Document:

exv10w1

 

Exhibit 10.1

Renewal Agreement to a Lease Agreement (as amended) (the “Lease”)

Dated: June 29, 1989

Between:

Canadian Tomken Inc. (“Landlord”)

and

Delphax Technologies Canada Limited (“Tenant”)

WHEREAS the Tenant occupies 24,038 square feet of the land and building owned by the
Landlord and designated municipally as 5060 Tomken Road, Mississauga, Ont.;

AND WHEREAS the Tenant is the lawful successor to the original tenant under the Lease;

AND WHEREAS the Lease Term expires on August 31, 2005, subject to the Tenants right of renewal;

AND WHEREAS the Landlord and Tenant have agreed to renew the Lease as follows:

Clause I — Term

The Term of the Lease is hereby extended to 11:59 P.M. August 31, 2010.

Clause II — Basic Annual Rent

	 	1.	 	The Rental Rate per square foot for the calculation of Basic Annual Rent for the
period of September 1, 2005 to August 31, 2010 shall be $5.50;
	 
	 	2.	 	Basic Annual Rent of ONE HUNDRED AND THIRTY-TWO THOUSAND TWO
HUNDRED AND NINE DOLLARS ($132,209.00) shall be payable in equal
monthly installments on the 1st day of each month commencing September 1,
2005 in the amount of ELEVEN THOUSAND AND SEVENTEEN DOLLARS
AND 41 CENTS ($11,017.41), together with all other sums properly payable under the Lease.

Clause 111 — Renwal

	 	1.	 	When not in default, the Tenant shall have 1 right of renewal for a further period
of THREE (3) YEARS from the expiration of the term, herein, such right to be excersied in
writing at least SIX (6) MONTHS prior to the expiration of the term herein;

 

 

	 	2.	 	The Basic Annual Rental Rate shall be market rent but shall not be less that SIX
Dollars ($6.00) per square foot or more than SIX DOLLARS, SEVENTY-FIVE CENTS ($6.75) per
Square foot.

Clause 1V — Restoration Conditions

	 	1.	 	The Tenant will leave all “roof top” HVAC equipment in place on roof, and will
not be required to remove same on lease termination. All such HVAC equipment
to be in good working condition, on expiry of lease extension or on expiry of any
further extension(s) to the lease. Such equipment will become the property of
the building owner. All other roof venting & other equipment, that is mounted on
and/or vented through the roof to be removed and roof restored, at the Tenant’s
expense, and in accordance with the terms of the lease;
	 
	 	2.	 	All other terms & conditions with regard to restoration, under the Lease, shall
remain the same.

Clause 1V — General

	 	1.	 	The Tenant accepts building in “as is” condition;
	 
	 	2.	 	Except as amended herein, all other terms of the Lease shall remain in full force and effect.
	 
	 	 	 	 

Dated as of July 15, 2005

Canadian Tomken Inc.

	 	 	 	 	 	 	 	 	 
	Per:

	 	 	/s/ Philip Brent	 	 	c/s
	 	 
	 	 	 	 	 	 
	 

	 	 	 	Philip Brent –President	 	 	 	 

Delphax Technologies Canada Limited

	 	 	 	 	 	 	 
	Per:

	/s/ Dieter P. Schilling
	 	 
	 	 	 	 
	 

	 	 	 	Name: Dieter P. Schilling	 	 
	 

	 	 	 	Title: Corp. VP Eng. +Mfg.	 	 
	 
	 	 	 	 	 	 
	Per:

	/s/ Ray Vella	 	 
	 	 	 	 
	 

	 	 	 	Name: RAY VELLA	 	 
	 

	 	 	 	Title: CONTROLLER	 	 

We have authority to bind our respective parties.

WITNESS: Joanne Gilroyexv10w5

 

Exhibit 10.5

ICORIA, INC.

SECURITIES PURCHASE AGREEMENT

October 19, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	1.	 	Agreement to Sell and Purchase	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	2.	 	Fees and Warrant	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	3.	 	Closing, Delivery and Payment	 	 	2	 
	 
	 	3.1	 	Closing	 	 	2	 
	 
	 	3.2	 	Delivery	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Representations and Warranties of the Company	 	 	3	 
	 
	 	4.1	 	Organization, Good Standing and Qualification	 	 	3	 
	 
	 	4.2	 	Subsidiaries	 	 	3	 
	 
	 	4.3	 	Capitalization; Voting Rights	 	 	3	 
	 
	 	4.4	 	Authorization; Binding Obligations	 	 	4	 
	 
	 	4.5	 	Liabilities	 	 	5	 
	 
	 	4.6	 	Agreements; Action	 	 	5	 
	 
	 	4.7	 	Obligations to Related Parties	 	 	5	 
	 
	 	4.8	 	Changes	 	 	6	 
	 
	 	4.9	 	Title to Properties and Assets; Liens, Etc.	 	 	7	 
	 
	 	4.10	 	Intellectual Property	 	 	8	 
	 
	 	4.11	 	Compliance with Other Instruments	 	 	8	 
	 
	 	4.12	 	Litigation	 	 	8	 
	 
	 	4.13	 	Tax Returns and Payments	 	 	9	 
	 
	 	4.14	 	Employees	 	 	9	 
	 
	 	4.15	 	Registration Rights and Voting Rights	 	 	10	 
	 
	 	4.16	 	Compliance with Laws; Permits	 	 	10	 
	 
	 	4.17	 	Environmental and Safety Laws	 	 	10	 
	 
	 	4.18	 	Valid Offering	 	 	10	 
	 
	 	4.19	 	Full Disclosure	 	 	11	 
	 
	 	4.20	 	Insurance	 	 	11	 
	 
	 	4.21	 	SEC Reports	 	 	11	 
	 
	 	4.22	 	Listing	 	 	11	 
	 
	 	4.23	 	No Integrated Offering	 	 	11	 
	 
	 	4.24	 	Stop Transfer	 	 	12	 
	 
	 	4.25	 	Dilution	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	5.	 	Representations and Warranties of the Purchaser	 	 	12	 
	 
	 	5.1	 	No Shorting	 	 	12	 
	 
	 	5.2	 	Requisite Power and Authority	 	 	13	 
	 
	 	5.3	 	Investment Representations	 	 	13	 
	 
	 	5.4	 	Purchaser Bears Economic Risk	 	 	13	 
	 
	 	5.5	 	Acquisition for Own Account	 	 	14	 
	 
	 	5.6	 	Purchaser Can Protect Its Interest	 	 	14	 
	 
	 	5.7	 	Accredited Investor	 	 	14	 
	 
	 	5.8	 	Legends	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	6.	 	Covenants of the Company	 	 	15	 
	 
	 	6.1	 	Stop Orders	 	 	15	 

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	 	6.2	 	Listing	 	 	15	 
	 
	 	6.3	 	Market Regulations	 	 	15	 
	 
	 	6.4	 	Reporting Requirements	 	 	15	 
	 
	 	6.5	 	Use of Funds	 	 	16	 
	 
	 	6.6	 	Access to Facilities	 	 	16	 
	 
	 	6.7	 	Taxes	 	 	16	 
	 
	 	6.8	 	Insurance	 	 	16	 
	 
	 	6.9	 	Intellectual Property	 	 	17	 
	 
	 	6.10	 	Properties	 	 	18	 
	 
	 	6.11	 	Confidentiality	 	 	18	 
	 
	 	6.12	 	Required Approvals	 	 	18	 
	 
	 	6.13	 	Reissuance of Securities	 	 	19	 
	 
	 	6.14	 	Opinion	 	 	19	 
	 
	 	6.15	 	Margin Stock	 	 	18	 
	 
	 	6.16	 	Financing Right of First Refusal	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	7.	 	Covenants of the Purchaser	 	 	19	 
	 
	 	7.1	 	Confidentiality	 	 	19	 
	 
	 	7.2	 	Non Public Information	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	8.	 	Covenants of the Company and Purchaser Regarding Indemnification	 	 	20	 
	 
	 	8.1	 	Company Indemnification	 	 	20	 
	 
	 	8.2	 	Purchaser’s Indemnification	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	9.	 	Conversion of Convertible Note	 	 	20	 
	 
	 	9.1	 	Mechanics of Conversion	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	10.	 	Registration Rights	 	 	21	 
	 
	 	10.1	 	Registration Rights Granted	 	 	22	 
	 
	 	10.2	 	Offering Restrictions	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	11.	 	Miscellaneous	 	 	22	 
	 
	 	11.1	 	Governing Law	 	 	22	 
	 
	 	11.2	 	Survival	 	 	22	 
	 
	 	11.3	 	Successors	 	 	22	 
	 
	 	11.4	 	Entire Agreement	 	 	23	 
	 
	 	11.5	 	Severability	 	 	23	 
	 
	 	11.6	 	Amendment and Waiver	 	 	23	 
	 
	 	11.7	 	Delays or Omissions	 	 	23	 
	 
	 	11.8	 	Notices	 	 	23	 
	 
	 	11.9	 	Attorneys’ Fees	 	 	24	 
	 
	 	11.10	 	Titles and Subtitles	 	 	24	 
	 
	 	11.11	 	Facsimile Signatures; Counterparts	 	 	25	 
	 
	 	11.12	 	Broker’s Fees	 	 	25	 
	 
	 	11.13	 	Construction	 	 	25	 

ii

 

 

LIST OF SCHEDULES

	 	 	 
	Capitalization and Voting
Rights

	 	Schedule 4.3
	Agreements; Action

	 	Schedule 4.6
	Obligations to Related
Parties

	 	Schedule 4.7
	Changes

	 	Schedule 4.8
	Tax Returns and
Payments

	 	Schedule 4.13
	Employees

	 	Schedule 4.14
	Registration Rights and Voting Rights

	 	Schedule 4.15
	Environmental and Safety Laws

	 	Schedule 4.17
	Broker’s Fees

	 	Schedule 11.12

LIST OF EXHIBITS

	 	 	 
	Form of Convertible Term Note

	 	Exhibit A
	Form of Warrant

	 	Exhibit B
	Form of Opinion

	 	Exhibit C
	Form of Escrow Agreement

	 	Exhibit D

iii

 

 

SECURITIES PURCHASE AGREEMENT

     THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of October
19, 2004, by and between Icoria, Inc., a Delaware corporation (the “Company”), and Laurus Master
Fund, Ltd., a Cayman Islands company (the “Purchaser”).

RECITALS

     WHEREAS, the Company has authorized the sale to the Purchaser of a Convertible Term Note (the
“Note”) in the aggregate principal amount of Five Million Dollars ($5,000,000), which Note is
convertible into shares of the Company’s common stock, $0.01 par value per share (the “Common
Stock”) at an initial fixed conversion price of $0.53 per share of Common Stock (“Fixed Conversion
Price”);

     WHEREAS, the Company wishes to issue warrants to the Purchaser to purchase up to 1,650,943
shares of the Company’s Common Stock (subject to adjustment as set forth therein) in connection
with Purchaser’s purchase of the Note;

     WHEREAS, Purchaser desires to purchase the Note and the Warrants (as defined in Section 2) on
the terms and conditions set forth herein, said Note and Warrants are further evidenced by separate
agreements and additional documents, the Securities Purchase Agreement, the Funds Escrow Agreement,
the Registration Rights Agreement and the Master Security Agreement, associated with this Agreement
(the “Related Agreements” or the “Documents” or the “Other Agreements”); and

     WHEREAS, the Company desires to issue and sell the Note and Warrants to Purchaser on the terms
and conditions set forth herein.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set forth in
this Agreement, on the Closing Date (as defined in Section 3), the Company agrees to sell to the
Purchaser, and the Purchaser hereby agrees to purchase from the Company a Note in the aggregate
principal amount of $5,000,000 convertible in accordance with the terms thereof into shares of the
Company’s Common Stock in accordance with the terms of the Note and this Agreement. The Note
purchased on the Closing Date shall be known as the “Offering.” A form of the Note is annexed
hereto as Exhibit A. The Note will mature on the Maturity Date (as defined in the Note).
Collectively, the Note and Warrant and Common Stock issuable in payment of the Note, upon
conversion of the Note and upon exercise of the Warrant are referred to as the “Securities.”

2. Fees and Warrant . On the Closing Date:

 

 

     (a) The Company will issue and deliver to the Purchaser (i) a warrant to purchase up to
825,471 shares of Common Stock within two years after the Closing Date in connection with
the Offering, in the form of Exhibit B-1 hereto (as amended, modified or supplemented from
time to time, the “Two-Year Warrant”), and (ii) a warrant to purchase up to 825,472 shares
of Common Stock within five years after the Closing Date in connection with the Offering, in
the form of Exhibit B-2 hereto (as amended, modified or supplemented from time to time, the
“Five-Year Warrant”; the Two-Year Warrant and the Five-Year Warrant are collectively
referred to herein as the “Warrant”). The Warrant must be delivered on the Closing Date. All
the representations, covenants, warranties, undertakings, and indemnification, and other
rights made or granted to or for the benefit of the Purchaser by the Company are hereby also
made and granted in respect of the Warrant and shares of the Company’s Common Stock issuable
upon exercise of the Warrant (the “Warrant Shares”).

     (b) Subject to the terms of Section 2(d) below, the Company shall pay to Laurus Capital
Management, LLC, manager of Purchaser a $175,000 closing payment, which is an amount equal
to three and one-half percent (3.50%) of the aggregate principal amount of the Note. The
foregoing fee is referred to herein as the “Closing Payment.”

     (c) The Company shall reimburse the Purchaser for its reasonable expenses (including
legal fees and expenses) incurred in connection with the preparation and negotiation of this
Agreement and the Related Agreements (as hereinafter defined), and expenses incurred in
connection with the Purchaser’s due diligence review of the Company and its Subsidiaries (as
defined in Section 6.8) and all related matters. Amounts required to be paid under this
Section 2(c) will be paid on the Closing Date and shall be $39,500 for such expenses
referred to in this Section 2(c).

     (d) The Closing Payment and the expenses referred to in the preceding clause (c) (net
of the $15,000 and other deposit(s) previously paid by the Company) shall be paid at closing
out of funds held pursuant to the Escrow Agreement (as defined below) and a disbursement
letter (the “Disbursement Letter”).

3. Closing, Delivery and Payment.

          3.1 Closing. Subject to the terms and conditions herein, the closing of the
transactions contemplated hereby (the “Closing”), shall take place on the date hereof, at such time
or place as the Company and Purchaser may mutually agree (such date is hereinafter referred to as
the “Closing Date”).

          3.2 Delivery. Pursuant to the Escrow Agreement, at the Closing on the Closing Date, the Company will
deliver to the Purchaser, among other things, a Note in the form attached as Exhibit A representing
the principal amount of $5,000,000 and the Two-Year Warrant and the Five-Year Warrant, each in the
Purchaser’s name representing an aggregate of 1,650,943 underlying shares of Common Stock and the
Purchaser will deliver to the Company, among other things, the amounts set forth in the
Disbursement Letter by wire transfer.

2

 

4. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Purchaser as follows. The representations and warranties are supplemented by, and
subject to, the Company’s filings under the Securities Exchange Act of 1934 made prior to the date
of this Agreement, collectively, the (“Exchange Act Filings”) copies of which have been provided to
the Purchaser. Such information previously disclosed in the Exchange Act Filings is not reproduced
in the Schedules attached hereto. The disclosures contained herein focus exclusively on the events
and occurrences that arose during the time period from the June 30, 2004 quarterly report on Form
10-Q, filed August 16, 2004, through the date of this agreement.

          4.1 Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware. The Company has the
corporate power and authority to own and operate its properties and assets, to execute and deliver
this (i) this Agreement, (ii) the Note, the Two-Year Warrant and the Five-Year Warrant to be issued
in connection with this Agreement, (iii) the Security Agreement dated as of the date hereof between
the Company and the Purchaser, (iv) the Registration Rights Agreement relating to the Securities
dated as of the date hereof between the Company and the Purchaser (as amended, modified or
supplemented from time to time, the “Registration Rights Agreement”), (v) the Escrow Agreement
dated as of the date hereof among the Company, the Purchaser and the escrow agent referred to
therein, substantially in the form of Exhibit D hereto (as amended, modified or supplemented from
time to time, the “Escrow Agreement”) and (vi) all other agreements related to this Agreement and
the Note and referred to herein (the preceding clauses (ii) through (vi), collectively, the
“Related Agreements”), to issue and sell the Note and the shares of Common Stock issuable upon
conversion of the Note (the “Note Shares”), to issue and sell the Warrant and the Warrant Shares,
and to carry out the provisions of this Agreement and the Related Agreements and to carry on its
business as presently conducted. The Company is duly qualified and is authorized to do business
and is in good standing as a foreign corporation in all jurisdictions, except for those
jurisdictions in which the failure to do so has not had, or could not reasonably be expected to
have, individually or in the aggregate, a material adverse effect on the business, assets,
liabilities, condition (financial or otherwise), properties, operations or prospects of the Company
(a “Material Adverse Effect”).

          4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the direct
owner of such Subsidiary and its percentage ownership thereof, is set forth on Schedule 4.2. For
the purpose of this Agreement, a “Subsidiary” of any person or entity means (i) a
corporation or other entity
whose shares of stock or other ownership interests having ordinary voting power (other than
stock or other ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such corporation, or other persons or entities
performing similar functions for such person or entity, are owned, directly or indirectly, by such
person or entity or (ii) a corporation or other entity in which such person or entity owns,
directly or indirectly, more than 50% of the equity interests at such time.

          4.3 Capitalization; Voting Rights.

     (a) The authorized capital stock of the Company, as of September 30, 2004, consists of
105,000,000 shares, of which 100,000,000 are shares of Common Stock, par value $0.01 per
share, 36,323,274 shares of which are issued and outstanding, and

3

 

5,000,000 are shares of
preferred stock, par value $0.01 per share, of which no shares of preferred stock are issued
and outstanding.

     (b) Except as disclosed on Schedule 4.3, another Schedule to this Agreement or in any
Exchange Act Filings, other than: (i) the shares reserved for issuance under the Company’s
stock option plans; and (ii) shares which may be issued pursuant to this Agreement and the
Related Agreements, there are no outstanding options, warrants, rights (including conversion
or preemptive rights and rights of first refusal), proxy or stockholder agreements, or
arrangements or agreements of any kind for the purchase or acquisition from the Company of
any of its securities. Except as disclosed on Schedule 4.3, another Schedule to this
Agreement or in any Exchange Act Filings, neither the offer, issuance or sale of any of the
Note or Warrant, or the issuance of any of the Note Shares or Warrant Shares, nor the
consummation of any transaction contemplated hereby will result in a change in the price or
number of any securities of the Company outstanding, under anti-dilution or other similar
provisions contained in or affecting any such securities.

     (c) All issued and outstanding shares of the Company’s Common Stock: (i) have been
duly authorized and validly issued and are fully paid and nonassessable; and (ii) were
issued in compliance with all applicable state and federal laws concerning the issuance of
securities.

     (d) The rights, preferences, privileges and restrictions of the shares of the Common
Stock are as stated in the Company’s Certificate of Incorporation (the “Charter”). The Note
Shares and Warrant Shares have been duly and validly reserved for issuance. When issued in
compliance with the provisions of this Agreement and the Company’s Charter, the Securities
will be validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Securities may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.

          4.4 Authorization; Binding Obligations . All corporate action on the part of the Company, its officers and directors necessary for
the authorization of this Agreement and the Related Agreements, the performance of all obligations
of the Company hereunder and under the Related Agreements at the Closing and, the authorization,
sale, issuance and delivery of the Note and Warrant has been taken or will be taken prior to the
Closing. This Agreement and the Related Agreements, when executed and delivered and to the extent
it is a party thereto, will be valid and binding obligations of the Company enforceable in
accordance with their terms, except:

     (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights; and

     (b) general principles of equity that restrict the availability of equitable or legal
remedies.

4

 

The sale of the Note and the subsequent conversion of the Note into Note Shares are not and will
not be subject to any preemptive rights or rights of first refusal that have not been properly
waived or complied with. The issuance of the Warrant and the subsequent exercise of the Warrant for
Warrant Shares are not and will not be subject to any preemptive rights or rights of first refusal
that have not been properly waived or complied with.

          4.5 Liabilities. The Company does not have any contingent liabilities in excess of
$200,000, except current liabilities incurred in the ordinary course of business and liabilities
disclosed in any Exchange Act Filings.

          4.6 Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any
Exchange Act Filings:

     (a) There are no agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Company is a party or to its
knowledge by which it is bound which may involve: (i) obligations (contingent or otherwise)
of, or payments to, the Company in excess of $200,000 (other than obligations of, or
payments to, the Company arising from purchase or sale agreements entered into in the
ordinary course of business); or (ii) the transfer or license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than licenses arising
from the purchase of “off the shelf” or other standard products); or (iii) provisions
restricting the development, manufacture or distribution of the Company’s products or
services; or (iv) indemnification by the Company with respect to infringements of
proprietary rights.

     (b) Since June 30, 2004, the Company has not: (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series of its
capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities
(other than ordinary course obligations) individually in excess of $200,000 or, in the case
of indebtedness and/or liabilities individually less than $200,000, in excess of
$300,000 in the aggregate; (iii) made any loans or advances to any person not in
excess, individually or in the aggregate, of $200,000, other than ordinary advances for
travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course of business.

     (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions involving the
same person or entity (including persons or entities the Company has reason to believe are
affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.

          4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7 or in any
Exchange Act filings, there are no obligations of the Company to officers, directors, ten percent
(10%) or greater stockholders or employees of the Company other than:

     (a) for payment of salary for services rendered and for bonus payments;

5

 

     (b) reimbursement for reasonable expenses incurred on behalf of the Company;

     (c) for other standard employee benefits made generally available to all employees
(including stock option agreements outstanding under any stock option plan approved by the
Board of Directors of the Company); and

     (d) obligations listed in the Company’s financial statements or disclosed in any of its
Exchange Act Filings.

Except as described above or set forth on Schedule 4.7 or in any Exchange Act Filings, none of the
officers, directors or, to the best of the Company’s knowledge, key employees or ten percent (10%)
or greater stockholders of the Company or any members of their immediate families, are indebted to
the Company, individually or in the aggregate, in excess of $200,000 or have any direct or indirect
ownership interest in any firm or corporation with which the Company is affiliated or with which
the Company has a business relationship, or any firm or corporation which competes with the
Company, other than passive investments in publicly traded companies (representing less than one
percent (1%) of such company) which may compete with the Company. Except as described above, no
officer, director or stockholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company and no agreements, understandings
or proposed transactions are contemplated between the Company and any such person. Except as set
forth on Schedule 4.7 or in any Exchange Act Filings, the Company is not a guarantor or indemnitor
of any indebtedness of any other person, firm or corporation.

          4.8 Changes. Since June 30, 2004, except as disclosed in any Exchange Act Filings or
in Schedule 4.8 to this Agreement or to any of the Related Agreements, there has not been:

     (a) any change in the business, assets, liabilities, condition (financial or
otherwise), properties, operations or prospects of the Company, which, individually or in
the aggregate, has had or could reasonably be expected to have, a Material Adverse Effect;

     (b) any resignation or termination of any officer, key employee or group of employees
of the Company;

     (c) any material change, except in the ordinary course of business, in the contingent
obligations of the Company by way of guaranty, endorsement, indemnity, warranty or
otherwise;

     (d) any damage, destruction or loss, whether or not covered by insurance, which has
had, or could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

     (e) any waiver by the Company of a valuable right or of a material debt owed to it;

6

 

     (f) any direct or indirect material loans made by the Company to any stockholder,
employee, officer or director of the Company, other than advances made in the ordinary
course of business;

     (g) any material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;

     (h) any declaration or payment of any dividend or other distribution of the assets of
the Company;

     (i) any labor organization activity related to the Company;

     (j) any debt, obligation or liability incurred, assumed or guaranteed by the Company,
except those for immaterial amounts and for current liabilities incurred in the ordinary
course of business;

     (k) any sale, assignment or transfer of any patents, trademarks, copyrights, trade
secrets or other intangible assets;

     (l) any change in any material agreement to which the Company is a party or by which it
is bound which, either individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect;

     (m) any other event or condition of any character that, either individually or in the
aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect; or

     (n) any arrangement or commitment by the Company to do any of the acts described in
subsection (a) through (m) above.

          4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule 4.9
or in any Exchange Act Filings, the Company has good and marketable title to its properties and
assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than:

     (a) those resulting from taxes which have not yet become delinquent;

     (b) minor liens and encumbrances which do not materially detract from the value of the
property subject thereto or materially impair the operations of the Company; and

     (c) those that have otherwise arisen in the ordinary course of business.

All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used
by the Company are in good operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used. Except as set forth on Schedule 4.9 or in any Exchange Act
Filings, the Company is in compliance with all material terms of each lease to which it is a party
or is otherwise bound.

7

 

          4.10 Intellectual Property.

     (a) Except as disclosed in any Exchange Act Filings, the Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes necessary
for its business as now conducted and to the Company’s knowledge as presently proposed to be
conducted (the “Intellectual Property”), without any known infringement of the rights of
others. There are no outstanding options, licenses or agreements of any kind relating to
the foregoing proprietary rights, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or agreements arising
from the purchase of “off the shelf” or standard products.

     (b) Except as disclosed in any Exchange Act Filings, the Company has not received any
communications alleging that the Company has violated any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary rights of any
other person or entity, nor is the Company aware of any basis therefor.

     (c) Except as disclosed in any Exchange Act Filings, the Company does not believe it is
or will be necessary to utilize any inventions, trade secrets or proprietary information of
any of its employees made prior to their employment by the Company, except for inventions,
trade secrets or proprietary information that have been rightfully assigned to the Company.

          4.11 Compliance with Other Instruments. Except as disclosed in any Exchange Act
Filings, the Company is not in violation or default of (x) any term of its Charter or Bylaws, or
(y) of any provision of any indebtedness, mortgage, indenture, contract, agreement or instrument to
which it is party or by which it is bound or of any judgment, decree, order or writ, which
violation or default, in the case of this clause (y), has had, or could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. The execution, delivery
and performance of and compliance with this Agreement and the Related Agreements to which it is a
party, and the issuance and sale of the Note by the Company and the other Securities by the Company
each pursuant hereto and thereto, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or constitute a default under
any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable
to the Company, its business or operations or any of its assets or properties.

          4.12 Litigation. Except as set forth on Schedule 4.12 hereto or as disclosed in any
Exchange Act Filings, there is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company that prevents the Company from
entering into this Agreement or the Related Agreements, or from consummating the transactions
contemplated hereby or thereby, or which has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or could result in any

8

 

change in the
current equity ownership of the Company, nor is the Company aware that there is any basis to assert
any of the foregoing. The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or instrumentality. There is no
action, suit, proceeding or investigation by the Company currently pending or which the Company
intends to initiate.

          4.13 Tax Returns and Payments. The Company has timely filed all tax returns (federal,
state and local) required to be filed by it. All taxes shown to be due and payable on such
returns, any assessments imposed, and all other taxes due and payable by the Company on or before
the Closing, have been paid or will be paid prior to the time they become delinquent. Except as
set forth on Schedule 4.13 or as disclosed in any Exchange Act Filings, the Company has not been
advised:

     (a) that any of its returns, federal, state or other, have been or are being audited as
of the date hereof; or

     (b) of any deficiency in assessment or proposed judgment to its federal, state or other
taxes.

The Company has no knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.

          4.14 Employees. Except as set forth on Schedule 4.14 or as disclosed in any Exchange
Act Filings, the Company has no collective bargaining agreements with any of its employees. There
is no labor union organizing activity pending or, to the Company’s knowledge, threatened with
respect to the Company. Except as disclosed in the Exchange Act Filings or on Schedule 4.14, the
Company is not a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement agreement or
other employee compensation plan or agreement. To the Company’s knowledge, no employee of the
Company, nor any consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other agreement relating to the
right of any such individual to be employed by, or to contract with, the Company because of the
nature of the business to be conducted by the Company; and to the Company’s knowledge the continued
employment by the Company of its present employees, and the performance of the Company’s contracts
with its independent contractors, will not result in any such violation. The Company is not aware
that any of its employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with their duties to the Company. The Company
has not received any notice alleging that any such violation has occurred. Except for employees
who have a current effective employment agreement with the Company, no employee of the Company has
been granted the right to continued employment by the Company or to any material compensation
following termination of employment with the Company. Except as set forth on Schedule 4.14 or as
disclosed in any Exchange Act Filings, the Company is not aware that any officer, key employee or
group of employees intends to terminate his, her or their employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer, key employee or group
of employees.

9

 

          4.15 Registration Rights and Voting Rights. Except as set forth on Schedule 4.15 and
except as disclosed in Exchange Act Filings, the Company is presently not under any obligation, and
has not granted any rights, to register any of the Company’s presently outstanding securities or
any of its securities that may hereafter be issued. Except as set forth on Schedule 4.15 and
except as disclosed in Exchange Act Filings, to the Company’s knowledge, no stockholder of the
Company has entered into any agreement with respect to the voting of equity securities of the
Company.

          4.16 Compliance with Laws; Permits. The Company is not in violation of any applicable
statute, rule, regulation, order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or the ownership of its
properties which has had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of this Agreement or any Related Agreement and
the issuance of any of the Securities, except such as has been duly and validly obtained or filed,
or with respect to any
filings that must be made after the Closing, as will be filed in a timely manner. The Company
has all material franchises, permits, licenses and any similar authority necessary for the conduct
of its business as now being conducted by it, the lack of which could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

          4.17 Environmental and Safety Laws. The Company is not in violation of any applicable
statute, law or regulation relating to the environment or occupational health and safety, and to
its knowledge, no material expenditures are or will be required in order to comply with any such
existing statute, law or regulation. Except as set forth on Schedule 4.17 or as disclosed in any
Exchange Act Filings, no Hazardous Materials (as defined below) are used or have been used, stored,
or disposed of by the Company or, to the Company’s knowledge, by any other person or entity on any
property owned, leased or used by the Company. For the purposes of the preceding sentence,
“Hazardous Materials” shall mean:

     (a) materials which are listed or otherwise defined as “hazardous” or “toxic” under any
applicable local, state, federal and/or foreign laws and regulations that govern the
existence and/or remedy of contamination on property, the protection of the environment from
contamination, the control of hazardous wastes, or other activities involving hazardous
substances, including building materials; or

     (b) any petroleum products or nuclear materials.

          4.18 Valid Offering. Assuming the accuracy of the representations and warranties of
the Purchaser contained in this Agreement, the Company will take all steps necessary to secure an
exemption from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), for the offer and sale of the Securities and will take the steps to register or
qualify (or secure an exemption from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws.

10

 

          4.19 Full Disclosure. The Company has provided, furnished or provided access to the
Purchaser regarding all information requested by the Purchaser in connection with its decision to
purchase the Note and Warrant, including all information the Company believes is reasonably
necessary to make such investment decision. Neither this Agreement, the Related Agreements, nor
the exhibits and schedules hereto and thereto, when incorporated with the Exchange Act Filings,
nor any other document delivered by the Company to Purchaser or its attorneys or agents in
connection herewith or therewith or with the transactions contemplated hereby or thereby, contain
any untrue statement of a material fact nor omit to state a material fact necessary in order to
make the statements contained herein or therein, in light of the circumstances in which they are
made, not misleading. Any financial projections and other estimates provided to the Purchaser by
the Company were based on the Company’s experience in the industry and on assumptions of fact and
opinion as to future events which the Company, at the date of the issuance of such projections or
estimates, believed to be reasonable.

          4.20 Insurance. The Company has general commercial, product liability, fire and
casualty insurance policies with coverages which the Company believes are customary for companies
similarly situated to the Company in the same or similar business.

          4.21 SEC Reports. Except as set forth on Schedule 4.21 or in the Exchange Act
Filings, the Company has filed all proxy statements, reports and other documents required to be
filed by it under the Securities Exchange Act 1934, as amended (the “Exchange Act”). The Company
has furnished the Purchaser with copies of: (i) its Annual Report on Form 10-K for the fiscal year
ended December 31, 2003; and (ii) its Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2004 and June 30, 2004 and the Form 8-K filings which it has made during the fiscal year
2004 to date (collectively, the “SEC Reports”). Except as set forth on Schedule 4.21, each SEC
Report was, at the time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and the notes thereto)
included in the SEC Reports, as of their respective filing dates, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading.

          4.22 Listing. The Company’s Common Stock is listed for trading on the Nasdaq National
Market (“Nasdaq National”) and satisfies all requirements for the continuation of such listing,
except as disclosed in any Exchange Act Filings.

          4.23 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 that would cause the
offering of the Securities pursuant to this Agreement or any Related Agreement to be integrated
with prior offerings by the Company for purposes of the Securities Act which would prevent the
Company from selling the Securities pursuant to Rule 506 under the Securities Act, or any
applicable exchange-related stockholder approval provisions, nor will the Company or any of its
affiliates or subsidiaries take any action or steps that would cause the offering of the Securities
to be integrated with other offerings.

11

 

          4.24 Stop Transfer. The Securities are restricted securities as of the date of this
Agreement. The Company will not issue any stop transfer order or other order impeding the sale and
delivery of any of the Securities at such time as the Securities are registered for public sale or
an exemption from registration is available, except if any material misrepresentation has occurred
in connection with the Purchaser’s representations and warranties in connection with their
investment in the Securities or as required by the National Association of Securities Dealers,
state and federal securities laws.

          4.25 Dilution. Except as set forth in paragraph 4.24, the Company specifically
acknowledges that its obligation to issue the shares of Common Stock upon conversion of the Note
and exercise of the Warrant is binding upon the Company and enforceable regardless of the dilution
such issuance may have on the ownership interests of other shareholders of the Company.

          4.26 Patriot Act. The Company certifies that, to the best of Company’s knowledge, the
Company has not been designated, and is not owned or controlled, by a “suspected terrorist” as
defined in Executive Order 13224. The Company hereby acknowledges that the Purchaser seeks to
comply with all applicable laws concerning money laundering and related activities. In furtherance
of those efforts, the Company hereby represents, warrants and agrees that: (i) none of the cash or
property that the Company will pay or will contribute to the Purchaser has been or shall be derived
from, or related to, any activity that is deemed criminal under United States law; and (ii) no
contribution or payment by the Company to the Purchaser, to the extent that they are within the
Company’s control shall cause the Purchaser to be in violation of the United States Bank Secrecy
Act, the United States International Money Laundering Control Act of 1986 or the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Company
shall promptly notify the Purchaser if any of these representations ceases to be true and accurate
regarding the Company. The Company agrees to provide the Purchaser any additional information
regarding the Company that the Purchaser deems necessary or convenient to ensure compliance with
all applicable laws concerning money laundering and similar activities. The Company understands
and agrees that if at any time it is discovered that any of the foregoing representations are
incorrect, or if otherwise required by applicable law or regulation related to money laundering
similar activities, the Purchaser may undertake appropriate actions to ensure compliance with
applicable law or regulation, including but not limited to segregation and/or redemption of the
Purchaser’s investment in the Company. The Company further understands that the Purchaser may
release confidential information about the Company and, if applicable, any underlying beneficial
owners, to proper authorities if the Purchaser, in its sole discretion, determines that it is in
the best interests of the Purchaser in light of relevant rules and regulations under the laws set
forth in subsection (ii) above.

5. Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company as follows (such representations and warranties do not lessen or
obviate the representations and warranties of the Company set forth in this Agreement)

          5.1 No Shorting. The Purchaser or any of its affiliates and investment partners have
not in the past or present, and will not in the future by themselves or cause any

12

 

person or entity,
to directly
engage in “short sales” of the Company’s Common Stock as long as the Note shall be
outstanding.

          5.2 Requisite Power and Authority. The Purchaser has all necessary power and
authority under all applicable provisions of law to execute and deliver this Agreement and the
Related Agreements and to carry out their provisions. All corporate action on Purchaser’s part
required for the lawful execution and delivery of this Agreement and the Related Agreements have
been or will be effectively taken prior to the Closing. Upon their execution and delivery, this
Agreement and the Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except:

     (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights; and

     (b) as limited by general principles of equity that restrict the availability of
equitable and legal remedies.

          5.3 Investment Representations. Purchaser understands that the Securities are being
offered and sold pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser’s representations contained in the Agreement, including, without limitation,
that the Purchaser is an “accredited investor” within the meaning of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”). The Purchaser confirms that it has
received or has had full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Note and the Warrant to be purchased by it
under this Agreement and the Note Shares and the Warrant Shares acquired by it upon the conversion
of the Note and the exercise of the Warrant, respectively. The Purchaser further confirms that it
has had an opportunity to ask questions and receive answers from the Company regarding the
Company’s business, management and financial affairs and the terms and conditions of the Offering,
the Note, the Warrant and the Securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Purchaser or to which the Purchaser had
access. Purchaser further warrants that it is purchasing the securities in accordance with all of
the requirements set forth under Regulation D of the Securities Act and the Rules promulgated
thereunder. Purchaser will cooperate with the Company in supplying any information requested by
the Company pursuant to any filing required to secure an exemption from registration at either
state or federal law.

          5.4 Purchaser Bears Economic Risk. The Purchaser has substantial experience in
evaluating and investing in private placement transactions of 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. The Purchaser must bear the economic
risk of this investment until the
Securities are sold pursuant to: (i) an effective registration statement under the Securities
Act; or (ii) an exemption from registration is available with respect to such sale.

13

 

          5.5 Acquisition for Own Account. The Purchaser is acquiring the Note and Warrant and
the Note Shares and the Warrant Shares for the Purchaser’s own account for investment only, and not
as a nominee or agent and not with a view towards or for resale in connection with their
distribution.

          5.6 Purchaser Can Protect Its Interest. The Purchaser represents that by reason of
its, or of its management’s, business and financial experience, the Purchaser has the capacity to
evaluate the merits and risks of its investment in the Note, the Warrant and the Securities and to
protect its own interests in connection with the transactions contemplated in this Agreement, and
the Related Agreements. Further, the Purchaser is aware of no publication of any advertisement in
connection with the transactions contemplated in the Agreement or the Related Agreements.

          5.7 Accredited Investor. Purchaser represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.

          5.8 Legends.

(a) The Note shall bear substantially the following legend:

“THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.”

     (b) The Note Shares and the Warrant Shares, if not issued by DWAC system (as
hereinafter defined), shall bear a legend which shall be in substantially the following form
until such shares are covered by an effective registration statement filed with the SEC:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES
LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.”

14

 

     (c) The Warrant shall bear substantially the following legend:

“THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.”

6. Covenants of the Company. The Company covenants and agrees with the Purchaser as
follows:

          6.1 Stop-Orders. The Company will advise the Purchaser, promptly after it receives
notice of issuance by the Securities and Exchange Commission (the “SEC”), any state securities
commission or any other regulatory authority of any stop order or of any order preventing or
suspending any offering of any securities of the Company, or of the suspension of the qualification
of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of
any proceeding for any such purpose.

          6.2 Listing. The Company shall promptly secure the listing of the shares of Common
Stock issuable upon conversion of the Note and upon the exercise of the Warrant on the Nasdaq
National Market, the Nasdaq Small Cap, or the Over the Counter Bulletin Board (the “Principal
Market”) (subject to official notice of issuance) and shall maintain such status so long as any
other shares of Common Stock shall be so quoted on such Principal Market. It is expressly
understood that movement between any exchange or quotation service set forth herein is permissible
and shall not be a breach of this or any other covenant contained herein or in the Related
Agreements. The Company will maintain the quotation of its Common Stock on the
Principal Market, and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the National Association of Securities
Dealers (“NASD”), such exchanges or quotation services, as applicable.

          6.3 Market Regulations. The Company shall notify the SEC, NASD and applicable state
authorities, in accordance with their requirements, of the transactions contemplated by this
Agreement, and shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid issuance of the
Securities to the Purchaser and promptly provide copies thereof to the Purchaser.

          6.4 Reporting Requirements. The Company will use all commercially reasonable efforts
to timely file with the SEC all reports required to be filed pursuant to the Exchange Act and
refrain from terminating its status as an issuer required by the Exchange Act

15

 

to file reports
thereunder even if the Exchange Act or the rules or regulations thereunder would permit such
termination.

          6.5 Use of Funds-Guideline. The Company agrees that the proceeds of (x) the sale of
the Note shall be generally utilized pursuant to the following guideline. The funds will be used:
(i) to repay in full all existing indebtedness owed by the Company to GE Capital, pursuant to the
Master Security Agreement No. 7237 and to terminate such credit facility, (ii) generally for
capital expenditures to be made by the Company and its Subsidiaries (subject to fluctuation in
market prices) in an aggregate amount of $1,600,000, (iii) generally for the purchase of chemical
libraries and outsourced studies (subject to fluctuation in market prices) in an aggregate amount
of $1,200,000, (iv) for expenses incurred in connection with the transactions contemplated by this
Agreement and the Related Agreements and (v) for general working capital purposes of the Company
and its Subsidiaries and (y) the sale of the Warrant shall be utilized for general working capital
purposes.

          6.6 Access to Facilities. The Company will permit any representatives designated by
the Purchaser (or any successor of the Purchaser), upon reasonable notice and during normal
business hours, at such person’s expense, while covered by Purchaser’s or their successor’s own
insurance for such an on-site investigation and accompanied by a representative of the Company, to:

     (a) visit and inspect any of the properties of the Company;

     (b) examine the corporate and financial records of the Company (unless such examination
is not permitted by federal, state or local law or by contract) and make copies thereof or
extracts therefrom; and

     (c) discuss the affairs, finances and accounts of the Company with the directors,
officers and independent accountants of the Company .

Notwithstanding the foregoing, the Company will not provide any material, non-public information to
the Purchaser (or any successor of the Purchaser) unless the Purchaser (or any successor of the
Purchaser) signs a confidentiality agreement and otherwise complies with Regulation FD, under the
federal securities laws.

          6.7 Taxes. The Company will promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company; provided, however, that any
such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have set aside on its
books adequate reserves with respect thereto, and provided, further, that the Company will pay all
such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor.

          6.8 Insurance. The Company will keep its assets which are of an insurable character
insured by financially sound and reputable insurers against loss or damage by fire, explosion and
other risks customarily insured against by companies in similar business similarly

16

 

situated as the
Company; and the Company will maintain, with financially sound and reputable insurers, insurance
against other hazards and risks and liability to persons and property to the extent and in the
manner which the Company reasonably believes is customary for companies in similar business
similarly situated as the Company and to the extent available on commercially reasonable terms. The
Company and each of its Subsidiaries will jointly and severally bear the full risk of loss from any
loss of any nature whatsoever with respect to the assets pledged to the Purchaser as security for
its obligations hereunder and under the Related Agreements. At the Company’s own cost and expense
in amounts and with carriers reasonably acceptable to Purchaser, the Company and each of the
Subsidiaries shall (i) keep all its insurable properties and properties in which it has an interest
insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary in the case of
companies engaged in businesses similar to the Company’s or the respective Subsidiary’s including
business interruption insurance; (ii) maintain insurance against claims for personal injury, death
or property damage suffered by others in such amounts as is customary in the industry in which the
Company operates its business; (iii) Intentionally Deleted; (iv) maintain all such worker’s
compensation or similar insurance as may be required under the laws of any state or jurisdiction in
which the Company or the Subsidiary is engaged in business; and (v) furnish Purchaser with (x)
evidence of the maintenance of such policies at least thirty (30) days before any expiration date,
(y) excepting the Company’s workers’ compensation policy, endorsements to such policies naming
Purchaser as “co-insured” or “additional insured” and appropriate loss payable endorsements in form
and substance satisfactory to Purchaser, naming Purchaser as loss payee, and (z) evidence that as
to Purchaser the insurance coverage shall not be impaired or invalidated by any act or neglect of
the Company or any Subsidiary and the insurer will provide Purchaser with at least thirty (30) days
notice prior to cancellation. The Company and each Subsidiary shall instruct the insurance
carriers that in the event of any loss thereunder,
the carriers shall make payment for such loss to the Company and/or the Subsidiary and
Purchaser jointly. In the event that as of the date of receipt of each loss recovery upon any such
insurance, the Purchaser has not declared an event of default with respect to this Agreement or any
of the Related Agreements, then the Company shall be permitted to direct the application of such
loss recovery proceeds toward investment in property, plant and equipment that would comprise
“Collateral” secured by Purchaser’s security interest pursuant to its security agreement, with any
surplus funds to be applied toward payment of the obligations of the Company to Purchaser. In the
event that Purchaser has properly declared an event of default with respect to this Agreement or
any of the Related Agreements, then all loss recoveries received by Purchaser upon any such
insurance thereafter may be applied to the obligations of the Company hereunder and under the
Related Agreements, in such order as the Purchaser may determine. Any surplus (following
satisfaction of all Company obligations to Purchaser) shall be paid by Purchaser to the Company or
applied as may be otherwise required by law. Any deficiency thereon shall be paid by the Company
or the Subsidiary, as applicable, to Purchaser, on demand.

          6.9 Intellectual Property. The Company shall maintain in full force and effect its
corporate existence, rights and franchises and all licenses and other rights to use Intellectual
Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its
business.

17

 

          6.10 Properties. The Company will keep its properties in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time make all needful and proper
repairs, renewals, replacements, additions and improvements thereto; and the Company will at all
times comply with each provision of all leases to which it is a party or under which it occupies
property if the breach of such provision could reasonably be expected to have a Material Adverse
Effect.

          6.11 Confidentiality. The Company agrees that it will not disclose, and will not
include in any public announcement, the name of the Purchaser, unless expressly agreed to by the
Purchaser or unless and until such disclosure is required by law or applicable regulation, and then
only to the extent of such requirement. The Company may disclose Purchaser’s identity and the
terms of this Agreement to its current and prospective debt and equity financing sources and as
required by law or applicable regulation.

          6.12 Required Approvals. For so long as twenty -five percent (25%) of the principal
amount of the Note is outstanding, the Company, without the prior written consent of the Purchaser,
which shall not be unreasonably withheld, shall not:

     (a) (i) directly or indirectly declare or pay any dividends, other than dividends paid
to the Parent or any of its wholly-owned Subsidiaries, (ii) issue any preferred stock
that is mandatorily redeemable prior to October 19, 2007, or (iii) redeem any of its
preferred stock or other equity interests during before the Maturity Date ;

     (b) liquidate, dissolve or effect a material reorganization (it being understood that
in no event shall the Company dissolve, liquidate or merge with any other person or entity
unless, the Company is the surviving entity or the successor entity expressly assumes all of
the duties and obligations of the Company and its Subsidiaries under this Agreement and
Related Agreements);

     (c) become subject to (including, without limitation, by way of amendment to or
modification of) any agreement or instrument which by its terms would (under any
circumstances) materially restrict the Company’s right to perform the provisions of this
Agreement or any of the agreements contemplated thereby;

     (d) materially alter or change the scope of business of the Company, unless such change
in scope is consistent with past practice;

     (e) (i) create, incur, assume or suffer to exist any indebtedness, exclusive of trade
debt, debt subordinated to or on collateral other than the security provided by the Related
Agreements and debt incurred to finance the purchase of equipment (not in excess of ten
percent (10%) of the fair market value of the Company’s and its Subsidiaries’ assets)
whether secured or unsecured other than (x) the Company’s indebtedness to the Purchaser, (y)
indebtedness set forth on Schedule 6.12(e) attached hereto and made a part hereof
and any refinancings or replacements thereof on terms no less favorable to the Purchaser
than the debt being refinanced or replaced, and (z) any indebtedness incurred in connection
with the purchase of assets in the ordinary course of business, and any refinancings or
replacements thereof on terms no less favorable to the

18

 

Purchaser than the indebtedness being
refinanced or replaced; (ii) cancel any indebtedness owing to it in excess of $200,000 in
the aggregate during any 12 month period; (iii) assume, guarantee, endorse or otherwise
become directly or contingently liable in connection with any obligations of any other
Person, except the endorsement of negotiable instruments by the Company for deposit or
collection or similar transactions in the ordinary course of business; and

     (f) (i) make investments in, make any loans or advances to, or transfer assets to, any
of its Subsidiaries, other than any immaterial investments, loans, advances and/or asset
transfers made in the ordinary course of business or (ii) create or acquire any Subsidiary
without the prior written consent of the Purchaser, which shall not be unreasonably
withheld.

          6.13 Reissuance of Securities. The Company agrees to reissue certificates
representing the Securities without the legends set forth in Section 5.8 above at such time as:

     (a) the holder thereof is permitted to dispose of such Securities pursuant to Rule
144(k) under the Securities Act; or

     (b) upon resale subject to an effective registration statement after such Securities
are registered under the Securities Act.

The Company agrees to cooperate with the Purchaser in connection with all resales pursuant to Rule
144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the
Company and its counsel receive reasonably requested representations from the selling Purchaser and
broker, if any.

          6.14 Opinion. On the Closing Date, the Company will deliver to the Purchaser an
opinion acceptable to the Purchaser from the Company’s legal counsel. The Company will provide, at
the Company’s expense, such other legal opinions in the future as are reasonably necessary for the
conversion of the Note and exercise of the Warrant.

          6.15 Margin Stock. The Company will not permit any of the proceeds of the Note or the
Warrant to be used directly or indirectly to “purchase” or “carry” “margin stock” or to repay
indebtedness incurred to “purchase” or “carry” “margin stock” within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System
as now and from time to time hereafter in effect.

          6.16 The Company will not, and will not permit its Subsidiaries to, agree, directly or indirectly,
to any restriction with any person or entity which limits the ability of the Purchaser to
consummate an additional financing with the Company or any of its Subsidiaries.

7. Covenants of the Purchaser. The Purchaser covenants and agrees with the Company as
follows:

          7.1 Confidentiality. The Purchaser agrees that it will not disclose, and will not
include in any public announcement, the name of the Company, unless expressly agreed to by

19

 

the
Company or unless and until such disclosure is required by law or applicable regulation, and then
only to the extent of such requirement.

          7.2 Non-Public Information. The Purchaser agrees not to effect any sales in the
shares of the Company’s Common Stock while in possession of material, non-public information
regarding the Company if such sales would violate applicable securities law.

8. Covenants of the Company and Purchaser Regarding Indemnification.

          8.1 Company Indemnification. The Company agrees to indemnify, hold harmless, reimburse and defend Purchaser, each of
Purchaser’s officers, directors, agents, affiliates, control persons, and principal shareholders,
against any forseeable: claim, cost, expense, liability, obligation, loss or damage (including
reasonable legal fees) of any nature, incurred by or imposed upon the Purchaser which results,
arises out of or is based upon: (i) any misrepresentation by Company or breach of any warranty by
Company in this Agreement, any Related Agreement or in any exhibits or schedules attached hereto or
thereto; or (ii) any breach or default in performance by Company of any covenant or undertaking to
be performed by Company hereunder, or any other agreement entered into by the Company and Purchaser
relating hereto.

          8.2 Purchaser’s Indemnification. Purchaser agrees to indemnify, hold harmless,
reimburse and defend the Company and each of the Company’s officers, directors, agents, affiliates,
control persons and principal shareholders, at all times against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by
or imposed upon the Company which results, arises out of or is based upon: (i) any
misrepresentation by Purchaser or breach of any warranty by Purchaser in this Agreement or in any
exhibits or schedules attached hereto or any Related Agreement; or (ii) any breach or default in
performance by Purchaser of any covenant or undertaking to be performed by Purchaser hereunder, or
any other agreement entered into by the Company and Purchaser relating hereto.

9. Conversion of Convertible Note.

          9.1 Mechanics of Conversion.

     (a) Provided the Purchaser has notified the Company of the Purchaser’s intention to
sell the Note Shares and the Note Shares are included in an effective registration statement
or are otherwise exempt from registration when sold: (i) Upon the conversion of the Note or
part thereof, the Company shall, at its own cost and expense, take all necessary action
(including the issuance of an opinion of counsel reasonably acceptable to the Purchaser
following a request by the Purchaser) to assure that the Company’s transfer agent shall
issue shares of the Company’s Common Stock in the name of the Purchaser (or its nominee) or
such other persons as designated by the Purchaser in accordance with Section 9.1(b) hereof
and in such denominations to be specified representing the number of Note Shares issuable
upon such conversion; and (ii) The Company warrants that no instructions other than these
instructions have been or will be given to the transfer agent of the Company’s Common Stock
and that after the Effectiveness Date (as defined in the Registration Rights Agreement) the
Note Shares

20

 

issued will be freely transferable subject to the prospectus delivery
requirements of the Securities Act and the provisions of this Agreement, and will not
contain a legend restricting the resale or transferability of the Note Shares.

     (b) Purchaser will give notice of its decision to exercise its right to convert the
Note or part thereof by telecopying or otherwise delivering an executed and completed notice
of the number of shares to be converted to the Company (the “Notice of Conversion”). The
Purchaser will surrender the Note previous to the Purchaser receiving a credit to the
account of the Purchaser’s prime broker through the DWAC system (as defined below),
representing the Note Shares or until the Note has been fully satisfied. Each date on which
a Notice of Conversion is telecopied or delivered to the Company in accordance with the
provisions hereof shall be deemed a “Conversion Date.” Pursuant to the terms of the Notice
of Conversion, the Company will issue instructions to the transfer agent accompanied by an
opinion of counsel within three (3) business days of the date of the delivery to the
Company of the Notice of Conversion and shall cause the transfer agent to transmit the
certificates representing the Conversion Shares to the Holder by crediting the account of
the Purchaser’s prime broker with the Depository Trust Company (“DTC”) through its Deposit
Withdrawal Agent Commission (“DWAC”) system within three (3) business days after the
creation and delivery of the opinion of counsel to the transfer agent pursuant to the
Company’s Notice of Conversion (the “Delivery Date”).

     (c) The Company understands that a delay in the delivery of the Note Shares in the form
required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss
to the Purchaser. In the event that the Company fails to direct its transfer agent to
deliver the Note Shares to the Purchaser via the DWAC system within the time frame set forth
in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the
Delivery Date, and is not cured within two (2) business days after the Delivery Date, as
compensation to the Purchaser for such loss, the Company agrees to pay late payments to the
Purchaser for late issuance of the Note Shares in the form required pursuant to Section 9
hereof upon conversion of the Note in the amount equal to the greater of: (i) $500 per
business day after the Delivery Date, including the period for cure. Notwithstanding the
foregoing, the Company will not owe the Purchaser any late payments if the delay in the
delivery of the Note Shares beyond the Delivery Date is solely out of the control of the
Company and the Company is actively trying to cure the cause of the delay, or the Company
cures within the two (2) business days following the Delivery Date. The Company shall pay
any payments incurred under this Section in immediately available funds upon demand.

Nothing contained herein or in any document referred to herein or delivered in connection herewith
shall be deemed to establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum amount permitted by
such law, any payments in excess of such maximum shall be credited against amounts owed by the
Company to a Purchaser and thus refunded to the Company.

10. Registration Rights.

21

 

          10.1 Registration Rights Granted. The Company hereby grants registration rights to the Purchaser pursuant to a Registration
Rights Agreement dated as of even date herewith between the Company and the Purchaser.

          10.2 Offering Restrictions. Except as previously disclosed in the Exchange Act
Filings, or stock or stock options granted to employees or directors of the Company (these
exceptions hereinafter referred to as the “Excepted Issuances”), the Company will not issue any
securities with a continuously variable/floating conversion feature which are or could be (by
conversion or registration) free-trading securities (i.e. common stock subject to a registration
statement) prior to the full repayment or conversion of the Note (together with all accrued and
unpaid interest and fees related thereto.

     11. Miscellaneous.

          11.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER PARTY AGAINST THE OTHER CONCERNING THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE BROUGHT ONLY IN THE
STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH PARTIES
AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND THE RELATED AGREEMENTS ON BEHALF OF THE COMPANY
AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND WAIVE TRIAL BY JURY. IN THE EVENT THAT ANY
PROVISION OF THIS AGREEMENT OR ANY RELATED AGREEMENT DELIVERED IN CONNECTION HEREWITH IS INVALID OR
UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED
INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM
WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE
UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS
AGREEMENT OR ANY RELATED AGREEMENT.

          11.2 Survival. The representations, warranties, covenants and agreements made herein
shall survive any investigation made by the Purchaser and the closing of the transactions
contemplated hereby to the extent provided therein. All statements as to factual matters contained
in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate or instrument.

          11.3 Successors. Except as otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, heirs, executors and administrators of the parties
hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of
the Securities from time to time, other than the holders of Common Stock which has been sold by the
Purchaser pursuant to Rule 144 or an effective

22

 

registration statement. Purchaser may not assign its
rights hereunder to a competitor of the Company.

          11.4 Entire Agreement. This Agreement, the Related Agreements, the exhibits and
schedules hereto and thereto and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the subjects hereof and
no party shall be liable or bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.

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

          11.6 Amendment and Waiver.

     (a) This Agreement may be amended or modified only upon the written consent of the
Company and the Purchaser.

     (b) The obligations of the Company and the rights of the Purchaser under this Agreement
may be waived only with the written consent of the Purchaser.

     (c) The obligations of the Purchaser and the rights of the Company under this Agreement
may be waived only with the written consent of the Company.

          11.7 Delays or Omissions. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or noncompliance by another
party under this Agreement or the Related Agreements, shall impair any such right, power or remedy,
nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance thereafter
occurring. All remedies, either under this Agreement, or the Related Agreements, by law or
otherwise afforded to any party, shall be cumulative and not alternative.

          11.8 Notices. All notices required or permitted hereunder (other than as expressly
set forth herein) shall be in writing and shall be deemed effectively given:

     (a) upon personal delivery to the party to be notified;

     (b) when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day;

     (c) five (5) business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or

     (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.

All communications shall be sent as follows:

23

 

	 	 	 
	If to the Company, to:

	 	Icoria, Inc.
	 

	 	108 T.W. Alexander Drive, Research Triangle Park,
	 

	 	North Carolina 27709
	 
	 	 
	 

	 	Attention:
	 
	 	 
	 

	 	                              Barry Buzogany
	 

	 	                              General Counsel
	 
	 	 
	 

	 	Telephone:    (919) 425-3000
	 
	 	 
	 

	 	Facsimile:   919-425-2915
	 
	 	 
	 

	 	with a copy to: Neil Aronson, Esq.
	 

	 	Mintz Levin Cohn Ferris Glovsky & Popeo PC
	 

	 	Telephone (617)-542-6000
	 

	 	Facsimile: 617-542-2241
	 
	 	 
	If to the Purchaser, to:

	 	Laurus Master Fund, Ltd.
	 

	 	M&C Corporate Services Limited
	 

	 	P.O. Box 309 GT
	 

	 	Ugland House
	 

	 	George Town
	 

	 	South Church Street
	 

	 	Grand Cayman, Cayman Islands
	 

	 	Facsimile:   345-949-8080
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	John E. Tucker , Esq.
	 

	 	825 Third Avenue 14th Floor
	 

	 	New York, NY 10022
	 

	 	Facsimile:    212-541-4434

or at such other address as the Company or the Purchaser may designate by written notice to the
other parties hereto given in accordance herewith.

          11.9 Attorneys’ Fees. In the event that any suit or action is instituted to enforce
any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of such prevailing party
under or with respect to this Agreement, including, without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.

          11.10 Titles and Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in construing this
Agreement.

24

 

          11.11 Facsimile Signatures; Counterparts. This Agreement may be executed by facsimile
signatures and in any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

          11.12 Broker’s Fees. Except as set forth on Schedule 11.12 hereof, Each party hereto
represents and warrants that no agent, broker, investment banker, person or firm acting on behalf
of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s
fee or any other commission directly or indirectly in connection with the transactions contemplated
herein. Each party hereto further agrees to indemnify each other party for any claims, losses or
expenses incurred by such other party as a result of the representation in this Section 11.12 being
untrue.

          11.13 Construction. Each party acknowledges that its legal counsel participated in
the preparation of this Agreement and the Related Agreements and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting party shall not be
applied in the interpretation of this Agreement to favor any party against the other.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

25

 

     IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES PURCHASE AGREEMENT as of
the date set forth in the first paragraph hereof.

	 	 	 	 	 	 	 
	COMPANY:	 	PURCHASER:
	 
	 	 	 	 	 	 
	ICORIA, INC.	 	Laurus Master Fund, Ltd.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 

26

 

EXHIBIT A

FORM OF CONVERTIBLE NOTE

A-1

 

 

EXHIBIT B

FORM OF WARRANT

B-1

 

 

EXHIBIT C

FORM OF OPINION

C-1

 

 

EXHIBIT D

FORM OF ESCROW AGREEMENT

D-2

 

 

SCHEDULES

(Any Schedule Not Listed Has Been Intentionally Omitted)

SCHEDULE 4.3

CAPITALIZATION AND VOTING RIGHTS

     Stonegate Securities, Inc.

     Placement Agency Agreement, dated July 14, 2004, by and between Paradigm Genetics, Inc., a
Delaware corporation, and Stonegate Securities, Inc., a Texas corporation.

     TissueInformatics.Inc. Merger

     On March 11, 2004, Paradigm Genetics, Inc. (now “Icoria, Inc.”) completed its acquisition of
TissueInformatics.Inc, a Delaware corporation. TissueInformatics merged with and into Paradigm with
Paradigm continuing as the surviving corporation pursuant to the terms of an Agreement and Plan of
Merger among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG dated
January 29, 2004 and as amended on March 10, 2004.

     The transaction is more fully disclosed in reports filed pursuant to the Securities Exchange
Act of 1934. See specifically, Form 8-K filed March 24, 2004 and the Form 10-K filed March 30,
2004.

     Future Amendments and Additions to Employee Stock/Option Plans

     Pursuant to recent stockholder vote, additions to existing and additional stock plans will be
registered. See definitive proxy statement filed March 31, 2004.

C-3

 

SCHEDULE 4.6

AGREEMENTS; ACTION

     GE Prepayment

     GE Healthcare Financial Services payoff letter dated October 15, 2004.

     Stonegate Securities, Inc.

     Placement Agency Agreement, dated July 14, 2004, by and between Paradigm Genetics, Inc., a
Delaware corporation, and Stonegate Securities, Inc., a Texas corporation.

     TissueInformatics.Inc. Merger

     On March 11, 2004, Paradigm Genetics, Inc. (now “Icoria, Inc.”) completed its acquisition of
TissueInformatics.Inc, a Delaware corporation. TissueInformatics merged with and into Paradigm with
Paradigm continuing as the surviving corporation pursuant to the terms of an Agreement and Plan of
Merger among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG dated
January 29, 2004 and as amended on March 10, 2004.

     The transaction is more fully disclosed in reports filed pursuant to the Securities Exchange
Act of 1934. See specifically, Form 8-K filed March 24, 2004 and the Form 10-K filed March 30,
2004.

     Silicon Valley Bank

     Intercreditor Agreement between Silicon Valley Bank and Laurus Master Fund regarding Silicon
Valley Bank Loan and Security Agreement of July 10, 2003.

C-4

 

SCHEDULE 4.7

OBLIGATIONS TO RELATED PARTIES

     TissueInformatics.Inc. Merger

     On March 11, 2004, Paradigm Genetics, Inc. (now “Icoria, Inc.”) completed its acquisition of
TissueInformatics.Inc, a Delaware corporation. TissueInformatics merged with and into Paradigm with
Paradigm continuing as the surviving corporation pursuant to the terms of an Agreement and Plan of
Merger among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG dated
January 29, 2004 and as amended on March 10, 2004.

     The transaction is more fully disclosed in reports filed pursuant to the Securities Exchange
Act of 1934. See specifically, Form 8-K filed March 24, 2004 and the Form 10-K filed March 30,
2004.

SCHEDULE 4.8

CHANGES

Routine IP Practice

     Our routine practice in developing compounds and conducting research on behalf of third
parties requires us to assign certain intellectual property rights to those third parties. This is
more fully described in our reports pursuant to the Securities Exchange Act of 1934.

SCHEDULE 4.13

TAX RETURNS AND PAYMENTS

     TissueInformatics.Inc. Merger

     There are outstanding tax filings due to merger. We anticipate making such filings forthwith
and that the cost will be primarily that of the process of filing.

C-5

 

SCHEDULE 4.14

EMPLOYEES

     Future Amendments and Additions to Employee Stock/Option Plans

     Pursuant to recent stockholder vote, additions to existing and additional stock plans will be
registered. See definitive proxy statement filed March 31, 2004.

SCHEDULE 4.15

REGISTRATION RIGHTS AND VOTING RIGHTS

     Stonegate Securities, Inc.

     Placement Agency Agreement, dated July 14, 2004, by and between Paradigm Genetics, Inc., a
Delaware corporation, and Stonegate Securities, Inc., a Texas corporation.

     TissueInformatics.Inc. Merger

     On March 11, 2004, Paradigm Genetics, Inc. (now “Icoria, Inc.”) completed its acquisition of
TissueInformatics.Inc, a Delaware corporation. TissueInformatics merged with and into Paradigm with
Paradigm continuing as the surviving corporation pursuant to the terms of an Agreement and Plan of
Merger among Paradigm, TissueInformatics and TVM V Life Science Ventures GmbH & Co., KG dated
January 29, 2004 and as amended on March 10, 2004.

     The transaction is more fully disclosed in reports filed pursuant to the Securities Exchange
Act of 1934. See specifically, Form 8-K filed March 24, 2004 and the Form 10-K filed March 30,
2004.

C-6

 

SCHEDULE 4.17

ENVIRONMENTAL AND SAFETY LAWS

     Environmental

     From time to time regulators review our facilities for our management of hazardous materials,
including radioactive material, when issues are raised we attempt to comply with regulators’
findings in a swift and thorough manner. We have not used radioactive material in our operations
since September of 2003. We still maintain certain licensure for the use of certain radioactive
material in case a future project should require it.

As disclosed in our reports filed pursuant to the Securities Exchange Act of 1934:

     Environmental Regulation

     Our research and development activities involve the controlled use of hazardous materials
and chemicals. We are subject to federal, state and local laws and regulations governing the use,
storage, handling and disposal of such materials and certain waste products. The risk of accidental
contamination or injury from these materials cannot be eliminated. In the event of an accident, we
could be held liable for any damages that result, and any liability could exceed our resources.

SCHEDULE 11.12

BROKER’S FEES

     Stonegate Securities, Inc.

     Placement Agency Agreement, dated July 14, 2004, by and between Paradigm Genetics, Inc., a
Delaware corporation, and Stonegate Securities, Inc., a Texas corporation.

C-7

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