Purchase Agreement



 Exhibit 10.1 
 Tego BioSciences Corporation 
 SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT 
 October 24, 2007 







 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

  

 ii 








 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 

  

 4 








 
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] 







 EXHIBIT A 
 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION 







 EXHIBIT B 
 JOINDER AND AMENDMENT TO INVESTORS’ RIGHTS AGREEMENT