Document:

exv10w31

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

EXHIBIT 10.31

SECOND AMENDMENT TO THE AMENDED AND RESTATED RESEARCH, DEVELOPMENT AND
MARKETING COLLABORATION AGREEMENT BETWEEN ONYX PHARMACEUTICALS, INC., A
DELAWARE CORPORATION (“ONYX”), and WARNER-LAMBERT COMPANY, A DELAWARE
CORPORATION (“WARNER”)

     THIS SECOND AMENDMENT (“Second Amendment”) between Onyx and Warner, which
Agreement was amended and restated July 1997, the AMENDED AND RESTATED
RESEARCH, DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT as amended by that
certain Amendment dated December 15, 1997 (as amended, the “Agreement”), dated
as of May 2, 1995, is entered into and made effective March 1, 2000. Onyx and
Warner may be referred to herein individually as “Party,” or collectively, as
the “Parties.”

RECITALS

     WHEREAS, Onyx and Warner desire to amend the Agreement to modify the
scope, personnel, resources, term, and research funding.

     NOW, THEREFORE, in consideration of the covenants contained in this Second
Amendment, the Parties hereby agree as follows:

	 	1.	 	Section 2.1, Undertaking and Scope, is amended to delete only
the fourth (4th) sentence, and replace it with the following:
	 
	 	 	 	Onyx agrees to use its best efforts at its cost [*] to supply
protein required to run screening assays relating to biochemical
targets, which targets were identified and transferred to Warner
prior to the Effective Date of this Amendment.
	 
	 	2.	 	Section 2.2 Personnel and Resources, is amended to delete
only the second (2nd) sentence, and replace it with the following:

From the effective date of the Agreement until March 1, 2000,
Warner and Onyx will each maintain at their cost an average of
fifteen (15) full-time equivalents (“FTEs”) devoted to cooperative
work under the Research Plan. Starting March 1, 2000 until the end
of the Term of the Research Collaboration, the number of FTEs that
Onyx shall devote to the cooperative work shall be reduced to nine
(9). The number of FTEs may, however, be increased up to eighteen
(18) by the Research Management Committee provided there is a
concomitant reduction in the number of FTEs that are working on the
Research, Development and

1.

 

	 	 	 	Marketing Collaboration Agreement pertaining to Inflammation
(“Inflammation Agreement”), having an effective date of July 31,
1997.
	 
	 	3.	 	Section 2.3, Term of the Research Collaboration, is hereby
deleted in its entirety and replaced by the following:
	 
	 	 	 	2.3 Research Term. Work under the Research Plan will commence as
of May 2, 1995 and, unless terminated earlier by either party
pursuant to the terms of this Agreement or extended by mutual
agreement of the Parties, will terminate on August 31, 2001.
	 
	 	4.	 	Section 9.1, Research Funding, is amended to delete the
months May 2, 2000 through February 2, 2001 and substitute therefor
the following:

	 	 	 	 	 
	June 1, 2000
	 	$	431,750	 
	Sept. 1, 2000
	 	$	506,250	 
	Dec. 1, 2000
	 	$	506,250	 
	Mar. 1, 2001
	 	$	506,250	 
	June 1, 2001
	 	$	337,500	 

	 	5.	 	Except as otherwise specifically set forth herein, all of the
terms and conditions of the Agreement shall remain in full force and
effect.

     IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed
by their duly authorized officers as of the date first written above.

	 	 	 	 	 
	ONYX
PHARMACEUTICALS, INC.	 	WARNER-LAMBERT COMPANY

	 	 	 
	By:	/s/ Hollings C. Renton

	 	By:	/s/ Peter B. Corr

	 	 	 
	Name:	Hollings C. Renton

	 	Name:	
Peter B. Corr, Ph.D.

	 	 
	Title:	President & CEO

	 	Title:	
Corporate Vice-President,

Warner-Lambert Company

President, Parke-Davis Pharmaceutical

Research & Development

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

2.exv10w32

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

EXHIBIT 10.32

SECOND AMENDMENT TO THE RESEARCH, DEVELOPMENT AND MARKETING COLLABORATION
AGREEMENT BETWEEN ONYX PHARMACEUTICALS, INC., A DELAWARE CORPORATION (“ONYX”),
and WARNER-LAMBERT COMPANY, A DELAWARE CORPORATION (“WARNER”).

     THIS SECOND AMENDMENT (“Second Amendment”) to the RESEARCH, DEVELOPMENT
AND MARKETING COLLABORATION AGREEMENT (“Agreement”), having an effective date
of July 31, 1997, between Onyx and Warner, which Agreement was first amended on
August 2, 1999 to extend its term one year, is entered into and made effective
March 1, 2000. Onyx and Warner may be referred to herein individually as
“Party,” or collectively, as the “Parties.”

RECITALS

     WHEREAS, Onyx and Warner desire to amend the Agreement to modify the
scope, personnel, resources, term and research funding.

     NOW, THEREFORE, in consideration of the covenants contained in this Second
Amendment the Parties hereby agree as follows:

	 	1.	 	Section 2.1, Undertaking and Scope, is amended to delete only
the fourth (4th) sentence, and replace it with the following:
	 
	 	 	 	Onyx agrees to use its best efforts at its cost [*] to supply
protein required to run screening assays relating to biochemical
targets, which targets were identified and transferred to Warner
prior to the Effective Date of this amendment.
	 
	 	2.	 	Section 2.2, Personnel and Resources, is amended to delete
only the second (2nd) sentence, and replace it with the following:
	 
	 	 	 	From the effective date of the Agreement until March 1, 2000 Warner
and Onyx will each maintain at their cost an average of ten (10)
full-time equivalents (“FTEs”) devoted to cooperative work under
the Research Plan. Starting March 1, 2000 until the end of the
Term of the Research Collaboration, the number of FTEs that Onyx
shall devote to the cooperative work shall be reduced to nine (9).
The number of FTEs may, however, be increased up to eighteen (18)
by the

1.

 

	 	 	 	Research Management Committee provided there is a concomitant
reduction in the number of FTEs that are working on the Amended and
Restated Research, Development and Marketing Collaboration
Agreement pertaining to the Cell Cycle (“Cell Cycle Agreement”),
dated May 2, 1995.
	 
	 	3.	 	Section 2.3, Term of the Research Collaboration, is hereby
deleted in its entirety and replaced by the following:
	 
	 	 	 	2.3 Research Term. Work under the Research Plan will commence as
of July 31, 1997 and, unless terminated earlier by either party
pursuant to the terms of this Agreement or extended by mutual
agreement of the Parties, will terminate on August 31, 2001.
	 
	 	4.	 	Section 8.2, Research Funding is amended to extend the
payment schedule as follows:

	 	 	 	 	 
	July 1, 2000
	 	$	450,000	 
	Oct 1, 2000
	 	$	506,250	 
	Jan 1, 2001
	 	$	506,250	 
	Apr 1, 2001
	 	$	506,250	 
	July 1, 2001
	 	$	506,250	 

	 	5.	 	Except as otherwise specifically set forth herein, all of the
terms and conditions of the Agreement shall remain in full force and
effect.

     IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed
by their duly authorized officers as of the date first written above.

	 	 	 	 	 
	ONYX PHARMACEUTICALS, INC.	 	
WARNER-LAMBERT COMPANY
	 
	By:	/s/ Hollings C. Renton

	 	By:	
/s/ Peter B. Corr

	 
	Name:	Hollings C. Renton

	 	Name:	
Peter B. Corr, Ph.D.

	 
	Title:	President & CEO

	 	Title:	
Corporate Vice-President,

Warner-Lambert Company

President, Parke-Davis Pharmaceutical

Research & Development

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

2.exv10w42

 

EXHIBIT 10.42

STOCK PURCHASE AGREEMENT

 

 

Exhibit 10.42

ONYX PHARMACEUTICALS, INC.

STOCK PURCHASE AGREEMENT

February 13, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	PAGE
	SECTION 1.
	 	 	AUTHORIZATION OF SALE OF THE SECURITIES	 	 	1	 
	SECTION 2.
	 	 	AGREEMENT TO SELL AND PURCHASE THE SECURITIES	 	 	1	 
	SECTION 3.
	 	 	CLOSING AND DELIVERY	 	 	1	 
	 	3.1
	 	Closing	 	 	1	 
	 	3.2
	 	Delivery of the Shares	 	 	1	 
	SECTION 4.
	 	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY	 	 	2	 
	 	4.1
	 	Organization and Qualification	 	 	2	 
	 	4.2
	 	Authorization; Enforcement	 	 	2	 
	 	4.3
	 	No Conflicts; No Violations	 	 	2	 
	 	4.4
	 	Governmental Consents	 	 	3	 
	 	4.5
	 	Issuance and Sale of the Shares	 	 	3	 
	 	4.6
	 	SEC Reports	 	 	3	 
	 	4.7
	 	Capitalization	 	 	4	 
	 	4.8
	 	Nasdaq Compliance	 	 	4	 
	 	4.9
	 	Absence of Litigation	 	 	5	 
	 	4.10
	 	Intangible Rights	 	 	5	 
	 	4.11
	 	No Integrated Offering	 	 	5	 
	 	4.12
	 	Investment Company Status	 	 	5	 
	 	4.13
	 	No General Solicitation	 	 	5	 
	 	4.14
	 	Eligibility For Use of Form S-3	 	 	6	 
	 	4.15
	 	Legal Compliance	 	 	6	 
	 	4.16
	 	Securities Act Exemption	 	 	6	 
	 	4.17
	 	Brokers	 	 	6	 
	SECTION 5.
	 	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS	 	 	7	 
	 	5.1
	 	Authority, Approval and Enforceability	 	 	7	 
	 	5.2
	 	Investment Representations	 	 	7	 
	 	5.3
	 	Brokers	 	 	8	 
	SECTION 6.
	 	 	SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS	 	 	9	 

i

 

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	PAGE
	SECTION 7.
	 	 	CONDITIONS TO
COMPANY’S OBLIGATIONS AT THE CLOSING	 	 	9	 
	 	7.1
	 	Representations and Warranties Correct	 	 	9	 
	 	7.2
	 	Covenants Performed	 	 	9	 
	 	7.3
	 	Qualifications	 	 	9	 
	 	7.4
	 	Legal Investment	 	 	9	 
	SECTION 8.
	 	 	CONDITIONS TO
PURCHASERS’ OBLIGATIONS AT THE CLOSING	 	 	9	 
	 	8.1
	 	Representations and Warranties Correct	 	 	9	 
	 	8.2
	 	Legal Opinion	 	 	9	 
	 	8.3
	 	Covenants Performed	 	 	10	 
	 	8.4
	 	Qualifications	 	 	10	 
	 	8.5
	 	Legal Investment	 	 	10	 
	 	8.6
	 	Compliance Certificate	 	 	10	 
	SECTION 9.
	 	 	REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT	 	 	10	 
	 	9.1
	 	Definitions	 	 	10	 
	 	9.2
	 	Registration Procedures and Expenses	 	 	10	 
	 	9.3
	 	Piggyback Registrations	 	 	12	 
	 	9.4
	 	Indemnification	 	 	12	 
	 	9.5
	 	Transfer of Shares After Registration; Notice	 	 	14	 
	 	9.6
	 	Reporting Requirements	 	 	14	 
	 	9.7
	 	Listing	 	 	15	 
	 	9.8
	 	Termination of Obligations	 	 	15	 
	 	9.9
	 	Assignability of Registration Rights	 	 	15	 
	SECTION 10.
	 	 	NOTICES	 	 	15	 
	SECTION 11.
	 	 	MISCELLANEOUS COVENANTS	 	 	16	 
	 	11.1
	 	Delivery of Proxy Statements	 	 	16	 
	 	11.2
	 	Form D; Blue Sky Laws	 	 	16	 
	SECTION 12.
	 	 	MISCELLANEOUS	 	 	16	 
	 	12.1
	 	Waivers and Amendments	 	 	16	 

ii

 

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	12.2
	 	Headings	 	 	16	 
	12.3
	 	Severability	 	 	16	 
	12.4
	 	Governing Law; Jurisdiction	 	 	16	 
	12.5
	 	Counterparts	 	 	16	 
	12.6
	 	Successors and Assigns	 	 	16	 
	12.7
	 	Expenses	 	 	17	 
	12.8
	 	Equitable Relief	 	 	17	 
	12.9
	 	Entire Agreement	 	 	17	 
	12.10
	 	Publicity	 	 	17	 
	12.11
	 	Material Adverse Effect	 	 	17	 

iii

 

 

ONYX PHARMACEUTICALS, INC.

STOCK PURCHASE AGREEMENT

     THIS
AGREEMENT (“Agreement”) is made as of the 13th day of February, 2003,
by and among ONYX PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”), and each of those persons and entities, severally and not jointly,
set forth on the Schedule of Purchasers attached as Exhibit A hereto (which
persons and entities are hereinafter collectively referred to herein as
“Purchasers” and each individually as a “Purchaser”).

AGREEMENT

     In consideration of the mutual covenants contained in this Agreement and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and each Purchaser (severally and not jointly) hereby
agree as follows:

SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the terms and
conditions of this Agreement, the Company has or before the Closing (as defined
in Section 3 below) will have authorized the sale and issuance of at least Two
Million One Hundred Five Thousand Two Hundred Sixty-Three (2,105,263) shares of
the Company’s Common Stock, $0.001 par value (the “Shares”).

SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES. At the Closing, the
Company shall issue and sell to each Purchaser, severally and not jointly, and
each Purchaser shall purchase from the Company, severally and not jointly, the
number of Shares set forth next to such Purchaser’s name on the Schedule of
Purchasers attached hereto as Exhibit A (the “Schedule of Purchasers”), at a
purchase price of Four Dollars and Seventy-Five Cents ($4.75) per Share, for an
aggregate purchase price amongst all Purchasers of Nine Million Nine Hundred
Ninety-Nine Thousand Nine Hundred Ninety-Nine Dollars and Twenty-Five Cents
($9,999,999.25) (the “Purchase Price”) (subject to proportionate adjustment
upon the occurrence of any stock split, stock dividend, reverse stock split or
like event that is consummated or becomes effective during the period
commencing on the date hereof and ending immediately prior to the Closing),
which Purchase Price shall be deliverable by each Purchaser at the Closing by
wire transfer to the Company.

SECTION 3. CLOSING AND DELIVERY

     3.1    Closing. The closing of the purchase and sale of the Shares to be
issued pursuant to this Agreement (the “Closing”) shall be held at the offices
of Cooley Godward llp, 3175 Hanover Street, Palo Alto, California, 94306 on
February 13, 2003 or on such other date and place as may be agreed to by the
Company and the Purchasers.

     3.2    Delivery of the Shares. Promptly following the Closing, the Company
shall deliver to each Purchaser a certificate representing the number of
Shares to be purchased at the Closing by each such Purchaser, registered in the
name of such Purchaser, or in such nominee name(s) as designated by such
Purchaser against payment of the purchase price therefore by wire transfer.
The Company shall also deliver an executed copy of this Agreement to each
Purchaser.

1.

 

SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

     Subject to and except as set forth on the Schedule of Exceptions which is
arranged in sections corresponding to the sub-section numbered provisions
contained below in this Section and except as described in the SEC Reports (as
defined below), the Company hereby represents and warrants to, and covenants
with, the Purchasers as of the Closing as follows:

     4.1    Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority and all licenses,
permits and authorizations to conduct its business as it is currently being
conducted and as it is presently proposed to be conducted and to own, lease and
operate its properties. The Company is duly qualified and is authorized to
transact business and is in good standing as a foreign corporation in each
jurisdiction in which the failure so to qualify would have a Material Adverse
Effect.

     4.2    Authorization; Enforcement. Assuming and relying on the accuracy of
the representations set forth in Section 5: (a) The Company has all requisite
corporate power and authority to enter into and to perform its obligations
under this Agreement and all other agreements, documents and instruments
contemplated hereby and thereby, to consummate the transactions contemplated
hereby and thereby and to issue the Shares in accordance with the terms hereof;
(b) the execution, delivery and performance of this Agreement and all other
agreements, documents and instruments contemplated hereby and thereby by the
Company and the consummation by it of the transaction contemplated hereby and
thereby (including without limitation the issuance of the Shares) have been
duly authorized by the Company’s Board of Directors and no further consent or
authorization of the Company, its Board or Directors or its stockholders is
required; (c) this Agreement and all other agreements, documents and
instruments contemplated hereby and thereby have been or will be duly executed
by the Company; and (d) each of this Agreement and all other agreements,
documents and instruments contemplated hereby and thereby constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization, or moratorium or similar laws affecting the rights
of creditors generally and the application of general principles of equity,
except as the indemnification provisions contained in Section 9.4 hereof may be
legally unenforceable.

     4.3    No Conflicts; No Violations. The Company’s execution, delivery and
performance of this Agreement and the issuance of the Shares will not violate,
conflict with, result in a breach of or constitute (upon notice or lapse of
time or both) a default under, or result in the creation or imposition of any
lien, security interest, mortgage, pledge, charge or other encumbrance, of any
material nature, upon any properties or assets of the Company under any (a)
law, regulation, rule, injunction, judgment, order, decree, ruling, charge or
other restriction of any government, governmental agency, court or arbitrator
to which the Company is subject, (b) the Company’s Amended and Restated
Certificate of Incorporation or Bylaws or (c) any provision of any indenture,
mortgage, agreement, contract or other instrument to which the Company is a
party or by which the Company or any of its properties or assets is bound as of
the date hereof except where such breach or default would have a Material
Adverse Effect.

2.

 

     4.4    Governmental Consents. Except for applicable filings with the Nasdaq
Market, under the Securities Act), or the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), no consent, approval, qualification, order or
authorization of, or filing with, any local, state, or federal governmental
authority is required on the part of the Company in connection with the
Company’s valid execution, delivery, or performance of this Agreement, or the
offer, sale or issuance of the Shares by the Company, other than any
post-closing filings as may be required under applicable federal or state
securities laws, which will be timely filed within the applicable periods
therefor.

     4.5    Issuance and Sale of the Shares. When issued and paid for in
accordance with this Agreement, the Shares to be sold hereunder by the Company,
will be validly issued and outstanding, fully paid and non-assessable, free
from all taxes, liens, claims, encumbrances and charges with respect to the
issue thereof, and will not be subject to preemptive rights of stockholders of
the Company.

     4.6    SEC Reports.

          (a)    Since January 1, 2002, the Company has filed in a timely manner with
the Securities and Exchange Commission (the “SEC”) all reports (“SEC Reports”)
required to be filed by it under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). All of the SEC Reports filed by the Company
comply in all material respects with the requirements of the Exchange Act or
the Securities Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Reports. None of the SEC
Reports contains, as of the respective dates thereof, any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made. All financial statements contained
in the SEC Reports have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the period indicated
(“GAAP”). Each balance sheet is in accordance with the books and records of
the Company and presents fairly in accordance with GAAP the financial position
of the Company as of the date of such balance sheet, and each statement of
operations, of stockholders’ equity and of cash flows is in accordance with the
books and records of the Company and presents fairly in accordance with GAAP
the results of operations, the stockholders’ equity and the cash flows of the
Company for the periods then ended. Except as set forth in the financial
statements included in the SEC Reports, the Company has no material
liabilities, contingent or otherwise, other than liabilities incurred in the
ordinary course of business subsequent to October 1, 2002.

          (b)    The Company has delivered to the Purchasers the following SEC Reports:

               (i)      the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 (without exhibits);

               (ii)     the Company’s Proxy Statement for the 2002 Annual Meeting of
Stockholders;

               (iii)    the Company’s quarterly Report on Form 10-Q for the quarter ended
March 31, 2002;

3.

 

               (iv)    the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002;

               (v)     the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002; and

               (vi)    the Company’s Current Report on Form 8-K, as filed January 30, 2003.

          (c)    No event has occurred since January 1, 2002, requiring the filing of
an SEC Report that has not heretofore been filed and furnished to the
Purchasers (including, without limitation, any amendment to any such SEC
Report).

     4.7    Capitalization. The authorized capital stock of the Company consists
of (i) 50,000,000 shares of Common Stock, $.001 par value, of which Twenty-One
Million Six Hundred Fourteen Thousand Seven Hundred Sixty-Seven (21,614,767)
such shares were issued and outstanding as of January 31, 2003 and (ii)
5,000,000 shares of preferred stock, $.001 par value, of which no shares are
issued and outstanding on the date hereof. As of the date hereof, the Company
has no intention, obligation or commitment, fixed or contingent, to issue any
shares of such Preferred Stock. Except as contemplated by this Agreement and
except for shares reserved under the Company’s 1996 Equity Incentive Plan, the
1996 Non-Employee Directors’ Stock Option Plan and the 1996 Employee Stock
Purchase Plan, and outstanding warrants to purchase 743,229 shares of Common
Stock, there are no existing options, warrants, calls, preemptive (or similar)
rights, subscriptions or other rights, agreements, arrangements or commitments
of any character obligating the Company to issue, transfer or sell, or cause to
be issued, transferred or sold, any shares of capital stock of the Company or
other equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire, or prepare and file with the SEC any registration
statement to register under the Securities Act of 1933, as amended (the
“Securities Act”) with respect to, any such shares of capital stock or other
equity interests. There exist no statutory preemptive, or other similar rights
to purchase securities of the Company, nor are there any anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in
any agreement providing rights to security holders) that will be triggered by
the issuance of the Shares.

     4.8    Nasdaq Compliance. The Company’s Common Stock is registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and is listed on the Nasdaq National Market (the “Nasdaq Stock
Market”), and the Company has taken no action designed to, or which to its
knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Stock Market. The Company is not in violation of the listing
requirements of The Nasdaq Stock Market, Inc. and has no knowledge of any
action pending or threatened by the National Association of Securities Dealers,
Inc. (the “NASD”) or the SEC with respect to delisting the Shares.

4.

 

     4.9    Absence of Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, that has been filed,
commenced or threatened, by or before any governmental agency, court or
arbitrator against the Company which might have, either individually or in the
aggregate, a Material Adverse Effect (including, without limitation, any such
action, suit, proceeding or investigation that questions the validity of this
Agreement or the issuance of the Shares hereunder).

     4.10    Intangible Rights. To the Company’s knowledge, the Company owns or
has the right to use pursuant to valid and enforceable licenses, sublicenses,
agreements or permissions, all Intangible Rights (as defined below) that are
necessary or desirable for the conduct of the business of the Company as it is
currently being conducted, and no claims adverse to the interests of the
Company are pending or, to the knowledge of the Company, have been threatened
or otherwise asserted with respect to the Company’s ownership or use of any
such Intangible Rights. To the Company’s knowledge, the Company is not
infringing any Intangible Right owned or used by any third party nor, to the
Company’s knowledge, is any third party infringing any Intangible Right owned
or used by the Company. For purposes of this Agreement, the term “Intangible
Rights” means (i) all inventions (whether patentable or unpatentable, and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (ii) all trademarks, service marks, trade dress, logos, trade names
and corporate names, together with all translations, adaptations, derivations
and combinations thereof and including all goodwill associated therewith, and
all applications, registrations and renewals in connection therewith, (iii) all
copyrightable works, all copyrights, all applications, registrations and
renewals in connection therewith, (iv) all trade secrets and confidential
business information (including, without limitation, ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
supplier lists, and business and marketing plans and proposals), (v) all gene
sequences, cell lines, chemical compounds, assays and biological materials,
(vi) all other proprietary rights and (vii) all copies and tangible embodiments
of any of the foregoing (in whatever form or medium).

     4.11    No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances within the prior six months that would
require registration under the Securities Act of the issuance of the Shares to
the Purchasers.

     4.12    Investment Company Status. The Company is not and upon consummation
of the sale of the Shares will not be an “investment company,” a company
controlled by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such
terms are defined in the Investment Company Act of 1940, as amended.

     4.13    No General Solicitation. Neither the Company nor anyone acting on
its behalf has offered or sold the Shares by any form of general solicitation
or general advertising.

5.

 

     4.14    Eligibility For Use of Form S-3.

          (a)    The Company has a class of securities registered pursuant to Section
12(b) of the Exchange Act or a class of equity securities registered pursuant
to Section 12(g) of the Exchange Act or is required to file reports pursuant to
Section 15(d) of the Exchange Act.

          (b)    The Company: (i) has been subject to the requirements of Section 12 or
15(d) of the Exchange Act and has filed all the material required to be filed
pursuant to Section 13, 14 or 15(d) for a period of at least 12 calendar months
immediately preceding the filing of the registration statement on Form S-3; and
(ii) has filed in a timely manner all reports required to be filed during the
12 calendar months and any portion of a month immediately preceding the filing
of the registration statement and, if the Company has used (during the 12
calendar months and any portion of a month immediately preceding the filing of
the Form S-3) Rule 12b-25(b) under the Exchange Act with respect to a report or
a portion of a report, that report or portion thereof has actually been filed
within the time period prescribed by the rule.

          (c)    Neither the Company nor any of its consolidated or unconsolidated
subsidiaries have, since the end of the last fiscal year for which certified
financial statements of the Company and its consolidated subsidiaries were
included in a report filed pursuant to Section 13(a) or 15(d) of the Exchange
Act: (i) failed to pay any dividend or sinking fund installment on preferred
stock; or (ii) defaulted: (1) on any installment or installments on
indebtedness for borrowed money or (2) on any rental on one or more long term
leases, which defaults in the aggregate are material to the financial position
of the Company and its consolidated and unconsolidated subsidiaries, taken as a
whole.

          (d)    The Company currently meets “registrant eligibility” requirements for
a secondary offering set forth in the general instructions to Form S-3 to
enable the registration of the Shares.

     4.15    Legal Compliance. The Company is not in default or violation of its
Amended and Restated Certificate of Incorporation or Bylaws. The Company has
not violated any applicable laws (including, without limitation, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of federal, state, local and foreign governments (and all
agencies thereof) in respect of the conduct of its business or the ownership of
its properties which default violation would (either individually or in the
aggregate) have a Material Adverse Effect. To the knowledge of the Company,
there exists no condition, event or act which constitutes, or which after
notice, lapse of time or both, would constitute, such a default or violation
under any of the foregoing except where such a default is not reasonably
expected to have a Material Adverse Effect.

     4.16    Securities Act Exemption. Assuming and relying in part on the truth
and accuracy of Purchaser’s representations and warranties in Section 5 of this
Agreement, the offer, sale and issuance of the Shares is exempt from
registration under the Securities Act.

     4.17    Brokers. Neither the Company nor any of the officers, directors or
employees of the Company has taken any action that would give rise to any claim
by any person for brokerage commissions, finder’s fees or similar payments in
connection with the transaction contemplated

6.

 

by this Agreement. The Company shall indemnify the Purchasers from and
against any brokerage commissions, finder’s fees or similar payments for which
the Company is responsible.

SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.

     5.1    Authority, Approval and Enforceability.

     Each Purchaser, severally and not jointly, represents and warrants to and
covenants with the Company that:

          (a)    Each Purchaser has full power and authority to execute, deliver and
perform its obligations under this Agreement and all agreements, instruments
and documents contemplated hereby, and all action of such Purchaser necessary
for such execution, delivery and performance has been duly taken.

          (b)    Each Purchaser’s execution, delivery and performance of this Agreement
has been duly authorized by all requisite action by such Purchaser. Upon the
execution and delivery by such Purchaser, and assuming the valid execution and
delivery of this Agreement by each of the other Purchasers and the Company,
this Agreement will constitute a valid and binding obligation of such
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ and contracting parties’ rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), including specific performance, and except to the extent
that the enforceability of the indemnification provisions of Section 9.4 may be
legally unenforceable.

     5.2    Investment Representations. Each Purchaser understands that the
Shares have not been registered under the Securities Act. Each Purchaser also
understands that the Shares are being offered and sold pursuant to an exemption
from registration contained in the Securities Act based in part upon such
Purchaser’s representations contained in the Agreement. Each Purchaser hereby
represents and warrants, severally and not jointly, as follows:

          (a)    Each Purchaser has substantial experience in evaluating and investing
in securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Such Purchaser must bear the economic
risk of this investment indefinitely unless the Shares are registered pursuant
to the Securities Act, or an exemption from registration is available. Such
Purchaser understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow such Purchaser to transfer all or any
portion of the Shares under the circumstances, in the amounts or at the times
such Purchaser might propose.

          (b)    Each Purchaser has been advised or is aware of the provisions of Rule
144 promulgated under the Securities Act, which permits limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions.

7.

 

          (c)    Each Purchaser agrees that it will not sell, pledge, assign, transfer,
otherwise dispose of or reduce its risk with respect to (collectively,
“Transfer”) any of the Shares unless the Transfer will be made pursuant to an
exemption from the registration requirements of the Securities Act or pursuant
to an effective registration statement under the Securities Act and pursuant to
an exemption from any applicable state securities laws or an effective
registration or other qualification under any applicable state securities laws.
Such Purchaser understands that exemptions from such registration requirements
are limited. The Company is under no obligation to register the Shares except
as provided in Section 9.

          (d)    Each Purchaser acknowledges and agrees that the Shares are subject to
certain restrictions as to resale under the federal and state securities laws.
Such Purchaser agrees and understands that stop transfer instructions will be
given to the transfer agent for the Shares, and each share certificate and
each certificate delivered on transfer of or in substitution for any such
certificate, shall have affixed a legend in substantially the following form:

		
	 	“The shares represented by this certificate have
not been registered under the Securities Act of
1933, as amended (the “Act”), and may not be
offered, sold or otherwise transferred,
assigned, pledged or hypothecated unless and
until registered under the Act or unless the
Company has received an opinion of counsel
satisfactory to the Company and its counsel that
such registration is not required.”

          (e)    The legend set forth above will be removed and the Company will issue
a certificate without the legend if a Purchaser shall have obtained an opinion
of counsel (which counsel may be counsel to the Company) reasonably acceptable
to the Company to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend.

          (f)    Each Purchaser is acquiring the Shares for such Purchaser’s own
account investment only, and not with a view towards their distribution.

          (g)    Each Purchaser represents that by reason of its, or of its
management’s, business or financial experience, Purchaser has the capacity to
protect its own interests in connection with the transactions contemplated in
this Agreement.

          (h)    Each Purchaser represents that it is an accredited investor within the
meaning of Regulation D under the Securities Act.

          (i)    Each Purchaser has received the SEC Reports listed in Section 4.6(b)
and has had an opportunity to discuss the Company’s business, management and
financial affairs with directors, officers and management of the Company and
has had the opportunity to review the Company’s operations and facilities.
Each Purchaser has also had the opportunity to ask questions of and receive
answers from, the Company and its management regarding the terms and conditions
of this investment.

     5.3    Brokers. Other than as disclosed to the Company, neither any
Purchaser nor any of its respective officers, directors or employees have taken
any action that would give rise to

8.

 

any claim by any person for brokerage commissions, finder’s fees or
similar payments in connection with the transaction contemplated by this
Agreement. Each Purchaser shall severally, and not jointly, indemnify the
Company from and against any brokerage commission, finder’s fees or similar
payments for which such Purchaser is responsible.

SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
each Purchaser herein shall survive the execution of this Agreement and the
issuance and sale to the Purchasers of the Shares and shall terminate with
respect to each such Purchaser upon subsequent transfer of the Shares held by
such Purchaser pursuant to Sections 5 or 9.

SECTION 7. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING. The Company’s
obligation to complete the sale and issuance of the Shares at Closing shall be
subject to the following conditions to the extent not waived by the Company:

     7.1    Representations and Warranties Correct. The representations and
warranties made by each Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.

     7.2    Covenants Performed. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchasers on or prior to
the Closing Date shall have been performed or complied with in all material
respects.

     7.3    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 binding upon any of the Purchasers and that are required in
connection with the lawful sale and issuance of the Shares at Closing pursuant
to this Agreement shall have been duly obtained and shall be effective on and
as of the date of such Closing. No stop order or other order enjoining the
sale of the Shares shall have been issued and no proceedings for such purpose
shall be pending or, to the knowledge of the Company, threatened by the SEC or
any commissioner of corporations or similar officer of any state having
jurisdiction over this transaction.

     7.4    Legal Investment. At the time of such Closing, the sale and issuance
of the Shares to be purchased and sold at such Closing shall be legally
permitted by all laws and regulations to which the Purchasers and the Company
are subject.

SECTION 8. CONDITIONS TO
PURCHASERS’ OBLIGATIONS AT THE CLOSING. Each
Purchaser’s obligation to purchase the Shares at the Closing thereby shall be
subject to the following conditions to the extent not waived by such Purchaser:

     8.1    Representations and Warranties Correct. The representations and
warranties made by the Company in Section 4 hereof shall be true and correct
when made, and shall be true and correct as of the Closing Date.

     8.2    Legal Opinion. Purchasers shall have received from Cooley Godward
LLP, counsel to the Company, an opinion letter addressed to the Purchasers,
dated as of the Closing Date, in the form attached hereto as Exhibit B.

9.

 

     8.3    Covenants Performed. All covenants, agreements and conditions
contained herein to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.

     8.4    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 binding upon the Company and that are required in connection
with the lawful sale and issuance of the Shares at such Closing pursuant to
this Agreement shall have been duly obtained and shall be effective on and as
of the Closing Date. No stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC, or any
commissioner of corporations or similar officer of any state having
jurisdiction over this transaction.

     8.5    Legal Investment. At the time of the Closing, the sale and issuance
of the Shares shall be legally permitted by all laws and regulations to which
the Purchasers and the Company are subject.

     8.6    Compliance Certificate. The Company shall have delivered to the
Purchasers, a Compliance Certificate, executed by the Chief Executive Officer
of the Company, dated the Closing Date, to the effect that the conditions,
specified in Sections 8.1, 8.3 and 8.4 have been satisfied.

SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.

     9.1    Definitions. As used in this Section 9 the following terms shall have
the following respective meanings:

          (a)    “Registrable Shares” shall mean (i) the Shares issued pursuant to this
Agreement and (ii) any other shares of Common Stock issued or issuable in
respect to the Shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events);

          (b)    “Registration Statement” shall mean any registration statement and
shall include any preliminary prospectus, final prospectus, exhibit, supplement
or amendment included in or relating to the Registration Statement referred to
in Section 9.2 and Section 9.3; and

          (c)    “Untrue Statement” shall include any untrue statement or alleged
untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

     9.2    Registration Procedures and Expenses. The Company is obligated to do
the following:

     The Company shall, within forty (40) days immediately following the
Closing Date, such actual date being referred to as the “Registration Date”:

10.

 

          (a)    prepare and file with the SEC a registration statement on Form S-3 in
order to register with the SEC under the Securities Act a sale by the
Purchasers on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act any or all of the Registrable Shares through the automated
quotation system of the Nasdaq National Market System or the facilities of any
national securities exchange on which the Company’s Common Stock is then
traded, or in privately-negotiated transactions (a “Registration Statement”)
(notwithstanding anything to the contrary expressed or implied herein, if a
registration statement on Form S-3, or any substitute form, is not then
available for registration of the Registrable Shares, the Company shall be
obligated instead to prepare and file with the SEC a registration statement on
Form S-1 in order to register the Registrable Shares under the Securities Act
and such registration statement will be a “Registration Statement” for the
purposes of this Agreement); the Registration Statement will disclose that the
Registrable Shares may be used by a Purchaser to cover short sales of the
Company’s Common Stock without limitation;

          (b)    subject to receipt of necessary information from the Purchasers, use
its best efforts to cause such Registration Statement to become effective
within ninety (90) days immediately following the Closing Date (the “Effective
Date”) and take all other reasonable actions necessary under any federal law or
regulation to permit all Registrable Shares to be sold or otherwise disposed
of;

          (c)    promptly notify each Purchaser, at any time when a prospectus relating
to such Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in or relating to such Registration Statement contains an untrue statement of a
material fact or omits to state any fact necessary to make the statements
therein not misleading;

          (d)    promptly prepare and file with the SEC, and deliver to each Purchaser,
such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective until termination of such obligation as
provided in Section 9.8 below;

          (e)    furnish to each Purchaser such number of copies of prospectuses in
conformity with the requirements of the Securities Act as requested by each
such Purchaser in order to facilitate the public sale or other disposition of
all or any of the Registrable Shares by such Purchaser;

          (f)    no later than the Registration Date, file such documents as may be
required of the Company for normal state securities law clearance for the
resale of the Registrable Shares in which states of the United States as may be
reasonably requested by each Purchaser provided, however, that the Company
shall not be required in connection with this paragraph (f) to qualify as a
foreign corporation or execute a general consent to service of process in any
jurisdiction;

          (g)    no later than the Registration Date, use its best efforts to cause all
Registrable Shares to be listed on each securities exchange, if any, on which
equity securities by the Company are then listed; and

11.

 

          (h)    bear all expenses in connection with the procedures in Section 9.2,
other than (i) fees and expenses, if any, of counsel or other advisers to the
Purchasers, and (ii) any expenses relating to the sale of the Registrable
Shares by the Purchasers, including broker’s commission, discounts or fees and
transfer taxes.

     9.3    Piggyback Registrations.

          (a)    If a Registration Statement is not effective with respect to all of
the Registrable Shares and the Company decides to register any of its
securities for its own account or for the account of others (if the agreement
pursuant to which such securities are being registered for the account of
others so allows), then the Company will promptly give the Purchasers written
notice thereof and will use its reasonable best efforts to include in such
registration all or any part of the Registrable Shares requested by the
Purchasers to be included therein (excluding any Registrable Shares previously
included in a Registration Statement). This requirement does not apply to
Company registrations on Form S-4 or S-8 or their equivalents (relating to
equity securities to be issued in connection with an acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans) or to registration statements that would
otherwise not permit the registration of re-sales of previously issued
securities. Each Purchaser must give its request for registration under this
paragraph to the Company in writing within 5 business days after receipt from
the Company of notice of such pending registration. If the registration for
which the Company gives notice is a public offering involving an underwriting,
the Company will so advise the Purchasers as part of the above-described
written notice. In that event, if the managing underwriter(s) of the public
offering impose a limitation on the number of shares of Common Stock that may
be included in the Registration Statement because, in such underwriter(s)’
judgment, such limitation would be necessary to effect an orderly public
distribution, then the Company shall include in such registration (i) first,
the securities the Company proposes to sell, and (ii) second, the Registrable
Shares requested by the Purchasers.

          (b)    No right to registration of Shares under this Section 9.3 limits in
any way the registration required under Section 9.2 above. The obligations of
the Company under this Section 9.3 expire upon the effectiveness of the
Registration Statement filed pursuant to Section 9.2 above with respect to the
Shares or the respective portion thereof.

     9.4    Indemnification

          (a)    The Company agrees to indemnify and hold harmless each Purchaser (and
each person, if any, who controls such Purchaser within the meaning of Section
15 of the Securities Act) from and against any losses, claims, damages or
liabilities to which such Purchaser (or such underwriter or controlling person)
may become subject (under the Securities Act or otherwise) insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any Untrue Statement contained in the
Registration Statement on the Effective Date thereof, or arise out of any
failure by the Company to fulfill any undertaking included in the Registration
Statement and the Company will promptly reimburse such Purchaser (or such
controlling person) for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim against such Purchaser (or such controlling person);
provided, however, that

12.

 

the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, (i) an Untrue
Statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
a Purchaser specifically for use in preparation of the Registration Statement;
(ii) the failure of a Purchaser to comply with the covenants and agreements
contained in Section 9.5 hereof respecting the sale of the Registrable Shares;
or (iii) any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to the Purchasers prior to the
pertinent sale or sales by such Purchaser.

          (b)    Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless the Company and underwriter (and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
each officer of the Company who signs the Registration Statement and each
director of the Company) from and against any losses, claims, damages or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any failure to comply with
the covenants and agreements contained in Section 9.5 hereof respecting sale of
the Registrable Shares, or any Untrue Statement contained in the Registration
Statement on the Effective Date thereof if such Untrue Statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of such Purchaser specifically for use in preparation of the
Registration Statement, and such Purchaser will promptly reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided that in no
event shall any indemnity by a Purchaser under this Section 9.4 exceed the net
proceeds received by such Purchaser from the sale of the Registrable Shares
covered by such Registration Statement.

          (c)    Promptly after receipt by any indemnified person of a written notice
of a claim or the beginning of any action in respect of which indemnity is to
be sought against an indemnifying person pursuant to this Section 9.4, such
indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein,
and, to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel for all indemnified
parties; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

13.

 

          (d)    If the indemnification provided for in this Section 9.4 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission; provided, that in
no event shall any contribution by a Purchaser hereunder exceed the net
proceeds received by such Purchaser from the sale of the Shares covered by the
Registration Statement.

          (e)    Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution in the underwriting agreement entered into in
connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

     9.5    Transfer of Shares After Registration; Notice. Each Purchaser hereby
covenants with the Company not to make any sale of the Registrable Shares after
registration without effectively causing the prospectus delivery requirement
under the Securities Act to be satisfied. Each Purchaser acknowledges that
there may be times when the Company must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the SEC, or until such time as the Company has filed an appropriate report
with the SEC pursuant to the Exchange Act. Each Purchaser hereby covenants
that it will not sell any Registrable Shares pursuant to said prospectus during
the period commencing at the time at which the Company gives the Purchasers
written notice of the suspension of the use of said prospectus and ending at
the time the Company gives the Purchasers notice that the Purchasers may
thereafter effect sales pursuant to said prospectus, provided, however, that
the Company shall not suspend the use of said prospectus more than once in any
twelve month period and the duration of any one such suspension shall not be
more than thirty (30) days. The foregoing provisions of this Section 9.5 shall
in no manner diminish or otherwise impair the Company’s obligations under
Section 9.2 and Section 9.3 hereof.

     9.6    Reporting Requirements. The Company agrees to use its best efforts:

          (a)    make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;

          (b)    file with the SEC in a timely manner all reports, schedules, forms,
statements and other documents required of the Company under the Securities Act
and the Exchange Act; and

14.

 

          (c)    so long as any of the Purchasers own Registrable Shares, to furnish to
a Purchaser forthwith upon request (1) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, and that it qualifies as a registrant whose securities
may be resold pursuant to SEC Form S-3, (2) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents filed by
the Company with the SEC and (3) such other information as may be reasonably
requested to permit such Purchaser to sell the Registrable Shares without
registration.

     9.7    Listing. The Company will use reasonable commercial efforts to
maintain the listing and trading of its Common Stock (including the Registrable
Shares) on the Nasdaq Stock Market and to comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the NASD and such exchanges, as applicable.

     9.8    Termination of Obligations. The obligations of the Company pursuant
to Sections 9.2 through 9.7 hereof shall cease and terminate upon the earlier
to occur of (i) such time as all of the Registrable Shares have been resold or
(ii) as to each Purchaser, such time as all of the Registrable Shares held by
such Purchaser may be sold pursuant to Rule 144 (k).

     9.9    Assignability of Registration Rights. The registration rights set
forth in this Section 9 are assignable by a Purchaser without the Company’s
prior consent to an affiliate of such Purchaser or, if such Purchaser is a
partnership or limited liability company, limited partner or a member of
Purchaser; provided, however, that the Purchasers shall only have the right to
require the Company to amend the Registration Statement twice for such
assignments and provided further that in all other cases such assignment shall
not be permitted.

SECTION 10. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by confirmed facsimile or mailed
by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, and shall be deemed given when so
sent and addressed as follows:

	 	 	 	 	 
	(a)	 	
if to the Company, to:
	 
	 	 	 	 	ONYX Pharmaceuticals, Inc.

3031 Research Drive

Richmond, California 94806

Fax No.: (510) 222-6552

Attention: Hollings C. Renton
	 	 	 	 	 
	 	 	
with a copy to:
	 	 	 	 	Cooley Godward LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, California 94306

Attention: Robert L. Jones, Esq.

or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and

15.

 

          (b)    if to a Purchaser, at the address as set forth below such Purchaser’s
name at the end of this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing.

SECTION 11. MISCELLANEOUS COVENANTS

     11.1    Delivery of Proxy Statements. The Company agrees to furnish to a
Purchaser copies of its definitive proxy statements as filed with the SEC so
long as such Purchaser is a stockholder.

     11.2    Form D; Blue Sky Laws. The Company will file a Notice of Sale of
Securities on Form D with respect to the Registrable Shares, if required under
Regulation D, and provide a copy thereof to the Purchasers promptly after such
filing. The Company will take such action as it reasonably determines to be
necessary, if any, to qualify the Registrable Shares for sale under this
Agreement under applicable securities (or “blue sky”) laws of the states of the
United States (or to obtain an exemption from such qualification), and will
provide evidence of any such action so taken to a Purchaser on or prior to the
date of the Closing. The Company will publicly announce the sale of the Shares
within 2 business days of the time of Closing.

SECTION 12. MISCELLANEOUS

     12.1    Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and holders of at
least 66 2/3%
of the Shares issued pursuant to this Agreement.

     12.2    Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.

     12.3    Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

     12.4    Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts entered into and performed entirely in Delaware by Delaware
residents, without regard to conflicts of law principles. The Company hereby
submits to the non-exclusive jurisdiction of the United States federal and
state courts located in the State of Delaware with respect to any dispute
arising under this Agreement, the agreements entered into in connection
herewith or the transactions contemplated hereby or thereby.

     12.5    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.

     12.6    Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs,

16.

 

executors and administrators of the parties hereto. The Company shall
not, directly or indirectly, enter into any merger, consolidation or
reorganization in which the Company shall not be the surviving corporation
unless the proposed surviving corporation shall, prior to such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under this Agreement; provided, however, that the provisions of
this Section 12.6 shall not apply in the event of any merger, consolidation or
reorganization in which the Company is not the surviving corporation if all
Purchasers are entitled to receive in exchange for their Registrable Shares
consideration consisting solely of (i) cash, or (ii) securities of the
acquiring corporation which may be immediately sold to the public without
registration under the Securities Act.

     12.7    Expenses. Each party shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement.

     12.8    Equitable Relief. The Company recognizes that, if it fails to
register, or instruct its transfer agent to register, any Transfer of Shares
requested by a Purchaser in compliance with Section 5.2, any remedy at law may
prove to be inadequate relief to such Purchaser. The Company therefore agrees
that such Purchaser is entitled to temporary and permanent injunctive relief in
such case without the necessity of proving actual damages.

     12.9    Entire Agreement. This Agreement, and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

     12.10    Publicity. No party shall issue any press releases or otherwise
make any public statement with respect to the transactions contemplated by this
Agreement without the prior written consent of the other parties, except as may
be required by applicable law or regulations, in which case such party shall
provide the other parties with reasonable notice of such publicity and/or
opportunity to review such disclosure.

     12.11    Material Adverse Effect. As used in this Agreement, a “Material
Adverse Effect” means (a) a material adverse effect upon the business,
operations, properties, assets or condition (financial or otherwise) of the
Company or, as the case may be, the Company and any of its subsidiaries, taken
as a whole or (b) the impairment of the ability of the Company to perform its
obligations under this Agreement, provided, however, that for purposes of
determining whether there shall have been any such “Material Adverse Effect”,
(i) any adverse change resulting from or relating to worldwide general,
business, economic, political or military conditions shall be disregarded, (ii)
any adverse change resulting from or relating to conditions generally affecting
the industry in which the Company competes shall be disregarded, and (iii) any
adverse change to the stock price of the Company’s Common Stock, as quoted on
any nationally recognized stock quotation system (provided that such adverse
change in stock price did not result from circumstances also giving rise to the
breach of a representation or warranty hereunder) shall be disregarded.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

17.

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

	 	 	 
	COMPANY:	 	
PURCHASERS:

	 	 	 	 	 	 
	ONYX PHARMACEUTICALS, INC.	 	DEERFIELD PARTNERS, L.P.
	 	 	 	By: Deerfield Capital, L.P.

          
        
        Its General Partner

	 	 	 	 	 	 
	By:     
     /s/ Hollings C. Renton

Hollings C. Renton

Chairman, President, and CEO
	 	By: Snider Capital Corp

          
        
        Its General Partner
	 
	Address:	3031 Research Drive

Richmond, CA 94806	 	
By:
                
   /s/ Arnold H. Snider

	 
	 	 	 	Print name:	
Arnold H. Snider
	 
	 	 	 	
Print title:
	General Partner
	 
	 	 	 	
Address:
	780 Third Avenue

37th Floor

New York, New York 10017
	 	 	 	 	 	 
	 	 	 	
DEERFIELD INTERNATIONAL LIMITED
	 	 	 	 	 	 
	 	 	 	
By:
                  
/s/ Arnold H. Snider

	 	 	 	 	 	 
	 	 	 	Print name:	Arnold H. Snider
	 	 	 	 	 	 
	 	 	 	
Print title:
	Investment Manager
	 	 	 	 	 	 
	 	 	 	
Address:
	c/o Hemisphere Management

(B.V.I.) Limited

Bison Court

Columbus Centre

P.O. Box 3460

Road Town, Tortola

British Virgin Islands

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

 

 

	 	 	 	 	 
	 	 	
SANDS POINT PARTNERS LP

	 	 	By:	Sands Point Capital Management

          Its General Partner
	 	 	 	 	 
	 	 	
By:
	/s/ Stuart Z. Feldman
	 	 	

	 	 	 	 	 
	 	 	
Print name:
	Stuart Z. Feldman
	 	 	 	 	 
	 	 	
Print title:
	Chief Operating Officer
	 	 	 	 	 
	 	 	
Address:
	 	280 Park Avenue

39th Floor

New York, New York 10017
	 	 	 	 	 
	 	 	
OFF SANDS POINT, LTD.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John P. Nicholson
	 	 	

	 	 	 	 	 
	 	 	
Print name:
	John P. Nicholson
	 	 	 	 	 
	 	 	
Print title:
	Director
	 	 	 	 	 
	 	 	
Address:
	 	280 Park Avenue

39th Floor

New York, New York 10017

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

 

 

EXHIBIT A

SCHEDULE OF PURCHASERS

	 	 	 	 	 	 	 	 	 	 
	NAME	 	SHARES	 	PURCHASE PRICE
	
	 	
	 	

	Deerfield Partners, L.P.
	 	 	1,060,000	 	 	$	5,035,000.00	 
	Deerfield International Limited
	 	 	940,000	 	 	$	4,465,000.00	 
	Sands Point Partners LP
	 	 	52,632	 	 	$	250,002.00	 
	Off Sands Point, Ltd.
	 	 	52,631	 	 	$	249,997.25	 
	 	Total
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	
	 
	 
	 	 	2,105,263	 	 	$	9,999,999.25	 

20

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