Document:

exv10w1

EXHIBIT 10.1

AMENDMENT NO. 5 TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

AMENDMENT NO. 5 dated as of July 30, 2010 (“Amendment”) between VIRCO MFG. CORPORATION, a
Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the
“Bank”), amending the Second Amended and Restated Credit Agreement dated as of March 12,
2008 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”)
between the Borrower and the Bank. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as therein defined.

WHEREAS, subject to the satisfaction of the conditions set forth herein, the Borrower and the Bank
have agreed to certain amendments to the Credit Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties
hereto agree as follows:

Section 1. Amendment to Section 5.11 of the Credit Agreement. Section 5.11 of the Credit Agreement
hereby is amended and restated in its entirety as follows:

Section 5.11 Minimum Net Income.

(a) For the fiscal year of the Borrower ended January 31, 2010, permit Net Income plus federal,
local and state income taxes as of the end of such fiscal year to be less than $(500,000), and for
any fiscal year of the Borrower thereafter, permit Net Income plus federal, local and state income
taxes as of the end of such fiscal year to be less than $1.00.

(b) For the six months ending July 31, 2010, permit Net Income plus federal, local and state income
taxes as of the end of such six-month period to be less than $(2,700,000).

Section 2. Amendment to Section 5.12 of the Credit Agreement. Section 5.12 of the Credit Agreement
is hereby amended and restated in its entirety as follows:

Section 5.12. Minimum Consolidated Fixed Charge Coverage Ratio.

Permit the Consolidated Fixed Charge Coverage Ratio (i) measured as of the end of each fiscal
quarter of each fiscal year (other than the fiscal quarter ended April 30, 2010), to be less than
2.50 to 1.00, and (ii) as of the end of the fiscal quarter ended April 30, 2010, to be less than
2.25 to 1.00. The foregoing notwithstanding, this Section 5.12 shall not apply to the fiscal
quarter ending July 31, 2010.

Section 3. Amendment to Section 5.13 of the Credit Agreement. The table appearing in Section 5.13
of the Credit Agreement hereby is amended by replacing the words “6.00 to 1.00” directly opposite
“Fiscal quarter ended July 31, 2010” with the following: “N/A.”

Section 4. Amendment to Annex A to the Credit Agreement. (a) The following definitions appearing
in Annex A to the Credit Agreement hereby are amended and restated as follows:

“Designated Finished Goods Advance Rate” means, at any date, a percentage equal to
(a) if such date is on or after March 1 and on or before July 31 of each year, 55% and (b) at all
other times, 45%.

Section 5. Amendment to Amended and Restated Line of Credit Note. The definition of “Applicable
Margin” set forth in the Amended and Restated Line of Credit Note amended and restated as of
January 29, 2010 is hereby amended and restated as follows:

“Applicable Margin” means the following percentages per annum: (i) when the principal
balance of this Note bears interest at the Base Rate, 1.00%, and (ii) when the principal balance of
this Note bears interest at the LIBOR Rate, 3.50%.

Section 6. Consent to Amendments. The Guarantor hereby acknowledges and consents to this
Amendment, and affirms and acknowledges that the Guaranty and each other Loan Document to which it
is a party remains in full force and effect and that such Person remains obligated thereunder
without defense, offset or counterclaim of any kind whatsoever, as if such Guaranty or other Loan
Document were executed and delivered to the Bank on the date hereof.

Section 7. Representations and Warranties. To induce the Bank to enter into this Amendment, the
Borrower represents and warrants to the Bank that:

 

 

(a) Representations and Warranties in Credit Agreement. Each of the representations and
warranties of the Borrower and its Subsidiaries contained in the Credit Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in connection with the Credit
Agreement (i) were true and correct when made and (ii) after giving effect to this Amendment,
continue to be true and correct on the date hereof (except to the extent that such representations
and warranties relate expressly to an earlier date).

(b) Authority. The execution and delivery by the Borrower of this Amendment and the performance by
the Borrower of its obligations under this Amendment (i) are within its power and authority,
(ii) have been duly authorized by all necessary proceedings, (iii) do not and will not conflict
with or result in any breach or contravention or any provision of law, statute, rule or regulation
to which the Borrower is subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower so as to materially adversely affect the assets, business or any
activity of the Borrower, (iv) do not conflict with any provision of the certificate of
incorporation or bylaws of the Borrower or any agreement or other instrument binding upon the
Borrower, (v) do not and will not require any waivers, consents or approvals by any of its
creditors which have not been obtained, or (vi) do not and will not require any approval which has
not been obtained.

(c) Enforceability of Obligations. This Amendment and the Credit Agreement, as amended
hereby, constitute the legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.

(d) No Event of Default. No Event of Default or Default has occurred and is continuing.

Section 8. Conditions to Effectiveness. This Amendment shall become effective on the date when the
following conditions precedent have been satisfied (the “Fifth Amendment Effective Date”):

(a) The Borrower, the Guarantor and the Bank shall have delivered an executed counterpart of this
Amendment.

(b) The Borrower and the Guarantor shall have delivered to the Bank a certificate, signed by a duly
appointed officer of such Person, dated as of the Fifth Amendment Effective Date, certifying as to
the incumbency of such officer, and attaching or making certifications that no changes have been
made to the copies last delivered to the Bank of, the Governing Documents of such Person and any
resolutions of such Person approving the execution of this Amendment.

(c) No Event of Default or Default shall have occurred and be continuing or would result after
giving effect to the transactions contemplated hereby.

(d) The representations and warranties set forth in Section 9 hereof shall be true and correct on
the Fifth Amendment Effective Date.

(e) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or
indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against the Borrower, the Guarantor or the Bank.

(f) The Borrower shall have paid all reasonable out-of-pocket costs and expenses of the Bank, to
the extent invoices therefor have been presented.

(g) All other documents and legal matters in connection with the transactions contemplated by this
Amendment shall have been delivered or executed or recorded and shall be in form and substance
satisfactory to the Bank.

Section 9. Admissions and Acknowledgments. The Borrower and the Guarantor expressly acknowledges
and agrees with each of the following:

(a) That such Person does not dispute the validity or enforceability of any of the Loan Documents
or any of their respective obligations under any of the foregoing, or the validity, priority,
enforceability, scope or extent of any charge, Lien, security interest or any other encumbrance of
the Bank in, on or against any of the Collateral in any judicial, administrative or other
proceeding;

(b) That such Person shall not challenge or dispute the validity of any of its obligations under
the Loan Documents to which it is party or any other obligations incurred by such Person pursuant
to the Loan Documents; and

(c) That the Indebtedness evidenced by the Loan Documents is secured by first priority,
non-avoidable, perfected, valid and enforceable liens on and security interests in the Collateral,
subject only to Permitted Liens.

 

 

Section 10. Reference to and Effect on Loan Documents.

(a) Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, and each
reference in the other Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.

(b) Except as expressly set forth herein, this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Bank
under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects
and shall continue in full force and effect.

(c) Nothing herein shall be deemed to entitle the Borrower or any Guarantor to a waiver, amendment,
modification or other change of any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or any other Loan Document in similar or difference
circumstances.

(d) This Amendment shall be a Loan Document for all purposes.

Section 11. Benefits of Amendment. The terms and provisions of this Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns to
the extent contemplated by the Credit Agreement.

Section 12. Interpretation. The Article and Section headings used in this Amendment are for
convenience of reference only and shall not affect the construction hereof.

Section 13. Execution in Counterparts. This Amendment may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same
Amendment. Faxed signatures of this Amendment shall be binding for all purposes.

Section 14. Severability. If any provision of this Amendment shall be held to be invalid, illegal
or unenforceable under applicable law in any jurisdiction, such provision shall be ineffective only
to the extent of such invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality and enforceability of such provision in any other
jurisdiction.

Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California. The arbitration provisions of Section 7.11 of the Credit
Agreement are incorporated herein by reference.

Section 16. Expenses. The Borrower agrees to pay the reasonable out-of-pocket expenses of the
Bank, including but not limited to the reasonable fees, charges and disbursements, including but
not limited to the fees, charges and disbursements of Gibson, Dunn & Crutcher LLP, special counsel
for the Bank, incurred in connection with the preparation, negotiation, execution and delivery of
this Amendment and any subsequent waiver, amendment or modification of the Credit Agreement or any
other Loan Document and the security arrangements in connection herewith or therewith.

Section 17. No Course of Dealing. The execution and delivery of this Amendment shall not establish
a course of dealing among the Bank, the Borrower and the Guarantors or in any other way obligate
the Bank to hereafter provide any further amendments, waivers, or consents of any kind to the
Borrower and the Guarantors.

Section 18. Arm’s Length Agreement. Each of the parties to this Amendment agrees and acknowledges
that this Amendment has been negotiated in good faith, at arm’s length, and not by any means
forbidden by law.

Section 19. Entire Agreement. This Amendment together with all other instruments, agreements, and
certificates executed by the parties in connection herewith or with reference thereto, embody the
entire understanding and agreement between the parties hereto and thereto with respect to the
subject matter hereof and thereof and supercede all prior agreements, understandings, and
inducements, whether express or implied, oral or written.

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as
of the date first set forth above.

					
	 	
VIRCO MFG. CORPORATION,

as the Borrower

 	 
	 	By:  	/s/ Robert E. Dose
 	 
	 	 	Name:  	Robert E. Dose 	 
	 	 	Title:  	Vice President - Finance, Secretary and      Treasurer 	 
	 

					
	 	
VIRCO, INC.,

as the Guarantor

 	 
	 	By:  	/s/ Robert E. Dose
 	 
	 	 	Name:  	Robert E. Dose 	 
	 	 	Title:  	Vice President - Finance, Secretary and      Treasurer 	 

 

 

	 	 	 	 	 

WELLS FARGO BANK, NATIONAL ASSOCIATION

					
	 	
 	 
	 	By:  	/s/ Mehdi Emrani
 	 
	 	 	Name:  	Mehdi Emrani 	 
	 	 	Title:  	Vice Presidentexv10w2

Exhibit 10.2

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

SERIES F PREFERRED STOCK PURCHASE AGREEMENT

June 16, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. AGREEMENT TO SELL AND PURCHASE
	 	 	1	 
	1.1 Authorization of Shares
	 	 	1	 
	1.2 Sale and Purchase
	 	 	1	 
	 
	 	 	 	 
	2. CLOSING, DELIVERY AND PAYMENT
	 	 	1	 
	2.1 Closing
	 	 	1	 
	2.2 Delivery
	 	 	2	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	2	 
	3.1 Organization, Good Standing and Qualification
	 	 	2	 
	3.2 Subsidiaries
	 	 	2	 
	3.3 Capitalization; Voting Rights
	 	 	3	 
	3.4 Authorization; Binding Obligations
	 	 	4	 
	3.5 Financial Statements
	 	 	5	 
	3.6 Liabilities
	 	 	5	 
	3.7 Agreements; Action
	 	 	5	 
	3.8 Obligations to Related Parties
	 	 	6	 
	3.9 Changes
	 	 	6	 
	3.10 Title to Properties and Assets; Liens, Etc.
	 	 	7	 
	3.11 Intellectual Property
	 	 	7	 
	3.12 Compliance with Other Instruments
	 	 	8	 
	3.13 Litigation
	 	 	8	 
	3.14 Tax Returns and Payments
	 	 	9	 
	3.15 Employees
	 	 	9	 
	3.16 Registration Rights and Voting Rights
	 	 	10	 
	3.17 Compliance with Laws; Permits
	 	 	10	 
	3.18 Offering Valid
	 	 	10	 
	3.19 Minute Books
	 	 	11	 
	3.20 Real Property Holding Corporation
	 	 	11	 
	3.21 Disclosure
	 	 	11	 
	3.22 Employee Benefit Plans
	 	 	11	 
	3.23 Employee Relations to Management
	 	 	11	 
	3.24 Environmental and Safety Laws
	 	 	11	 
	3.25 Insurance
	 	 	11	 
	3.26 No Restricted Persons
	 	 	11	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS
	 	 	12	 
	4.1 Requisite Power and Authority
	 	 	12	 
	4.2 Investment Representations
	 	 	12	 
	4.3 Transfer Restrictions
	 	 	13	 

 

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 	 	Page	 
	5. CONDITIONS TO CLOSING
	 	 	14	 
	5.1 Conditions to Purchasers’ Obligations at the Initial Closing
	 	 	14	 
	5.2 Conditions to Obligations of the Company
	 	 	15	 
	 
	 	 	 	 
	6. MISCELLANEOUS
	 	 	16	 
	6.1 Governing Law
	 	 	16	 
	6.2 Survival
	 	 	16	 
	6.3 Successors and Assigns
	 	 	16	 
	6.4 Entire Agreement
	 	 	16	 
	6.5 Severability
	 	 	17	 
	6.6 Amendment and Waiver
	 	 	17	 
	6.7 Delays or Omissions
	 	 	17	 
	6.8 Waiver of Conflicts
	 	 	17	 
	6.9 Notices
	 	 	18	 
	6.10 Expenses
	 	 	18	 
	6.11 Attorneys’ Fees
	 	 	18	 
	6.12 Titles and Subtitles
	 	 	19	 
	6.13 Counterparts
	 	 	19	 
	6.14 Broker’s Fees
	 	 	19	 
	6.15 Exculpation Among Purchasers
	 	 	19	 
	6.16 Rights of Purchasers
	 	 	19	 
	6.17 No Commitment for Additional Financing
	 	 	19	 
	6.18 Pronouns
	 	 	20	 
	6.19 California Corporate Securities Law
	 	 	20	 

-ii-

 

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

SERIES F PREFERRED STOCK PURCHASE AGREEMENT

     THIS SERIES F PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of June 16, 2010, by and among PACIFIC BIOSCIENCES OF CALIFORNIA, INC., a Delaware corporation
(the “Company”), and each of those persons and entities, severally and not jointly, whose names are
set forth on the Schedule of Purchasers attached hereto as Exhibit A (which persons and
entities are hereinafter collectively referred to as “Purchasers” and each individually as a
“Purchaser”).

     THE PARTIES HEREBY AGREE AS FOLLOWS:

     1. AGREEMENT TO SELL AND PURCHASE

          1.1 Authorization of Shares. The Company has authorized (a) the sale and issuance to Purchasers
of up to an aggregate of 19,659,240 shares of its Series F Preferred Stock (the “Shares”) and (b)
the shares of Junior Preferred Stock and Common Stock issuable upon conversion of the shares of
Series F Preferred Stock and the shares of Common Stock issuable upon conversion of any such shares
of Junior Preferred Stock (the “Conversion Shares”). The Shares and the Conversion Shares have the
rights, preferences, privileges and restrictions set forth in the Amended and Restated Certificate
of Incorporation of the Company, in the form attached hereto as Exhibit B (the “Restated
Charter”).

          1.2 Sale and Purchase. Subject to the terms and conditions hereof, at the Closing (as hereinafter
defined) the Company hereby agrees to issue and sell to each Purchaser, severally and not jointly,
and each Purchaser agrees to purchase from the Company, severally and not jointly, the number of
Shares set forth opposite such Purchaser’s name on Exhibit A, at a purchase price of seven
dollars and sixty-three cents ($7.63) per share.

     2. CLOSING, DELIVERY AND PAYMENT.

          2.1 Closing.

               (a) The purchase, sale and issuance of the shares shall take place at one or more closings
(each of which is referred to in this Agreement as a “Closing”). The initial Closing of the sale
and purchase of the Shares under this Agreement (the “Initial Closing”) shall take place at 1:00
p.m. local time on the date hereof, at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California, 94304 or at such other time or
place as the Company and Purchasers may mutually agree.

               (b) If less than all of the Shares are sold and issued at the Initial Closing, then, subject
to the terms and conditions of this Agreement, the Company may sell and issue at one or more
subsequent Closings (each, a “Subsequent Closing”), within 90 days after the Initial Closing,

1

 

up to the balance of the unissued Shares to such persons or entities as may be approved by the Company.
Any such sale and issuance in a Subsequent Closing shall be on the same terms and conditions as
those contained herein, and such persons or entities shall, upon execution and delivery of the
relevant signature pages, become parties to, and be bound by, this Agreement, the Fifth Amended and
Restated Investor Rights Agreement in substantially the form attached hereto as Exhibit C
(the “Investor Rights Agreement”), the Fifth Amended and Restated Right of First Refusal and
Co-Sale Agreement in substantially the form attached hereto as Exhibit D (the “Co-Sale
Agreement”), and the Fifth Amended and Restated Voting Agreement in substantially the form attached
hereto as Exhibit E (the “Voting Agreement,” and together with this Agreement, the Co-Sale
Agreement and the Investor Rights Agreement, the “Related Agreements”), without the need for an
amendment to any of the Related Agreements except to add such person’s or entity’s name to the
appropriate exhibit to such Related Agreements, and shall have the rights and obligations hereunder
and thereunder, in each case as of the date of the applicable Subsequent Closing. The Company will
promptly furnish to each Purchaser copies of the amended exhibits referred to in the preceding
sentence. Each Subsequent Closing shall take place at such date, time and place as shall be
approved by the Company in its sole discretion.

          2.2 Delivery. At each Closing, subject to the terms and conditions hereof, the Company will
deliver to each Purchaser a certificate representing the number of Shares to be purchased at the
Closing by such Purchaser, against payment of the purchase price therefor by check, wire transfer
made payable to the order of the Company, cancellation or conversion of indebtedness or any
combination of the foregoing, or in the case of Deerfield Private Design Fund, L.P. and Deerfield
Private Design International, L.P., in the form of a promissory note acceptable to the Company.

     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     Except as set forth on a Schedule of Exceptions delivered by the Company to Purchasers at the
applicable Closing, the Company hereby represents and warrants to each Purchaser as follows:

          3.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to conduct its business, own and operate its properties and
assets, to execute and deliver this Agreement and the Investor Rights Agreement, Co-Sale Agreement
and Voting Agreement, to issue and sell the Shares and the Conversion Shares, and to carry out the
provisions of this Agreement, the Related Agreements and the Restated Charter and to carry on its
business as presently conducted and as proposed to be conducted. The Company is duly qualified to
do business and is in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to do so would not have a material
adverse effect on the Company or its business, properties, assets or financial condition.

          3.2 Subsidiaries. The Company does not own or control any equity security or other interest of
any other corporation, limited partnership or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement. Since its inception, the

2

 

Company has not consolidated or merged with, acquired all or substantially all of the assets of, or
acquired the stock of or any interest in any corporation, partnership, association, or other
business entity.

          3.3 Capitalization; Voting Rights.

               (a) The authorized capital stock of the Company, immediately prior to the Initial Closing,
consists of (i) 121,668,835 shares of Common Stock, par value $0.0001 per share, 1,428,795 of
which are issued and outstanding, (ii) 153,394,052 shares of Preferred Stock, par value $0.0001 per
share, 5,405,992 of which are designated Series A Preferred Stock, all of which are issued and
outstanding, (iii) 3,530,768 shares of Series B Preferred Stock, par value $0.0001 per share,
3,500,000 shares of which are issued and outstanding, (iv) 5,342,197 shares of Series C Preferred
Stock, par value $0.0001 per share, 5,322,396 of which are issued and outstanding, (v) 12,525,000
shares of Series D Preferred Stock, 12,500,000 of which are issued and outstanding, (vi) 26,866,790
shares of Series E Preferred Stock, all of which are issued and outstanding, (vii) 19,659,240
shares of Series F Preferred Stock, none of which are issued and outstanding, and (viii) 80,064,065
shares of Junior Preferred Stock, 6,506,160 shares of which are issued and outstanding. Attached
to this Agreement as Exhibit G is a complete list of all stockholders, option holders,
warrant holders, convertible note holders and other security holders of the Company (and their
respective holdings) as of immediately prior to the Closing.

               (b) Under the Company’s 2004 Equity Incentive Plan (the “2004 Plan”), (i) 2,637,152 shares of
Junior Preferred Stock have been issued pursuant to restricted stock purchase
agreements and/or the exercise of outstanding options and are included in 3.3(a)(viii) above,
(ii) options to purchase 227,918 shares of Junior Preferred Stock are currently outstanding, and
(iii) no options to purchase shares of Junior Preferred Stock remain available for future issuance
to officers, directors, employees and consultants of the Company under the 2004 Plan.

               (c) Under the Company’s 2005 Equity Incentive Plan (the “2005 Plan,” together with the 2004
Plan, the “Plans”), (i) 1,428,795 shares of Common Stock are currently outstanding pursuant to
restricted stock purchase agreements and/or the exercise of outstanding options and are included in
3.3(a)(i) above, (ii) 17,844,968 options to purchase shares of Common Stock are currently
outstanding, and (iii) 4,032,406 shares of Common Stock remain available for future issuance to
officers, directors, employees and consultants of the Company.

               (d) Other than the shares reserved for issuance under the Plans and except as may be granted
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 agreements of any kind for the purchase or acquisition from the Company
of any of its securities.

               (e) All issued and outstanding shares of the Company’s Common Stock and Preferred Stock (i)
have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued
in compliance with all applicable state and federal laws concerning the issuance of securities and
(iii) solely with respect to the Common Stock or Junior Preferred Stock

3

 

not issued upon the
conversion of Preferred Stock, are subject to a right of first refusal in favor of the Company upon
transfer.

               (f) The rights, preferences, privileges and restrictions of the Shares and the Conversion
Shares are as stated in the Restated Charter. The Conversion Shares have been duly and validly
reserved for issuance. When issued in compliance with the provisions of this Agreement and the
Restated Charter, the Shares and the Conversion Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances other than liens and encumbrances
created by or imposed by Purchasers; provided, however, that the Shares and the Conversion Shares
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.

               (g) All options granted and Common Stock or Junior Preferred Stock issued (other than upon
conversion of Preferred Stock) vest as follows: twenty-five percent (25%) of the shares vest one
(1) year following the vesting commencement date, with the remaining seventy-five percent (75%)
vesting in equal monthly installments over the three (3) years following the anniversary of the
vesting commencement date. No stock plan, stock purchase, stock option or other agreement or
understanding between the Company and any holder of any equity securities or rights to purchase
equity securities provides for acceleration or other changes in the vesting provisions or other
terms of such agreement or understanding as the result of (i) termination of employment or
consulting services (whether actual or constructive); (ii) any merger, consolidated sale of
stock or assets, change in control or any other transaction(s) by the Company; or (iii) the
occurrence of any other event or combination of events.

               (h) All outstanding shares of Common Stock and Preferred Stock, and all shares of Common Stock
and Preferred Stock issuable upon the exercise or conversion of outstanding options, warrants or
other exercisable or convertible securities are subject to a market standoff or “lockup” agreement
of not less than 180 days following the Company’s initial public offering.

          3.4 Authorization; Binding Obligations. All corporate action on the part of the Company and its
directors and stockholders necessary for the authorization of this Agreement and the Related
Agreements, the performance of all obligations of the Company hereunder and thereunder at the
Closing and the authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Restated Charter has been taken. The Agreement and the Related
Agreements, when executed and delivered, 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, (b) general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification provisions in the
Investor Rights Agreement may be limited by applicable laws. The sale of the Shares and the
subsequent conversion of the Shares into Conversion 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

 

          3.5 Financial Statements. The Company has made available to each Purchaser its unaudited balance
sheet as at December 31, 2009 (the “Statement Date”) and unaudited consolidated statements of
income and cash flows for the 12-month period ending on the Statement Date (collectively, the
“Financial Statements”). The Financial Statements, together with the notes thereto, have been
prepared in accordance with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as disclosed therein, and present fairly the financial
condition and position of the Company as of the Statement Date; provided, however, that the
Financial Statements are subject to year-end audit adjustments (which are not expected to be
material either individually or in the aggregate), and do not contain all footnotes required under
generally accepted accounting principles.

          3.6 Liabilities. The Company has no material liabilities, contingent or otherwise, not disclosed in the
Financial Statements, except current liabilities incurred in the ordinary course of business
subsequent to the Statement Date which have not been, either in any individual case or in the
aggregate, material to the financial condition or operation of the Company. The Company maintains
and will continue to maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.

          3.7 Agreements; Action.

               (a) Except for agreements explicitly contemplated hereby and agreements between the Company
and its employees with respect to the sale of the Company’s Common Stock pursuant to the Plans,
there are no agreements, understandings or proposed transactions between the Company and any of its
officers, directors, employees, affiliates or any affiliate thereof.

               (b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or by which it is bound which
may involve (i) future obligations (contingent or otherwise) of, or payments to, the Company in
excess of $50,000, or (ii) the transfer or license of any patent, copyright, trade secret or other
proprietary right to or from the Company (other than licenses by the Company of “off the shelf” or
other standard products, each of which agreements are not, individually, material to the Company’s
business), (iii) provisions restricting or affecting 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 (other than indemnification obligations arising from purchase,
sale or license agreements entered into in the ordinary course of business).

               (c) 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 or
guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to
dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in excess of $25,000
or, in the case of indebtedness and/or liabilities individually less than $25,000, in excess of
$50,000 in the aggregate, (iii) made any loans or advances to any person, 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.

5

 

               (d) For the purposes of subsections (b) and (c) 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.

          3.8 Obligations to Related Parties. There are no obligations of the Company to officers,
directors, stockholders, or employees of the Company other than (a) for payment of salary for
services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and
(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).

          3.9 Changes. Since the Statement Date, there has not been:

               (a) Any change in the assets, liabilities, financial condition or operations of the Company
from that reflected in the Financial Statements, other than changes in the ordinary course of
business, none of which individually or in the aggregate has had a material adverse effect on such
assets, liabilities, financial condition or operations of the Company;

               (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, materially and
adversely affecting the assets, properties, business or financial condition of the Company, or that
would reasonably be expected to materially and adversely affect the prospects of the Company;

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

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

               (g) Any labor organization activity related to the Company;

               (h) Any sale, assignment, or exclusive license or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;

               (i) Any change in any agreement to which the Company is a party or by which it is bound which
materially and adversely affects the business, assets, liabilities, financial

6

 

condition or operations of the Company, or that would reasonably be expected to materially and
adversely affect the prospects of the Company;

               (j) Any other event or condition of any character that, either individually or cumulatively,
has materially and adversely affected the business, assets, liabilities, financial condition or
operations of the Company; or

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

          3.10 Title to Properties and Assets; Liens, Etc.. The Company has good and marketable title to its
properties and assets, including the properties and assets reflected in the most recent balance
sheet included in the Financial Statements, 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 and do not materially impair the Company’s use and ownership of such property and assets.
The Company is in compliance with all material terms of each lease to which it is a party or is
otherwise bound. The Company’s properties and assets are in good condition and repair in all
material respects, normal wear and tear excepted.

          3.11 Intellectual Property.

               (a) To the best of its knowledge, 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 as
presently proposed to be conducted, 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 to which the Company is a party, 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) The Company has not received any communications alleging that the Company has violated or,
by conducting its business as presently proposed, would violate 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 that has not
previously been disclosed to the Purchasers. To the Company’s knowledge, the Company has not
violated any of the patents, trademarks, service marks, trade names, copyrights or trade secrets of
any other person or entity.

               (c) 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

7

 

subject to any
judgment, decree or order of any court or administrative agency, that would interfere with their
duties to the Company or that would conflict with the Company’s business as proposed to be
conducted. Each current and former employee, officer and consultant of the Company has executed a
proprietary information and inventions agreement in the form(s) as delivered to Purchasers. No
current or former employee, officer or consultant of the Company has excluded works or inventions
made prior to his or her employment with the Company from his or her assignment of inventions
pursuant to such employee, officer or consultant’s proprietary information and inventions
agreement. Neither the execution nor delivery of this Agreement or the Related Agreements, or any
amendments thereto, nor the carrying on of the Company’s business by the employees of the Company,
nor the conduct of the Company’s business, will, to the best of the Company’s knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees is now obligated. To
the Company’s knowledge, no employee or officer of the Company has used any patents, trademarks,
service marks, trade names, copyrights or trade secrets (collectively, the “Intellectual Property”)
of a third party (including, without limitation, development of any Company Intellectual Property).
The Company does not believe it is or will be necessary to utilize any Intellectual Property of
any of its employees (or people it currently intends to hire) made prior to their employment by the
Company, and at present no such employee Intellectual Property forms a part of any Company
Intellectual Property except that which has already been assigned to the Company by its employees
or the Cornell Research Foundation, Inc. The Schedule of Exceptions contains a complete list of
patents and pending and provisional patent applications owned by or exclusively licensed to the
Company. The Company has taken reasonable steps to protect and preserve the confidentiality of all
confidential, non-public information desired to be kept confidential by the Company.

          3.12 Compliance with Other Instruments. The Company is not in violation or default of any term of
its charter documents, each as amended, or of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is party or by which it or any of its assets or
properties is bound or of any judgment, decree, order or writ other than any such violation that
would not have a material adverse effect on the Company, its business, properties, assets or
financial condition. The execution, delivery, and performance of and compliance with this
Agreement, and the Related Agreements, and the issuance and sale of the Shares pursuant hereto and
of the Conversion Shares pursuant to the Restated Charter, 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 material default under any such
term, 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. To its knowledge, the Company has not
performed any act, nor does any condition exist, the occurrence or existence of which would result
in the Company’s loss of any right granted under any license, distribution agreement or other
agreement required to be disclosed on the Schedule of Exceptions.

          3.13 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened in writing against the Company that questions the

8

 

validity of this Agreement, the Related Agreements or the right of the Company to enter into any of
such agreements, or to consummate the transactions contemplated hereby or thereby, or which would
reasonably be expected to result, either individually or in the aggregate, in any material adverse
effect on the Company, or the business, properties, assets, condition or affairs of the Company,
financially or otherwise, or any change in the current equity ownership of the Company, nor is the
Company aware that there is any basis for any of the foregoing. The foregoing includes, without
limitation, actions pending or, to the Company’s knowledge, threatened in writing involving the
prior employment of any of the Company’s employees, their use in connection with the Company’s
business of any information or techniques allegedly proprietary to any of their former employers,
or their obligations under any agreements with prior employers. The Company is not a party or to
its knowledge 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.

          3.14 Tax Returns and Payments. The Company is and always has been a subchapter C corporation. The
Company has filed all tax returns (federal, state and local) required to be filed by it and such
returns are true and correct in all material respects. All taxes shown to be due and payable on
such returns, any assessments imposed, and to the Company’s knowledge 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. 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.
The Company has not been advised (a) that any of its returns, federal, state or local, have been
or are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed
adjustment to its federal, state or local taxes.

          3.15 Employees. The Company is not a party to nor 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. The Company has no collective
bargaining agreements with any of its employees. Subject to applicable law, the employment of each
officer and employee of the Company is terminable at the will of the Company. 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; 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 has not received any notice alleging that any such
violation has occurred. 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. 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. There
are no actions pending, or to the Company’s knowledge, threatened, by any former or current
employee concerning such person’s employment by the Company. To the best of its knowledge, the
Company has complied in

9

 

all material respects with all applicable state and federal laws and
regulations respecting employment and employment practices, terms and conditions of employment,
wages and hours and other laws related to employment, and there are no arrears in the payment of
wages, withholding or social security taxes, unemployment insurance premiums or other similar
obligation.

          3.16 Registration Rights and Voting Rights. Except as required pursuant to the Investor Rights
Agreement, the Company is presently not under any obligation, and has not granted any rights, to
register (as defined in Section 1.1 of the Investor Rights Agreement) any of the Company’s
presently outstanding securities or any of its securities that may hereafter be issued. To the
Company’s knowledge, except as contemplated in the Voting Agreement, no stockholder of the Company
has entered into any agreement with respect to the voting of equity securities of the Company.

          3.17 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 violation would materially and adversely affect the business, assets, liabilities, financial
condition or operations of the Company or which could reasonably be expected to materially and
adversely affect the Company’s prospects. No United States domestic 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 the Related Agreements or the
issuance of the Shares or the Conversion Shares, except such as have 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 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
materially and adversely affect the business, properties or financial condition of the Company or
which could reasonably be expected to materially and adversely affect the Company’s prospects and
believes it can obtain, without undue burden or expense, any similar authority for the conduct of
its business as planned to be conducted. The Company is not in default in any material respect
under any of such franchises, permits, licenses or other similar authority.

          3.18 Offering Valid. Assuming the accuracy of the representations and warranties of Purchasers
contained in Section 4.2 hereof, the offer, sale and issuance of the Shares and the Conversion
Shares will be exempt from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and will have been registered or qualified (or are exempt from registration
and qualification) under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company nor any agent on its behalf has solicited or will
solicit any offers to sell or has offered to sell or will offer to sell all or any part of the
Shares to any person or persons so as to bring the sale of such Shares by the Company within the
registration provisions of the Securities Act or any state securities laws.

10

 

          3.19 Minute Books. The minute books of the Company made available to Purchasers who have requested
the same contain a complete summary of all meetings of directors and stockholders since the time of
incorporation.

          3.20 Real Property Holding Corporation. The Company is not a real property holding corporation
within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.

          3.21 Disclosure. The Company has provided each Purchaser with all the information that such
Purchaser has requested for deciding whether to purchase the Shares and all information that the
Company believes is reasonably necessary to enable such Purchaser to make such decision. Neither
this Agreement nor any certificate furnished or to be furnished to the Purchasers at the Closing
contains any untrue statement of a material fact or, when taken together, omits to state a material fact necessary
to make the statements herein or therein, in light of the circumstances under which they were made,
not misleading. The Company’s business plan, as delivered to the Purchasers, was prepared in good
faith by the Company. The Company does not represent or warrant that it will achieve any results
projected in such business plan.

          3.22 Employee Benefit Plans. The Company does not have any Employee Benefit Plan as defined in the
Employee Retirement Income Security Act of 1974.

          3.23 Employee Relations to Management. To its knowledge, no member of the Company’s management is
related by blood, marriage, legal adoption, guardianship or other legally authorized custodial
relationship to any Board member or employee of the Company.

          3.24 Environmental and Safety Laws. To the Company’s knowledge, the Company is not in violation of
any applicable statute, law or regulation relating to the environment or occupational health and
safety, and to the Company’s knowledge, no material expenditures are or will be required in order
to comply with any current environmental and safety statute, law or regulation.

          3.25 Insurance. The Company has in full force and effect general commercial, fire, casualty
insurance, products liability and errors and omissions policies with coverage sufficient in amount
it believes to allow it to replace any of its properties that could be damaged or destroyed and
customary for companies similarly situated (as to business and financial resources) to the Company.

          3.26 No Restricted Persons. To the Company’s knowledge, no officer, director or employee of the
Company is identified on any of the following documents: (1) the Office of Foreign Assets Control
of the United States Department of the Treasury list of “Specially Designated Nationals and Blocked
Persons” (“SDNs”); (2) the Bureau of Industry and Security of the United States Department of
Commerce “Denied Persons List,” “Entity List” or “Unverified List”; (3) the Office of Defense Trade
Controls of the United States Department of State “List of Debarred Parties”; (4) the Financial
Sanctions Unit of the Bank of England “Consolidated List”; (5) the Solicitor General of Canada’s
“Anti-Terrorism Act Listed Entities”; (6) the Australian Department

11

 

of Foreign Affairs and Trade
“Charter of the United Nations (Anti-terrorism — Persons and Entities) List”; (7) the United
Nations Security Council
Counter-Terrorism Committee “Consolidated List”; or (8) European Union Commission Regulation
No. 1996/2001 of October 11, 2001. The Company is not involved in business arrangements or
otherwise engages in transactions with or involving countries subject to economic or trade
sanctions imposed by the United States Government, or with or involving SDNs or Cuban nationals in
violation of the regulations maintained by OFAC.

     4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.

     Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as
follows (provided that such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

          4.1 Requisite Power and Authority. Purchaser has all necessary power and authority to execute and
deliver this Agreement and the Related Agreements and to carry out their provisions. All action on
Purchaser’s part required for the lawful execution and delivery of this Agreement and the Related
Agreements has been taken. 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, (b) as limited by
general principles of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of the Investor Rights Agreement
may be limited by applicable laws.

          4.2 Investment Representations. Purchaser understands that neither the Shares nor the Conversion
Shares have been registered under the Securities Act. 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 Purchaser’s representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:

               (a) Purchaser Bears Economic Risk. 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. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered pursuant to the Securities
Act, or an exemption from registration is available. Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any shares of its Common
Stock. Purchaser also 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 Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times Purchaser might propose.

               (b) Acquisition for Own Account. Purchaser is acquiring the Shares and the Conversion Shares
for Purchaser’s own account or for the account of its clients as an investment advisor for
investment only, and not with a view towards their distribution.

12

 

               (c) Purchaser Can Protect Its Interest. 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, and the Related
Agreements. Further, Purchaser is aware of no publication of any advertisement in connection with
the transactions contemplated in the Agreement.

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

               (e) Company Information. Purchaser 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. 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.

               (f) Rule 144. Purchaser acknowledges and agrees that the Shares, and, if issued, the
Conversion Shares are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such registration is
available. Purchaser has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current public information
about the Company, the resale occurring following the required holding period under Rule 144 and
the number of shares being sold during any three-month period not exceeding specified limitations.

               (g) Residence. If Purchaser is an individual, then Purchaser resides in the state or province
identified in the address of Purchaser set forth on Exhibit A; if Purchaser is a
partnership, corporation, limited liability company or other entity, then the office or offices of
Purchaser in which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A.

               (h) Foreign Investors. If Purchaser is not a United States person (as defined by Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended), Purchaser hereby represents that it
has satisfied itself as to the full observance of the laws of its jurisdiction in
connection with any invitation to subscribe for the Shares or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii)
any foreign exchange restrictions applicable to such purchase, (iii) any government or other
consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of the Shares. The
Company’s offer and sale and Purchaser’s subscription and payment for and continued beneficial
ownership of the Shares will not violate any applicable securities or other laws of Purchaser’s
jurisdiction.

          4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that the Shares and, if issued,
the Conversion Shares are subject to restrictions on transfer as set forth in the Investor Rights
Agreement.

13

 

     5. CONDITIONS TO CLOSING.

          5.1 Conditions to Purchasers’ Obligations at the Initial Closing. Purchasers’ obligations to
purchase the Shares at a Closing are subject to the satisfaction, at or prior to the date of such
Closing, of the following conditions:

               (a) Representations and Warranties True; Performance of Obligations. The representations and
warranties made by the Company in Section 3 hereof together with the Schedule of Exceptions shall
be true and correct as of the date of such Closing with the same force and effect as if they had
been made as of the date of such Closing, and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the Closing.

               (b) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
the Agreement and the Related Agreements.

               (c) Filing of Restated Charter. The Restated Charter shall have been filed with the Secretary
of State of the State of Delaware and shall continue to be in full force and effect as of the
Closing.

               (d) Corporate Documents. The Company shall have delivered to Purchasers or their counsel,
copies of all corporate documents of the Company as Purchasers shall reasonably request.

               (e) Reservation of Conversion Shares. The Conversion Shares issuable upon conversion of the
Shares shall have been duly authorized and reserved for issuance upon such conversion.

               (f) Compliance Certificate. The Company shall have delivered to Purchasers a Compliance
Certificate, executed by the Chief Executive Officer of the Company, dated the date of such
Closing, to the effect that the conditions specified in subsection (a) of this Section 5.1 have
been satisfied.

               (g) Secretary’s Certificate. Purchasers shall have received from the Company’s Secretary, a
certificate having attached thereto (i) the Company’s Restated Charter as in effect at the time of
the Initial Closing, (ii) the Company’s Bylaws as in effect at the time of the Initial Closing,
(iii) resolutions approved by the Board of Directors authorizing the transactions contemplated
hereby, (iv) resolutions approved by the Company’s stockholders authorizing the filing of the
Restated Charter, and (v) good standing certificates (including tax good standing) with respect to
the Company from the applicable authority(ies) in Delaware and any other jurisdiction in which the
Company is qualified to do business, dated a recent date before such Closing.

               (h) Investor Rights Agreement. The Investor Rights Agreement shall have been executed and
delivered by the parties thereto.

14

 

               (i) Co-Sale Agreement. The Co-Sale Agreement shall have been executed and delivered by the
parties thereto. The stock certificates representing the outstanding shares subject to the Co-Sale
Agreement shall have been delivered to the Secretary of the Company and shall have had appropriate
legends placed upon them to reflect the restrictions on transfer set forth in the Co-Sale
Agreement.

               (j) Voting Agreement. The Voting Agreement shall have been executed and delivered by the
parties thereto. The stock certificates representing the outstanding shares subject to the Voting
Agreement shall have been delivered to the Secretary of the Company and shall have had appropriate
legends placed upon them to reflect the restrictions on transfer set forth in the Voting Agreement.

               (k) Board of Directors. Upon the Initial Closing, the authorized size of the Board of
Directors of the Company shall be eight members and the Board shall consist of Stephen Turner,
Susan Siegel, William Ericson, Hugh Martin, Brook Byers, Michael Hunkapiller, David Singer and
Randy Livingston.

               (l) Legal Opinion. Purchasers shall have received from legal counsel to the Company an
opinion addressed to them, dated as of the Initial Closing, in substantially the form attached
hereto as Exhibit F.

               (m) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Initial Closing hereby and all documents and instruments incident
to such transactions shall be reasonably satisfactory in substance and form to Purchasers and their
special counsel, and Purchasers and their special counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably request.

          5.2 Conditions to Obligations of the Company. The Company’s obligation to issue and sell the
Shares at each Closing is subject to the satisfaction, on or prior to such Closing, of the
following conditions:

               (a) Representations and Warranties True. The representations and warranties in Section 4 made
by those Purchasers acquiring Shares hereof shall be true and correct at the date of the Initial
Closing or the Subsequent Closing, as applicable, with the same force and effect as if they had
been made on and as of said date.

               (b) Performance of Obligations. Such Purchasers shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by such Purchasers on or
before the applicable Closing.

               (c) Filing of Restated Charter. The Restated Charter shall have been filed with the Secretary
of State of the State of Delaware.

15

 

               (d) Investor Rights Agreement. The Investor Rights Agreement shall have been executed
and delivered by Purchasers.

               (e) Co-Sale Agreement. The Co-Sale Agreement shall have been executed and delivered by the
parties thereto.

               (f) Voting Agreement. The Voting Agreement shall have been executed and delivered by the
parties thereto.

               (g) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
the Agreement and the Related Agreements.

     6. MISCELLANEOUS.

          6.1 Governing Law. This Agreement shall be governed by and construed under the laws of the State
of California in all respects as such laws are applied to agreements among California residents
entered into and performed entirely within California, without giving effect to conflict of law
principles thereof.

          6.2 Survival. The representations, warranties, covenants and agreements made herein shall survive
the closing of the transactions contemplated hereby. 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. The representations, warranties, covenants and obligations of the Company, and the
rights and remedies that may be exercised by the Purchasers, shall not be limited or otherwise
affected by or as a result of any information furnished to, or any investigation made by or
knowledge of, any of the Purchasers or any of their representatives.

          6.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the parties hereto and their respective
successors, assigns, heirs, executors and administrators and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to time; provided,
however, that prior to the receipt by the Company of adequate written notice of the transfer of any
Shares specifying the full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such Shares in its records as the absolute owner and holder of such
Shares for all purposes.

          6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the Related Agreements
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 oral or written representations, warranties, covenants and
agreements except as specifically set forth herein and therein. Each party

16

 

expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of the Agreement and the Related
Agreements.

          6.5 Severability. In the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had never been contained
herein.

          6.6 Amendment and Waiver.

               (a) Except as otherwise expressly provided for in Section 2.1(b), this Agreement may be
amended or modified only upon the written consent of the Company and holders of a majority of the
then outstanding Shares (treated as if converted and including any Conversion Shares into which the
then outstanding Shares have been converted that have not been sold to the public).

               (b) The obligations of the Company and the rights of the holders of the Shares and the
Conversion Shares under the Agreement may be waived only with the written consent of the holders of
a majority of the then outstanding Shares (treated as if converted and including any Conversion
Shares into which the then outstanding Shares have been converted that have not been sold to the
public).

          6.7 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, the Related Agreements or the Restated Charter, 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. It is further agreed that any waiver, permit, consent or approval of any kind or
character on any party’s part of any breach, default or noncompliance under this Agreement, the
Related Agreements or under the Restated Charter or any waiver on such party’s part of any
provisions or conditions of the Agreement, the Related Agreements, or the Restated Charter must be
in writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, the Related Agreements, the Restated Charter, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.

          6.8 Waiver of Conflicts. Each party to this Agreement acknowledges that Wilson Sonsini Goodrich &
Rosati, Professional Corporation (“WSGR”), outside general counsel to the Company, has in the past
performed and is or may now or in the future represent one or more Purchasers or their affiliates
in matters unrelated to the transactions contemplated by this Agreement (the “Financing”),
including representation of such Purchasers or their affiliates in matters of a similar nature to
the Financing. The applicable rules of professional conduct require that WSGR inform the parties
hereunder of this representation and obtain their consent. WSGR has served as outside general
counsel to the Company and has negotiated the terms of the Financing solely on behalf of the
Company. The Company and each Purchaser hereby (a) acknowledge that they have

17

 

had an opportunity to ask for and have obtained information relevant to such representation,
including disclosure of the reasonably foreseeable adverse consequences of such representation; (b)
acknowledge that with respect to the Financing, WSGR has represented solely the Company, and not
any Purchaser or any stockholder, director or employee of the Company or any Purchaser; and (c)
gives its informed consent to WSGR’s representation of the Company in the Financing.

     The Company acknowledges that limited liability companies composed of partners, special
counsel, associates and senior administrators of WSGR, WS Investment Company, LLC (2004A), WS
Investment Company, LLC (2004C), WS Investment Company, LLC (2005A) and WS Investment Company, LLC
(2005D) (“WS Investment Companies”) are stockholders of the Company and may continue to invest in
the Company in the future. As WSGR acts as counsel to WS Investment Companies, WS Investment
Companies could be considered to have interests adverse to the Company. The applicable rules of
professional conduct require that before WS Investment Companies can invest in future financings
and purchase additional securities from the Company (i) the terms of the transaction must be fully
and fairly disclosed, (ii) the Company must be given the right to seek advice of an independent
attorney, and (iii) the Company must consent to the terms of the transaction. WSGR has served as
outside general counsel to the Company in connection with the transactions contemplated hereby.
The Company acknowledges (i) disclosure to it of the transaction with WS Investment Companies and
(ii) that it has had a reasonable opportunity to consult independent counsel. The Company hereby
agrees that (i) WSGR may act as the Company’s counsel in connection with the Financing and (ii)
WSGR may continue to act as general counsel for the Company and to WS Investment Companies in other
matters.

          6.9 Notices. All notices required or permitted hereunder 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 electronic mail, telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) 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 to the Company at the address as set
forth on the signature page hereof and to Purchaser at the address set forth on Exhibit A
attached hereto or at such other address or electronic mail address as the Company or Purchaser may
designate by ten (10) days advance written notice to the other parties hereto.

          6.10 Expenses. Each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of the Agreement; provided, however, that the
Company shall, at the Closing, reimburse the reasonable fees and expenses of legal counsel to the
Purchasers, up to a total of $60,000, allocated as follows: (i) up to a total of $15,000 for other
Purchasers, and (ii) up to a total of $45,000 for the lead Purchaser.

          6.11 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation to
this Agreement, including without limitation 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,

18

 

including without limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of appeals.

          6.12 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.

          6.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.

          6.14 Broker’s Fees. 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 6.14 being untrue.

          6.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon any
person, firm, or corporation, other than the Company and its officers and directors, in making its
investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor the
respective controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion Shares.

          6.16 Rights of Purchasers. Each Purchaser, in its sole and absolute discretion, may exercise or
refrain from exercising any rights or privileges that such Purchaser may have pursuant to this
Agreement, the Related Agreements, the Restated Charter, the Company’s Bylaws or at law or in
equity, and such Purchaser shall not incur or be subject to any liability or obligation, any other
Purchaser or holder of Shares, any other stockholder or securityholder of the Company or any other
person, by reason of exercising or refraining from exercising any such rights or privileges,
provided, however that this provision shall not relieve any Purchaser of their voting obligations
pursuant to the Voting Agreement.

          6.17 No Commitment for Additional Financing. The Company acknowledges and agrees that no Purchaser
has made any representation, undertaking, commitment or agreement to provide or assist the Company
in obtaining any financing, investment or other assistance, other than the purchase of the Shares
as set forth in Section 1.2 and subject to the conditions set forth in Section 5.1. In addition,
the Company acknowledges and agrees that (i) no statements, whether written or oral, made by any
Purchaser or its representatives on or prior to the date hereof shall have created an obligation,
commitment or agreement to provide or assist the Company in obtaining any financing or investment,
(ii) the Company shall not rely on any such statement by any Purchaser or its representatives and
(iii) an obligation, commitment or agreement to provide or assist the Company in obtaining any
financing or investment may only be created by a written agreement, signed by such Purchaser and
the Company, setting forth the terms and conditions of such financing

19

 

 or investment and stating
that the parties intend for such writing to be a binding obligation or agreement. Absent a written
agreement to the contrary, signed by such Purchaser, such Purchaser shall have the right in its sole and absolute discretion, to refuse or decline to participate
in any other financing of or investment in the Company, and shall have no obligation to assist or
cooperate with the Company in obtaining any financing, investment or other assistance.

          6.18 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to refer
to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto
may require.

          6.19 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS
UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
FROM SUCH QUALIFICATION BEING AVAILABLE.

[THIS SPACE INTENTIONALLY LEFT BLANK]

20

 

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

	 	 	 	 	 
	 	COMPANY:

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

 	 
	 	By:  	/s/ Hugh Martin
 	 
	 	 	Name:  	Hugh Martin 	 
	 	 	Title:  	Chief Executive Officer

 	 
	 
	 	 	Address:  	

             1505 Adams Drive

Menlo Park, CA  94025 	 
	 

SIGNATURE PAGE TO SERIES F PREFERRED STOCK PURCHASE AGREEMENT

 

 

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

	 	 	 	 	 
	 	PURCHASERS:

GEN–PROBE INCORPORATED

 	 
	 	By:  	/s/ Eric Tardif
 	 
	 	 	Name:  	Eric Tardif 	 
	 	 	Title:  	SVP, Corporate Strategy 	 
	 

SIGNATURE PAGE TO SERIES F PREFERRED STOCK PURCHASE AGREEMENT

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