to
its directors; PROVIDED, HOWEVER, that the Company reserves the right to exclude
such representative from access to any material or meeting or portion thereof if
the Company believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons. Such
representative may participate in discussions of
-17-
matters brought to the Board at the invitation of the Board. Purchaser agrees,
and will cause any representative of Purchaser to agree, to hold in confidence
and trust and not use or disclose any confidential information provided to or
learned by it in connection with its rights under this Agreement. The
confidentiality provisions hereof will survive any termination of this Observer
Right.
9. CONFIDENTIALITY. Neither the Company nor the Purchaser, nor
any of their officers, directors, employees, agents or representatives shall
issue any statement of communication to any third party, whether or not in
response to an inquiry, regarding the existence of subject matter of this
Agreement and the transactions contemplated hereby, without prior consent of the
other party, subject to the obligations of the parties to comply with applicable
securities laws and the rules and regulations of the New York Stock Exchange and
The Nasdaq National Market.
10. MISCELLANEOUS
10.1 WAIVERS AND AMENDMENTS. With the written consent of the
record holders of a majority of the Securities then outstanding, the obligation
of the Company and the rights of the holders of the Securities under this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), and with the same consent the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement. Neither this Agreement nor
any provisions hereof may be changed, waived, discharged or terminated orally,
but only by a signed statement in writing.
10.2 GOVERNING LAW. This Agreement shall be governed in all
aspects by the law of the State of Washington as such law is applied to
agreements between Washington residents entered into and to be performed
entirely within Washington.
10.3 SURVIVAL OF WARRANTIES. The representations, warranties,
covenants and agreements made herein shall survive any investigation made by the
Purchaser, the execution and delivery of this Agreement and the Closings of the
transactions contemplated hereby.
10.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto. If the Purchaser shall, on or about November 1, 1999,
transfer certain assets and personnel dealing with the subject matter of the
Collaboration Agreement to Agilent Technologies, Inc. ("AGILENT"), this
Agreement shall on such date be automatically transferred to and be binding upon
Agilent.
10.5 ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
-18-
10.6 SEVERABILITY OF THIS AGREEMENT. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
10.7 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
10.8 DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the Purchaser, upon
any breach or default of the Company under the Agreement, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character by the Purchaser of any breach or default
under this Agreement, or any waiver by the Purchaser of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in writing and that all remedies, either under
this Agreement, or by law or otherwise afforded to the Purchaser, shall be
cumulative and not alternative.
10.9 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Purchaser shall bear its own expenses incurred on its behalf with respect to
this Agreement and the transactions contemplated thereby. If any action at law
or in equity is necessary to enforce the terms of this Agreement or the Restated
Certificate, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
10.10 NOTICES. Any notice or report required in this Agreement
or permitted to be given shall be given in writing and shall be deemed effective
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax (a) if to Purchaser, at Purchaser's address as set forth on
Exhibit A, or at such other address as Purchaser shall have furnished to the
Company in writing, (b) if to any other holder of any Series D Preferred, at
such address as such holder shall have furnished the Company in writing, or,
until any such holder so furnishes an address to the Company, (c) if to the
Company, one copy should be sent to its address set forth below and addressed to
the attention of the Corporate Secretary, or at such other address as the
Company shall have furnished to the Purchaser and (d) if to the Company, one
copy should be sent to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Venture Law Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
10.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
COMPANY:
ROSETTA INPHARMATICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: -------------------------------
(print)
Title: ------------------------------
Address: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PURCHASER:
HEWLETT-PACKARD COMPANY
By: ---------------------------------
Name: -------------------------------
(print)
Title: ------------------------------
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO SERIES D PREFERRED
STOCK PURCHASE AGREEMENT]
EXHIBITS
EXHIBIT A - Purchaser
EXHIBIT B - Form of Amended and Restated Certificate of Incorporation
EXHIBIT C - Schedule of Exceptions to Representations and Warranties
EXHIBIT D - Form of Investors' Rights Agreement
EXHIBIT E - Form of Standstill Agreement
EXHIBIT F - Form of Legal Opinion of Venture Law Group
EXHIBIT G - Form of Voting Agreement
