Document:

Series A Preferred Stock Purchase Agreement

 Exhibit 10.1 
 NANOPOLARIS, INC. 
 SERIES A PREFERRED STOCK PURCHASE
AGREEMENT 
 June 13, 2006 

 TABLE OF CONTENTS 
  

							
	 	  	Page
	1.	 	PURCHASE AND SALE OF STOCK	  	1
				
		 	 1.1
	  	Sale and Issuance of Series A Preferred Stock	  	1
		 	 1.2
	  	Closing	  	1
			
	2.	 	 REPRESENTATIONS AND WARRANTIES OF INVESTOR
	  	1
				
		 	 2.1
	  	Authorization	  	1
		 	 2.2
	  	Purchase Entirely for Own Account	  	1
		 	 2.3
	  	Disclosure of Information	  	2
		 	 2.4
	  	Investment Experience	  	2
		 	 2.5
	  	Accredited Investor	  	2
		 	 2.6
	  	Restricted Securities	  	2
		 	 2.7
	  	Legends	  	2
			
	3.	 	CONDITIONS OF INVESTOR’S OBLIGATIONS AT CLOSING	  	3
				
		 	 3.1
	  	Performance	  	3
		 	 3.2
	  	Compliance Certificate	  	3
		 	 3.3
	  	Qualifications	  	3
		 	 3.4
	  	Proceedings and Documents	  	3
		 	 3.5
	  	Restated Certificate	  	3
		 	 3.6
	  	Secretary’s Certificate	  	3
		 	 3.7
	  	Investors’ Rights Agreement	  	3
		 	 3.8
	  	Voting Agreement	  	3
		 	 3.9
	  	Agreement to Provide Additional Capital	  	3
			
	4.	 	CONDITIONS OF THE COMPANY’S OBLIGATIONS	  	4
				
		 	 4.1
	  	Representations and Warranties	  	4
		 	 4.2
	  	Payment of Purchase Price	  	4
		 	 4.3
	  	Qualifications	  	4
		 	 4.4
	  	Investors’ Rights Agreement	  	4
		 	 4.5
	  	Voting Agreements	  	4
		 	 4.6
	  	Additional Capital Agreement	  	4
			
	5.	 	MISCELLANEOUS	  	4
				
		 	 5.1
	  	Survival	  	4
		 	 5.2
	  	Successors and Assigns	  	4
		 	 5.3
	  	Governing Law	  	4
		 	 5.4
	  	Titles and Subtitles	  	4
		 	 5.5
	  	Notices	  	5
		 	 5.6
	  	Finder’s Fee	  	5

  

 i. 

							
		 	5.7
5.8
5.9
5.10
5.11	  	Amendments and Waivers	  	5
		 	  	Severability	  	5
		 	  	Aggregation of Stock	  	5
		 	  	Entire Agreement	  	5
		 	  	Counterparts	  	5

  

			
	 EXHIBIT A
	  	Amended and Restated Certificate of Incorporation
		
	 EXHIBIT B
	  	Investors’ Rights Agreement
		
	 EXHIBIT C
	  	Voting Agreement
		
	 EXHIBIT D
	  	Agreement to Provide Additional Capital

  

 ii. 

 SERIES A PREFERRED STOCK PURCHASE AGREEMENT 
 THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made on the 13th day of June, 2006, among NanoPolaris,
Inc., a Delaware corporation (the “Company”), and Arrowhead Research Corporation, a Delaware corporation (“Investor”). 
 THE PARTIES HEREBY AGREE AS FOLLOWS: 
 1. Purchase and Sale of Stock. 
 1.1 Sale and Issuance of Series A Preferred Stock. 
 (a) The Company shall adopt and file with the Secretary of State of the State of Delaware on or before the Closing (as defined below) the
Amended and Restated Certificate of Incorporation in the form attached hereto as Exhibit A (the “Restated Certificate”). 
 (b) Subject to the terms and conditions of this Agreement, Investor agrees to purchase at the Closing (as defined herein) and the Company agrees to sell and issue to Investor at the Closing, Two Million Eight Hundred
Eighty-Nine Thousand (2,889,000) shares of the Company’s Series A Preferred Stock for a purchase price of $1.0384 per share. 
 1.2 Closing. The purchase and sale of the Series A Preferred Stock hereunder shall take place at the offices of Arrowhead Research Corporation, 201 South Lake Avenue, Suite 703, Pasadena, California, 91101, at
10:00 A.M. on June 1, 2006, or at such other time and place as the Company and Investor mutually agree upon orally or in writing (which time and place are designated as the “Closing”). At the Closing, the Company shall
deliver to Investor a certificate representing the Series A Preferred Stock that such Investor is purchasing against payment of the purchase price therefor by wire transfer. 
 2. Representations and Warranties of Investor. Investor hereby represents, warrants and covenants that: 
 2.1 Authorization. Such Investor has full power and authority to enter into this Agreement, the Investors’ Rights Agreement
(as defined below) and the Voting Agreement (as defined below), and each such agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in the Investors’ Rights Agreement and the Voting Agreement may be limited by applicable federal or state securities laws. 
 2.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in reliance upon such Investor’s
representation to the Company, which by such Investor’s execution of this Agreement, such Investor hereby confirms that the Series A Preferred Stock to be received by such Investor and the Common Stock issuable upon conversion 

  

 1 

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

 2.3 Disclosure of Information. Such Investor believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Series A Preferred Stock. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of
the Series A Preferred Stock and the business, properties, prospects and financial condition of the Company. 
 2.4
Investment Experience. Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Series A Preferred Stock. If other than an individual, such Investor also represents it has not been organized for the purpose of
acquiring the Series A Preferred Stock. 
 2.5 Accredited Investor. Such Investor is an “accredited investor”
within the meaning of SEC Rule 501 of Regulation D, as presently in effect. 
 2.6 Restricted Securities. Such Investor
understands that the Securities it is purchasing are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such Securities may be resold without registration under the Securities Act of 1933, as amended (the “Act”), only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities or an available exemption from registration under the Act, the Series A Preferred Stock (and any Common Stock issued on conversion thereof) must be held indefinitely. 
 2.7 Legends. It is understood that the certificates evidencing the Securities may bear one or all of the following legends:

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

 2 

 3. Conditions of Investor’s Obligations at Closing. The obligations of Investor under
Section 1.1(b) of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions: 
 3.1 Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before
the Closing. 
 3.2 Compliance Certificate. The President of the Company shall deliver to Investor at the Closing a
certificate stating that the conditions specified in Section 3.1 has been fulfilled. 
 3.3 Qualifications.
All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities in the Closing pursuant to
this Agreement shall be duly obtained and effective as of the Closing, other than such authorizations, approvals or permits or other filings which may be timely made after the Closing. 
 3.4 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing
and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investor, and it shall have received all such counterpart original and certified or other copies of such documents as it may reasonably request.

 3.5 Restated Certificate. The Restated Certificate of the Company shall have been filed with the Secretary of State
of the State of Delaware and shall continue to be in full force and effect as of the Closing. 
 3.6 Secretary’s
Certificate. Investor shall have received from the Company’s Secretary a certificate having attached thereto (i) the Company’s Certificate of Incorporation as in effect at the time of the Closing, (ii) the Company’s
Bylaws as in effect at the time of the Closing, (iii) resolutions approved by the Board of Directors authorizing the transactions contemplated hereby, and (iv) resolutions approved by the Company’s stockholders authorizing the filing
of the Restated Certificate. 
 3.7 Investors’ Rights Agreement. The Company and Investor shall have entered into
the Investors’ Rights Agreement in the form attached hereto as Exhibit B (the “Investors’ Rights Agreement”). 
 3.8 Voting Agreement. Unidym, Inc., a California corporation (“Unidym”), Investor and the Company shall each have entered into the Voting Agreement in the form attached hereto as
Exhibit C (the “Voting Agreement”). 
 3.9 Agreement to Provide Additional Capital. The
Company and Investor shall have entered into the Agreement to Provide Additional Capital attached hereto as Exhibit D (the “Additional Capital Agreement”). 
  

 3 

 4. Conditions of the Company’s Obligations. The obligations of the Company to Investor under
this Agreement in connection with the Closing are subject to the fulfillment on or before the Closing of each of the following conditions: 
 4.1 Representations and Warranties. The representations and warranties of Investor contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations
and warranties had been made on and as of the Closing. 
 4.2 Payment of Purchase Price. Investor shall have delivered
to the Company the purchase price specified in Section 1.1(b) on or prior to the Closing. 
 4.3
Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities in the
Closing pursuant to this Agreement shall be duly obtained and effective as of the Closing, other than such authorizations, approvals or permits or other filings which may be timely made after the Closing. 
 4.4 Investors’ Rights Agreement. The Company and Investor shall have entered into the Investors’ Rights Agreement.

 4.5 Voting Agreements. Unidym, Investor and the Company shall each have entered into the Voting Agreement.

 4.6 Additional Capital Agreement. The Company and Investor shall have entered into the Additional Capital Agreement.

 5. Miscellaneous. 
 5.1 Survival. The warranties, representations and covenants of the Company and Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing
and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of Investor or the Company. 
 5.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees
of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. 
 5.3 Governing Law. This Agreement shall be governed
by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 
 5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. 
  

 4 

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

5.6 Finder’s Fee. Each party represents that it neither is nor will be obligated for any finders’ fee or commission in
connection with this transaction. Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such
liability or asserted liability) for which such Investor or any of its officers, partners, employees or representatives is responsible. The Company agrees to indemnify and hold harmless Investor from any liability for any commission or compensation
in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 
 5.7 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the Common Stock that is issuable or issued upon conversion of the Series
A Preferred Stock sold pursuant to this Agreement. Any amendment or waiver effected in accordance with this Section 5.7 shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of all such securities and the Company. 
 5.8
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms. 
 5.9 Aggregation of Stock. All shares of the
Series A Preferred Stock or Common Stock issued upon conversion thereof held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. 

5.10 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and
no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. 
 5.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. 
  

 5 

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

  

			
	 COMPANY:
  
 NANOPOLARIS, INC.
 a Delaware corporation

		
	 By:
	 	 /S/ R. Bruce Stewart

		 	 President

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

			
	
	 INVESTOR:
  
 ARROWHEAD RESEARCH CORPORATION
 a Delaware corporation

		
	 By:
	 	 /s/ R. Bruce Stewart

		 	 R. Bruce Stewart
 Chief Executive Officer

			
		
	 Address:
	 	 201 South Lake Avenue, Suite 703
 Pasadena, CA 91101
 Fax No. (626) 792-5554Agreement to Provide Additional Capital

 Exhibit 10.2 
 AGREEMENT TO PROVIDE ADDITIONAL CAPITAL 
 THIS AGREEMENT TO PROVIDE ADDITIONAL CAPITAL (this
“Agreement”) is made and entered into as of June 13, 2006, by and between ARROWHEAD RESEARCH CORPORATION, a Delaware corporation (“Arrowhead”), and
NANOPOLARIS, INC., a Delaware corporation (the “Company”). 
 A. Concurrent
with the execution and delivery hereof, Arrowhead has entered into that certain Series A Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”), pursuant to which, among other things, Arrowhead has agreed to
purchase 2,889,000 shares of Series A Preferred Stock of the Company (the “Preferred Stock”). 
 B. The Purchase Agreement has been
entered into in contemplation of and in consideration of this Agreement, whereby Arrowhead agrees to contribute $4,000,000 of additional capital to the Company on the terms and conditions set forth herein, provided the Company meets certain
milestones set forth herein. 
 C. This Agreement is being executed and delivered by the parties hereto as contemplated by the Purchase
Agreement. 
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth below, the parties
hereto agree as follows: 
 1. Commitment to Provide Additional Capital. Arrowhead agrees to provide up to $4,000,000 of additional
capital to the Company, on the following terms and subject to the following conditions: 
 (a) Attached hereto as Appendix
I is a schedule setting forth specified events, the occurrence of which will require future contributions of capital to be made (the “Milestones”). The date upon which each such Milestone shall have been reached is hereinafter referred
to as a “Milestone Date.” 
 (b) Within ten (10) business days following each Milestone Date, the Company shall
deliver to Arrowhead a certificate of the Chief Executive Officer of the Company setting forth, in reasonable detail, sufficient information for Arrowhead to evaluate whether the Company has achieved the specific Milestone to be achieved by the
Milestone Date in question. 
 (c) Arrowhead will have a period of thirty (30) business days following receipt of the
certificate specified in subparagraph 1(b) to evaluate the information provided to Arrowhead by the Company in the certificate. In the event that Arrowhead determines, to its reasonable satisfaction, that the Milestone in question was achieved by
the Company, Arrowhead shall, within such 30-day period, provide to the Company, in cash, by corporate check(s) or wire transfer, the amount of additional capital set forth on Appendix I opposite the Milestone in question. 
  

 - 1 - 

 (d) Any and all amounts provided by Arrowhead to the Company pursuant to this Agreement
shall be deemed contributions to the capital of the Company by Arrowhead, as an existing holder of capital stock of the Company. It is understood and agreed that no capital stock or other security of the Company shall be issued to Arrowhead in
consideration or on account of any additional capital provided by Arrowhead to the Company pursuant to the provisions of this Agreement, and that none of such funds shall be considered a loan by Arrowhead to the Company, or otherwise be repayable by
the Company to Arrowhead. 
 2. Failure of Arrowhead to Make a Required Contribution. In the event that Arrowhead fails to provide, on
a timely basis, any amount of additional funding that Arrowhead is obligated to provide pursuant to the provisions of paragraph 1 above (the “Adjustment Event”), then appropriate adjustments will be made to the Preferred Stock pursuant to
the terms of the Company’s Certificate of Incorporation then in effect (the “Certificate”). In the event Arrowhead previously converted all or a portion of its Preferred Stock into Common Stock prior to such Adjustment Event, then, as
provided in this paragraph 2 below, Arrowhead will be required to surrender a portion of its shares of Common Stock to the Company to the extent it no longer holds enough Preferred Stock to provide for the necessary adjustments set forth in the
Certificate. If Arrowhead shall have converted a portion, but not all, of its Preferred Stock into Common Stock prior to an Adjustment Event and, after making the adjustments in the Certificate as a result of the Adjustment Event, the shares of
Preferred Stock held by Arrowhead would convert into a negative number of shares of Common Stock (the “Negative Conversion Shares”), then Arrowhead shall surrender to the Company that number of shares of Common Stock equal to the Negative
Conversion Shares. In the event Arrowhead shall have converted all of its Preferred Stock into Common Stock prior to such Adjustment Event (and therefore the conversion adjustment cannot be calculated), then Arrowhead shall surrender that number of
shares of Common Stock equal to (A) the number of shares of Common Stock issued upon conversion of its Preferred Stock, multiplied by (B) the amount of the additional funding Arrowhead failed to provide in connection with the Adjustment
Event, divided by (C) $7,000,000. The Company shall not have any additional rights or remedies in connection with Arrowhead’s failure to make a contribution as required by this Agreement. 
 3. Optional Contribution. In the event the Company does not achieve one or more of the milestones, Arrowhead may, in its sole discretion,
contribute all or a portion of the $4,000,000 of additional capital to the Company. In addition, nothing herein shall prevent the Company and Arrowhead from agreeing to a future financing transaction on other terms. 
 4. Miscellaneous. 
 (a) Subject to the terms and conditions of this Agreement, each of the parties hereto shall use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws, rules and regulations to consummate and make effective the transactions contemplated by this Agreement. 
 (b) This Agreement shall be binding upon and inure to the benefit of the parties hereto, the heirs, personal representatives, successors and permitted assigns of each of the parties hereto, but shall not confer, expressly or by implication,
any rights or remedies upon any 

  

 - 2 - 

 
other party. Neither this Agreement nor any of the rights, interests or obligations of either party hereunder may be assigned without the prior written
consent of the other party. 
 (c) This Agreement shall be governed by and construed in accordance with the General
Corporation Law of the State of Delaware as to matters within the scope thereof, without regard to its principles of conflicts of laws. 
 (d) To the extent any Common Stock of the Company is issued to Arrowhead as a result of a conversion of the shares of Preferred Stock of the Company, the certificates evidencing such securities may bear legends deemed
appropriate acknowledging the terms of this Agreement. 
 (e) All notices, requests or demands and other communications
hereunder must be in writing and shall be deemed to have been duly made if personally delivered or mailed, postage prepaid, to the parties at their respective addresses set forth on the signature page hereof. Any party hereto may change its address
by written notice to the other party given in accordance with this subsection 3(e). 
 (f) This Agreement, together with the
exhibits attached hereto, contains the entire agreement between the parties and supersedes all prior agreements, understandings and writings between the parties with respect to the subject matter hereof and thereof. Each party hereto acknowledges
that no representations, inducements, promises or agreements, oral or otherwise, have been made by any party, or anyone acting with authority on behalf of any party, which are not embodied herein or in an exhibit hereto, and that no other agreement,
statement or promise may be relied upon or shall be valid or binding. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally. This Agreement may be amended or any term hereof may be changed, waived,
discharged or terminated only by an agreement in writing signed by each of the parties hereto. 
 (g) The captions and
headings used herein are for convenience only and shall not be construed as a part of this Agreement. 
 (h) In the event of
any litigation between the parties hereto, the non-prevailing party shall pay the reasonable expenses, including the attorneys’ fees, of the prevailing party in connection therewith. 
 (i) This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which taken together shall
constitute but one and the same document. 
 [SIGNATURE PAGE FOLLOWS] 
  

 - 3 - 

 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day and
year first above written. 
  

			
	COMPANY:
	
	 NANOPOLARIS, INC.
 a Delaware corporation

		
	By:	 	 /S/ R. Bruce Stewart

		 	 President

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

  

			
	ARROWHEAD:
	
	 ARROWHEAD RESEARCH CORPORATION
 a Delaware corporation

		
	By:	 	 /s/ R. Bruce Stewart

		 	 Chief Executive Officer

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

 [SIGNATURE PAGE TO AGREEMENT TO PROVIDE ADDITIONAL CAPITAL] 

 APPENDIX I 
 MILESTONES 
  

						
	  	  	 Description
	  	Capital to be
Contributed
	 Milestone 1
	  	12 months	  	$	2,000,000.00
	 Milestone 2
	  	24 months	  	$	2,000,000.00

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