EXHIBIT 99.3
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
BY AND AMONG
ICORIA, INC.
CLINICAL DATA, INC.
AND
LAURUS MASTER FUND, LTD.
DATED AS OF OCTOBER 19, 2004
AS AMENDED AND AS RESTATED ON AUGUST 31, 2006
TABLE OF CONTENTS
PAGE
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1. Agreement to Sell and Purchase....................................... 2
2. Fees and Warrant..................................................... 2
3. Closing, Delivery and Payment........................................ 3
3.1 Closing........................................................ 3
3.2 Delivery....................................................... 3
4. Representations and Warranties of the Company........................ 3
4.1 Organization, Good Standing and Qualification.................. 3
4.2 Subsidiaries................................................... 4
4.3 Capitalization; Voting Rights.................................. 4
4.4 Authorization; Binding Obligations............................. 5
4.5 Liabilities.................................................... 5
4.6 Agreements; Action............................................. 5
4.7 Obligations to Related Parties................................. 6
4.8 Changes........................................................ 7
4.9 Title to Properties and Assets; Liens, Etc..................... 8
4.10 Intellectual Property.......................................... 8
4.11 Compliance with Other Instruments.............................. 9
4.12 Litigation..................................................... 9
4.13 Tax Returns and Payments....................................... 9
4.14 Employees...................................................... 10
4.15 Registration Rights and Voting Rights.......................... 10
4.16 Compliance with Laws; Permits.................................. 10
4.17 Environmental and Safety Laws.................................. 11
4.18 Valid Offering................................................. 11
4.19 Full Disclosure................................................ 11
4.20 Insurance...................................................... 12
4.21 SEC Reports.................................................... 12
4.22 Listing........................................................ 12
4.23 No Integrated Offering......................................... 11
4.24 Stop Transfer.................................................. 12
4.25 Dilution....................................................... 12
5. Representations and Warranties of the Purchaser...................... 13
5.1 No Shorting.................................................... 13
5.2 Requisite Power and Authority.................................. 13
5.3 Investment Representations..................................... 14
5.4 Purchaser Bears Economic Risk.................................. 14
5.5 Acquisition for Own Account.................................... 14
5.6 Purchaser Can Protect Its Interest............................. 14
5.7 Accredited Investor............................................ 15
5.8 Legends........................................................ 15
6. Covenants of the Company............................................. 16
6.1 Stop-Orders.................................................... 16
6.2 Listing........................................................ 16
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6.3 Market Regulations............................................. 16
6.4 Reporting Requirements......................................... 16
6.5 Use of Funds................................................... 16
6.6 Access to Facilities........................................... 17
6.7 Taxes.......................................................... 17
6.8 Insurance...................................................... 17
6.9 Intellectual Property.......................................... 18
6.10 Properties..................................................... 18
6.11 Confidentiality................................................ 18
6.12 Required Approvals............................................. 19
6.13 Reissuance of Securities....................................... 20
6.14 Opinion........................................................ 20
6.15 Margin Stock................................................... 18
6.16 Financing Right of First Refusal............................... 18
7. Covenants of the Purchaser........................................... 21
7.1 Confidentiality................................................ 21
7.2 Non-Public Information......................................... 21
7.3 Limitation on Acquisition of Common Stock of the Company
and/or the Parent.............................................. 20
8. Covenants of the Company and Purchaser Regarding Indemnification..... 21
8.1 Company Indemnification........................................ 21
8.2 Purchaser's Indemnification.................................... 22
9. Conversion of Convertible Note....................................... 22
9.1 Mechanics of Conversion........................................ 22
10. Registration Rights.................................................. 23
10.1 Registration Rights Granted.................................... 23
10.2 Offering Restrictions.......................................... 23
11. Miscellaneous........................................................ 24
11.1 Governing Law.................................................. 24
11.2 Survival....................................................... 24
11.3 Successors..................................................... 24
11.4 Entire Agreement............................................... 24
11.5 Severability................................................... 25
11.6 Amendment and Waiver........................................... 25
11.7 Delays or Omissions............................................ 25
11.8 Notices........................................................ 25
11.9 Attorneys' Fees................................................ 26
11.10 Titles and Subtitles........................................... 27
11.11 Facsimile Signatures; Counterparts............................. 27
11.12 Broker's Fees.................................................. 27
11.13 Construction................................................... 27
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LIST OF SCHEDULES
Capitalization and Voting Rights............................... Schedule 4.3
Agreements; Action............................................. Schedule 4.6
Obligations to Related Parties................................. Schedule 4.7
Changes........................................................ Schedule 4.8
Tax Returns and Payments....................................... Schedule 4.13
Employees...................................................... Schedule 4.14
Registration Rights and Voting Rights.......................... Schedule 4.15
Environmental and Safety Laws.................................. Schedule 4.17
Broker's Fees.................................................. Schedule 11.12
LIST OF EXHIBITS
Form of Convertible Term Note....................................... Exhibit A
Form of Warrant..................................................... Exhibit B
Form of Opinion..................................................... Exhibit C
Form of Escrow Agreement............................................ Exhibit D
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AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (this "Agreement")
is made and entered into as of October 19, 2004 and amended and restated as of
August 31, 2006, among Icoria, Inc., a Delaware corporation (the "Company"),
Clinical Data, Inc., a Delaware corporation (the "Parent") and Laurus Master
Fund, Ltd., a Cayman Islands company (the "Purchaser"). This Agreement amends
and restates in its entirety that certain Securities Purchase Agreement made by
the Company in favor of the Purchaser on October 19, 2004 (the "Original
Purchase Agreement").
RECITALS
WHEREAS, on or prior to October 19, 2004, the Company authorized the sale
to the Purchaser of a Convertible Term Note (the "Note") in the aggregate
principal amount of Five Million Dollars ($5,000,000), which Note is convertible
into shares of the Company's common stock, $0.01 par value per share (the
"Common Stock") at an initial fixed conversion price of $ 0.53per share of
Common Stock ("Fixed Conversion Price");
WHEREAS, on October 19, 2004, the Company issued warrants to the Purchaser
to purchase up to 1,650,943 shares of the Company's Common Stock (subject to
adjustment as set forth therein) in connection with Purchaser's purchase of the
Note;
WHEREAS, on October 19, 2004, Purchaser purchased the Note and the Warrants
(as defined in Section 2) on the terms and conditions set forth herein, said
Note and Warrants are further evidenced by separate agreements and additional
documents, the Securities Purchase Agreement, the Funds Escrow Agreement, the
Registration Rights Agreement and the Security Agreement, associated with this
Agreement (the "Related Agreements" or the "Documents" or the "Other
Agreements");
WHEREAS, on October 19, 2004, the Company issued and sold the Note and
Warrants to Purchaser on the terms and conditions set forth herein; and
WHEREAS, on December 20, 2005, Clinical Data, Inc., a Delaware corporation
(the "Parent"), Irides Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of the Parent and the Company consummated a merger, the
result of which was the acquisition by the Parent of 100% of the outstanding
equity interests of the Company and to otherwise assume the obligations and
liabilities of the Company; and
WHEREAS, the Company, the Parent and Laurus have agreed to amend and
restate the Original Agreement in the form hereof in order to incorporate
certain mutually agreed-to terms.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set
forth in this Agreement, on the Closing Date (as defined in Section 3), the
Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to
purchase from the Company a Note in the aggregate principal amount of $5,000,000
convertible in accordance with the terms thereof into shares of the Company's
Common Stock in accordance with the terms of the Note and this Agreement. The
Note purchased on the Closing Date shall be known as the "Offering." A form of
the Note is annexed hereto as Exhibit A. The Note will mature on the Maturity
Date (as defined in the Note). Collectively, the Note and Warrant and Common
Stock issuable in payment of the Note, upon conversion of the Note and upon
exercise of the Warrant are referred to as the "Securities."
2. Fees and Warrant. On the Closing Date:
(a) The Company will issue and deliver to the Purchaser (i) a warrant
to purchase up to 825,472 shares of Common Stock within two years
after the Closing Date in connection with the Offering, in the
form of Exhibit B-1 hereto (as amended, modified or supplemented
from time to time, the "Two-Year Warrant"), and (ii) a warrant to
purchase up to 825,472 shares of Common Stock within five years
after the Closing Date in connection with the Offering, in the
form of Exhibit B-2 hereto (as amended, modified or supplemented
from time to time, the "Five-Year Warrant"; the Two-Year Warrant
and the Five-Year Warrant are collectively referred to herein as
the "Warrant"). The Warrant must be delivered on the Closing
Date. All the representations, covenants, warranties,
undertakings, and indemnification, and other rights made or
granted to or for the benefit of the Purchaser by the Company are
hereby also made and granted in respect of the Warrant and shares
of the Company's Common Stock issuable upon exercise of the
Warrant (the "Warrant Shares").
(b) Subject to the terms of Section 2(d) below, the Company shall pay
to Laurus Capital Management, LLC, manager of Purchaser a
$175,000 closing payment, which is an amount equal to three and
one-half percent (3.50%) of the aggregate principal amount of the
Note. The foregoing fee is referred to herein as the "Closing
Payment."
(c) The Company shall reimburse the Purchaser for its reasonable
expenses (including legal fees and expenses) incurred in
connection with the preparation and negotiation of this Agreement
and the Related Agreements (as hereinafter defined), and expenses
incurred in connection with the Purchaser's due diligence review
of the Company and its Subsidiaries (as defined in Section 6.8)
and all related matters. Amounts required to be paid under this
Section 2(c) will be paid on the Closing Date and shall be
$39,500 for such expenses referred to in this Section 2(c).
(d) The Closing Payment and the expenses referred to in the preceding
clause (c) (net of the $15,000 and other deposit(s) previously
paid by the
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Company) shall be paid at closing out of funds held pursuant to
the Escrow Agreement (as defined below) and a disbursement letter
(the "Disbursement Letter").
3. Closing, Delivery and Payment.
3.1 Closing. Subject to the terms and conditions herein, the closing of the
transactions contemplated hereby (the "Closing"), shall take place on October
19, 2004, at such time or place as the Company and Purchaser may mutually agree
(such date is hereinafter referred to as the "Closing Date").
3.2 Delivery. Pursuant to the Escrow Agreement, at the Closing on the
Closing Date, the Company will deliver to the Purchaser, among other things, a
Note in the form attached as Exhibit A representing the principal amount of
$5,000,000 and the Two-Year Warrant and the Five-Year Warrant, each in the
Purchaser's name representing an aggregate of 1,650,943underlying shares of
Common Stock and the Purchaser will deliver to the Company, among other things,
the amounts set forth in the Disbursement Letter by wire transfer.
4. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Purchaser as follows. The representations and warranties are
supplemented by, and subject to, the Company's and the Parent's filings under
the Securities Act of 1933, as amended or the Securities Exchange Act of 1934
made prior to the effectiveness of this Agreement, (collectively, the "Exchange
Act Filings"). Such information disclosed in the Exchange Act Filings is not
reproduced in the Schedules attached hereto.
4.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware. The Company has the corporate power and authority to own and
operate its properties and assets, to execute and deliver this (i) this
Agreement, (ii) the Note, the Two-Year Warrant and the Five-Year Warrant to be
issued in connection with this Agreement, (iii) the Security Agreement dated as
of the date hereof between the Company and the Purchaser (as amended, modified
or supplemented from time to time, the "Security Agreement"), (iv) the
Registration Rights Agreement relating to the Securities dated as of the date
hereof between the Company and the Purchaser (as amended, modified or
supplemented from time to time, the "Registration Rights Agreement"), (v) the
Escrow Agreement dated as of the date hereof among the Company, the Purchaser
and the escrow agent referred to therein, substantially in the form of Exhibit D
hereto (as amended, modified or supplemented from time to time, the "Escrow
Agreement") and (vi) all other agreements related to this Agreement and the Note
and referred to herein (the preceding clauses (ii) through (vii), collectively,
the "Related Agreements"), to issue and sell the Note and the shares of Common
Stock issuable upon conversion of the Note (the "Note Shares"), to issue and
sell the Warrant and the Warrant Shares, and to carry out the provisions of this
Agreement and the Related Agreements and to carry on its business as presently
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions, except for those
jurisdictions in which the failure to do so has not had, or could not reasonably
be expected to have, individually or in the aggregate, a material adverse effect
on
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the business, assets, liabilities, condition (financial or otherwise),
properties, operations or prospects of the Company (a "Material Adverse
Effect").
4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the
direct owner of such Subsidiary and its percentage ownership thereof, is set
forth on Schedule 4.2. For the purpose of this Agreement, a "Subsidiary" of any
person or entity means (i) a corporation or other entity whose shares of stock
or other ownership interests having ordinary voting power (other than stock or
other ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such corporation, or other
persons or entities performing similar functions for such person or entity, are
owned, directly or indirectly, by such person or entity or (ii) a corporation or
other entity in which such person or entity owns, directly or indirectly, more
than 50% of the equity interests at such time.
4.3 Capitalization; Voting Rights.
(a) The authorized capital stock of the Company, as of September 30,
2004, consists of 105,000,000 shares, of which 100,000,000 are
shares of Common Stock, par value $0.01 per share, 36,323,274
shares of which are issued and outstanding, and 5,000,000 are
shares of preferred stock, par value $0.01 per share, of which no
shares of preferred stock are issued and outstanding.
(b) Except as disclosed on Schedule 4.3, another Schedule to this
Agreement or in any Exchange Act Filings, other than: (i) the
shares reserved for issuance under the Company's stock option
plans; and (ii) shares which may be issued pursuant to this
Agreement and the Related Agreements, there are no outstanding
options, warrants, rights (including conversion or preemptive
rights and rights of first refusal), proxy or stockholder
agreements, or arrangements or agreements of any kind for the
purchase or acquisition from the Company of any of its
securities. Except as disclosed on Schedule 4.3, another Schedule
to this Agreement or in any Exchange Act Filings, neither the
offer, issuance or sale of any of the Note or Warrant, or the
issuance of any of the Note Shares or Warrant Shares, nor the
consummation of any transaction contemplated hereby will result
in a change in the price or number of any securities of the
Company outstanding, under anti-dilution or other similar
provisions contained in or affecting any such securities.
(c) All issued and outstanding shares of the Company's Common Stock:
(i) have been duly authorized and validly issued and are fully
paid and nonassessable; and (ii) were issued in compliance with
all applicable state and federal laws concerning the issuance of
securities.
(d) The rights, preferences, privileges and restrictions of the
shares of the Common Stock are as stated in the Company's
Certificate of Incorporation (the "Charter"). The Note Shares and
Warrant Shares have been duly and validly reserved for issuance.
When issued in compliance with the
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provisions of this Agreement and the Company's Charter, the
Securities will be validly issued, fully paid and nonassessable,
and will be free of any liens or encumbrances; provided, however,
that the Securities may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein or
as otherwise required by such laws at the time a transfer is
proposed.
4.4 Authorization; Binding Obligations. All corporate action on the part of
the Company, its officers and directors necessary for the authorization of this
Agreement and the Related Agreements, the performance of all obligations of the
Company hereunder and under the Related Agreements at the Closing and, the
authorization, sale, issuance and delivery of the Note and Warrant has been
taken or will be taken prior to the Closing. This Agreement and the Related
Agreements, when executed and delivered and to the extent it is a party thereto,
will be valid and binding obligations of the Company enforceable in accordance
with their terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting
enforcement of creditors' rights; and
(b) general principles of equity that restrict the availability of
equitable or legal remedies.
The sale of the Note and the subsequent conversion of the Note into Note Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with. The issuance of the
Warrant and the subsequent exercise of the Warrant for Warrant Shares are not
and will not be subject to any preemptive rights or rights of first refusal that
have not been properly waived or complied with.
4.5 Liabilities. The Company does not have any contingent liabilities in
excess of $200,000, except current liabilities incurred in the ordinary course
of business and liabilities disclosed in any Exchange Act Filings.
4.6 Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed
in any Exchange Act Filings:
(a) There are no agreements, understandings, instruments, contracts,
proposed transactions, judgments, orders, writs or decrees to
which the Company is a party or to its knowledge by which it is
bound which may involve: (i) obligations (contingent or
otherwise) of, or payments to, the Company in excess of $200,000
(other than obligations of, or payments to, the Company arising
from purchase or sale agreements entered into in the ordinary
course of business); or (ii) the transfer or license of any
patent, copyright, trade secret or other proprietary right to or
from the Company (other than licenses arising from the purchase
of "off the shelf" or other standard products); or (iii)
provisions restricting the development, manufacture or
distribution of the Company's products or services; or (iv)
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indemnification by the Company with respect to infringements of
proprietary rights.
(b) Since June 30, 2004, the Company has not: (i) declared or paid
any dividends, or authorized or made any distribution upon or
with respect to any class or series of its capital stock; (ii)
incurred any indebtedness for money borrowed or any other
liabilities (other than ordinary course obligations) individually
in excess of $200,000 or, in the case of indebtedness and/or
liabilities individually less than $200,000, in excess of
$300,000 in the aggregate; (iii) made any loans or advances to
any person not in excess, individually or in the aggregate, of
$200,000, other than ordinary advances for travel expenses; or
(iv) sold, exchanged or otherwise disposed of any of its assets
or rights, other than the sale of its inventory in the ordinary
course of business.
(c) For the purposes of subsections (a) and (b) above, all
indebtedness, liabilities, agreements, understandings,
instruments, contracts and proposed transactions involving the
same person or entity (including persons or entities the Company
has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.
4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7 or
in any Exchange Act filings, there are no obligations of the Company to
officers, directors, ten percent (10%) or greater stockholders or employees of
the Company other than:
(a) for payment of salary for services rendered and for bonus
payments;
(b) reimbursement for reasonable expenses incurred on behalf of the
Company;
(c) for other standard employee benefits made generally available to
all employees (including stock option agreements outstanding
under any stock option plan approved by the Board of Directors of
the Company); and
(d) obligations listed in the Company's financial statements or
disclosed in any of its Exchange Act Filings.
Except as described above or set forth on Schedule 4.7 or in any Exchange Act
Filings, none of the officers, directors or, to the best of the Company's
knowledge, key employees or ten percent (10%) or greater stockholders of the
Company or any members of their immediate families, are indebted to the Company,
individually or in the aggregate, in excess of $200,000 or have 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, or any firm or
corporation which competes with the Company, other than passive investments in
publicly traded companies (representing less than one percent (1%) of such
company) which may compete with the Company. Except as described above, no
officer, director or stockholder, or any member of their
6
immediate families, is, directly or indirectly, interested in any material
contract with the Company and no agreements, understandings or proposed
transactions are contemplated between the Company and any such person. Except as
set forth on Schedule 4.7 or in any Exchange Act Filings, the Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
4.8 Changes. Since June 30, 2004, except as disclosed in any Exchange Act
Filings or in Schedule 4.8 to this Agreement or to any of the Related
Agreements, there has not been:
(a) any change in the business, assets, liabilities, condition
(financial or otherwise), properties, operations or prospects of
the Company, which, individually or in the aggregate, has had or
could reasonably be expected to have, a Material Adverse Effect;
(b) any resignation or termination of any officer, key employee or
group of employees of the Company;
(c) any material change, except in the ordinary course of business,
in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(d) any damage, destruction or loss, whether or not covered by
insurance, which has had, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect;
(e) any waiver by the Company of a valuable right or of a material
debt owed to it;
(f) any direct or indirect material loans made by the Company to any
stockholder, employee, officer or director of the Company, other
than advances made in the ordinary course of business;
(g) any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(h) any declaration or payment of any dividend or other distribution
of the assets of the Company;
(i) any labor organization activity related to the Company;
(j) any debt, obligation or liability incurred, assumed or guaranteed
by the Company, except those for immaterial amounts and for
current liabilities incurred in the ordinary course of business;
(k) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
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(l) any change in any material agreement to which the Company is a
party or by which it is bound which, either individually or in
the aggregate, has had, or could reasonably be expected to have,
a Material Adverse Effect;
(m) any other event or condition of any character that, either
individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect; or
(n) any arrangement or commitment by the Company to do any of the
acts described in subsection (a) through (m) above.
4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on
Schedule 4.9 or in any Exchange Act Filings, the Company has good and marketable
title to its properties and assets, and good title to its leasehold estates, in
each case subject to no mortgage, pledge, lien, lease, encumbrance or charge,
other than:
(a) those resulting from taxes which have not yet become delinquent;
(b) minor liens and encumbrances which do not materially detract from
the value of the property subject thereto or materially impair
the operations of the Company; and
(c) those that have otherwise arisen in the ordinary course of
business.
All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by the Company are in good operating condition and repair
and are reasonably fit and usable for the purposes for which they are being
used. Except as set forth on Schedule 4.9 or in any Exchange Act Filings, the
Company is in compliance with all material terms of each lease to which it is a
party or is otherwise bound.
4.10 Intellectual Property.
(a) Except as disclosed in any Exchange Act Filings, the Company owns
or possesses sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes necessary
for its business as now conducted and to the Company's knowledge
as presently proposed to be conducted (the "Intellectual
Property"), without any known infringement of the rights of
others. There are no outstanding options, licenses or agreements
of any kind relating to the foregoing proprietary rights, nor is
the Company bound by or a party to any options, licenses or
agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any
other person or entity other than such licenses or agreements
arising from the purchase of "off the shelf" or standard
products.
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(b) Except as disclosed in any Exchange Act Filings, the Company has
not received any communications alleging that the Company has
violated any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of
any other person or entity, nor is the Company aware of any basis
therefor.
(c) Except as disclosed in any Exchange Act Filings, the Company does
not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees
made prior to their employment by the Company, except for
inventions, trade secrets or proprietary information that have
been rightfully assigned to the Company.
4.11 Compliance with Other Instruments. Except as disclosed in any Exchange
Act Filings, the Company is not in violation or default of (x) any term of its
Charter or Bylaws, or (y) of any provision of any indebtedness, mortgage,
indenture, contract, agreement or instrument to which it is party or by which it
is bound or of any judgment, decree, order or writ, which violation or default,
in the case of this clause (y), has had, or could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. The
execution, delivery and performance of and compliance with this Agreement and
the Related Agreements to which it is a party, and the issuance and sale of the
Note by the Company and the other Securities by the Company each pursuant hereto
and thereto, will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term or provision, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
4.12 Litigation. Except as set forth on Schedule 4.12 hereto or as
disclosed in any Exchange Act Filings, there is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that prevents the Company from entering into this Agreement
or the Related Agreements, or from consummating the transactions contemplated
hereby or thereby, or which has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect or could
result in any change in the current equity ownership of the Company, nor is the
Company aware that there is any basis to assert any of the foregoing. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
4.13 Tax Returns and Payments. The Company has timely filed all tax returns
(federal, state and local) required to be filed by it. All taxes shown to be due
and payable on such returns, any assessments imposed, and all other taxes due
and payable by the Company on or before the Closing, have been paid or will be
paid prior to the time they become delinquent. Except as set forth on Schedule
4.13 or as disclosed in any Exchange Act Filings, the Company has not been
advised:
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(a) that any of its returns, federal, state or other, have been or
are being audited as of the date hereof; or
(b) of any deficiency in assessment or proposed judgment to its
federal, state or other taxes.
The Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.
4.14 Employees. Except as set forth on Schedule 4.14 or as disclosed in any
Exchange Act Filings, the Company has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending or, to
the Company's knowledge, threatened with respect to the Company. Except as
disclosed in the Exchange Act Filings or on Schedule 4.14, the Company is not a
party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the Company's knowledge the continued employment by the Company of its
present employees, and the performance of the Company's contracts with its
independent contractors, will not result in any such violation. 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 their duties to the Company. The Company has not received
any notice alleging that any such violation has occurred. Except for employees
who have a current effective employment agreement with the Company, no employee
of the Company has been granted the right to continued employment by the Company
or to any material compensation following termination of employment with the
Company. Except as set forth on Schedule 4.14 or as disclosed in any Exchange
Act Filings, the Company is not aware that any officer, key employee or group of
employees intends to terminate his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
officer, key employee or group of employees.
4.15 Registration Rights and Voting Rights. Except as set forth on Schedule
4.15 and except as disclosed in Exchange Act Filings, the Company is presently
not under any obligation, and has not granted any rights, to register any of the
Company's presently outstanding securities or any of its securities that may
hereafter be issued. Except as set forth on Schedule 4.15 and except as
disclosed in Exchange Act Filings, to the Company's knowledge, no stockholder of
the Company has entered into any agreement with respect to the voting of equity
securities of the Company.
4.16 Compliance with Laws; Permits. The Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which has had, or
could reasonably be expected to have, either individually or in
10
the aggregate, a Material Adverse Effect. No governmental orders, permissions,
consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the
execution and delivery of this Agreement or any Related Agreement and the
issuance of any of the Securities, except such as has been duly and validly
obtained or filed, or with respect to any filings that must be made after the
Closing, as will be filed in a timely manner. The Company has all material
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.17 Environmental and Safety Laws. The Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation. Except as set forth on Schedule 4.17 or as disclosed in any
Exchange Act Filings, no Hazardous Materials (as defined below) are used or have
been used, stored, or disposed of by the Company or, to the Company's knowledge,
by any other person or entity on any property owned, leased or used by the
Company. For the purposes of the preceding sentence, "Hazardous Materials" shall
mean:
(a) materials which are listed or otherwise defined as "hazardous" or
"toxic" under any applicable local, state, federal and/or foreign
laws and regulations that govern the existence and/or remedy of
contamination on property, the protection of the environment from
contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building
materials; or
(b) any petroleum products or nuclear materials.
4.18 Valid Offering. Assuming the accuracy of the representations and
warranties of the Purchaser contained in this Agreement, the Company will take
all steps necessary to secure an exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), for the offer and
sale of the Securities and will take the steps to register or qualify (or secure
an exemption from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws.
4.19 Full Disclosure. The Company has provided, furnished or provided
access to the Purchaser regarding all information requested by the Purchaser in
connection with its decision to purchase the Note and Warrant, including all
information the Company believes is reasonably necessary to make such investment
decision. Neither this Agreement, the Related Agreements, nor the exhibits and
schedules hereto and thereto, when incorporated with the Exchange Act Filings,
nor any other document delivered by the Company to Purchaser or its attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, contain any untrue statement of a material fact nor omit to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances in which they are made, not
misleading. Any financial projections and other estimates provided to the
Purchaser by the Company were based on the Company's experience in the industry
and on
11
assumptions of fact and opinion as to future events which the Company, at the
date of the issuance of such projections or estimates, believed to be
reasonable.
4.20 Insurance. The Company has general commercial, product liability, fire
and casualty insurance policies with coverages which the Company believes are
customary for companies similarly situated to the Company in the same or similar
business.
4.21 SEC Reports. Except as set forth on Schedule 4.21 or in the Exchange
Act Filings, the Parent has filed all proxy statements, reports and other
documents required to be filed by it under the Securities ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, as
amended (the "Exchange Act"). The Parent has furnished the Purchaser with copies
of: (i) its Annual Report on Form 10-K for the fiscal year ended March 31, 2006;
and (ii) its Quarterly Report on Form 10-Q for the fiscal quarters ended June
30, 2006 and the Form 8-K filings which it has made during the fiscal year 2007
to date (collectively, the "SEC Reports"). Except as set forth on Schedule 4.21,
each SEC Report was, at the time of its filing, in substantial compliance with
the requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.22 Listing. The Company's Common Stock is listed for trading on the
Nasdaq National Market ("Nasdaq National") and satisfies all requirements for
the continuation of such listing, except as disclosed in any Exchange Act
Filings.
4.23 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the offering of the
Securities pursuant to this Agreement or any Related Agreement to be integrated
with prior offerings by the Company for purposes of the Securities Act which
would prevent the Company from selling the Securities pursuant to Rule 506 under
the Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or subsidiaries take
any action or steps that would cause the offering of the Securities to be
integrated with other offerings.
4.24 Stop Transfer. The Securities are restricted securities as of the date
of this Agreement. The Company will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Securities at such time as
the Securities are registered for public sale or an exemption from registration
is available, except if any material misrepresentation has occurred in
connection with the Purchaser's representations and warranties in connection
with their investment in the Securities or as required by the National
Association of Securities Dealers, state and federal securities laws.
4.25 Dilution. Except as set forth in paragraph 4.24, the Company
specifically acknowledges that its obligation to issue the shares of Common
Stock upon conversion of the Note and exercise of the Warrant is binding upon
the Company
12
and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company.
4.26 Patriot Act. The Company certifies that, to the best of Company's
knowledge, the Company has not been designated, and is not owned or controlled,
by a "suspected terrorist" as defined in Executive Order 13224. The Company
hereby acknowledges that the Purchaser seeks to comply with all applicable laws
concerning money laundering and related activities. In furtherance of those
efforts, the Company hereby represents, warrants and agrees that: (i) none of
the cash or property that the Company will pay or will contribute to the
Purchaser has been or shall be derived from, or related to, any activity that is
deemed criminal under United States law; and (ii) no contribution or payment by
the Company to the Purchaser, to the extent that they are within the Company's
control shall cause the Purchaser to be in violation of the United States Bank
Secrecy Act, the United States International Money Laundering Control Act of
1986 or the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001. The Company shall promptly notify the
Purchaser if any of these representations ceases to be true and accurate
regarding the Company. The Company agrees to provide the Purchaser any
additional information regarding the Company that the Purchaser deems necessary
or convenient to ensure compliance with all applicable laws concerning money
laundering and similar activities. The Company understands and agrees that if at
any time it is discovered that any of the foregoing representations are
incorrect, or if otherwise required by applicable law or regulation related to
money laundering similar activities, the Purchaser may undertake appropriate
actions to ensure compliance with applicable law or regulation, including but
not limited to segregation and/or redemption of the Purchaser's investment in
the Company. The Company further understands that the Purchaser may release
confidential information about the Company and, if applicable, any underlying
beneficial owners, to proper authorities if the Purchaser, in its sole
discretion, determines that it is in the best interests of the Purchaser in
light of relevant rules and regulations under the laws set forth in subsection
(ii) above.
5. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows (such representations and
warranties do not lessen or obviate the representations and warranties of the
Company set forth in this Agreement)
5.1 No Shorting. The Purchaser or any of its affiliates and investment
partners have not in the past or present, and will not in the future by
themselves or cause any person or entity, to directly engage in "short sales" of
the Company's Common Stock as long as the Note shall be outstanding.
5.2 Requisite Power and Authority. The Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
corporate action on Purchaser's part required for the lawful execution and
delivery of this Agreement and the Related Agreements
13
have been or will be effectively taken prior to the Closing. Upon their
execution and delivery, this Agreement and the Related Agreements will be valid
and binding obligations of Purchaser, enforceable in accordance with their
terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting
enforcement of creditors' rights; and
(b) as limited by general principles of equity that restrict the
availability of equitable and legal remedies.
5.3 Investment Representations. Purchaser understands that the Securities
are being offered and sold pursuant to an exemption from registration contained
in the Securities Act based in part upon Purchaser's representations contained
in the Agreement, including, without limitation, that the Purchaser is an
"accredited investor" within the meaning of Regulation D under the Securities
Act of 1933, as amended (the "Securities Act"). The Purchaser confirms that it
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to
the Note and the Warrant to be purchased by it under this Agreement and the Note
Shares and the Warrant Shares acquired by it upon the conversion of the Note and
the exercise of the Warrant, respectively. The Purchaser further confirms that
it has had an opportunity to ask questions and receive answers from the Company
regarding the Company's business, management and financial affairs and the terms
and conditions of the Offering, the Note, the Warrant and the Securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Purchaser or to which the
Purchaser had access. Purchaser further warrants that it is purchasing the
securities in accordance with all of the requirements set forth under Regulation
D of the Securities Act and the Rules promulgated thereunder. Purchaser will
cooperate with the Company in supplying any information requested by the Company
pursuant to any filing required to secure an exemption from registration at
either state or federal law.
5.4 Purchaser Bears Economic Risk. The Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. The Purchaser must bear the economic risk of this investment
until the Securities are sold pursuant to: (i) an effective registration
statement under the Securities Act; or (ii) an exemption from registration is
available with respect to such sale.
5.5 Acquisition for Own Account. The Purchaser is acquiring the Note and
Warrant and the Note Shares and the Warrant Shares for the Purchaser's own
account for investment only, and not as a nominee or agent and not with a view
towards or for resale in connection with their distribution.
5.6 Purchaser Can Protect Its Interest. The Purchaser represents that by
reason of its, or of its management's, business and financial experience, the
Purchaser has the capacity to evaluate the merits and risks of its investment in
the Note, the Warrant and the Securities and to
14
protect its own interests in connection with the transactions contemplated in
this Agreement, and the Related Agreements. Further, the Purchaser is aware of
no publication of any advertisement in connection with the transactions
contemplated in the Agreement or the Related Agreements.
5.7 Accredited Investor. Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.
5.8 Legends.
(a) The Note shall bear substantially the following legend:
"THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) The Note Shares and the Warrant Shares, if not issued by DWAC
system (as hereinafter defined), shall bear a legend which shall
be in substantially the following form until such shares are
covered by an effective registration statement filed with the
SEC:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE
SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
(c) The Warrant shall bear substantially the following legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE
COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE
15
REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF
COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
6. Covenants of the Company. The Company and the Parent each covenant and agrees
with the Purchaser as follows:
6.1 Stop-Orders. The Parent will advise the Purchaser, promptly after it
receives notice of issuance by the Securities and Exchange Commission (the
"SEC"), any state securities commission or any other regulatory authority of any
stop order or of any order preventing or suspending any offering of any
securities of the Parent, or of the suspension of the qualification of the
common stock of the Parent, par value $0.01 (the "Parent Common Stock") for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose.
6.2 Listing. The Parent shall promptly secure the listing of the shares of
Parent Common Stock issuable upon conversion of the Note and upon the exercise
of the common stock purchase warrants issued by the Parent to the Purchaser (the
"Parent Warrants") on the Nasdaq Global Market, the Nasdaq Capital, or the Over
the Counter Bulletin Board (the "Principal Market") (subject to official notice
of issuance) and shall maintain such status so long as any other shares of
Parent Common Stock shall be so quoted on such Principal Market. It is expressly
understood that movement between any exchange or quotation service set forth
herein is permissible and shall not be a breach of this or any other covenant
contained herein or in the Related Agreements. The Parent will maintain the
quotation of it's the Parent Common Stock on the Principal Market, and will
comply in all material respects with the Parent's reporting, filing and other
obligations under the bylaws or rules of the National Association of Securities
Dealers ("NASD"), such exchanges or quotation services, as applicable.
6.3 Market Regulations. The Parent shall notify the SEC, NASD and
applicable state authorities, in accordance with their requirements, of the
transactions contemplated by this Agreement, and shall take all other necessary
action and proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Securities to the
Purchaser and promptly provide copies thereof to the Purchaser.
6.4 Reporting Requirements. The Parent will use all commercially reasonable
efforts to timely file with the SEC all reports required to be filed pursuant to
the Exchange Act and refrain from terminating its status as an issuer required
by the Exchange Act to file reports thereunder even if the Exchange Act or the
rules or regulations thereunder would permit such termination.
6.5 Use of Funds-Guideline. The Company agrees that the proceeds of (x) the
sale of the Note shall be generally utilized pursuant to the following
guideline. The funds will be used: (i) to repay in full all existing
indebtedness owed by the Company to GE Capital, pursuant to the Master Security
Agreement No. 7237 and to terminate such credit facility, (ii) generally for
capital expenditures to be made by the Company and its Subsidiaries (subject to
fluctuation in market prices) in an aggregate amount of $1,600,000, (iii)
generally for the purchase of
16
chemical libraries and outsourced studies (subject to fluctuation in market
prices) in an aggregate amount of $1,200,000, (iv) for expenses incurred in
connection with the transactions contemplated by this Agreement and the Related
Agreements and (v) for general working capital purposes of the Company and its
Subsidiaries and (y) the sale of the Warrant shall be utilized for general
working capital purposes.
6.6 Access to Facilities. The Company will permit any representatives
designated by the Purchaser (or any successor of the Purchaser), upon reasonable
notice and during normal business hours, at such person's expense, while covered
by Purchaser's or their successor's own insurance for such an on-site
investigation and accompanied by a representative of the Company, to:
(a) visit and inspect any of the properties of the Company;
(b) examine the corporate and financial records of the Company
(unless such examination is not permitted by federal, state or
local law or by contract) and make copies thereof or extracts
therefrom; and
(c) discuss the affairs, finances and accounts of the Company with
the directors, officers and independent accountants of the
Company.
Notwithstanding the foregoing, the Company will not provide any material,
non-public information to the Purchaser (or any successor of the Purchaser)
unless the Purchaser (or any successor of the Purchaser) signs a confidentiality
agreement and otherwise complies with Regulation FD, under the federal
securities laws.
6.7 Taxes. The Company will promptly pay and discharge, or cause to be paid
and discharged, when due and payable, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits, property or
business of the Company; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
set aside on its books adequate reserves with respect thereto, and provided,
further, that the Company will pay all such taxes, assessments, charges or
levies forthwith upon the commencement of proceedings to foreclose any lien
which may have attached as security therefor.
6.8 Insurance. The Company will keep its assets which are of an insurable
character insured by financially sound and reputable insurers against loss or
damage by fire, explosion and other risks customarily insured against by
companies in similar business similarly situated as the Company; and the Company
will maintain, with financially sound and reputable insurers, insurance against
other hazards and risks and liability to persons and property to the extent and
in the manner which the Company reasonably believes is customary for companies
in similar business similarly situated as the Company and to the extent
available on commercially reasonable terms. The Company and each of its
Subsidiaries will jointly and severally bear the full risk of loss from any loss
of any nature whatsoever with respect to the assets pledged to the Purchaser as
security for its obligations hereunder and under the Related Agreements. At the
Company's own cost and expense in amounts and with carriers reasonably
acceptable to
17
Purchaser, the Company and each of the Subsidiaries shall (i) keep all its
insurable properties and properties in which it has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of companies engaged in businesses similar to the Company's or the
respective Subsidiary's including business interruption insurance; (ii) maintain
insurance against claims for personal injury, death or property damage suffered
by others in such amounts as is customary in the industry in which the Company
operates its business; (iii) Intentionally Deleted; (iv) maintain all such
worker's compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which the Company or the Subsidiary is engaged in
business; and (v) furnish Purchaser with (x) evidence of the maintenance of such
policies at least thirty (30) days before any expiration date, (y) excepting the
Company's workers' compensation policy, endorsements to such policies naming
Purchaser as "co-insured" or "additional insured" and appropriate loss payable
endorsements in form and substance satisfactory to Purchaser, naming Purchaser
as loss payee, and (z) evidence that as to Purchaser the insurance coverage
shall not be impaired or invalidated by any act or neglect of the Company or any
Subsidiary and the insurer will provide Purchaser with at least thirty (30) days
notice prior to cancellation. The Company and each Subsidiary shall instruct the
insurance carriers that in the event of any loss thereunder, the carriers shall
make payment for such loss to the Company and/or the Subsidiary and Purchaser
jointly. In the event that as of the date of receipt of each loss recovery upon
any such insurance, the Purchaser has not declared an event of default with
respect to this Agreement or any of the Related Agreements, then the Company
shall be permitted to direct the application of such loss recovery proceeds
toward investment in property, plant and equipment that would comprise
"Collateral" secured by Purchaser's security interest pursuant to its security
agreement, with any surplus funds to be applied toward payment of the
obligations of the Company to Purchaser. In the event that Purchaser has
properly declared an event of default with respect to this Agreement or any of
the Related Agreements, then all loss recoveries received by Purchaser upon any
such insurance thereafter may be applied to the obligations of the Company
hereunder and under the Related Agreements, in such order as the Purchaser may
determine. Any surplus (following satisfaction of all Company obligations to
Purchaser) shall be paid by Purchaser to the Company or applied as may be
otherwise required by law. Any deficiency thereon shall be paid by the Company
or the Subsidiary, as applicable, to Purchaser, on demand.
6.9 Intellectual Property. The Company shall maintain in full force and
effect its corporate existence, rights and franchises and all licenses and other
rights to use Intellectual Property owned or possessed by it and reasonably
deemed to be necessary to the conduct of its business.
6.10 Properties. The Company will keep its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from time to
time make all needful and proper repairs, renewals, replacements, additions and
improvements thereto; and the Company will at all times comply with each
provision of all leases to which it is a party or under which it occupies
property if the breach of such provision could reasonably be expected to have a
Material Adverse Effect.
6.11 Confidentiality. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of the Purchaser, unless
expressly agreed to by
18
the Purchaser or unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company may disclose Purchaser's identity and the terms of this Agreement to its
current and prospective debt and equity financing sources and as required by law
or applicable regulation.
6.12 Required Approvals. For so long as twenty-five percent (25%) of the
principal amount of the Note is outstanding, the Company, without the prior
written consent of the Purchaser, which shall not be unreasonably withheld,
shall not:
(a) (i) directly or indirectly declare or pay any dividends, other
than dividends paid to the Parent or any of its wholly-owned
Subsidiaries, (ii) issue any preferred stock that is mandatorily
redeemable prior to October 19, 2007, or (iii) redeem any of its
preferred stock or other equity interests during before the
Maturity Date ;
(b) liquidate, dissolve or effect a material reorganization (it being
understood that in no event shall the Company dissolve, liquidate
or merge with any other person or entity unless, the Company is
the surviving entity or the successor entity expressly assumes
all of the duties and obligations of the Company and its
Subsidiaries under this Agreement and Related Agreements);
(c) become subject to (including, without limitation, by way of
amendment to or modification of) any agreement or instrument
which by its terms would (under any circumstances) materially
restrict the Company's right to perform the provisions of this
Agreement or any of the agreements contemplated thereby;
(d) materially alter or change the scope of business of the Company,
unless such change in scope is consistent with past practice;
(e) (i) create, incur, assume or suffer to exist any indebtedness,
exclusive of trade debt, debt subordinated to or on collateral
other than the security provided by the Related Agreements and
debt incurred to finance the purchase of equipment (not in excess
of ten percent (10%) of the fair market value of the Company's
and its Subsidiaries' assets) whether secured or unsecured other
than (x) the Company's indebtedness to the Purchaser, (y)
indebtedness set forth on Schedule 6.12(e) attached hereto and
made a part hereof and any refinancings or replacements thereof
on terms no less favorable to the Purchaser than the debt being
refinanced or replaced, and (z) any indebtedness incurred in
connection with the purchase of assets in the ordinary course of
business, and any refinancings or replacements thereof on terms
no less favorable to the Purchaser than the indebtedness being
refinanced or replaced; (ii) cancel any indebtedness owing to it
in excess of $200,000 in the aggregate during any 12 month
period; (iii) assume, guarantee, endorse or otherwise become
directly or contingently liable in connection with any
obligations of any other Person,
19
except the endorsement of negotiable instruments by the Company
for deposit or collection or similar transactions in the ordinary
course of business; and
(f) (i) make investments in, make any loans or advances to, or
transfer assets to, any of its Subsidiaries, other than any
immaterial investments, loans, advances and/or asset transfers
made in the ordinary course of business or (ii) create or acquire
any Subsidiary without the prior written consent of the
Purchaser, which shall not be unreasonably withheld.
6.13 Reissuance of Securities. The Company and Parent agree to reissue
certificates representing the Securities without the legends set forth in
Section 5.8 above at such time as:
(a) the holder thereof is permitted to dispose of such Securities
pursuant to Rule 144(k) under the Securities Act; or
(b) upon resale subject to an effective registration statement after
such Securities are registered under the Securities Act.
The Parent agrees to cooperate with the Purchaser in connection with all resales
pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to
allow such resales provided the Parent and its counsel receive reasonably
requested representations from the selling Purchaser and broker, if any.
6.14 Opinion. On the Closing Date, the Company will deliver to the
Purchaser an opinion acceptable to the Purchaser from the Company's legal
counsel. The Company will provide, at the Company's expense, such other legal
opinions in the future as are reasonably necessary for the conversion of the
Note and exercise of the Warrant.
6.15 Margin Stock. The Company will not permit any of the proceeds of the
Note or the Warrant to be used directly or indirectly to "purchase" or "carry"
"margin stock" or to repay indebtedness incurred to "purchase" or "carry"
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.
6.16 No Restrictions on Additional Financings. The Company will not, and
will not permit its Subsidiaries to, agree, directly or indirectly, to any
restriction with any person or entity which limits the ability of the Purchaser
to consummate an additional financing with the Company or any of its
Subsidiaries.
6.17 Negative Pledge. The Parent shall not sell, transfer, assign,
mortgage, pledge, lease, grant a security interest in, or encumber any of the
Company's equity interests, including, without limitation, all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interest in (however designated) equity of the Company,
including, without limitation, any common stock, preferred stock, any limited or
general partnership interest and any limited liability company membership
interest.
20
7. Covenants of the Purchaser. The Purchaser covenants and agrees with the
Company as follows:
7.1 Confidentiality. The Purchaser agrees that it will not disclose, and
will not include in any public announcement, the name of the Company, unless
expressly agreed to by the Company or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement.
7.2 Non-Public Information. The Purchaser agrees not to effect any sales in
the shares of the Company's Common Stock while in possession of material,
non-public information regarding the Company if such sales would violate
applicable securities law.
7.3 Limitation on Acquisition of Common Stock of the Company and/or the
Parent. Notwithstanding anything to the contrary contained in this Agreement,
any Related Agreement or any document, instrument or agreement entered into in
connection with any other transactions between the Purchaser, the Company and
the Parent, the Purchaser may not acquire stock in the Company and/or the Parent
(including, without limitation, pursuant to a contract to purchase, by
exercising an option or warrant, by converting any other security or instrument,
by acquiring or exercising any other right to acquire, shares of stock or other
security convertible into shares of stock in the Company and/or the Parent, or
otherwise, and such contracts, options, warrants, conversion or other rights
shall not be enforceable or exercisable) to the extent such stock acquisition
would cause any interest (including any original issue discount) payable by the
Company to the Purchaser not to qualify as "portfolio interest" within the
meaning of Section 881(c)(2) of the Code, by reason of Section 881(c)(3) of the
Code, taking into account the constructive ownership rules under Section
871(h)(3)(C) of the Code (the "Stock Acquisition Limitation"). The Stock
Acquisition Limitation shall automatically become null and void without any
notice to the Company or the Parent upon the earlier to occur of either (a) the
Company's delivery to the Purchaser of a Notice of Redemption (as defined in the
Note) or (b) the existence of an Event of Default (as defined in the Note) at a
time when the average closing price of the Parent's common stock as reported by
Bloomberg, L.P. on the Principal Market for the immediately preceding five
trading days is greater than or equal to 150% of the Fixed Conversion Price (as
defined in the Note).
8. Covenants of the Company and Purchaser Regarding Indemnification.
8.1 Company Indemnification. The Company agrees to indemnify, hold
harmless, reimburse and defend Purchaser, each of Purchaser's officers,
directors, agents, affiliates, control persons, and principal shareholders,
against any forseeable: claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon the Purchaser which results, arises out of or is based upon: (i) any
misrepresentation by Company or breach of any warranty by Company in this
Agreement, any Related Agreement or in any exhibits or schedules attached hereto
or thereto; or (ii) any breach or default in performance by Company of any
covenant or undertaking to be performed by Company hereunder, or any other
agreement entered into by the Company and Purchaser relating hereto.
21
8.2 Purchaser's Indemnification. Purchaser agrees to indemnify, hold
harmless, reimburse and defend the Company and each of the Company's officers,
directors, agents, affiliates, control persons and principal shareholders, at
all times against any claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon the Company which results, arises out of or is based upon: (i) any
misrepresentation by Purchaser or breach of any warranty by Purchaser in this
Agreement or in any exhibits or schedules attached hereto or any Related
Agreement; or (ii) any breach or default in performance by Purchaser of any
covenant or undertaking to be performed by Purchaser hereunder, or any other
agreement entered into by the Company and Purchaser relating hereto.
9. Conversion of Convertible Note.
9.1 Mechanics of Conversion.
(a) Provided the Purchaser has notified the Parent of the Purchaser's
intention to sell the Note Shares and the Note Shares are
included in an effective registration statement or are otherwise
exempt from registration when sold: (i) Upon the conversion of
the Note or part thereof, the Parent shall, at its own cost and
expense, take all necessary action (including the issuance of an
opinion of counsel reasonably acceptable to the Purchaser
following a request by the Purchaser) to assure that the Parent's
transfer agent shall issue shares of the Parent's Common Stock in
the name of the Purchaser (or its nominee) or such other persons
as designated by the Purchaser in accordance with Section 9.1(b)
hereof and in such denominations to be specified representing the
number of Note Shares issuable upon such conversion; and (ii) the
Parent warrants that no instructions other than these
instructions have been or will be given to the transfer agent of
the Parent's Common Stock and that after the Effectiveness Date
(as defined in the Registration Rights Agreement) the Note Shares
issued will be freely transferable subject to the prospectus
delivery requirements of the Securities Act and the provisions of
this Agreement, and will not contain a legend restricting the
resale or transferability of the Note Shares.
(b) Purchaser will give notice of its decision to exercise its right
to convert the Note or part thereof by telecopying or otherwise
delivering an executed and completed notice of the number of
shares to be converted to the Parent (the "Notice of
Conversion"). The Purchaser will not be required to surrender the
Note until the Purchaser receives a credit to the account of the
Purchaser's prime broker through the DWAC system (as defined
below), representing the Note Shares or until the Note has been
fully satisfied. Each date on which (i) a Notice of Conversion is
telecopied or delivered to the Parent in accordance with the
provisions hereof shall be deemed a "Conversion Date." Pursuant
to the terms of the Notice of Conversion, the Parent will issue
instructions to the transfer agent accompanied by an opinion of
counsel within three (3) business days of the date of the
delivery to the Parent of the Notice of Conversion and shall
22
cause the transfer agent to transmit the certificates
representing the Parent Common Stock subject of such Notice of
Conversion to the Holder by crediting the account of the
Purchaser's prime broker with the Depository Trust Company
("DTC") through its Deposit Withdrawal Agent Commission ("DWAC")
system within three (3) business days after the creation and
delivery of the opinion of counsel to the transfer agent pursuant
to the Parent's Notice of Conversion (the "Delivery Date").
(c) The Company and Parent each understand that a delay in the
delivery of the Note Shares in the form required pursuant to the
terms of Article III of the Note beyond the Delivery Date could
result in economic loss to the Purchaser. In the event that the
Parent fails to direct its transfer agent to deliver the Note
Shares to the Purchaser via the DWAC system within the time frame
set forth in Article III of the Note and the Note Shares are not
delivered to the Purchaser by the Delivery Date, and is not cured
within two (2) business days after the Delivery Date, as
compensation to the Purchaser for such loss, the Company agrees
to pay late payments to the Purchaser for late issuance of the
Note Shares in the form required pursuant to Article III of the
Note upon conversion of the Note in the amount equal to the
greater of: (i) $500 per business day after the Delivery Date,
including the period for cure. Notwithstanding the foregoing, the
Company will not owe the Purchaser any late payments if the delay
in the delivery of the Note Shares beyond the Delivery Date is
solely out of the control of the Parent and the Parent is
actively trying to cure the cause of the delay, or the Parent
cures within the two (2) business days following the Delivery
Date. The Company shall pay any payments incurred under this
Section in immediately available funds upon demand.
Nothing contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required to
be paid or other charges hereunder exceed the maximum amount permitted by such
law, any payments in excess of such maximum shall be credited against amounts
owed by the Company to a Purchaser and thus refunded to the Company.
10. Registration Rights.
10.1 Registration Rights Granted. The Parent hereby grants registration
rights to the Purchaser pursuant to a Registration Rights Agreement dated as of
August 31, 2006between the Parent and the Purchaser.
10.2 Offering Restrictions. Except as previously disclosed in the Exchange
Act Filings, or stock or stock options granted to employees or directors of the
Company (these exceptions hereinafter referred to as the "Excepted Issuances"),
the Company will not issue any securities with a continuously variable/floating
conversion feature which are or could be (by conversion or registration)
free-trading securities (i.e. common stock subject to a registration statement)
prior to
23
the full repayment or conversion of the Note (together with all accrued and
unpaid interest and fees related thereto.
11. Miscellaneous.
11.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER
PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND EACH RELATED AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS
OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH
PARTIES AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND THE RELATED AGREEMENTS
ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND
WAIVE TRIAL BY JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY
RELATED AGREEMENT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE
UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED
INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED
MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH
MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY
OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT OR ANY RELATED
AGREEMENT.
11.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Purchaser and the
closing of the transactions contemplated hereby to the extent provided therein.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.
11.3 Successors. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, heirs, executors and administrators of the parties hereto and shall
inure to the benefit of and be enforceable by each person who shall be a holder
of the Securities from time to time, other than the holders of Common Stock
which has been sold by the Purchaser pursuant to Rule 144 or an effective
registration statement. Purchaser may not assign its rights hereunder to a
competitor of the Company.
11.4 Entire Agreement. This Agreement, the Related Agreements, the exhibits
and schedules hereto and thereto and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and no party shall be liable or bound
to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
24
11.5 Severability. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
11.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the written
consent of the Company and the Purchaser.
(b) The obligations of the Company and the rights of the Purchaser
under this Agreement may be waived only with the written consent
of the Purchaser.
(c) The obligations of the Purchaser and the rights of the Company
under this Agreement may be waived only with the written consent
of the Company.
11.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement or the Related
Agreements, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. All remedies, either under this Agreement, or the Related
Agreements, by law or otherwise afforded to any party, shall be cumulative and
not alternative.
11.8 Notices. All notices required or permitted hereunder (other than as
expressly set forth herein) shall be in writing and shall be deemed effectively
given:
(a) upon personal delivery to the party to be notified;
(b) when sent by confirmed facsimile if sent during normal business
hours of the recipient, if not, then on the next business day;
(c) five (5) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or
(d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification
of receipt.
All communications shall be sent as follows:
If to the Company, to: Icoria, Inc.
c/o Clinical Data, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EVP and Chief Legal Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
25
with a copy to:
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Parent, to: Clinical Data, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, EVP and Chief Legal
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser, to: Laurus Master Fund, Ltd.
M&C Corporate Services Limited
▇.▇. ▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
South Church Street
Grand Cayman, Cayman Islands
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Portfolio Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 212-541-4410
or at such other address as the Company or the Purchaser may designate by
written notice to the other parties hereto given in accordance herewith.
11.9 Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including, without limitation, such reasonable fees and
26
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
11.10 Titles and Subtitles. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.
11.11 Facsimile Signatures; Counterparts. This Agreement may be executed by
facsimile signatures and in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
11.12 Broker's Fees. Except as set forth on Schedule 11.12 hereof, Each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 11.12 being untrue.
11.13 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement and the Related Agreements
and, therefore, stipulates that the rule of construction that ambiguities are to
be resolved against the drafting party shall not be applied in the
interpretation of this Agreement to favor any party against the other.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
27
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED SECURITIES PURCHASE AGREEMENT as of August 31, 2006.
COMPANY: PURCHASER:
ICORIA, INC. LAURUS MASTER FUND, LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ Grin
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ Grin
Title: Secretary Title: Director
CLINCAL DATA:
CLINICAL DATA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Legal Officer
28
EXHIBIT A
FORM OF CONVERTIBLE NOTE
A-1
EXHIBIT B
FORM OF WARRANT
B-1
EXHIBIT C
FORM OF OPINION
C-1
EXHIBIT D
FORM OF ESCROW AGREEMENT
D-2
SCHEDULES
(Any Schedule Not Listed Has Been Intentionally Omitted)
The following Schedules have been prepared in response to the provisions of the
Amended and Restated Securities Purchase Agreement (the "Agreement"). These
Schedules relate to certain matters concerning the Company and, in some cases,
the Parent, and are qualified in their entirety by reference to the specific
provisions of the Agreement. The Schedules may include items or information
which the Company and the Parent are not required to disclose under the
Agreement; disclosure of such items or information shall not affect (directly or
indirectly) the interpretation of the Agreement or the scope of the disclosure
obligations of the Company or the Parent under the Agreement. Any disclosure set
forth in any particular section of the Schedules shall be deemed disclosed in
reference to all representations and warranties of the Company and the Parent in
the Agreement. Inclusion of information herein shall not be construed as an
admission that such information is material to the Company's business or the
financial position or results of operation of the Company's business.
GENERAL DISCLOSURE: As of December 20, 2005, the Company was acquired by the
Parent in a stock-for-stock merger and became a wholly-owned subsidiary of the
Parent. Accordingly, the Company's stock was de-registered from the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Act"), and
was de-listed from trading on the Nasdaq Stock Market. The Parent files reports
under the Act and its common stock trades on the Nasdaq Global Market.
SCHEDULE 4.2
SUBSIDIARIES
SUBSIDIARIES OF THE PARENT
Name Jurisdiction
---- ------------
Clinical Data BV The Netherlands
Clinical Data Incorporated Massachusetts
Clinical Data Sales & Service, Inc. Delaware
Electa Lab s.r.l. Italy
Genaissance Pharmaceuticals, Inc. Delaware
Genome Express S.A. France
GPSI Acquisition, Inc. Delaware
Icoria, Inc. Delaware
Lark Technologies, Inc. Delaware
NovaChem BV The Netherlands
Spectronetics NV Curacao, Netherlands Antilles
Vital Scientific NV The Netherlands
Vital Diagnostics Pty. Ltd. Australia
Vital Diagnostics Ltd. New Zealand
C-3
SCHEDULE 4.3
CAPITALIZATION AND VOTING RIGHTS
STONEGATE SECURITIES, INC.
Placement Agency Agreement, dated July 14, 2004, by and between Paradigm
Genetics, Inc., a Delaware corporation, and Stonegate Securities, Inc., a Texas
corporation.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. MERGER
On March 11, 2004, Paradigm Genetics, Inc. (now "Icoria, Inc.") completed
its acquisition of ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware corporation.
TissueInformatics merged with and into Paradigm with Paradigm continuing as the
surviving corporation pursuant to the terms of an Agreement and Plan of Merger
among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG
dated January 29, 2004 and as amended on March 10, 2004.
The transaction is more fully disclosed in reports filed pursuant to the
Securities Exchange Act of 1934. See specifically, Form 8-K filed March 24, 2004
and the Form 10-K filed March 30, 2004.
FUTURE AMENDMENTS AND ADDITIONS TO EMPLOYEE STOCK/OPTION PLANS
Pursuant to recent stockholder vote, additions to existing and additional
stock plans will be registered. See definitive proxy statement filed March 31,
2004.
SCHEDULE 4.6
AGREEMENTS; ACTION
GE PREPAYMENT
GE Healthcare Financial Services payoff letter dated October 15, 2004.
C-4
STONEGATE SECURITIES, INC.
Placement Agency Agreement, dated July 14, 2004, by and between Paradigm
Genetics, Inc., a Delaware corporation, and Stonegate Securities, Inc., a Texas
corporation.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. MERGER
On March 11, 2004, Paradigm Genetics, Inc. (now "Icoria, Inc.") completed
its acquisition of ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware corporation.
TissueInformatics merged with and into Paradigm with Paradigm continuing as the
surviving corporation pursuant to the terms of an Agreement and Plan of Merger
among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG
dated January 29, 2004 and as amended on March 10, 2004.
The transaction is more fully disclosed in reports filed pursuant to the
Securities Exchange Act of 1934. See specifically, Form 8-K filed March 24, 2004
and the Form 10-K filed March 30, 2004.
SILICON VALLEY BANK
Intercreditor Agreement between Silicon Valley Bank and Laurus Master Fund
regarding Silicon Valley Bank Loan and Security Agreement of July 10, 2003.
SCHEDULE 4.7
OBLIGATIONS TO RELATED PARTIES
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. MERGER
On March 11, 2004, Paradigm Genetics, Inc. (now "Icoria, Inc.") completed
its acquisition of ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware corporation.
TissueInformatics merged with and into Paradigm with Paradigm continuing as the
surviving corporation pursuant to the terms of an Agreement and Plan of Merger
among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG
dated January 29, 2004 and as amended on March 10, 2004.
The transaction is more fully disclosed in reports filed pursuant to the
Securities Exchange Act of 1934. See specifically, Form 8-K filed March 24, 2004
and the Form 10-K filed March 30, 2004.
C-5
SCHEDULE 4.8
CHANGES
ROUTINE IP PRACTICE
Our routine practice in developing compounds and conducting research on
behalf of third parties requires us to assign certain intellectual property
rights to those third parties. This is more fully described in our reports
pursuant to the Securities Exchange Act of 1934.
SCHEDULE 4.13
TAX RETURNS AND PAYMENTS
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. MERGER
There are outstanding tax filings due to merger. We anticipate making such
filings forthwith and that the cost will be primarily that of the process of
filing.
SCHEDULE 4.14
EMPLOYEES
FUTURE AMENDMENTS AND ADDITIONS TO EMPLOYEE STOCK/OPTION PLANS
Pursuant to recent stockholder vote, additions to existing and additional
stock plans will be registered. See definitive proxy statement filed March 31,
2004.
C-6
SCHEDULE 4.15
REGISTRATION RIGHTS AND VOTING RIGHTS
STONEGATE SECURITIES, INC.
Placement Agency Agreement, dated July 14, 2004, by and between Paradigm
Genetics, Inc., a Delaware corporation, and Stonegate Securities, Inc., a Texas
corporation.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. MERGER
On March 11, 2004, Paradigm Genetics, Inc. (now "Icoria, Inc.") completed
its acquisition of ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware corporation.
TissueInformatics merged with and into Paradigm with Paradigm continuing as the
surviving corporation pursuant to the terms of an Agreement and Plan of Merger
among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG
dated January 29, 2004 and as amended on March 10, 2004.
The transaction is more fully disclosed in reports filed pursuant to the
Securities Exchange Act of 1934. See specifically, Form 8-K filed March 24, 2004
and the Form 10-K filed March 30, 2004.
SCHEDULE 4.17
ENVIRONMENTAL AND SAFETY LAWS
ENVIRONMENTAL
From time to time regulators review our facilities for our management of
hazardous materials, including radioactive material, when issues are raised we
attempt to comply with regulators' findings in a swift and thorough manner. We
have not used radioactive material in our operations since September of 2003. We
still maintain certain licensure for the use of certain radioactive material in
case a future project should require it.
As disclosed in our reports filed pursuant to the Securities Exchange Act of
1934:
Environmental Regulation
Our research and development activities involve the controlled use of
hazardous materials and chemicals. We are subject to federal, state and local
laws and regulations governing the use, storage, handling and disposal of such
materials and certain waste products. The risk of accidental contamination
C-7
or injury from these materials cannot be eliminated. In the event of an
accident, we could be held liable for any damages that result, and any liability
could exceed our resources.
SCHEDULE 4.21
SEC REPORTS
As of December 20, 2005, as a result of the consummation of the merger between
the Company and the Parent, the Company no longer files reports under the Act.
SCHEDULE 4.22
LISTING
As of December 20, 2005, as a result of the consummation of the merger between
the Company and the Parent, the Company's Common Stock is no longer listed for
trading on the Nasdaq Stock Market.
SCHEDULE 11.12
BROKER'S FEES
STONEGATE SECURITIES, INC.
Placement Agency Agreement, dated July 14, 2004, by and between Paradigm
Genetics, Inc., a Delaware corporation, and Stonegate Securities, Inc., a Texas
corporation.
C-8