Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) dated August 4, 2014, is
entered into by and among (i) Metabolix, Inc., a Delaware corporation (the
“Company”), and (ii) each person listed on Schedule I hereto (each, an
“Investor” and collectively, the “Investors”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to each Investor, and each Investor, severally
and not jointly, desires to purchase from the Company, an aggregate of
50,000,000 units of the Company’s securities (each, a “Unit” and collectively,
the “Units”), each Unit consisting of one (1) share of the Company’s common
stock, par value $0.01 per share (“Common Stock”), and one one-thousandth
(1/1,000) of a share of the Company’s Series B Convertible Preferred Stock, par
value $0.01 per share (“Preferred Stock”), comprising an aggregate of 50,000,000
shares of Common Stock (the “Common Shares”) and an aggregate of 50,000 shares
of Preferred Stock (the “Preferred Shares”), in a private placement pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”); and

 

WHEREAS, as provided in the certificate of designation, in the form of Exhibit A
attached hereto (the “Certificate of Designation”), to be filed by the Company
prior to the Closing (as defined below) with the Secretary of State of the State
of Delaware, each one-one thousandth of a share of Preferred Stock will
automatically convert into one share of Common Stock upon the effectiveness of
the filing with the Secretary of State of the State of Delaware of an amendment
(the “Charter Amendment”) to the Company’s Restated Certificate of
Incorporation, as amended, increasing the number of authorized shares of Common
Stock to not less than 150,000,000.

 

NOW THEREFORE, in consideration of the mutual covenants made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

1.                                      Purchase and Sale of Securities. 
Subject to the terms and conditions hereof, each Investor agrees, severally and
not jointly, to purchase from the Company, and the Company agrees to sell to the
Investors at the Closing, the number of Units set forth opposite each such
Investor’s name on Schedule I hereto for the price per Unit set forth in
Section 4 hereof and the aggregate purchase price set forth in Schedule I
hereto.

 

2.                                      Issuance of Securities.  Notwithstanding
anything in this Agreement to the contrary, the Company shall have no obligation
to sell any of the Securities (as defined below) to any person who is a resident
of a jurisdiction in which the sale of Securities to such person would
constitute a violation of the securities, “blue sky” or other similar laws of
such jurisdiction (collectively referred to as the “State Securities Laws”). 
For purposes of this Agreement, “Securities” shall mean the Common Shares, the
Preferred Shares and the shares of Common Stock issued or issuable upon
conversion of the Preferred Shares in accordance with the terms of the
Certificate of Designation (such shares of Common Stock, the “Underlying
Shares”).

 

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3.                                      The Closing.  The closing of the
purchase and sale of the Units (the “Closing”) shall take place at the
headquarters of the Company as promptly as practicable after the satisfaction or
waiver (to the extent permitted by law) of the conditions set forth in Section 7
hereof, or at such other time and place as the Company may designate by notice
to the Investors (such date and time being referred to herein as the “Closing
Date”); provided, however, that if the Closing Date does not occur on or before
September 15, 2014, this Agreement may be terminated by any Investor, as to such
Investor’s obligations hereunder and without any effect whatsoever on the
obligations between the Company and the other Investors, by written notice to
the other parties.

 

4.                                      Payment for Securities.  Payment for the
Units shall be received by the Company from the Investors by wire transfer of
immediately available funds or other means approved by the Company at or prior
to the Closing, at the price of $0.50 per Unit.  The Company shall deliver or
cause its transfer agent to deliver certificates representing the Common Shares,
and certificates representing the Preferred Shares, that each Investor purchases
to each such Investor at the Closing bearing the legend set forth in Section 10.

 

5.                                      Representations and Warranties of the
Company.  Except as otherwise specifically described in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2013,  the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, and any
current reports on Form 8-K filed by the Company subsequent to December 31, 2013
and through the date of this Agreement with the Securities and Exchange
Commission (the “Commission”), including the information incorporated by
reference therein (collectively, the “Disclosure Package”), the Company hereby
represents and warrants to and covenants with the Investors, as of the date
hereof and as of the Closing, that:

 

(a)                                 Organization, Good Standing and
Qualification.  The Company is duly formed and validly existing under the laws
of Delaware, with full corporate power and authority to conduct its business as
it is currently being conducted and to own its assets; and has secured any other
material authorizations, approvals, permits and orders required by law for the
conduct by the Company of its business as it is currently being conducted. 
Metabolix GmbH (“Metabolix Germany”), the Company’s wholly-owned subsidiary, is
duly formed and validly existing under the laws of Germany, with full corporate
power and authority to conduct its business as it is currently being conducted
and to own its assets; and has secured any other material authorizations,
approvals, permits and orders required by law for the conduct by Metabolix
Germany of its business as it is currently being conducted.  The Company has no
material subsidiaries other than Metabolix Germany.

 

(b)                                 Authorization.  The Company has all
corporate right, power and authority to enter into this Agreement and, subject
to receipt of the approval of the Charter Amendment by the holders of a majority
of the Company’s outstanding shares of Common Stock (the “Stockholder Approval”)
and the Nasdaq Viability Exception (as defined in Section 7(e) hereof), to
consummate the transactions contemplated hereby.  Except for the Stockholder
Approval and receipt of the Nasdaq Viability Exception, all corporate action on
the part of the Company, its directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Company, the authorization, sale, issuance and delivery of the Securities
contemplated herein and the performance of the Company’s obligations hereunder
has

 

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been taken.  This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

 

(c)                                  Capitalization.

 

(i)                                     As of July 31, 2014, the authorized
capital stock of the Company consisted of 5,000,000 shares of preferred stock,
none of which were issued and outstanding, and 100,000,000 shares of Common
Stock, 35,094,640 shares of which were issued and outstanding. The Preferred
Stock and the Common Stock are collectively referred to herein as the “Capital
Stock.” All of the issued and outstanding shares of Capital Stock have been duly
authorized, validly issued and are fully paid and nonassessable. As of July 31,
2014, restricted stock units for 600,000 shares of Common Stock were
outstanding, options to purchase 7,049,559 shares of Common Stock were
outstanding, 49,517 shares of Common Stock were reserved for issuance under the
Company’s 401(k) Plan, and an additional 2,700,265 shares of Common Stock were
available for issuance under the Company’s 2006 Stock Option and Incentive Plan.
Except as set forth in the preceding sentence, as of the date hereof there are
no outstanding options, warrants, rights (including conversion or preemptive
rights), agreements, arrangements or commitments of any character, whether or
not contingent, relating to the issued or unissued Capital Stock of the Company
or obligating the Company to issue or sell any share of Capital Stock of, or
other equity interest in, the Company.

 

(ii)                                  The Common Shares and the Preferred Shares
have been duly authorized and, when issued, delivered and paid for in the manner
set forth in this Agreement, will be validly issued, fully paid and
non-assessable and shall be free and clear of any encumbrances, preemptive
rights or restrictions (other than as provided in this Agreement or any
restrictions on transfer generally imposed under applicable securities laws). 
Subject to receipt of Stockholder Approval and the Nasdaq Viability Exception,
the Underlying Shares, when issued in accordance with the Certificate of
Designation and this Agreement, will be validly issued, fully paid and
non-assessable and shall be free and clear of any encumbrances, preemptive
rights or restrictions (other than as provided in this Agreement or any
restrictions on transfer generally imposed under applicable securities laws).

 

(iii)                               No “bad actor” disqualifying event described
in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”)
is applicable to the Company or, to the Company’s knowledge, any Company Covered
Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or
(d)(3), is applicable.  For purposes of this Agreement a “Company Covered
Person” means, with respect to the Company as an “issuer” for purposes of
Rule 506 of the Securities Act, any person listed in the first paragraph of
Rule 506(d)(1).

 

(iv)                              The Company owns all of the issued and
outstanding equity interests of Metabolix Germany.

 

(d)                                 Consents.  The Company is not required to
obtain any material consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other person in connection with the
execution, delivery and performance by the Company of this Agreement, other than
the

 

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Stockholder Approval, the Nasdaq Viability Exception, filings that have been
made, or will be made, pursuant to the rules and regulations of The Nasdaq Stock
Market LLC (“Nasdaq”), applicable State Securities Laws and post-sale filings
pursuant to applicable federal and State Securities Laws which the Company
undertakes to file or obtain within the applicable time periods.

 

(e)                                  Securities Laws. Assuming the accuracy of
each Investor’s representations and warranties set forth in Section 6, no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Investors as contemplated hereby.

 

(f)                                   Litigation. There is no action, suit,
proceeding or investigation pending or, to the Company’s knowledge, currently
threatened in writing against the Company or any of its directors and officers
that questions the validity of this Agreement or the right of the Company to
enter into this Agreement or to consummate the transactions contemplated hereby.
Except as disclosed in the Disclosure Package, there is no action, suit,
proceeding or investigation pending or, to the Company’s knowledge, currently
threatened in writing against the Company or any subsidiary or any of their
respective directors and officers which would have, either individually or in
the aggregate, a Material Adverse Effect (as defined below).

 

(g)                                  Filings. The Company has filed all forms,
reports and documents required to be filed by it with the Commission
(collectively, the “Company SEC Reports”). As of the respective dates they were
filed (except if amended, updated or superseded by a filing made by the Company
with the Commission prior to the date of this Agreement, then on the date of
such filing), the Company SEC Reports complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations of the Commission thereunder.

 

(h)                                 Financial Statements. The consolidated
financial statements of the Company (including any notes thereto) contained in
the Disclosure Package (i) complied as to form in all material respects with the
published rules and regulations of the Commission with respect thereto,
(ii) were prepared in accordance with United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto or, in the
case of unaudited financial statements, as permitted by Form 10-Q or Form 8-K)
and (iii) each presented fairly, in all material respects, the consolidated
financial position of the Company and its consolidated subsidiaries as of the
respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited financial
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to have a Material Adverse
Effect). The Company has not had any material disagreement with any of its
auditors regarding accounting matters or policies during any of its past three
full fiscal years or during the current fiscal year-to-date, which disagreements
would require disclosure to the Company’s Board of Directors.

 

(i)                                     Certain Fees.  No brokerage or finder’s
fees or commissions are or will be payable by the Company or any subsidiary of
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, other than those payable to Needham & Company,

 

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the Company’s financial advisor. The Investors shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement.

 

(j)                                    Acknowledgment Regarding Investors’
Purchase of Securities.  The Company acknowledges and agrees that each of the
Investors 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 no Investor is 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 any
Investor or any of their respective representatives or agents in connection with
this Agreement and the transactions contemplated hereby is merely incidental to
the Investors’ purchase of the Securities.  The Company further represents to
each Investor that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

 

(k)                                 Acknowledgment Regarding Investors’ Trading
Activity.  Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 6(a)(iv) and 12 hereof), it is understood
and acknowledged by the Company that: (i) none of the Investors has been asked
by the Company to agree, nor has any Investor agreed, to desist from purchasing
or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by
any Investor, specifically including, without limitation, short sales or
“derivative” transactions, before or after the Closing, may negatively impact
the market price of the Company’s publicly-traded securities, (iii) any
Investor, and counter-parties in “derivative” transactions to which any such
Investor is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each Investor shall not be deemed to have
any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. The Company further understands and acknowledges that,
except as otherwise provided by applicable law or the policies of the Company
applicable to directors, officers and employees of the Company, (y) one or more
Investors may engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation, during the
periods that the value of the Underlying Shares deliverable with respect to
Securities are being determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company
at and after the time that the hedging activities are being conducted.  The
Company acknowledges that such aforementioned hedging activities do not
constitute a breach of this Agreement.

 

(l)                                     Termination of Shareholder Rights
Agreement.  Effective as of the date of this Agreement, the Company has
terminated that certain Shareholder Rights Agreement, dated as of July 7, 2009,
as amended, by and between the Company and American Stock Transfer & Trust
Company, LLC, a New York Limited Liability Trust Company, as Rights Agent.

 

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6.                                      Representations and Warranties of the
Investors.   As of the date hereof and as of the Closing, each of the Investors,
severally and not jointly, hereby represents and warrants to and covenants with
the Company that:

 

(a)                                 General.

 

(i)                                     The Investor has all requisite authority
to purchase the Securities, enter into this Agreement and to perform all the
obligations required to be performed by the Investor hereunder, and such
purchase will not contravene any law, rule or regulation binding on the Investor
or any investment guideline or restriction applicable to the Investor.

 

(ii)                                  The Investor is acquiring the Securities
for its own account and is not acquiring the Securities as a nominee or agent or
otherwise for any other person.

 

(iii)                               The Investor will comply with all applicable
laws and regulations the Investor is required to comply with in connection with
the purchase or sale of Securities in effect in any jurisdiction in which the
Investor purchases or sells Securities and obtain any consent, approval or
permission the Investor is required to obtain in connection with such purchase
or sale of Securities under the laws and regulations of any jurisdiction to
which the Investor is subject or in which the Investor makes such purchases or
sales, and the Company shall have no responsibility therefor.

 

(iv)                              Other than consummating the transactions
contemplated hereby, the Investor has not directly or indirectly, nor has any
person acting on behalf of or pursuant to any understanding with such Investor,
executed any purchases or sales, including short sales, of the securities of the
Company during the period commencing as of the time that such Investor first
received a term sheet (written or oral) from the Company or any other person
representing the Company setting forth the material terms of the transactions
contemplated hereby and ending immediately prior to the execution hereof. 
Notwithstanding the foregoing, in the case of an Investor that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Investor’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Investor’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement.  Other than to other persons party to this Agreement,
such Investor has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing
contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing
of, available shares to borrow in order to effect short sales or similar
transactions in the future.

 

(b)                                 Information Concerning the Company.

 

(i)                                     The Investor understands and accepts
that the purchase of the Securities involves various risks.  The Investor
represents that it is able to bear a complete loss of its investment in the
Securities.

 

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(ii)                                  The Investor confirms that it is not
relying on any communication (written or oral) of the Company or any of its
affiliates, as investment advice or as a recommendation to purchase the
Securities.  It is understood that information and explanations related to the
terms and conditions of the Securities provided by the Company or any of its
affiliates shall not be considered investment advice or a recommendation to
purchase the Securities, and that neither the Company nor any of its affiliates
is acting or has acted as an advisor to the Investor in deciding to invest in
the Securities.  The Investor acknowledges that neither the Company nor any of
its affiliates has made any representation regarding the proper characterization
of the Securities for purposes of determining the Investor’s authority to invest
in the Securities.

 

(iii)                               The Investor acknowledges that it has had
the opportunity to review this Agreement (including all exhibits and schedules
hereto) and the Disclosure Package and has been afforded (A) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (B) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (C) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment.

 

(iv)                              The Investor understands that, unless the
Investor notifies the Company in writing to the contrary at or before the
Closing, each of the Investor’s representations and warranties contained in this
Agreement will be deemed to have been reaffirmed and confirmed as of the
Closing, taking into account all information received by the Investor.

 

(v)                                 The Investor understands that no federal or
state agency has passed upon the merits or risks of an investment in the
Securities or made any finding or determination concerning the fairness or
advisability of this investment.

 

(vi)                              The Investor is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

(c)                                  Non-reliance.

 

(i)                                     The Investor represents that it is not
relying on (and will not at any time rely on) any communication (written or
oral) of the Company, as investment advice or as a recommendation to purchase
the Securities, it being understood that information and explanations related to
the terms and conditions of the Securities shall not be considered investment
advice or a recommendation to purchase the Securities.

 

(ii)                                  Except as expressly provided herein, the
Investor confirms that the Company has not (A) given any guarantee or
representation as to the potential success, return,

 

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effect or benefit (either legal, regulatory, tax, financial, accounting or
otherwise) an of investment in the Securities or (B) made any representation to
the Investor regarding the legality of an investment in the Securities under
applicable legal investment or similar laws or regulations.  In deciding to
purchase the Securities, the Investor is not relying on the advice or
recommendations of the Company and the Investor has made its own independent
decision that the investment in the Securities is suitable and appropriate for
the Investor.

 

(d)                                 Status of Investor.

 

(i)                                     The Investor has such knowledge,
sophistication, skill and experience in business, financial and investment
matters that the Investor is capable of evaluating the merits and risks of an
investment in the Securities, and has so evaluated the merits and risks of such
investment.  With the assistance of the Investor’s own professional advisors, to
the extent that the Investor has deemed appropriate, the Investor has made its
own legal, tax, accounting and financial evaluation of the merits and risks of
an investment in the Securities and the consequences of this Agreement.  The
Investor has considered the suitability of the Securities as an investment in
light of its own circumstances and financial condition and the Investor is able
to bear the risks associated with an investment in the Securities and its
authority to invest in the Securities.

 

(ii)                                  At the time the Investor was offered the
Securities, the Investor was, and as of the date hereof the Investor is, and on
the Closing Date, the Investor will be either (A) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act or (B) an “accredited
investor” as defined in as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) under the Securities Act, and not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.  The Investor agrees to
furnish any additional information reasonably requested by the Company or any of
its affiliates to assure compliance with applicable U.S. federal and State
Securities Laws in connection with the purchase and sale of the Securities.

 

(iii)                               The Investor hereby represents that neither
it nor any of its Rule 506(d) Related Parties is a “bad actor” within the
meaning of Rule 506(d) of the Securities Act.  For purposes of this Agreement a
“Rule 506(d) Related Party” means a person or entity covered by the “Bad Actor
disqualification” provision of Rule 506(d) of the Securities Act.

 

(e)                                  Restrictions on Transfer or Sale of
Securities.

 

(i)                                     The Investor is acquiring the Securities
solely for the Investor’s own beneficial account, for investment purposes, and
not with a view to, or for resale in connection with, any distribution of the
Securities, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable State Securities Laws and has
no direct or indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securities in violation of the
Securities Act or any applicable State Securities Laws (this representation and
warranty not limiting such Investor’s right to sell the Securities pursuant to
the Registration Statement (as defined below) or otherwise in compliance with
applicable federal law and State Securities Laws). The Investor understands that
the Securities have not been registered under the Securities Act or any State
Securities Laws by reason of specific exemptions under the provisions thereof
which depend in part upon the

 

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investment intent of the Investor and of the other representations made by the
Investor in this Agreement.  The Investor understands that the Company is
relying upon the representations and agreements contained in this Agreement for
the purpose of determining whether this transaction meets the requirements for
such exemptions.

 

(ii)                                  The Investor understands that the
Securities are “restricted securities” under applicable federal securities laws
and that the Securities Act and the rules of the Commission provide in substance
that the Investor may dispose of the Securities only pursuant to an effective
registration statement under the Securities Act or an exemption therefrom such
as the exemption and safe harbor provided under Rule 144 of the Securities Act.

 

(iii)                               The Investor agrees that the Investor will
not sell, assign, pledge, give, transfer or otherwise dispose of the Securities
or any interest therein, or make any offer or attempt to do any of the
foregoing, except pursuant to a registration of the Securities under the
Securities Act or in a transaction which is exempt from the registration
provisions of the Securities Act such as the exemption and safe harbor provided
under Rule 144 of the Securities Act; that the certificates representing the
Securities will bear a legend making reference to the foregoing restrictions;
and that the Company and its affiliates and transfer agent shall not be required
to give effect to any purported transfer of such Securities except upon
compliance with the foregoing restrictions.  The Company acknowledges and agrees
that an Investor may from time to time pledge pursuant to a bona fide margin
agreement with a registered broker-dealer or grant a security interest in some
or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to
be bound by the provisions of this Agreement and, if required under the terms of
such arrangement, such Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties.  Such a pledge or transfer would not be subject
to approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith.  Further, no
notice shall be required of such pledge.

 

7.                                      Conditions to Obligations of the
Investor and the Company.  The obligations of the Investors to purchase and pay
for the Securities and of the Company to sell the Securities are subject to the
satisfaction at or prior to the Closing of the following conditions precedent:

 

(a)                                 Solely in the case of the Investors:

 

(i)                                     The representations and warranties of
the Company contained in Section 5 hereof shall be true and correct as of the
Closing in all material respects with the same effect as though such
representations and warranties had been made as of the Closing.

 

(ii)                                  No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered or
promulgated by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

(iii)                               Between the date of this Agreement and the
Closing Date, there shall not have been a Material Adverse Effect.  For purposes
of this Agreement, a “Material Adverse Effect” means any event, change,
violation, inaccuracy, circumstance or effect that,

 

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individually or in the aggregate, has had or would reasonably be expected to
have a material adverse effect on, or result in a material adverse change in, as
the case may be, the business, operations, properties, condition (financial or
otherwise), assets, liabilities or results of operations of the Company, except
for any such events, changes, violations, inaccuracies, circumstances or effects
resulting from (w) any changes in general economic, regulatory or political
conditions, (x) any changes or events generally affecting the industry in which
the Company operates, (y) any adverse change or effect that is caused by the
announcement of the transactions contemplated by this Agreement, or (z) any
violations or other matters arising from changes in law or GAAP; unless in any
such instance such change or effect described in (w), (x) or (z) impacts the
Company in a materially disproportionate manner relative to a preponderance of
the other similar entities impacted by such change.

 

(iv)                              The Company shall have delivered or caused to
be delivered to each Investor evidence of the filing and acceptance of the
Certificate of Designation from the Secretary of State of the State of Delaware.

 

(v)                                 The Company shall have received a financial
viability exception pursuant to Nasdaq Listing Rule 5635(f) from the shareholder
approval requirements of Nasdaq’s Listing Rules 5635(b), 5635(c), and
5635(d)(2) with respect to the purchase and sale of the Common Shares and
Preferred Shares hereunder and shall have complied with Nasdaq requirements for
notification to shareholders regarding such exception (the “Nasdaq Viability
Exception”).

 

(vi)                              The Company shall have executed and delivered
the letter agreement in the form attached hereto as Exhibit B (the “Standstill
Amendment”) amending and restating that certain letter agreement, dated as of
February 6, 2012, by and among the Company, Jack W. Schuler, Renate Schuler and
the Schuler Family Foundation.

 

(b)                                 Solely in the case of the Company:

 

(i)                                     The representations and warranties of
the Investors contained in Section 6 hereof shall be true and correct as of the
Closing in all material respects with the same effect as though such
representations and warranties had been made as of the Closing.

 

(ii)                                  No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered or
promulgated by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

(iii)                               The Company shall have received the Nasdaq
Viability Exception.

 

(iv)                              Jack W. Schuler, Renate Schuler and the
Schuler Family Foundation shall have executed and delivered the Standstill
Amendment.

 

8.                                      Covenants of the Company.

 

(a)                                 The Company shall use its best efforts to
apply for and obtain the Nasdaq Viability Exception for the transactions
contemplated by this Agreement. If Nasdaq grants the

 

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Nasdaq Viability Exception, the Company shall mail the stockholder notification
letter in accordance with Nasdaq Listing Rule 5635(f) and take such other
actions as may be required to preserve, and comply with the terms of, the Nasdaq
Viability Exception.

 

(b)                                 The Company hereby agrees to use reasonable
best efforts (i) to maintain the listing or quotation of the Common Stock on the
Nasdaq Global Market (or such other trading market that the Company applies to
have the Common Stock traded on), (ii) as promptly as practicable following the
Closing Date, to secure the listing of the Common Shares on such trading market,
and (iii) as promptly as practicable following date on which the Stockholder
Approval is obtained (the “Stockholder Approval Date”), to secure the listing of
all of the Underlying Shares on such trading market.

 

(c)                                  The Company shall file a Current Report on
Form 8-K and press release disclosing the material terms of the transactions
contemplated hereby.  The Company shall, prior to such filing, furnish to the
Investors for review a copy of such Form 8-K and press release. Such press
release will be issued prior to market open on the business day following the
date of execution of this Agreement and the Form-8-K will be filed within the
time prescribed by the regulations of the Commission.

 

(d)                                 The Company shall use its reasonable best
efforts to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act. For so long as any Investor
holds unregistered Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to such Investor and
make publicly available in accordance with Rule 144(c) such information as is
required for such Investor to sell the Common Shares and the Underlying Shares
under Rule 144.

 

(e)                                  The Board of Directors of the Company shall
use commercially reasonable efforts as soon as possible and in any event not
later than the 75th day after the Closing Date for the purpose of obtaining the
Stockholder Approval, with the recommendation of the Company’s Board of
Directors that the Charter Amendment be approved, and the Company shall solicit
proxies from its stockholders in connection therewith in the same manner as all
other management proposals in such proxy statement and, to the extent
authorized,  all management-appointed proxyholders shall vote their proxies in
favor of such proposal.

 

9.                                      Registration Rights.

 

(a)                                 Shelf Registration.

 

(i)                                     At the request of the holders of at
least a majority of the Registrable Shares (the “Majority Investors”), the
Company shall use commercially reasonable efforts to file no later than 15
business days after the Stockholder Approval Date (the “Filing Date”) a
registration statement covering the resale of the Common Shares and the
Underlying Shares (the “Registrable Shares”) with the Commission for an offering
to be made on a continuous basis pursuant to Rule 415, or if Rule 415 is not
available for offers and sales of the Registrable Shares, by such other means of
distribution of Registrable Shares as the Majority Investors may reasonably
specify (the “Initial Registration Statement”). The Initial Registration

 

11

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Statement shall be on Form S-3 (except if the Company is ineligible to register
for resale the Registrable Shares on Form S-3, in which case such registration
shall be on another appropriate form).

 

(ii)                                  The Company shall use commercially
reasonable efforts to effect the registration (including a declaration of
effectiveness thereof by the Commission) and applicable qualifications or
compliances (including, without limitation, the execution of any required
undertaking to file post-effective amendments, appropriate qualifications or
exemptions under applicable State Securities Laws and appropriate compliance
with applicable securities laws, requirements or regulations) as promptly as
practicable after the filing of the Initial Registration Statement, but in any
event prior to the date which is 90 days after the Filing Date (the
“Effectiveness Date”). The Company shall, within two (2) business days after the
Effectiveness Date, file a final prospectus with the Commission as required by
Rule 424 under the Securities Act.

 

(iii)                               In the event that all of the Registrable
Shares cannot, as a result of the rules and regulations of the Commission, be
registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly (i) inform the Investors thereof,
(ii) use commercially reasonable efforts to file amendments to the Initial
Registration Statement as required by the Commission and/or (iii) withdraw the
Initial Registration Statement and use commercially reasonable efforts to file a
new registration statement (a “New Registration Statement”), in either case
covering the maximum number of Registrable Shares permitted to be registered by
the Commission, on Form S-3 or, if the Company is ineligible to register for
resale the Registrable Shares on Form S-3, such other form available to register
for resale the Registrable Shares as a secondary offering; provided, however,
that prior to filing such amendment or New Registration Statement, the Company
shall be obligated to use commercially reasonable efforts to advocate with the
Commission for the registration of all of the Registrable Shares. In the event
the Company amends the Initial Registration Statement or files a New
Registration Statement, as the case may be, under clauses (ii) or (iii) above,
the Company will use commercially reasonable efforts to file with the
Commission, as promptly as practicable, one or more registration statements on
Form S-3 or, if the Company is ineligible to register for resale the Registrable
Shares on Form S-3, such other form available to register for resale those
Registrable Shares that were not registered for resale on the Initial
Registration Statement, as amended, or the New Registration Statement (the
“Remainder Registration Statements” and, collectively with the Initial
Registration Statement and the New Registration Statement, the “Registration
Statements”).

 

(iv)                              Notwithstanding any other provision of this
Agreement, if the Commission limits the number of Registrable Shares permitted
to be registered on a particular Registration Statement (and notwithstanding
that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater number of Registrable Shares), unless otherwise
directed in writing by a Holder as to its Registrable Shares, the number of
Registrable Shares to be registered on such Registration Statement will be
reduced as follows:

 

(1)                                 First, the Company shall reduce or eliminate
any securities to be included other than Registrable Shares;

 

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(2)                                 Second, the Company shall reduce Registrable
Shares (applied to the Investors on a pro rata basis based on the total number
of unregistered Registrable Shares held by such Investors).

 

In the event of a cutback hereunder, the Company shall give the Investors at
least three (3) business days prior written notice along with the calculations
as to such Investor’s allotment.

 

(b)                                 All expenses incurred by the Company in
complying with Section 9(a) hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and expenses of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the fees of legal counsel for any Investor or holder of
Registrable Shares) shall be borne by the Company. All selling commissions
applicable to the sale of Registrable Shares and all fees and expenses of legal
counsel for any Investor or holder of Registrable Shares related to the
registration and sale of the Registrable Shares shall be borne by the Investor
or holder of Registrable Shares incurring such commissions, fees or expenses.

 

(c)                                  In the case of the registration,
qualification, exemption or compliance effected by the Company pursuant to this
Agreement, the Company shall, upon reasonable request, inform the Investors as
to the status of such registration, qualification, exemption and compliance. At
its expense the Company shall:

 

(i)                                     except for such times as the Company is
permitted hereunder to suspend the use of the prospectus forming part of a
Registration Statement, use its commercially reasonable efforts to keep such
registration, and any qualification, exemption or compliance under State
Securities Laws which the Company determines to obtain, continuously effective
with respect to the Investors, and to keep the applicable Registration Statement
effective until the later of (A) two (2) years from the Closing Date, (B) the
date by which all the Registrable Shares may be sold without volume or manner of
sale restrictions which may be applicable to affiliates under Rule 144, or
(C) the date on which all of the Registrable Shares are sold. The period of time
during which the Company is required hereunder to keep a Registration Statement
effective is referred to herein as the “Registration Period”;

 

(ii)                                  advise the Investors within five
(5) business days:

 

(1)                                 when a Registration Statement or any
amendment thereto has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become effective;

 

(2)                                 of any request by the Commission for
amendments or supplements to any Registration Statement or the prospectus
included therein or for additional information;

 

(3)                                 of the issuance by the Commission of any
stop order suspending the effectiveness of any Registration Statement or, to the
Company’s knowledge, the initiation of any proceedings for such purpose;

 

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(4)                                 of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Shares included therein for sale in any jurisdiction or, to the
Company’s knowledge, the initiation or threatening of any proceeding for such
purpose; and

 

(5)                                 subject to the provisions this Agreement, of
the occurrence of any event that requires the making of any changes in any
Registration Statement or prospectus so that, as of such date, the statements
therein are not misleading and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading;

 

(iii)                               use its commercially reasonable efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement as soon as reasonably practicable;

 

(iv)                              if an Investor so requests in writing,
promptly furnish to the Investor, without charge, at least one copy of each
Registration Statement and each post-effective amendment thereto, including
financial statements and schedules, and, if explicitly requested, all exhibits
in the form filed with the Commission;

 

(v)                                 during the Registration Period, promptly
deliver to each Investor, without charge, as many copies of each prospectus
included in a Registration Statement and any amendment or supplement thereto as
the Investor may reasonably request in writing; and the Company consents to the
use, consistent with the provisions hereof, of the prospectus or any amendment
or supplement thereto by the Investor of Registrable Shares in connection with
the offering and sale of the Registrable Shares covered by a prospectus or any
amendment or supplement thereto;

 

(vi)                              during the Registration Period, if an Investor
so requests in writing, deliver to the Investor, without charge, (i) one copy of
the following documents, other than those documents available via the
Commission’s EDGAR system: (A) its annual report on Form 10-K (or similar form),
(B) its definitive proxy statement with respect to its annual meeting of
stockholders, (C) each of its quarterly reports on Form 10-Q, and (D) a copy of
each full Registration Statement (the foregoing, in each case, excluding
exhibits); and (ii) if explicitly requested, all exhibits excluded by the
parenthetical to the immediately preceding clause (D); provided, that the
Company shall have no obligation to provide any document pursuant to this clause
that is available on the Commission’s EDGAR system;

 

(vii)                           prior to any public offering of Registrable
Shares pursuant to any Registration Statement, promptly take such actions as may
be necessary to register or qualify or obtain an exemption for offer and sale
under State Securities Laws of such United States jurisdictions as an Investor
reasonably request in writing; provided that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of

 

14

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process in any such jurisdiction, and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the Registrable Shares covered by any such Registration
Statement;

 

(viii)                        upon the occurrence of any event contemplated by
Section 9(c)(ii)(5) above, except for such times as the Company is permitted
hereunder to suspend the use of a prospectus forming part of a Registration
Statement, and taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its stockholders of the premature
disclosure of such event, the Company shall use its commercially reasonable
efforts to prepare a post-effective amendment to such Registration Statement or
a supplement to the related prospectus, or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Shares included
therein, such prospectus will not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

 

(ix)                              otherwise use its commercially reasonable
efforts to comply in all material respects with all applicable rules and
regulations of the Commission which could affect the sale of the Registrable
Shares;

 

(x)                                 use its commercially reasonable efforts to
cause all Registrable Shares to be listed on each securities exchange or market,
if any, on which equity securities issued by the Company have been listed; and

 

(xi)                              cooperate with any broker-dealer through which
an Investor proposes to resell its Registrable Shares in such broker-dealer’s
filing with the FINRA Corporate Financing Department pursuant to FINRA
Rule 5110, as requested by any such Investor.

 

(d)                                 No Investor shall have the right to take any
action to restrain, enjoin or otherwise delay any registration pursuant to
Section 9(a) hereof as a result of any controversy that may arise with respect
to the interpretation or implementation of this Agreement.

 

(e)                                  Indemnification.

 

(i)                                     To the extent permitted by law, the
Company shall indemnify each Investor and each person controlling such Investor
within the meaning of Section 15 of the Securities Act, with respect to which
any registration that has been effected pursuant to this Agreement, against all
claims, losses, damages and liabilities (or action in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened (subject to Section 9(e)(iii) below), arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any Registration Statement, prospectus, any amendment or supplement
thereof, or other document incident to any registration, qualification or
compliance or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in which they were made,
or any violation by the Company of any rule or regulation promulgated by the
Securities Act applicable to the Company and relating to any action or inaction
required of the Company in connection with any such registration,

 

15

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qualification or compliance, and will reimburse each Investor and each person
controlling such Investor, for reasonable legal and other out-of-pocket expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action as incurred; provided that the Company
will not be liable in any such case to the extent that any untrue statement or
omission or allegation thereof is made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Investor
for use in preparation of any Registration Statement, prospectus, amendment or
supplement; provided however, that the Company will not be liable in any such
case where the claim, loss, damage or liability arises out of the failure of
such Investor to comply with the covenants and agreements contained in this
Agreement respecting sales of Registrable Shares, and except that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any such untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time any Registration
Statement becomes effective or in an amended prospectus filed with the
Commission pursuant to Rule 424(b) which meets the requirements of
Section 10(a) of the Securities Act (each, a “Final Prospectus”), such indemnity
shall not inure to the benefit of the Investor or any such controlling person,
if a copy of a Final Prospectus furnished by the Company to the Investor for
delivery was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act and a Final Prospectus would have cured the defect giving
rise to such loss, liability, claim or damage.

 

(ii)                                  Each Investor will, severally and not
jointly, indemnify the Company, each of its directors and officers, and each
person who controls the Company within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened (subject to Section 9(e)(iii) below),
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any Registration Statement, prospectus, any
amendment or supplement thereof, or other document incident to any such
registration, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in which they were made,
and will reimburse the Company, such directors and officers, and each person
controlling the Company for reasonable legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred, in each case to the extent, but only to
the extent, that such untrue statement or omission or allegation thereof is made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Investor for use in preparation of any
Registration Statement, prospectus, amendment or supplement. Notwithstanding the
foregoing, the maximum liability of the Investor under this section shall be
limited to the proceeds received by the Investor from the sale of Registrable
Shares.

 

(iii)                               Each party entitled to indemnification under
this Section 9(e) (the “Indemnified Party”) shall give notice to the party
required to provide indemnification (the “Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party (at its expense) to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel

 

16

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for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld, conditioned or delayed), and the Indemnified Party may
participate in such defense at such Indemnified Party’s expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless such failure is materially prejudicial to the Indemnifying
Party in defending such claim or litigation. An Indemnifying Party shall not be
liable for any settlement of an action or claim effected without its written
consent (which consent shall not be unreasonably withheld, conditioned or
delayed). No Indemnifying Party, in its defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party (which consent shall
not be unreasonably withheld, conditioned or delayed), consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.

 

(iv)                              If the indemnification provided for in this
Section 9(e) is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9(e) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 9(e), no Investor
shall be required to contribute pursuant to this Section 9(e), in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by such Investor from the sale of the Registrable Shares exceeds the amount of
any damages that such Investor has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

 

(f)                                   Disclosure, Etc.

 

(i)                                     Not less than five (5) business days
prior to the filing of each Registration Statement, the Company shall furnish to
each Investor copies of such Registration Statement and all exhibits being filed
therewith, and shall consider in good faith the reasonable comments of such
Investor. Notwithstanding the foregoing sentence, the Company shall not be
obligated to provide the Investors advance copies of any universal shelf
registration statement registering securities in addition to those required
hereunder.

 

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Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event requiring the preparation of a supplement or amendment to
a prospectus relating to Registrable Shares so that, as thereafter delivered to
the Investor, such prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, the Investor will
forthwith discontinue disposition of Registrable Shares pursuant to a
Registration Statement and prospectus contemplated by Section 9(a) until its
receipt of copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, the Investor shall deliver to the Company
all copies, other than permanent file copies then in the Investor’s possession,
of the prospectus covering such Registrable Shares current at the time of
receipt of such notice.

 

(ii)                                  Each Investor shall suspend, upon request
of the Company, any disposition of Registrable Shares pursuant to any
Registration Statement and prospectus contemplated by Section 9(a) during the
occurrence or existence of any pending corporate development with respect to the
Company that the Board of Directors of the Company believes in good faith may be
material and that, in the determination of the Board of Directors of the
Company, makes it not in the best interest of the Company to allow continued
availability of a Registration Statement or prospectus.  The Company shall be
entitled to exercise its right under this paragraph to suspend the availability
of a Registration Statement and prospectus for a period not to exceed 60
calendar days (which need not be consecutive days) in any 12-month period.

 

(iii)                               Upon the occurrence of any event
contemplated by Section 3(d), as promptly as reasonably possible under the
circumstances taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither a Registration Statement nor such prospectus will
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.  The
Company will use its best efforts to ensure that the use of the prospectus may
be resumed as promptly as is practicable.  The Company shall be entitled to
exercise its right under this Section 9(f) to suspend the availability of a
Registration Statement and prospectus for a period not to exceed 60 calendar
days (which need not be consecutive days) in any 12-month period.

 

(iv)                              As a condition to the inclusion of its
Registrable Shares, the Investor shall furnish to the Company such information
regarding the Investor and the distribution proposed by the Investor as the
Company may reasonably request in writing, including completing a Registration
Statement Questionnaire in the form provided by the Company, or as shall be
required in connection with any registration referred to in this Section 9.

 

(v)                                 Each Investor hereby covenants with the
Company (i) not to make any sale of the Registrable Shares without effectively
causing the prospectus delivery requirements under the Securities Act to be
satisfied (unless such sale is pursuant to Rule 144).

 

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(vi)                              Each Investor agrees not to take any action
with respect to any distribution deemed to be made pursuant to a Registration
Statement which would constitute a violation of Regulation M under the Exchange
Act or any other applicable rule, regulation or law.

 

(vii)                           At the end of the Registration Period, each
Investor shall discontinue sales of shares pursuant to any Registration
Statement upon receipt of notice from the Company of its intention to remove
from registration the shares covered by any such Registration Statement which
remain unsold, and the Investor shall notify the Company of the number of shares
registered which remain unsold immediately upon receipt of such notice from the
Company.

 

(g)                                  The rights to cause the Company to register
Registrable Shares granted to the Investors by the Company under
Section 9(a) may be assigned by an Investor in connection with a transfer by
such Investor of all or a portion of its Registrable Shares, provided, however,
that the Investor must give the Company at least 10 days prior notice of such
transfer for such transfer to be reflected in the Registration Statement or any
amendment thereto and that (i) such transfer may otherwise be effected in
accordance with applicable securities laws; (ii) such Investor gives prior
written notice to the Company at least 10 days prior to the transfer; and
(iii) such transferee agrees to comply with the terms and provisions of this
Agreement, and such transfer is otherwise in compliance with this Agreement.
Except as specifically permitted by this Section 9(g), the rights of an Investor
with respect to Registrable Shares as set out herein shall not be transferable
to any other person, and any attempted transfer shall cause all rights of such
Investor therein to be forfeited.

 

(h)                                 The rights of an Investor under any
provision of this Section 9 may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) or amended by an instrument in writing signed by
such Investor.

 

10.                               Legend.  At the Closing, the certificates
representing the Common Shares, and the certificates representing the Preferred
Shares, sold pursuant to this Agreement, and upon issuance the certificates
representing the Underlying Shares, will be imprinted with a legend in
substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN

 

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CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

 

provided, that the Company shall (a) cause such legend to be promptly removed
once a registration statement covering the resale of any Securities is effective
under the Securities Act or if such legend is no longer required under
applicable law and (b) in connection with any sale under Rule 144, promptly (and
in any event within five (5)business days after receipt by the Company of a
request therefor accompanied by all reasonably required documentation) deliver,
or cause to be delivered, to the Investors new certificate(s) representing such
Securities that are free from all restrictive and other legends or, at the
request of an Investor, via DWAC transfer to such Investor’s account.

 

11.                               Replacement of Securities. If any certificate
or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof (in the case of mutilation), 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.  The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities.

 

12.                               Certain Transactions. Each Investor, severally
and not jointly, covenants that neither it, nor any affiliate acting on its
behalf or pursuant to any understanding with it will execute any purchases or
sales, including short sales, of any of the Company’s securities during the
period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 8(b).

 

13.                               Expenses. The parties hereto shall pay their
own costs and expenses in connection herewith; provided that, subject to the
consummation of the transactions contemplated hereby, the Company shall
reimburse the Investors upon demand for up to $50,000 of reasonable
out-of-pocket expenses incurred by the Investors, including without limitation
reimbursement of reasonable attorneys’ fees, in connection with the negotiation
and execution of this Agreement and the consummation of the transactions
contemplated hereby.

 

14.                               Waiver, Amendment.  Neither this Agreement nor
any provisions hereof shall be amended, waived, discharged or terminated except
by an instrument in writing signed, in the case of an amendment, by the Company
and Investors holding not less than a majority of the Registrable Shares
affected by such amendment or, in the case of a waiver, discharge or
termination, by the party against whom such waiver, discharge or termination is
sought.

 

15.                               Assignability.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investors holding
not less than a majority of the Registrable Shares. Any Investor may assign any

 

20

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or all of its rights under this Agreement to any person to whom such Investor
assigns or transfers any Securities; provided that such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions of this Agreement that apply to the “Investors.”  Additionally, at
any time prior to the Closing, any Investor may allocate any portion of his, her
or its Units being purchased hereunder to a third party reasonably acceptable to
the Company (an “Additional Investor”), provided that such Additional Investor
executes a counterpart signature page to this Agreement becoming an Investor
hereunder in all respects, including without limitation making the
representations and warranties in Section 6 of this Agreement.  In the event an
Additional Investor becomes a party to this Agreement, Schedule I to this
Agreement shall be updated automatically without the need for an amendment to
this Agreement.

 

16.                               Waiver of Jury Trial.  EACH OF THE COMPANY AND
THE INVESTORS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT
TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

17.                               Submission to Jurisdiction.  With respect to
any suit, action or proceeding relating to any offers, purchases or sales of the
Securities by the Investors (“Proceedings”), each of the Company and the
Investors irrevocably submits to the jurisdiction of the federal or state courts
located in the State of Delaware, which submission shall be exclusive unless
none of such courts has lawful jurisdiction over such Proceedings.

 

18.                               Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.

 

19.                               Section and Other Headings.  The section and
other headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

 

20.                               Counterparts.  This Agreement may be executed
in any number of counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which together shall be deemed to
be one and the same agreement.

 

21.                               Notices.  All notices and other communications
provided for herein shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by registered or certified mail, return
receipt requested, postage prepaid to the following addresses (or such other
address as either party shall have specified by notice in writing to the other):

 

If to the Company:

Metabolix, Inc.

21 Erie Street

Cambridge, MA 02139

Attention: Joseph Shaulson, CEO

Email: jshaulson@metabolix.com

 

 

 

With a copy (which shall not constitute notice) to:

 

21

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Goodwin Procter LLP

Exchange Place

53 State Street

Boston, MA 02109

Attention: John M. Mutkoski

Email: jmutkoski@goodwinprocter.com

 

 

If to any Investor:

The address specified in Schedule I for notices to such Investor

 

22.                               Binding Effect.  The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns.

 

23.                               Survival.  All representations, warranties and
covenants contained in this Agreement shall survive the Closing.

 

24.                               Notification of Changes.  Each of the Company
and the Investors hereby covenants and agrees to notify the other upon the
occurrence of any event prior to the Closing which would cause any
representation, warranty, or covenant of such party contained in this Agreement
to be false or incorrect.

 

25.                               Severability.  If any term or provision of
this Agreement is invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other term or
provision of this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction.

 

26.                               Independent Nature of Investors’ Obligations
and Rights.  The obligations of each Investor under this Agreement are several
and not joint with the obligations of any other Investor, and no Investor shall
be responsible in any way for the performance or non-performance of the
obligations of any other Investor under this Agreement.  Nothing contained
herein, and no action taken by any Investor pursuant hereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated hereby.  Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any proceeding for such
purpose.  Each Investor has had the opportunity to be represented by its own
separate legal counsel in its review and negotiation of this Agreement
(including the exhibits and schedules hereto).  Except as expressly contemplated
by this Agreement, the Company has elected to provide all Investors with the
same terms and Agreement for the convenience of the Company and not because it
was required or requested to do so by any of the Investors.

 

[SIGNATURE PAGE FOLLOWS]

 

22

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

 

 

METABOLIX, INC.

 

 

 

 

 

 

 

By:

/s/ Joseph Shaulson

 

Name:

Joseph Shaulson

 

Title:

President and CEO

 

 

 

 

 

 

 

SCHULER FAMILY FOUNDATION

 

 

 

 

 

 

 

By:

/s/ Jack W. Schuler

 

Name:

Jack W. Schuler

 

Title:

Trustee

 

 

 

 

 

 

 

TINO HANS SCHULER TRUST

 

 

 

 

 

 

 

By:

/s/ H. George Schuler

 

Name:

H. George Schuler

 

Title:

Trustee

 

 

 

 

 

 

 

TANYA EVE SCHULER TRUST

 

 

 

 

 

 

By:

/s/ H. George Schuler

 

Name:

H. George Schuler

 

Title:

Trustee

 

 

 

 

 

 

 

THERESE HEIDI SCHULER TRUST

 

 

 

 

 

 

By:

/s/ H. George Schuler

 

Name:

H. George Schuler

 

Title:

Trustee

 

 

 

 

 

 

 

ORACLE TEN FUND MASTER, LP

 

 

 

 

 

 

 

By:

/s/ Larry N. Feinberg

 

Name:

Larry N. Feinberg

 

Title:

Managing Member of General Partner

 

Securities Purchase Agreement

 

--------------------------------------------------------------------------------

 

 

ORACLE INSTITUTIONAL PARTNERS, LP

 

 

 

 

 

 

 

By:

/s/ Larry N. Feinberg

 

Name:

Larry N. Feinberg

 

Title:

Managing Member of General Partner

 

 

 

 

 

 

 

GEORGE SCHULER

 

 

 

 

 

 

 

/s/ George Schuler

 

Name: George Schuler

 

 

 

 

 

 

 

MYLES C. POLLIN

 

 

 

 

 

 

/s/ Myles C. Pollin

 

Name: Myles C. Pollin

 

 

 

 

 

 

 

SCOTT M. FREEMAN

 

 

 

 

 

 

 

/s/ Scott M. Freeman

 

Name: Scott M. Freeman

 

 

 

 

 

 

 

GIANFRANCO CAPASSO

 

 

 

 

 

 

/s/ Gianfranco Capasso

 

Name: Gianfranco Capasso

 

 

 

 

 

 

 

PAUL AND CAROLYN CLARK REVOCABLE TRUST OF 2009

 

 

 

 

 

 

By:

/s/ Paul Clark

 

Name:

Paul Clark

 

Title:

Trustee

 

 

 

 

 

 

 

MATTHEW STROBECK

 

24

--------------------------------------------------------------------------------

 

 

/s/ Matthew Strobeck

 

Name: Matthew Strobeck

 

 

 

 

 

 

 

BIRCHVIEW FUND, LP

 

 

 

 

 

 

/s/ Matthew Strobeck

 

Name: Matthew Strobeck

 

 

 

 

 

 

 

EDWARD M. GILES

 

 

 

 

 

 

 

/s/ Edward M. Giles

 

Name: Edward M. Giles

 

 

 

 

 

 

 

F. HUDNALL CHRISTOPHER, JR.

 

 

 

 

 

 

 

/s/ F. Hudnall Christopher, Jr.

 

Name: F. Hudnall Christopher, Jr.

 

 

 

 

 

 

 

MICHAEL J. LEWICKI

 

 

 

 

 

 

 

/s/ Michael J. Lewicki

 

Name: Michael J. Lewicki

 

 

 

 

 

 

 

GEORGE F. WOOD

 

 

 

 

 

 

 

/s/ George F. Wood

 

Name: George F. Wood

 

 

 

 

 

 

 

PATRICK R. D. PAUL

 

 

 

 

 

 

 

/s/ Patrick R. D. Paul

 

Name: Patrick R. D. Paul

 

 

 

 

 

 

 

WILLIAM P. SCULLY

 

25

--------------------------------------------------------------------------------

 

 

/s/ William P. Scully

 

Name: William P. Scully

 

 

 

 

 

 

 

OLIVER P. PEOPLES

 

 

 

 

 

 

/s/ Oliver P. Peoples

 

Name: Oliver P. Peoples

 

 

 

 

 

 

 

JOHAN VAN WALSEM

 

 

 

 

 

 

 

/s/ Johan van Walsem

 

Name: Johan van Walsem

 

 

 

 

 

 

 

MICHAEL A. GORDON

 

 

 

 

 

 

/s/ Michael A. Gordon

 

Name: Michael A. Gordon

 

 

 

 

 

 

 

BENJAMIN SMALL

 

 

 

 

 

 

 

/s/ Benjamin Small

 

Name: Benjamin Small

 

26

--------------------------------------------------------------------------------

 

SCHEDULE I

 

Investor

 

Number of
Units

 

Price per
Unit

 

Aggregate
Purchase
Price

 

 

 

 

 

 

 

 

 

Schuler Family Foundation

 

23,400,000

 

$

0.50

 

$

11,700,000

 

 

 

 

 

 

 

 

 

George Schuler

 

500,000

 

$

0.50

 

$

250,000

 

 

 

 

 

 

 

 

 

Oracle Ten Fund Master, LP

 

2,000,000

 

$

0.50

 

$

1,000,000

 

 

 

 

 

 

 

 

 

Oracle Institutional Partners, LP

 

2,000,000

 

$

0.50

 

$

1,000,000

 

 

 

 

 

 

 

 

 

Michael A. Gordon

 

400,000

 

$

0.50

 

$

200,000

 

 

 

 

 

 

 

 

 

Myles C. Pollin

 

400,000

 

$

0.50

 

$

200,000

 

 

 

 

 

 

 

 

 

Scott M. Freeman

 

200,000

 

$

0.50

 

$

100,000

 

 

 

 

 

 

 

 

 

Paul and Carolyn Clark Revocable Trust of 2009

 

500,000

 

$

0.50

 

$

250,000

 

 

 

 

 

 

 

 

 

Gianfranco Capasso

 

200,000

 

$

0.50

 

$

100,000

 

 

 

 

 

 

 

 

 

Edward M. Giles

 

2,100,000

 

$

0.50

 

$

1,050,000

 

 

 

 

 

 

 

 

 

F. Hudnall Christopher, Jr.

 

200,000

 

$

0.50

 

$

100,000

 

 

 

 

 

 

 

 

 

Michael J. Lewicki

 

200,000

 

$

0.50

 

$

100,000

 

 

 

 

 

 

 

 

 

George F. Wood

 

1,500,000

 

$

0.50

 

$

750,000

 

 

 

 

 

 

 

 

 

Patrick R. D. Paul

 

1,500,000

 

$

0.50

 

$

750,000

 

 

 

 

 

 

 

 

 

William P. Scully

 

8,000,000

 

$

0.50

 

$

4,000,000

 

 

 

 

 

 

 

 

 

Matthew Strobeck

 

4,000,000

 

$

0.50

 

$

2,000,000

 

 

 

 

 

 

 

 

 

BIRCHVIEW FUND, LP

 

2,000,000

 

$

0.50

 

$

1,000,000

 

 

 

 

 

 

 

 

 

Benjamin Small

 

200,000

 

$

0.50

 

$

100,000

 

 

 

 

 

 

 

 

 

Oliver P. Peoples

 

400,000

 

$

0.50

 

$

200,000

 

 

 

 

 

 

 

 

 

Johan van Walsem

 

300,000

 

$

0.50

 

$

150,000

 

 

 

 

 

 

 

 

 

TOTAL Transaction

 

50,000,000

 

$

0.50

 

$

25,000,000

 

 

--------------------------------------------------------------------------------

 

Exhibit A

 

Form of Certificate of Designation

 

28

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Exhibit B

 

Form of Standstill Amendment

 

August     , 2014

 

Metabolix, Inc.
21 Erie Street
Cambridge, MA 02139

 

Re:          Amended and Restated Letter Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain letter agreement, dated February 6, 2012 (the
“2012 Agreement”), between the undersigned (the “Schuler Parties” or “we”) and
Metabolix, Inc. (“Metabolix”).  The purpose of this letter agreement is to amend
and restate in its entirety the 2012 Agreement, and in so doing, this letter
agreement shall replace in its entirety the 2012 Agreement.  The undersigned
hereby advises Metabolix that, in connection with the execution of that certain
Securities Purchase Agreement dated as of the date hereof by and among
Metabolix, certain of the Schuler Parties and the other investors listed
therein, and Metabolix’s termination of its shareholder rights agreement, as
additional consideration therefor, we hereby agree that neither we nor any of
our affiliates or associates (as defined in the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) shall purchase any shares of Metabolix’s common
stock, par value $0.01 per share (the “Common Stock”), if after such purchase,
our aggregate beneficial ownership (as determined in accordance with the
rules of the Securities and Exchange Commission) would equal or exceed 44% of
the then outstanding shares of Common Stock.

 

If the foregoing is acceptable to Metabolix, please countersign below as
indicated.  Upon your signature and approval by your Board of Directors, this
letter shall become the binding agreement of Metabolix, Jack W. Schuler, Renate
Schuler and the Schuler Family Foundation.

 

 

Sincerely,

 

 

 

 

 

Jack W. Schuler

 

 

 

 

 

Renate Schuler

 

 

 

 

 

Schuler Family Foundation

 

 

 

By:

 

 

 

Name:

Jack W. Schuler

 

 

Title:

Director

 

 

The foregoing is hereby accepted:

 

 

 

Metabolix, Inc.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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