EXHIBIT 99.2
LEASE TERMINATION AGREEMENT
This LEASE TERMINATION AGREEMENT ("Agreement") is made and entered into
as of November 22, 2002, by and between EOP-SHORELINE TECHNOLOGY PARK, L.L.C., a
Delaware limited liability company ("LANDLORD"), and INTRABIOTICS
PHARMACEUTICALS, INC., a Delaware corporation ("TENANT").
R E C I T A L S :
A. Landlord and Tenant entered into that certain Office Lease Agreement
(the "OFFICE LEASE"), dated as of February 7, 2000, as amended by that certain
First Amendment, dated as of September 26, 2001 and that certain letter
agreement dated December 21, 2001 (collectively, the "LEASE"), whereby Landlord
leased to Tenant and Tenant leased from Landlord approximately 65,856 rentable
square feet of space (collectively the "PREMISES") described as Building 1
located at 0000 Xxxxxxxx Xxxxx, in that certain project (the "Project") commonly
known as Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000.
B. Tenant failed to pay the monthly rent due and owing under the terms
of the Lease on October 1, 2002 and November 1, 2002. On or about October 7,
2002, following Tenant's failure to pay the monthly rental obligation due on
October 1, 2002, Landlord duly and validly served on Tenant that certain Notice
to Pay Rent or Quit the Premises (the "NOTICE") demanding the immediate payment
of the amount of $243,267.12 in Rent then in default. As a result of Tenant's
failure to cure the Lease defaults in accordance with the Notice, Landlord has
filed a Complaint for Unlawful Detainer against Tenant in the Superior Court of
California, County of Santa Xxxxx, Case No. DC02 429297 (the "ACTION"), and such
Action is currently pending.
C. Except as otherwise provided herein, Landlord and Tenant desire to
enter into this Agreement in order to confirm that the Lease will terminate,
effective January 3, 2003, and to release one another from their respective
obligations thereunder, upon Landlord's receipt of the consideration set forth
herein.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. CAPITALIZED TERMS. All undefined terms when used herein shall have
the same respective meanings as are given such terms in the Lease unless
expressly provided otherwise in this Agreement.
2. TERMINATION OF LEASE. Subject to the terms of this Section 2, Tenant
acknowledges and agrees that: (i) Tenant is presently in default under the terms
of the Lease as a
result of its failure to pay monthly rent due and owing under the terms of the
Lease on October 1, 2002 and November 1, 2002 and failure to cure such defaults
in accordance with the Notice; (ii) Tenant hereby notifies Landlord that Tenant
is unable to continue to pay the full amount of the Rent and other charges due
and owing under the terms of the Lease; (iii) Tenant hereby repudiates its
obligations under the Lease; and (iv) as a result of Tenant's defaults and
failure to perform in accordance with the terms of the Lease, Landlord has the
immediate right to exercise any and all rights and remedies it has under the
Lease or state law, including the right to draw upon the "Letters of Credit," as
that term is defined in Section 3.2 of this Agreement. Notwithstanding the
foregoing, in lieu of litigation between the parties concerning the Action and
Tenant's defaults, Landlord and Tenant hereby mutually agree that, conditioned
upon the satisfaction of all of the "Release Conditions," as that term is
defined in Section 6 below, the Lease will permanently and irrevocably terminate
effective January 3, 2003 (the "LEASE TERMINATION DATE"). The parties agree that
the Lease is being terminated in settlement of the Action and, except to the
extent the releases set forth in Section 6 below become effective, the
termination of the Lease shall not extinguish, release or discharge Tenant of
its obligations under the Lease and/or obligation to pay damages resulting from
its default under the Lease or the early termination of the Lease.
Notwithstanding the foregoing, in the event that any of the Release Conditions
do not occur, then Tenant's notification to Landlord that Tenant is unable to
continue to pay the full amount of Rent and other charges due and owing under
the terms of the Lease and its repudiation of the Lease, as set forth above,
shall be null and void and of no further force or effect, and Tenant shall not
be deemed to have repudiated the Lease (such language shall not be construed to
void or nullify any other defaults under the Lease, if any).
2.1 SURRENDER OF PREMISES. Subject to the satisfaction of the
Release Conditions set forth in Section 6, items (ii) through (vi) below, Tenant
shall vacate the Premises and surrender and deliver exclusive possession thereof
to Landlord on or before the Lease Termination Date, in accordance with the
provisions of the Lease. If Tenant fails to timely vacate and surrender the
Premises, then notwithstanding any contrary provision of this Agreement, Tenant
shall be deemed to be holding over in the Premises and the terms of Article XXV
of the Office Lease shall apply.
2.2 CONTINUING LIABILITY. Notwithstanding the termination of the
Lease and the release of liability, if at all, as set forth in Section 6 of this
Agreement, Landlord and Tenant shall remain liable, with respect to the period
of Tenant's tenancy prior to the Lease Termination Date, for the performance of
all of their respective obligations under the Lease (but excluding any
obligation of Tenant to pay Base Rent except as set forth in Section 2.4 below,
Tenant's Pro Rata Share of estimated or actual Expenses and Taxes for calendar
year 2003, and, except as set forth in Section 2.4 below, any Expenses and Taxes
in accordance with the annual reconciliation of Expenses and Taxes as set forth
in the Lease for any calendar year prior to 2003 (collectively, "TENANT'S
EXCLUDED OBLIGATIONS"), and excluding any obligation of Landlord to refund to
Tenant or credit against Rent due under the Lease any overpayment by Tenant of
Expenses and Taxes in accordance with the annual reconciliation of Expenses and
Taxes as set forth in the Lease), and for any obligations set forth in the Lease
which specifically survive the expiration or earlier termination thereof, and
the payment by Tenant of all amounts owed by Tenant under the Lease (but
excluding any amounts owing for Tenant's Excluded Obligations), up to and
including the Lease Termination Date. Landlord and Tenant shall have all their
respective rights and remedies with respect to such obligations as set forth in
the Lease.
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2.3 TENANT'S REPRESENTATIONS. Tenant represents and warrants to
Landlord that (i) Tenant has not heretofore assigned or otherwise transferred
any portion of its interest in the Lease, or sublet or granted occupancy rights
to any portion of the Premises; (ii) no other person, firm or entity has any
right, title or interest in the Lease or the Premises; and (iii) Tenant has the
full right, legal power and actual authority to enter into this Agreement and to
terminate Tenant's lease of the Premises; (iv) to Tenant's knowledge, as of the
date hereof, Landlord is not in default of any of its obligations under the
Lease, and Tenant knows of no circumstance which, with the passing of time,
would be a default under the Lease; and (v) there are no existing defenses or
offsets, or claims or any basis for a claim, that Tenant has against Landlord.
Tenant further represents and warrants to Landlord that as of the date hereof
there are no, and as of the Lease Termination Date there shall not be any,
mechanic's liens or other liens encumbering all or any portion of the Project,
by virtue of any act or omission on the part of Tenant, its predecessors,
contractors, agents, employees, successors or assigns. Notwithstanding the
termination of the Lease and the release of liability provided for herein, the
representations and warranties set forth in this Section shall survive the Lease
Termination Date and Tenant shall be liable to Landlord for any inaccuracy or
any breach thereof.
2.4 BASE RENT; ADDITIONAL RENT. Concurrently with Tenant's
execution and delivery of this Agreement to Landlord, Tenant shall pay to
Landlord cash, by wire transfer as directed by Landlord, in the amount of
$740,207.57 (the "RENT PAYMENT"), comprised of the sum of (i) Base Rent for the
months of October, November and December 2002 and for January 1 and 2, 2003 in
the amount of $646,266.88 in the aggregate, plus Tenant's Pro Rata Share of
estimated Expenses and Taxes for the months of October, November and December
2002 in the amount of $97,583.76, plus (ii) the amount of $40,303.93,
representing the difference between (a) the amount of $430,638.97, representing
the amount projected by Landlord as Tenant's Pro Rata Share of actual Expenses
and Taxes for calendar year 2002, and (b) the amount of $390,335.04,
representing the amount of Tenant's Pro Rata Share of estimated Expenses and
Taxes for calendar year 2002, minus (iii) the amount of $43,947.00, representing
the amount owing by Landlord to Tenant for the annual reconciliation of Expenses
and Taxes as set forth in the Lease for calendar year 2001 .
3. CASH CONSIDERATION AMOUNTS. The payments and agreements set forth in
this Section 3 are referred to herein as the "CASH CONSIDERATION AMOUNTS".
3.1 TERMINATION PAYMENT. Concurrently with Tenant's execution of
this Agreement to Landlord, Tenant shall pay to Landlord cash, by wire transfer
as directed by Landlord, in the amount of $3,300,000.00 (the "CASH TERMINATION
PAYMENT").
3.2 LETTERS OF CREDIT. Landlord and Tenant hereby acknowledge and
agree that, in accordance with the terms of Article VI of the Office Lease,
Landlord currently holds two Irrevocable Standby Letters of Credit, namely
Letter of Credit No. SVB01IS3689 in the amount of $600,000.00, and Letter of
Credit No. SVB001S2056 in the amount of $1,000,000.00 (collectively, the
"LETTERS OF CREDIT"), both of which Letters of Credit were issued by Silicon
Valley Bank (the "LC LENDER"). Tenant acknowledges that neither the Letters of
Credit nor the proceeds thereof are an asset of Tenant, and in the event of a
bankruptcy action filed by or against Tenant, they shall not be part of the
Tenant's estate. Immediately upon the full execution and delivery of this
Agreement by Landlord and Tenant, Landlord shall have the right to draw
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down upon the entire amount of the Letters of Credit, and to keep the proceeds
of such draws for Landlord's own account. Tenant shall exercise its best efforts
to assist Landlord in its effort to draw upon the full amount of the Letters of
Credit, including, but not limited to, by confirming to the LC Lender that
Landlord has the right to draw on the full amount of the Letters of Credit, and
by executing any and all documents required by the LC Lender, or reasonably
required by Landlord, in connection with any draw request and taking any other
actions necessary to facilitate the draws on the Letters of Credit. Any costs or
fees charged by the LC Lender in connection with the Landlord's draw thereof
shall be reimbursed by Tenant to Landlord promptly upon Landlord's submission of
an invoice to Tenant for such amounts. Tenant hereby acknowledges and agrees
that the amounts being drawn under the Letters of Credit are being drawn
pursuant to the terms of the Office Lease Agreement dated as of February 7,
2000, as amended, between Tenant, as tenant and Landlord, as landlord, for
certain premises located at Shoreline Technology Park, Mountain View,
California. A failure of Landlord to be able to draw the entire amount of the
Letters of Credit shall, at Landlord's option, either (i) be deemed a default by
Tenant under this Agreement, which shall entitle Landlord to exercise all of its
remedies hereunder, as more particularly set forth in Section 7, below, or (ii)
Landlord shall be entitled to demand a cash payment from Tenant in the amount of
the unsatisfied draw, which amount shall be payable by Tenant to Landlord within
five (5) business days of Landlord's request therefor, and Tenant's failure to
timely pay such amount shall constitute a default by Tenant under this
Agreement, which shall entitle Landlord to exercise all of its remedies
hereunder, as more particularly set forth in Section 7, below.
4. STOCK GRANT. Concurrently with the execution of this Agreement,
Tenant and Landlord shall enter into a common stock purchase agreement (the
"COMMON STOCK PURCHASE AGREEMENT") in the form attached hereto as EXHIBIT A,
pursuant to which Tenant shall agree to immediately grant to Landlord One
Million Two Hundred Fifty Thousand (1,250,000) shares of Tenant's common stock
on the terms and conditions of the Common Stock Purchase Agreement.
5. DISMISSAL OF LITIGATION. Within five (5) business days after all of
the conditions set forth in Section 6, items (ii) through (vi) below have
occurred, Landlord shall dismiss with prejudice the Action, and any other
currently pending actions by Landlord against Tenant. Landlord shall provide
Tenant with conformed copies of all such endorsed filed requests for dismissal
with prejudice promptly thereafter.
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6. RELEASE. The terms of this Section 6 shall be effective, if at all,
only upon the occurrence of all of the following conditions: (i) the occurrence
of the Lease Termination Date; (ii) the delivery by Tenant to Landlord of the
Rent Payment in accordance with Section 2.4 above; (iii) the delivery by Tenant
to Landlord of the Cash Termination Payment in accordance with Section 3.1
above; (iv) the receipt by Landlord of the proceeds of the Letters of Credit in
accordance with Section 3.2 above, on or before December 15, 2002, or Tenant's
cash payment in lieu thereof in accordance with Section 3.2 above (the "LETTERS
OF CREDIT PROCEEDS OR SUBSTITUTE PAYMENT"); (v) the full execution and delivery
of the Common Stock Purchase Agreement by Landlord and Tenant in accordance with
Section 4 above; and (vi) the receipt by Landlord of the "Shares," as that term
is defined in Section 1.1 of the Common Stock Purchase Agreement, in accordance
with the terms of the Common Stock Purchase Agreement (the foregoing conditions
set forth in items (i) through (vi) are referred to herein as the "RELEASE
CONDITIONS").
6.1 TENANT'S RELEASE. For valuable consideration, and the mutual
covenants and agreements contained herein, Tenant, on behalf of itself, and its
predecessors, guarantors, successors and assigns, fully and forever releases
Landlord, and its affiliates, directors, officers, shareholders, employees,
agents, attorneys, investment advisors, portfolio managers, trustees, ancillary
trustees, beneficiaries and their affiliates, successors and assigns, and their
respective partners, shareholders, officers, directors and employees and all
persons acting by, through, under or in concert with them, or any of them
(collectively "LANDLORD RELEASEE"), of and from any and all manner of action or
actions, cause or causes of action, at law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs or expenses of any nature whatsoever, known or unknown, fixed or
contingent, which Tenant has as of the Lease Termination Date or may thereafter
have against Landlord, or any Landlord Releasee, by reason of, arising out of,
based upon or relating to Landlord's obligations under the Lease, except as
provided in this Agreement.
6.2 TENANT WAIVER. Tenant hereby certifies that it has read and
understood the provisions of California Civil Code, Section 1542 and has
consulted or has had the opportunity to consult with its own counsel regarding
same. Tenant hereby waives any and all rights under California Civil Code,
Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
6.3 LANDLORD'S RELEASE. For valuable consideration, and the
mutual covenants and agreements contained herein, Landlord, on behalf of itself,
and its predecessors, successors and assigns, fully and forever releases Tenant,
and its affiliates, directors, officers, shareholders, employees, agents,
attorneys, investment advisors, portfolio managers, trustees, ancillary
trustees, beneficiaries and their affiliates, successors and assigns, and their
respective partners, shareholders, officers, directors and employees and all
persons acting by, through, under or in concert with them, or any of them
(collectively "TENANT RELEASEE"), of and from any and all manner of action or
actions, cause or causes of action, at law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs or
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expenses of any nature whatsoever, known or unknown, fixed or contingent, which
Landlord has as of the Lease Termination Date or may hereafter have against
Tenant, or any Tenant Releasee, by reason of, arising out of, based upon or
relating to Tenant's obligations under the Lease, except as provided in this
Agreement. Landlord's release pursuant to this Section 6.3 shall be effective so
long as no action, litigation, or other proceeding (collectively, the
"PREFERENCE ACTION") is filed or brought against Landlord under 11 U.S.C.
section 547, or any other similar state or federal law in connection with a
bankruptcy filed within ninety-one (91) days after the occurrence of the last
"Transfer," as that term is defined hereinbelow, by Tenant to Landlord, seeking
the avoidance or return of any payments or transfers to Landlord made under the
terms of this Agreement, including the Cash Termination Payment, the Letters of
Credit Proceeds or Substitute Payment, the Rent Payment or the Shares
(collectively, the "TRANSFERS"), and which results in Landlord being obligated
to pay any amount to anyone by reason of a judgment entered in any such action,
in settlement of any claims, or otherwise. In the event any Preference Action is
filed against Landlord seeking the avoidance or return of any of the Transfers
which results in Landlord being obligated to pay any amount to anyone by reason
of a judgment entered in any such action, in settlement of any claims, or
otherwise, Landlord's release shall become null and void and Landlord shall be
entitled to assert against Tenant all of Landlord's rights and remedies as set
forth in Article XX of the Office Lease, and the right to recover damages from
Tenant as provided in California Civil Code Section 1951.2, in addition to any
other rights and remedies it has under either the Lease or state or federal law,
but taking into account, in any case, amounts previously paid and consideration
given that are not recovered in the Preference Action, and in such event it is
expressly understood and agreed by the parties hereto that this Agreement shall
not be construed as a substitution of an agreement for an obligation, nor as a
novation or the substitution of a contract for an obligation, but instead as a
mere mechanism employed by the parties hereto to permit a procedure whereby
Landlord and Tenant are afforded the benefits set forth herein.
6.4 LANDLORD WAIVER. Landlord hereby certifies that it has read
and understood the provisions of California Civil Code, Section 1542 and has
consulted or has had the opportunity to consult with its own counsel regarding
same. Landlord hereby waives any and all rights under California Civil Code,
Section 1542, which is set forth in Section 6.2, above.
7. DEFAULT BY TENANT. In the event that Tenant fails to perform any of
its obligations as set forth in this Agreement or the Common Stock Purchase
Agreement, or fails to cause all of the Release Conditions to occur, and such
failure continues for a period of three (3) days after notice thereof, then
Tenant shall be deemed to be in default (the "DEFAULT") of this Agreement, and
Landlord shall have all of its rights and remedies available at law or in
equity.
8. INVALIDITY. Wherever possible, each provision of this Agreement shall
be interpreted in such a manner as to be valid under applicable law, but, if any
provisions of this Agreement shall be invalid or prohibited thereunder, such
invalidity or prohibition shall be construed as if such invalid or prohibited
provisions had not been inserted herein and shall not affect the remainder of
such provision or the remaining provisions of this Agreement.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument. A facsimile copy of this
Agreement is effective as a signed original.
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10. ENTIRE AGREEMENT. This Agreement and the Common Stock Purchase
Agreement constitute and are intended to constitute the entire agreement of the
parties hereto concerning the subject matter hereof. No covenants, agreements,
representations or warranties of any kind whatsoever have been made by any party
hereto except as specifically set forth herein. All prior discussions and
negotiations with respect to the subject matter hereof are superseded by this
Agreement.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
12. ATTORNEYS' FEES. If any action is brought by either party against
the other party to interpret or enforce any of the terms of this Agreement, the
prevailing party shall be entitled to recover from the other party reasonable
attorneys' fees, costs and expenses incurred in connection with the prosecution
or defense of such action, whether or not the action is prosecuted to a final
judgment. For purposes of this Agreement, the term "attorneys' fees" shall mean
the reasonable fees and expenses of counsel to the parties hereto, which may
include printing, photostatting, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals and other persons not
admitted to the bar but performing services under the supervision of an
attorney.
13. AUTHORITY TO EXECUTE AGREEMENT. Each individual and entity executing
this Agreement hereby represents and warrants that he, she or it has the
capacity set forth on the signature pages hereof with full power and authority
to bind the party on whose behalf he, she or it is executing this Agreement to
the terms hereof. The parties have read and understand this Agreement and have
had the opportunity to consult with counsel with respect hereto. Upon request by
Landlord, Tenant shall provide (i) a corporate resolution, properly certified by
the secretary of the corporation, specifically authorizing Tenant's execution of
this Agreement and the Common Stock Purchase Agreement, and Tenant's performance
in accordance with the terms thereof, and (ii) incumbency certificates for the
officers executing this Agreement and the Common Stock Purchase Agreement.
14. MODIFICATIONS. This Agreement may not be altered, amended, modified
or otherwise changed in any respect whatsoever, except by a writing duly
executed by all of the parties affected by such modification or by their
authorized representatives. Any modification or waiver of any one provision
shall not constitute the waiver or modification of any other provision not
expressly waived or modified.
15. FURTHER ASSURANCES. Landlord and Tenant hereby agree to execute such
further documents or instruments as may be necessary or appropriate to carry out
the intention of this Agreement.
16. CONFIDENTIALITY. Tenant agrees that, except as otherwise
specifically required by law (including, but not limited to, as the result of
Tenant's status as a publicly held company) or as required by court order,
neither Tenant nor its agents or any other parties acting on behalf of Tenant
shall disclose any matters set forth in this Agreement or the Common Stock
Purchase Agreement or disseminate or distribute any information concerning the
terms, details or conditions hereof to any person, firm or entity not a party to
this Agreement or the Common
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Stock Purchase Agreement, including, but not limited to, any press release,
without first obtaining the express written consent of Landlord (which Landlord
may withhold in its sole and absolute discretion). Subject to Tenant's right,
without Landlord's consent or prior notice to Landlord, to file this Agreement
and the Common Stock Purchase Agreement with the Securities and Exchange
Commission (the "SEC") and to provide information (to the extent required by
law) to the SEC relating to this Agreement and the Common Stock Purchase
Agreement, if Tenant is required by applicable law or legal process to disclose
any information contained in this Agreement or the Common Stock Purchase
Agreement to any other person, firm or entity not a party to this Agreement or
the Common Stock Purchase Agreement, Tenant will give Landlord written notice of
such requirement promptly upon Tenant becoming aware of same and in any event
prior to making any disclosure pursuant thereto, will consult with Landlord
regarding the disclosure proposed to be made by Tenant and, if disclosure is
required by court order, Tenant will provide such assistance in seeking a
protective order or other appropriate relief as Landlord may reasonably request.
If Tenant is required by law or court order to disclose any information
contained in this Agreement or the Common Stock Purchase Agreement, Tenant will
disclose or otherwise furnish only the information legally required to be
disclosed, as advised in writing by Tenant's legal counsel, and such disclosure
shall be made only to the necessary and appropriate governmental entities.
17. NOTICES. All notices, requests, demands, statements, designations,
approvals or other communications (collectively, "NOTICES") given or required to
be given by either party to the other hereunder or by law shall be in writing,
shall be (A) sent by United States certified or registered mail, postage
prepaid, return receipt requested ("MAIL"), (B) transmitted by telecopy, if such
telecopy is promptly followed by a Notice sent by Mail, (C) delivered by a
nationally recognized overnight courier, or (D) delivered personally. Any Notice
shall be sent, transmitted, or delivered, as the case may be, to Tenant at the
addresses set forth below, or to such other place as Tenant may from time to
time designate in a Notice to Landlord, or to Landlord at the addresses set
forth below, or to such other places as Landlord may from time to time designate
in a Notice to Tenant. If personally delivered, such Notice shall be effective
upon delivery. If Notice is sent by telex or fax transmission or other form of
electronic transmission, such Notice shall be effective upon transmission (if
prior to 6:00 p.m. in the recipient's time zone. If after 6:00 p.m., the Notice
shall be effective at 9:00 a.m. on the next business day after such
transmission). If mailed, Notice shall be deemed given on the third day after it
is deposited in the mail in accordance with the foregoing. Any correctly
addressed Notice that is refused, unclaimed or undelivered because of an act or
omission of the party to be notified shall be considered to be effective as of
the first date that the Notice was refused, unclaimed or considered
undeliverable by the postal authorities, messenger, officer of the law or
overnight delivery service. As of the date hereof, any Notices must be sent,
transmitted, or delivered, as the case may be, to the following addresses:
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Landlord:
c/o EOP Operating Limited Partnership
0 Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with copies, at the same address, to:
Chief Legal Counsel
Facsimile: (000) 000-0000
and with additional copies to:
Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP
1901 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Tenant:
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with copies to:
Cooley Godward LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
18. EFFECT OF AGREEMENT. The terms and provisions of this Agreement
shall be binding upon, and inure to the benefit of, each of the parties hereto,
their respective assignors, officers, directors, agents, heirs, related and
affiliated entities, guarantors, assigns and successors in interest of every
kind and nature whatsoever, as well as their representatives and attorneys.
[Signatures on next page]
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[Signatures continued]
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
"LANDLORD"
EOP-SHORELINE TECHNOLOGY PARK, L.L.C.,
a Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its
sole member
By: Equity Office Properties Trust,
a Maryland real estate
investment trust, its general
partner
By: /s/ Xxxxxxx Xxxx
----------------------------
Name: Xxxxxxx Xxxx
-------------------------
Title: Vice President
-------------------------
"TENANT"
INTRABIOTICS PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxx
------------------------------------------
Title: Sr. VP and Chief Financial Officer
---------------------------------------
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EXHIBIT A
COMMON STOCK PURCHASE AGREEMENT
[ATTACHED]
EXHIBIT A
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INTRABIOTICS PHARMACEUTICALS, INC.
----------------
COMMON STOCK PURCHASE AGREEMENT
----------------
NOVEMBER 22, 2002
TABLE OF CONTENTS
Page
----
SECTION 1 Authorization and Sale of Common Stock......................................1
1.1 Authorization...............................................................1
1.2 Sale of Common Stock........................................................1
SECTION 2 Closing; Delivery...........................................................1
2.1 Closing.....................................................................1
2.2 Delivery....................................................................1
SECTION 3 Representations and Warranties of the Company...............................2
3.1 Organization................................................................2
3.2 Authority...................................................................2
3.3 Capitalization..............................................................2
3.4 Compliance With Other Instruments, Governmental Consents....................2
3.5 Issuance of Common Stock....................................................3
3.6 SEC Filings; Company Financial Statements...................................3
3.7 Material Changes............................................................3
3.8 Absence of Litigation.......................................................4
3.9 Compliance..................................................................4
3.10 Title to Assets.............................................................4
3.11 Certain Fees................................................................5
3.12 [Intentionally Deleted].....................................................5
3.13 [Intentionally Deleted].....................................................5
3.14 [Intentionally Deleted].....................................................5
3.15 Application of Takeover Protections.........................................5
3.16 Disclosure..................................................................5
3.17 Acknowledgment Regarding Purchasers' Purchase of Shares.....................5
3.18 Patents and Trademarks......................................................6
3.19 [Intentionally Deleted].....................................................6
3.20 Insurance...................................................................6
3.21 Regulatory Permits..........................................................6
3.22 Transactions With Affiliates and Employees..................................6
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TABLE OF CONTENTS
Page
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3.23 [Intentionally Deleted].....................................................6
3.24 Internal Accounting Controls................................................6
SECTION 4 Representations and Warranties of the Purchaser.............................7
4.1 Authorization...............................................................7
4.2 Compliance With Other Instruments; Governmental Consents....................7
4.3 Residency...................................................................7
4.4 Investment Intent; Experience; No Registration..............................7
4.5 Covenants of Purchaser......................................................8
SECTION 5 Conditions to Closing of Purchaser..........................................9
5.1 Representations and Warranties Correct......................................9
5.2 Covenants...................................................................10
5.3 Lease Termination Agreement.................................................10
SECTION 6 Conditions to Closing of Company............................................10
6.1 Representations and Warranties Correct......................................10
6.2 Covenants...................................................................10
6.3 Blue Sky....................................................................10
6.4 Lease Termination Agreement.................................................10
SECTION 7 Registration of the Shares; Compliance with the Securities Act..............10
7.1 Registration Procedures and Expenses........................................10
7.2 Transfer of Shares After Registration; Suspension...........................12
7.3 Indemnification.............................................................13
7.4 Repurchase Option...........................................................16
SECTION 8 Miscellaneous...............................................................18
8.1 Governing Law...............................................................18
8.2 Successors and Assigns......................................................18
8.3 Entire Agreement............................................................18
8.4 Amendment and Waiver........................................................18
8.5 Notices, Etc................................................................18
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TABLE OF CONTENTS
Page
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8.6 Delays or Omissions.........................................................19
8.7 Fees and Expenses...........................................................20
8.8 Severability................................................................20
8.9 Titles and Subtitles........................................................20
8.10 Counterparts................................................................20
8.11 Third Party Beneficiaries...................................................20
8.12 Replacement of Shares.......................................................20
8.13 Remedies....................................................................20
8.14 [Intentionally Deleted].....................................................20
EXHIBIT A -- Schedule of Purchaser
EXHIBIT B -- [Intentionally Deleted]
EXHIBIT C -- Legal Opinion
EXHIBIT D -- IntraBiotics Pharmaceuticals, Inc. -- Purchaser Questionnaire
EXHIBIT E -- IntraBiotics Pharmaceuticals, Inc. -- Certificate of Subsequent
Sale
EXHIBIT F -- Plan of Distribution
SCHEDULE 3.8 -- List of Pending or Threatened Proceedings Against Company or any
of its Subsidiaries
-iii-
INTRABIOTICS PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "AGREEMENT") is made as of
November 22, 2002, by and among Intrabiotics Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"); EOP-Shoreline Technology Park, L.L.C., a Delaware
limited liability company ("EOP-SHORELINE" or "PURCHASER").
SECTION 1
AUTHORIZATION AND SALE OF COMMON STOCK
1.1 Authorization. On or before the Closing (as defined in Section 2
below), the Company will authorize for sale and issuance hereunder of an
aggregate of 1,250,000 shares (the "SHARES") of the Company's authorized Common
Stock, par value $.001 per share.
1.2 Sale of Common Stock. Subject to the terms and conditions hereof,
the Company will issue and sell to the Purchaser, and the Purchaser will buy
from the Company, that number of shares of Common Stock specified opposite the
Purchaser's name on the Schedule of Purchaser attached hereto as EXHIBIT A (the
"SCHEDULE OF PURCHASER"). The sale of the Shares shall be deemed made in
consideration of the Purchaser's entering into the Lease Termination Agreement
of even date herewith (the "LEASE TERMINATION AGREEMENT") between the Company
and EOP-Shoreline.
SECTION 2
CLOSING; DELIVERY
2.1 Closing. The closing of the purchase and sale of the Shares
hereunder (the "CLOSING") shall be held at the offices of Xxxxxx Godward LLP,
0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000 California at 10:00 a.m.,
local time, on November 22, 2002, or at such other time and place upon which the
Company and the Purchaser shall agree.
2.2 Delivery. At the Closing, the Company will deliver to Purchaser an
irrevocable instruction to the Company's transfer agent, dated as of the
Closing, to issue to Purchaser, as soon as practicable but in no event later
than five (5) business days after the Closing, (i) certificate or certificates,
registered in the Purchaser's name as set forth on the Schedule of Purchaser,
representing the number of Shares to be purchased by the Purchaser, as
designated on the Schedule of Purchaser, and (ii) legal opinion of Xxxxxx
Godward LLP, in the form of EXHIBIT C, executed by such counsel and delivered to
the Purchaser, against delivery to the Company by the Purchaser of the duly
authorized and executed Lease Termination Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise described in the Company's regular reports on Form
10-Q, 10-K and 8-K as filed by the Company with the Securities and Exchange
Commission (the "SEC") in 2002 up to the date hereof (the "SEC DOCUMENTS") and
in the Company's press releases since September 30, 2002, true and complete
copies of which have been delivered to Purchaser, including via XXXXX SEC filing
system, prior to Closing, which qualifies the following representations and
warranties in their entirety, the Company hereby represents and warrants to the
Purchaser as follows:
3.1 Organization. The Company is a corporation duly organized and
validly existing under, and by virtue of, the laws of the State of Delaware and
is in good standing under such laws. The Company has requisite corporate power
and authority to own, lease, and operate its properties and assets and to carry
on its business as presently conducted. The Company is presently qualified to do
business in each state in which the failure to be so qualified would have a
Material Adverse Effect (as defined in Section 3.7, below) on the Company's
business as presently conducted or the Company's properties.
3.2 Authority. The Company has all requisite corporate power and
authority to execute and deliver this Agreement and the Lease Termination
Agreement; to sell and issue the Shares hereunder; and to carry out and perform
its obligations under the terms of this Agreement and the Lease Termination
Agreement. All corporate action on the part of the Company necessary for the
authorization, execution, delivery and performance by the Company of this
Agreement and the Lease Termination Agreement, and the authorization, sale,
issuance and delivery of the Shares has been taken. This Agreement and the Lease
Termination Agreement, when executed and delivered by the Company, constitute
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
3.3 Capitalization. The authorized capital stock of the Company consists
of 50,000,000 shares of Common Stock and 5,000,000 shares of the Company's
Preferred Stock, par value $0.001 per share. As of November 5, 2002, 37,784,886
shares of Common Stock were issued and outstanding, and no shares of Preferred
Stock were outstanding. The Company has not issued any capital stock since
September 30, 2002 other than pursuant to employee benefit plans disclosed in
the Company SEC Documents. Except as set forth in the Company's SEC Documents,
there are no outstanding rights, warrants or options to acquire any unissued
shares of capital stock of the Company.
3.4 Compliance With Other Instruments, Governmental Consents. The
execution and delivery of this Agreement and the Lease Termination Agreement do
not, and the consummation of the transactions contemplated hereby and thereby
(including the issuance of the Shares), will not conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both) or give rise to a right of termination, cancellation, modification, or
acceleration of any obligation or loss of any benefit under (any such event a
"CONFLICT") (i) any provision of the Company's Certificate of Incorporation or
Bylaws; (ii) any agreement to which the Company is a party that is material to
the Company's business or properties where such Conflict would
-2-
reasonably be expected to have a material adverse effect on the Company's
business or properties; (iii) any judgment, order, or decree applicable to the
Company; or (iv) any statute, law, ordinance, rule, or regulation applicable to
the Company, where such Conflict with such statute, law, ordinance, rule, or
regulation would reasonably be expected to have a material adverse effect on the
Company's business or properties. No consent, waiver, approval, order, or
authorization of, or registration, declaration, or filing with, any court,
administrative agency or commission or other federal, state, county, local, or
foreign governmental authority, instrumentality, agency, or commission
("GOVERNMENTAL Entity") is required by or with respect to the Company in
connection with the execution and delivery of this Agreement or the Lease
Termination Agreement, or the consummation of the transactions contemplated
hereby and thereby, except qualification (or taking such action as may be
necessary to secure an exemption from qualification, if available) of the offer
and sale of the Shares under applicable federal and state securities laws.
3.5 Issuance of Common Stock. The Shares to be issued pursuant to this
Agreement will be duly authorized, validly issued, fully paid and
non-assessable.
3.6 SEC Filings; Company Financial Statements. The Company has filed all
reports required to be filed by it with the SEC under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") for at least the one year period preceding the
date hereof. As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act, and none of the
SEC Documents 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 made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected by a subsequently filed document
with the SEC. To the best knowledge of the Company, the Company is eligible to
register the Shares for resale by the Purchaser under Form S-3 promulgated under
the Securities Act. The financial statements of the Company, including the notes
thereto, included in the SEC Documents (the "COMPANY FINANCIAL STATEMENTS")
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles in the United States, consistently applied (except as may
be indicated in the notes thereto), and present fairly the consolidated
financial position of the Company at the dates thereof and of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal audit adjustments). There has been no material change in
the Company's accounting policies except as described in the notes to the
Company Financial Statements.
3.7 Material Changes. Since the date of the latest audited financial
statements included within the SEC Documents, except as specifically disclosed
in the SEC Documents, (i) there has been no event, occurrence or development
that, individually or in the aggregate, has had or that could result in a
Material Adverse Effect (as defined below), (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to United States generally accepted accounting
principles applied on a consistent basis during the periods involved ("GAAP") or
required to be disclosed in filings made with the SEC, (iii) the Company has not
altered its method of accounting or the identity of its auditors, (iv) the
-3-
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock, and (v) the Company has not
issued any equity securities to any officer, director or Affiliate (as defined
below), except pursuant to existing Company stock option plans. A "MATERIAL
ADVERSE EFFECT" is any event that individually or in the aggregate, (i)
adversely affects the legality, validity or enforceability of any Transaction
Document (as defined in Section 3.15, below), (ii) has or results in a material
adverse effect on the results of operations, assets, business or condition
(financial or otherwise) of the Company and the Subsidiaries (as defined in
Section 3.8, below), taken as a whole, or (iii) adversely impairs the Company's
ability to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (i), (ii) or (iii), a "Material Adverse Effect").
"Affiliate" means any Person (as defined below) that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144 under the Securities Act ("AFFILIATE"). "PERSON" means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
3.8 Absence of Litigation. Other than as set forth in the SEC Documents,
there is no material action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, overtly
threatened against or affecting the Company or any of its Subsidiaries (as
defined below) that could, individually or in the aggregate, have a Material
Adverse Effect. "Subsidiary" means any Person in which the Company, directly or
indirectly, owns all or a controlling majority of capital stock or similar
interest ("SUBSIDIARY" OR PLURALLY "SUBSIDIARIES"). SCHEDULE 3.8 contains a
complete list of any pending or, to the knowledge of the Company, overtly
threatened proceeding against the Company or any of its Subsidiaries, which
would, individually or in the aggregate, have a Material Adverse Effect.
3.9 Compliance. Neither the Company nor any Subsidiary (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the
Company or any Subsidiary), nor has the Company or any Subsidiary received
notice of a claim that it is in default under or that it is in violation of, any
material indenture, loan or credit agreement or any other material agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
to its knowledge, is or has been in violation of any statute, rule or regulation
of any governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and
labor matters, except in each case as could not, individually or in the
aggregate, have or result in a Material Adverse Effect.
3.10 Title to Assets. The Company and the Subsidiaries have good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens (as defined below), except for Liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries. "LIENS"
-4-
means any lien, charge, claim, security interest, encumbrance, right of first
refusal or other restriction.
3.11 Certain Fees. No brokerage or finder's fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement, and the Company has not taken
any action that would cause any Purchaser to be liable for any such fees or
commissions.
3.12 [Intentionally Deleted].
3.13 [Intentionally Deleted].
3.14 [Intentionally Deleted].
3.15 Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
charter documents or the laws of its state of incorporation that is or could
become applicable to the Purchaser as a result of the Purchaser and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents (as defined below), including, without limitation, as a result of the
Company's issuance of the Shares and the Purchaser's ownership of the Shares.
"TRANSACTION DOCUMENTS" means this Agreement and the Lease Termination
Agreement.
3.16 Disclosure. All disclosure provided to the Purchaser regarding the
Company, its business and the transactions contemplated hereby, including the
Schedules to this Agreement, furnished by or on behalf of the Company are true
and correct in all material respects and do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed. The
Company acknowledges and agrees that the Purchaser does not make or has not made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 4.
3.17 Acknowledgment Regarding Purchasers' Purchase of Shares. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that the
Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Purchaser or any of its
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchaser's
purchase of the Shares. The Company further represents to the Purchaser that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.
-5-
3.18 Patents and Trademarks. To its knowledge, the Company has, or has
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary for use in connection with its business as described
in the SEC Documents and which the failure to so have could have a Material
Adverse Effect (collectively, the "Intellectual Property Rights"). The Company
has not received a written notice that the Intellectual Property Rights used by
the Company violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights.
3.19 [Intentionally Deleted].
3.20 Insurance. The Company maintains insurance against such losses and
risks and in such amounts as the Company reasonably believes is adequate and as
is customary for a company of comparable size and similarly situated in the
business in which the Company is engaged. The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage as may be necessary to
continue its business.
3.21 Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Documents, except where the
failure to possess such permits could not, individually or in the aggregate,
have or result in a Material Adverse Effect ("Material Permits"), and neither
the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit.
3.22 Transactions With Affiliates and Employees. Except as set forth in
SEC Documents, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
3.23 [Intentionally Deleted].
3.24 Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
-6-
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company with respect to the
purchase of the Shares as follows:
4.1 Authorization. The Purchaser has all requisite power and authority
to execute and deliver this Agreement and the Lease Termination Agreement; to
purchase the Shares hereunder; and to carry out and perform its obligations
under the terms of this Agreement and the Lease Termination Agreement. All
action on the part of the Purchaser, including all required corporate or limited
liability company approvals, necessary for the authorization, execution,
delivery, and performance of this Agreement, the Lease Termination Agreement,
and the performance of the Purchaser's obligations under this Agreement and the
Lease Termination Agreement, has been taken. This Agreement, and the Lease
Termination Agreement, when executed and delivered by the Purchaser, will
constitute valid and legally binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with their terms.
4.2 Compliance With Other Instruments; Governmental Consents. The
execution and delivery of this Agreement and the Lease Termination Agreement do
not, and the consummation of the transactions contemplated hereby and thereby
(including the purchase of the Shares), will not result in any Conflict with (i)
any provision of the constituent documents of the Purchaser; (ii) any agreement
to which the Purchaser is a party that is material to the Purchaser's business
or properties; (iii) any judgment, order, or decree applicable to the Purchaser;
or (iv) any statute, law, ordinance, rule, or regulation applicable to the
Purchaser, where such Conflict with such statute, law, ordinance, rule, or
regulation would reasonably be expected to have a material adverse effect on the
Purchaser's business or properties or the Purchaser's ability to perform fully
on a timely basis its obligation under any of the Transaction Documents. No
consent, waiver, approval, order, or authorization of, or registration,
declaration, or filing with, any Governmental Entity is required by or with
respect to the Purchaser in connection with the execution and delivery of this
Agreement, the Lease Termination Agreement, or the consummation of the
transactions contemplated hereby and thereby.
4.3 Residency. The residency of the Purchaser (or, in the case of a
limited liability company or corporation, such entity's principal place of
business) is correctly set forth on the Schedule of Purchaser.
4.4 Investment Intent; Experience; No Registration. The Purchaser
represents and warrants to, and covenants with, the Company that: (i) the
Purchaser is an "accredited investor" as defined in Regulation D under the
Securities Act and the Purchaser is also knowledgeable, sophisticated and
experienced in making, and is qualified to make decisions with respect to,
investments in shares presenting an investment decision like that involved in
the purchase of the Shares, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Shares; (ii) the Purchaser is acquiring the Shares in
the ordinary course of its business and for its own account for investment only
and with no present intention of distributing any of such Shares or any
arrangement or
-7-
understanding with any other persons regarding the distribution of such Shares;
(iii) the Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act, applicable state securities laws and the respective
rules and regulations promulgated thereunder; (iv) the Purchaser has, in
connection with its decision to purchase the Shares, relied only upon the
information provided to the Purchaser by the Company in contemplation of the
transaction and the representations and warranties of the Company contained
herein; (v) the Purchaser has the ability to bear the economic risks of its
prospective investment; and (vi) the Purchaser is able, without materially
impairing its financial condition, to hold the Shares for an indefinite period
of time and to suffer a complete loss on its investment. Purchaser understands
that its acquisition of the Shares has not been registered under the Securities
Act or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of the Purchaser's investment intent as expressed
herein. Purchaser has completed or caused to be completed and delivered to the
Company the Purchaser Questionnaire attached hereto EXHIBIT D, which
questionnaire is true and correct in all material respects. The Purchaser will
notify the Company immediately of any material change in any of such information
until such time as the Purchaser has sold all of its Shares.
4.5 Covenants of Purchaser.
(i) Legend Requirements. The Purchaser acknowledges and agrees
that the Common Stock to be issued pursuant to the Agreement initially will not
be registered under the Securities Act in reliance on an the exemption from the
registration requirements of Section 5 of the Securities Act set forth in
Section 4(2) thereof. In addition to any legend imposed by applicable state
securities laws, the Purchaser agrees that the certificates representing the
Shares issued pursuant to the Agreement shall bear a restrictive legend (and
stop transfer orders shall be placed against the transfer thereof with the
Company's transfer agent), stating as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT PURPOSES AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THESE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED UNLESS (I) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS EFFECTIVE
COVERING SUCH TRANSFER OR (II) THERE IS AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, OR NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
-8-
(ii) Purchaser's Representations Regarding Securities Law
Matters. The Purchaser shall be bound by the following provisions:
(a) The Purchaser will not offer, sell, or
otherwise dispose of any shares of Common Stock except in
compliance with the Securities Act and the rules and regulations
thereunder.
(b) Such Purchaser will not sell, transfer or
otherwise dispose of any Shares unless (i) such sale, transfer or
other disposition is within the limitations of and in compliance
with Rule 144 promulgated by the SEC under the Securities Act and
the Purchaser furnishes the Company with reasonable proof of
compliance with such Rule; (ii) in the opinion of counsel,
reasonably satisfactory to the Company and its counsel, some
other exemption from registration under the Securities Act is
available with respect to any such proposed sale, transfer, or
other disposition of Shares; or (iii) the offer and sale of
Shares is registered under the Securities Act. Notwithstanding
the foregoing, no such registration statement or opinion of
counsel shall be necessary for a transfer by the Purchaser in
compliance with all applicable securities laws (i) to a partner
or member (including a limited partner) of the Purchaser who is a
partnership or limited liability company; (ii) to any parent or
majority-owned subsidiary of the Purchaser or parent of the
Purchaser or any successor or permitted assignee of any Purchaser
or of any parent of any Purchaser; (iii) to (x) any taxable REIT
subsidiary of Equity Office Properties Trust, a Maryland real
estate investment trust, or (y) Equity Office Properties
Management Corp., a Delaware corporation, or any one of its
subsidiaries; (iv) to the Equity Office Properties Management
Corp. Trust, dated March 30, 2001, of which Equity Office
Properties Management Corp. is the sole beneficiary; or (v) to
any "affiliate" of the Purchaser (as defined in Rule 12b-2 of the
Exchange Act); provided, however, that such transferee shall have
agreed in writing to be bound by the terms of this Agreement.
(iii) Purchaser's Acknowledgment. The Purchaser understands that
nothing in this Agreement or any other materials presented to the Purchaser in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Shares.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASER
The obligations of the Purchaser to purchase the Shares are subject to
the fulfillment of the following conditions as of the Closing:
5.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 3 hereof shall have been true and
correct when made and shall be true and correct as of the Closing.
-9-
5.2 Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing shall
have been performed or complied with in all material respects.
5.3 Lease Termination Agreement. The Lease Termination Agreement shall
have been executed and delivered by the Company.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The obligation of the Company to sell and issue the Shares is subject to
the fulfillment of the following conditions as of the Closing:
6.1 Representations and Warranties Correct. The representations and
warranties made by the Purchaser in Section 4 hereof shall have been true and
correct when made and shall be true and correct on the Closing.
6.2 Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchaser on or prior to the Closing shall
have been performed or complied with in all material respects.
6.3 Blue Sky. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or have the availability of exemptions therefrom,
required by any applicable state for the offer and sale of the Shares.
6.4 Lease Termination Agreement. The Purchaser shall have executed and
delivered the Lease Termination Agreement.
SECTION 7
REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT
7.1 Registration Procedures and Expenses. The Company shall:
(i) subject to receipt of necessary information from the
Purchaser, prepare and file with the SEC, as soon as practicable, but in no
event later than twenty (20) days after the Closing, a registration statement on
Form S-3 (the "REGISTRATION STATEMENT") to enable the resale of the Shares by
the Purchaser from time to time through the automated quotation system of the
Nasdaq Stock Market or in privately-negotiated transactions.
(ii) use its best efforts, subject to receipt of necessary
information from the Purchaser, to cause the Registration Statement to become
effective as soon as practicable, but in no event later than ninety (90) days
after the Registration Statement is filed by the Company;
(iii) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to keep the Registration Statement
current and effective for a period not
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exceeding, with respect to the Purchaser's Shares purchased hereunder, the
earlier of (a) the second anniversary of the Closing, (b) the date on which the
Purchaser may sell all Shares then held by the Purchaser without restriction by
the volume limitations of Rule 144(e) of the Securities Act or (c) such time as
all Shares purchased by such Purchaser have been sold pursuant to a registration
statement;
(iv) furnish to the Purchaser with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, prospectuses and preliminary prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Purchaser may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Purchaser, provided,
however, that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to the Purchaser shall be subject to the receipt by the
Company of reasonable assurances from the Purchaser that the Purchaser will
comply with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(v) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser, provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;
(vi) bear all expenses in connection with the procedures in
paragraph (i) through (v) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement; and
(vii) advise the Purchaser, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(viii) use its reasonable commercial efforts to secure and
maintain the listing of the Shares on an Eligible Market (as defined below)
until such time as the Registration Statement is declared effective.
(ix) With a view to making available to the Purchaser the
benefits of Rule 144 (or its successor rule) and any other Rule or regulation of
the SEC that may at any time permit the Purchaser to sell Shares to the public
without registration, the Company covenants and agrees to: (a) make and keep
public information available, as those terms are understood and defined in Rule
144, until the earlier of (A) such date as all of the Purchaser's Shares may be
resold pursuant to Rule 144(k) or any other Rule of similar effect or (B) such
date as all of the Purchaser's Shares shall have been resold; (b) file with the
SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and under the Exchange Act; and (c) furnish to the
Purchaser upon request, as long as the Purchaser owns any Shares, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act, (B) a copy of the Company's most recent
Annual
-11-
Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the Purchaser of
any Rule or regulation of the SEC that permits the selling of any such Shares
without registration.
It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 7.1 that the Purchaser shall
furnish to the Company such information regarding itself, the Shares to be sold
by Purchaser, and the intended method of disposition of such securities as shall
be required to effect the registration of the Shares.
7.2 Transfer of Shares After Registration; Suspension.
(i) The Purchaser agrees that it will not effect any disposition
of the Shares except as contemplated in the plan of distribution set forth on
EXHIBIT F (the "Plan of Distribution") and will promptly notify the Company of
any changes in the information set forth in the Registration Statement regarding
the Purchaser or in the Plan of Distribution.
(ii) Except in the event that paragraph (iii) below applies, the
Company shall: (a) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such prospectus will not contain an untrue statement of a material
fact or omit 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; (b) provide the Purchaser copies of any documents
filed pursuant to Section 7.2(ii)(a); and (c) inform each Purchaser that the
Company has complied with its obligations in Section 7.2(ii)(a) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has not yet been declared effective, the Company will notify the Purchaser to
that effect, will use its reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Purchaser pursuant to Section 7.2(ii)(a) hereof when the amendment has become
effective).
(iii) Subject to paragraph (iv) below, in the event: (a) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related prospectus or for additional
information; (b) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(c) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation of any proceeding for such
purpose; or (d) of any event or circumstance which necessitates the making of
any changes in the Registration Statement or prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case
-12-
of the prospectus, it will not contain any untrue statement of a material fact
or any omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; then the Company shall deliver a
certificate in writing to the Purchaser (the "SUSPENSION NOTICE") to the effect
of the foregoing and, upon receipt of such Suspension Notice, the Purchaser will
refrain from selling any Shares pursuant to the Registration Statement (a
"SUSPENSION") until the Purchaser's receipt of copies of a supplemented or
amended prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such prospectus. In the event of any
Suspension, the Company will use its reasonable efforts to cause the use of the
prospectus so suspended to be resumed as soon as reasonably practicable after
delivery of a Suspension Notice to the Purchaser.
(iv) Notwithstanding the foregoing paragraphs of this Section
7.2, the Purchaser shall not be prohibited from selling Shares under the
Registration Statement as a result of Suspensions on more than two occasions of
not more than 20 days each in any twelve month period, unless, in the good faith
judgment of the Company's Board of Directors, upon advice of counsel, the sale
of Shares under the Registration Statement in reliance on this paragraph 7.2(iv)
would be reasonably likely to cause a violation of the Securities Act or the
Exchange Act and result in potential liability to the Company.
(v) Provided that a Suspension is not then in effect, the
Purchaser may sell Shares under the Registration Statement, provided that it
arranges for delivery of a current prospectus to the transferee of such Shares.
Upon receipt of a request therefor, the Company has agreed to provide an
adequate number of current prospectuses to the Purchaser and to supply copies to
any other parties requiring such prospectuses.
(vi) In the event of a sale of Shares by the Purchaser, the
Purchaser must also deliver to the Company's transfer agent, with a copy to the
Company, a Certificate of Subsequent Sale substantially in the form attached
hereto as EXHIBIT E, so that the Shares may be properly transferred.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Purchaser,
any affiliate of such Purchaser, any trustee or officer of such Purchaser, and
any investment adviser of such Purchaser (and each person, if any, who controls
such Purchaser or such investment adviser within the meaning of Section 15 of
the Securities Act);
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
-13-
(a) The Company will indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities,
including any of the foregoing incurred in settlements of any litigation
commenced or threatened, or actions or proceedings in respect thereof, to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, (ii) any omission (or alleged omission) of a material
fact required to be stated in the Registration Statement or necessary in order
to make the statements in the Registration Statement not misleading or (iii) any
failure by the Company to fulfill any undertaking included in the Registration
Statement, and the Company will reimburse such Selling Stockholder for any
reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement or the failure of such Selling Stockholder to comply with its
covenants and agreements contained in this Agreement or any misstatement or
omission in any prospectus that is corrected in any subsequent prospectus that
was delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.
(b) The Purchaser will indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the Purchaser's covenants and
agreements contained in this Agreement or (ii) any untrue statement (or alleged
untrue statement) of a material fact contained in the Registration Statement or
any omission (or alleged omission) of a material fact required to be stated in
the Registration Statement or necessary in order to make the statements in the
Registration Statement not misleading if such untrue statement or omission was
made in reliance upon and in conformity with written information furnished by or
on behalf of the Purchaser specifically for use in preparation of the
Registration Statement, and the Purchaser will reimburse the Company (or such
officer, director or controlling person), as the case may be, for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that no
Purchaser shall be required to pay any amount in excess of the net proceeds
received by the Purchaser from the sale of the Shares to which such loss
relates.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 7.3,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may
-14-
have to any indemnified party under this Section 7.3 (except to the extent that
such omission materially and adversely affects the indemnifying party's ability
to defend such action) or from any liability otherwise than under this Section
7.3. Subject to the provisions hereinafter stated, in case any such action shall
be brought against an indemnified person, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof,
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the reasonable opinion of counsel to the
indemnified person, for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person; provided, however, that no indemnifying person shall
be responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement. No indemnifying person shall, without the prior
written consent of the indemnified person, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified person is or could
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section
7.3 is unavailable to or insufficient to hold harmless an indemnified party
under subSection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
on the other in connection with the statements or omissions or other matters
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or the Purchaser on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Purchaser agree
that it would not be just and equitable if contribution pursuant to this
subSection (d) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subSection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subSection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subSection (d), the Purchaser
shall not be required to contribute any amount in excess of the amount by which
the net proceeds received by the
-15-
Purchaser from the sale of the Shares to which such loss relates exceeds the
amount of any damages which the Purchaser has otherwise been required to pay by
reason of such untrue statement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 7.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.
(f) The obligations of the Company and the Selling
Stockholder under this Section 7 shall survive the completion of any offering of
Shares pursuant to this Agreement.
7.4 Repurchase Option. For the purposes of this Section 7.4, each of the
following shall constitute an "Event":
(i) the Registration Statement is not filed on or
prior to the Filing Date (as defined below) or is not declared effective on or
prior to the Required Effectiveness Date (as defined below);
(ii) on the Effective Date, any Registrable
Securities covered by such Registration Statement are not listed on an Eligible
Market (as defined below);
(iii) the Common Stock (as defined below) is not
listed or quoted, or is suspended from trading, on an Eligible Market on the
Effective Date; or
(iii) the Company fails for any reason within its
control or its agent's control to deliver a certificate evidencing the Shares to
the Purchaser within three (3) Trading Days after delivery of such certificate
is required pursuant to the Agreement.
If (i) any Event occurs and remains uncured for 30 days; (ii) the
Company fails to make any cash payment required under the Lease Termination
Agreement and such failure is not cured within ten days after notice of such
default is first given to the Company by the Purchaser; or (iii) if prior to the
Registration Statement being declared effective the Company defaults in the
timely performance of any other obligation under the Transaction Documents and
such default continues uncured for a period of 20 days after the date on which
notice of such default is first given to the Company by the Purchaser (it being
understood that no prior notice need be given in the case of a default that
cannot reasonably be cured within 20 days), then at any time within sixty (60)
days thereafter the Purchaser may deliver to the Company a notice (a "REPURCHASE
NOTICE") requiring the Company to repurchase all or any portion of the Shares
then held by the Purchaser at a price (the "REPURCHASE PRICE") per share equal
to 100% of the highest Closing Price for any Trading Day after the Closing and
preceding either (a) the date of delivery of the notice requiring such
repurchase, or (b) the date on which the applicable repurchase price (together
with any other payments, expenses and liquidated damages then due and payable
under
-16-
the Transaction Documents) is paid in full, whichever is greater. If the
Purchaser delivers a Repurchase Notice pursuant to this Section, the Company
shall pay the aggregate Repurchase Price (together with any other payments,
expenses and liquidated damages then due and payable pursuant to the Transaction
Documents) to the Purchaser no later than the tenth Trading Day following the
date of delivery of the Repurchase Notice, and upon receipt thereof the
Purchaser shall deliver original certificates evidencing the Shares so
repurchased to the Company (to the extent such certificates have been delivered
to the Purchaser).
For the purposes of this Section 7.4, the following terms shall have the
following meanings:
"CLOSING PRICE" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on an Eligible Market or any other national securities exchange, the
closing bid price per share of the Common Stock for such date (or the nearest
preceding date) on the primary Eligible Market or exchange on which the Common
Stock is then listed or quoted; (b) if prices for the Common Stock are then
quoted on the OTC Bulletin Board, the closing bid price per share of the Common
Stock for such date (or the nearest preceding date) so quoted; (c) if prices for
the Common Stock are then reported in the "Pink Sheets" published by the
National Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined in good faith by the Board
of Directors of the Company.
"COMMON STOCK" means the common stock of the Company, par value $0.001
per share.
"EFFECTIVE DATE" means the date that the Registration Statement is first
declared effective by the SEC.
"ELIGIBLE MARKET" means the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market.
"FILING DATE" means twenty (20) days following the date first written
above.
"REGISTRABLE SECURITIES" means any Common Stock issued pursuant to the
Agreement , together with any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing.
"REQUIRED EFFECTIVENESS DATE" means ninety (90) days from the Filing
Date; provided, however, so long as the Registration Statement is filed by the
Filing Date, if the Registration Statement receives SEC review, then the
Required Effectiveness Date will be one hundred eighty (180) days from the date
of Closing.
"TRADING DAY" means (a) any day on which the Common Stock is listed or
quoted and traded on its primary Eligible Market, or (b) if the Common Stock is
not then listed or quoted and traded on any Eligible Market, then a day on which
trading occurs on the New York Stock Exchange (or any successor thereto).
-17-
"TRANSACTION DOCUMENTS" means this Agreement and the Lease Termination
Agreement between the Company and Purchaser of even date herewith and any
exhibits hereto or thereto.
SECTION 8
MISCELLANEOUS
8.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that process may be served upon them in any
manner authorized by the laws of the State of California for such persons and
waives and covenants not to assert or plead any objection that they might
otherwise have to such jurisdiction and such process. The Company hereby waives
all rights to a trial by jury.
8.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto;
provided, however, that the rights of the Purchaser to purchase the Shares shall
not be assignable.
8.3 Entire Agreement. This Agreement, the Lease Termination Agreement
and the other documents delivered pursuant hereto at the Closing constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and supersede in their entirety all prior undertakings and
agreements of the parties hereto with respect to the subjects hereof, all with
the intent and effect that such prior agreements and undertakings shall be
hereby terminated and shall have no further force or effect. No party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
8.4 Amendment and Waiver. This Agreement may be amended by the parties
hereto, and any condition hereof may be waived, at any time by execution of an
instrument in writing signed by the Company and the Purchaser.
8.5 Notices, Etc. Any request, communication, or other notice required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if sent by facsimile or delivered by recognized overnight or international
courier service or personal delivery (as the situation may require) at the
respective address or facsimile number of the party receiving notice as set
forth below. Any party hereto may by notice so given change its address or
facsimile number for future notice hereunder. All such notices and other
communications hereunder shall be deemed given (i) upon confirmation of
delivery, if sent by facsimile and (ii) upon delivery, if sent by recognized
overnight or international courier service or personal delivery:
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(i) if to the Company, to:
Intrabiotics Pharmaceuticals, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Cooley Godward LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx; Xxxx X. Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(ii) if to EOP-Shoreline:
EOP-Shoreline Technology Park, L.L.C.
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx,
General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP
1901 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
8.6 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any holder of any
Shares, upon any breach or default of the Company under this Agreement, shall
impair any such right, power or remedy of such holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any holder of any breach or
default under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies,
-19-
either under this Agreement or by law or otherwise afforded to any holder, shall
be cumulative and not alternative.
8.7 Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
issuance of the Shares.
8.8 Severability. In the event that any provision of this Agreement
becomes or is held by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
8.9 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
8.11 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
8.12 Replacement of Shares. If any certificate or instrument evidencing
any Shares is mutilated, lost, stolen or destroyed, the Company shall instruct
its transfer agent to issue or cause to be issued in exchange and substitution
for and upon cancellation thereof, or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Shares.
8.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchaser
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
8.14 [Intentionally Deleted].
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Common Stock Purchase Agreement has been
executed by the undersigned as of the date first above written:
"COMPANY" INTRABIOTICS PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx .
-------------------------------------------
Name: Xxxx X. Xxxxxxxxx .
-----------------------------------------
Title: Sr. VP and Chief Financial Officer
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"EOP-SHORELINE" EOP-SHORELINE TECHNOLOGY PARK, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its sole
member
By: Equity Office Properties Trust,
a Maryland real estate investment
trust, its general partner
By: /s/ Xxxxxxx Xxxx .
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Name: Xxxxxxx Xxxx .
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Title: Vice President .
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EXHIBIT A
SCHEDULE OF PURCHASER
NAME NUMBER OF SHARES
---- ----------------
EOP-Shoreline Technology Park, L.L.C. 1,250,000
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, CFO
EXHIBIT A
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EXHIBIT B
[INTENTIONALLY DELETED]
EXHIBIT B
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EXHIBIT C
LEGAL OPINION
EXHIBIT C
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November __, 2002
EOP-Shoreline Technology Park, L.L.C.
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: IntraBiotics Pharmaceuticals, Inc.
Ladies and Gentlemen:
We have acted as counsel for IntraBiotics Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), in connection with the issuance to you of
1,250,000 shares of Common Stock of the Company (the "Shares") pursuant to that
certain Common Stock Purchase Agreement dated November __, 2002 (the "Purchase
Agreement") between the Company and you. We are rendering this opinion pursuant
to Section 2.2 of the Purchase Agreement. Except as otherwise defined herein,
capitalized terms used but not defined herein have the respective meanings given
to them in the Purchase Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by the various parties (and assumed that all
such representations and warranties remain true and complete as if given on the
date hereof) and originals or copies certified to our satisfaction, of such
records, documents, certificates, opinions, memoranda and other instruments as
in our judgment are necessary or appropriate to enable us to render the opinions
expressed below. Where we render an opinion "to the best of our knowledge" or
concerning an item "known to us" or our opinion otherwise refers to our
knowledge, it is based solely upon (i) an inquiry of attorneys within this firm
who perform legal services for the Company, (ii) receipt of a certificate
executed by an officer of the Company covering such matters and (iii) such other
investigation, if any, that we specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents (excluding the due authorization, execution and
delivery by the Company of the Purchase Agreement) by all of the parties thereto
where due authorization, execution and delivery are prerequisites to the
effectiveness of such documents. We have also assumed: that all individuals
executing and delivering documents had the legal capacity to so execute and
deliver; that you have received all documents you were to receive under the
Purchase Agreement; that the Purchase Agreement executed by you is an obligation
binding upon you; that you have filed any required California franchise or
income tax returns and have paid any required California franchise or income
taxes; and that there are no extrinsic agreements or understandings among the
parties to the Purchase Agreement that would modify
EXHIBIT C
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or interpret the terms of the Purchase Agreement or the respective rights or
obligations of the parties thereunder.
We express no opinion herein concerning any laws other than the laws of
the State of California, the General Corporation Law of the State of Delaware
and the federal laws of the United States. We express no opinion as to whether
the laws of any particular jurisdiction apply, and no opinion to the extent that
the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof. We are not rendering any opinion as to compliance
with any antifraud law, rule or regulation relating to securities, or to the
sale or issuance thereof.
On the basis of the foregoing and in reliance thereon, and subject to
the qualifications herein stated, we are of the opinion that:
1. The Shares have been duly authorized, and when issued, delivered and
paid for in accordance with the terms of the Purchase Agreement, will be validly
issued, fully paid and nonassessable.
2. Assuming the accuracy and completeness of all representations and
warranties made by the you under the Purchase Agreement, as if made on the date
hereof, the sale and issuance of the Shares is exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended, subject to
the filing of a Form D pursuant to Securities and Exchange Commission Regulation
D.
* * * * *
This opinion is furnished to you solely for your benefit and may not be
made available to or relied upon by any other person, firm or entity without our
prior written consent.
Very truly yours,
Xxxxx X. Xxxxxxx
Xxxxxx Godward LLP
SJL:sbe
EXHIBIT C
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EXHIBIT D
INTRABIOTICS PHARMACEUTICALS, INC.
PURCHASER QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: IntraBiotics Pharmaceuticals, Inc.
This Purchaser Questionnaire ("QUESTIONNAIRE") must be completed by the
potential purchaser in connection with the offer and sale of the shares of the
common stock, par value $0.001 per share, of IntraBiotics Pharmaceuticals, Inc.
(the "Securities"). The Securities are being offered and sold by IntraBiotics
Pharmaceuticals, Inc. (the "Corporation") without registration under the
Securities Act of 1933, as amended (the "Act"), and the securities laws of
certain states, in reliance on the exemptions contained in Section 4(2) of the
Act and on Regulation D promulgated thereunder and in reliance on similar
exemptions under applicable state laws. The Corporation must determine that a
potential purchaser meets certain suitability requirements before offering or
selling Securities to such purchaser. The purpose of this Questionnaire is to
assure the Corporation that the purchaser will meet the applicable suitability
requirements. The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering exemption
from registration is based in part on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a
solicitation of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable
to purchasers of the Securities. You must answer all applicable questions and
complete, date and sign this Questionnaire. Please print or type your responses
and attach additional sheets of paper if necessary to complete your answers to
any item.
A. BACKGROUND INFORMATION
Name: EOP-Shoreline Technology Park L.L.C.
Business Address: Two N. Riverside Plaza, Suite 2100
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(Number and Street)
Xxxxxxx Xxxxxxxx 00000
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(City) (State) (Zip Code)
Telephone Number: (000) 000-0000
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If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: Limited Liability Company
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State of formation: Delaware Date of formation: 12/4/97
--------- ----------
Social Security or Taxpayer Identification No. 00-0000000
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B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):
EXHIBIT D
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_____(1) a bank, as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act; a Small Business Investment
Corporation licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act
of 1974, if the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
the investment decisions made solely by persons that are accredited
investors;(1)
_____(2) a private business development company as defined in Section 202(a)(22)
of the Investment Adviser Act of 1940;
_____(3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;
_____(4) a director, executive officer, or general partner of the issuer of the
Securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer;
_____(5) a natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Securities
exceeds $1,000,000;
_____(6) a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
_____(7) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and
[X] (8) an entity in which all of the equity owners are accredited investors
(as defined above).
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Corporation as follows:
1. Any purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with a view to any
resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be
relied upon by the Corporation, and the undersigned will notify the Corporation
immediately of any material change in any of such
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(1) As used in this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
EXHIBIT D
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information occurring prior to the closing, if any, with respect to the purchase
of Securities by the undersigned or any co-purchaser.
3. There are no suits, pending litigation, or claims against the
undersigned that could materially affect the net worth of the undersigned as
reported in this Questionnaire.
4. The undersigned acknowledges that there may occasionally be times
when the Corporation, based on the advice of its counsel, determines that it
must suspend the use of the prospectus forming a part of the Registration
Statement (as such terms are defined in the Common Stock Purchase Agreement to
which this Questionnaire is attached) until such time as an amendment to the
Registration Statement has been filed by the Corporation and declared effective
by the Securities and Exchange Commission or until the Corporation has amended
or supplemented such prospectus. The undersigned is aware that, in such event,
the Securities will not be subject to ready liquidation, and that any Securities
purchased by the undersigned would have to be held during such suspension. The
overall commitment of the undersigned to investments which are not readily
marketable is not excessive in view of the undersigned's net worth and financial
circumstances, and any purchase of the Securities will not cause such commitment
to become excessive. The undersigned is able to bear the economic risk of an
investment in the Securities.
5. The undersigned has carefully considered the potential risks relating
to the Corporation and a purchase of the Securities, and fully understands that
the Securities are speculative investments which involve a high degree of risk
of loss of the undersigned's entire investment. Among others, the undersigned
has carefully considered each of the risks described under the heading "Risks
Related to Our Business" in the Corporation's most recent annual report on Form
10-K and quarterly report on Form 10-Q.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this
22nd day of November, 2002, and declares under oath that it is truthful and
correct.
EOP-Shoreline Technology Park L.L.C.,
A Delaware limited liability company
By: EOP Operating Limited Partnership, a Delaware
limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner
By: /s/ Xxxxxxx X Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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Title: Executive Vice President and
General Counsel
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(required for any purchaser that is a
corporation, partnership, trust or other
entity)
EXHIBIT D
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EXHIBIT E
INTRABIOTICS PHARMACEUTICALS, INC.
CERTIFICATE OF SUBSEQUENT SALE
Computershare Trust Company, Inc.
RE: Sale of Shares of Common Stock of IntraBiotics Pharmaceuticals,
Inc. (the "Company") pursuant to the Company's Prospectus
dated _______________, 2002 (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares
of Common Stock of the Company included in the table of Selling Shareholders in
the Prospectus, that the undersigned has sold the Shares pursuant to the
Prospectus and in a manner described under the caption "Plan of Distribution" in
the Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner):
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Record Purchaser (e.g., if held in name of nominee):
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Restricted Stock Certificate No.(s):
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Number of Shares Sold:
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Date of Sale:
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In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Purchaser and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
By:
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Print Name:
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Title:
-----------------------------------
Dated:
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cc: Investor Relations
IntraBiotics Pharmaceuticals, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
EXHIBIT E
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EXHIBIT F
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of the Shares by
the Purchaser. The Purchaser will receive all of the net proceeds from the sale
of the Shares under this prospectus. The Shares may be sold or distributed from
time to time by the Purchaser or the pledgees, donees, transferees of, or other
successors in interest to, the Purchaser directly to one or more purchasers
(including pledgees) or through brokers, dealers or underwriters who may act
solely as agents or may acquire Shares as principals at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices, all of which may be changed. The
distribution of the Shares may be effected in one or more transactions that may
take place through the Nasdaq National Market, including block trades or
ordinary broker's transactions, or through privately negotiated transactions,
through put or call options transactions relating to the Shares, through short
sales of the Shares or through a combination of any such methods of sale, at
market prices prevailing at the time of the sale, at prices related to such
prevailing market prices or negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the
Purchaser in connection with such sales.
The aggregate proceeds to the Purchaser from the sale of the Shares will
be the purchase price of the Shares sold less the aggregate agents' commissions,
if any, and other expenses of issuance and distribution not borne by the
Company. The Purchaser and any dealers or agents that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, and any profit on the sale of the Shares by them and any
commissions received by any such dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
EXHIBIT F
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SCHEDULE 3.8
LISTING OF PENDING OR THREATENED PROCEEDINGS AGAINST
COMPANY OR ANY OF ITS SUBSIDIARIES
The Company failed to pay the monthly rent due and owing under the terms of that
certain Office Lease Agreement between the Company and the Purchaser dated as of
February 7, 2000, as amended by that certain First Amendment, dated as of
September 26, 2001 and that certain letter agreement dated December 21, 2001
(collectively, the "LEASE") on October 1, 2002 and November 1, 2002. On or about
October 7, 2002, following the Company's failure to pay the monthly rental
obligation due on October 1, 2002, the Purchaser duly and validly served on the
Company that certain Notice to Pay Rent or Quit the Premises (the "NOTICE")
demanding the immediate payment of the amount of $243,267.12 in rent then in
default. As a result of the Company's failure to cure the Lease defaults in
accordance with the Notice, the Purchaser has filed a Complaint for Unlawful
Detainer against the Company in the Superior Court of California, County of
Santa Xxxxx, Case No. DC02 429297 (the "ACTION"), and such Action is currently
pending.
