EXECUTION COPY
EXHIBIT 10.64
OPTIMER PHARMACEUTICALS, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
CLOSING: APRIL ___, 2005
TABLE OF CONTENTS
PAGE
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1. AUTHORIZATION AND SALE OF PREFERRED SHARES............................1
1.1 AUTHORIZATION................................................1
1.2 SALE OF SERIES C PREFERRED STOCK.............................1
2. CLOSING; DELIVERY.....................................................1
2.1 CLOSING......................................................1
2.2 DELIVERY.....................................................1
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................2
3.1 ORGANIZATION AND STANDING; CERTIFICATE AND BY-LAWS...........2
3.2 CORPORATE POWER..............................................2
3.3 CAPITALIZATION...............................................2
3.4 SUBSIDIARIES.................................................3
3.5 AUTHORIZATION................................................3
3.6 OUTSTANDING INDEBTEDNESS.....................................3
3.7 TITLE TO PROPERTIES AND ASSETS...............................3
3.8 PATENTS, TRADEMARKS..........................................4
3.9 COMPLIANCE WITH OTHER INSTRUMENTS; NONE BURDENSOME...........4
3.10 LITIGATION...................................................4
3.11 TAX RETURNS..................................................5
3.12 EMPLOYEES; CONSULTANTS.......................................5
3.13 REGISTRATION RIGHTS..........................................5
3.14 GOVERNMENTAL CONSENTS........................................5
3.15 SECURITIES LAW EXEMPTION.....................................5
3.16 AGREEMENTS; ACTION...........................................6
3.17 BROKERS OR FINDERS; OTHER OFFERS.............................6
3.18 DISCLOSURE...................................................6
3.19 LICENSES.....................................................6
3.20 CERTAIN ACTIONS..............................................6
3.21 FINANCIAL STATEMENTS.........................................7
3.22 CHANGES......................................................7
3.23 REAL PROPERTY HOLDING COMPANY................................8
3.24 INVESTMENT COMPANY...........................................8
3.25 MINUTES......................................................8
3.26 HOLDING COMPANY STATUS.......................................8
3.27 ACCOUNTING...................................................8
3.28 SECTION 1202 COMPLIANCE......................................8
3.29 SECTION 83(B) ELECTIONS......................................9
3.30 MATERIAL LIABILITIES.........................................9
3.31 RELATED-PARTY TRANSACTIONS...................................9
3.32 STOCK CERTIFICATES..........................................10
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS......................10
4.1 AUTHORIZATION...............................................10
4.2 EXPERIENCED ACCREDITED INVESTOR.............................10
4.3 INVESTMENT..................................................10
4.4 RESTRICTED SECURITIES.......................................10
4.5 FURTHER LIMITATIONS ON DISPOSITION..........................11
4.6 NO PUBLIC MARKET............................................11
4.7 ACCESS TO DATA..............................................11
4.8 BROKERS OR FINDERS..........................................11
5. CONDITIONS OF INVESTORS' OBLIGATIONS AT THE CLOSING..................12
5.1 REPRESENTATIONS AND WARRANTIES TRUE.........................12
5.2 COVENANTS...................................................12
5.3 CONSENTS....................................................12
5.4 OPINION OF THE COMPANY'S COUNSEL............................12
5.5 COMPLIANCE CERTIFICATE......................................12
5.6 CERTIFICATE OF INCORPORATION................................12
5.7 ANCILLARY AGREEMENTS........................................12
5.8 PROCEEDINGS AND DOCUMENTS...................................12
5.9 RESERVATION OF CONVERSION STOCK.............................12
5.10 COMPLIANCE WITH LAWS........................................12
5.11 BOARD OF DIRECTORS..........................................13
5.12 APPROVAL BY THE BOARD OF DIRECTORS OF PAR PHARMACEUTICAL....13
5.13 MANAGEMENT RIGHTS LETTER....................................13
5.14 SECURING OF ADDITIONAL FUNDING..............................13
6. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING...................13
6.1 REPRESENTATIONS AND WARRANTIES TRUE.........................13
6.2 CONSENTS....................................................13
6.3 CERTIFICATE OF INCORPORATION................................13
6.4 ANCILLARY AGREEMENTS........................................13
6.5 COMPLIANCE WITH ALL LAWS....................................13
7. MISCELLANEOUS........................................................14
7.1 GOVERNING LAW...............................................14
7.2 SURVIVAL....................................................14
7.3 FINDER'S FEE................................................14
7.4 SUCCESSORS AND ASSIGNS......................................14
7.5 ENTIRE AGREEMENT............................................14
7.6 SEVERABILITY................................................14
7.7 AMENDMENT AND WAIVER........................................14
7.8 DELAYS OR OMISSIONS.........................................15
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TABLE OF CONTENTS
(CONTINUED)
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7.9 NOTICES.....................................................15
7.10 EXPENSES....................................................15
7.11 TITLES AND SUBTITLES........................................15
7.12 COUNTERPARTS................................................15
7.13 INDEMNIFICATION.............................................15
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EXHIBITS
Exhibit A Schedule of Investors
Exhibit B Amended and Restated Certificate of Incorporation
Exhibit C Amended and Restated Investors' Rights Agreement
Exhibit D Amended and Restated Co-Sale Agreement
Exhibit E Amended and Restated Voting Agreement
Exhibit F Schedule of Exceptions
Exhibit G Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
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OPTIMER PHARMACEUTICALS, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
This Series C Preferred Stock Purchase Agreement (the "AGREEMENT") is made
as of April ___, 2005 by and among Optimer Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), and the investors listed on the Schedule of
Investors attached as EXHIBIT A (the "INVESTORS").
1. AUTHORIZATION AND SALE OF PREFERRED SHARES.
1.1 AUTHORIZATION. The Company has authorized (a) the issuance and
sale pursuant to this Agreement of up to an aggregate of 3,333,333 shares of its
Series C Preferred Stock (the "SHARES") having the rights, restrictions,
privileges and preferences set forth in the Company's Restated Certificate of
Incorporation attached as EXHIBIT B (the "RESTATED CERTIFICATE"); and (b) the
reservation of shares of Common Stock for issuance upon conversion of the Shares
(the "CONVERSION STOCK"). The Company shall adopt and file the Restated
Certificate with the Secretary of State of the State of Delaware on or before
the Closing (as defined below).
1.2 SALE OF SERIES C PREFERRED STOCK. Subject to the terms and
conditions hereof, the Company will issue and sell to the Investors, and each
Investor will purchase from the Company, severally and not jointly, the total
number of shares of Series C Preferred Stock specified opposite such Investor's
name on the Schedule of Investors for the purchase price of $3.60 per share at
the Closing (as defined hereafter). The Company's agreement with each Investor
is a separate agreement, and the issuance of the Shares to each Investor is a
separate sale and issuance.
2. CLOSING; DELIVERY.
2.1 CLOSING. The sale, purchase and issuance of the Shares under this
Agreement shall take place at one closing (the "CLOSING"). The Closing shall be
held at 3 p.m. on April ___, 2005 (the "CLOSING DATE"), at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other time and place as the Company and Investors representing
a majority of the Shares to be sold in the Closing may agree.
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company shall duly execute and deliver to each Investor a
certificate, in due and proper form, representing the Shares purchased by the
Investor from the Company against payment of the purchase price therefore by
check, wire transfer of immediately available funds, or cancellation of
indebtedness. Each Investor shall also enter into (i) that certain Amended and
Restated Investors' Rights Agreement dated as of the date hereof (the
"INVESTORS' RIGHTS AGREEMENT"), by and among the Company and the Investors, the
form of which is attached hereto as EXHIBIT C, (ii) that certain Amended and
Restated Co-Sale Agreement date as of the date hereof (the "CO-SALE AGREEMENT"),
by and among the Company, the Investors and the Founders (as defined in such
agreement), the form of which is attached hereto as EXHIBIT D, and (iii) that
certain Amended and Restated Voting Agreement dated as of the date hereof (the
"VOTING Agreement"), by and among the Company, the Investors, and the Founders
(as defined in the Voting Agreement), the form of which is attached hereto as
EXHIBIT E. The Investors' Rights Agreement, Co-Sale Agreement, and Voting
Agreement are collectively referred to as the "ANCILLARY AGREEMENTS".
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as otherwise set
forth on the Schedule of Exceptions attached hereto as Exhibit F, the Company
represents and warrants to the Investors as of the Closing as follows:
3.1 ORGANIZATION AND STANDING; CERTIFICATE AND BY-LAWS. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. The Company has all requisite corporate power and
authority 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
qualified to do business as a foreign corporation in the State of California.
The Company is not so qualified in any other jurisdiction and the failure to be
so qualified will not have a material adverse effect on the Company's business
as now conducted or as proposed to be conducted. The Company has furnished the
Investors with copies of its Certificate of Incorporation and Bylaws. Said
copies are true, correct and complete and contain all amendments through the
Closing Date.
3.2 CORPORATE POWER. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, to sell and issue the Shares
hereunder, to issue the Conversion Stock, and to carry out and perform its
obligations under the terms of this Agreement and the Ancillary Agreements.
3.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
55,000,000 shares of Common Stock, $0.001 par value, and 31,000,000 shares of
Preferred Stock, $0.001 par value, of which (i) 5,000,000 shares have been
designated Series A Preferred Stock, (ii) 14,000,000 shares have been designated
Series B Preferred Stock, (iii) 3,500,000 shares have been designated Series C
Preferred Stock, and (iv) 8,500,000 shares have been designated Series D
Preferred Stock. Immediately prior to the Closing, 3,400,000 shares of Series A
Preferred Stock, 8,954,431 shares of Series B Preferred Stock, no shares of
Series C Preferred Stock, and no shares of Series D Preferred Stock are issued
and outstanding.
(b) Immediately prior to the Closing, 5,082,711 shares of Common
Stock are issued and outstanding. All issued and outstanding shares of the
Company's capital stock are duly authorized and validly issued, fully paid and
nonassessable, and were issued in compliance with applicable federal and state
securities laws.
(c) Except for (i) the conversion privileges of the Preferred
Stock, (ii) 4,000,000 shares of Common Stock reserved for issuance pursuant to
the Company's 1998 Stock Plan, as amended, as of the Closing, and (iii) the
rights provided in the Investors' Rights Agreement, there are no other
outstanding shares of capital stock or outstanding rights of first refusal,
preemptive rights or other rights, options, warrants, conversion rights, or
other agreements either directly or indirectly for the purchase or acquisition
from the Company or for the voting of any shares of its capital stock. The
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rights, privileges and preferences of each series of Preferred Stock are set
forth in the Restated Certificate.
3.4 SUBSIDIARIES. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity.
3.5 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for (a) the authorization,
execution, delivery and performance by the Company of this Agreement and the
Ancillary Agreements, (b) the authorization, issuance, sale and delivery of the
Shares and the Conversion Stock, and (c) the performance of all of the Company's
obligations hereunder has been taken or will be taken prior to the Closing. This
Agreement and the Ancillary Agreements, when executed and delivered by the
Company, shall constitute valid and legally binding obligations of the Company
enforceable in accordance with their respective terms, except (i) as limited by
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, (ii) as limited by rules of law governing specific performance,
injunctive relief or other equitable remedies and by general principles of
equity, and (iii) to the extent the indemnification provisions contained in the
Investor Rights' Agreement may further be limited by applicable laws and
principles of public policy. The Shares, when issued in compliance with the
provisions of this Agreement, will be duly authorized and validly issued, fully
paid and nonassessable, will be issued in compliance with applicable federal and
state securities laws, and will have the rights, preferences and privileges
described in the Restated Certificate; and the Shares and the Conversion Stock
will be free of any liens or encumbrances, assuming the Investors take the
Shares and the Conversion Stock with no notice thereof, other than any liens or
encumbrances created by or imposed upon the Investors; PROVIDED, HOWEVER, that
the Shares and the Conversion Stock may be subject to restrictions on transfer
under applicable securities laws as set forth herein. The Shares are not subject
to any preemptive rights, rights of first refusal or similar rights.
3.6 OUTSTANDING INDEBTEDNESS. The Company has no indebtedness for
borrowed money which the Company has directly or indirectly created, incurred,
assumed or guaranteed, or with respect to which the Company has become directly
or indirectly liable. The Company has no liability or obligation, absolute or
contingent, other than liabilities or obligations of less than $25,000 each and
in the aggregate less than $50,000, under purchase orders, sales contracts, real
property leases, equipment leases or similar obligations, all incurred in the
ordinary course of business. For purposes of this Section 3.6, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company has reason to believe are affiliated therewith) shall be aggregated
for the purpose of meeting the aforementioned individual minimum dollar amounts.
3.7 TITLE TO PROPERTIES AND ASSETS. The Company has 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,
loan, encumbrance or charge, except (i) the lien of current taxes not yet due
and payable, and (ii) possible minor liens and encumbrances (of which the
Company has no knowledge) which do not in any case materially detract from the
value of the property subject thereto or materially impair the Company's
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operations, and which have not arisen otherwise than in the ordinary course of
business. With respect to property it leases, the Company is in compliance with
such leases in all material respects.
3.8 PATENTS, TRADEMARKS. To the Company's knowledge, the Company has
sufficient title and ownership of all patents, patent applications, licenses,
trademarks, service marks, trade names, inventions, franchises, copyrights,
trade secrets, information and other proprietary rights necessary for the
operation of its business as now conducted and as proposed to be conducted
(collectively the "INTELLECTUAL PROPERTY") with no known infringement of the
rights of others. There are no outstanding options, licenses, or agreements of
any kind related to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements with respect to the patents, patent
applications, licenses, trade marks, service marks, trade names, inventions,
franchises, copyrights, trade secrets, information, proprietary rights or
processes of any other person or entity. The Company has not received any
communications alleging that the Company has violated, or by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights, trade secrets or other proprietary rights of any
other person or entity. The Company, after reasonable inquiry, is not aware that
any of its employees or consultants is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of the employee's 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 operation of the Company's business by the employees or consultants of
the Company, nor the conduct of the Company's business as proposed, 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
of such employees or consultants is now obligated.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS; NONE BURDENSOME. The Company is
not in violation of any term of its Certificate of Incorporation or Bylaws or,
in any material respect, any contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree, order or any statute, rule or
regulation applicable to the Company. The execution, delivery, and performance
of and compliance with this Agreement, the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby, have not
resulted and will not result in any such violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any lien,
mortgage, pledge, encumbrance or charge upon any of the properties or assets of
the Company; and there is no such violation or default which materially or
adversely affects the Company's business or any of its properties or assets. The
Company is not a party to any contract, agreement or instrument or subject to
any judgment, order, injunction, rule or regulation which, in the opinion of the
Company, materially and adversely affects its business, operations, financial
condition or prospects.
3.10 LITIGATION. There are no actions, suits, proceedings or
investigations pending against the Company or any of its properties before any
court or governmental agency (nor, to the best of the Company's knowledge, is
there any reasonable basis therefor or threat thereof). The foregoing includes,
without limitation, actions pending or threatened (or any basis therefor known
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to the Company after reasonable inquiry) involving the prior employment of any
of the Company's employees or former employees or their obligations under any
agreements with prior employers. The Company is not a party or subject to the
provisions of 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 currently pending or that the Company intends to
initiate.
3.11 TAX RETURNS. The Company has filed or obtained extensions for all
federal, state and other tax returns which are required to be filed and has paid
all taxes which have become due and payable. The Company has not been advised
that any of its returns, federal, state or other, have been or are being audited
as of the date thereof.
3.12 EMPLOYEES; CONSULTANTS. To the Company's knowledge after due
inquiry, no employee or consultant of the Company is in violation of any term of
any employment or consulting contract, patent disclosure agreement, invention
assignment agreement, proprietary information agreement or other contract or
agreement relating to the relationship of such employee or consultant with the
Company or any other party because of the nature of the business conducted or to
be conducted by the Company. The Company does not have any employment or
consulting contracts, deferred compensation agreements or bonus, incentive or
profit sharing plans, either currently in effect or proposed, except the 1998
Stock Plan adopted by the Company's Board of Directors and shareholders. The
Company has no collective bargaining agreements with any of its employees and
there is no labor union organizing activity pending or threatened with respect
to the Company. All employees of the Company have signed a Proprietary
Information Agreement and all consultants of the Company have signed Consulting
Agreements in substantially the forms furnished to special counsel to the
Investors.
3.13 REGISTRATION RIGHTS. Except as provided in the Investors' Rights
Agreement, the Company is not under any contractual obligation to register any
of its presently outstanding securities or any of its securities which may
hereafter be issued.
3.14 GOVERNMENTAL CONSENTS. 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, the Ancillary Agreements or the offer, sale or
issuance of the Shares (and the Conversion Stock), or the consummation of any
other transaction contemplated hereby, except qualification or registration (or
taking such action as may be necessary to secure an exemption from qualification
or registration, if available) of the offer, sale and issuance of the Shares
(and the Conversion Stock) under applicable Blue Sky laws, which filings and
qualifications, if required, will be accomplished in a timely manner.
3.15 SECURITIES LAW EXEMPTION. Subject to the accuracy of the
Investors' representations in Section 4 of this Agreement, the offer, sale and
issuance of the Shares and the issuance of the Conversion Stock constitute
transactions exempt from the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended (the "ACT"), and have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws.
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3.16 AGREEMENTS; ACTION. Except for agreements explicitly contemplated
hereby, there are no agreements, understandings or proposed transactions between
the Company and any of its officers, employees, consultants, directors,
affiliates, or any affiliate thereof. The Company and, to the Company's
knowledge after having made due inquiry, its officers employees, consultants and
directors, have no interest (other than as holders of less than 1% of any class
of securities of a publicly-traded company), either directly or indirectly, in
any entity, including without limitation thereto, any corporation, partnership,
joint venture, proprietorship, firm, licensee, business or association (whether
as an employee, officer, director, shareholder, agent, independent contractor,
security holder, creditor, consultant or otherwise) that presently (i) provides
any services or designs, produces and/or sells any products or product lines, or
engages or plans to engage in any activity which is the same, similar to or
competitive with any activity or business in which the Company is now engaged or
plans to engage; (ii) is a supplier, customer, creditor, or has an existing
contractual relationship with any of its managing employees or consultants;
(iii) has any direct or indirect interest in any asset or property, real or
personal, tangible, or intangible, of the Company or any property, real or
personal, tangible or intangible, that is necessary or desirable for the conduct
of its current or presently proposed business.
(a) The Schedule of Exceptions sets forth a list of all (i)
contracts, indentures, agreements or licenses of any patent, copyright, or other
proprietary agreement to which the Company is a party and which relate to the
payment or receipt of money in excess of $25,000, (ii) all consulting,
employment and severance agreements, (iii) all distribution, reseller, joint
venture and corporate partnering agreements and (iv) all leases which relate to
the payment of money in excess of $50,000 (each a "MATERIAL CONTRACT").
3.17 BROKERS OR FINDERS; OTHER OFFERS. The Company has not incurred,
and will not incur, directly or indirectly, as a result of any action taken by
or on behalf of the Company, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement.
3.18 DISCLOSURE. Neither this Agreement or the Ancillary Agreements
nor any information in the Exhibits hereto or otherwise furnished to the
Investors taken as a whole contains any untrue statement of a material fact
regarding the Company or omits to state a material fact necessary in order to
make the statements contained herein and therein not misleading regarding the
Company.
3.19 LICENSES. The Company has all licenses and permits necessary to
the conduct of its business as currently being conducted (federal, state,
foreign and local), the failure to obtain which would have a material adverse
effect on the Company's business properties, and such licenses and permits are
in full force and effect.
3.20 CERTAIN ACTIONS. The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) made any loans or advances to any
person, other than loans in connection with employee relocations and ordinary
advances for travel expenses, (iii) sold, exchanged or otherwise disposed of any
of its assets or rights other than in the ordinary course of business or (iv)
redeemed or obligated itself to redeem any of its capital stock, other than
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repurchases of unvested shares of Common Stock from terminated employees and
consultants at a repurchase price equal to the original issue price for such
repurchased shares. (a) The Company is not a party to and is not bound by any
contract, agreement, or instrument, or subject to any restrictions under its
Certificate of Incorporation or Bylaws, which materially and adversely affects
its business as now conducted and as now proposed to be conducted.
3.21 FINANCIAL STATEMENTS. The Company has delivered to the Investors
the Company's unaudited financial statements as of December 31, 2004 ("FINANCIAL
STATEMENTS"). The Financial Statements, (i) are complete and correct in all
material respects, (ii) are in accordance with the Company's books and records,
(iii) fairly present its financial position as of the dates indicated and the
results of its operations for the periods indicated and (iv) have been prepared
in conformity with generally accepted accounting principles consistently
applied, except that unaudited Financial Statements do not include footnotes and
do not reflect normal year-end adjustments (which are not expected to be
material). Except as set forth in the Financial Statements, the Company has no
material liabilities or obligations, absolute or contingent, except those
incurred in the ordinary course of business since December 31, 2004, which have
not been in the aggregate materially adverse. Except as disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
3.22 CHANGES. Since December 31, 2004 there has not been:
(a) any waiver by the Company of a valuable right or of a
material debt owed to it;
(b) 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 which is not material to the assets, properties,
financial condition, operating results or business of the Company (as such
business is presently conducted and as it is now proposed to be conducted);
(c) any change or amendment to a material contract or arrangement
by which the Company or any of its assets or properties is bound or subject;
(d) any change in any compensation arrangement or agreement with
any executive officer;
(e) any change in the assets, liabilities, financial condition or
operations of the Company, except changes in the ordinary course of business
which have not been, either in any case or in the aggregate, materially adverse;
(f) any change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;
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(g) any declaration or payment of any dividend or other
distribution of assets of the Company or the adoption or consideration of any
plan or arrangement with respect thereto;
(h) any resignation or termination of employment of any key
employee of the Company (other than terminations of temporary employment during
university leaves of absence), or to the Company's knowledge any plans with
respect thereto;
(i) to the Company's knowledge, any other event or condition of
any character which might materially and adversely affect the assets,
properties, financial condition, operating results or business of the Company
(as such business is currently conducted and as it is proposed to be conducted);
or
(j) any material change in the Company's accounting or internal
control procedures and practices.
3.23 REAL PROPERTY HOLDING COMPANY. The Company is not and has not
been at any time a "United States real property holding corporation" as defined
in Section 897 of the Internal Revenue Code of 1986, as amended.
3.24 INVESTMENT COMPANY. The Company is not, and after the receipt of
the proceeds from the sale of the Shares hereunder will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
3.25 MINUTES. The minute books of the Company contain a complete
summary of all meetings of directors and shareholders since the time of
incorporation.
3.26 HOLDING COMPANY STATUS. The Company is not a "holding company,"
or a subsidiary or affiliate of a "holding company," or a "subsidiary company"
of a "holding company," or a "public utility," within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or a "public utility" within
the meaning of the Federal Power Act, as amended.
3.27 ACCOUNTING. The Company maintains and will continue to maintain a
system of accounting established and administered in accordance with generally
accepted accounting principles and has in place reasonable internal controls
which are adequate and appropriate for the Company.
3.28 SECTION 1202 COMPLIANCE. The Company is a "C" corporation for
federal income tax purposes, is an "eligible corporation" as defined in Section
1202(e)(4) of the Internal Revenue Code of 1986, as amended (the "Code") and is
engaged in a "qualified trade or business" as defined in Section 1202(e)(3) of
the Code.
(a) During the one-year period beginning on the date one year
before the Closing, the Company has not made one or more purchases of its stock
with an aggregate value (as of the time of the respective purchases) exceeding
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5% of the aggregate value of all of its stock as of the beginning of such
period.
(b) At all times during the period that began with the formation
of the Company and ends on the Closing, the aggregate gross assets of the
Company did not exceed $50,000,000. For purposes of this representation, (i) the
amount received by the Company from the sale of its stock as contemplated herein
shall be taken into account, (ii) "aggregate gross assets" shall mean the amount
of (A) cash, (B) the aggregate fair market value of all property contributed to
the Company (or other property with a basis determined in whole or part for
federal income tax purposes by reference to the adjusted basis of property so
contributed) as of the date of such contribution, and (C) the aggregate adjusted
basis for federal income tax purposes of other property held by the Company, and
(iii) the Company shall be deemed to own its ratable share of the assets of its
subsidiaries, if any.
(c) Ten percent or less of the total value of the Company's
assets as of the Closing consists of real property that is not used in the
Company's business.
(d) Ten percent or less of the total value of the Company's
assets (in excess of liabilities) as of the Closing consists of stock or
securities in other corporations that are not subsidiaries of the Company (other
than assets described in Section 1202(e)(6) of the Code).
3.29 SECTION 83(B) ELECTIONS. All elections notices permitted by
Section 83(b) of the Internal Revenue Code and any analogous provisions of
applicable state tax laws have been timely filed by all employees who have
purchased shares of the Company's Common Stock under agreements that provide for
the vesting of such shares.
3.30 MATERIAL LIABILITIES. The Company has no material liability or
obligation, absolute or contingent (individually or in the aggregate), except
(i) obligation and liabilities incurred after the date of incorporation in the
ordinary course of business that are not material, individually or in the
aggregate, and (ii) obligations under contracts made in the ordinary course of
business that would not be required to be reflected in financial statements
prepared in accordance with generally accepted accounting principles.
3.31 RELATED-PARTY TRANSACTIONS.
(a) No employee, officer, shareholder, director or affiliate of
the Company, or any member of his or her immediate family, or any affiliate of
any of the foregoing, is indebted to the Company. The Company is not indebted
(or committed to make loans or extend or guaranty credit) to any of the
foregoing, other than for (i) the payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of the Company, and/or
(iii) other standard employee benefits made generally available to all
employees.
(b) To the Company's knowledge, none of such persons is,
directly, or indirectly, interested in any material contract with the Company
(other than such contracts as relate to any such persons employment with the
Company or ownership of capital stock of the Company).
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(c) To the Company's knowledge, none of such persons has any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship.
(d) To the Company's knowledge, none of such persons has any
direct or indirect ownership interest in any firm or corporation that competes
with the Company, except that such persons may own stock in publicly traded
companies (not exceeding one percent of such company's outstanding capital
stock) that may compete with the Company.
3.32 STOCK CERTIFICATES. The certificates for the Shares to be
delivered to the Investors are in due and proper form, have been duly executed
and will be delivered by the Company within three (3) days of the Closing.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor, as to
such Investor only, hereby represents and warrants to the Company as follows:
4.1 AUTHORIZATION. This Agreement and the Ancillary Agreements, when
executed and delivered by such Investor, will constitute valid and legally
binding obligations of the Investor, enforceable in accordance with the terms of
each agreement, except (i) as limited by laws of general application relating to
bankruptcy, insolvency and the relief of debtors, (ii) as limited by rules of
law governing specific performance, injunctive relief or other equitable
remedies and by general principles of equity, and (iii) to the extent the
indemnification provisions contained in the Investor Rights' Agreement may
further be limited by applicable laws and principles of public policy.
4.2 EXPERIENCED ACCREDITED INVESTOR. Such Investor has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Such Investor is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Act, as presently in
effect.
4.3 INVESTMENT. Such Investor is acquiring the Shares and the
Conversion Stock for investment for its own account, not as a nominee or agent,
and not with the view to, or for resale in connection with, any distribution
thereof. The Investor understands that the Shares and the Conversion Stock have
not been, and will not be, registered under the Act by reason of a specific
exemption from the registration provisions of the Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Investor's representations as expressed herein.
4.4 RESTRICTED SECURITIES. The Investor understands that the Shares
and the Conversion Stock are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. In this connection, the Investor
represents that it is familiar with Rule 144 promulgated under the Act by the
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Securities and Exchange Commission, as presently in effect ("RULE 144"), and
understands the resale limitations imposed thereby and by the Act.
4.5 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Shares or the Conversion Stock unless
and until the transferee has agreed in writing for the benefit of the Company to
be bound by this Section 4 and the Ancillary Agreements, provided and to the
extent this Section and such agreements are then applicable, and:
(a) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) The Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition and (ii) if
reasonably requested by the Company, the Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by the Investor that is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his or her spouse or to
the siblings, lineal descendants or ancestors of such partner or his or her
spouse, if the transferee agrees in writing to be subject to the terms of this
Agreement and the Ancillary Agreements to the same extent as if he or she were
an original Investor hereunder.
4.6 NO PUBLIC MARKET. The Investor understands that no public market
now exists for any of the securities issued by the Company and that the Company
has made no assurances that a public market will ever exist for the Company's
securities.
4.7 ACCESS TO DATA. The Investor has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has also had an opportunity to ask questions of the Company's
officers, which questions were answered to its satisfaction.
4.8 BROKERS OR FINDERS. The Investor 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.
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5. CONDITIONS OF INVESTORS' OBLIGATIONS AT THE CLOSING. Each Investor's
obligation to purchase Series C Preferred Stock at the Closing under this
Agreement is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any of which may be waived in whole or in part by such
Investor:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by the Company in Section 3 hereof 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 said date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with.
5.3 CONSENTS. The Company shall have obtained all consents, permits
and waivers necessary to consummate the transactions contemplated by this
Agreement.
5.4 OPINION OF THE COMPANY'S COUNSEL. The Investors shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation
("WSGR"), counsel to the Company, an opinion letter addressed to the Investors
in the form attached as EXHIBIT G dated as of the Closing Date.
5.5 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Investors a certificate of the Company, executed by the Chief Executive Officer,
President or a Vice President of the Company and dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Sections 5.1, 5.2
and 5.3.
5.6 CERTIFICATE OF INCORPORATION. The Restated Certificate in
substantially the form attached as EXHIBIT B shall have been filed with the
Secretary of State of the State of Delaware.
5.7 ANCILLARY AGREEMENTS. The Ancillary Agreements shall have been
executed by the Company and the Investors.
5.8 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
and instruments incident to such transactions shall have been reasonably
approved by the Investors, and the Investors shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
5.9 RESERVATION OF CONVERSION STOCK. The shares of the Conversion
Stock issuable upon conversion of the Series C Preferred Stock shall have been
duly authorized and reserved for issuance upon such conversion.
5.10 COMPLIANCE WITH LAWS. The purchase of the Shares shall be legally
permitted by all laws and regulations to which the Investors or the Company are
subject.
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5.11 BOARD OF DIRECTORS. Immediately after the Closing the Board of
Directors shall consist of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and Chi ▇▇▇▇ ▇▇▇▇.
5.12 APPROVAL BY THE BOARD OF DIRECTORS OF PAR PHARMACEUTICAL. With
respect to any purchase of the Shares by Par Pharmaceutical, Inc., such purchase
shall be approved by the Board of Directors of Par Pharmaceutical, Inc.
5.13 MANAGEMENT RIGHTS LETTER. To the extent requested by Par
Pharmaceutical, a Management Rights Letter in a form reasonably acceptable to
Par Pharmaceutical shall have been executed by the Company and Par
Pharmaceutical.
5.14 SECURING OF ADDITIONAL FUNDING. The Company shall have secured
commitments from investors to purchase an aggregate amount of at least
$10,000,000 of the shares of the Company's Series D Preferred Stock (the "SERIES
D SHARES"), including warrants to purchase shares of the Company's Common Stock
(the "WARRANTS"), to be governed by a stock and warrant purchase agreement
similar to this Agreement and the Ancillary Agreements ("ADDITIONAL FUNDING
AGREEMENTS"). The initial closing of the purchase and sale of the Series D
Shares and the Warrants shall be consummated concurrently with the Closing
contemplated hereby.
6. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The Company's
obligation to sell and issue the Series C Preferred Stock 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 whole or in part by the Company
(unless the Company shall have contributed in whole or in part to the
nonoccurrence or nonfulfillment of such condition):
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by the Investors herein 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.
6.2 CONSENTS. 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.
6.3 CERTIFICATE OF INCORPORATION. The Company shall have filed the
Restated Certificate in substantially the form attached as EXHIBIT B with the
Secretary of State of the State of Delaware on or prior to the Closing Date.
6.4 ANCILLARY AGREEMENTS. The Ancillary Agreements shall have been
executed by the Company and the Investors.
6.5 COMPLIANCE WITH ALL LAWS. At the Closing, the purchase and
issuance of the Shares hereunder shall be legally permitted by all laws and
regulations to which the Investors or the Company are subject.
-13-
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents, made and to be performed entirely within the State of Delaware.
7.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by the Investors and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder as of the date of such certificate or instrument.
7.3 FINDER'S FEE. Except as set forth on Schedule 7.3 attached hereto,
each party represents, as to itself only, that it neither is nor will be
obligated for any finder's fee or commission in connection with this
transaction. The Investors (severally but not jointly) and the Company agree to
indemnify and hold harmless the other party from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Investors or the Company is responsible.
7.4 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.
7.5 ENTIRE AGREEMENT. This Agreement, the Exhibits, the Ancillary
Agreements and the other documents delivered pursuant to this Agreement or
contemplated hereby constitute the full and entire understanding and agreement
among the parties with regard to the subjects hereof and thereof and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, the Exhibits or the
Ancillary Agreements, express or implied, is intended to confer upon any party,
other than the parties hereto and thereto and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, the Exhibits or the Ancillary Agreements, except as expressly
provided herein and therein.
7.6 SEVERABILITY. In case any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision; PROVIDED, HOWEVER, that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
7.7 AMENDMENT AND WAIVER. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
shares of the Common Stock issued or issuable upon conversion of the Shares;
PROVIDED that no amendment of this Agreement shall (i) increase any financial
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obligation or liability of an Investor or holder beyond that set forth herein or
permitted hereby without such Investor's or holder's written consent or (ii)
materially and adversely affect the rights of an Investor or holder in a manner
that discriminates against such Investor/holder vis-a-vis other
Investors/holders without such Investor/holder's written consent. Any amendment
or waiver effected in accordance with this Section 7.7 shall be binding upon
each holder of any then outstanding shares of the Common Stock issued or
issuable upon conversion of the Shares, each future holder of all such
securities and the Company.
7.8 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power, or remedy accruing to the Investors or any subsequent holder of any
Shares or Conversion Stock upon any breach, default or noncompliance of the
Company under this Agreement or under the Restated Certificate, shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
the Investors' part of any breach, default or noncompliance under this Agreement
or under the Restated Certificate or any waiver on the Investors' part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing, and that
all remedies, either under this Agreement, the Restated Certificate, Bylaw, or
otherwise afforded to the Investors, shall be cumulative and not alternative.
7.9 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed effectively given: (a) upon actual delivery,
when delivered personally; (b) upon receipt when sent by confirmed telegram or
fax if sent during normal business hours, and if not, then on the next business
day; (c) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt; or (d) four
business days after being deposited in the U.S. mail, as certified or registered
mail, return receipt requested, postage prepaid. All communications shall be
sent to the Company and to the Investors at the addresses as set forth on the
signature page hereof or at such other address as the Company or Investors may
designate by ten (10) days advance written notice to the other parties hereto.
7.10 EXPENSES. The Company and the Investors shall each bear their own
expenses and legal fees in connection with the consummation of this transaction.
7.11 TITLES AND SUBTITLES. The titles of the sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
7.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
7.13 INDEMNIFICATION. The Company assumes liability for and agrees to
indemnify, defend and hold harmless each Investor (the "INDEMNIFIED PERSONS")
from and against, all losses, claims, damages, liabilities, obligations, fines,
penalties, judgments, settlements, costs, expenses and disbursements (including
attorneys' fees and expenses) (collectively, "LOSSES") (i) arising out of or
-15-
related to any breach or inaccuracy of any representation or warranty of the
Company contained in this Agreement; (ii) any non-fulfillment or breach of any
covenant or agreement of the Company contained in this Agreement; or (iii)
incurred in connection with any action or proceeding against the Company or any
Indemnified Person (a "PROCEEDING") arising out of or in connection with this
Agreement or any other document or instrument executed pursuant hereto or
thereto, or the transactions contemplated herein or therein to the full extent
permitted by applicable law, other than Losses that are finally determined in
such Proceeding to be primarily and directly a result of (1) the gross
negligence of such Indemnified Person, (2) a breach of a fiduciary duty, if any,
owed by such Indemnified Person to the Company, (3) the willful misconduct or a
knowing violation of applicable law by such Indemnified Person, or (4) a
transaction from which such Indemnified Person received an improper personal
benefit. The obligations of the Company to each Indemnified Person under this
Section 7.13 will be separate and distinct obligations.
[Remainder of page intentionally left blank.]
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The foregoing Series C Preferred Stock Purchase Agreement is executed
as of the date first above written.
COMPANY:
OPTIMER PHARMACEUTICALS, INC.
By: _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
OPTIMER PHARMACEUTICALS, INC.
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
The foregoing Series C Preferred Stock Purchase Agreement is executed
as of the date first above written.
INVESTOR:
PAR PHARMACEUTICAL, INC.
By: _____________________________________
Name:____________________________________
Title: __________________________________
OPTIMER PHARMACEUTICALS, INC.
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF INVESTORS
INVESTORS
NUMBER OF
INVESTOR SERIES C SHARES PURCHASE PRICE
-------- --------------- ---------------
PAR PHARMACEUTICAL, INC. 3,333,333 $ 11,999,998.00
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Senior Vice
President, Business Development
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
& General Counsel
TOTAL 3,333,333 $ 11,999,998.00