Exhibit 10.1

 

EXECUTION

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of April 23, 2013 by and among Tranzyme, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the Schedule of Purchasers attached as Schedule 1 hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.                                    The Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.

 

B.                                    Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of common stock (the “Common Stock”), of the Company, set forth opposite such Purchaser’s name on    Schedule 1 hereto (which aggregate amount for all Purchasers together shall collectively referred to herein as the “Shares”).

 

C.                                    Immediately prior to the closing of the sale of securities to the Purchasers hereunder, Terrapin Acquisition, Inc. (“Merger Sub”), a wholly owned subsidiary of the Company, will merge with and into Ocera Therapeutics, Inc. (“Ocera”), upon which Ocera will become a wholly owned subsidiary of the Company.

 

D.                                    Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), to be effective upon the Closing, pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Shares under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:

 

ARTICLE I.
 DEFINITIONS

 

1.1                         Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly

 











 

through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.  With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York or the State of California are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to this Agreement.

 

“Closing Date” means the Closing Date as defined in the Merger Agreement.

 

“Commission” has the meaning set forth in the Recitals.

 

“Common Stock” has the meaning set forth in the Recitals, and also includes any other class of securities into which the Common Stock may hereafter be reclassified or changed into.

 

“Common Stock Equivalents” means any securities of the Company or any Subsidiary which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company’s Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon the knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement after a reasonable inquiry.

 

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Disclosure Materials” has the meaning set forth in Section 3.1(h).

 

“Disclosure Schedules” has the meaning set forth in Section 3.1.

 

“DTC” has the meaning set forth in Section 4.1(c).

 

“Environmental Laws” has the meaning set forth in Section 3.1(dd).

 

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“Evaluation Date” has the meaning set forth in Section 3.1(t).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“GAAP” means U.S. generally accepted accounting principles, as applied by the Company.

 

“Indebtedness” has the meaning set forth in Section 3.1(mm).

 

“Intellectual Property Rights” has the meaning set forth in Section 3.1(p).

 

“Legend Removal Date” has the meaning set forth in Section 4.1(c).

 

“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

 

“Material Adverse Effect” means a material adverse effect on the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable to the industry in which the Company operates, provided that such effects are not borne disproportionately by the Company, (ii) effects resulting from or relating to the announcement or disclosure of the sale of the Shares or other transactions contemplated by this Agreement, or (iii) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement.

 

“Material Contract” means any contract of the Company that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Material Permits” has the meaning set forth in Section 3.1(n).

 

“Merger” means the closing of the merger of Merger Sub with and into Ocera pursuant to that certain Agreement and Plan of Merger and Reorganization to be entered into by and among the Company, Ocera and Merger Sub on or about the date hereof (the “Merger Agreement”).

 

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

“OFAC” has the meaning set forth in Section 3.1(ll).

 

“Outside Date” means October 31, 2013.

 

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

“Press Release” has the meaning set forth in Section 4.4.

 

“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement, shall be the NASDAQ Global Market.

 

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“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Purchase Price” means an amount per share equal to the volume-weighted average of the closing prices of the Common Stock over the ten (10) Trading Days ending the date prior to the Closing Date.

 

“Purchaser” or “Purchasers” has the meaning set forth in the Recitals.

 

“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

 

“Purchaser Party” has the meaning set forth in Section 4.8.

 

“Registration Rights Agreement” has the meaning set forth in the Recitals.

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Required Approvals” has the meaning set forth in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” has the meaning set forth in Section 3.1(h).

 

“Securities Act” has the meaning set forth in the Recitals.

 

“Shares” has the meaning set forth in the Recitals.

 

“Short Sales” include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and (ii) sales and other transactions through non-U.S. broker dealers or foreign regulated brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Stock Certificates” has the meaning set forth in Section 2.2(a)(ii).

 

“Subscription Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the Shares purchased hereunder as indicated on Schedule 1 hereto beneath the heading “Aggregate Purchase Price (Subscription Amount)” in United States dollars and in immediately available funds.

 

“Subsidiary” means any subsidiary of the Company, and shall, where applicable, include any subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Affiliate” has the meaning set forth in Section 3.2(h).

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not

 

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quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the Registration Rights Agreement and any other documents or agreements explicitly contemplated hereunder.

 

“Transfer Agent” means Continental Stock Transfer & Trust Co., the current transfer agent of the Company, with a mailing address of 17 Battery Place, 8th Floor, New York, NY 10004 and a facsimile number of (212) 509-5150, or any successor transfer agent for the Company.

 

ARTICLE II.
 PURCHASE AND SALE

 

2.1                         Closing.

 

(a)                                 Amount.  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, such number of shares of Common Stock equal to the quotient resulting from dividing (i) the Subscription Amount for such Purchaser by (ii) the Purchase Price, rounded down to the nearest whole Share.  The aggregate Subscription Amount for all Purchasers shall $19,995,499.90.

 

(b)                                 Closing.  The Closing of the purchase and sale of the Shares shall take place at the offices of Goodwin Procter LLP, Exchange Place, Boston, MA 02109, immediately after the closing of the Merger, on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.

 

(c)                                  Form of Payment.  Except as may otherwise be agreed to among the Company and one or more of the Purchasers, on or prior to the Business Day immediately prior to the Closing Date, each Purchaser shall wire its Subscription Amount, in United States dollars and in immediately available funds, to Goodwin Procter LLP, for the benefit of the Company, as set forth on Exhibit B hereto.  On the Closing Date, the Company shall irrevocably instruct the Transfer Agent to deliver to each Purchaser one or more stock certificates, free and clear of all restrictive and other legends (except as expressly provided in Section 4.1(b) hereof), evidencing the number of Shares such Purchaser is purchasing as is set forth on Schedule 1 hereto beneath the heading “Number of Shares to be Acquired”, within three (3) Trading Days after the Closing.

 

2.2                         Closing Deliveries.

 

(a)                                 On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):

 

(i)                                     this Agreement, duly executed by the Company;

 

(ii)                                  facsimile copies of one or more stock certificates, free and clear of all

 

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restrictive and other legends (except as provided in Section 4.1(b) hereof), evidencing the Shares subscribed for by such Purchaser hereunder, registered in the name of such Purchaser (the “Stock Certificate”), with the original Stock Certificates delivered within three (3) Trading Days of Closing;

 

(iii)                               the Registration Rights Agreement, duly executed by the Company;

 

(iv)                              a legal opinion of Goodwin Procter LLP, addressed to the Purchasers and dated the Closing Date, substantially in the form of Exhibit C attached hereto;

 

(v)                                 an executed copy of an indemnification agreement with the director of the Company affiliated with each Purchaser with a representative on the Board of Directors of the Company; and

 

(vi)                              a certificate of the Secretary of the Company, dated as of the Closing Date, (A) certifying the resolutions adopted by the Board of Directors or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, (B) certifying that the stockholders of the Company have adopted resolutions approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, (C) certifying the current versions of the certificate of incorporation, as amended, and bylaws of the Company, and (D) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company

 

(b)                                 On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

(i)                                     this Agreement, duly executed by such Purchaser;

 

(ii)                                  its Subscription Amount, in United States dollars and in immediately available funds, in the amount set forth as the “Purchase Price” indicated opposite such Purchaser’s name on Schedule 1 hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer to Goodwin Procter LLP, for the benefit of the Company, as set forth on Exhibit B attached hereto;

 

(iii)                               the Registration Rights Agreement, duly executed by such Purchaser; and

 

(iv)                              an executed copy of an indemnification agreement with the director of the Company affiliated with such Purchaser if such Purchaser has a representative on the Board of Directors of the Company.

 

2.3                               Closing Conditions.

 

(a)                           Company Condition to Close. The obligations of the Company hereunder in connection with the Closing are subject to the condition that the Merger closes immediately prior to the Closing.

 

(b)                            Purchasers’ Conditions to Close. The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the condition that the Merger closes immediately prior to the Closing.

 

ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

3.1                         Representations and Warranties of the Company.  Except (i) as set forth in the schedules delivered herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof

 

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and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, or (ii) disclosed in the SEC Reports, the Company hereby represents and warrants as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers as is set forth below.  For purposes of this Article III, all references to the “Company” contained herein shall not include Ocera.

 

(a)                                 Subsidiaries.  The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a) hereto.  Except as disclosed in Schedule 3.1(a) hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(b)                                 Organization and Qualification.  The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect, and no Proceeding has been instituted, is pending, or, to the Company’s Knowledge, has been threatened in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)                                  Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals.  Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)                                 No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of the Shares) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the

 

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Company or any Subsidiary or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company or a Subsidiary is bound or affected, except in the case of clauses (ii) and (iii) such as would not, individually or in the aggregate, have  or  reasonably be expected to result in a Material Adverse Effect.

 

(e)                                  Filings, Consents and Approvals.  Neither the Company nor any of its Subsidiaries is required to obtain any 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 the Transaction Documents (including the issuance of the Shares), other than (i) filings required by applicable state securities laws, (ii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iii) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (iv) the filings required in accordance with Section 4.4 of this Agreement and (v) those that have been made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).

 

(f)                                   Issuance of the Shares.  The Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and nonassessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.  Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws.

 

(g)                                  Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is set forth in Schedule 3.1(g) hereto.  The Company has not issued any capital stock since the date of its most recently filed SEC Report other than to reflect stock option and warrant exercises that do not, individually or in the aggregate, have a material affect on the issued and outstanding capital stock, options and other securities.   No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents that have not been effectively waived as of the Closing Date. Except as set forth on Schedule 3.1(g) or a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the

 

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issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.

 

(h)                                 SEC Reports; Disclosure Materials.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”, and the SEC Reports, together with the Disclosure Schedules, being collectively referred to as the “Disclosure Materials”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension, except where the failure to file on a timely basis would not have or reasonably be expected to result in a Material Adverse Effect (including, for this purpose only, any failure to qualify to register the Shares for resale on Form S-3 or which would prevent any Purchaser from using Rule 144 to resell any Shares).  As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act.  Each of the Material Contracts to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any of its Subsidiaries are subject has been filed as an exhibit to the SEC Reports.

 

(i)                                     Financial Statements.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement).  Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial year-end audit adjustments.

 

(j)                                    Material Changes.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or the transactions related to the Merger, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than in connection with repurchases of unvested stock issued to employees of the Company), and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued in the ordinary course as dividends on outstanding preferred stock or issued pursuant to existing Company stock option or stock purchase plans or executive and director compensation arrangements disclosed in the SEC Reports. Except for the issuance of the Shares contemplated by this Agreement, no

 

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event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(k)                                 Litigation.  There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor to the Company’s Knowledge any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Exchange Act or the Securities Act.

 

(l)                                     Employment Matters.  No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company.  None of the Company’s or any Subsidiary’s employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Subsidiary believes that its relationship with its employees is generally good.  No executive officer of the Company (as defined in Rule 501(f) of the Securities Act) has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary.  To the Company’s Knowledge, no employee is, or is now expected to be, in violation of any term of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such employee does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance in all material respects with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours.

 

(m)                             Compliance.  Neither the Company nor any of its Subsidiaries (i) is in material default under or in material violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a material default by the Company or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received notice of a claim that it is in material default under or that it is in material violation of, any Material Contract (whether or not such material default or material violation has been waived), (ii) is in material violation of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or (iii) is in material violation of, or in receipt of notice that it is in material violation of, any statute, rule or regulation of any governmental authority applicable to the Company.

 

(n)                                 Regulatory Permits. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its respective business as currently conducted and as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and would not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any of its Subsidiaries has received any notice of Proceedings relating to the revocation or modification of any such Material Permits.

 

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(o)                                 Title to Assets.  The Company and its Subsidiaries have good and marketable title in fee simple to all real property owned by them.  The Company and its Subsidiaries have good and marketable title to all tangible personal property owned by them that is material to the business of the Company and its Subsidiaries, taken as whole, in each case free and clear of all Liens except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries.  Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

 

(p)                                 Patents and Trademarks.  The Company and the Subsidiaries own, possess, license or have other rights to use, all patents, patent applications, trade and service marks, trade and service mark applications and registrations, trade names, trade secrets, inventions, copyrights, licenses, technology, know-how and other intellectual property rights and similar rights described in the SEC Reports as necessary or material for use in connection with their respective businesses (collectively, the “ Intellectual Property Rights”).  Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person.  There is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by any Person that the Company’s business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of another.  To the Company’s Knowledge, there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.

 

(q)                                 Insurance.  The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant  increase  in cost.

 

(r)                                    Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

 

(s)                                   Internal Accounting Controls.  The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences.

 

(t)                                    Sarbanes-Oxley; Disclosure Controls.  The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company has established disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company and designed such disclosure

 

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controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(u)                                 Certain Fees.   No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company. The Purchasers 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 paragraph (u) that may be due in connection with the transactions contemplated by the Transaction Documents.  The Company shall indemnify, pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(v)                                 Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers under the Transaction Documents. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.

 

(w)                               Investment Company                        The Company is not, and immediately after receipt of payment for the Shares, will not be or be an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.

 

(x)                                 Registration Rights.  Other than each of the Purchasers or as set forth in Schedule 3.1(x) hereto, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered on an effective registration statement on file with the Commission.

 

(y)                                 Disclosure.  The Company confirms that it has not provided, and to the Company’s Knowledge, none of its officers or directors nor any other Person acting on its or their behalf has provided, any Purchaser or its respective agents or counsel with any information that it believes constitutes material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information, all of which will be disclosed by the Company in the Press Release as contemplated by Section 4.4 hereof. The Company understands and confirms that the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2.

 

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(z)                                  No Integrated Offering.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six (6) months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated.

 

(aa)                          Tax Matters.  The Company and each of its Subsidiaries (i) has accurately and timely prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return would not have or reasonably be expected to result in a Material Adverse Effect.  There are no unpaid taxes in any material amount claimed to be due by the Company or any of its Subsidiaries by the taxing authority of any jurisdiction.

 

(bb)                          Environmental Matters.  To the Company’s Knowledge, neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; and there is no pending investigation or, to the Company’s Knowledge, investigation threatened that might lead to such a claim.

 

(cc)                            No General Solicitation. Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising.

 

(dd)                          Foreign Corrupt Practices.  Neither the Company, nor to the Company’s Knowledge, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(ee)                            Off Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Reports and is not so disclosed.

 

(ff)                              Acknowledgment Regarding Purchasers’ Purchase of Shares.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length

 

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purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(gg)                            Regulation M Compliance.  The Company has not, and to the Company’s Knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of the Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

 

(hh)                          PFIC.  Neither the Company nor any Subsidiary is or intends to become a “passive foreign investment company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(ii)                                  OFAC. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

 

(jj)                                FDA.  As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in material compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports.  There is no pending, completed or, to the Company’s Knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries.  The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all

 

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applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

(kk)                          No Additional Agreements.  The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(ll)                                  Ocera Representations and Warranties.  The representations and warranties of Ocera contained in the Merger Agreement and related agreements are true and correct in all material respects.

 

3.2                         Representations and Warranties of the Purchasers.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (provided that nothing in this Section 3.2 shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents):

 

(a)                                 Organization; Authority.  Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by such Purchaser and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser.  Each Transaction document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b)                                 No Conflicts.  The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

 

(c)                                  Investment Intent.  Such Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves the right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in

 

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compliance with applicable federal and state securities laws.  Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Such Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(d)                                 Purchaser Status.  At the time such Purchaser was offered the Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

 

(e)                                  General Solicitation.  Such Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

(f)                                   Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(g)                                  Access to Information.  Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) 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 Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) 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. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.  Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(h)                                 Certain Trading Activities.  Other than with respect to the transactions contemplated herein, since the time that such Purchaser was first contacted by the Company or any other Person regarding the transactions contemplated hereby, neither the Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Purchaser’s investments or trading or information concerning such Purchaser’s investments, including in respect of the Shares, and (z) is subject to such Purchaser’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser or Trading Affiliate, effected or agreed to effect any purchases or sales of the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities). Notwithstanding the foregoing, in the case of a Purchaser and/or Trading Affiliate that is, individually or collectively, a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated by this Agreement.  Other than to other Persons party to this

 

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Agreement or to any of such Purchaser’s employees, officers, directors, service providers, attorneys, accountants, consultants and other professionals, to the extent necessary to obtain their services in connection with the transactions contemplated hereby, such Purchaser 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.

 

(i)                                     Brokers and Finders.  No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

 

(j)                                    Independent Investment Decision.  Such Purchaser has independently evaluated the merits of its decision to purchase Shares pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision.  Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Shares constitutes legal, tax or investment advice.  Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares.

 

(k)                                 Reliance on Exemptions.  Such Purchaser understands that the Shares being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Shares.

 

(l)                                     No Governmental Review.  Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

(m)                             Regulation M.                   Such Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with respect to the Common Stock by the Purchasers.

 

(n)                                 Residency.  Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Shares was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

 

The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

 

ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES

 

4.1                         Transfer Restrictions.

 

(a)                                 Compliance with Laws.  Notwithstanding any other provision of this Article IV, each Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration

 

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statement under, and in compliance with the requirements of, 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 compliance with any applicable state and federal securities laws.  In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (provided that the Purchaser provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant to such rule), (iv) in connection with a bona fide pledge as contemplated in Section 4.1(b), or (v) to its Affiliates, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement with respect to such transferred Shares.

 

(b)                                 Legends.  Certificates evidencing the Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

The Company acknowledges and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.  Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge.  No notice shall be required of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure.  Each Purchaser acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Shares or for any agreement, understanding or arrangement between any Purchaser and its pledgee or secured party.  At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.  Each Purchaser acknowledges and agrees that, except as

 

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otherwise provided in Section 4.1(c), any Shares subject to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a).

 

(c)                                  Removal of Legends.  The legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate without such legend or any other legend to the holder of the applicable Shares upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such Shares are registered for resale under the Securities Act (provided that, if the Purchaser is selling pursuant to the effective registration statement registering the Shares for resale, the Purchaser agrees to only sell such Shares during such time that such registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement), (ii) such Shares are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner-of-sale restrictions.  Following the date in which a legend is no longer required for certain Shares, the Company will no later than three (3) Trading Days following the delivery by a Purchaser to the Company (with notice to the Company) of a legended certificate representing Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer), and an opinion of counsel to the extent required by Section 4.1(a) (such third (3rd) Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such Shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c).  Certificates for Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as directed by such Purchaser.

 

(d)                                 Acknowledgement.  Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Shares or any interest therein without complying with the requirements of the Securities Act.

 

4.2                               Furnishing of Information.  In order to enable the Purchasers to sell the Shares under Rule 144, for a period of twelve (12) months from the Closing, the Company shall use its commercially reasonable 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. During such twelve (12) month period, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Shares under Rule 144.

 

4.3                         Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchasers, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.4                               Securities Laws Disclosure; Publicity.  The Company (a) may, on or after the date hereof, issue a press release reasonably acceptable to a majority in interest of the Purchasers disclosing the material terms of the transactions contemplated by this Agreement (the “Press Release”) and may, on or after the date hereof file a Current Report on Form 8-K describing the terms of the Transaction Documents and including

 

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the Press Release and the forms of the Transaction Documents, as exhibits thereto, with the Commission (the “Press Release 8-K”), and (b) shall file a Current Report on Form 8-K describing the terms of the Transaction Documents and including the Transaction Documents as exhibits thereto, with the Commission, no later than 9:00 A.M. Eastern time on the first (1st) Trading Day immediately following the Closing (the “Closing 8-K”).  From and after the Closing, no Purchaser shall be in possession of any material, non-public information received from the Company or any of its officers, directors, employees or agents with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and, other than the Press Release, neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior written consent of such Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld, conditioned or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) the filing of the Press Release and form of Transaction Documents, (b) as required by federal securities law in connection with the filing of the Closing 8-K and final Transaction Documents (including signature pages thereto) with the Commission after the Closing Date and (c) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (c).

 

4.5                         Form D; Blue Sky.  The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof, promptly upon the written request of any Purchaser.  The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Shares for sale to the Purchasers under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon the written request of any Purchaser.

 

4.6                         Delivery of Shares After Closing. The Company shall deliver, or cause to be delivered, the respective Shares purchased by each Purchaser to such Purchaser within three (3) Trading Days of the Closing Date.

 

4.7                         Short Sales and Confidentiality After The Date Hereof.  Such Purchaser shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions in the Company’s securities (including, without limitation, any Short Sales involving the Company’s securities) during the period from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced as required by and described in Section 4.4 or (ii) this Agreement is terminated in full pursuant to Section 5.18.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and Disclosure Schedules.  Notwithstanding the foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4; provided, however, each Purchaser agrees, severally and not jointly with any Purchasers, that they will not enter into any Net Short Sales (as hereinafter defined) from the period commencing on the Closing Date and ending on the earliest of (x) the twenty-four (24) month anniversary of the Closing Date and (y) the date that such Purchaser no longer holds any Shares.  For purposes of this Section 4.7, a “Net Short Sale” by any

 

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Purchaser shall mean a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time when there is no equivalent offsetting long position in Common Stock held by such Purchaser.  Notwithstanding the foregoing, in the event that a Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall apply only with respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated by this Agreement.  Each Purchaser understands and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently takes the position that covering a short position established prior to effectiveness of a resale registration statement with shares included in such registration statement would be a violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance.

 

4.8                               Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders, members, partners and employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon (i) a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder, (ii) any violations by such Purchaser of state or federal securities laws or (iii) any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (A) the employment thereof has been specifically authorized by the Company in writing, (B) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (C) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.  The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others, and any liabilities

 

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the Company may be subject to pursuant to law.

 

4.9                               Preparation of the Proxy Statement and Company’s Stockholders Meeting.

 

(a)                           The Company shall use its reasonable best efforts to call, hold and convene a special meeting of its stockholders to vote on the approval of transactions contemplated by this Agreement, as required under the rules of the Trading Market, as soon as reasonable practicable after the date hereof but in any event not later than October 31, 2013 (the “Company Stockholders Meeting”).  The board of directors of the Company shall recommend to the Company stockholders that the Company stockholders vote to approve the transactions contemplated by this Agreement, as required under the rules of the Trading Market (the “Recommendation”) and shall include such Recommendation in the proxy statement to be issued in connection with this Agreement (the “Proxy Statement”).  In connection with the Company’s Stockholders Meeting, the Company shall prepare and file with the Commission as soon as reasonably practicable, but in any event, not later than ten (10) days after the date hereof the Proxy Statement in preliminary form, and the Company shall use its reasonable best efforts to respond as promptly as practicable to any comments of the Commission with respect thereto.  The Company shall use its reasonable best efforts to prepare and file with the Commission the definitive Proxy Statement and to cause the definitive Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after the filing of the definitive Proxy Statement with the Commission.  The Company shall take any action required to be taken under any applicable state securities laws in connection with this Agreement.  The Company shall notify the legal counsel to the Purchasers promptly of the receipt of any written comments from the Commission or its staff and of any request by the Commission or its staff for amendments or supplements to the Proxy Statement or for additional information and shall supply the Purchasers with copies of all correspondence between the Company or any of its representatives, on the one hand, and the Commission or its staff, on the other hand, with respect to the Proxy Statement. Prior to filing or mailing the preliminary or definitive Proxy Statement (or any amendment or supplement thereto) or responding to the comments of the Commission with respect thereto, the Company (i) shall provide the Purchasers a reasonable opportunity to review such document or response and (ii) shall consider in good faith comments proposed by the Purchasers on such document or response.

 

(b)                           Until the Closing, the Company shall not, and shall instruct its directors, officers, managers, partners, financial advisors and other Representatives not to, directly or indirectly, knowingly encourage, solicit, initiate or continue any inquiries or proposals from, discuss or negotiate with, or provide any non-public information to, any person or entity concerning the sale of more than 2% of the outstanding shares of the Company’s capital stock or enter into any agreement with respect thereto, and each of them shall terminate and cease any existing activities, discussions or negotiations with respect to the foregoing.

 

ARTICLE V.
 MISCELLANEOUS

 

5.1                               Fees and Expenses.  Except as expressly set forth in this Section 5.1 to the contrary, the Company and the Purchasers shall each pay the fees and expenses of their respective advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party in connection with the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Shares to the Purchasers.  Notwithstanding the foregoing, the Company shall reimburse the reasonable and documented fees and disbursements of O’Melveny & Myers LLP, in an amount not to exceed $50,000 in the aggregate.

 

5.2                         Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such

 

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matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

5.3                         Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via electronic mail or facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the e-mail address or facsimile number specified in this Section 5.3 prior to 5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via electronic mail or facsimile at the e-mail address or facsimile number specified in this Section 5.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as follows:

 

	
If to the Company:
    	
 
    	
Tranzyme, Inc.
    
	
 
    	
 
    	
5001 South Miami Boulevard, Suite 300
    
	
 
    	
 
    	
Durham, NC 27703
    
	
 
    	
 
    	
Telephone No.: (919) 474-0020
    
	
 
    	
 
    	
Facsimile No.: (919) 474-0025
    
	
 
    	
 
    	
Attention: Vipin K. Garg
    
	
 
    	
 
    	
E-mail: vgarg@tranzyme.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
Goodwin Procter LLP
    
	
 
    	
 
    	
Exchange Place
    
	
 
    	
 
    	
Boston, MA 02109
    
	
 
    	
 
    	
Telephone No.: (617) 570-1000
    
	
 
    	
 
    	
Facsimile No.: (617) 523-1231
    
	
 
    	
 
    	
Attention: Mitchell S. Bloom
    
	
 
    	
 
    	
E-mail: mbloom@goodwinprocter.com
    
	
 
    	
 
    	
 
    
	
If to a Purchaser:
    	
 
    	
To the address set forth under such   Purchaser’s name on the signature page  hereof;
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
O’Melveny & Myers LLP
    
	
 
    	
 
    	
2765 Sand Hill Road
    
	
 
    	
 
    	
Menlo Park, CA 94025
    
	
 
    	
 
    	
Telephone No.: (650) 473-2600
    
	
 
    	
 
    	
Facsimile No.: (650) 473-2601
    
	
 
    	
 
    	
Attention: Brian E. Covotta
    
	
 
    	
 
    	
E-mail: bcovotta@omm.com
    


 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

5.4                         Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of at least a majority in interest of the Shares still held by Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought; provided, however, that, notwithstanding the foregoing, any change to the aggregate Subscription Amount

 

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described in Section 2.1(a) shall require the written consent of all of the Purchasers.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.  No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Shares.

 

5.5                         Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

5.6                         Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns.  This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of each Purchaser.  Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Shares in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Shares, by the terms and conditions of this Agreement that apply to the “Purchasers”.

 

5.7                         No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each Purchaser Party is an intended third party beneficiary of Section 4.8.

 

5.8                         Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

5.9                         Survival.  Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Shares.

 

5.10                  Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

5.11                  Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

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5.12                  Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

5.13                  Replacement of Shares.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares.  If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

5.14                  Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

5.15                  Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.16                  Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing, including without limitation the reverse stock split expected to be effected by the Company in connection with the Merger if such reverse stock split is effected prior to the Closing, each reference in any Transaction Document to a number of shares or a price per share shall be adjusted to provide each Purchaser with the same percentage ownership of the outstanding Common Stock immediately following the Closing, and aggregate purchase price for such Purchaser’s Shares, that such Purchaser would have obtained if such Closing were to occur without such stock split, subdivision, dividend, distribution, combination or similar recapitalization or event occurring prior to the Closing.

 

5.17                  Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and

 

25











 

no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document.  The decision of each Purchaser to purchase Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions.  Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any Purchaser.

 

5.18                  Termination. This Agreement may be terminated and the sale and purchase of the Shares abandoned at any time prior to the Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, upon the earlier of (i) if the Closing has not been consummated on or prior to 5:00 P.M., New York City time, on the Outside Date and (ii) the date that the Merger Agreement is terminated in accordance with its terms; provided, however, that the right to terminate this Agreement under this Section 5.18 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.  Nothing in this Section 5.18 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.  In the event of a termination pursuant to this Section 5.18, the Company shall promptly notify all non-terminating Purchasers.  Upon a termination in accordance with this Section 5.18, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom except as a result of a willful breach of this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

	
 
    	
TRANZYME,   INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John H. Johnson
    
	
 
    	
Name:   John H. Johnson
    
	
 
    	
Title:   Chairman of the Board of Directors of
    
	
 
    	
Tranzyme,   Inc.
    


 

[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

 











 

	
 
    	
NAME   OF PURCHASER: AGECHEM VENTURE FUND L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Louis Lacasse
    
	
 
    	
Name:   Louis Lacasse
    
	
 
    	
Title:   PRESIDENT AGECHEM FINANCIAL INC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $965684.90
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                           
    
	
 
    	
 
    
	
 
    	
Tax   ID No:          N/A              
    
	
 
    	
 
    
	
 
    	
Adress   for Notice:
    
	
 
    	
 
    
	
 
    	
1   West Mount Square, Suite 800
    
	
 
    	
Montreal,   Qc. H32289
    
	
 
    	
Canada
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 514-849-7994
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 514-849-5191
    
	
 
    	
 
    
	
 
    	
E-mail   Address: louis@benechem.com
    
	
 
    	
 
    
	
 
    	
Attention:   Louis Lacasse
    


 

	
Delivery Instructions:
    	
 
    
	
(if different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip: 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention: 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.: 
    	
 
    	
 
    


 











 

	
 
    	
NAME   OF PURCHASER:
    
	
 
    	
CDIB   Bioscience Ventures I, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Benny T. Hu
    
	
 
    	
Name:   Benny T. Hu
    
	
 
    	
Title:   Chairman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $300,000,00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                           
    
	
 
    	
 
    
	
 
    	
Tax   ID No.:          N/A              
    
	
 
    	
 
    
	
 
    	
Adress   for Notice:
    
	
 
    	
 
    
	
 
    	
9F,   No. 205-1, Peihsin Road, Section 3, Hsintien District, New
    
	
 
    	
Taipei   City, Taiwan
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 886-2-8913-1956
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 886-2-8913-1955
    
	
 
    	
 
    
	
 
    	
E-mail   Address: pollylin67@cdibbioscience.com
    
	
 
    	
 
    
	
 
    	
Attention:   Polly Lin
    


 

Delivery Instructions:

(if different than above)

 

c/o      Grace Yu           

 

Street: 9191 Towne Centre Dr., Ste 575

 

City/State/Zip: San Diego, CA 92122

 

Attention: Grace Yu

 

Telephone No.: 858-552-6808 ext 237

 











 

	
 
    	
NAME   OF PURCHASER: Cross Creek Capital, L.P.
    
	
 
    	
By:   Cross Creek Capital GP, L.P. its Sole General Partner
    
	
 
    	
By:   Cross Creek Capital, LLC its Sole General Partner
    
	
 
    	
By:   Cross Creek Holdings, LLC its Sole Member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Karey Barker
    
	
 
    	
Name:   Karey Barker
    
	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $384,682
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                           
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-4822488
    
	
 
    	
 
    
	
 
    	
Adress   for Notice:
    
	
 
    	
 
    
	
 
    	
150   Social Hall Ave
    
	
 
    	
4th Floor
    
	
 
    	
Salt   Lake City UT 84111
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 801-533-0777
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 
    
	
 
    	
 
    
	
 
    	
E-mail   Address: ventureops@crosscreekadvisors.com
    
	
 
    	
 
    
	
 
    	
Attention:   Tyler Christensen
    


 

	
Delivery Instructions:
    	
 
    
	
(if different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o 
    	
Bank  of   America / Institutional Custody
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
225 Franklin Street, 4th Floor
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip: 
    	
Boston MA 02110
    	
 
    
	
 
    	
 
    	
 
    
	
Attention: 
    	
Christine McCullough
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
617-434-7627
    	
 
    


 











 

	
 
    	
NAME   OF PURCHASER: Cross Creek Capital Employees Fund, L.P.
    
	
 
    	
By:   Cross Creek Capital GP, L.P. its Sole General Partner
    
	
 
    	
By:   Cross Creek Capital LLC its Sole General Partner
    
	
 
    	
By:   Cross Creek Holdings, LLC its Sole Member
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Karey Barker
    
	
 
    	
Name:   Karey Barker
    
	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $37,805
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                           
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-4822534
    
	
 
    	
 
    
	
 
    	
Adress   for Notice:
    
	
 
    	
 
    
	
 
    	
150   Social Hall Ave
    
	
 
    	
4th Floor
    
	
 
    	
Salt   Lake City UT 84111
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 801-533-0777
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 
    
	
 
    	
 
    
	
 
    	
E-mail   Address: ventureops@crosscreekadvisors.com
    
	
 
    	
 
    
	
 
    	
Attention:   Tyler Christensen
    


 

	
Delivery Instructions:
    	
 
    
	
(if different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o 
    	
Bank  of   America / Institutional Custody
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
225 Franklin Street, 4th Floor
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip: 
    	
Boston MA 02110
    	
 
    
	
 
    	
 
    	
 
    
	
Attention: 
    	
Christine McCullough
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone No.:
    	
617-434-7627
    	
 
    


 











 

	
 
    	
NAME   OF PURCHASER:
    	
DOMAIN   PARTNERS VI L.P.

BY:   ONE PALMER SQUARE

ASSOCIATES   VI, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Kathleen K. Schoemaker
    
	
 
    	
Name:   Kathleen K. Schoemaker
    
	
 
    	
Title:   MANAGING MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $2,000,000
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 33-1073839
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
DOMAIN   ASSOCIATES LLC
    
	
 
    	
One   Palmer Square, Suite 515
    
	
 
    	
Princeton,   NJ 08542
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 6096835656
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 6096834581
    
	
 
    	
 
    
	
 
    	
E-mail   Address: schoemaker@domainve.com
    
	
 
    	
 
    
	
 
    	
Attention:   kathleen K.Schoemaker
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER:
    	
DOMAIN   PARTNERS VIII, L.P.

BY:   ONE PALMER SQUARE

ASSOCIATES   VIII, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Kathleen K. Schoemaker
    
	
 
    	
Name:   Kathleen K. Schoemaker
    
	
 
    	
Title:   MANAGING MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $5,955,806.71
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 90-0451590
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
DOMAIN   ASSOCIATES LLC
    
	
 
    	
One   Palmer Square, Suite 515
    
	
 
    	
Princeton,   NJ 08542
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 6096835656
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 6096834581
    
	
 
    	
 
    
	
 
    	
E-mail   Address:                               
    
	
 
    	
 
    
	
 
    	
Attention:   kathleen K.Schoemaker
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER:
    	
DP   VIII ASSOCIATES, L.P.

BY:   ONE PALMER SQUARE

ASSOCIATES   VIII, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Kathleen K. Schoemaker
    
	
 
    	
Name:   Kathleen K. Schoemaker
    
	
 
    	
Title:   MANAGING MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $44,193.29
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 90-0451593
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
DOMAIN   ASSOCIATES LLC
    
	
 
    	
One   Palmer Square, Suite 515
    
	
 
    	
Princeton,   NJ 08542
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 6096835652
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 6096834581
    
	
 
    	
 
    
	
 
    	
E-mail   Address: Schoemaker@domainve.com
    
	
 
    	
 
    
	
 
    	
Attention:   kathleen K.Schoemaker
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 












 

	
 
    	
NAME OF PURCHASER:
    	
 
    
	
 
    	
Greenspring   Global Partners III, L.P .
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Eric Thompson
    
	
 
    	
Name:   Eric Thompson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $291,163.90
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                     
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-3905158
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
100   Painters Mill Road, Suite 700
    
	
 
    	
Owings   Mills, MD 21117
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 410-363-2725
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 410-363-9075
    
	
 
    	
 
    
	
 
    	
E-mail   Address: finance@gspring.com
    
	
 
    	
 
    
	
 
    	
Attention:   Eric Thompson
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER: 
    	
 
    
	
 
    	
Greenspring   Global Partners III-A, L.P .
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Eric Thompson
    
	
 
    	
Name:   Eric Thompson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $133,540.30
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-3905237
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
100   Painters Mill Road, Suite 700
    
	
 
    	
Owings   Mills, MD 21117
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 410-363-2725
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 410-363-9075
    
	
 
    	
 
    
	
 
    	
E-mail   Address: finance@gspring.com
    
	
 
    	
 
    
	
 
    	
Attention:   Eric Thompson
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER: 
    	
 
    
	
 
    	
Greenspring   Global Partners III-B, L.P .
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Eric Thompson
    
	
 
    	
Name:   Eric Thompson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $421,249.60
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-3905284
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
100   Painters Mill Road, Suite 700
    
	
 
    	
Owings   Mills, MD 21117
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 410-363-2725
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 410-363-9075
    
	
 
    	
 
    
	
 
    	
E-mail   Address: finance@gspring.com
    
	
 
    	
 
    
	
 
    	
Attention:   Eric Thompson
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER: 
    	
 
    
	
 
    	
Greenspring   Crossover Ventures I, L.P .
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Eric Thompson
    
	
 
    	
Name:   Eric Thompson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $304,046.20
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 39-2067914
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
100   Painters Mill Road, Suite 700
    
	
 
    	
Owings   Mills, MD 21117
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 410-363-2725
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 410-363-9075
    
	
 
    	
 
    
	
 
    	
E-mail   Address: finance@gspring.com
    
	
 
    	
 
    
	
 
    	
Attention:   Eric Thompson
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER: 
    	
InterWest   Partners IX, LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Glibert H. Kliman
    
	
 
    	
Name:   Glibert H. Kliman
    
	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $2,600,000
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                     
    
	
 
    	
 
    
	
 
    	
Tax   ID No.: 20-2312479
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
2710   Sand Hill Rd.
    
	
 
    	
Suite   200
    
	
 
    	
Menlo   Park CA 94025
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 6508548585
    
	
 
    	
 
    
	
 
    	
Facsimile   No.: 650854-4706
    
	
 
    	
 
    
	
 
    	
E-mail   Address: nkjellson@interwest.com
    
	
 
    	
 
    
	
 
    	
Attention:   Nina Kjellson
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    
					


 











 

	
 
    	
NAME   OF PURCHASER:
    
	
 
    	
 
    
	
 
    	
SOFINNOVA   VENTURE PARTNERS VI, L.P.
    
	
 
    	
By:   Sofinnova Management VI, LLC
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael F. Powell
    
	
 
    	
Name:   Michael F. Powell
    
	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $1,945,377.93
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.:55-0821687
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
2800   Sand Hill Road, Suite 150
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
 
    
	
 
    	
Telephone   No.: (650) 681-8425
    
	
 
    	
 
    
	
 
    	
Facsimile   no.:(650) 322-2037
    
	
 
    	
 
    
	
 
    	
E-mail   Address: Powell@sofinnova.com
    
	
 
    	
 
    
	
 
    	
Attention:   Michael Powell
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    


 











 

	
 
    	
NAME   OF PURCHASER:
    
	
 
    	
 
    
	
 
    	
SOFINNOVA   VENTURE PARTNERS VI, GmbH Co. KG
    
	
 
    	
By:   Sofinnova Management VI, LLC
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael F. Powell
    
	
 
    	
Name:   Michael F. Powell
    
	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $385,432.12
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.:N/A
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
2800   Sand Hill Road, Suite 150
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
 
    
	
 
    	
Telephone   No.: (650) 681-8425
    
	
 
    	
 
    
	
 
    	
Facsimile   no.:(650) 322-2037
    
	
 
    	
 
    
	
 
    	
E-mail   Address: Powell@sofinnova.com
    
	
 
    	
 
    
	
 
    	
Attention:   Michael Powell
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    


 











 

	
 
    	
NAME   OF PURCHASER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SOFINNOVA   VENTURE PARTNERS VI, L.P.
    
	
 
    	
By:   Sofinnova Management VI, LLC
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael F. Powell
    
	
 
    	
Name:   Michael F. Powell
    
	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $26,517.95
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:                       
    
	
 
    	
 
    
	
 
    	
Tax   ID No.:20-1643659
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
2800   Sand Hill Road, Suite 150
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
 
    
	
 
    	
Telephone   No.: (650) 681-8425
    
	
 
    	
 
    
	
 
    	
Facsimile   no.: (650) 322-2037
    
	
 
    	
 
    
	
 
    	
E-mail   Address: Powell@sofinnova.com
    
	
 
    	
 
    
	
 
    	
Attention:   Michael Powell
    
	
 
    	
 
    
	
Delivery   Instructions:

(if   different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
City/State/Zip:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Telephone   No.: 
    	
 
    	
 
    


 












 

	
 
    	
NAME   OF PURCHASER: TMP Nominee, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Thomas
    
	
 
    	
Name:   James Thomas
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $21,516.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
Facsimile   No.:
    
	
 
    	
 
    
	
 
    	
E-mail   Address:
    
	
 
    	
 
    
	
 
    	
Attention:
    


 

	
Delivery   Instructions:
    	
 
    
	
(if different than above)
    	
 
    
	
 
    	
 
    	
 
    
	
c/o:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Street:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
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1











 

	
 
    	
NAME   OF PURCHASER: TMP Nominee, II, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Thomas
    
	
 
    	
Name:   James Thomas
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $11,100.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
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2











 

	
 
    	
NAME   OF PURCHASER: TMP Associates, L.P
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pratik Shah
    
	
 
    	
Name:   Pratik Shah
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $4,380.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
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3











 

	
 
    	
NAME   OF PURCHASER: TMP Associates, II, L.P
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pratik Shah
    
	
 
    	
Name:   Pratik Shah
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $30,900.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
Facsimile   No.:
    
	
 
    	
 
    
	
 
    	
E-mail   Address:
    
	
 
    	
 
    
	
 
    	
Attention:
    


 

	
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4











 

	
 
    	
NAME   OF PURCHASER: Thomas, McNerney & Partners, L.P.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pratik Shah
    
	
 
    	
Name:   Pratik Shah
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $1,174,104.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
Facsimile   No.:
    
	
 
    	
 
    
	
 
    	
E-mail   Address:
    
	
 
    	
 
    
	
 
    	
Attention:
    


 

	
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5











 

	
 
    	
NAME   OF PURCHASER: Thomas, McNerney & Partners, II L.P.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pratik Shah
    
	
 
    	
Name:   Pratik Shah
    
	
 
    	
Title:   Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Aggregate   Purchase Price (Subscription Amount): $2,958,000.00
    
	
 
    	
 
    
	
 
    	
Number   of Shares to be Acquired:
    
	
 
    	
 
    
	
 
    	
Tax   ID No:
    
	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
 
    
	
 
    	
Thomas   Mc Nerney & Partners
    
	
 
    	
60   South 6th Street    Suite 3620,
    
	
 
    	
Minneapolis,   MN 55402
    
	
 
    	
 
    
	
 
    	
Telephone   No.: 612-465-8660
    
	
 
    	
 
    
	
 
    	
Facsimile   No.:
    
	
 
    	
 
    
	
 
    	
E-mail   Address:
    
	
 
    	
 
    
	
 
    	
Attention:
    
	
 
    	
 
    
	
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6