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EXHIBIT 10.11
SERIES J PREFERRED STOCK PURCHASE AGREEMENT
(70,000 Shares of Series J Preferred Stock)
By and Between
CombiChem, Inc.,
a California corporation
and
Xxxxxxxx Xxxxxx
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TABLE OF CONTENTS
Page
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1. Sale of Preferred Shares...................................................................... 1
2. Closing....................................................................................... 1
3. Representations and Warranties of the Company................................................. 1
(a) Organization and Standing; Articles and Bylaws....................................... 1
(b) Authorization........................................................................ 2
(c) Validity of the Shares............................................................... 2
4. Representations and Warranties of the Purchaser............................................... 2
(a) Authorization........................................................................ 2
(b) Investment Intent.................................................................... 2
(c) Reliance Upon the Purchaser's Representations........................................ 2
(d) Restricted Securities................................................................ 3
(e) Receipt of Information............................................................... 3
(f) Investment Experience................................................................ 3
(g) Limitations on Disposition........................................................... 3
(h) Public Sale.......................................................................... 4
(i) Legends.............................................................................. 4
5. Company Right Of First Refusal................................................................ 4
6. Market Stand-off Agreement.................................................................... 4
7. Miscellaneous................................................................................. 5
(a) Further Instruments and Actions...................................................... 5
(b) Notices.............................................................................. 5
(c) Governing Law........................................................................ 5
(d) Successors and Assigns............................................................... 5
(e) Amendments and Waivers............................................................... 5
(f) Counsel to the Company............................................................... 5
EXHIBITS
Exhibit A -- Consent of Spouse
(i)
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PREFERRED STOCK PURCHASE AGREEMENT
(70,000 Shares of Series J Preferred Stock)
THIS SERIES J PREFERRED STOCK PURCHASE AGREEMENT ("Agreement") is made as
of June 11, 1997 by and between CombiChem, Inc., a California corporation (the
"Company"), and Xxxxxxxx Xxxxxx (the "Purchaser," which term includes his heirs,
executors, guardians, successors and assigns).
WHEREAS, the Company and the Purchaser are parties to that certain Stock
Option Agreement dated December 1, 1995 (the "Option Agreement") pursuant to
which the Company granted Purchaser an option to purchase up to 140,000 shares
of the Company's Series J Preferred Stock at an option price of $0.10 per share;
and
WHEREAS, the Purchaser desires to purchase shares of the Company's Series
J Preferred Stock pursuant to the Option Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
1. Sale of Preferred Shares. Subject to the terms and conditions of
this Agreement, the Purchaser hereby purchases, and the Company hereby sells to
the Purchaser, Seventy Thousand shares of the Company's Series J Preferred Stock
(the "Shares") at a price of ten cents ($0.10) per share, for an aggregate sum
of Seven Thousand ($7,000) (the "Purchase Price").
2. Closing. The purchase and sale of the Shares shall occur at the
offices of the Company, on that date the Purchaser has conditionally delivered
to the Company (i) Purchaser's signature on the Agreement's signature page
offering to purchase the Shares, (ii) an executed Consent of Spouse attached
hereto as Exhibit A and incorporated herein by reference and (iii) consideration
equal to the Purchase Price in the form of cash (requiring a receipt signed by
Company officer), or check and an authorized officer of the Company, after
having confirmed that Purchaser has complied with the conditions precedent to
execution, executes this Agreement on behalf of the Company (the "Closing").
Within ten business days of the Closing, the Company shall deliver to the
Purchaser a share certificate dated the date of the Closing, registered in the
name the Purchaser designates, representing the Shares purchased by the
Purchaser pursuant to this Agreement.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) Organization and Standing; Articles and Bylaws. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the
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State of California, and has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as presently
conducted.
(b) Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
the Company's obligations under this Agreement and for the authorization,
issuance, sale and delivery of the Shares and the common stock issuable upon
conversion thereof (the "Underlying Common Shares") has been taken or will be
taken prior to the Closing. This Agreement, when executed and delivered by the
Company and the Purchaser shall constitute a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors.
(c) Validity of the Shares. The Shares and the Underlying Common
Shares will be validly issued, fully paid and nonassessable.
4. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(a) Authorization. The Purchaser has the requisite legal power and
authority to enter into this Agreement and that this Agreement when executed
shall constitute a valid and legally binding obligation of the Purchaser.
(b) Investment Intent. This Agreement is made with the Purchaser
in reliance upon his representation to the Company, which by his execution
hereof he confirms, that the Shares have been acquired with his own funds for
investment for an indefinite period for his own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof, and
that he has no present intention of selling, granting participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participations, to such
person or to any third person, with respect to any of the Shares.
(c) Reliance Upon the Purchaser's Representations. The Purchaser
understands (i) that the Shares are not registered under the Securities Act or
qualified under the California Corporate Securities Law of 1968, as amended (the
"Law"), and (ii) that the Shares are being issued to the Purchaser on the ground
that the sale provided for in this Agreement and the issuance of securities
hereunder is exempt from registration under the Securities Act pursuant to
Section 4(2) thereof and/or Regulation D promulgated thereunder and the
exemption from qualification provided by Section 25102(f) of the Law, and (iii)
that the Company's reliance on such exemptions is predicated on the Purchaser's
representations set forth herein. The Purchaser realizes that the basis for the
exemptions may not be present if, notwithstanding such representations, the
Purchaser has in mind merely acquiring the Shares for a fixed or determinable
period in the future, or for a market rise, or for sale if the market does not
rise. The Purchaser does not have any such intention. These exemptions only
exempt
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the issuance of the Shares to the Purchaser and not any sale or other
disposition of the Shares or any interest therein by the Purchaser.
(d) Restricted Securities. The Purchaser hereby confirms that the
Purchaser has been informed that the Shares are restricted securities under the
Securities Act and may not be resold or transferred unless the Shares are first
registered under the Federal securities laws or unless an exemption from such
registration is available. In addition, the Purchaser understands that any
resale or transfer must comply with applicable state securities laws.
Accordingly, the Purchaser hereby acknowledges that the Purchaser is prepared to
hold the Shares for an indefinite period, and that the Purchaser is familiar
with the provisions of Rule 144 of the Securities and Exchange Commission issued
under the Securities Act, and is aware that Rule 144 is not presently available
to exempt the sale of the Shares from the registration requirements of the
Securities Act.
(e) Receipt of Information. The Purchaser acknowledges that he has
received all the information he considers necessary or appropriate for deciding
whether to purchase the Shares. The Purchaser further represents that he has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares and the business,
properties, prospects, and financial condition of the Company 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 the
accuracy of any information furnished to Purchaser or to which Purchaser had
access.
(f) Investment Experience. In connection with representations made
herein, the Purchaser represents that he has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of his investment, has the ability to bear the economic risks of his
investment and has been furnished with and has had access to all of the
information he considers necessary or appropriate to evaluate the risks and
merits of an investment in the Shares, and has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management.
(g) Limitations on Disposition. The Purchaser agrees that in no
event will he make a disposition of any of the Shares, unless and until (a) he
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and (b) he shall have furnished the Company with an
opinion of counsel satisfactory to the Company to the effect that (i) such
disposition will not require registration of such Shares under the Securities
Act, or (ii) that appropriate action necessary for compliance with the
Securities Act has been taken, or (c) the Company shall have waived, expressly
and in writing, its rights under clauses (a) and (b) of this subparagraph. The
opinion shall also indicate that the disposition is exempt from, in compliance
with, or qualified under all applicable state securities laws.
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(h) Public Sale. The Purchaser agrees not to make, without the
prior written consent of the Company, any public offering or sale of the Shares,
even if permitted to do so pursuant to Rule 144(k) promulgated under the
Securities Act, until the earlier of (i) six months after the date on which the
Company effects its initial registered public offering pursuant to the
Securities Act or (ii) five years after the date of the Closing of this
Agreement.
(i) Legends. All certificates representing any shares of the
Company subject to the provisions of this Agreement shall have endorsed thereon
customary legends regarding:
(1) Restrictions on transfer under the Federal Securities
Act of 1933.
(2) Market Stand-off Agreement pursuant to Section 6 hereof.
(3) Right of First Refusal upon any resale of the Shares,
pursuant to the Company's Bylaws and Section 5 hereof.
(4) Any legend required by state securities laws.
5. Company Right Of First Refusal. Any resale of the Shares shall be
subject to the Right of First Refusal provisions set forth in Article VI of the
Company's Bylaws. This right terminates upon the Company completing its initial
public offering of stock.
6. Market Stand-off Agreement.
(a) In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement
filed under the Securities Act, including the Company's initial public offering,
the Purchaser shall not sell, make any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to the Shares without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for one hundred eighty (180)
days from and after the effective date of such registration statement or such
longer time as may be required by the Company's underwriters.
(b) In the event any stock dividend, stock split, recapitalization
or other change affecting the Company's outstanding common shares is effected
without receipt of consideration, then any new, substituted or additional
securities distributed with respect to the Shares shall be immediately subject
to the provisions of this Section 6 to the same extent the Shares are at such
time covered by such provisions.
(c) In order to enforce the limitations of this Section 6, the
Company may impose stop-transfer instructions with respect to the Shares until
the end of the applicable stand-off period.
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(d) The obligation in this Section 6 shall not apply to a
registration relating solely to employee benefit plan shares or to a Rule 145
transaction registered on Form S-4.
7. Miscellaneous.
(a) Further Instruments and Actions. The parties agree to execute
such further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
(b) Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to the other party hereto at his
address hereinafter shown below his signature or at such other address as such
party may designate by advance written notice to the other party hereto.
(c) Governing Law. This Agreement has been negotiated, executed
and delivered in the State of California. The parties hereto agree that all
questions pertaining to the validity and interpretation of this Agreement shall
be determined in accordance with the laws of the State of California.
(d) Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon the Purchaser, his heirs, executors,
administrators, guardians, successors and assigns.
(e) Amendments and Waivers. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all previous understandings, written or oral. This Agreement may only
be amended with the written consent of the parties hereto, or the successors or
assigns of the foregoing, and no oral waiver or amendment shall be effective
under any circumstances whatsoever.
(f) Counsel to the Company. The Purchaser acknowledges and agrees
that this Agreement has been prepared by Xxxxxxx, Xxxxxxx & Xxxxxxxx, counsel to
the Company, which counsel has represented the interests of the Company and not
those of the Purchaser with respect to the transactions documented by this
Agreement. The Purchaser further acknowledges and agrees that the Purchaser has
been provided the opportunity and encouraged to consult with counsel of the
Purchaser's own choosing with respect to this Agreement. The Purchaser certifies
and acknowledges that the Purchaser has carefully read all of the provisions of
this Agreement and that the Purchaser fully understands and shall fully and
faithfully comply with such provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY
COMBICHEM, INC., a California corporation
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, President and CEO
Address: 0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
PURCHASER
/s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
Address: 0000 Xxxxxx Xxx
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Xxxx Xxxx, XX 00000
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[SIGNATURE PAGE TO
SERIES J PREFERRED STOCK PURCHASE AGREEMENT]
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EXHIBIT A
CONSENT OF SPOUSE
I,___________________________________________________, spouse
of_____________________________________, have read and approve the foregoing
Agreement. I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws of the
State of California or similar laws relating to marital property in effect in
the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated: ______________, 1995
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(Signature)
________ I hereby represent that I do not currently have a spouse.
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(Printed Name)
A-1
