Exhibit 10.1

Tego BioSciences Corporation

SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT

October 24, 2007

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TABLE OF CONTENTS

 

               Page 1.    PURCHASE AND SALE OF STOCK    1    1.1   

Sale and Issuance of Series A-2 Preferred Stock

   1    1.2   

Closing

   1 2.    REPRESENTATIONS AND WARRANTIES OF INVESTOR    1    2.1   

Authorization

   1    2.2   

Purchase Entirely for Own Account

   1    2.3   

Disclosure of Information

   2    2.4   

Investment Experience

   2    2.5   

Accredited Investor

   2    2.6   

Restricted Securities

   2    2.7   

Legends

   2 3.    CONDITIONS OF INVESTOR’S OBLIGATIONS AT CLOSING    3    3.1   

Performance

   3    3.2   

Compliance Certificate

   3    3.3   

Qualifications

   3    3.4   

Proceedings and Documents

   3    3.5   

Restated Certificate

   3    3.6   

Investors’ Rights Agreement

   3 4.    CONDITIONS OF THE COMPANY’S OBLIGATIONS    3    4.1   

Representations and Warranties

   3    4.2   

Payment of Purchase Price

   3    4.3   

Qualifications

   3    4.4   

Investors’ Rights Agreement

   4 5.    MISCELLANEOUS    4    5.1   

Survival

   4    5.2   

Successors and Assigns

   4    5.3   

Governing Law

   4    5.4   

Titles and Subtitles

   4    5.5   

Notices

   4    5.6   

Finder’s Fee

   4    5.7   

Amendments and Waivers

   4    5.8   

Severability

   5    5.9   

Aggregation of Stock

   5    5.10   

Entire Agreement

   5    5.11   

Counterparts

   5

 

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EXHIBIT A    Amended and Restated Certificate of Incorporation EXHIBIT B   
Joinder and Amendment to Investors’ Rights Agreement

 

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SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT

THIS SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made on
the 24 day of October, 2007, among Tego BioSciences, a Delaware corporation (the
“Company”), and Arrowhead Research Corporation, a Delaware corporation
(“Investor”).

THE PARTIES HEREBY AGREE AS FOLLOWS:

1. Purchase and Sale of Stock.

1.1 Sale and Issuance of Series A-2 Preferred Stock.

(a) The Company shall adopt and file with the Secretary of State of the State of
Delaware on or before the Closing (as defined below) the Amended and Restated
Certificate of Incorporation in the form attached hereto as Exhibit A (the
“Restated Certificate”).

(b) Subject to the terms and conditions of this Agreement, Investor agrees to
purchase at the Closing (as defined herein) and the Company agrees to sell and
issue to Investor at the Closing, Fifteen Million (15,000,000) shares of the
Company’s Series A-2 Preferred Stock for a purchase price of $0.16 per share.

1.2 Closing. The purchase and sale of the Series A-2 Preferred Stock hereunder
shall take place at the offices of Arrowhead Research Corporation, 201 South
Lake Avenue, Suite 703, Pasadena, California, 91101, at 10:00 A.M. on
October 24, 2007, or at such other time and place as the Company and Investor
mutually agree upon orally or in writing (which time and place are designated as
the “Closing”). At the Closing, the Company shall deliver to Investor a
certificate representing the Series A-2 Preferred Stock that such Investor is
purchasing against payment of the purchase price therefor by wire transfer.

2. Representations and Warranties of Investor. Investor hereby represents,
warrants and covenants that:

2.1 Authorization. Such Investor has full power and authority to enter into this
Agreement and the Joinder and Amendment (as defined below) and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investors’ Rights Agreement may be limited by applicable
federal or state securities laws.

2.2 Purchase Entirely for Own Account. This Agreement is made with such Investor
in reliance upon such Investor’s representation to the Company, which by such
Investor’s execution of this Agreement, such Investor hereby confirms that the
Series A-2 Preferred Stock to be received by such Investor and the Common Stock
issuable upon conversion thereof (collectively, the “Securities”) will be
acquired for investment for such Investor’s own

 

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account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Investor has no present
intention of selling, granting any participation in or otherwise distributing
the same. By executing this Agreement, such Investor further represents that
such Investor does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person, with respect to any of the Securities.

2.3 Disclosure of Information. Such Investor believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Series A-2 Preferred Stock. Such Investor further represents that
it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series A-2 Preferred
Stock and the business, properties, prospects and financial condition of the
Company.

2.4 Investment Experience. Such Investor is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Series A-2 Preferred Stock. If other
than an individual, such Investor also represents it has not been organized for
the purpose of acquiring the Series A-2 Preferred Stock.

2.5 Accredited Investor. Such Investor is an “accredited investor” within the
meaning of SEC Rule 501 of Regulation D, as presently in effect.

2.6 Restricted Securities. Such Investor understands that the Securities it is
purchasing are characterized as “restricted securities” under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Securities Act of 1933, as amended (the “Act”), only in certain limited
circumstances. In the absence of an effective registration statement covering
the Securities or an available exemption from registration under the Act, the
Series A-2 Preferred Stock (and any Common Stock issued on conversion thereof)
must be held indefinitely.

2.7 Legends. It is understood that the certificates evidencing the Securities
may bear one or all of the following legends:

(a) “These securities have not been registered under the Securities Act of 1933,
as amended. They may not be sold, offered for sale, pledged or hypothecated in
the absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to the Company that such
registration is not required or unless sold pursuant to Rule 144 of such Act.”

(b) Any legend required by applicable laws.

 

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3. Conditions of Investor’s Obligations at Closing. The obligations of Investor
under Section 1.1(b) of this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions:

3.1 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

3.2 Compliance Certificate. The President of the Company shall deliver to
Investor at the Closing a certificate stating that the conditions specified in
Section 3.1 has been fulfilled.

3.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the
Securities in the Closing pursuant to this Agreement shall be duly obtained and
effective as of the Closing, other than such authorizations, approvals or
permits or other filings which may be timely made after the Closing.

3.4 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Investor,
and it shall have received all such counterpart original and certified or other
copies of such documents as it may reasonably request.

3.5 Restated Certificate. The Restated Certificate of the Company shall have
been filed with the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing.

3.6 Investors’ Rights Agreement. The Company and Investor shall have entered
into the Joinder and Amendment to Investors’ Rights Agreement in the form
attached hereto as Exhibit B (the “Joinder and Amendment”).

4. Conditions of the Company’s Obligations. The obligations of the Company to
Investor under this Agreement in connection with the Closing are subject to the
fulfillment on or before the Closing of each of the following conditions:

4.1 Representations and Warranties. The representations and warranties of
Investor contained in Section 2 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and
as of the Closing.

4.2 Payment of Purchase Price. Investor shall have delivered to the Company the
purchase price specified in Section 1.1(b) on or prior to the Closing.

4.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the
Securities in the Closing pursuant to this Agreement shall be duly obtained and
effective as of the Closing, other than such authorizations, approvals or
permits or other filings which may be timely made after the Closing.

 

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4.4 Investors’ Rights Agreement. The Company and Investor shall have entered
into the Joinder and Amendment.

5. Miscellaneous.

5.1 Survival. The warranties, representations and covenants of the Company and
Investor contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of Investor or the Company.

5.2 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties (including transferees of
any Securities). Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

5.3 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.

5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

5.5 Notices. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day;
(iii) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the address
as set forth on the signature page hereof or at such other address as such party
may designate by ten days’ advance written notice to the other parties hereto.

5.6 Finder’s Fee. Each party represents that it neither is nor will be obligated
for any finders’ fee or commission in connection with this transaction. Investor
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finders’ fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such Investor or any of its officers, partners, employees or representatives is
responsible. The Company agrees to indemnify and hold harmless Investor from any
liability for any commission or compensation in the nature of a finders’ fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.

5.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of

 

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the Company and the holders of a majority of the Common Stock that is issuable
or issued upon conversion of the Series A-2 Preferred Stock sold pursuant to
this Agreement. Any amendment or waiver effected in accordance with this Section
5.7 shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.

5.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

5.9 Aggregation of Stock. All shares of the Series A-2 Preferred Stock or Common
Stock issued upon conversion thereof held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.

5.10 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and 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.

5.11 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

COMPANY:

TEGO BIOSCIENCES, INC.

a Delaware corporation

By:

 

 

  President

Address:

  201 South Lake Avenue, Suite 703   Pasadena, CA 91101   Fax No. (626) 304-3401

 

INVESTOR:

ARROWHEAD RESEARCH CORPORATION

a Delaware corporation

By:

 

 

  R. Bruce Stewart   Chief Executive Officer

Address:

  201 South Lake Avenue, Suite 703   Pasadena, CA 91101   Fax No. (626) 792-5554

[SIGNATURE PAGE TO SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT]

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EXHIBIT A

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

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EXHIBIT B

JOINDER AND AMENDMENT TO INVESTORS’ RIGHTS AGREEMENT