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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 20, 1999
(Date of earliest reported event)
TREGA BIOSCIENCES, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-27972 51-0336233
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
9880 Campus Point Drive, San Diego, CA 92121
(Address of Principal Executive Offices) (Zip Code)
(619) 410-6500
(Registrant's telephone number, including area code)
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Item 5. OTHER EVENTS
On August 20, 1999, Trega Biosciences, Inc. (the "Company") entered into a
transaction with ChemNavigator.com, Inc., a private company developing an
internet website for the sale of chemicals and related information to the
pharmaceutical, biotechnology, and agricultural industries, among others, and to
academia. The transaction was comprised of several parts.
The Company entered into a Series B Convertible Preferred Stock and
Warrant Purchase Agreement pursuant to which the Company acquired 1,176,666
shares of the Series B Convertible Preferred Stock of ChemNavigator.com, Inc.
(the "Series B Stock") together with a warrant to acquire 294,167 of the Common
Stock of ChemNavigator.com, Inc. at a purchase price of $5.00 per share. In
exchange, the Company paid $1.0 million in cash out of working capital to
ChemNavigator.com, Inc. and, under a Stock and Warrant Issuance Agreement, the
Company also issued 1.0 million shares of its Common Stock to ChemNavigator.com,
Inc. In addition, the Company will issue a warrant entitling ChemNavigator.com,
Inc. to purchase 294,167 shares of the Common Stock of the Company at a purchase
price of $5.00 per share, provided that the ChemNavigator.com website is running
by December 31, 1999, and offering for sale compounds supplied by the Company.
The terms of this transaction were the result of arms'-length bargaining.
In conjunction with this transaction, the Company also entered into
arrangements typical for an investment in a private company including, for
example, arrangements covering: the election of directors; required votes to
modify the rights of investors; registration rights, and the like. In
connection with the acquisition of the Series B Stock, the Company also
obtained the right to designate one member of the Board of Directors of
ChemNavigator.com, Inc. It is the intention of the Company to designate
Michael Grey, the Company's President and Chief Executive Officer, as the
initial Series B Director. Finally, the Company entered into a non-exclusive
arrangement with ChemNavigator.com, Inc. for the listing of Company compounds
on the ChemNavigator.com web site. This distribution channel is in addition
to the other means by which the Company offers its compounds for sale.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10.1 Series B Convertible Preferred Stock and Warrant Purchase Agreement
dated as of August 20, 1999 between ChemNavigator.com, Inc., the
Company and certain other parties.
10.2 Stock and Warrant Issuance Agreement dated as of August 20, 1999
between the Company and ChemNavigator.com, Inc.
10.3 Warrant to Purchase 294,167 Shares of the Common Stock of
ChemNavigator.com, Inc. dated August 20, 1999.
10.4 Form of Warrant to Purchase 294,167 Shares of the Common Stock of
Trega Biosciences, Inc.
99.1 Press Release dated August 24, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Trega Biosciences, Inc.
Date: August 31, 1999 /s/ Michael G. Grey
--------------------
Michael G. Grey
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Gerard A. Wills
---------------------
Gerard A. Wills
Vice President, Finance and Chief Financial
Officer
(Principal Financial and Accounting Officer)
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Exhibit 10.1
CHEMNAVIGATOR.COM, INC.
SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT
DATED AS OF
AUGUST 20, 1999
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SECTION 1
AUTHORIZATION AND SALE OF SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT
1.1 AUTHORIZATION............................................................1
1.2 SALE OF PREFERRED........................................................1
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE.............................................................1
2.2 DELIVERY.................................................................1
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 ORGANIZATION AND STANDING; CERTIFICATE AND BYLAWS; SUBSIDIARIES..........2
3.2 CORPORATE POWER..........................................................2
3.3 CAPITALIZATION...........................................................2
3.4 AUTHORIZATION............................................................3
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME.......................3
3.6 GOVERNMENTAL CONSENT.....................................................3
3.7 LITIGATION...............................................................4
3.8 PATENTS AND TRADEMARKS...................................................4
3.9 MATERIAL CONTRACTS AND OBLIGATIONS.......................................4
3.10 EMPLOYEE AGREEMENTS.....................................................5
3.11 AGREEMENTS; ACTION......................................................5
3.12 DISCLOSURE..............................................................5
3.13 REGISTRATION RIGHTS.....................................................6
3.14 TITLE TO PROPERTY AND ASSETS............................................6
3.15 TAX RETURNS AND PAYMENTS................................................6
3.16 MINUTE BOOKS............................................................6
3.17 LABOR AGREEMENTS AND ACTIONS............................................6
3.18 CERCLA/SUPERFUND REQUIREMENTS...........................................7
3.19 RELATED-PARTY TRANSACTIONS..............................................8
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3.20 PERMITS.................................................................8
3.21 EMPLOYEE BENEFIT PLANS..................................................8
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
4.1 EXPERIENCE...............................................................9
4.2 INVESTMENT...............................................................9
4.3 RULE 144................................................................10
4.4 NO PUBLIC MARKET........................................................10
4.5 AUTHORIZATION...........................................................10
4.6 FINDER'S FEES...........................................................10
SECTION 5
CONDITIONS TO CLOSING OF PURCHASERS
5.1 REPRESENTATIONS AND WARRANTIES CORRECT..................................11
5.2 COVENANTS...............................................................11
5.3 OPINION OF COMPANY'S COUNSEL............................................11
5.4 BLUE SKY................................................................11
5.5 RESTATED CERTIFICATE OF INCORPORATION...................................11
5.6 INVESTOR RIGHTS AGREEMENT...............................................11
5.7 AMENDED AND RESTATED CO-SALE AGREEMENT..................................11
5.8 VOTING AGREEMENT........................................................11
5.9 AMENDED AND RESTATED COOPERATIVE AGREEMENT..............................11
5.10 COMPLIANCE CERTIFICATE.................................................11
5.11 QUALIFICATIONS.........................................................12
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
6.1 REPRESENTATIONS.........................................................12
6.2 COVENANTS...............................................................12
6.3 BLUE SKY................................................................12
6.4 RESTATED CERTIFICATE OF INCORPORATION...................................12
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6.5 QUALIFICATIONS..........................................................12
SECTION 7
INDEMNIFICATION
7.1 INDEMNIFICATION.........................................................12
7.2 BROKERS OR FINDERS......................................................13
SECTION 8
MISCELLANEOUS
8.1 GOVERNING LAW...........................................................13
8.2.CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF CALIFORNIA.......13
8.3.WAIVER OF JURY TRIAL....................................................14
8.4 SURVIVAL................................................................14
8.5 SUCCESSORS AND ASSIGNS..................................................14
8.6 ENTIRE AGREEMENT; AMENDMENT.............................................14
8.7 NOTICES.................................................................14
8.8 DELAYS OR OMISSIONS.....................................................15
8.9 CALIFORNIA CORPORATE SECURITIES LAW.....................................15
8.10 COUNTERPARTS...........................................................15
8.11 SEVERABILITY...........................................................15
8.12 TITLES AND SUBTITLES...................................................15
8.13 TRANSFER OF UNITS......................................................15
SIGNATURE BLOCKS..............................................................17
EXHIBITS
*EXHIBIT A - SCHEDULE OF PURCHAERS........................................EXA
*EXHIBIT B - CERTIFICATE OF INCORPORATION.................................EXB
*EXHIBIT C - SCHEDULE OF EXCEPTIONS.......................................EXC
*EXHIBITS D1 & D2 - HOLDERS OF SHARES OUTSTANDING.........................EXD
*EXHIBIT E - INVESTOR RIGHTS AGREEMENT....................................EXE
*EXHIBIT F - - AMENDED AND RESTATED CO-SALE AGREEMENT.....................EXF
*EXHIBIT G - AMENDED AND RESTATED VOTING AGREEMENT........................EXG
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*EXHIBIT H - AMENDED AND RESTATED COOPERATIVE AGREEMENT...................EXH
*EXHIBIT I - MATERIAL CONTRACTS AND OBLIGATIONS...........................EXI
*EXHIBITS J - COUNSEL OPINION.............................................EXJ
*EXHIBIT K - COMPLIANCE CERTIFICATE.......................................EXK
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CHEMNAVIGATOR.COM, INC.
SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANTS
PURCHASE AGREEMENT
This Agreement is made as of August 20, 1999, by and among
ChemNavigator.com, Inc., a Delaware corporation ("COMPANY"), and the entities
listed on the Schedule of Purchasers attached hereto as EXHIBIT A (collectively,
the "PURCHASER").
SECTION 1
AUTHORIZATION AND SALE OF SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANTS
1.1 AUTHORIZATION. The Company has authorized the sale and
issuance of up to one million eight hundred thousand (1,800,000) shares (the
"SHARES") of Series B Convertible Preferred Stock (the "SERIES B PREFERRED
STOCK") and warrants to purchase three hundred thousand eight hundred fifteen
(300,815) shares of Common Stock at a strike price of five dollars ($5.00) per
share of Common Stock (the "WARRANT"), the Series B Preferred Stock and the
Common Stock having the rights, preferences, privileges and restrictions as set
forth in the Second Amended and Restated Certificate of Incorporation
("CERTIFICATE OF INCORPORATION") in substantially the form attached hereto as
EXHIBIT B.
1.2 SALE OF PREFERRED AND WARRANT. Subject to the terms and
conditions hereof, each of the Purchasers agrees to purchase at the Closing (as
hereinafter defined) and the Company agrees to issue and sell to each Purchaser
that number of Shares and Warrant in the form of Units as specified opposite the
Purchaser's name in column 2 of the Schedule of Purchasers, at a per Unit
purchase price of TWO DOLLARS AND TWENTY EIGHT CENTS ($2.28) in the form of
payment as set forth in column 3. Each Purchaser and the Company agree that any
transfer of Units, Shares and Warrants by the Purchasers shall be in accordance
with the provisions of Section 8.13 of this Agreement. In the event that there
is more than one (1) Purchaser, the Company's agreements with each Purchaser are
separate agreements, and the sale of the Units to each Purchaser is a separate
sale.
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the
Series B Preferred Stock hereunder (the "CLOSING") is to be held at the offices
of Arena Pharmaceuticals, Inc. 6166 Nancy Ridge Drive, San Diego, California
92121, on the date hereof (the "CLOSING DATE").
2.2 DELIVERY. At each Closing, the Company will deliver to each
Purchaser participating in such Closing a certificate or certificates,
registered in such Purchaser's name as set forth on the Schedule of Purchasers,
representing the number of Shares designated in column 2 of the Schedule of
Purchasers to be purchased by such Purchaser at such Closing, and a
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separate Warrant Agreement, against payment of the aggregate purchase price,
by check payable to the Company, by wire transfer or by other instrument as
agreed to by the Company and Purchaser.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedule of Exceptions to Representations
and Warranties, attached hereto as EXHIBIT C, the Company represents and
warrants to the Purchasers as follows:
3.1 ORGANIZATION AND STANDING; CERTIFICATE AND BYLAWS;
SUBSIDIARIES. The Company is a corporation duly organized and existing under,
and by virtue of, the laws of the State of Delaware and is in good standing
under such laws. The Company has requisite corporate power and authority to own
and operate its properties and assets, and to carry on its business as presently
conducted and as proposed to be conducted. The Company is not presently
qualified to do business as a foreign corporation in any jurisdiction other than
California, and the failure to be so qualified will not have a material adverse
effect on the Company's business as now conducted or as now proposed to be
conducted. The Company has furnished the Purchasers with copies of its
Certificate of Incorporation, Restated Certificate of Incorporation, Second
Amended and Restated Certificate of Incorporation and Bylaws, and the Purchasers
have reviewed such documents. Said copies are true, correct and complete and
contain all amendments through the applicable Closing Date. Prior to the Closing
Date, the Company does not presently own or control, directly or indirectly, any
interest in any other corporation, association or other business entity (SEE
EXHIBIT C).
3.2 CORPORATE POWER. The Company will have at the applicable
Closing Date all requisite legal and corporate power and authority to execute
and deliver this Agreement and the Related Agreements (as defined below), to
sell and issue the Shares hereunder, to issue the Common Stock issuable upon
conversion of the Series B Preferred Stock and to carry out and perform its
obligations under the terms of this Agreement and the Related Agreements.
3.3 CAPITALIZATION. Immediately prior to the Closing, the
authorized capital stock of the Company will consist of fifteen million
(15,000,000) shares, Nine Million Eight Hundred Sixty Two Thousand Five Hundred
of which consist of Common Stock, par value $.0001, One Million Seventy Five
Thousand (1,075,000) shares of which are issued and outstanding, Three Hundred
Thousand Eight Hundred Fifteen (300,815) of which are reserved for issuance
pursuant to the Warrant, none of which are issued and outstanding, Five Million
One Hundred Thirty Seven Thousand Five Hundred (5,137,500) shares of Preferred
Stock, par value $.0001, Three Million Three Hundred Thirty Seven Thousand Five
Hundred (3,337,500) of which are designated Series A Preferred Stock, which are
issued and outstanding, One Million Eight Hundred Thousand (1,800,000) of which
are designated Series B Preferred Stock, none of which are issued and
outstanding. The outstanding shares of Common Stock and Series A Preferred Stock
have been duly authorized and validly issued to the persons listed on EXHIBIT D1
and D2, respectively, hereto, are fully paid and nonassessable, and have been
issued in compliance with applicable state and federal securities laws. The
rights, preferences, privileges and restrictions of
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the Shares are as stated in the Certificate of Incorporation. The Company has
reserved 300,000 shares of Common Stock for issuance pursuant to the exercise
of options granted under the Amended and Restated ChemNavigator.com, Inc.
1999 Equity Compensation Plan (the "1999 PLAN"). Except as set forth on
EXHIBIT C, there are no options, warrants or other rights to purchase any of
the Company's authorized and unissued capital stock.
3.4 AUTHORIZATION. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement, the Series
A and Series B Preferred Stock Investor Rights Agreement attached hereto as
EXHIBIT E (the "INVESTOR RIGHTS AGREEMENT"), the Amended and Restated Co-Sale
Agreement attached hereto as EXHIBIT F (the "AMENDED AND RESTATED CO-SALE
AGREEMENT") the Amended and Restated Voting Agreement attached hereto as EXHIBIT
G (the "AMENDED AND RESTATED VOTING AGREEMENT"), the Amended and Restated
Cooperative Voting Rights Agreement attached hereto as EXHIBIT H (the "AMENDED
AND RESTATED COOPERATIVE AGREEMENT"), the authorization, sale, issuance and
delivery of the Shares and the performance of all of the Company's obligations
hereunder and thereunder and has been taken or will be taken prior to the
Closing. This Agreement and the Investor Rights Agreement, the Amended and
Restated Co-Sale Agreement, the Amended and Restated Voting Agreement and the
Amended and Restated Cooperative Agreement (collectively, the "RELATED
AGREEMENTS"), when executed and delivered by the Company shall constitute valid
and binding obligations of the Company, enforceable in accordance with their
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debt and rules of law governing specific performance,
injunctive relief or other equitable remedies. The Shares and Warrant, when
issued in compliance with the provisions of this Agreement, will be validly
issued, will be fully paid and nonassessable, and will have the rights,
preferences and privileges described in the Certificate of Incorporation and
will be free of restrictions on transfer other than under this Agreement and
applicable federal and state securities laws. Based in part upon the
representations of the Purchasers in this Agreement, the Shares and Warrant will
be issued in compliance with all applicable United States of America federal and
state securities laws. The Common Stock issuable upon conversion of the Shares
has been duly and validly reserved for issuance and upon issuance in accordance
with the terms of the Certificate of Incorporation, will be duly and validly
issued, fully paid and non-assessable and will be issued in compliance with all
applicable United States of America federal and state securities laws and will
be free of restrictions on transfer other than under this Agreement and
applicable United States of America federal and state securities laws.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME. The
Company is not in violation or default of any term of its Certificate of
Incorporation or Bylaws, or of any term or provision of any mortgage,
indebtedness, indenture, contract, agreement, instrument, judgment, order, writ
or decree, and as of the Closing Date is not in violation of any statute, rule
or regulation applicable to the Company. The execution, delivery and performance
of and compliance with this Agreement and the Related Agreements and the
issuance of the Shares and the Common Stock issuable upon the conversion of the
Shares, have not resulted and will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and giving of notice, a
default under the Company's Certificate of Incorporation or Bylaws or any of
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its agreements, nor result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company.
3.6 GOVERNMENTAL CONSENT. No consent, approval or authorization of
or designation, declaration or filing with any United States of America federal
or state governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Agreement, or the
offer, sale or issuance of the Warrant and of the Shares (and the Common Stock
issuable upon conversion of the Shares), respectively, or the consummation of
any other transaction contemplated hereby, except (a) qualification (or taking
such action as may be necessary to secure an exemption from qualification, if
available) of the offer and sale of the Warrant and of the Shares (and the
Common Stock issuable upon conversion of the Shares), respectively, under state
securities laws, which filings and qualifications, if required, will be
accomplished in a timely manner, and (b) filing of a notice pursuant to
Regulation D of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
which filing will be accomplished in a timely manner.
3.7 LITIGATION. There is no action, suit or proceeding pending or
currently threatened against the Company which questions the validity of this
Agreement or the Related Agreements or the right of the Company to enter into
this Agreement or the Related Agreements, or to consummate the transactions
contemplated hereby or thereby, or which might result, either individually or in
the aggregate, in any material adverse changes in the assets, condition, affairs
or prospects of the Company, financial or otherwise, or any change in the
current equity ownership of the Company, nor is the Company aware that there is
any basis for the foregoing. The Company is not a party or subject to provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit or proceeding by the Company
currently pending or which the Company intends to initiate.
3.8 PATENTS AND TRADEMARKS. Other than as set forth in EXHIBIT C,
the Company (i) has sufficient title and ownership of the patents, trademarks,
service marks, trade names, copyrights, trade secrets, information, proprietary
rights and processes necessary for the operation of its business as now
conducted without any conflict with or infringement of the rights of others and
(ii) believes it can develop or obtain on terms which will not adversely affect
the business of the Company sufficient title and ownership of such items listed
in clause (i) as will be necessary for the conduct of its business as intended
to be conducted without any conflict with or infringement of the rights of
others. There are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, 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, proprietary rights and processes of any other person or entity. The
Company has not received any communications alleging that the Company has
violated or, by conducting its business as now conducted, 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. 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 the use of such employee's best efforts to promote the
interests of the Company or that would conflict with the Company's business as
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proposed to be conducted. Neither the execution nor delivery of this
Agreement, nor the carrying on of the Company's business by the employees of
the Company, nor the conduct of the Company's business as proposed, will, to
the Company's knowledge, after due inquiry, 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. Other than as set forth on EXHIBIT C, the Company does not
believe it is utilizing or will be necessary to utilize any inventions of any
of its employees (or people it currently intends to hire) made prior to their
employment by the Company.
3.9 MATERIAL CONTRACTS AND OBLIGATIONS. The Company has made
available to the Purchasers who so request copies of all of the Company's
material contracts, which are set forth on EXHIBIT I attached hereto.
3.10 EMPLOYEE AGREEMENTS. Each employee and officer of the Company
has executed an agreement with the Company regarding confidentiality of
proprietary information and assignment of inventions. The Company, after
reasonable investigation, is not aware that any of its employees is in
violation thereof, and the Company will use its best efforts to prevent any
such violation.
3.11 AGREEMENTS; ACTION.
(a) Other than as set forth in EXHIBIT C, and except for
agreements explicitly contemplated hereby, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, affiliates, or any affiliate thereof.
(b) Other than as set forth in EXHIBIT C, there are no
agreements, understandings, instruments, contracts or proposed transactions
to which the Company is a party or by which it is bound that involve (i)
obligations of, or payments to the Company in excess of, $50,000, or (ii) the
license of any patent, copyright, trade secret or other proprietary right to
or from the Company.
(c) Other than as set forth in EXHIBIT C, the Company has not,
subsequent to August 20, 1999, except for repurchases of options, at cost,
from terminated employees, (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 incurred
any other liabilities 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.
(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.
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(e) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Certificate of Incorporation or Bylaws which adversely affects its business as
now conducted or as proposed to be conducted, its properties or its financial
condition.
3.12 DISCLOSURE. The Company has fully provided: (i) each Purchaser
with all the information which such Purchaser has requested for deciding whether
to acquire the Warrant and the shares of Series B Preferred Stock; and (ii) all
information that the Company believes is reasonably necessary to enable such
Purchaser to make such decision. Additionally, all agreements referenced in
EXHIBIT C of this Agreement have been provided to Purchasers prior to the
Closing Date, and Purchases acknowledge that all such agreements have been fully
reviewed by Purchaser and/or its authorized representative. This Agreement and
all schedules and Exhibits attached hereto do not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements herein or therein not misleading.
3.13 REGISTRATION RIGHTS. Except as contemplated by this Agreement
and except as provided for in the Series A Convertible Preferred Stock Purchase
Agreement dated June 30, 1999, the Company has not granted or agreed to grant
any registration rights, including piggyback rights, to any person or entity.
3.14 TITLE TO PROPERTY AND ASSETS. Other than as set forth in
EXHIBIT C, the Company owns its property and assets free and clear of all
mortgages, liens, loans and encumbrances, except such encumbrances and liens
that arise in the ordinary course of business and do not materially impair the
Company's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to the best of its knowledge, holds a valid leasehold or sublease interest
free of any liens, claims or encumbrances.
3.15 TAX RETURNS AND PAYMENTS. The Company will file all tax
returns and reports as required by law. These returns and reports shall be true
and correct in all material respects. The Company shall pay all taxes and other
assessments due. The Company has not elected pursuant to the Internal Revenue
Code of 1986, as amended (the "CODE"), to be treated as a Subchapter S
corporation or a collapsible corporation pursuant to Section 1362(a) or Section
341(f) of the Code, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation
or amortization) that would have a material effect on the Company, its financial
condition, its business as presently conducted or proposed to be conducted or
any of its properties or material assets. The Company has never had any tax
deficiency proposed or assessed against it and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax or
governmental charge. None of the Company's federal income tax returns and none
of its state income or franchise tax or sales or use tax returns has ever been
audited by governmental authorities. The Company has not incurred any taxes,
assessments or governmental charges other than in the ordinary course of
business and the Company has made adequate provisions on its books of account
for all taxes, assessments and governmental charges with respect to its
business, properties and operations for such period. The Company has withheld or
collected from each payment made to each of its employees, the amount of all
taxes (including, but not limited to, federal income taxes, Federal
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Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositories.
3.16 MINUTE BOOKS. The minute books of the Company have been made
available to the Purchasers and contain a complete summary of all meetings of
directors and stockholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material respects.
3.17 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company (as such business is presently
conducted and as it is proposed to be conducted), nor is the Company aware of
any labor organization activity involving its employees. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
The employment of each officer and employee of the Company is terminable at the
will of the Company. To the Company's knowledge, the Company has complied in all
material respects with all applicable state and federal equal employment
opportunity and other laws related to employment.
3.18 CERCLA/SUPERFUND REQUIREMENTS.
SEE EXHIBIT C with respect to this Section 3.18.
(a) The Company, the operations of its business, and any real
property that the Company owns, leases, subleases or otherwise occupies or uses
(the "PREMISES") are in compliance in all material respects with all applicable
Environmental Laws (as defined below) and orders or directives of any
governmental authorities having jurisdiction under such Environmental Laws
including, without limitation, any Environmental Laws or orders or directives
with respect to any cleanup or remediation of any release or threat of release
of Hazardous Substances.
(b) The Company has not received any citation, directive,
letter or other communication, written or oral, or any notice of any
proceedings, claims or lawsuits, from any person, entity or governmental
authority arising out of the ownership or occupation of the Premises, or the
conduct of its operations.
(c) The Company has obtained and is maintaining in full force
and effect all necessary permits, licenses and approvals required by any
Environmental Laws applicable to the Premises and the business operations
conducted thereon (including operations conducted by tenants on the Premises)
and is in compliance with all such permits, licenses and approvals.
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(d) The Company has not caused, or allowed a release, or a
threat of release, of any Hazardous Substance unto, nor to the best of the
Company's knowledge, after due inquiry, has the Premises ever been subject to a
release, or a threat of a release, of any Hazardous Substance.
(e) The term "ENVIRONMENTAL LAWS" shall mean any federal,
state or local law, ordinance or regulation pertaining to the protection of
human health or the environment including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601,
et seq., Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections
11001, et seq., and the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901, et seq.
(f) The term "HAZARDOUS SUBSTANCE" shall mean any substance
regulated as a hazardous waste, substance or material under Environmental Laws,
and shall include oil and petroleum products, asbestos, polychlorinated
biphenyls and urea formaldehyde.
3.19 RELATED-PARTY TRANSACTIONS. Other than as is set forth in
EXHIBIT C, no employee, officer or director of the Company or member of his or
her immediate family is indebted to the Company, nor is the Company indebted (or
committed to make loans or extend or guarantee credit) to any of them. To the
best of the Company's knowledge, none of such persons has any direct or indirect
ownership 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
that competes with the Company, except that employees, officers or directors of
the Company and members of their immediate families may own stock in publicly
traded companies that may compete with the Company. To the best of the Company's
knowledge, no officer or director or any member of their immediate families is,
directly or indirectly, interested in any material contract with the Company.
3.20 PERMITS. 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, prospects, or financial condition of the Company, and the
Company believes that 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.
3.21 EMPLOYEE BENEFIT PLANS. Neither the Company nor any ERISA
Affiliate maintains or contributes to or, at any time has had any obligation to
maintain or contribute to, any Guaranteed Pension Plan (as defined below) or
Multiemployer Plan (as defined below). With respect to each Employee Benefit
Plan (as defined below) and as listed on EXHIBIT C, to the extent applicable,
(a) Each such Employee Benefit Plan has been maintained and
operated in all material respects in compliance with its terms and with all
applicable provisions of the Employee
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Retirement Income Security Act of 1974, as amended ("ERISA"), the Code and
all applicable regulations, rulings and other authority issued thereunder;
(b) All contributions required by law to have been made under
each such Employee Benefit Plan (without regard to any waivers granted under
Section 412 of the Code) to any fund or trust established thereunder or in
connection therewith have been made by the due date thereof;
(c) Each such Employee Benefit Plan intended to qualify under
Section 401(a) of the Code is the subject of a favorable unrevoked determination
letter issued by the Internal Revenue Service as to its qualified status under
the Code, which determination letter may still be relied upon as to such tax
qualified status, and no circumstances have occurred since the date of such
determination that would adversely affect the tax qualified status of any such
Employee Benefit Plan; each trust created under any such Employee Benefit Plan
is exempt from tax under Section 501(a) of the Code and has been so exempt
during the period from creation to date;
(d) None of such Employee Benefit Plans that are "employee
welfare benefit plans" as defined in Section 3(1) of ERISA provides for
continuing benefits or coverage for any participant or beneficiary of a
participant after such participant's termination of employment, except as
required by applicable law, including Section 4980B of the Code and Section 601
of ERISA; and
(e) The term "EMPLOYEE BENEFIT PLAN" means any employee
benefit plan within the meaning of Section 3(3) of ERISA maintained or
contributed to by the Company or any ERISA Affiliate, other than a Multiemployer
Plan.
(f) The term "ERISA AFFILIATE" means any Person that is
treated as a single employer with the Company under Section 414 of the Code.
(g) The term "GUARANTEED PENSION PLAN" means any employee
pension benefit plan within the meaning of Section 3(2) of ERISA maintained or
contributed to by the Company or any ERISA Affiliate, the benefits of which are
guaranteed on termination in full or in part by the Pension Benefit Guarantee
Corporation pursuant to Title IV of ERISA, other than a Multiemployer Plan.
(h) The term "MULTIEMPLOYER PLAN" means a multiemployer plan
within the meaning of Section 3(37) of ERISA.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby severally represents and warrants to the Company
with respect to the purchase of the Warrant and of the shares of Series B
Preferred Stock, respectively, as follows:
4.1 EXPERIENCE. The Purchaser has substantial experience in
evaluating and participating and/or investing (as the case may be) 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.
4.2 INVESTMENT. The Purchaser is acquiring the Warrant and the
shares of Series B Preferred Stock and the underlying Common Stock for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof. The Purchaser
understands that the Warrant and the shares of Series B Preferred Stock to be
purchased and the underlying Common Stock may not be sold, transferred or
otherwise disposed of without registration under the Securities Act or by reason
of a specific exemption from the registration provisions of the Securities Act,
the availability of which depends upon, among other things, the bona fide nature
of the investment intent and the accuracy of such Purchaser's representations as
expressed herein. Each Purchaser that is not a corporation is an "accredited
investor" within the meaning of Regulation D, Rule 501(a), promulgated by the
Securities and Exchange Commission. The acquisition of the Warrant and of the
shares of Series B Preferred Stock and the underlying Common Stock by the
Purchaser will be made in compliance with all laws outside of the United States
of America to which the Purchaser is subject.
4.3 RULE 144. The Purchaser acknowledges that the Warrant and of
the shares of Series B Preferred Stock and the underlying Common Stock must be
held indefinitely unless subsequently registered under the Securities Act or
unless an exemption from such registration is available. The Purchaser is aware
of the provisions of Rule 144 promulgated under the Securities Act which permit
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the existence
of a public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions directly with a
"market maker" and the number of shares being sold during any three-month period
not exceeding specified limitations.
4.4 NO PUBLIC MARKET. The Purchaser understands that no public
market now exists for any of the securities issued by the Company and that the
Company has made no assurances that a public market will ever exist for the
Company's securities.
4.5 AUTHORIZATION. This Agreement when executed and delivered by
the Purchaser will constitute a valid and legally binding obligation of the
Purchaser, enforceable in accordance
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with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
4.6 FINDER'S FEES. The Purchasers have not incurred, and will not
incur, directly or indirectly, as a result of any action taken by the Company,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASERS
The Purchaser's obligations to purchase shares of Series B Preferred
Stock and the Warrant at the Closing Date are, at the option of such Purchaser,
subject to the fulfillment of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
as of the Closing Date.
5.2 COVENANTS. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with unless waived in writing by the
Purchaser.
5.3 OPINION OF COMPANY'S COUNSEL. The Purchasers shall have
received from Allen, Matkins, Leck, Gamble & Mallory, LLP, counsel to the
Company, an opinion addressed to them, dated the Closing Date, in substantially
the form attached hereto as EXHIBIT J.
5.4 BLUE SKY. The Company shall have obtained all necessary state
securities law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of the
Warrant and Shares and the Common Stock issuable upon conversion of the Shares.
5.5 SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION. The
Second Amended and Restated Certificate of Incorporation shall have been filed
with the Delaware Secretary of State.
5.6 INVESTOR RIGHTS AGREEMENT. The Series A and Series B Investor
Rights Agreement in the form attached hereto as EXHIBIT E shall have been
executed and shall be binding on the parties thereto.
5.7 AMENDED AND RESTATED CO-SALE AGREEMENT. The Amended and
Restated Co-Sale Agreement in the form attached hereto as EXHIBIT F shall have
been executed and shall be binding on the parties thereto.
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5.8 AMENDED AND RESTATED VOTING AGREEMENT. The Amended and
Restated Voting Agreement in the form attached hereto as EXHIBIT G shall have
been executed and shall be binding on the parties thereto.
5.9 AMENDED AND RESTATED COOPERATIVE AGREEMENT. The Amended and
Restated Cooperative Agreement in the form attached hereto as EXHIBIT H shall
have been executed and shall be binding on the parties thereto
5.10 COMPLIANCE CERTIFICATE. The Company shall have delivered to
the Purchasers a certificate of the Company in substantially the form attached
hereto as EXHIBIT K, executed by the President of the Company, dated the Closing
Date, and certifying, among other things, to the fulfillment of the conditions
specified in Sections 5.1, 5.2 and 5.5 of this Agreement.
5.11 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares and the Warrant
at the Closing Date is, at the option of the Company, subject to the fulfillment
of the following conditions:
6.1 REPRESENTATIONS. The representations made by the Purchasers in
Section 4 hereof shall be true and correct as of the Closing Date.
6.2 COVENANTS. All covenants, agreements, and conditions contained
in this Agreement to be performed by the Purchasers on or prior to the Closing
Date shall have been performed or complied with unless waived in writing by the
Company.
6.3 BLUE SKY. The Company shall have obtained all necessary state
securities law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of the Shares
and the Common Stock issuable upon conversion of the Shares.
6.4 SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION. The
Second Amended and Restated Certificate of Incorporation shall have been filed
with the Delaware Secretary of State.
6.5 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.
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SECTION 7
INDEMNIFICATION; BROKERS OR FINDERS
7.1 INDEMNIFICATION. Notwithstanding any disclosures made in this
Agreement or EXHIBIT C hereto or any knowledge acquired by any Purchaser, the
Company hereby agrees to indemnify, exonerate and hold each of the Purchasers
and their (if applicable) general and limited partners and their respective
shareholders, officers, directors, employees and agents (the "INDEMNITEES") free
and harmless from and against any and all actions, causes of action or suits
brought against them by third parties ("THIRD PARTY CLAIMS"), losses,
liabilities, damages and expenses, including, without limitation, reasonable
attorneys' fees and disbursements (collectively, "DAMAGES") arising from any
such Third Party Claim, incurred in the capacity as a Purchaser by any of the
Indemnitees as a result of or relating to (i) any transaction by the Company
financed or to be financed in whole or in part, directly or indirectly, with
proceeds from the sale of any of the Warrant and Shares, except for those
transactions which have been approved by the Company's Board of Directors
following the date hereof, (ii) the execution, delivery, performance or
enforcement of this Agreement, the Related Agreements or any other agreement
contemplated hereby or thereby (including, without limitation, any failure by
the Company to comply with any of its covenants or any breach of its
representations and warranties in this Agreement, the Related Agreements or any
other agreement contemplated hereby or thereby) except where such Damages are
caused directly by the actions of the Indemnitee in violation of its obligations
under such agreements, (iii) any violation by the Company of any Environmental
Laws, or (iv) the investigation or remediation of offsite locations at which the
Company or its predecessors are alleged to have directly or indirectly disposed
of Hazardous Materials.
7.2 BROKERS OR FINDERS. The Company shall hold harmless and
indemnify each of the Purchasers from and against any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement incurred, directly or indirectly, as a result of any action taken
by the Company, and each Purchaser shall hold harmless and indemnify the Company
and the other Purchasers from and against any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement incurred, directly or indirectly, as a result of any action taken
by such Purchaser.
SECTION 8
MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the internal laws of the State of Delaware, without respect to
provisions concerning the conflict of laws that would otherwise require
application of the substantive law of another jurisdiction.
8.2. CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF CALIFORNIA.
(a) Each of the parties hereto hereby consents to the
exclusive jurisdiction of the courts of the State of California and the United
States District Court for the Southern District
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of California, as well as to the jurisdiction of all courts to which an
appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of, or in connection with, this Agreement or any
of the Related Agreements or any of the transactions contemplated hereby or
thereby.
(b) Each party hereby expressly waives any and all rights to
bring any suit, action or other proceeding in or before any court or tribunal
other than the courts of the State of California and covenants that it shall not
seek in any manner to resolve any dispute other than as set forth in this
Section 8 or to challenge or set aside any decision, award or judgment obtained
in accordance with the provisions hereof.
(c) Each of the parties hereto hereby expressly waives any and
all objections it may have to venue, including, without limitation, the
inconvenience of such forum, in any of such courts. In addition, each of the
parties consents to the service of process by personal service or any manner in
which notices may be delivered hereunder in accordance with Section 8.7.
8.3 WAIVER OF JURY TRIAL. Each of the parties hereto hereby
voluntarily and irrevocably waives trial by jury in any action or other
proceeding brought in connection with this agreement, any of the other
transaction documents or any of the transactions contemplated hereby or thereby.
8.4 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby.
8.5 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided, however, that the rights of a Purchaser to purchase the Warrant and
the Shares (and the Common Stock issuable upon conversion of the Shares) shall
not be assignable without the consent of the Company.
8.6 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
documents delivered pursuant hereto at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and no party shall be liable to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
PROVIDED, HOWEVER, that holders of 66 2/3% of the Series B Preferred Stock may
act in such regards on behalf of all such holders to waive, modify or amend, any
provisions hereof.
8.7 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, delivered by hand or by messenger, or sent by
facsimile and confirmed by mail addressed (a) if to a
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Purchaser, at such Purchaser's address set forth in EXHIBIT A, or at such
other address as such Purchaser shall have furnished to the Company in
writing, or (b) if to any other holder of any Shares, at such address as such
holder shall have furnished the Company in writing, or, until any such holder
so furnishes an address to the Company, then to and at the address of the
last holder of such Shares who has so furnished an address to the Company, or
(c) if to the Company, to ChemNavigator.com, Inc., 6166 Nancy Ridge Drive,
San Diego, CA 92121, fax (858) 625-2377 and addressed to the attention of the
Corporate Secretary, or at such other address as the Company shall have
furnished to the Purchasers.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally or sent by facsimile, or, if sent by mail, at the earlier
of its receipt or five (5) business days after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.
8.8 DELAYS OR OMISSIONS. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any holder
of any Shares, upon any breach or default of the Company under this Agreement,
shall impair any such right, power or remedy of such holder nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or waiver of or acquiescence in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any Purchaser of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any Purchaser, shall be cumulative
and not alternative.
8.9 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 IS UNLAWFUL UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
8.11 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement
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shall continue in full force and effect without said provision; provided that
no such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
8.12 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.13 TRANSFER OF UNITS Prior to the date on which a fully
underwritten, firm commitment offering by the Company of its Common Stock to the
public pursuant to an effective registration statement under the Securities Act
of 1933 or any comparable statement under any similar federal statute then in
force is secured, and which involves the listing of such Common Stock on a
nationally recognized U.S. exchange or the NASDAQ National Market ("QPO Date"),
the Units purchased by the Purchasers may be transferred or otherwise disposed,
to the extent and only if otherwise permitted under the terms and conditions of
this Agreement and/or the Related Agreements, as Units only and not the separate
component parts of the Units (I.E., Shares and Warrant); following the QPO Date,
such requirement shall automatically expire such that the Purchasers may
separately transfer or otherwise dispose, to the extent and only if otherwise
permitted under the terms and conditions of this Agreement and/or Related
Agreements, of the component parts of the Units.
8.14 EFFECTS OF AMENDMENT OR WAIVER. The Purchasers each
acknowledge and agree that by the operation of Section 8.6 hereof the holders of
66-2/3% of the Series B Preferred Stock will have the right to diminish or
eliminate all rights of Purchasers under this Agreement. The foregoing shall not
be construed to grant any right to affect any rights of (i) the holders of any
other preferred stock (and Common Stock issued upon conversion thereof), or (ii)
the Company.
8.15 RIGHTS OF INVESTORS. Any holder of the Series B Preferred
Stock (and Common Stock issued upon conversion thereof) shall have the absolute
right to exercise or refrain from exercising any right or rights that such
holder may have by reason of this Agreement or any Series B Preferred Stock
(including, without limitation, the right to consent to the waiver of any
obligation of the Company under this Agreement and to enter into any agreement
with the Company for the purpose of modifying this Agreement or any other
agreement affecting any such modification), and such holder shall not incur any
liability to any other holder or holders of the Series B Preferred Stock (or
Common Stock issued upon exercise thereof) with respect to exercising or
refraining from exercising any such right or rights.
8.16 EXCULPATION AMONG INVESTORS. Each Purchaser acknowledges that
it is not relying upon any person, firm 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 not the respective
controlling persons, officers, directors, partners, agents or employees of such
Purchaser shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Series B Preferred
Stock (or Common Stock issued upon conversion thereof).
--THE REST OF THIS PAGE IS INTENTIONALLY BLANK--
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The foregoing Agreement is hereby executed as of the date first above
written.
"COMPANY"
CHEMNAVIGATOR.COM, INC.
By: /s/ RICHARD P. BURGOON, JR.
---------------------------
Richard P. Burgoon, Jr.
Secretary
"PURCHASERS"
TREGA BIOSCIENCES, INC.
By: /s/ MICHAEL G. GREY
-----------------------------------
Name: Michael G. Grey
Title: President & Chief Executive Officer
H. GILL SAWHNEY MICHAEL STEINMETZ, PH.D.
By: /s/ H. GILL SAWHNEY By: /s/ MICHAEL STEINMETZ
------------------------- ------------------------------
Name (print): H. GILL SAWHNEY Name (print): MICHAEL STEINMETZ
----------------- ---------------------
...............................................................................
*THE EXHIBITS HAVE BEEN OMITTED FROM THIS AGREEMENT AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). THE OMITTED INFORMATION IS
CONSIDERED IMMATERIAL FROM AN INVESTOR'S PERSPECTIVE. THE COMPANY WILL
FURNISH SUPPLEMENTALLY A COPY OF ANY OF THE EXHIBITS TO THE SEC UPON REQUEST
OF THE SEC.
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Exhibit 10.2
STOCK AND WARRANT ISSUANCE AGREEMENT
THIS STOCK AND WARRANT ISSUANCE AGREEMENT (this "AGREEMENT") is made as
of August 20, 1999 (the "EFFECTIVE DATE") by and between CHEMNAVIGATOR.COM,
INC., a Delaware corporation (the "INVESTOR"), and TREGA BIOSCIENCES, INC., a
Delaware corporation (the "COMPANY"), with reference to the following facts:
A. Concurrently herewith, the Investor and the Company are
entering into that certain Series B Convertible Preferred Stock and Warrants
Purchase Agreement (the "INVESTOR AGREEMENT") with respect to the issuance to
the Company of the following (collectively, the "INVESTOR SECURITIES"):
(i) 1,176,666 shares of the Investor's Series B Preferred Stock;
and
(ii) a warrant to acquire up to 294,167 shares of the Investor's
Common Stock at a per share exercise price of $5.00.
B. The execution and delivery of this Agreement by the
parties, and the performance by the Company of the following obligations,
constitutes a portion of the consideration for the Investor's issuance to the
Company of the Investor Securities pursuant to the Investor Agreement:
(x) the issuance to the Investor of 1,000,000 shares (the "COMPANY
SHARES") of the Company's common stock, par value $0.001 per
share (the "COMMON STOCK"); and
(y) the issuance to the Investor of a warrant to acquire up to
294,167 shares of the Common Stock at a per share exercise
price of $5.00 in substantially the form attached hereto as
EXHIBIT A (the "COMPANY WARRANT"); PROVIDED, HOWEVER, that the
issuance of the Company Warrant is contingent upon the
Investor having a commercial website that includes the
Company's compounds thereon by December 31, 1999 (the "WARRANT
ISSUANCE CONDITION").
NOW, THEREFORE, in respect of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1.
ISSUANCE OF SECURITIES
1.1 COMPANY SHARES. Subject to the terms and conditions
hereof, at the Closing (as defined in the Investor Agreement), the Company
will issue and sell the Company Shares to the Investor, and the Investor will
buy the Company Shares from the Company, as contemplated by, and for the
consideration enumerated in, the Investor Agreement. At the Closing, the
Company will deliver to the Investor a stock certificate, issued in the
Investor's name, representing the Company Shares against payment to the
Company of the Investor Securities as contemplated by the Investor Agreement.
<PAGE>
1.2 COMPANY WARRANT. Subject to the terms and conditions
hereof, upon the satisfaction of the Warrant Issuance Condition (in the
reasonable estimation of the Company), the Company will issue the Company
Warrant to the Investor; PROVIDED, HOWEVER, that if the Warrant Issuance
Condition is not satisfied on or before December 31, 1999, then the Company's
obligations under this Section 1.2 (and with respect to the Company Warrant
in all respects) shall terminate and be of no further force or effect.
1.3 FURTHER ASSURANCES. The Company and the Investor hereby
covenant and agree, without the necessity of any further consideration, to
execute, acknowledge and deliver any and all such other documents and to take
any such other action as may be reasonably necessary to carry out the intent
and purposes of this Agreement.
SECTION 2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investor, as of the
Effective Date, as follows:
2.1 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 corporate authority to own and operate its properties and assets,
to carry on its business as now conducted, to enter into this Agreement, to
sell the Company Shares, to issue the Company Warrant (and the shares of
Common Stock underlying the Company Warrant) when required hereby (and by the
Company Warrant), and to carry out the other transactions contemplated
hereunder. The Company is qualified to transact business and is in good
standing in each jurisdiction in which the failure to qualify would be
reasonably likely to have a material adverse effect on the business,
properties, financial condition or results of operations of the Company (a
"MATERIAL ADVERSE EFFECT"). The Company has made available to the Investor
true, correct and complete copies of the Company's Amended and Restated
Certificate of Incorporation (the "RESTATED CERTIFICATE") and the Company's
By-laws (the "BY-LAWS"), each in the form as is in effect on the Effective
Date.
2.2 AUTHORIZATION. All corporate action on the part of the
Company necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and
the authorization, issuance and delivery of the Company Shares and the
Company Warrant to be issued and sold hereunder (as well as the shares of
Common Stock underlying the Company Warrant) has been taken or will be taken
prior to the Closing. This Agreement has been duly executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms (except
as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights and (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies). The execution, delivery and performance of this Agreement and
compliance with the provisions hereof by the Company will not:
(a) violate any provision of law, statute, ordinance, rule
or regulation or any ruling, writ, injunction, order, judgment or decree of
any court, administrative agency or other governmental body to which the
Company or its material assets are subject, the violation of which would have
a Material Adverse Effect.
(b) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with due notice or lapse
of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under (i) any material agreement, document,
instrument, contract, understanding, arrangement, note, indenture, mortgage
or lease to which the Company is a party or under which the Company or any of
its
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assets is bound or affected, (ii) the Restated Certificate or (iii) the
By-laws; or
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company
where the same would have a Material Adverse Effect.
2.3 VALID ISSUANCE OF COMMON STOCK. When issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, the Company Shares (and the shares of Common Stock issuable upon an
exercise of the Company Warrant, when issued pursuant to the terms of the
Company Warrant) will be validly issued and outstanding, fully paid and
nonassessable and not subject to any preemptive rights, rights of first
refusal or other similar rights imposed by the Company.
2.4 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part
of the Company is required in connection with the issuance and delivery to
the Investor of the Company Shares or the Company Warrant (or the shares of
Common Stock issuable upon an exercise of the Company Warrant), except those
filings which the Company shall have effected prior to the Closing or shall
thereafter effect in a timely manner.
2.5 FINANCIAL STATEMENTS.
(a) The Company has made available to the Investor the
Company's Annual Report on Form 10-K for the year ended December 31, 1998
(the "10-K") containing its audited financial statements (Balance Sheets,
Statements of Operations, Statements of Stockholders' Equity and Statements
of Cash Flow) at December 31, 1997 and 1998 and for the fiscal years then
ended (the "AUDITED FINANCIAL STATEMENTS"). The Audited Financial Statements
have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
indicated and fairly present the financial condition and consistent operating
results of the Company as of the dates, and for the periods, indicated
therein.
(b) Since December 31, 1998, the Company has filed all
required reports, schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) with the SEC (the
"COMPANY SEC DOCUMENTS"). As of their respective dates (or if amended, then
as of the date of the most recent amendment for each respective Company SEC
Document), the Company SEC Documents complied in all material respects with
the requirements of the Securities Act of 1993, as amended (the "SECURITIES
ACT"), or the Securities Exchange Act of 1934, as amended (the "SECURITIES
EXCHANGE ACT"), as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Documents, and no
Company SEC Document when filed (or if amended, then as of the date of the
most recent amendment for each respective Company SEC Document) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in Company SEC
Documents complied as to form, as of their respective dates of filing with
the SEC (or if amended, then as of the date of the most recent amendment for
each respective Company SEC Document), in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared (as amended, if applicable)
in accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present (as amended, if applicable) the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
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<PAGE>
2.6 OFFERING. Subject to the accuracy of the Investor's
representations set forth in Section 3 of this Agreement, the offer, sale and
issuance of the Company Shares and the Company Warrant to be issued in
conformity with the terms of this Agreement constitute transactions which are
exempt from the registration requirements of the Securities Act and from all
applicable state registration or qualification requirements, other than those
with which the Company has complied or will comply.
2.7 NASDAQ NATIONAL MARKET. Quotations for trading in shares
of Common Stock are presently included in the National Market System of The
Nasdaq Stock Market, Inc. ("NASDAQ") and the Company has not received any
notice from Nasdaq with respect to any pending action or intent by Nasdaq to
delist the Common Stock.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor hereby represents and warrants the following:
3.1 AUTHORIZATION. All corporate action on the part of the
Investor necessary for the authorization, execution and delivery of this
Agreement and the performance of all obligations of the Investor hereunder
has been taken or will be taken prior to the Closing. This Agreement has been
duly executed and delivered by the Investor and constitutes a valid and
legally binding obligation of the Investor, enforceable in accordance with
its terms (except as such enforcement is limited by (i) bankruptcy,
insolvency and similar laws affecting creditor rights and (ii) rules of law
governing specific performance, injunctive relief and other equitable
remedies). No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of the Investor is required in
connection with the consummation of the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
violation or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any provision of the
Investor's corporate charter or by-laws or any instrument, judgment, order,
writ, decree or contract to which the Investor is a party or by which it is
bound.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. By the Investor's
execution of this Agreement, the Investor hereby confirms that the Company
Shares and the Company Warrant (and any shares of Common Stock issuable upon
an exercise of the Company Warrant) will be acquired for investment for the
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and the Investor has no present
intention of selling, granting any participation or otherwise distributing
the Company Shares or the Company Warrant (or any shares of Common Stock
issuable upon an exercise of the Company Warrant). By executing this
Agreement, the Investor further represents that the Investor does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant any participation to such person or to any third person,
with respect to any of the Company Shares or the Company Warrant (or any
shares of Common Stock issuable upon an exercise of the Company Warrant). The
Investor represents that it has full power and authority to enter into this
Agreement.
3.3 DISCLOSURE OF INFORMATION. The Investor has received all
the information from the Company and its management that the Investor
considers necessary or appropriate for deciding whether to purchase the
Company Shares and the Company Warrant hereunder (and any shares of Common
Stock issuable upon an exercise of the Company Warrant). The Investor further
represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering
of the Company Shares and the
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<PAGE>
Company Warrant (and any shares of Common Stock issuable upon an exercise of the
Company Warrant). The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement.
3.4 INVESTMENT EXPERIENCE. The Investor has experience with
investments in companies in the development stage and acknowledges that it is
able to fend for itself and bear the economic risk of its investment. The
Investor has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of the investment in
the Company Shares and the Company Warrant hereunder (and any shares of
Common Stock issuable upon an exercise of the Company Warrant). The Investor
acknowledges that it has not been formed for the purpose of acquiring the
Company Shares or the Company Warrant or otherwise making an investment in
the Company.
3.5 RESTRICTED SECURITIES. The Investor understands that the
Company Shares and the Company Warrant (and any shares of Common Stock
issuable upon an exercise of the Company Warrant), when issued, will be
"RESTRICTED SECURITIES" (as defined in Rule 144 under the Securities Act
("RULE 144")) under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, the Investor represents that it is
familiar with Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
3.6 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, the Investor further
represents, warrants and agrees that it will not make any disposition of all
or any portion of the Company Shares or the Company Warrant (or any shares of
Common Stock issuable upon an exercise of the Company Warrant) unless:
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such Registration Statement; or
(b) The disposition is made pursuant to Rule 144 or similar
provisions of federal securities laws as in effect from time to time; or
(c) (i) The Investor shall have notified the Company of the
proposed disposition; and (ii) if requested by the Company, the Investor shall
have furnished the Company with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration of such
securities under the Securities Act.
3.7 LEGENDS. It is understood that the certificates evidencing
the Company Shares and the Company Warrant (and any shares of Common Stock
issuable upon an exercise of the Company Warrant) will bear substantially the
following legends:
(a) "These securities have not been registered under the
Securities Act of 1933. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel reasonably
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by applicable state securities laws.
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<PAGE>
SECTION 4.
CONDITIONS TO CLOSING OF INVESTOR
The Investor's obligation to participate in a Closing, for purposes of
this Agreement, is subject to the fulfillment as of the Closing of the following
conditions:
4.1 REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Company in Section 2 hereof shall
be true and correct in all material respects as of the date of the Closing
with the same force and effect as though such representations and warranties
had been made on and as of such date.
4.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement or the Investor Agreement to be performed or
complied with by the Company on or prior to the Closing shall have been
performed or complied with in all material respects.
4.3 PROCEEDINGS. All proceedings to have been taken and all
waivers and consents to be obtained in connection with the transactions
contemplated by this Agreement, insofar as the Company is concerned, shall
have been taken or obtained, and all documents incidental thereto shall be
satisfactory to the Investor and its counsel, and the Investor and its
counsel shall have received copies (executed or certified, as may be
appropriate) of all documents which the Investor or its counsel may
reasonably have requested in connection with such transactions.
4.4 LEGAL OPINION. The Investor shall have received from the
Company's counsel (which shall be reasonably satisfactory to the Investor)
such counsel's opinion, addressed to the Investor and dated the date of the
Closing, in substantially the form of EXHIBIT B hereto.
SECTION 5.
CONDITIONS TO CLOSING OF THE COMPANY
The Company's obligation to participate in the Closing, for purposes of
this Agreement, is subject to the fulfillment as of the Closing of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Investor in Section 3 hereof shall
be true and correct in all material respects as of the date of the Closing
with the same force and effect as though such representations and warranties
had been made on such date.
5.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement or the Investor Agreement to be performed or
complied with by the Investor on or prior to the Closing shall have been
performed or complied with in all material respects.
SECTION 6.
MUTUAL CONDITIONS OF CLOSING
The obligations of each of the Investor and the Company to consummate
the Closing, for purposes of this Agreement, are subject to the fulfillment as
of the date of the Closing of the following conditions:
6.1 CONSENTS. All consents, permits, approvals, qualifications
and registrations to be obtained or
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<PAGE>
effected with any governmental authority, including, without limitation,
necessary blue sky law permits and qualifications required by any state for
the offer and sale to the Investor of the Company Shares and the Company
Warrant, shall have been obtained or effected.
6.2 ABSENCE OF LITIGATION. There shall be no injunction,
actions, suits, proceedings or investigations pending or currently threatened
against the Company or the Investor which question the validity of this
Agreement or the right of the Company or the Investor to enter into it, or to
consummate the transactions contemplated hereby.
SECTION 7.
MISCELLANEOUS.
7.1 SURVIVAL. The warranties and representations of the Company
contained in this Agreement shall survive solely for a period of one year
following the Closing (and any related indemnification obligations, to the
extent not exercised within such one-year period, shall lapse promptly upon
the termination of such one-year period). The representations and warranties
of the Investor set forth in Section 3 hereof shall survive indefinitely
until, by their respective terms, they are no longer operative.
7.2 INDEMNIFICATION. Each party shall indemnify, defend and
hold the other party and the other party's directors, officers, employees,
agents and affiliates harmless from and against any and all liabilities,
losses, costs or damages, together with all reasonable costs and expenses
related thereto (including legal and accounting fees and expenses), arising
from, relating to, or connected with the untruth, inaccuracy or breach of any
representations, warranties or covenants of the indemnifying party contained
herein (if, in the instance of representations and warranties, the survival
period (with reference to Section 7.1 above) has not lapsed prior to the
making of any related claim for indemnification). The foregoing
indemnification shall survive the termination of this Agreement for any
reason.
7.3 REMEDIES. In case any one or more of the covenants or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may proceed to protect and enforce their rights either by suit in
equity or action at law, including, but not limited to, an action for damages
as a result of any such breach or an action for specific performance of any
such covenant or agreement contained in this Agreement. The rights, powers
and remedies of the parties under this Agreement are cumulative and not
exclusive of any other right, power or remedy which such parties may have
under any other agreement or law. No single or partial assertion or exercise
of any right, power or remedy of a party hereunder shall preclude any other
or further assertion or exercise thereof.
7.4 SUCCESSORS AND ASSIGNS. This Agreement and the rights and
duties of the parties set forth herein may not be assigned, in whole or in
part, without the prior written consent of the other party. Notwithstanding
the foregoing sentence, the Company may assign this Agreement, and the rights
and the duties of the Company set forth herein, to an entity or person which
purchases or otherwise acquires all or substantially all of its assets or
voting securities, so long as the successor agrees in writing to be bound by
all of the terms of this Agreement.
7.5 ENTIRE AGREEMENT. This Agreement, the Investor Agreement
and the other writings referred to herein or therein or delivered pursuant
hereto or thereto and which form a part hereof or thereof contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings,
whether written or oral, with respect thereto.
7.6 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of
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<PAGE>
Delaware (without regard to the conflict of law principles thereof).
7.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.8 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.9 FINDER'S FEE. In respect of the transactions and
arrangements contemplated hereby, (i) the Investor agrees to indemnify and to
hold harmless the Company from any liability for any commission or
compensation in the nature of a finder's fee (and the reasonable costs and
expenses of defending against such liability or asserted liability) for which
the Investor or any of its officers, partners, employees, or representatives
is responsible and (ii) the Company agrees to indemnify and hold harmless the
Investor from any liability for any commission or compensation in the nature
of a finder's fee (and the reasonable costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
7.11 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, in any jurisdiction, such
provision shall be ineffective, as to such jurisdiction, and the balance of
the Agreement shall be interpreted as if such provision were so excluded,
without invalidating the remaining provisions of this Agreement; and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the Effective Date.
CHEMNAVIGATOR.COM, INC.
By: /s/ JACK LIEF
---------------------------------------
Title: CHIEF EXECUTIVE OFFICER
By: /s/ RICHARD P. BURGOON, JR.
---------------------------------------
Title: SECRETARY
TREGA BIOSCIENCES, INC.
By: /s/ MICHAEL G. GREY
---------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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<PAGE>
EXHIBIT A
Form of Company Warrant
Filed herewith as exhibit 10.4
[attached]
<PAGE>
EXHIBIT B
Form of Closing Opinion
THIS EXHIBIT HAS BEEN OMITTED FROM THIS AGREEMENT AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"). THE OMITTED INFORMATION IS CONSIDERED
IMMATERIAL FROM AN INVESTOR'S PERSPECTIVE. THE COMPANY WILL FURNISH
SUPPLEMENTALLY A COPY OF THIS EXHIBIT TO THE SEC UPON REQUEST OF THE SEC.
[attached]
<PAGE>
Exhibit 10.3
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
NO.: W-B-001 NO. OF SHARES SUBJECT TO WARRANT: 294,167
HOLDER: TREGA BIOSCIENCES, INC.
DATE: AUGUST 20, 1999
WARRANT TO PURCHASE SHARES OF
THE COMMON STOCK OF
CHEMNAVIGATOR.COM, INC.
This is to certify that, for value received, TREGA BIOSCIENCES, INC., a
Delaware corporation (the "HOLDER"), is entitled to purchase, subject to the
provisions of this Warrant, from CHEMNAVIGATOR.COM, INC., a Delaware corporation
(the "COMPANY"), up to 294,167 shares of the common stock, $0.001 par value, of
the Company ("COMMON STOCK"), at an exercise price of $5.00 per share. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid therefor may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "WARRANT SHARES," and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "EXERCISE PRICE."
1. EXERCISE OF WARRANT. Subject to the provisions and conditions set
forth herein, this Warrant may be exercised in whole or in part at any time
during the period beginning on the date hereof and ending not later than 5:00
p.m. Pacific Time on August 20, 2009 (the "EXPIRATION DATE").
(a) METHODS. The Holder may exercise this Warrant, in whole or
in part, by either of the following methods:
(x) Delivery to the Company at its principal office of
(i) a written notice of the Holder's election to
exercise this Warrant (in the form attached hereto as
EXHIBIT A), which notice shall specify the number of
Warrant Shares to be purchased, (ii) this Warrant and
(iii) a sum equal to the aggregate Exercise Price
therefor payable by wire transfer to a bank account
specified by the Company or by such other method as
the Company and the Holder may otherwise agree; or
(y) In a "CASHLESS" or "NET-ISSUE" exercise by delivery
to the Company at its principal office of this
Warrant and a written notice of the Holder's election
to exercise this Warrant (in the form attached hereto
as EXHIBIT A and
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<PAGE>
marked to reflect the net-issue exercise), which
notice shall specify the number of shares of Common
Stock to be delivered to the Holder and the number of
shares of Common Stock with respect to which this
Warrant is being surrendered in payment of the
aggregate Exercise Price for the shares of Common
Stock to be delivered to the Holder. Upon such
exercise, the Holder shall be entitled to receive
shares equal to the value of this Warrant (or the
portion thereof being canceled) by surrender of this
Warrant to the Company together with notice of such
election in which event the Company shall issue to
the Holder a number of shares of the Common Stock
computed as of the date of surrender of this Warrant
to the Company using the following formula:
X = Y (A-B)
-------
A
Where:
X = the number of shares of Common Stock to be
issued to the Holder under this Section
1(a);
Y = the number of shares of Common Stock
purchasable under this Warrant, or any
lesser number of shares as to which this
Warrant is being exercised (at the date of
such calculation);
A = the fair market value of one Warrant Share
(at the date of such calculation);
B = the Exercise Price (as adjusted to the date
of such calculation).
(b) FAIR MARKET VALUE. For purposes of this Warrant, "FAIR
MARKET VALUE" of one share of Common Stock shall mean:
(1) the average closing price per share of the Common
Stock over the most recent ten (10) trading days on
the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or
(2) if not listed or traded on any such exchange, the
average last reported sales price per share on the
Nasdaq National Market or the Nasdaq Small-Cap Market
over the most recent ten (10) trading days, or
(3) if not listed or traded on any such exchange or
Nasdaq, the average, over the most recent ten (10)
trading days, of each such day's last bid and asked
price per share as reported in the "PINK SHEETS"
published by the National Quotation Bureau, Inc., or
(4) if such quotations are not available, the fair market
value per share of the Common Stock on the date such
notice was received by the Company as reasonably
determined by the Board of Directors of the Company.
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(c) NOTICE. Any notice of exercise given pursuant to this
Section 1 may be in the form attached hereto as EXHIBIT A. Upon delivery
thereof, the Company shall cause to be executed and delivered to the Holder
within five (5) business days a certificate or certificates representing the
aggregate number of fully-paid and nonassessable shares of Common Stock issuable
upon such exercise.
(d) CERTIFICATES. The stock certificate or certificates for
shares of Common Stock so delivered shall be in such denominations as may be
specified in the notice and shall be registered in the name of the Holder. Such
certificate or certificates shall be deemed to have been issued and the Holder
shall be deemed to have become a holder of record of such shares, including to
the extent permitted by law the right to vote such shares or to consent or to
receive notice as a stockholder, as of the time the notice is delivered to the
Company. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the certificate or certificates for shares of
Common Stock, deliver to the Holder a new Warrant dated the date it is issued,
evidencing the rights of the Holder to purchase the remaining shares of Common
Stock, which new Warrant shall in all other respects be identical to this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant and the Warrant shall be returned to the Holder.
(e) EXPENSES. The Company shall pay all expenses, transfer
taxes and other charges payable in connection with the preparation, issue and
delivery of stock certificates under this Section 1.
(f) VALID ISSUANCE. All shares of Common Stock issuable upon
the exercise of this Warrant shall be validly issued, fully paid and
nonassessable and free from all liens and other encumbrances thereon, other than
liens or other encumbrances created by the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of shares of the Common Stock as shall be required for
issuance and delivery upon exercise of this Warrant.
3. FRACTIONAL SHARES. The Company shall not be required to issue
fractions of shares on the exercise of this Warrant. If any fraction of a share
would, except for the provisions of this Section, be issuable on the exercise of
this Warrant, the Company will (1) if the fraction of a share otherwise issuable
is equal to or less than one-half, round down and issue to the Holder only the
largest whole number of shares of Common Stock to which the Holder is otherwise
entitled, or (2) if the fraction of a share otherwise issuable is greater than
one-half, round-up and issue to the Holder one additional share of Common Stock
in addition to the largest whole number of shares of Common Stock to which the
Holder is otherwise entitled.
4. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
such indemnification as the Company may in its discretion impose, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver to the Holder a new Warrant of like tenor and date.
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<PAGE>
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. ANTIDILUTION PROVISIONS. The Exercise Price and the number and kind
of securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time as hereinafter provided:
(a) STOCK DIVIDEND. In case the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, shall
subdivide the number of outstanding shares of Common Stock into a greater number
of shares or shall contract the number of outstanding shares of Common Stock
into a lesser number of shares, the Exercise Price then in effect shall be
adjusted, effective at the close of business on the record date for the
determination of stockholders entitled to receive such dividend or be subject to
such subdivision or contraction, to the price (computed to the nearest cent)
determined by dividing (x) the product obtained by multiplying the Exercise
Price in effect immediately prior to the close of business on such record date
by the number of shares of Common Stock outstanding prior to such dividend,
subdivision or contraction, by (y) the sum of the number of shares of Common
Stock outstanding immediately after such dividend, subdivision, or contraction.
(b) REORGANIZATION. If any capital reorganization or
reclassification of the capital stock of the Company (other than as set forth in
subsection (a) of this Section 6), or consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder shall thereafter have the
right to purchase and receive upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of Common Stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such Common Stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented by this Warrant had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interest of the Holder to
the end that the provisions of this Warrant (including, without limitation,
provisions for adjustment of the Exercise Price and of the number of shares
issuable upon the exercise of this Warrant) shall thereafter be applicable as
nearly as may be practicable in relation to any shares of stock, securities or
assets thereafter deliverable upon exercise of this Warrant. The Company shall
not effect any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase.
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(c) NUMBER OF SHARES. Upon each adjustment of the Exercise
Price pursuant to subsection (a) of this Section 6, the number of shares of
Common Stock specified in this Warrant shall thereupon evidence the right to
purchase that number of shares of Common Stock (calculated to the nearest
hundredth of a share of Common Stock) obtained by multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable immediately prior to such adjustment upon exercise of this
Warrant and dividing the product so obtained by the Exercise Price in effect
after such adjustment.
(d) CONTINUING EFFECTIVENESS. Irrespective of any adjustments
of the number or kind of securities issuable upon exercise of this Warrant or
the Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number of shares of Common Stock and Exercise Price as are
stated in similar Warrants previously issued.
(e) ACCOUNTING FIRM. The Company may, at its sole option,
retain the independent public accounting firm regularly retained by the Company,
or another firm of independent public accountants of recognized standing
selected by the Company's Board of Directors, to make any computation required
under this Section 6 and a certificate signed by such firm shall be conclusive
evidence of any computation made under this Section 6.
(f) ADJUSTMENT CERTIFICATE. Whenever there is an adjustment in
the Exercise Price or in the number or kind of securities issuable upon exercise
of this Warrant, or both, as provided in this Section 6, the Company shall (i)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, setting forth the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of this Warrant after such adjustment; and (ii) cause a notice stating
that such adjustment has been effected and stating the Exercise Price then in
effect and the number and kind of securities issuable upon exercise of this
Warrant to be sent to the Holder.
(g) ADJUSTMENT EVENTS. The Exercise Price and the number of
shares issuable upon exercise of this Warrant shall not be adjusted except in
the manner and only upon the occurrence of the events heretofore specifically
referred to in this Section 6.
(h) BOARD ACTIONS. The Board of Directors of the Company may,
in its sole discretion, (i) reduce the Exercise Price, (ii) increase the number
of shares of Common Stock issuable upon exercise of this Warrant and/or (iii)
provide for the issuance of other securities (in addition to the shares of
Common Stock otherwise issuable upon exercise of this Warrant) upon exercise of
this Warrant.
7. NO TRANSFERS. The Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may not be sold or otherwise disposed of
unless the Holder provides the Company with an opinion of counsel in form and
substance satisfactory to the Company that the Warrant Shares or such other
security may be legally transferred without violating the Securities Act of
1933, as amended (the "1933 ACT"), and any other applicable securities law and
then only
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against receipt of an agreement of the transferee to comply with the
provisions of this Section 7 with respect to any resale or other disposition
of such securities.
(a) ACKNOWLEDGEMENTS. The Holder, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares issuable upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will not
offer, sell or otherwise dispose of any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a violation
of the 1933 Act or any state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the Holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale.
(b) RESTRICTIVE LEGENDS. This Warrant shall (and any Warrant
issued in substitution for this Warrant shall) be stamped or otherwise imprinted
with a legend in substantially the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT."
Each stock certificate for Warrant Shares issued upon the exercise of this
Warrant and each stock certificate issued upon the direct or indirect transfer
of any such Warrant Shares shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
Notwithstanding the foregoing, the Holder may require the Company to issue a
stock certificate for Warrant Shares without a legend if (i) such Warrant
Shares, as the case may be, have been registered for resale under the 1933 Act
or sold pursuant to Rule 144 under the 1933 Act (or a successor rule thereto) or
(ii) the Holder has received an opinion of counsel reasonably satisfactory to
the Company that such registration is not required with respect to such Warrant
Shares.
8. OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of
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ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary.
CHEMNAVIGATOR.COM, INC.
By: /s/ Jack Lief
----------------------------
Name: Jack Lief
Title: Chief Executive Officer
Dated: August 20, 1999
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THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
EXERCISE FORM
(To be executed upon exercise of Warrant No.W-B-001)
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant, to purchase Warrant Shares and (check one):
_______ herewith tenders payment for _______ of the Warrant Shares
to the order of Chemnavigator.com, Inc. in the amount of
$_________ in accordance with the terms of the Warrant; or
_______ herewith tenders this Warrant for _______ Warrant
Shares pursuant to the "net issue" provisions of
Section 1 of the Warrant.
The undersigned requests that a certificate (or certificates) for such Warrant
Shares be registered in the name of the undersigned and that such certificate
(or certificates) be delivered to the undersigned's address below.
In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the Warrant Shares are being acquired for investment solely
for the account of the undersigned and not as a nominee for any other party, and
that the undersigned will not offer, sell or otherwise dispose of any such
Warrant Shares except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
Dated: ___________________.
Signature _____________________________________
Print Name:_____________________________________
Address: _____________________________________
_____________________________________
(City) (State) (Zip Code)
If said number of shares shall not be all the shares purchasable under the
Warrant, a new Warrant is to be issued in the name of the Holder for the balance
remaining of the shares purchasable thereunder.
*****************************
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<PAGE>
Exhibit 10.4
[NOTE: THIS WARRANT IS NOT TO BE ISSUED UNTIL THE WARRANT ISSUANCE CONDITION HAS
BEEN SATISFIED]
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
No.: 1999-AA1
Date: [______ __], 1999
WARRANT TO PURCHASE SHARES OF
THE COMMON STOCK OF
TREGA BIOSCIENCES, INC.
This is to certify that, for value received, CHEMNAVIGATOR.COM, INC, a
Delaware corporation (the "HOLDER"), is entitled to purchase, subject to the
provisions of this Warrant, from TREGA BIOSCIENCES, INC., a Delaware corporation
(the "COMPANY"), up to 294,167 shares of the common stock, $0.001 par value, of
the Company ("COMMON STOCK"), at an exercise price of $5.00 per share. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid therefor may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "WARRANT SHARES," and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "EXERCISE PRICE."
1. EXERCISE OF WARRANT. Subject to the provisions and conditions set
forth herein, this Warrant may be exercised in whole or in part at any time
during the period beginning on the date hereof and ending not later than 5:00
p.m. Pacific Time on August , 2009 (the "EXPIRATION DATE").
(a) METHODS. The Holder may exercise this Warrant, in whole or in
part, by either of the following methods:
(x) Delivery to the Company at its principal office of (i) a written
notice of the Holder's election to exercise this Warrant (in the
form attached hereto as EXHIBIT A), which notice shall specify
the number of Warrant Shares to be purchased, (ii) this Warrant
and (iii) a sum equal to the aggregate Exercise Price therefor
payable by wire transfer of immediately available funds to a
bank account specified by the Company or by such other method as
the Company and the Holder may otherwise agree; or
(y) In a "CASHLESS" or "NET-ISSUE" exercise by delivery to the
Company at its principal office of this Warrant and a written
notice of the Holder's election to exercise this Warrant (in
the form attached hereto as EXHIBIT A and marked to reflect
the net-issue exercise), which notice shall specify the number
of shares of Common Stock to be delivered to the Holder and the
number of shares of Common Stock with respect to which this
Warrant is being surrendered in payment of the aggregate
Exercise Price for the shares of Common Stock to
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be delivered to the Holder. Upon such exercise, the Holder
shall be entitled to receive shares equal to the value of
this Warrant (or the portion thereof being canceled) by
surrender of this Warrant to the Company together with notice of
such election in which event the Company shall issue to the
Holder a number of shares of the Common Stock computed as of the
date of surrender of this Warrant to the Company using the
following formula:
X = Y (A-B)
-------
A
Where: X = the number of shares of Common Stock to be issued to the
Holder under this Section 1(a);
Y = the number of shares of Common Stock purchasable under
this Warrant, or any lesser number of shares as to which
this Warrant is being exercised (at the date of such
calculation);
A = the fair market value of one Warrant Share (at the date of
such calculation);
B = the Exercise Price (as adjusted to the date of such
calculation).
(b) FAIR MARKET VALUE. For purposes of this Warrant, "FAIR
MARKET VALUE" of one share of Common Stock shall mean:
(1) the average closing price per share of the Common Stock over
the most recent ten (10) trading days on the principal
national securities exchange on which the Common Stock is
listed or admitted to trading, or
(2) if not listed or traded on any such exchange, the average
last reported sales price per share on the Nasdaq National
Market or the Nasdaq Small-Cap Market over the most recent
ten (10) trading days, or
(3) if not listed or traded on any such exchange or Nasdaq, the
average, over the most recent ten (10) trading days, of each
such day's last bid and asked price per share as reported in
the "PINK SHEETS" published by the National Quotation
Bureau, Inc., or
(4) if such quotations are not available, the fair market value
per share of the Common Stock on the date such notice was
received by the Company as reasonably determined by the
Board of Directors of the Company.
(c) NOTICE. Any notice of exercise given pursuant to this
Section 1 may be in the form attached hereto as EXHIBIT A. Upon delivery
thereof, the Company shall cause to be executed and delivered to the Holder
within five (5) business days a certificate or certificates representing the
aggregate number of fully-paid and nonassessable shares of Common Stock
issuable upon such exercise.
(d) CERTIFICATES. The stock certificate or certificates for
shares of Common Stock so delivered shall be in such denominations as may be
specified in the notice and shall be registered in the name of the Holder.
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<PAGE>
Such certificate or certificates shall be deemed to have been issued and the
Holder shall be deemed to have become a holder of record of such shares,
including to the extent permitted by law the right to vote such shares or to
consent or to receive notice as a stockholder, as of the time the notice is
delivered to the Company. If this Warrant shall have been exercised only in
part, the Company shall, at the time of delivery of the certificate or
certificates for shares of Common Stock, deliver to the Holder a new Warrant
dated the date it is issued, evidencing the rights of the Holder to purchase
the remaining shares of Common Stock, which new Warrant shall in all other
respects be identical to this Warrant, or, at the request of the Holder,
appropriate notation may be made on this Warrant and the Warrant shall be
returned to the Holder.
(e) EXPENSES. The Company shall pay all expenses, transfer
taxes and other charges payable in connection with the preparation, issue and
delivery of stock certificates under this Section 1.
(f) VALID ISSUANCE. All shares of Common Stock issuable upon
the exercise of this Warrant shall be validly issued, fully paid and
nonassessable and free from all liens and other encumbrances thereon, other
than liens or other encumbrances created by the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of
this Warrant such number of shares of the Common Stock as shall be required
for issuance and delivery upon exercise of this Warrant.
3. FRACTIONAL SHARES. The Company shall not be required to issue
fractions of shares on the exercise of this Warrant. If any fraction of a
share would, except for the provisions of this Section, be issuable on the
exercise of this Warrant, the Company will (1) if the fraction of a share
otherwise issuable is equal to or less than one-half, round down and issue to
the Holder only the largest whole number of shares of Common Stock to which
the Holder is otherwise entitled, or (2) if the fraction of a share otherwise
issuable is greater than one-half, round-up and issue to the Holder one
additional share of Common Stock in addition to the largest whole number of
shares of Common Stock to which the Holder is otherwise entitled.
4. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction)
of such indemnification as the Company may in its discretion impose, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver to the Holder a new Warrant of like tenor and date.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. ANTIDILUTION PROVISIONS. The Exercise Price and the number and
kind of securities purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time as hereinafter provided:
(a) STOCK DIVIDEND. In case the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon,
shall subdivide the number of outstanding shares of Common Stock into a
greater number of shares or shall contract the number of outstanding shares
of Common Stock into a lesser number of shares, the Exercise Price then in
effect shall be adjusted, effective at the close of business on the record
date for the determination of stockholders entitled to receive such dividend
or be subject to such subdivision or contraction, to the price (computed to
the nearest cent) determined by dividing (x) the product obtained by
multiplying the Exercise Price in effect immediately prior to the close of
business on such record date by the number of shares of Common Stock
outstanding prior to such dividend, subdivision or contraction, by (y) the
sum
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of the number of shares of Common Stock outstanding immediately after such
dividend, subdivision, or contraction.
(b) REORGANIZATION. If any capital reorganization or
reclassification of the capital stock of the Company (other than as set forth
in subsection (a) of this Section 6), or consolidation or merger of the
Company with another corporation, or the sale of all or substantially all of
its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby the Holder shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions specified in this Warrant and in lieu of the shares of Common
Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by this Warrant, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the number of
shares of such Common Stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented by this Warrant had
such reorganization, reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interest of the Holder to the end that the
provisions of this Warrant (including, without limitation, provisions for
adjustment of the Exercise Price and of the number of shares issuable upon
the exercise of this Warrant) shall thereafter be applicable as nearly as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon exercise of this Warrant. The Company shall not
effect any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase.
(c) NUMBER OF SHARES. Upon each adjustment of the Exercise
Price pursuant to subsection (a) of this Section 6, the number of shares of
Common Stock specified in this Warrant shall thereupon evidence the right to
purchase that number of shares of Common Stock (calculated to the nearest
hundredth of a share of Common Stock) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares
of Common Stock purchasable immediately prior to such adjustment upon
exercise of this Warrant and dividing the product so obtained by the Exercise
Price in effect after such adjustment.
(d) CONTINUING EFFECTIVENESS. Irrespective of any adjustments
of the number or kind of securities issuable upon exercise of this Warrant or
the Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number of shares of Common Stock and Exercise Price as are
stated in similar Warrants previously issued.
(e) ACCOUNTING FIRM. The Company may, at its sole option,
retain the independent public accounting firm regularly retained by the
Company, or another firm of independent public accountants of recognized
standing selected by the Company's Board of Directors, to make any
computation required under this Section 6 and a certificate signed by such
firm shall be conclusive evidence of any computation made under this Section
6.
(f) ADJUSTMENT CERTIFICATE. Whenever there is an adjustment
in the Exercise Price or in the number or kind of securities issuable upon
exercise of this Warrant, or both, as provided in this Section 6, the Company
shall (i) promptly file in the custody of its Secretary or Assistant
Secretary a certificate signed by the Chairman of the Board or the President
or a Vice President of the Company and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company, setting
forth the facts requiring such adjustment and the number and kind of
securities issuable upon exercise of this Warrant after such adjustment; and
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(ii) cause a notice stating that such adjustment has been effected and
stating the Exercise Price then in effect and the number and kind of
securities issuable upon exercise of this Warrant to be sent to the Holder.
(g) ADJUSTMENT EVENTS. The Exercise Price and the number of
shares issuable upon exercise of this Warrant shall not be adjusted except in
the manner and only upon the occurrence of the events heretofore specifically
referred to in this Section 6.
(h) BOARD ACTIONS. The Board of Directors of the Company may,
in its sole discretion, (i) reduce the Exercise Price, (ii) increase the
number of shares of Common Stock issuable upon exercise of this Warrant
and/or (iii) provide for the issuance of other securities (in addition to the
shares of Common Stock otherwise issuable upon exercise of this Warrant) upon
exercise of this Warrant.
7. NO TRANSFERS. This Warrant is not assignable. The Warrant Shares or
any other security issued or issuable upon exercise of this Warrant may not be
sold or otherwise disposed of unless the Holder provides the Company with an
opinion of counsel in form and substance satisfactory to the Company that the
Warrant Shares or such other security may be legally transferred without
violating the Securities Act of 1933, as amended (the "1933 ACT"), and any other
applicable securities law and then only against receipt of an agreement of the
transferee to comply with the provisions of this Section 7 with respect to any
resale or other disposition of such securities.
(a) ACKNOWLEDGEMENTS. The Holder, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares issuable upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will not
offer, sell or otherwise dispose of any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a
violation of the 1933 Act or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing,
in a form satisfactory to the Company, that the Warrant Shares so purchased
are being acquired solely for the Holder's own account and not as a nominee
for any other party, for investment, and not with a view toward distribution
or resale.
(b) RESTRICTIVE LEGENDS. This Warrant shall (and any Warrant
issued in substitution for this Warrant shall) be stamped or otherwise
imprinted with a legend in substantially the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
Each stock certificate for Warrant Shares issued upon the exercise of this
Warrant and each stock certificate issued upon the direct or indirect transfer
of any such Warrant Shares shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT."
Notwithstanding the foregoing, the Holder may require the Company to issue a
stock certificate for Warrant Shares
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without a legend if (i) such Warrant Shares, as the case may be, have been
registered for resale under the 1933 Act or sold pursuant to Rule 144 under
the 1933 Act (or a successor rule thereto) or (ii) the Holder has received an
opinion of counsel reasonably satisfactory to the Company that such
registration is not required with respect to such Warrant Shares.
8. OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary.
TREGA BIOSCIENCES, INC.
By: ______________________________________
Name: Michael G. Grey
Title: President & Chief Executive Officer
Dated: [______ __], 1999
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THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
EXERCISE FORM
(To be executed upon exercise of Warrant No. 1999-AA1)
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant, to purchase Warrant Shares and (check one):
/ / herewith tenders payment for of the Warrant Shares to
the order of Trega Biosciences, Inc. in the amount of
$ in accordance with the terms of this Warrant; or
/ / herewith tenders this Warrant for Warrant Shares
pursuant to the "net- issue" provisions of Section 1 of the
Warrant.
The undersigned requests that a certificate (or certificates) for such Warrant
Shares be registered in the name of the undersigned and that such certificate
(or certificates) be delivered to the undersigned's address below.
In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the Warrant Shares are being acquired for investment solely
for the account of the undersigned and not as a nominee for any other party, and
that the undersigned will not offer, sell or otherwise dispose of any such
Warrant Shares except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
Dated: ___________________.
Signature ___________________________________
___________________________________
(Print Name)
___________________________________
(Street Address)
___________________________________
___________________________________
(City) (State) (Zip Code)
If said number of shares shall not be all the shares purchasable under the
Warrant, a new Warrant is to be issued in the name of the Holder for the balance
remaining of the shares purchasable thereunder.
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Exhibit 99.1
Contact: Gerard A. Wills Scott Hutton
V.P. of Finance & CFO President
Trega Biosciences, Inc. ChemNavigator.com, Inc.
(858) 410-6695 (858) 450-9740 x225
FOR IMMEDIATE RELEASE
TREGA BIOSCIENCES FORMS A STRATEGIC RELATIONSHIP WITH
CHEMNAVIGATOR.COM
SAN DIEGO, Calif. - August 23, 1999 - Trega Biosciences, Inc. (Nasdaq: TRGA)
today announced the formation of a strategic relationship with
ChemNavigator.com, Inc., a privately held i-Research company founded to
supply chemistry and reagents to pharmaceutical, biotechnology, agricultural and
life science researchers. Trega's Chem.Folio chemical compounds will occupy
a substantial position on ChemNavigator.com, providing a valuable complement
to Trega's existing distribution channels.
The ChemNavigator.com web site is a net-based commercial site that will provide
a new strategy for finding and purchasing research compounds and reagents from
sources around the world. Uniquely, ChemNavigator.com will provide a powerful
proprietary search engine to facilitate structure and property-based searches of
compound collections and libraries available on the site. ChemNavigator.com will
also contain links to other important databases of relevant information.
Pharmaceutical companies spend approximately $21 billion a year for research and
development, an estimated $2 billion of which is spent for chemical synthesis
and extraction. It is anticipated that the ChemNavigator.com web site will be
launched in the fourth quarter of 1999.
"This relationship represents a step in Trega's strategy of making our research
products available through e-commerce and for increasing the exposure and sales
of Chem.Folio compounds," said Michael G. Grey, president and chief executive
officer. "ChemNavigator.com may develop into the principal means of distribution
for our chemistry. We believe that ChemNavigator.com will provide research
scientists with superior search capabilities that will enable them to identify a
wide range of compounds to meet their needs."
"We are pleased to be able to offer Trega's high quality compounds to our
ChemNavigator i-Research System clients," said Scott Hutton, president of
ChemNavigator.com. "This collaboration with Trega is very complimentary to our
goal of providing ChemNavigator clients with access to the world's largest
collection of high quality drug-like compounds for life science research."
<PAGE>
TREGA FORMS RELATIONSHIP WITH CHEMNAVIGATOR.COM -PAGE 2--
Trega has acquired 1,176,666 shares of the Series B Convertible Preferred Stock
of ChemNavigator.com, Inc. representing approximately 20% of the outstanding
equity securities of ChemNavigator.com, Inc. and a warrant to purchase an
additional 294,167 shares of ChemNavigator's Common Stock at a purchase price of
$5.00 per share. In exchange, Trega has paid $1.0 million and issued 1.0 million
shares of its Common Stock to ChemNavigator.com, Inc. Trega will also issue a
warrant to ChemNavigator.com to purchase an additional 294,167 shares of Trega
Common Stock at a purchase price of $5.00 per share upon the occurrence of
certain events. At June 30, 1999, Trega had outstanding 18,027,095 shares of
Common Stock.
ChemNavigator.com will provide a revolutionary new strategy for finding and
purchasing research compounds and reagents from sources throughout the world by
combining the power of Internet search technology with proprietary, industry
leading computational analysis techniques. Initiated in January of 1999,
ChemNavigator.com will facilitate global research, dubbed "i-Research," for
chemical compounds and reagents.
Trega Biosciences is focused on accelerating the process of drug discovery from
disease targets to clinical candidates by using small molecule combinatorial
chemistry, high throughput screening and predictive bioinformatics to rapidly
create novel drug candidates having greater chances of clinical success. Trega
offers integrated products and services spanning the drug discovery process --
beginning with synthesizing novel compounds to providing uniquely qualified drug
leads -- to the pharmaceutical and biopharmaceutical industries. Trega also uses
its drug discovery technologies in its internal development programs, which are
focused on discovering small molecules acting on melanocortin receptors, which
may be important in the treatment of inflammatory and metabolic diseases.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN
THIS NEWS RELEASE ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING WHETHER A WEBSITE CAN BE IMPLEMENTED IN A TIMELY
FASHION, WHETHER THE SITE WILL PERFORM AS PLANNED, WHETHER THE SITE WILL
GENERATE SUFFICIENT REVENUES FOR CHEMNAVIGATOR.COM ON THE SALE OF TREGA
COMPOUNDS TO BE CONSIDERED A SUCCESS BY EITHER PARTY, WHETHER AN EXTENDED
COLLABORATION WILL BE AGREED TO, THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING,
AND OTHER RISKS DETAILED FROM TIME TO TIME IN TREGA'S SECURITIES AND EXCHANGE
COMMISSION FILINGS. THESE FORWARD-LOOKING STATEMENTS REPRESENT TREGA'S JUDGMENT
AS OF THE DATE OF THIS RELEASE. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED. TREGA DISCLAIMS, HOWEVER, ANY INTENT OR OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS.
Trega's releases are on the World Wide Web at http://www.trega.com and PR
Newswire's fax-on-demand service at 1-800-758-5804, extension 374050.
