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As filed with the Securities and Exchange Commission on
September 15, 2008
Registration
No. 333-150227
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
AMENDMENT NO. 8 TO
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
FLUIDIGM CORPORATION
(Exact name of Registrant as
specified in its charter)
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Delaware
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3826
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77-0513190
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(State or other jurisdiction
of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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7000 Shoreline Court, Suite 100
South San Francisco, CA 94080
(650) 266-6000
(Address, including zip code,
and telephone number,
including area code, of Registrants principal executive
offices)
Gajus V. Worthington
President and Chief Executive Officer
7000 Shoreline Court, Suite 100
South San Francisco, CA 94080
(650) 266-6000
(Name, address, including zip
code, and telephone number,
including area code, of agent for service)
Copies to:
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David J. Segre
Robert F. Kornegay
Asaf H. Kharal
Wilson Sonsini Goodrich & Rosati P.C.
650 Page Mill Road
Palo Alto, CA 94304
Telephone:
(650) 493-9300
Telecopy:
(650) 493-6811
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William M. Smith
Vice President, Legal Affairs
and General Counsel
7000 Shoreline Court, Suite 100
South San Francisco, CA 94080
Telephone: (650) 266-6000
Telecopy: (650) 871-7152
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Charles K. Ruck
B. Shayne Kennedy
Latham & Watkins LLP
650 Town Center Drive,
20th Floor
Costa Mesa, CA 92626
Telephone: (714) 540-1235
Telecopy: (714) 755-8290
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Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, as amended, check the
following
box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Ruler
12b-2 of the
Exchange Act. (Check one):
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Large accelerated
filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller reporting company)
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment that
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to such
Section 8(a), may determine.
EXPLANATORY
NOTE
Fluidigm Corporation has prepared this Amendment No. 8 to
the Registration Statement on
Form S-1
(File No. 333-150227)
for the purpose of refiling Exhibits 4.2, 4.4, 4.5A, 10.8,
10.9, 10.10, 10.11, 10.12 and 10.18 to the Registration
Statement and filing Exhibits 1.1, 4.1, 5.1 and 10.19 to
the Registration Statement with the Securities and Exchange
Commission. This Amendment No. 8 does not modify any
provision of the prospectus that forms a part of the
Registration Statement, and accordingly such prospectus has not
been included herein.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 13.
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Other
Expenses of Issuance and Distribution.
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The following table sets forth all expenses to be paid by the
registrant, other than estimated underwriting discounts and
commissions, in connection with this offering. All amounts shown
are estimates except for the SEC registration fee, the NASD
filing fee and the NASDAQ Global Market listing fee.
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SEC registration fee
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$
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3,593
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NASD filing fee
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9,700
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NASDAQ Global Market listing fee
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105,000
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Printing and engraving
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390,000
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Legal fees and expenses
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1,700,000
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Accounting fees and expenses
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850,000
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Blue sky fees and expenses (including legal fees)
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10,000
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Transfer agent and registrar fees
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2,500
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Miscellaneous
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29,207
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Total
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$
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3,100,000
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Item 14.
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Indemnification
of Directors and Officers.
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Section 145 of the Delaware General Corporation Law
authorizes a corporations board of directors to grant, and
authorizes a court to award, indemnity to officers, directors
and other corporate agents.
As permitted by Section 102(b)(7) of the Delaware General
Corporation Law, the registrants certificate of
incorporation includes provisions that eliminate the personal
liability of its directors and officers for monetary damages for
breach of their fiduciary duty as directors and officers.
In addition, as permitted by Section 145 of the Delaware
General Corporation Law, the bylaws of the registrant provide
that:
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The registrant shall indemnify its directors and officers for
serving the registrant in those capacities or for serving other
business enterprises at the registrants request, to the
fullest extent permitted by Delaware law. Delaware law provides
that a corporation may indemnify such person if such person
acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe such persons conduct was
unlawful.
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The registrant may, in its discretion, indemnify employees and
agents in those circumstances where indemnification is not
required by law.
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The registrant is required to advance expenses, as incurred, to
its directors and officers in connection with defending a
proceeding, except that such director or officer shall undertake
to repay such advances if it is ultimately determined that such
person is not entitled to indemnification.
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The registrant will not be obligated pursuant to the bylaws to
indemnify a person with respect to proceedings initiated by that
person, except with respect to proceedings authorized by the
registrants Board of Directors or brought to enforce a
right to indemnification.
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The rights conferred in the bylaws are not exclusive, and the
registrant is authorized to enter into indemnification
agreements with its directors, officers, employees and agents
and to obtain insurance to indemnify such persons.
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II-1
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The registrant may not retroactively amend the bylaw provisions
to reduce its indemnification obligations to directors,
officers, employees and agents.
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The registrants policy is to enter into separate
indemnification agreements with each of its directors and
officers that provide the maximum indemnity allowed to directors
and executive officers by Section 145 of the Delaware
General Corporation Law and also provides for certain additional
procedural protections. The registrant also maintains directors
and officers insurance to insure such persons against certain
liabilities.
These indemnification provisions and the indemnification
agreements entered into between the registrant and its officers
and directors may be sufficiently broad to permit
indemnification of the registrants officers and directors
for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
The underwriting agreement filed as Exhibit 1.1 to this
registration statement provides for indemnification by the
underwriters of the registrant and its officers and directors
for certain liabilities arising under the Securities Act and
otherwise.
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Item 15.
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Recent
Sales of Unregistered Securities.
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In the three years prior to the filing of this registration
statement, the registrant has issued the following unregistered
securities:
(a) From March 2005 through July 17, 2007, Fluidigm
Corporation, a California corporation, issued and sold an
aggregate of 134,561 shares of its common stock upon the
exercise of options issued to certain employees, directors and
consultants under the registrants 1999 Stock Option Plan,
as amended, at exercise prices ranging from $1.05 to $2.90, for
aggregate consideration of $188,442. From July 18, 2007
through May 22, 2008, the registrant issued and sold
an aggregate of 71,634 shares of its common stock upon the
exercise of options issued to certain employees, directors and
consultants under the registrants 1999 Stock Option Plan,
as amended, at exercise prices ranging from $1.05 to $4.76 per
share, for aggregate consideration of $123,346.
(b) From March 2005 through July 17, 2007, Fluidigm
Corporation, a California corporation, granted to certain of its
employees, directors and consultants under the registrants
1999 Stock Option Plan, as amended, options to purchase an
aggregate of 1,138,869 shares of its common stock at
exercise prices ranging from $1.05 to $4.76 per share. From
July 18, 2007 through May 22, 2008, the registrant
granted to certain of its employees, directors and consultants
under the registrants 1999 Stock Option Plan, as amended,
options to purchase an aggregate of 129,200 shares of the
registrants common stock at exercise prices ranging from
$4.83 to $8.40 per share.
(c) In March and December 2005, Fluidigm Corporation, a
California corporation, pursuant to a loan and security
agreement, issued and sold warrants to purchase
106,122 shares of its Series D Preferred Stock to one
accredited investor at an exercise price of $9.80 per share. In
connection with the registrants reincorporation into the
State of Delaware on July 18, 2007, the warrant was
converted into a warrant to purchase an equal number of shares
of the registrants Series D Preferred Stock.
(d) In November 2005, Fluidigm Corporation, a California
corporation, issued and sold 20,000 shares of its common
stock to one accredited investor at an issuance price of $1.96
per share for aggregate monetary consideration of $39,200, which
amount was deemed paid by the transfer of certain rights granted
to registrant pursuant to the terms of a licensing agreement.
(e) In December 2005, Fluidigm Corporation, a California
corporation, issued 237,895 shares of its Series D
Preferred Stock to one accredited investor in connection with
the conversion of a convertible promissory note at a conversion
price per share of $9.80.
(f) In June 2006, Fluidigm Corporation, a California
corporation, issued to one accredited investor a convertible
promissory notes in an aggregate principal amount of $3,000,000
convertible into shares of its Series D Preferred Stock. In
July 2007, the notes were converted into 330,612 shares of
Series D Preferred Stock at a conversion price per share of
$9.80.
II-2
(g) In April 2006, Fluidigm Corporation, a California
corporation, issued 61,224 shares of its Series D
Preferred Stock to three accredited investors at an issuance
price of $9.80 per share, for aggregate monetary consideration
of $599,998, which amount was deemed paid by the transfer of
certain rights granted to registrant pursuant to the terms of a
licensing agreement and the achievement of certain milestones
thereunder.
(h) In June 2006, Fluidigm Corporation, a California
corporation, issued 76,530 shares of its Series D
Preferred Stock to one accredited investor in connection with
the exercise of a warrant to purchase shares of its
Series D Preferred Stock at an exercise price per share of
$9.80.
(i) From August 2006 through April 2007, Fluidigm
Corporation, a California corporation, issued three convertible
promissory notes to one accredited investor in an aggregate
principal amount of $15,000,000, all of which were convertible
into shares of its Series E Preferred Stock. In March 2007,
two of the notes were converted into an aggregate of
844,095 shares of the Series E Preferred Stock of
Fluidigm Corporation, a California corporation. In connection
with the registrants reincorporation into the State of
Delaware on July 18, 2007, the remaining outstanding
convertible promissory note was made convertible into shares of
the registrants Series E Preferred Stock.
(j) In March 2007, Fluidigm Corporation, a California
corporation, issued 28,571 shares of its common stock to
one accredited investor at an issuance price of $2.90 per share,
for aggregate monetary consideration of $83,000, which amount
was deemed paid by the transfer of certain rights granted to
registrant pursuant to the terms of a licensing agreement.
(k) In May 2007, Fluidigm Corporation, a California
corporation, granted to seven of its employees and directors
under the registrants 1999 Stock Option Plan, as amended,
options to purchase an aggregate of 219,142 shares of its
common stock at an exercise price of $4.76 per share.
(l) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of
2,770,285 shares of common stock to a total of 128
stockholders in exchange for the outstanding shares of common
stock Fluidigm Corporation, a California corporation.
(m) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of 779,220 shares
of the registrants Series A Preferred Stock to a
total of 41 investors in exchange for the outstanding shares of
Series A Preferred Stock of Fluidigm Corporation, a
California corporation.
(n) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of
1,845,907 shares of the registrants Series B
Preferred Stock to a total of 35 investors in exchange for the
outstanding shares of Series B Preferred Stock of Fluidigm
Corporation, a California corporation.
(o) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of
4,675,666 shares of the registrants Series C
Preferred Stock to a total of 62 investors in exchange for the
outstanding shares of Series C Preferred Stock of Fluidigm
Corporation, a California corporation.
(p) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of
3,484,626 shares of the registrants Series D
Preferred Stock to a total of 52 investors in exchange for the
outstanding shares of Series D Preferred Stock of Fluidigm
Corporation, a California corporation.
(q) In connection with the registrants
reincorporation into the State of Delaware on July 18,
2007, the registrant issued an aggregate of
2,562,810 shares of the registrants Series E
Preferred Stock to a total of 35 investors in exchange for the
outstanding shares of Series E Preferred Stock of Fluidigm
Corporation, a California corporation.
(r) From October 2007 through December 2007, the registrant
issued and sold an aggregate of 2,512,841 shares of
Series E Preferred Stock to a total of seven investors at
$14.00 per share, for aggregate proceeds of $35,179,780.
II-3
(s) In December 2007, the registrant issued
1,714 shares of its common stock to one accredited investor
at an issuance price of $4.76 per share for aggregate monetary
consideration of $8,160, which amount was deemed paid by the
transfer of certain rights granted to registrant pursuant to the
terms of a licensing agreement.
(t) In December 2007, the registrant granted to one of its
directors under the registrants 1999 Stock Option Plan, as
amended, options to purchase an aggregate of 28,571 shares
of the registrants common stock at an exercise price of
$8.40 per share.
(u) In February and June 2008, the registrant issued a
warrant to purchase 28,572 and 57,142 shares of the
registrants Series E Preferred Stock to one
accredited investor at an exercise price of $14.00 per share.
(v) In February 2008, the registrant granted to one of its
executive officers under the registrants 1999 Stock Option
Plan, as amended, options to purchase an aggregate of
171,427 shares of the registrants common stock at an
exercise price of $8.40 per share.
(w) In April 2008, the registrant granted to 110 of its
employees, consultants and directors under the registrants
1999 Stock Option Plan, as amended, options to purchase an
aggregate of 546,711 shares of its common stock at an
exercise price of $11.16 per share.
(x) On May 12, 2008, the registrant issued
4,692 shares of its Series C Preferred Stock to
Imperial Bank pursuant to Imperial Banks net exercise of
its warrant to purchase up to 11,795 shares of
Series C Preferred Stock. The remainder of the warrant was
cancelled pursuant to the terms of the net exercise.
(y) In June 2008, the registrant granted to seven of its
employees and consultants under the registrants 1999 Stock
Option Plan, as amended, options to purchase an aggregate of
24,426 shares of its common stock at an exercise price of
$11.97 per share.
(z) In August 2008, the registrant granted to eight of its
employees under the registrants 1999 Stock Option Plan, as
amended, options to purchase an aggregate of 18,426 shares
of its common stock at an exercise price of $12.71 per share.
None of the foregoing transactions involved any underwriters,
underwriting discounts or commissions, or any public offering,
and the registrant believes that each transaction was exempt
from the registration requirements of the Securities Act in
reliance on the following exemptions:
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with respect to the transactions described in paragraphs
(a) and (b), Rule 701 promulgated under the Securities
Act as transactions pursuant to a compensatory benefit plan
approved by the registrants Board of Directors;
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with respect to the transactions described in paragraphs (1)
through (q), Rule 145(a)(2) promulgated under the
Securities Act as transactions pursuant to a plan or agreement
for statutory merger or similar plan or acquisition in which
securities of the registrant were exchanged for the securities
of Fluidigm Corporation, a California corporation, the sole
purpose of which was to change the registrants domicile
solely within the United States, and a Permit granted pursuant
to Section 25121 of the California Corporations Code; and
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with respect to the transactions described in paragraphs
(c) through (k) and paragraphs (r) through (z),
Section 4(2) of the Securities Act, or Rule 506 of
Regulation D promulgated thereunder, as transactions by an
issuer not involving a public offering. Each recipient of the
securities in this transaction represented his or her intention
to acquire the securities for investment only and not with a
view to, or for resale in connection with, any distribution
thereof, and appropriate legends were affixed to the share
certificates issued in each such transaction. In each case, the
recipient received adequate information about the registrant or
had adequate access, through his or her relationship with the
registrant, to information about the registrant.
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Item 16.
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Exhibits
and Financial Statement Schedules.
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(a) Exhibits. The following exhibits are
included herein or incorporated herein by reference:
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Exhibit Number
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Description
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1
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.1
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Form of Underwriting Agreement.
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3
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.1(3)
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Certificate of Incorporation of the Registrant, as currently in
effect.
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II-4
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Exhibit Number
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Description
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3
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.2(3)
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Form of Restated Certificate of Incorporation of the Registrant,
to be in effect upon the completion of this offering.
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3
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.3(3)
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Bylaws of the Registrant.
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3
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.4(3)
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Form of Amended and Restated Bylaws of the Registrant, to be in
effect upon completion of this offering.
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4
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.1
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Specimen Common Stock Certificate of the Registrant.
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4
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.2
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Series E Preferred Stock Purchase Agreement dated
June 13, 2006 through December 31, 2007 between the
Registrant and the Purchasers set forth therein, as amended.
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4
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.3(3)
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Eighth Amended and Restated Investor Rights Agreement between
the Registrant and certain holders of the Registrants
common stock named therein, including amendments No. 1 and
No. 2.
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4
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.4(2)
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Loan and Security Agreement No. 4561 between the Registrant
and Lighthouse Capital Partners V, L.P. dated
March 29, 2005, including amendments Nos. 1 through 4.
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4
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.4A(3)
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Preferred Stock Purchase Warrant issued to Lighthouse Capital
Partners V, L.P. effective March 29, 2005.
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4
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.4B(3)
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Negative Pledge Agreement by and between the Registrant and
Lighthouse Capital Partners V, L.P. dated March 29,
2005.
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4
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.5(3)
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Convertible Note Purchase Agreement by and between Biomedical
Sciences Investment Fund Pte Ltd and the Registrant dated
August 7, 2006.
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4
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.5A
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Convertible Promissory Note issued to Biomedical Sciences
Investment Fund Pte Ltd dated April 19, 2007, as
amended.
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5
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.1
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Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation.
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10
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.1(3)
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Form of Indemnification Agreement between the Registrant and its
directors and officers.
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10
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.2(3)
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1999 Stock Plan of the Registrant, as amended April 24,
2008.
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10
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.2A(3)
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Forms of agreements under the 1999 Stock Plan.
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10
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.3(3)
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2008 Equity Incentive Plan.
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10
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.3A(3)
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Forms of agreements under the 2008 Equity Incentive Plan.
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10
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.4(2)(3)
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Second Amended and Restated License Agreement by and between
California Institute of Technology and the Registrant effective
as of May 1, 2004.
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10
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.4A(2)(3)
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First Addendum, effective as of March 29, 2007, to Second
Amended and Restated License Agreement by and between California
Institute of Technology and the Registrant effective as of
May 1, 2004.
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10
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.5(2)(3)
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Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
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10
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.5A(2)(3)
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First Amendment to Co-Exclusive License Agreement between
President and Fellows of Harvard College and the Registrant
effective as of October 15, 2000.
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10
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.6(2)(3)
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Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
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10
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.7(2)(3)
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Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
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10
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.8(2)
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Patent License Agreement by and between Gyros AB and the
Registrant dated January 9, 2003.
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10
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.8A(2)(3)
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Amendment No. 1 dated January 9, 2005 to Patent
License Agreement by and between Gyros AB and the Registrant
dated January 9, 2003.
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10
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.9(2)
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Master Closing Agreement by and between UAB Research Foundation,
Oculus Pharmaceuticals, Inc. and the Registrant dated
March 7, 2003.
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10
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.9A(2)(3)
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License Agreement by and between UAB Research Foundation and the
Registrant dated March 7, 2003.
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10
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.10(2)
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Amended and Restated Letter Agreement Regarding Application for
Incentives Under the Research Incentive Scheme for Companies
(RISC) dated March 27, 2008 (originally dated
October 7, 2005), by and between Singapore Economic
Development Board and Fluidigm Singapore Pte. Ltd.
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II-5
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Exhibit Number
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Description
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10
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.10A(2)(3)
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Supplement Dated January 11, 2006 to Letter Agreement
Relating to Application for Incentives under the Research
Incentive Scheme for Companies (RISC), dated October 7,
2005 between Singapore Economic Development Board and Fluidigm
Singapore Pte. Ltd.
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10
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.11(2)
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Amended and Restated Letter Agreement Regarding Application for
Incentives Under the Research Incentive Scheme for Companies
(RISC) dated March 27, 2008 (originally dated
February 12, 2007), by and between Singapore Economic
Development Board and Fluidigm Singapore Pte. Ltd.
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10
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.12(2)
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Distribution Agreement by and between Eppendorf AG and the
Registrant effective as of April 1, 2005.
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10
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.12A(3)
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First Amendment, effective as of December 1, 2007, to the
Distribution Agreement by and between Eppendorf AG and the
Registrant effective as of April 1, 2005.
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10
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.13(3)
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Form of Employment and Severance Agreement between the
Registrant and each of its executive officers.
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10
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.14(3)
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Consulting Agreement by and between the Registrant and Richard
DeLateur dated February 29, 2008.
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10
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.15(3)
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Employee Loan Agreement with Gajus Worthington dated
January 20, 2004.
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10
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.15A(3)
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Stock Repurchase Agreement between the Registrant and Gajus V.
Worthington dated April 10, 2008.
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10
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.16(3)
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Offer Letter to Vikram Jog dated January 29, 2008.
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10
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.17(3)
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Settlement Agreement and General Release of all Claims by and
between Michael Ybarra Lucero and the Registrant dated
March 20, 2008.
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10
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.18(2)
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Letter Agreement between President and Fellows of Harvard
College and the Registrant dated December 22, 2004.
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10
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.19
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Sublease, dated March 25, 2004, between Genome Therapeutics
Corporation as Sublessor and Fluidigm Corporation as Sublessee
and amendment thereto, and related master lease agreements and
amendments thereto.
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21
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.1(3)
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List of subsidiaries of Registrant.
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23
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.1(3)
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Consent of Independent Registered Public Accounting Firm.
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23
|
.2
|
|
Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit 5.1).
|
|
24
|
.1(3)
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|
Power of Attorney.
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|
|
|
(1)
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|
To be filed by amendment.
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(2)
|
|
Confidential treatment has been
requested with respect to certain portions of this exhibit.
Omitted portions have been filed separately with the Securities
and Exchange Commission.
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(3)
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|
Previously filed.
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(b) Financial Statement Schedules.
All schedules have been omitted because the information required
to be presented in them is not applicable or is shown in the
consolidated financial statements or related notes.
Item 17. Undertakings.
The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting
agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such
II-6
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) For the purpose of determining liability under the
Securities Act of 1933 to any purchaser, if the registrant is
subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness; provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
(4) For the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser to
the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchasers and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 8 to the
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of South San
Francisco, State of California, on the 15th day of September
2008.
FLUIDIGM CORPORATION
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|
|
|
By:
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/s/ Gajus
V. Worthington
|
Gajus V. Worthington
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 8 to the registration statement has been signed by
the following persons in the capacities indicated on the 15th
day of September 2008.
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|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Gajus
V. Worthington
Gajus
V. Worthington
|
|
President, Chief Executive Officer and Director (Principal
Executive Officer)
|
|
September 15, 2008
|
|
|
|
|
|
/s/ Vikram
Jog
Vikram
Jog
|
|
Chief Financial Officer (Principal Accounting and Financial
Officer)
|
|
September 15, 2008
|
|
|
|
|
|
*
Samuel
Colella
|
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Director
|
|
September 15, 2008
|
|
|
|
|
|
*
Michael
W. Hunkapiller
|
|
Director
|
|
September 15, 2008
|
|
|
|
|
|
*
Elaine
V. Jones
|
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Director
|
|
September 15, 2008
|
|
|
|
|
|
*
Kenneth
Nussbacher
|
|
Director
|
|
September 15, 2008
|
|
|
|
|
|
*
John
A. Young
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Director
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|
September 15, 2008
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*By:
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/s/ Gajus
V. Worthington
Gajus
V. Worthington
Attorney-in-Fact
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II-8
EXHIBIT INDEX
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement.
|
|
3
|
.1(3)
|
|
Certificate of Incorporation of the Registrant, as currently in
effect.
|
|
3
|
.2(3)
|
|
Form of Restated Certificate of Incorporation of the Registrant,
to be in effect upon the completion of this offering.
|
|
3
|
.3(3)
|
|
Bylaws of the Registrant.
|
|
3
|
.4(3)
|
|
Form of Amended and Restated Bylaws of the Registrant, to be in
effect upon completion of this offering.
|
|
4
|
.1
|
|
Specimen Common Stock Certificate of the Registrant.
|
|
4
|
.2
|
|
Series E Preferred Stock Purchase Agreement dated
June 13, 2006 through December 31, 2007 between the
Registrant and the Purchasers set forth therein, as amended.
|
|
4
|
.3(3)
|
|
Eighth Amended and Restated Investor Rights Agreement between
the Registrant and certain holders of the Registrants
common stock named therein, including amendments No. 1 and
No. 2.
|
|
4
|
.4(2)
|
|
Loan and Security Agreement No. 4561 between the Registrant
and Lighthouse Capital Partners V, L.P. dated
March 29, 2005, including amendments Nos. 1 through 4.
|
|
4
|
.4A(3)
|
|
Preferred Stock Purchase Warrant issued to Lighthouse Capital
Partners V, L.P. effective March 29, 2005.
|
|
4
|
.4B(3)
|
|
Negative Pledge Agreement by and between the Registrant and
Lighthouse Capital Partners V, L.P. dated March 29,
2005.
|
|
4
|
.5(3)
|
|
Convertible Note Purchase Agreement by and between Biomedical
Sciences Investment Fund Pte Ltd and the Registrant dated
August 7, 2006.
|
|
4
|
.5A
|
|
Convertible Promissory Note issued to Biomedical Sciences
Investment Fund Pte Ltd dated April 19, 2007, as
amended.
|
|
5
|
.1
|
|
Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation.
|
|
10
|
.1(3)
|
|
Form of Indemnification Agreement between the Registrant and its
directors and officers.
|
|
10
|
.2(3)
|
|
1999 Stock Plan of the Registrant, as amended April 24,
2008.
|
|
10
|
.2A(3)
|
|
Forms of agreements under the 1999 Stock Plan.
|
|
10
|
.3(3)
|
|
2008 Equity Incentive Plan.
|
|
10
|
.3A(3)
|
|
Forms of agreements under the 2008 Equity Incentive Plan.
|
|
10
|
.4(2)(3)
|
|
Second Amended and Restated License Agreement by and between
California Institute of Technology and the Registrant effective
as of May 1, 2004.
|
|
10
|
.4A(2)(3)
|
|
First Addendum, effective as of March 29, 2007, to Second
Amended and Restated License Agreement by and between California
Institute of Technology and the Registrant effective as of
May 1, 2004.
|
|
10
|
.5(2)(3)
|
|
Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
|
|
10
|
.5A(2)(3)
|
|
First Amendment to Co-Exclusive License Agreement between
President and Fellows of Harvard College and the Registrant
effective as of October 15, 2000.
|
|
10
|
.6(2)(3)
|
|
Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
|
|
10
|
.7(2)(3)
|
|
Co-Exclusive License Agreement between President and Fellows of
Harvard College and the Registrant effective as of
October 15, 2000.
|
|
10
|
.8(2)
|
|
Patent License Agreement by and between Gyros AB and the
Registrant dated January 9, 2003.
|
|
10
|
.8A(2)(3)
|
|
Amendment No. 1 dated January 9, 2005 to Patent
License Agreement by and between Gyros AB and the Registrant
dated January 9, 2003.
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
10
|
.9(2)
|
|
Master Closing Agreement by and between UAB Research Foundation,
Oculus Pharmaceuticals, Inc. and the Registrant dated
March 7, 2003.
|
|
10
|
.9A(2)(3)
|
|
License Agreement by and between UAB Research Foundation and the
Registrant dated March 7, 2003.
|
|
10
|
.10(2)
|
|
Amended and Restated Letter Agreement Regarding Application for
Incentives Under the Research Incentive Scheme for Companies
(RISC) dated March 27, 2008 (originally dated
October 7, 2005), by and between Singapore Economic
Development Board and Fluidigm Singapore Pte. Ltd.
|
|
10
|
.10A(2)(3)
|
|
Supplement Dated January 11, 2006 to Letter Agreement
Relating to Application for Incentives under the Research
Incentive Scheme for Companies (RISC), dated October 7,
2005 between Singapore Economic Development Board and Fluidigm
Singapore Pte. Ltd.
|
|
10
|
.11(2)
|
|
Amended and Restated Letter Agreement Regarding Application for
Incentives Under the Research Incentive Scheme for Companies
(RISC) dated March 27, 2008 (originally dated
February 12, 2007), by and between Singapore Economic
Development Board and Fluidigm Singapore Pte. Ltd.
|
|
10
|
.12(2)
|
|
Distribution Agreement by and between Eppendorf AG and the
Registrant effective as of April 1, 2005.
|
|
10
|
.12A(3)
|
|
First Amendment, effective as of December 1, 2007, to the
Distribution Agreement by and between Eppendorf AG and the
Registrant effective as of April 1, 2005.
|
|
10
|
.13(3)
|
|
Form of Employment and Severance Agreement between the
Registrant and each of its executive officers.
|
|
10
|
.14(3)
|
|
Consulting Agreement by and between the Registrant and Richard
DeLateur dated February 29, 2008.
|
|
10
|
.15(3)
|
|
Employee Loan Agreement with Gajus Worthington dated
January 20, 2004.
|
|
10
|
.15A(3)
|
|
Stock Repurchase Agreement between the Registrant and Gajus V.
Worthington dated April 10, 2008.
|
|
10
|
.16(3)
|
|
Offer Letter to Vikram Jog dated January 29, 2008.
|
|
10
|
.17(3)
|
|
Settlement Agreement and General Release of all Claims by and
between Michael Ybarra Lucero and the Registrant dated
March 20, 2008.
|
|
10
|
.18(2)
|
|
Letter Agreement between President and Fellows of Harvard
College and the Registrant dated December 22, 2004.
|
|
10
|
.19
|
|
Sublease, dated March 25, 2004, between Genome Therapeutics
Corporation as Sublessor and Fluidigm Corporation as Sublessee
and amendment thereto, and related master lease agreements and
amendments thereto.
|
|
21
|
.1(3)
|
|
List of subsidiaries of Registrant.
|
|
23
|
.1(3)
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
23
|
.2
|
|
Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit 5.1).
|
|
24
|
.1(3)
|
|
Power of Attorney.
|
|
|
|
(1)
|
|
To be filed by amendment.
|
(2)
|
|
Confidential treatment has been
requested with respect to certain portions of this exhibit.
Omitted portions have been filed separately with the Securities
and Exchange Commission.
|
(3)
|
|
Previously filed.
|
exv1w1
Exhibit 1.1
5,300,000 SHARES
FLUIDIGM CORPORATION
COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
September [__], 2008
September [__], 2008
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Leerink Swan LLC
Pacific Growth Equities LLC
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Fluidigm Corporation, a Delaware corporation (the Company), proposes to issue and sell to
the several Underwriters named in Schedule I hereto (the Underwriters) 5,300,000 shares of its
common stock, par value $0.001 per share (the Firm Shares). The Company also proposes to issue
and sell to the several Underwriters not more than an additional 795,000 shares of its common
stock, par value $0.001 per share (the Additional Shares) if and to the extent that you, as
Manager of the offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred to as the Shares. The
shares of common stock, par value $0.001 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the Common Stock.
The Company has filed with the Securities and Exchange Commission (the Commission) a
registration statement, including a prospectus, relating to the Shares. The registration statement
as amended at the time it becomes effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the Securities Act), is hereinafter referred to as the
Registration Statement; the prospectus in the form first used to confirm sales of Shares (or in
the form first made available to the Underwriters by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the Prospectus. If
the Company has filed an abbreviated registration statement to register additional shares of Common
Stock pursuant to Rule 462(b) under the Securities Act (the Rule 462 Registration Statement),
then any reference herein to the term Registration Statement shall be deemed to include such
Rule 462 Registration Statement.
For purposes of this Agreement, free writing prospectus has the meaning set forth in Rule
405 under the Securities Act, Time of Sale Prospectus means the preliminary prospectus together
with the free writing prospectuses, if any, each identified in Schedule II hereto, and broadly
available road show means a bona fide electronic road show as defined in Rule 433(h)(5) under
the Securities Act that has been made available without restriction to any person. As used herein,
the terms Registration Statement, preliminary prospectus, Time of Sale
1
Prospectus and Prospectus shall include the documents, if any, incorporated by reference
therein.
1. Representations and Warranties. The Company represents and warrants to and agrees with
each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the Companys knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder, (iii) the Time of Sale Prospectus
does not, and at the time of each sale of the Shares in connection with the offering when the
Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in
Section 4), the Time of Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, (iv) each broadly available road show, if any, when considered together
with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (v) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions in the Registration
Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you expressly for use
therein.
(c) Any statistical and market-related data included in the Registration Statement, the Time
of Sale Prospectus and the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and is consistent with the sources from which they are
derived.
(d) The Company is not an ineligible issuer in connection with the offering pursuant to
Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with
the Commission in accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that the Company has
filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free writing
2
prospectuses, if any, identified in Schedule II hereto, and electronic road shows, if any,
furnished to you before first use, the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to, any free writing prospectus.
(e) The Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the Time of Sale
Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.
(f) Each subsidiary of the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as described in the
Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each
jurisdiction, to the extent that the concept of good standing is applicable under the laws of
such jurisdiction, in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(g) This Agreement has been duly authorized, executed and delivered by the Company.
(h) The authorized capital stock of the Company conforms as to legal matters to the
description thereof contained in the Section entitled Description of Capital Stock in each of the
Time of Sale Prospectus and the Prospectus.
(i) The shares of Common Stock outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.
(j) The Shares have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any preemptive or similar rights which have
not otherwise been waived.
(k) The execution and delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any provision of (i) applicable law; (ii) the
certificate of incorporation or bylaws of the Company; (iii) any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole; or (iv) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, except that in the case of
clause (iii) as would not have a material adverse effect on the Company and its subsidiaries, taken
as a whole, or on the power or ability of the Company to perform its
3
obligations under this Agreement, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states or the rules and regulations of the Financial Industry Regulatory
Authority (FINRA) in connection with the offer and sale of the Shares.
(l) There has not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a whole, from that set forth
in the Time of Sale Prospectus.
(m) There are no legal or governmental proceedings pending or to the Companys knowledge
threatened to which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject (i) other than proceedings
accurately described in all material respects in the Time of Sale Prospectus and proceedings that
would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or
on the power or ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale Prospectus or (ii) that are required
to be described in the Registration Statement or the Prospectus and are not so described; and there
are no statutes, regulations, contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(n) Each preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied as to form when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(o) The Company is not, and after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus will not be, required to
register as an investment company as such term is defined in the Investment Company Act of 1940,
as amended.
(p) The Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(Environmental Laws), (ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, be reasonably likely to have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
4
related constraints on operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, be reasonably likely to have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(r) The accountants who certified the financial statements and supporting schedules included
in the Registration Statement are independent public accountants with respect to the Company as
required by the Securities Act and the applicable rules and regulations of the Commission
thereunder.
(s) The financial statements of the Company filed with the Commission as a part of the
Registration Statement and included in each of the Time of Sale Prospectus and the Prospectus
present fairly in all material respects the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the results of their statement of operations,
stockholders equity and cash flows for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles as applied in the United
States (GAAP) applied on a consistent basis throughout the periods involved. The financial data
set forth in the Prospectus under the captions Prospectus Summary Summary Consolidated Financial
Data, Selected Consolidated Financial Data and Capitalization present fairly in all material
respects the information set forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(t) Except as described in the Time of Sale Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect to any securities of
the Company or to require the Company to include such securities with the Shares registered
pursuant to the Registration Statement, except as otherwise have been waived in connection with the
issuance and sale of the Shares contemplated hereby.
(u) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, representative, employee or affiliate of the Company or of any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the FCPA), including, without limitation, taking any action in
furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or
giving of money, property, gift or anything else of value, directly or indirectly, to any foreign
official (as such term is defined in the FCPA) or to any foreign political party or official
thereof or any candidate for foreign political office in contravention of the FCPA.
(v) The operations of the Company and those of its subsidiaries are, and have been conducted,
in compliance with (i) all applicable financial recordkeeping and reporting requirements, including
those of the Bank Secrecy Act of 1970 and Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT
Act) except where noncompliance would not, singly or in the aggregate, be reasonably likely to have
a material adverse effect on the Company and its subsidiaries, taken as a whole, and (ii) to
the best of the Companys knowledge, all other applicable anti-money laundering statutes of all
jurisdictions, the rules and regulations
5
thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (the Anti-Money Laundering Laws). No action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to (i) the Bank Secrecy Act of 1970
and Title III of the USA PATRIOT Act or (ii) the Anti-Money Laundering Laws is pending or, to the
best of the Companys knowledge, threatened.
(w) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is an
individual or entity (Person) that is currently the subject of any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC-administered
sanctions); and the Company will not directly or indirectly use the proceeds of the offering of
Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, to fund activities of or business with any Person, or in any
country or territory, that is the subject of OFAC-administered sanctions, or in a manner that would
otherwise cause any Person (including any Person involved in or facilitating the offering of the
Shares, whether as underwriter, advisor, or otherwise) to violate any OFAC-administered sanctions.
(x) Subsequent to the respective dates as of which information is given in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or contingent, nor
entered into any material transaction; (ii) the Company has not purchased any of its outstanding
capital stock other than capital stock from its employees or other service providers in connection
with the termination of their service pursuant to employee benefit plans disclosed in the
Registration Statement or agreements to provide employment or consulting services to the Company,
nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock
other than ordinary and customary dividends; and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company and its subsidiaries, except in
each case as described in each of the Registration Statement, the Time of Sale Prospectus and the
Prospectus, respectively.
(y) Neither the Company nor its subsidiaries own any real property. The Company and its
subsidiaries have good and marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances and defects of title except such as are described in the Time
of Sale Prospectus or do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property and buildings by
the Company and its subsidiaries, in each case except as described in the Time of Sale Prospectus.
(z) Except as described in the Registration Statement, Time of Sale Prospectus, and the
Prospectus: (i) the Company owns, or possesses, or has rights to, or can acquire on reasonable
terms all Intellectual Property reasonably necessary to conduct the business of the
6
Company as described in the Registration Statement, Time of Sale Prospectus, and the
Prospectus (Company Intellectual Property), except where the failure to own or possess or the
inability to acquire on reasonable terms any of the foregoing would not, individually or in the
aggregate, have a material adverse effect on the Company and its susidiaries taken as a whole; (ii)
to the Companys knowledge, there is no infringement, misappropriation, or violation by third
parties of any Company Intellectual Property, which individually or in the aggregate would have a
material adverse effect of the Company and its subsidiaries taken as a whole; (iii) neither the
Company nor any of its subsidiaries has received any written threat or notice of action, suit,
proceeding, or claim by others challenging the Companys rights in or to the Company Intellectual
Property, nor is there any such action or proceeding currently pending; (iv) neither the Company
nor any of its subsidiaries have received any written threat or notice of action, suit, proceeding,
or claim by others claiming the invalidity or unenforceability of the Company Intellectual
Property, nor is there any such action or proceeding currently pending and (v) neither the Company
nor any of its subsidiaries has received any written threat or notice of infringement of or
conflict with asserted rights of others with respect to any Intellectual Property which, with
respect to (iii) through (v), individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the Company and its
subsidiaries taken as a whole. The term Intellectual Property as used in this section means all
material, valid, and enforceable patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, and know-how.
(aa) No material labor dispute with the employees of the Company or any of its subsidiaries
exists, except as described in the Time of Sale Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or contractors that would be
reasonably likely to have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(bb) The Company and each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not be reasonably likely to have a
material adverse effect on the Company and its subsidiaries, taken as a whole, except as described
in the Time of Sale Prospectus.
(cc) The Company and its subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except where the failure to obtain such certificates, authorizations,
or permits would not, individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on
7
the Company and its subsidiaries, taken as a whole, except as described in the Time of Sale
Prospectus.
(dd) All United States federal income tax returns of the Company and its subsidiaries required
by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which
are due and payable, have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been provided. The Company and its
subsidiaries have filed all other tax returns that are required to have been filed by them pursuant
to applicable foreign, state, local or other law except insofar as the failure to file such returns
would not, singly or in the aggregate, result in a material adverse effect on the Company and its
subsidiaries taken as a whole, and has paid all taxes due pursuant to such returns or pursuant to
any assessment received by the Company and its subsidiaries, except for such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been provided.
(ee) The Company and each of its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with managements general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with managements general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as described in the Time of
Sale Prospectus, since the end of the Companys most recent audited fiscal year, there has been (i)
no material weakness in the Companys internal control over financial reporting (whether or not
remediated) and (ii) no change in the Companys internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Companys internal control
over financial reporting.
(ff) The Company has taken all necessary actions to ensure that, upon the effectiveness of the
Registration Statement, it will be in compliance in all material respects with all provisions of
the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing
the provisions thereof (the Sarbanes-Oxley Act) that are then in effect and which the Company is
required to comply with as of the effectiveness of the Registration Statement, and is actively
taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley
Act which the Company is not required to comply with, upon the applicability of such provisions to
the Company, at all times after the effectiveness of the Registration Statement.
(gg) Except with respect to any such failure to comply that has been corrected by the date of
this Agreement, or would not, individually or in the aggregate, have a material adverse effect on
the Company, (i) all stock option awards granted by the Company have been duly authorized by all
necessary corporate action, including, as applicable, approval by the board of directors of the
Company or a duly authorized committee thereof, including approval of the exercise or purchase
price or the methodology for determining the exercise or purchase price and the substantive terms
of the stock options awards, and any required stockholder approval by the necessary number of votes
or written consents; and (ii) no stock option awards granted by the
8
Company have been retroactively granted, or the exercise or purchase price of any stock option
award determined retroactively; there is no action, suit, proceeding, formal inquiry or formal
investigation before or brought by any court or governmental agency or body, domestic or foreign,
or the Nasdaq Global Market or any self regulatory organization, now pending, or, to the knowledge
of the Company, threatened, against or affecting the Company in connection with any stock option
awards granted by the Company.
(hh) Except as described in the Time of Sale Prospectus, the Company has not sold, issued or
distributed any shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or warrants.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $ a share (the Purchase Price).
On the basis of the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to sell to the Underwriters the Additional Shares, and
the Underwriters shall have the right to purchase, severally and not jointly, up to 795,000
Additional Shares at the Purchase Price. You may exercise this right on behalf of the Underwriters
in whole or from time to time in part by giving written notice not later than 30 days after the
date of this Agreement. Any exercise notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase
date must be at least one business day after the written notice is given and may not be earlier
than the closing date for the Firm Shares nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm Shares. On each day,
if any, that Additional Shares are to be purchased (an Option Closing Date), each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the same proportion to
the total number of Additional Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
3. Terms of Public Offering. The Company is advised by you that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Shares are to be offered to the public initially at $ a share
(the Public Offering Price) and to certain dealers selected by you at a price that represents a
concession not in excess of $ a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of $ a share, to any
Underwriter or to certain other dealers.
9
4. Payment and Delivery. Payment for the Firm Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City time, on ,
2008, or at such other time on the same or such other date, not later than , 2008, as
shall be designated in writing by you. The time and date of such payment are hereinafter referred
to as the Closing Date.
Payment for any Additional Shares shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Additional Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 2 or at such other time on the same or
on such other date, in any event not later than , 2008, as shall be designated in writing by
you.
The Firm Shares and Additional Shares shall be registered in such names and in such
denominations as you shall request in writing not later than one full business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and
Additional Shares shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly paid, against
payment of the Purchase Price therefor.
5. Conditions to the Underwriters Obligations. The obligations of the Company to sell the
Shares to the Underwriters and the several obligations of the Underwriters to purchase and pay for
the Shares on the Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any notice have been given
of any intended or potential downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the rating accorded any of the
securities of the Company or any of its subsidiaries by any nationally recognized
statistical rating organization, as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole, from that set forth in
the Time of Sale Prospectus as of the date of this Agreement that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Time of Sale Prospectus.
10
(b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing
Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i)
above and to the effect that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has complied with all of
the agreements and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, outside counsel for the Company, dated the Closing
Date, in a form reasonably agreed to by the Underwriters, which shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(d) The Underwriters shall have received on the Closing Date an opinion of Townsend and
Townsend and Crew LLP, outside intellectual property counsel for the Company, dated the Closing
Date, in a form reasonably agreed to by the Underwriters.
(e) The Underwriters shall have received on the Closing Date an opinion of Latham & Watkins
LLP, counsel for the Underwriters, dated the Closing Date, with respect to such matters as the
Underwriters may reasonably request.
(f) The Underwriters shall have received, on each of the date hereof and the Closing Date, a
letter dated the date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, independent public accountants,
containing statements and information of the type ordinarily included in accountants comfort
letters to underwriters with respect to the financial statements and certain financial information
contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided
that the letter delivered on the Closing Date shall use a cut-off date not earlier than the date
hereof.
(g) The lock-up agreements, in a form reasonably agreed to by the Company and the
Underwriters, between you and all stockholders, optionholders, officers and directors of the
Company other than those persons listed on Schedule III attached hereto relating to sales and
certain other dispositions of shares of Common Stock or certain other securities, delivered to you
on or before the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares hereunder are
subject to the delivery to you on the applicable Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date and other matters related
to the issuance of such Additional Shares.
6. Covenants of the Company. The Company covenants with each Underwriter as follows:
11
(a) To furnish to you, without charge, five signed copies of the Registration Statement
(including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(e) or 6(f) below, as many copies of the Time
of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement, the Time of Sale Prospectus
or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not
to file any such proposed amendment or supplement to which you reasonably object, and to file with
the Commission within the applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on
behalf of, used by, or referred to by the Company and not to use or refer to any proposed free
writing prospectus to which you reasonably object.
(d) Not to take any action that would result in an Underwriter or the Company being required
to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing
prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not
have been required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time
when the Prospectus is not yet available to prospective purchasers and any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration Statement then on file, or
if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time
of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the circumstances under which
they were made when the Time of Sale Prospectus is delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of the Shares as in the
opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to
in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule
173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion
of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to
12
comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its
own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to
the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under
the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with applicable law.
(g) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws
of such jurisdictions as you shall reasonably request, other than in jurisdictions which would
require the Company as a condition thereto to qualify to do business or to file a general consent
to service of process in any such jurisdiction.
(h) To make generally available to the Companys security holders and to you as soon as
practicable an earning statement covering a period of at least twelve months beginning with the
first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(i) Whether or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and expenses of the
Companys counsel and the Companys accountants in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or
referred to by the Company and amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the FINRA, (v) all fees and expenses in
connection with the preparation and filing of the registration statement on Form 8-A relating to
the Common Stock and all costs and expenses incident to listing the Shares on the NASDAQ Global
Market, (vi) the cost of printing certificates representing the Shares, (vii) the costs and charges
of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company
relating to investor presentations on any road show undertaken in connection with the marketing
of the offering of the Shares, including, without limitation, expenses associated with the
preparation or dissemination of any electronic road show, expenses associated with the production
of road show slides and graphics, fees and expenses of any
13
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the representatives and officers of
the Company and any such consultants, and one-half of the cost of any aircraft chartered in
connection with the road show, (ix) the document production charges and expenses associated with
printing this Agreement and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 8 entitled Indemnity and
Contribution and the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and one-half of the cost of chartering any aircraft in
connection with any road show presentation.
The Company also covenants with each Underwriter that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise or (3) file any registration statement with the
Commission relating to the offering of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock.
The restrictions contained in the preceding paragraph shall not apply to (a) the Shares to be
sold hereunder, (b) the issuance of shares of, or options to purchase shares of, Common Stock to
employees, officers, directors, advisors or consultants of the Company pursuant to employee benefit
plans disclosed in the Prospectus or an employee benefit plan assumed by the Company in a merger or
acquisition transaction, (c) the filing of a registration statement on Form S-8 for the
registration of shares of Common Stock issued pursuant to employee benefit plans disclosed in the
Prospectus or an employee benefit plan assumed by the Company in a merger or acquisition
transaction, or (d) the issuance of shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock in an amount having an aggregate value (determined as
of the date of issuance) equal to $ in connection with a merger or acquisition transaction;
provided prior to any issuance pursuant to clauses (b) or (d), the Company shall cause each
recipient of such shares or options to execute and deliver to you a lock-up agreement
substantially in the form of Exhibit C hereto.
Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period
the Company issues an earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last day of the 180-day
period, the restrictions imposed by this agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event. The Company shall promptly notify Morgan Stanley & Co.
14
Incorporated of any earnings release, news or event that may give rise to an extension of the
initial 180-day restricted period.
7. Covenants of the Underwriters. Each Underwriter severally covenants with the Company not
to take any action that would result in the Company being required to file with the Commission
under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that
otherwise would not be required to be filed by the Company thereunder, but for the action of the
Underwriter.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any
Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act,
any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act, or the Prospectus or any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and each person, if any,
who controls the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus or the Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b),
such person (the indemnified party) shall promptly notify the person against whom such indemnity
may be sought (the indemnifying party) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonably incurred fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have mutually agreed in
writing to the retention of such counsel or
15
(ii) the named parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 8(a), and by the Company, in
the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to
an indemnified party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided
by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other hand in connection with the offering of the Shares
shall be deemed to be in the same respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the table on the cover
of the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault
of the Company on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or
16
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Underwriters and the
parties relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any indemnified party at
law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter, any person controlling any
Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Termination. The Underwriters may terminate this Agreement by notice given by you to the
Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on, or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade
(ii) trading of any securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or (v) there shall
have occurred any outbreak or escalation of hostilities, or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and which, singly or together
with any other event specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the
17
Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the
Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite their respective
names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such Firm Shares are not
made within 36 hours after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement, in the Time of Sale
Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional
Shares and the aggregate number of Additional Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option
Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date or
(ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated hereunder.
18
11. Entire Agreement. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Shares, represents the entire agreement between the Company and the
Underwriters with respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Shares.
(b) The Company acknowledges that in connection with the offering of the Shares: (i) the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the
Company or any other person, (ii) the Underwriters owe the Company only those duties and
obligations set forth in this Agreement and prior written agreements (to the extent not superseded
by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of
the Company. The Company waives to the full extent permitted by applicable law any claims it may
have against the Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
12. Counterparts. This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
15. Notices. All communications hereunder shall be in writing and effective only upon receipt
and if to the Underwriters shall be delivered, mailed or sent to you in care of Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate
Desk, with a copy to the Legal Department and Latham & Watkins LLP, 650 Town Center Drive
20th Floor, Costa Mesa, California 92626, Attention: Charles K. Ruck; and if to the
Company shall be delivered, mailed or sent to 7000 Shoreline Court, Suite 100, South San Francisco,
California 94080, Attention: Chief Executive Officer with a copy to Wilson Sonsini Goodrich &
Rosati, P.C., 950 Page Mill Road, Palo Alto, California 94304, Attention: David J. Segre and
Robert F. Kornegay.
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Very truly yours,
FLUIDIGM CORPORATION
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By: |
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Name: |
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Title: |
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19
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Leerink Swan LLC
Pacific Growth Equities, LLC
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By:
Name:
Title:
20
SCHEDULE I
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Number of Firm Shares To |
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Underwriter |
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Be Purchased |
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Morgan Stanley & Co. Incorporated |
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UBS Securities LLC |
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Leerink Swan LLC |
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Pacific Growth Equities, LLC |
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Total: |
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I-1
SCHEDULE II
Time of Sale Prospectus
1. |
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Preliminary Prospectus issued September 5, 2008. |
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2. |
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[identify all free writing prospectuses filed by the Company under Rule 433(d) of the
Securities Act] |
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3. |
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[free writing prospectus containing a description of terms that does not reflect final terms,
if the Time of Sale Prospectus does not include a final term sheet] |
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4. |
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[orally communicated pricing information to be included on Schedule II if a final term sheet
is not used] [to be discussed] |
C-1
exv4w1
Exhibit 4.1
THIS CERTIFIES THAT
is the owner of
CUSIP
DATED
COUNTERSIGNED AND REGISTERED:
COMPUTERSHARE TRUST COMPANY, N.A.
TRANSFER AGENT AND REGISTRAR,
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
Fluidigm Corporation (hereinafter called the Company), transferable on the books of the Company in
person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and
the shares represented hereby, are issued and shall be held subject to all of the provisions of the Certicate of
Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the
Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This
Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.
COMMON STOCK
PAR VALUE $0.001
COMMON STOCK
THIS CERTIFICATE IS TRANSFERABLE IN
CANTON, MA AND JERSEY CITY, NJ
SEE REVERSE FOR CERTAIN DEFINITIONS
Certificate
Number
Shares
.
FLUIDIGM CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
FACSIMILE SIGNATURE TO COME
FACSIMILE SIGNATURE TO COME
President
Secretary
By
AUTHORIZED SIGNATURE
016570| 003590|127C|RESTRICTED||4|057-423
34385P 10 8
>Month Day, Year<
* * 600620* * * * * *
* * * 600620* * * * *
* * * * 600620* * * *
* * * * * 600620* * *
* * * * * * 600620* *
** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample
**** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David
Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander
David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr.
Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample ****
Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample
**** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David
Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander
David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr.
Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample ****
Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample
**600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares***
*600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****
600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****6
0062
0**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****60
0620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600
620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares***600620**Shares****600620**Shares****60062
0**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620
**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620*
*Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**
Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**S
hares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Sh
* * * SIX HUNDRED THOUSAND
SIX HUNDRED AND TWENTY* * *
MR. SAMPLE & MRS. SAMPLE &
MR. SAMPLE & MRS. SAMPLE
NNNNN
ZQ 000000
Certificate Numbers
1234567890/1234567890
1234567890/1234567890
1234567890/1234567890
1234567890/1234567890
1234567890/1234567890
1234567890/1234567890
Total Transaction
Num/No.
123456
Denom.
123456
Total
1234567
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
PO BOX 43004, Providence, RI 02940-3004
CUSIP XXXXXX XX X
Holder ID XXXXXXXXXX
Insurance Value 1,000,000.00
Number of Shares 123456
DTC 12345678 123456789012345 |
FLUIDIGM CORPORATION
THE
COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, A SUMMARY OF THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR
EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND
THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF
DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE
SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF
A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO
INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM
ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.
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The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations: |
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TEN COM
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as tenants in common
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UNIF GIFT MIN ACT-
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Custodian |
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as tenants by the entireties |
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under Uniform Gifts to Minors Act |
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JT TEN
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as joint tenants with right of survivorship
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UNIF TRF MIN ACT
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Custodian (until age) |
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and not as tenants in common
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(Cust)
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under Uniform Transfers to Minors Act |
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Additional abbreviations may also be used though not in the above list. |
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PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
For value received,
hereby sell, assign and transfer unto
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)
of the common stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
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Dated:
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20 |
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Signature: |
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Signature: |
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Notice: The
signature to this assignment must correspond with the name
as written upon the face of the certificate, in every particular,
without alteration or enlargement, or any change whatever. |
Signature(s) Guaranteed: Medallion Guarantee Stamp
THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
exv4w2
Exhibit 4.2
FLUIDIGM CORPORATION
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
First Closing: June 13, 2006
Second Closing: December 22, 2006
Third Closing: March 30, 2007
Fourth Extended Closing: October 10, 2007
Fifth Extended Closing: October 26, 2007
Sixth Extended Closing: December 31, 2007
TABLE OF CONTENTS
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Page |
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1. |
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Purchase and Sale of Preferred Stock |
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1.1 |
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Authorization of the Shares |
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1.2 |
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Purchase and Sale of the Shares |
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1.3 |
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Closing Date |
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1.4 |
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Delivery |
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Representations and Warranties of the Company |
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2.1 |
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Organization, Good Standing and Qualification |
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2.2 |
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Corporate Power |
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2.3 |
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Subsidiaries |
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2.4 |
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Capitalization |
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2.5 |
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Authorization |
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3 |
|
|
|
2.6 |
|
Valid Issuance of Preferred and Common Stock |
|
|
3 |
|
|
|
2.7 |
|
Governmental Consents |
|
|
4 |
|
|
|
2.8 |
|
Litigation |
|
|
4 |
|
|
|
2.9 |
|
Employees |
|
|
4 |
|
|
|
2.10 |
|
Patents and Other Intangible Assets |
|
|
5 |
|
|
|
2.11 |
|
Compliance with Other Instruments |
|
|
7 |
|
|
|
2.12 |
|
Permits |
|
|
7 |
|
|
|
2.13 |
|
Environmental and Safety Laws |
|
|
7 |
|
|
|
2.14 |
|
Title to Property and Assets |
|
|
7 |
|
|
|
2.15 |
|
Agreements; Action |
|
|
7 |
|
|
|
2.16 |
|
Financial Statements |
|
|
8 |
|
|
|
2.17 |
|
Changes |
|
|
9 |
|
|
|
2.18 |
|
Brokers or Finders |
|
|
9 |
|
|
|
2.19 |
|
Qualified Small Business Stock |
|
|
9 |
|
|
|
2.20 |
|
Employee Benefit Plans |
|
|
10 |
|
|
|
2.21 |
|
Tax Matters |
|
|
10 |
|
|
|
2.22 |
|
Insurance |
|
|
10 |
|
|
|
2.23 |
|
Corporate Documents |
|
|
10 |
|
|
|
2.24 |
|
Disclosure |
|
|
10 |
|
|
|
2.25 |
|
Offering |
|
|
11 |
|
|
|
2.26 |
|
Returns and Complaints |
|
|
11 |
|
|
|
|
|
|
|
|
|
|
3. |
|
Representations and Warranties of the Purchasers |
|
|
11 |
|
|
|
3.1 |
|
Experience |
|
|
11 |
|
|
|
3.2 |
|
Investment |
|
|
11 |
|
|
|
3.3 |
|
Rule 144 |
|
|
11 |
|
|
|
3.4 |
|
Legends |
|
|
12 |
|
|
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3.5 |
|
No Public Market |
|
|
12 |
|
|
|
3.6 |
|
Access to Data |
|
|
12 |
|
-i-
TABLE OF CONTENTS
(continued)
|
|
|
|
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|
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|
|
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|
|
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|
Page |
|
|
|
3.7 |
|
Authorization |
|
|
12 |
|
|
|
3.8 |
|
Accredited Investor |
|
|
12 |
|
|
|
3.9 |
|
Public Solicitation |
|
|
12 |
|
|
|
3.10 |
|
Tax Advisors |
|
|
12 |
|
|
|
3.11 |
|
Purchaser Counsel |
|
|
12 |
|
|
|
3.12 |
|
Brokers or Finders |
|
|
13 |
|
|
|
3.13 |
|
Non-United States Persons |
|
|
13 |
|
|
|
|
|
|
|
|
|
|
4. |
|
Conditions of Purchasers Obligations at Closing |
|
|
13 |
|
|
|
4.1 |
|
Representations and Warranties |
|
|
13 |
|
|
|
4.2 |
|
Performance |
|
|
13 |
|
|
|
4.3 |
|
Compliance Certificate |
|
|
13 |
|
|
|
4.4 |
|
Blue Sky |
|
|
13 |
|
|
|
4.5 |
|
Opinion of Company Counsel |
|
|
13 |
|
|
|
4.6 |
|
Investor Rights Agreement |
|
|
14 |
|
|
|
4.7 |
|
Restated Articles |
|
|
14 |
|
|
|
4.8 |
|
Corporate Proceedings; Waivers and Consents |
|
|
14 |
|
|
|
|
|
|
|
|
|
|
5. |
|
Conditions of the Companys Obligations at Closing |
|
|
14 |
|
|
|
5.1 |
|
Representations and Warranties |
|
|
14 |
|
|
|
5.2 |
|
Payment of Purchase Price |
|
|
14 |
|
|
|
5.3 |
|
Blue Sky |
|
|
14 |
|
|
|
5.4 |
|
Investor Rights Agreements |
|
|
14 |
|
|
|
5.5 |
|
Restated Articles |
|
|
14 |
|
|
|
5.6 |
|
Proceedings and Documents |
|
|
14 |
|
|
|
|
|
|
|
|
|
|
6. |
|
Miscellaneous |
|
|
14 |
|
|
|
6.1 |
|
Governing Law; Jurisdiction |
|
|
14 |
|
|
|
6.2 |
|
Indemnification |
|
|
15 |
|
|
|
6.3 |
|
Survival |
|
|
15 |
|
|
|
6.4 |
|
Successors and Assigns |
|
|
15 |
|
|
|
6.5 |
|
Entire Agreement; Amendment |
|
|
15 |
|
|
|
6.6 |
|
Notices, Etc |
|
|
15 |
|
|
|
6.7 |
|
Delays or Omissions |
|
|
16 |
|
|
|
6.8 |
|
California Corporate Securities Law |
|
|
16 |
|
|
|
6.9 |
|
Finders Fee |
|
|
16 |
|
|
|
6.10 |
|
Expenses |
|
|
16 |
|
|
|
6.11 |
|
Waiver of Conflict |
|
|
16 |
|
|
|
6.12 |
|
Severability |
|
|
17 |
|
|
|
6.13 |
|
Counterparts; Facsimile |
|
|
17 |
|
|
|
6.14 |
|
Titles and Subtitles |
|
|
17 |
|
-ii-
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
6.15 |
|
Exculpation Among Purchasers |
|
|
17 |
|
|
|
6.16 |
|
Like Treatment of Holders |
|
|
17 |
|
|
|
6.17 |
|
Jury Trial |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
EXHIBITS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit A |
|
Schedule of Purchasers |
|
|
|
|
Exhibit B |
|
Form of Amended and Restated Articles of Incorporation |
|
|
|
|
Exhibit C |
|
Schedule of Exceptions |
|
|
|
|
Exhibit D |
|
Form of Eighth Amended and Restated Investor Rights Agreement |
|
|
|
|
Exhibit E |
|
Form of Legal Opinion |
|
|
|
|
-iii-
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES E PREFERRED STOCK PURCHASE AGREEMENT is made as of June 13, 2006, by and among
Fluidigm Corporation, a California corporation (the Company), and the purchasers listed on the
Schedule of Purchasers attached hereto as EXHIBIT A (the Schedule of Purchasers). The
persons or entities listed thereon are hereinafter referred to collectively as the Purchasers and
individually as a Purchaser.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Preferred Stock.
1.1 Authorization of the Shares. The Company will on or before the Closing
(as defined below) authorize the sale and issuance pursuant to this Agreement of up
to 5,000,000 shares (the Shares) of its Series E Preferred Stock (the Series E
Preferred), having the rights, preferences and privileges as set forth in the
Amended and Restated Articles of Incorporation attached hereto as EXHIBIT B
(the Restated Articles).
1.2 Purchase and Sale of the Shares. Subject to the terms and conditions
hereof and in reliance upon the representations, warranties and agreements contained
herein, the Company will issue and sell to each Purchaser, severally and not jointly,
and each Purchaser will purchase from the Company, severally and not jointly, at the
Closing, the number of Shares set forth opposite the Purchasers name on the Schedule
of Purchasers, at a purchase price of Four Dollars ($4.00) per Share. The Company
shall be entitled to sell any unpurchased Shares to any Purchaser or to a person who
is not a Purchaser and to amend the Schedule of Purchasers to include the information
relating to such sales, and such purchasers shall be considered Purchasers and
parties to this Agreement; provided that (i) such sales are made pursuant to this
Agreement or an agreement identical to this one except for the Closing Date and
exhibits, and (ii) such sales are completed within 120 days of the Initial Closing
(as defined below). The Companys agreement with each Purchaser is a separate
agreement, and the sale of the Shares to each Purchaser is a separate sale.
1.3 Closing Date. The first closing of the purchase and sale of the Shares
hereunder (the Initial Closing) shall be held at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304 on June 13, 2006
(the Closing Date) or such other date as the Company and a majority-in-interest of
the Purchasers may agree. Subject to Section 1.2 above, subsequent closings under
this Agreement may be held from time to time after the Initial Closing at such time
and place as the Company and the relevant Purchasers agree (Subsequent Closings).
For the purposes of this Agreement, the term Closing and Closing Date unless
otherwise indicated, refers to the closing or date of closing
of the purchase and sale of the Shares with respect to a particular Purchaser or
group of Purchasers, whether such closing occurs at the Initial Closing or at a
Subsequent Closing.
1.4 Delivery. At Closing, the Company shall deliver to each Purchaser a
certificate, in such denomination and registered in Purchasers name as set forth on
the Schedule of Purchasers, representing the number of Shares which Purchaser is
purchasing from the Company
against delivery to the Company of a check or wire
transfer payable to the order of the Company in the amount of the purchase price of
the Shares to be purchased by such Purchaser.
2. Representations and Warranties of the Company. The Company hereby represents
and warrants to Purchaser that, except as set forth in the Schedule of Exceptions attached
hereto as EXHIBIT C (the Schedule of Exceptions), which has been delivered to each
Purchaser prior to Purchasers execution hereof, each of the representations, warranties and
statements contained in this Section 2 is true and correct as of the date of this Agreement and
will be true and correct on and as of the Closing Date. For all purposes of this Agreement,
the statements contained in the Schedule of Exceptions shall also be deemed to be
representations and warranties made and given by Company under this Agreement.
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 California and has all requisite corporate power and authority to carry
on its business as currently conducted. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify, individually or in the aggregate, would have a material adverse effect on
its business (as now conducted), properties, or financial condition.
2.2 Corporate Power. The Company will have at the Closing all requisite
legal and corporate power and authority to (i) execute and deliver this Agreement;
(ii) sell and issue the Shares hereunder; (iii) issue the Common Stock issuable upon
conversion of the Shares (the Conversion Shares); and (iv) carry out and perform
its obligations under the terms of this Agreement.
2.3 Subsidiaries. The Company does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or other business
entity.
2.4 Capitalization. The authorized capital stock of the Company consists, or
immediately prior to the Initial Closing will consist, of 77,857,144 shares of Common
Stock (Common Stock), of which 9,274,356 shares are issued and outstanding
immediately prior to the Initial Closing and 51,687,948 shares of Preferred Stock
(Preferred Stock), 2,727,273 of which are designated Series A Preferred Stock of
which 2,727,273 are outstanding immediately prior to the Initial Closing; 6,460,675
of which are designated Series B Preferred Stock of which 6,460,675 are outstanding
immediately prior to the Initial Closing; 17,000,000 of which are designated Series C
Preferred Stock, 16,364,832 of which are issued and outstanding immediately prior to
the Initial Closing; and 15,500,000 of which are designated Series D Preferred Stock,
11,714,048 of which are issued and outstanding immediately prior to the Initial
Closing; and 10,000,000 of which are designated Series E Preferred Stock, none of
which will be outstanding immediately prior to the Initial Closing. All such issued
and outstanding shares have been duly authorized and validly issued in compliance
with applicable laws, and are fully paid and nonassessable.
The Company has reserved: (i) 5,000,000 shares of Series E Preferred for issuance hereunder
and 5,000,000 shares of Common Stock for issuance upon conversion of such shares of Series E
Preferred; (ii) 11,714,048 shares of Common Stock for issuance upon conversion of the outstanding
-2-
shares of Series D Preferred; (iii) 916,335 shares of Series D Preferred for issuance upon exercise
of outstanding warrants and 916,335 shares of Common Stock for issuance upon conversion of such
Series D Preferred; (iv) 16,364,832 shares of Common Stock for issuance upon conversion of the
outstanding shares of Series C Preferred Stock; (v) 294,868 shares of Series C Preferred Stock for
issuance upon exercise of outstanding warrants and 294,868 shares of Common Stock for issuance upon
conversion of such Series C Preferred Stock; (vi) 6,460,675 shares of Common Stock for issuance
upon conversion of the outstanding Series B Preferred Stock; (vii) 2,727,273 shares of Common Stock
for issuance upon conversion of the outstanding Series A Preferred Stock; and (viii) an aggregate
of 10,800,000 shares of Common Stock for issuance to employees and consultants of the Company
pursuant to the Companys 1999 Stock Option Plan, pursuant to which options to purchase 5,597,763
shares are granted and outstanding and 1,554,643 shares are available for future grant. Other than
with respect to the shares reserved for issuance in the preceding sentence, or as set forth in the
Ancillary Agreements (as defined below), there are no outstanding rights, options, warrants,
conversion rights, preemptive rights, rights of first refusal or similar rights for the purchase or
acquisition from the Company of any securities of the Company. There are no outstanding
obligations of the Company to repurchase or redeem any of its securities.
Except as contemplated in the Investor Rights Agreement (as defined below), the Company has
not granted or agreed to grant any registration rights, including piggyback rights, to any person
or entity. Except as contemplated in the Second Amended and Restated Voting Agreement dated as of
August 16, 2005, the Company is not a party or subject to any agreement or understanding, and to
the Companys knowledge, there is no agreement or understanding between any person or entities,
which relates to the voting or the giving of written consents with respect to any security of the
Company or by a director of the Company.
2.5 Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution and
delivery of this Agreement, the Eighth Amended and Restated Investor Rights Agreement
in the form attached hereto as EXHIBIT D (the Investor Rights Agreement),
the performance of all obligations of the Company under this Agreement and the
Investor Rights Agreement (other than those registration obligations contained in
Section 1 of the Investor Rights Agreement), and any other agreements to which the
Company is a party, the execution and delivery of which is a contemplated hereby (the
Ancillary
Agreements) and the authorization, issuance (or reservation for issuance), sale and
delivery of the Shares and the Conversion Shares has been taken or will be taken
prior to the Closing. This Agreement and the Investor Rights Agreement constitute
valid and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms, subject to: (i) judicial principles
limiting the availability of specific performance, injunctive relief, and other
equitable remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect generally relating to or affecting creditors
rights; and (iii) limitations on the enforceability of the indemnification provisions
of the Investor Rights Agreement.
2.6 Valid Issuance of Preferred and Common Stock. The Shares that are being purchased by the Purchasers hereunder, when issued, sold and
delivered in accordance with the
-3-
terms of this Agreement for the consideration expressed herein,
will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on
transfer other than restrictions on transfer under this Agreement and the Investor Rights Agreement
and under applicable state and federal securities laws. The Conversion Shares have been duly and
validly reserved for issuance, and, upon issuance in accordance with the terms of the Restated
Articles, will be duly and validly issued, fully paid, and nonassessable and will be free of
restrictions on transfer other than restrictions on transfer under this Agreement and the Investor
Rights Agreement and under applicable state and federal securities laws. The Conversion Shares may
be issued without any registration or qualification under state and federal securities laws as such
laws are currently in effect.
2.7 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 offer, sale or issuance of the Shares or the Conversion Shares or
the consummation of any other transaction contemplated hereby, except for (a) the
filing of the Restated Articles with the Secretary of State of the State of
California prior to the Closing and (b) filings required pursuant to applicable
federal and state securities laws and blue sky laws, which filings, the Company
covenants to complete within the required statutory period.
2.8 Litigation. There is no action, suit, proceeding or investigation
pending or, to the Companys knowledge, currently threatened against the Company
before any court, administrative agency or other governmental body which questions
the validity of this Agreement or the Investor Rights Agreement or the right of the
Company to enter into any of them, or to consummate the transactions contemplated
hereby or thereby, or which could result, either individually or in the aggregate, in
any material adverse change in the condition (financial or otherwise), business,
property, assets or liabilities 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, and none
of its assets is bound
by, the provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. There is no action, suit, proceeding or
investigation by or involving the Company currently pending or that the Company
intends to initiate.
2.9 Employees. Each employee of the Company has executed a proprietary
information and invention assignment agreement substantially in the form or forms
made available to the Purchasers. To the Companys knowledge, no officer or key
employee is in violation of any prior employee contract or proprietary information
agreement. No employees of the Company are represented by any labor union or covered
by any collective bargaining agreement. There is no pending or, to the Companys
knowledge, threatened labor dispute involving the Company and any group of its
employees. The Company is not aware that any officer or key employee intends to
terminate his or her employment with the Company within the six months after Closing.
The Company does not have a present intention to terminate the employment of any
officer or key employee. Each officer and key employee is devoting 100% of his or
her business time to the conduct of the business of the Company. The Company is not
aware that any officer or key employee intends to work less than full time during the
six months after Closing. Subject to general
-4-
principles related to wrongful
termination of employees, the employment of each officer and employee of the Company
is terminable at will.
2.10 Patents and Other Intangible Assets.
(a) The Company owns, or is licensed or otherwise has the legally enforceable right to use,
all copyrights, domain names, maskworks, applications for the issuance or registration of any of
the foregoing, trade secrets, confidential or proprietary know-how, data and information, ideas,
inventions, designs, developments, algorithms, processes, schematics, techniques, computer
programs, applications and other software, works of authorship, creative effort and, to the
Companys knowledge after such investigation as the Company deemed reasonable, patents, patent
applications, trademarks (including service marks and design marks) and applications therefor,
tradenames (all of the foregoing generically, Intellectual Property Rights) utilized in, or
necessary for, its business as now conducted (collectively, the Company Intellectual Property)
without infringing upon the right of any person, corporation or other entity.
(b) Section 2.10 of the Schedule of Exceptions lists (i) all patents and patent applications
and all registered and unregistered trademarks, trade names, copyrights and maskworks and
registered domain names included in the Company Intellectual Property, including the jurisdictions
in which each such intellectual property right has been issued or registered or in which any
application for such issuance or registration has been filed, (ii) all licenses, sublicenses,
collaborations and other agreements (or options for any of the foregoing) to which the Company is a
party and pursuant to which any person, corporation or other entity is authorized to use any of the
Company Intellectual Property, and (iii) all licenses, sublicenses, collaborations and other
agreements (or options for any of the foregoing) to which the Company is a party and pursuant
to which the Company is authorized to use any Intellectual Property Right of any third party (other
than standard licenses for commercially available software). Each of the agreements in (ii) and
(iii) above remain in full force and effect and, to the Companys knowledge, no party to any such
agreement is in material breach or default under such agreement, and the Company is not aware of
any act or failure to act by a party which would constitute a material breach or default under any
such agreement, give rise to a right of the licensor to terminate any such agreement or otherwise
result in termination of, or suspension or loss of exclusive rights under, any such agreement.
(c) To the Companys knowledge, the Company has not infringed or misappropriated any
Intellectual Property Right of any other person, corporation or other entity. The Company has not
received any communication or otherwise received any information alleging any such conduct by the
Company or asserting a claim by any third party to the ownership of, or right to use, any of the
Company Intellectual Property, and the Company does not know of any basis for any such claim. The
Company is not aware of any action, suit, proceeding or investigation pending or currently
threatened against the Company (or any third party owner or licensor of rights to the Company of
any of the Company Intellectual Property) which would have a material impact on the Companys
ownership of or exclusive or co-exclusive rights to use, the Company Intellectual Property.
-5-
(d) The Company is not aware that any of its employees is obligated under any agreement, or
subject to any judgment, decree or order of any court or administrative agency, that would
materially interfere with his or her ability to fully and freely perform their duties to the
Company or that would conflict with the Companys business. To the Companys knowledge, neither
the filing of the Restated Articles nor the execution and delivery of this Agreement or the
Investor Rights Agreement, nor the carrying on of the Companys business by the employees of the
Company, will conflict with or result in a material breach of the terms, conditions, or provisions
of, or constitute a default under, any agreement under which any such employee is now obligated.
The Company does not utilize, and will not be required to utilize, any invention, development or
work of authorship of any of its employees (or persons it currently intends to hire) made prior to
their employment by the Company.
(e) Except as described in Schedule 2.10, (i) the Company is not obligated, or under any
liability whatsoever to make any payments by way of royalties, fees or otherwise, to any owner or
licensor of, or other claimant to, any Company Intellectual Property, and (ii) the Company is not a
party to any agreement concerning the Company Intellectual Property or any other Intellectual
Property Right used or to be used by the Company in its business as conducted. No founder,
director, officer or employee of the Company, or, to the Companys knowledge, no shareholder of the
Company has any interest in the Company Intellectual Property.
(f) Except with respect to any rights granted under the agreements described in Schedule 2.10,
the Company owns exclusively all rights arising from or associated with the research and
development efforts of the Company, its founders, employees and independent contractors relating to
the Companys business as now conducted, and all such rights form part of
the Company Intellectual Property. The Company has secured valid written assignments from all
employees and independent contractors who contributed to the creation or development of any of the
Company Intellectual Property of the rights to such contributions that the Company does not already
own by operation of law. The Company has not received notice of any claim being asserted by any
current or former employee, independent contractor or other third party to the ownership, of or
right to use, any of the Company Intellectual Property, or challenging or questioning the validity
of any of the Company Intellectual Property, and the Company is not aware of any basis for any such
claim.
(g) The Company has taken reasonable steps to protect and preserve the confidentiality of all
material trade secrets included in Company Intellectual Property not otherwise protected by patents
or copyright (Confidential Information). All disclosure of Confidential Information to a third
party has been pursuant to the terms of a written confidentiality or non-disclosure agreement
between the Company and such third party.
(h) The Company hereby represents and warrants that the data, written and oral reports and
other representations and information that the Company provided to its investors (or their counsel)
pertaining to the Company Intellectual Property, when taken as a whole, were truthful and, to the
Companys knowledge, accurate in all material respects, and there was no omission therefrom which
made such information misleading, or incomplete in any material way.
-6-
2.11 Compliance with Other Instruments. The Company is not in violation or default of any provision of its Articles of
Incorporation or Bylaws, each as amended and in effect on and as of the Closing. The Company is
not in violation or default of any material provision of any instrument, mortgage, deed of trust,
loan, contract, commitment, judgment, decree, order or obligation to which it is a party or by
which it or any of its properties or assets are bound or, to the best of its knowledge, of any
provision of any federal, state or local statute, rule or governmental regulation. The execution,
delivery and performance of and compliance with this Agreement and the Investor Rights Agreement,
and the issuance and sale of the Shares, will not result in any such violation, be in conflict with
or constitute, with or without the passage of time or giving of notice, a default under any such
provision, license, indenture, instrument, mortgage, deed of trust, loan, contract, commitment,
judgment, decree, order or obligation; or require any consent or waiver under any such provision,
license, indenture, instrument, mortgage, deed of trust, loan, contract, commitment, judgment,
decree, order or obligation (other than any consents or waivers that have been obtained); or result
in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company pursuant to any such provision, license, indenture, instrument, mortgage,
deed of trust, loan, contract, commitment, judgment, decree, order or obligation.
2.12 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 Company is not in default in any material respect under any of such
franchises, permits, licenses, or other similar authority.
2.13 Environmental and Safety Laws. To its knowledge, the Company is not in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety, and to its knowledge, no material
expenditures by the Company are or will be required in order to comply with any such existing
statute, law, or regulation.
2.14 Title to Property and Assets. The Company has good and marketable title
to all of its properties and assets free and clear of all pledges, mortgages, liens
security interests, charges and encumbrances, except liens for current taxes and
assessments not yet due and possible minor liens and encumbrances which do not, in
any case, individually or in the aggregate, materially detract from the value of the
property subject thereto or materially impair the ownership or use of said property
or assets, or the operations of the Company. 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 interest free of all liens, claims or
encumbrances. The Companys properties and assets are in good condition and repair
in all material respects.
2.15 Agreements; Action.
(a) Except for agreements contemplated by this Agreement, there are no agreements,
understandings or proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof other than standard option grants and stock purchase
agreements entered into prior to the date of this Agreement.
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(b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or by which it is bound that
may involve (i) obligations (contingent or otherwise) of, or payments by the Company in excess of,
$100,000, other than in the ordinary course of business, (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from the Company other than standard commercial
software licenses, (iii) provisions restricting or adversely affecting the development, manufacture
or distribution of the Companys products or services, or (iv) indemnification by the Company with
respect to infringements of proprietary rights other than indemnifications entered into in the
ordinary course of business.
(c) For the purposes of subsection (b) above, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions involving the same person or
entity (including persons or entities the Company has reason to believe are affiliated therewith)
shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such
subsection.
(d) The Company is not a party to and is not bound by any contract, agreement or instrument,
or subject to any restriction under its Restated Articles or its Bylaws that adversely affects its
business as now conducted, its properties or its financial condition.
(e) The Company is not a guarantor or indemnitor of any indebtedness of any other person or
entity.
(f) The Company has not engaged in the past three months in any discussion (i) with any
representative of any entity or entities regarding the merger of the Company with or into any such
entity or entities or any affiliate thereof, (ii) with any representative of any entity or any
individual regarding the sale, conveyance or disposition of all or substantially all of the assets
of the Company or a transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company would be disposed of, or (iii) regarding any other form of
liquidation, dissolution or winding up of the Company.
2.16 Financial Statements. The Company has made available to each Purchaser
its unaudited balance sheet dated as of December 31, 2005 and the unaudited statement
of operations for the fiscal year then ended, its unaudited balance sheet as of March
31, 2006, and its unaudited statement of operations and cash flow statement covering
the three month period then ended (collectively, the Financial Statements). The
Financial Statements are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The Financial Statements
accurately set out and describe the financial condition and operating results of the
Company as of the date, and during the periods, indicated therein. Except as set
forth in the Financial Statements, the Company has no material liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary course
of business subsequent to March 31, 2006 and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial Statements,
which, in both cases, individually or in the aggregate are not material to the
financial condition or operating results of the Company.
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2.17 Changes. Since March 31 2006:
(a) the Company has not (i) declared or paid any dividends or authorized or made any
distribution upon or with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or any other liabilities outside the ordinary course of its
business individually in excess of $100,000 or, in the case of indebtedness and/or liabilities
individually less than $100,000, in excess of $200,000 in the aggregate, (iii) made any loans or
advances to any person, other than ordinary advances for reimbursable businesses expenses,
(iv) sold, exchanged, assigned, transferred, licensed or otherwise disposed of any of its assets or
rights (including Company Intellectual Property), other than the sale of its inventory in the
ordinary course of business, (v) waived or compromised a valuable right or a material debt owed to
it, (vi) materially changed any compensation arrangement or agreement with any employee, officer,
director or shareholder, or (vii) arranged or committed to do any of the things described in this
subsection (a); and
(b) there has not been (i) a loss of, or a material order cancellation by, any major customer
of the Company, (ii) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the business, properties, or financial condition of the Company,
(iii) any change in the assets, liabilities, financial condition or operating results of the
Company from that reflected in the Financial Statements, except changes in the ordinary course of
business that have not been, in the aggregate, materially adverse, (iv) any resignation or
termination of any officer or key employee of the Company, and the Company is not aware of the
impending resignation or termination of employment of any such officer, or (v) to the best of the
Companys knowledge, any other event or condition of any character that would materially and
adversely affect the business, properties, or financial condition of the Company.
2.18 Brokers or Finders. The Company has not agreed to incur, directly or
indirectly, any liability for brokerage or finders fees, agents commissions or
other similar charges in connection with this Agreement or any of the transactions
contemplated hereby.
2.19 Qualified Small Business Stock.
(a) As of and immediately following the Closing, the Shares will meet each of the requirements
for qualification as qualified small business stock set forth in Section 1202(c) of the Internal
Revenue Code of 1986, as amended (the Code), including without limitation the following: (i) the
Company will be a domestic C corporation, (ii) the Company will not have made any purchases of its
own stock described in Code Section 1202(c)(3)(B) during the one-year period preceding the Closing,
and (iii) the Companys (and any predecessors) aggregate gross assets, as defined by Code Section
1202(d)(2), at no time from the date of incorporation of the Company and through the Closing have
exceeded or will exceed $50 million, taking into account the assets of any corporations required to
be aggregated with the Company in accordance with Code Section 1202(d)(3).
(b) As of the Closing, at least 80% (by value) of the assets of the Company are used by it in
the active conduct of one or more qualified trades or businesses, as defined by Code
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Section
1202(e)(3), and the Company is an eligible corporation, as defined by Code Section 1202(e)(4).
2.20 Employee Benefit Plans. The Company does not have any Employee Benefit
Plan as defined in the Employee Retirement Income Security Act of 1974 other than the
Companys 401(k) Plan. The Company is in material compliance with the terms of the
Companys 401(k) Plan and has not received notice of any material increase in the
costs of such plans.
2.21 Tax Matters. The Company has filed all tax returns and reports as
required by law. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due. The Company has
not elected
pursuant to 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 business, properties or condition (financial or otherwise) of
the Company. None of the Companys tax returns have ever been audited by any
governmental authorities. The Company has withheld or collected from each payment
made to its employees the amount of all taxes (including without limitation, federal
income taxes, Federal 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.
2.22 Insurance. The Company has in full force and effect fire and casualty
insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might be
damaged or destroyed. The Company has obtained term life insurance payable to the
Company on the lives of Stephen Quake and Gajus Worthington in the amount of
$500,000. The Company has in full force and effect directors and officers liability
insurance, covering all of its directors, with aggregate coverage in the amount of
$2,000,000.
2.23 Corporate Documents. The Restated Articles and Bylaws of the Company
are in the form made available to the Purchasers. The copy of the minute books of
the Company made available to the Purchasers counsel contains true and correct
minutes of all meetings of directors (including any committees thereof) and
shareholders and all actions by written consent taken without a meeting by the
directors and shareholders since December 18, 2003.
2.24 Disclosure. The Company has fully provided each Purchaser with all the
information which such Purchaser has requested in connection with the purchase of the
Shares hereunder, as well as all information which the Company in its judgment
believes is reasonably necessary to enable such Purchaser to make a decision as to
whether to invest in the Company. Neither this Agreement with the Exhibits hereto,
nor any other statements, certificates or documents made or delivered in connection
herewith or therewith, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made. The financial
projections made available to the Purchasers (the Projections) were prepared in
good faith and based upon assumptions that the Company believes are reasonable, and
represent the Companys good faith
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estimate of its future plans and results; provided
however that the Company does not represent or warrant that it will achieve any of
the Projections.
2.25 Offering. Subject in part to the truth and accuracy of each Purchasers representations set forth in
this Agreement, the offer, sale and issuance of the Shares as contemplated by this Agreement is
exempt from the registration requirements of the Securities Act of 1933, as amended (the
Securities Act), and from the registration or qualification requirements of applicable state
securities laws or blue sky laws, and neither the Company nor any authorized agent acting on its
behalf will take any action hereafter that would cause the loss of such exemption.
2.26 Returns and Complaints. The Company has not received customer
complaints concerning alleged defects in the design of its products that, if true,
would have, individually or in the aggregate, a material adverse effect on its
business, properties, or financial condition.
3. Representations and Warranties of the Purchasers. Each Purchaser, individually
and not jointly, hereby represents and warrants as of the Closing Date that:
3.1 Experience. Such Purchaser is experienced in evaluating start-up
companies such as the Company, is able to evaluate and represent its own interests in
transactions such as the one contemplated by this Agreement, has such knowledge and
experience in financial and business matters such that Purchaser is capable of
evaluating the merits and risks of Purchasers prospective investment in the Company,
and has the ability to bear the economic risks of its investment.
3.2 Investment. Such Purchaser is acquiring the Shares, and the Conversion
Shares, for investment for such Purchasers own account and not with the view to, or
for resale in connection with, any distribution thereof. Such Purchaser understands
that the Shares, and the Conversion Shares have not been registered under the
Securities Act by reason of a specific exemption from the registration provisions of
the Securities Act which depends upon, among other things, the bona fide nature of
the investment intent as expressed herein. Such Purchaser further represents that it
does not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to any third person with respect to any of the
Shares, or the Conversion Shares, other than a transfer not involving a change of
beneficial ownership. Such Purchaser understands and acknowledges that the offering
of the Shares pursuant to this Agreement will not be registered under the Securities
Act on the ground that the sale provided for in this Agreement is exempt from the
registration requirements of the Securities Act.
3.3 Rule 144. Such Purchaser acknowledges that the Shares and the Conversion
Shares must be held indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. Such 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. Such Purchaser covenants that, in the absence of an effective
registration statement covering the stock in question, such Purchaser will sell,
transfer, or otherwise dispose of the Shares or the Conversion Shares only in a
manner consistent
with applicable securities laws and such Purchasers representations and covenants
set forth in this Section 3. In connection therewith, such Purchaser acknowledges
that the Company
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will make a notation on its stock books regarding the restrictions
on transfers set forth in this Section 3 and will transfer securities on the books of
the Company only to the extent not inconsistent therewith.
3.4 Legends. Purchaser understands and acknowledges that the certificate
evidencing its Shares and the Conversion Shares will be imprinted with legends in the
form set forth in Section 1.3 of the Investor Rights Agreement.
3.5 No Public Market. Such 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 Shares or the Conversion
Shares.
3.6 Access to Data. Such Purchaser has received and reviewed information
about the Company and has had an opportunity to discuss the Companys business,
management and financial affairs with its management and to review the Companys
facilities. The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 2 of this Agreement or the right of the
Purchasers to rely thereon.
3.7 Authorization. This Agreement when executed and delivered by such
Purchaser will constitute a valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to:
(i) judicial principles respecting election of remedies or limiting the availability
of specific performance, injunctive relief, and other equitable remedies;
(ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors rights; and
(iii) limitations on the enforceability of the indemnification provisions of the
Investor Rights Agreement.
3.8 Accredited Investor. Such Purchaser acknowledges that it is an
accredited investor as defined in Rule 501 of Regulation D as promulgated by the
Securities and Exchange Commission under the Securities Act and shall submit to the
Company such further assurances of such status as may be reasonably requested by the
Company. The principal address of such Purchaser is as set forth on the Schedule of
Purchasers.
3.9 Public Solicitation. Purchaser knows of no public solicitation or
advertisement of an offer in connection with the proposed issuance and sale of the
Shares.
3.10 Tax Advisors. Purchaser has reviewed with Purchasers own tax advisors
the federal, state and local tax consequences of this investment, where applicable,
and the transactions contemplated by this Agreement. Each Purchaser is relying
solely on
such advisors and not on any statements or representations of the Company or any of
its agents and understands that each Purchaser (and not the Company) shall be
responsible for the Purchasers own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
3.11 Purchaser Counsel. Purchaser acknowledges that it has had the
opportunity to review this Agreement, the exhibits and the schedules attached hereto
and the transactions contemplated by this Agreement with Purchasers own legal
counsel. Each Purchaser is relying
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solely on such counsel and not on any statements
or representations of the Company or any of its agents for legal advice with respect
to this investment or the transactions contemplated by this Agreement.
3.12 Brokers or Finders. The Company has not incurred and will not incur,
directly or indirectly, as a result of any action taken by such Purchaser, any
liability for brokerage or finders fees or agents commissions or any similar
changes in connection with this Agreement.
3.13 Non-United States Persons. If Purchaser is not a United States person, such Purchaser hereby represents that such
Purchaser is satisfied as to the full observance of the laws of such Purchasers jurisdiction in
connection with any invitation to subscribe for the Shares and the Conversion Shares or any use of
this Agreement, the Investor Rights Agreement and the Voting Agreement, including (i) the legal
requirements within such Purchasers jurisdiction for the purchase of Shares and the Conversion
Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental
or other consents that may need to be obtained and (iv) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, redemption, sale or transfer of such
securities. Such Purchasers subscription and payment for, and such Purchasers continued
beneficial ownership of, the Shares and the Conversion Shares will not violate any applicable
securities or other laws of such Purchasers jurisdiction.
4. Conditions of Purchasers Obligations at Closing. The obligations of each
Purchaser under this Agreement are subject to the fulfillment on or before the Closing of each
of the following conditions, the waiver of which shall not be effective against any Purchaser
who does not consent in writing thereto:
4.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and as of
the date of the Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The President of the Company shall deliver to
each Purchaser at the Closing a certificate stating that the conditions specified in
Sections 4.1 and 4.2 have been fulfilled and stating that as of the Closing there
shall have been no adverse change in the business, affairs, operations, properties,
assets or condition of the Company.
4.4 Blue Sky. The Company shall have obtained all necessary permits and
qualifications, if any, or secured an exemption therefrom, required by any state or
country prior to the offer and sale of the Shares.
4.5 Opinion of Company Counsel. Each Purchaser in the Initial Closing shall
have received from Wilson Sonsini Goodrich & Rosati, Professional Corporation,
counsel for the Company, an opinion, dated as of the Initial Closing, in the form
attached hereto as EXHIBIT E.
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4.6 Investor Rights Agreement. The Company and each Purchaser shall have
entered into the Investor Rights Agreement.
4.7 Restated Articles. The Restated Articles shall have been accepted for
filing by the California Secretary of State and shall be in full force and effect as
of the Closing Date.
4.8 Corporate Proceedings; Waivers and Consents. All corporate and other
proceedings to be taken and all waivers, consents and permits necessary or
appropriate for the consummation of the transactions contemplated by this Agreement
will have been taken or obtained.
5. Conditions of the Companys Obligations at Closing. The obligations of the
Company to each Purchaser under this Agreement are subject to the fulfillment on or before the
Closing of each of the following conditions by that Purchaser:
5.1 Representations and Warranties. The representations and warranties of
the Purchasers contained in Section 3 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and as of
the Closing.
5.2 Payment of Purchase Price. Each Purchaser shall have delivered the
purchase price against delivery of the Shares as set forth in Section 1.4 by the
Company to such Purchaser.
5.3 Blue Sky. The Company shall have obtained all necessary permits and
qualifications, if any, or secured an exemption therefrom, required by any state or
country for the offer and sale of the Shares.
5.4 Investor Rights Agreements. The Company and each Purchaser shall have
entered into the Investor Rights Agreement.
5.5 Restated Articles . The Restated Articles shall have been accepted for
filing by the California Secretary of State and shall be in full force and effect as
of the Closing Date.
5.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing hereby, and all
documents and instruments incident to these transactions, shall be reasonably
satisfactory in substance to the Company and its counsel.
6. Miscellaneous.
6.1 Governing Law; Jurisdiction. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties hereto
shall be governed in all respects by the laws of the State of California, without
regard to any provisions thereof relating to conflicts of laws among different
jurisdictions. The parties hereto agree to submit to the exclusive jurisdiction of
the federal and state courts of San Mateo County, California with respect to the
breach or interpretation of this Agreement or the enforcement of any and all rights,
duties, liabilities, obligations, powers, and other relations between the parties
arising under this Agreement.
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6.2 Indemnification. The Company shall indemnify, defend and hold each
Purchaser harmless against all liability, loss or damage (collectively, Losses and
individually, a Loss) arising from any litigation, proceeding or dispute arising
from such Purchasers status as a shareholder of the Company other than Losses
arising from such Purchasers gross negligence or willful misconduct, provided that
such indemnification shall apply only to litigation, proceedings or disputes arising
prior to the Companys Initial Public Offering (as defined in the Investor Rights
Agreement) and the Companys obligation to indemnify any Purchaser shall be limited
in amount to the amount paid by such Purchaser for the purchase of such Purchasers
Shares as set forth on EXHIBIT A. The foregoing indemnity is not intended to
supercede or replace the indemnification obligations of the parties set forth in
Section 1.10 of the Investor Rights Agreement nor shall it be construed to limit any
other rights and remedies of the Purchasers under this Agreement or any other
indemnification to which such Purchaser may be entitled under any other agreement of
the Company. The foregoing indemnification rights are transferable only to
Affiliates (as defined in the Investor Rights Agreement) of a Purchaser.
6.3 Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by any Purchaser or the Company and the
Closing of the transactions contemplated hereby; provided, however, that such
representations and warranties are only made as of the date of such execution and
delivery and as of such Closing.
6.4 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 Shares at the Closing shall not
be assignable without the consent of the Company.
6.5 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and agreement
among the parties with regard to the subjects hereof and thereof relating to the
purchase of the Shares. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by the
Company and the holder or holders of greater than fifty percent (50%) of the
then-outstanding Shares or the Conversion Shares. Notwithstanding the foregoing, any
additional purchaser pursuant to Section 1.2 may become a party to this Agreement by
executing and delivering an additional counterpart signature page to this Agreement
and such purchaser shall be deemed a Purchaser hereunder. The parties agree that the
Schedule of Purchasers attached hereto as Exhibit A shall be updated
automatically without any formal amendment to reflect the addition of any such
additional Purchaser. Any amendment or waiver effected in accordance with this
Section 6.5 shall be binding upon the Purchasers and each transferee of the Shares
(or the Common Stock issuable upon conversion thereof), each future holder of all
such securities, and the Company.
6.6 Notices, Etc. All notices and other communications required or permitted
hereunder, shall be in writing and shall be personally delivered, sent by facsimile,
mailed by registered or certified mail, postage prepaid, return receipt requested, or
delivered by a nationally recognized overnight courier, addressed (a) if to a
Purchaser, at such Purchasers address or
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facsimile number set forth on the Schedule
of Purchasers, or at such other address or facsimile number as such Purchaser shall
have furnished to the Company in writing, or (b) if to the Company, at its address or
facsimile number set forth on the signature page to this Agreement addressed to the
attention of the Corporate Secretary, or at such other address or facsimile number as
the Company shall have furnished to the Purchasers. Any such notice or communication
shall be deemed to have been received (A) in the case of personal delivery or
delivery by telecopier, on the date of such delivery, (B) in the case of a commercial
overnight courier, on the next business day after the date when sent and (C) in the
case of mailing, on the fifth business day following that on which the piece of mail
containing such communication is posted.
6.7 Delays or Omissions. 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 of or 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 holder 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 or as provided in this
Agreement. All remedies, either under this Agreement or by law or otherwise afforded
to any holder, shall be cumulative and not alternative.
6.8 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.
6.9 Finders Fee. The Company and each Purchaser shall each indemnify and
hold the other harmless from any liability for any commission or compensation in the
nature of a finders fee (including the costs, expenses and legal fees of defending
against such liability) for which the Company or the Purchasers, or any of their
respective partners, employees, or representatives, as the case may be, is
responsible.
6.10 Expenses. The Company and each Purchaser shall bear its own expenses
and legal fees incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.
6.11 Waiver of Conflict. Each of the Purchasers and the Company acknowledges
that Wilson Sonsini Goodrich & Rosati, Professional Corporation (WSGR) may have
represented and may currently represent Purchasers. In the course of such
representation, WSGR may have
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come into possession of confidential information
relating to such Purchasers. Each of the Purchasers and the Company acknowledges
that WSGR is representing only the Company in this transaction. Pursuant to Rule
3-310 of the Rules of Professional Conduct promulgated by the State Bar of
California, an attorney must avoid representations in which the attorney has or had a
relationship with another party interested in the representation without the informed
written consent of all parties affected. By executing this Agreement, each of the
Purchasers
and the Company hereby waives any actual or potential conflict of interest that may
arise in this financing as a result of WSGRs representation of such persons or
entities, WSGRs possession of such confidential information and the participation by
WSGRs affiliate in the financing. Each of the Purchasers and the Company represents
that it has had the opportunity to consult with independent counsel concerning the
giving of this waiver.
6.12 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 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.
6.13 Counterparts; Facsimile. This Agreement may be executed in any number
of counterparts, each of which may be executed by less than all Purchasers, each of
which shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature.
6.14 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.
6.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it is
not relying upon any person, firm or corporation (including without limitation any
other Purchaser), other than the Company and its officers and directors (acting in
their capacity as representatives of the Company), in deciding to invest and in
making its investment in the Company. Each Purchaser agrees that no other Purchaser
nor the respective controlling persons, officers, directors, partners, agents or
employees of any other Purchaser shall be liable to such Purchaser for any losses
incurred by such Purchaser in connection with its investment in the Company.
6.16 Like Treatment of Holders. The Company shall not directly or indirectly
pay or cause to be paid any consideration, whether by way of interest, fee, payment
for the redemption or exchange of Preferred Stock, or otherwise to any holder of
Preferred Stock for or as inducement to, any consent, waiver or amendment of any term
or provision of the Preferred Stock, this Agreement or the Investor Rights Agreement
unless equivalent consideration is offered on equivalent terms and conditions to all
Purchasers of Preferred Stock under this Agreement bound by such consent, waiver or
amendment.
6.17 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING (WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.
-17-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
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FLUIDIGM CORPORATION
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By: |
/s/ Gajus Worthington
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Gajus Worthington |
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President and Chief Executive Officer
7100 Shoreline Court
South San Francisco, CA 94080
FAX: (650) 871-7195 |
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[FLUIDIGM CORPORATION SERIES E PREFERRED STOCK PURCHASE AGREEMENT]
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PURCHASER: |
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AllianceBernstein L.P. |
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By:
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/s/ Adam Spilka |
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Name:
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Adam Spilka |
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Title:
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SVP, Counsel, Secretary |
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[FLUIDIGM CORPORATION SERIES E PREFERRED STOCK PURCHASE AGREEMENT]
EXHIBIT A
SCHEDULE OF PURCHASERS
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Name and Address |
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Shares of Series E |
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Purchase Price |
AllianceBernstein L.P. |
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1,250,000 |
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$ |
5,000,000.00 |
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TOTALS |
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1,250,000 |
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$ |
5,000,000.00 |
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FLUIDIGM CORPORATION
AMENDMENT NO. 1 TO
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 1 (the Amendment) to that certain Series E Preferred Stock Purchase
Agreement, dated as of June 13, 2006 (the Purchase Agreement), is made and entered into effective
as of December 22, 2006 (the Effective Date) by and among Fluidigm Corporation, a California
corporation (the Company), and the Purchasers named therein. Capitalized terms used in this
Amendment that are not otherwise defined herein shall have the respective meanings assigned to them
in the Purchase Agreement.
RECITALS
WHEREAS, the Company previously sold and issued an aggregate of 1,250,000 shares of Series E
Preferred Stock of the Company (the Series E Preferred) pursuant to the terms of the Purchase
Agreement at the Initial Closing held on June 13, 2006;
WHEREAS, the Company and the Purchaser now desire to amend the terms of the Purchase Agreement
to provide that the Company may sell and issue additional shares of Series E Preferred pursuant to
the Purchase Agreement, at one or more additional Subsequent Closings, provided that any such
additional Subsequent Closings shall take place no later than March 31, 2007.
WHEREAS, pursuant to Section 6.5 of the Purchase Agreement, the terms of the Purchase
Agreement may be amended upon the written consent of the Company and the holder or holders of
greater than fifty percent (50%) of the outstanding Shares or the Conversion Shares; and
WHEREAS, the Purchaser who has signed below holds greater than fifty percent (50%) of the
outstanding Shares purchased under the Purchase Agreement as of the Effective Date and consents to
the changes as set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
mutually agree as follows:
AGREEMENT
1. Amendment to Section 1.1. Section 1.1 (Authorization of the Shares) of the
Purchase Agreement is hereby amended and restated in its entirety as follows:
1.1 Authorization of the Shares. The Company will on or
before the Closing (as defined below) authorize the sale and issuance
pursuant to this Agreement of up to 6,318,333 shares (the Shares) of its
- 1 -
Series E Preferred Stock (the Series E Preferred), having the rights,
preferences and privileges as set forth in the Amended and Restated Articles
of Incorporation attached hereto as EXHIBIT B (the Restated
Articles).
2. Amendment to Section 1.2. Section 1.2 (Purchase and Sale of the Shares) of the
Purchase Agreement is hereby amended and restated in its entirety as follows:
1.2 Purchase and Sale of the Shares. Subject to the terms and
conditions hereof and in reliance upon the representations, warranties and
agreements contained herein, the Company will issue and sell to each
Purchaser, severally and not jointly, and each Purchaser will purchase from
the Company, severally and not jointly, at the Closing, the number of Shares
set forth opposite the Purchasers name on the Schedule of Purchasers, at a
purchase price of Four Dollars ($4.00) per Share. The Company shall be
entitled to sell any unpurchased Shares to any Purchaser or to a person who
is not a Purchaser and to amend the Schedule of Purchasers to include the
information relating to such sales, and such purchasers shall be considered
Purchasers and parties to this Agreement; provided that (i) such sales are
made pursuant to this Agreement or an agreement identical to this one except
for the Closing Date and exhibits, and (ii) such sales are completed on or
prior to March 31, 2007. The Companys agreement with each Purchaser is a
separate agreement, and the sale of the Shares to each Purchaser is a
separate sale.
3. Governing Law. This Amendment shall be governed in all respects by the laws of the
State of California, without regard to any provisions thereof relating to conflicts of laws among
different jurisdictions.
4. Purchase Agreement. Wherever necessary, all other terms of the Purchase Agreement
are hereby amended to be consistent with the terms of this Amendment. Except as specifically set
forth herein, the Purchase Agreement shall remain in full force and effect.
5. Counterparts; Facsimile. This Amendment may be executed in any number of
counterparts, each of which shall be an original, and all of which together shall constitute one
instrument. Executed signatures transmitted via facsimile will be accepted and considered duly
executed.
6. Effect of Execution of Amendment by Certain Purchaser. This Amendment, when
executed and delivered by the Company and a Purchaser purchasing shares of Series E Preferred at a
Subsequent Closing held on or after the date hereof, shall also constitute and shall be deemed a
counterpart signature page to the Purchase Agreement. Consequently, each undersigned Purchaser
purchasing shares of Series E Preferred at a Subsequent Closing held on or after the date hereof
acknowledges and agrees that he, she or it is bound by the terms and
- 2 -
conditions contained in the Purchase Agreement, as amended by this Amendment, with respect to
the purchase of such shares.
[Remainder of page intentionally left blank]
- 3 -
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
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COMPANY: |
FLUIDIGM CORPORATION
a California corporation
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By: |
/s/ Gajus Worthington
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Gajus Worthington, |
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President and Chief Executive Officer |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Cross Creek Capital, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC |
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Its Sole General Partner |
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By:
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Wasatch Advisors, Inc.
Its Sole Member |
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By:
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/s/ Karey Barker
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Name:
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Karey Barker |
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Title:
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Vice President |
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Cross Creek Capital Employees Fund, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC |
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Its Sole General Partner |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Karey Barker
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Name:
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Karey Barker |
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Title:
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Vice President |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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WASATCH FUNDS, INC.
Wasatch Small Cap Growth Fund |
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By:
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Wasatch Advisors, Inc. |
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Its:
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Investment Adviser |
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By:
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/s/ Dan Thurber
Name: Dan Thurber
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Title: Vice President |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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SMALLCAP World Fund, Inc. |
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By:
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Capital Research and Management Company, |
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its, investment adviser |
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By:
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/s/ Michael Downer
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Name:
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Michael Downer |
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Title: |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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AllianceBernstein Venture Fund I, L.P. |
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By:
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AllianceBernstein ESG Venture Management, L.P.,
its general partner |
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By:
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AllianceBernstein Global Derivatives Corporation,
its general partner |
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By:
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/s/ James D. Kiggen
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Name:
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James D. Kiggen |
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Title:
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Senior Vice President |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Versant
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Affiliates Fund 1-A, L.P. |
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Versant
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Affiliates Fund 1-B, L.P. |
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Versant
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Side Fund I, L.P. |
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Versant
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Venture Capital I, L.P. |
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By:
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Versant Ventures I, LLC |
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its General Partner |
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By:
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/s/ Samuel D. Colella
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Name:
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Samuel D. Colella |
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Title:
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Managing Director |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Lehman Brothers Healthcare Venture Capital L.P. |
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By:
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Lehman Brothers HealthCare Venture Capital Associates L.P., |
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its General Partner |
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By:
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LB I Group Inc., its General Partner |
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By:
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/s/ Michael Odrich
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Name:
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Michael Odrich |
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Its:
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Senior Vice President |
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Lehman Brothers P.A. LLC |
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By:
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/s/ Michael Odrich
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Name:
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Michael Odrich |
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Its:
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Senior Vice President |
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Lehman Brothers Partnership Account
2000/2001, L.P. |
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By:
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LB I Group Inc., its General Partner |
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By:
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/s/ Michael Odrich
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Name:
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Michael Odrich |
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Its:
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Senior Vice President |
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Lehman Brothers Offshore Partnership Account 2000/2001, L.P. |
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By:
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LB I Offshore Partners Group Ltd., its General Partner |
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By:
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/s/ Michael Odrich
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Name:
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Michael Odrich |
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Its:
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Senior Vice President |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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EuclidSR Partners, L.P. |
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By:
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EuclidSR Associates, L.P. |
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its General Partner |
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By:
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/s/ Elaine V. Jones
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Name:
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Elaine V. Jones |
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Title:
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General Partner |
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EuclidSR Biotechnology Partners, L.P. |
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By:
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EuclidSR Biotechnology Associates, L.P. |
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its General Partner |
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By:
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/s/ Elaine V. Jones
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Name:
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Elaine V. Jones |
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Title:
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General Partner |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Iinterwest Partners VII, L.P. |
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By:
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InterWest Management Partners VII, LLC |
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its General Partner |
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By:
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/s/ Michael Sweeney
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Name:
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Michael Sweeney |
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Title:
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As agent for the general partner |
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Interwest Investors VII, L.P. |
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By:
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InterWest Management Partners VII, LLC |
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its General Partner |
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By:
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/s/ Michael Sweeney
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Name:
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Michael Sweeney |
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Title:
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As agent for the general partner |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Lilly Bioventures, Eli Lilly & Company |
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By:
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/s/ Thomas W. Grein
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Name:
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Thomas W. Grein |
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Title:
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Vice President and Treasurer |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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Alloy Ventures 2005, L.P. |
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By:
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Alloy Ventures 2005, LLC |
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its General Partner |
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By:
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/s/ Tony DiBona
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Name:
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Toni DiBona |
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Title:
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Managing Member of Alloy Ventures
2005 LLC |
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Alloy Ventures 2002, L.P. |
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Alloy Partners 2002, L.P. |
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By:
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Alloy Ventures 2002, LLC |
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its General Partner |
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By:
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/s/ Tony DiBona
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Name:
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Tony DiBona |
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Title:
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Managing Member of Alloy
Ventures
2002, LLC, the general partner of Alloy
Partners 2002, L.P. and Alloy Ventures
2002, L.P. |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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SightLine Healthcare Fund III, L.P. |
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By:
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/s/ Kenneth E. Higgins
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Name:
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Kenneth E. Higgins |
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Title:
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Managing Director of Sightline
Partners
LLC, general partner of its general partner |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASER:
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/s/ Bruce Burrows
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Bruce Burrows |
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[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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|
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/s/ John M. Harland
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John M. Harland |
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|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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Ferguson/Egan Family Trust dated 6/28/99 |
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|
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By:
Name:
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/s/ Rodney A. Ferguson
Rodney A. Ferguson
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|
|
|
|
Title:
|
|
Trustee |
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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Health Care Administration Company |
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By:
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/s/ Gary L. Bowers
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|
|
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Name:
|
|
Gary L. Bowers |
|
|
|
|
Title:
|
|
President |
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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The Condon Family Trust |
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By:
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/s/ Thomas J. Condon
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Name:
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Thomas J. Condon |
|
|
|
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Title:
|
|
Trustee |
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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In-Q-Tel, Inc. |
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By:
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/s/ Scott G. Yancey
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Name:
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|
Scott G. Yancey |
|
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|
|
Title:
|
|
Executive Vice President |
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In-Q-Tel Employee Fund, LLC |
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By:
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/s/ Scott G. Yancey |
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Name:
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|
Scott G. Yancey |
|
|
|
|
Title:
|
|
EVP of In-Q-Tel, Inc., the manager of the
fund |
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
|
|
|
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The V Foundation for Cancer Research |
|
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By:
Name:
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|
/s/ Nicholas Valvano
Nicholas Valvano
|
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Title:
|
|
Chief Executive Officer |
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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|
|
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/s/ Fredrick H. Stern
Fredrick H. Stern
|
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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|
|
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/s/ Alfred J. Mandel
Alfred J. Mandel
|
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
|
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/s/ Pauline E. van Ysendoorn
Pauline E. van Ysendoorn
|
|
|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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/s/ Rhett E. Brown
|
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Rhett E. Brown |
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|
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 1 to
Series E Preferred Stock Purchase Agreement as of the 30th day of March, 2007.
PURCHASER:
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|
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SMALLCAP World Fund, Inc. |
|
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By:
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Capital Research and Management Company,
its investment adviser |
|
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By:
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/s/ Timothy D. Amour |
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Name:
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|
Timothy D. Armour |
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Title:
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|
President |
[Signature Page to Amendment No. 1 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES E PREFERED STOCK FINANCING
DECEMBER 22, 2006
|
|
|
|
|
|
|
|
|
|
|
Shares of Series E |
|
|
Name |
|
Preferred Stock |
|
Purchase Price |
CLIPPERBAY & CO.
SMALLCAP World Fund, Inc. |
|
|
1,875,000 |
|
|
$ |
7,500,000.00 |
|
PACO c/o 80-16-200-1037662
Cross Creek Capital, L.P. |
|
|
569,074 |
|
|
$ |
2,276,296.00 |
|
PACO c/o 80-16-200-1037670 |
|
|
55,926 |
|
|
$ |
223,704.00 |
|
CLEARMOON & CO. |
|
|
625,000 |
|
|
$ |
2,500,000.00 |
|
ALLIANCEBERNSTEIN VENTURE FUND I, L.P. |
|
|
62,500 |
|
|
$ |
250,000.00 |
|
ALLOY VENTURES 2005, L.P. |
|
|
80,625 |
|
|
$ |
322,500.00 |
|
ALLOY VENTURES 2002, L.P. |
|
|
78,505 |
|
|
$ |
314,020.00 |
|
ALLOY PARTNERS 2002, L.P. |
|
|
2,120 |
|
|
$ |
8,480.00 |
|
INTERWEST INVESTORS VII, L.P. |
|
|
2,285 |
|
|
$ |
9,140.00 |
|
INTERWEST PARTNERS VII, L.P. |
|
|
47,715 |
|
|
$ |
190,860.00 |
|
EUCLIDSR BIOTECHNOLOGY PARTNERS, L.P. |
|
|
105,875 |
|
|
$ |
423,500.00 |
|
EUCLIDSR PARTNERS, L.P. |
|
|
105,875 |
|
|
$ |
423,500.00 |
|
VERSANT AFFLIATES FUND 1-A, L.P. |
|
|
5,000 |
|
|
$ |
20,000.00 |
|
VERSANT AFFLIATES FUND 1-B, L.P. |
|
|
10,500 |
|
|
$ |
42,000.00 |
|
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES E PREFERED STOCK FINANCING
DECEMBER 22, 2006
|
|
|
|
|
|
|
|
|
|
|
Shares of Series E |
|
|
Name |
|
Preferred Stock |
|
Purchase Price |
VERSANT SIDE FUND I, L.P. |
|
|
4,500 |
|
|
$ |
18,000.00 |
|
VERSANT VENTURE CAPITAL I, L.P. |
|
|
230,000 |
|
|
$ |
920,000.00 |
|
LILLY BIO VENTURES, ELI LILLY AND COMPANY |
|
|
89,750 |
|
|
$ |
359,000.00 |
|
SIGHTLINE HEALTHCARE FUND III, L.P. |
|
|
30,000 |
|
|
$ |
120,000.00 |
|
BRUCE BURROWS |
|
|
144,750 |
|
|
$ |
579,000.00 |
|
LEHMAN BROTHERS HEALTHCARE VENTURE CAPITAL, L.P. |
|
|
39,937 |
|
|
$ |
159,748.00 |
|
LEHMAN BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, L.P. |
|
|
8,932 |
|
|
$ |
35,728.00 |
|
LEHMAN BROTHERS P.A., LLC |
|
|
76,440 |
|
|
$ |
305,760.00 |
|
LEHMAN BROTHERS PARTNERSHIP ACCOUNT 2000/2001, L.P. |
|
|
34,440 |
|
|
$ |
137,760.00 |
|
TOTALS |
|
|
4,284,749 |
|
|
$ |
17,138,996.00 |
|
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES E PREFERED STOCK FINANCING
MARCH 30, 2007
|
|
|
|
|
|
|
|
|
|
|
Shares of Series E |
|
|
Name |
|
Preferred Stock |
|
Purchase Price |
JOHN M. HARLAND |
|
|
5,000 |
|
|
$ |
20,000.00 |
|
FERGUSON/EGAN FAMILY TRUST DATED 6/28/99 |
|
|
15,000 |
|
|
$ |
60,000.00 |
|
HEALTH CARE ADMINISTRATION COMPANY |
|
|
25,000 |
|
|
$ |
100,000.00 |
|
THE CONDON FAMILY TRUST |
|
|
12,500 |
|
|
$ |
50,000.00 |
|
IN-Q-TEL, INC. |
|
|
10,125 |
|
|
$ |
40,500.00 |
|
IN-Q-TEL EMPLOYEE FUND, LLC |
|
|
3,375 |
|
|
$ |
13,500.00 |
|
THE V FOUNDATION FOR CANCER RESEARCH |
|
|
6,250 |
|
|
$ |
25,000.00 |
|
FREDRICK H. STERN |
|
|
37,500 |
|
|
$ |
150,000.00 |
|
ALFRED J. MANDEL |
|
|
1,000 |
|
|
$ |
4,000.00 |
|
PAULINE E. van YSENDOORN |
|
|
2,500 |
|
|
$ |
10,000.00 |
|
RHETT E. BROWN |
|
|
12,500 |
|
|
$ |
50,000.00 |
|
CLIPPERBAY & CO. |
|
|
350,000 |
|
|
$ |
1,400,000.00 |
|
TOTALS |
|
|
480,750 |
|
|
$ |
1,923,000.00 |
|
FLUIDIGM CORPORATION
AMENDMENT NO. 2 TO
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 2 (the Amendment) to that certain Series E Preferred Stock Purchase
Agreement, dated as of June 13, 2006, as amended December 22, 2006, by and among Fluidigm
Corporation, a California corporation (Fluidigm California) and the Purchasers named therein (the
Purchase Agreement), is made and entered into effective as of October 10, 2007 (the Effective
Date) by and among Fluidigm Corporation, a Delaware corporation (the Company), and the
Purchasers named herein. Capitalized terms used in this Amendment that are not otherwise defined
herein shall have the respective meanings assigned to them in the Purchase Agreement.
RECITALS
WHEREAS, Fluidigm California previously sold and issued an aggregate of 1,250,000 shares of
Series E Preferred Stock (the Series E Preferred) pursuant to the terms of the Purchase Agreement
at the Initial Closing held on June 13, 2006 and an additional 6,015,499 shares of Series E
Preferred at Subsequent Closings held on December 22, 2006 and March 30, 2007;
WHEREAS, on July 18, 2007, Fluidigm California was merged with and into the Company, with the
Company being the surviving corporation such that the Company succeeded to all of Fluidigm
Californias rights and obligations under the Purchase Agreement and all outstanding shares of
Series E Preferred of Fluidigm California were exchanged on a one for one basis for shares of
Series E Preferred of the Company;
WHEREAS, the Company and the Purchasers now desire to amend the terms of the Purchase
Agreement to provide that the Company may sell and issue up to 7,375,000 additional shares of
Series E Preferred (the Additional Shares) pursuant to the Purchase Agreement, at one or more
additional Subsequent Closings, provided that any such additional Subsequent Closings shall take
place no later than December 31, 2007.
WHEREAS, pursuant to Section 6.5 of the Purchase Agreement, the terms of the Purchase
Agreement may be amended upon the written consent of the Company and the holder or holders of
greater than fifty percent (50%) of the outstanding Shares or the Conversion Shares;
WHEREAS, the Purchasers who have signed below hold greater than fifty percent (50%) of the
outstanding Shares purchased under the Purchase Agreement as of the Effective Date and consent to
the changes as set forth in this Amendment;
WHEREAS, in connection with the execution of this Amendment, the Company is amending the
Amended and Restated Certificate of Incorporation of the Company to increase the
number of
authorized shares of capital stock of the Company to facilitate the sale of the Additional Shares.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
mutually agree as follows:
AGREEMENT
1. Amendment to Section 1.1. Section 1.1 (Authorization of the Shares) of the
Purchase Agreement is hereby amended and restated in its entirety as follows:
1.1 Authorization of the Shares. The Company will on or
before the Closing (as defined below) authorize the sale and issuance
pursuant to this Agreement of up to 17,956,252 shares (the Shares) of its
Series E Preferred Stock (the Series E Preferred), having the rights,
preferences and privileges as set forth in the Amended and Restated
Certificate of Incorporation, as amended by Amendment No. 1 to Amended and
Restated Certificate of Incorporation and Amendment No. 2 to Amended and
Restated Certificate of Incorporation, as attached hereto as EXHIBITS
B-1 AND B-2, respectively (together for purposes of this
Agreement, the Restated Certificate).
2. Amendment to Section 1.2. Section 1.2 (Purchase and Sale of the Shares) of the
Purchase Agreement is hereby amended and restated in its entirety as follows:
1.2 Purchase and Sale of the Shares. Subject to the terms and
conditions hereof and in reliance upon the representations, warranties and
agreements contained herein, the Company will issue and sell to each
Purchaser, severally and not jointly, and each Purchaser will purchase from
the Company, severally and not jointly, at the applicable Closing, the
number of Shares set forth opposite the Purchasers name on the Schedule of
Purchasers, at a purchase price of Four Dollars ($4.00) per Share. The
Company shall be entitled to sell any unpurchased Shares to any Purchaser or
to a person who is not a Purchaser and to amend the Schedule of Purchasers
to include the information relating to such sales, and such purchasers shall
be considered Purchasers and parties to this Agreement; provided that (i)
such sales are made pursuant to this Agreement or an agreement identical to
this one except for the Closing Date and exhibits, and (ii) such sales are
completed on or prior to December 31, 2007. The Companys agreement with
each Purchaser is a separate agreement, and the sale of the Shares to each
Purchaser is a separate sale.
-2-
3. Amendment to Section 2. Section 2 (Representations and Warranties of the Company)
of the Purchase Agreement is hereby amended to add the following sentence to the end of the
paragraph which reads in its entirety as follows:
At each Subsequent Closing, the Company shall provide an updated
Schedule of Exceptions and EXHIBIT C shall be concurrently amended
and restated for purposes of such Subsequent Closing.
4. Amendment to Section 2.4. Solely in connection with the sale of Additional Shares
pursuant to this Amendment, Section 2.4 (Capitalization) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:
The authorized capital stock of the Company consists, or immediately
prior to the Closing will consist, of 85,232,144 shares of Common Stock
(Common Stock), of which 9,760,848 shares are issued and outstanding
immediately prior to the Closing and 57,961,085 shares of Preferred Stock
(Preferred Stock), 2,727,273 of which are designated Series A Preferred
Stock of which 2,727,273 are outstanding immediately prior to the Closing;
6,460,675 of which are designated Series B Preferred Stock of which
6,460,675 are outstanding immediately prior to the Closing; 16,854,624 of
which are designated Series C Preferred Stock, 16,364,832 of which are
issued and outstanding immediately prior to the Closing; and 13,962,261 of
which are designated Series D Preferred Stock, 13,353,333 of which are
issued and outstanding immediately prior to the Closing; and 17,956,252 of
which are designated Series E Preferred Stock, 8,969,836 of which are issued
and outstanding immediately prior to the Closing. All such issued and
outstanding shares have been duly authorized and validly issued in
compliance with applicable laws, and are fully paid and nonassessable.
The Company has reserved: (i) 17,956,252 shares of Series E Preferred
for issuance hereunder and 17,956,252 shares of Common Stock for issuance
upon conversion of such shares of Series E Preferred; (ii) 13,353,333
shares of Common Stock for issuance upon conversion of the outstanding
shares of Series D Preferred; (iii) 408,928 shares of Series D Preferred for
issuance upon exercise of outstanding warrants and 408,928 shares of Common
Stock for issuance upon conversion of such Series D Preferred; (iv)
16,364,832 shares of Common Stock for issuance upon conversion of the
outstanding shares of Series C Preferred Stock; (v) 289,792shares of Series
C Preferred Stock for issuance upon exercise of outstanding warrants and
289,792 shares of Common Stock for issuance upon conversion of such Series C
Preferred Stock; (vi) 6,460,675 shares of Common Stock for issuance upon
conversion of the outstanding Series B Preferred Stock; (vii) 2,727,273
shares of Common Stock for issuance upon conversion of the outstanding
Series A Preferred Stock; and (viii) an aggregate of 12,800,000 shares of
Common Stock for issuance to
-3-
employees and consultants of the Company
pursuant to the Companys 1999 Stock Option Plan, pursuant to which options
to purchase 7,247,691 shares are granted and outstanding and 1,518,223
shares are available for future grant. As of the date hereof and after
giving effect to the purchase of Shares hereunder, each share of each series
of the Companys Preferred Stock is convertible into one share of the
Companys Common Stock. Other than with respect to the shares reserved for
issuance in this paragraph, or as set forth in the Ancillary Agreements (as
defined below), there are no outstanding rights, options, warrants,
conversion rights, preemptive rights, rights of first refusal or similar
rights for the purchase or acquisition from the Company of any securities of
the Company. There are no outstanding obligations of the Company to
repurchase or redeem any of its securities.
5. Amendment to Section 2.16. Solely in connection with the sale of Additional Shares
pursuant to this Amendment, Section 2.16 (Financial Statements) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:
The Company has made available to each Purchaser its audited balance
sheet dated as of December 31, 2004. The Company has also made available to
each Purchaser unaudited balance sheets dated December 31, 2005 and December
31, 2006 and the unaudited statements of operations for the fiscal years
then ended (collectively, the Financial Statements). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated. The Financial
Statements accurately set out and describe the financial condition and
operating results of the Company as of the date, and during the periods,
indicated therein. Except as set forth in the Financial Statements, the
Company has no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to
December 31, 2006 and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in the Financial Statements,
which, in both cases, individually or in the aggregate are not material to
the financial condition or operating results of the Company.
6. Deletion of Sections 6.9 and 6.11. Solely in connection with the sale of
Additional Shares pursuant to this Amendment, the Purchase Agreement is hereby amended to delete
Section 6.9 (Finders Fee) and Section 6.11 (Waiver of Conflict), each in its entirety.
-4-
7. Amendment to Section 6.10. Solely in connection with the sale of Additional Shares
pursuant to this Amendment, Section 6.10 of the Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
6.10 Expenses. The Company and each Purchaser shall bear its
own expenses and legal fees incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby, provided, however, that
if a Closing is effected, the Company shall reimburse the reasonable
documented fees of one counsel for the Purchasers, such amount not to exceed
$25,000, by wire transfer at such Closing.
8. Addition of Section 6.17. The Purchase Agreement is hereby amended to add the
following Section 6.17 which reads in its entirety as follows:
6.17 Reincorporation. Each Purchaser hereunder acknowledges
that the Company completed a reincorporation into the State of Delaware on
July 18, 2007 and each Purchaser hereby consents to the assignment of this
Agreement to Fluidigm Corporation, a Delaware corporation effective as of
July 18, 2007.
9. Restated Certificate. All references in the Purchase Agreement to the term
Restated Articles are hereby deleted and replaced with the term Restated Certificate.
10. Governing Law. This Amendment shall be governed in all respects by the laws of
the State of California, without regard to any provisions thereof relating to conflicts of laws
among different jurisdictions.
11. Purchase Agreement. Wherever necessary, all other terms of the Purchase Agreement
are hereby amended to be consistent with the terms of this Amendment. Except as specifically set
forth herein, the Purchase Agreement shall remain in full force and effect.
12. Counterparts; Facsimile. This Amendment may be executed in any number of
counterparts, each of which shall be an original, and all of which together shall constitute one
instrument. Executed signatures transmitted via facsimile will be accepted and considered duly
executed.
13. Effect of Execution of Amendment by Certain Purchasers. This Amendment, when
executed and delivered by the Company and a Purchaser purchasing shares of Series E Preferred at a
Subsequent Closing held on or after the date hereof, shall also constitute and shall be deemed a
counterpart signature page to the Purchase Agreement. Consequently, each undersigned Purchaser
purchasing shares of Series E Preferred at a Subsequent Closing held on or after the date hereof
acknowledges and agrees that he, she or it is bound by the terms and conditions contained in the
Purchase Agreement, as amended by this Amendment, with respect to the purchase of such shares.
[Remainder of page intentionally left blank]
-5-
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2
to Series E Preferred Stock Purchase Agreement as of the Effective Date.
COMPANY:
|
|
|
|
|
|
FLUIDIGM CORPORATION
a Delaware corporation
|
|
|
By: |
/s/ Gajus Worthington
|
|
|
|
Gajus Worthington, |
|
|
|
President and Chief Executive Officer |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
|
|
|
Fidelity Contrafund: |
|
|
|
|
Fidelity Advisor New Insights Fund |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Gary Ryan
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Gary Ryan |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Assistant Treasurer |
|
|
|
|
|
|
|
|
|
|
|
Fidelity Contrafund: Fidelity Contrafund |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Gary Ryan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
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Gary Ryan |
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Title:
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Assistant Treasurer |
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Variable Insurance Products Fund II: |
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Contrafund Portfolio |
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By:
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/s/ Gary Ryan |
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Name:
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Gary Ryan |
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Title:
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Assistant Treasurer |
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[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Leerink Swann Holdings, LLC |
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By:
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/s/ Jeffrey A. Leerink
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Name:
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Jeffrey A. Leerink |
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Title:
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Chief Executive Officer |
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Leerink Swann Holdings, LLC |
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Co-Investment Fund, LLC |
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By:
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/s/ Donald D. Notman, Jr. |
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Name:
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Donald D. Notman, Jr. |
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Title:
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Managing Director |
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[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
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PURCHASERS: |
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Cross Creek Capital, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC |
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Its Sole General Partner |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Karey Barker
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Name:
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Karey Barker |
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Title:
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Vice President |
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Cross Creek Capital Employees Fund, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC |
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Its Sole General Partner |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Karey Barker
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Name:
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Karey Barker |
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Title:
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Vice President |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Wasatch Funds, Inc. |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Dan Thurber
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Name:
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Dan Thurber |
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Title:
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Vice President |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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SMALLCAP World Fund, Inc. |
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By:
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Capital Research and Management Company, |
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its, investment adviser |
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By:
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/s/ Michael Downer
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Name:
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Michael Downer |
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Title: |
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|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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AllianceBernstein Venture Fund I, L.P. |
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By:
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AllianceBernstein ESG Venture
Management, L.P., its general partner |
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By:
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AllianceBernstein Global
Derivatives
Corporation, its general partner |
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By:
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/s/ James D. Kiggen
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Name:
|
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James D. Kiggen |
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Title:
|
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Senior Vice President |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Versant Affiliates Fund 1-A, L.P. |
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Versant Affiliates Fund1-B, L.P. |
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Versant Side Fund I, L.P. |
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Versant Venture Capital I, L.P. |
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By:
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Versant Ventures I, LLC |
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its General Partner |
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By:
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/s/ Samuel D. Colella
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Name:
|
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Samuel D. Colella |
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Title:
|
|
Managing Director |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
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Lehman
Brothers Healthcare Venture Capital L.P. |
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By:
|
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Lehman Brothers HealthCare Venture Capital |
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Associates L.P., |
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its General Partner |
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By:
|
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LB I Group Inc., its General Partner |
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By:
Name:
|
|
/s/ Steven Berkenfeld
Steven Berkenfeld
|
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|
|
Its:
|
|
Senior Vice President |
|
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Lehman Brothers P.A. LLC |
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By:
|
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/s/ Steven Berkenfeld |
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Name:
|
|
Steven Berkenfeld |
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|
|
Its:
|
|
Senior Vice President |
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|
Lehman Brothers Partnership Account 2000/2001,
L.P. |
|
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By:
|
|
LB I Group Inc., its General Partner |
|
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By:
|
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/s/ Steven Berkenfeld |
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|
|
Name:
|
|
Steven Berkenfeld |
|
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|
|
Its:
|
|
Senior Vice President |
|
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|
Lehman
Brothers Offshore Partnership Account 2000/2001, L.P. |
|
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By:
|
|
LB I Offshore Partners Group Ltd., its General |
|
|
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|
|
|
Partner |
|
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By:
|
|
/s/ Steven Berkenfeld |
|
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|
|
Name:
|
|
Steven Berkenfeld |
|
|
|
|
Its:
|
|
Senior Vice President |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
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|
|
EuclidSR Partners, L.P. |
|
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|
By:
|
|
EuclidSR Associates, L.P. |
|
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|
|
|
|
its General Partner |
|
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|
|
By:
|
|
/s/ Elaine V. Jones
|
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|
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|
|
Name:
|
|
Elaine V. Jones |
|
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|
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|
|
Title:
|
|
General Partner |
|
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|
EuclidSR Biotechnology Partners, L.P. |
|
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|
|
By:
|
|
EuclidSR Biotechnology Associates, L.P. |
|
|
|
|
|
|
its General Partner |
|
|
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|
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|
|
By:
|
|
/s/ Elaine V. Jones |
|
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|
|
Name:
|
|
Elaine V. Jones |
|
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|
|
|
|
|
|
Title:
|
|
General Partner |
|
|
|
|
|
|
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|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
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|
|
Interwest Partners VII, L.P. |
|
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|
|
By:
|
|
InterWest Management Partners VII,
LLC |
|
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|
|
|
|
its General Partner |
|
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|
|
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|
|
By:
|
|
/s/ Michael Sweeney
|
|
|
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|
|
Name:
|
|
Michael Sweeney |
|
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|
|
|
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|
|
Title:
|
|
As agent for the general partner |
|
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|
Interwest Investors VII, L.P. |
|
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|
|
By:
|
|
InterWest Management Partners VII,
LLC |
|
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|
|
|
|
its General Partner |
|
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|
|
|
|
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|
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|
|
By:
|
|
/s/ Michael Sweeney |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Michael Sweeney |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
As agent for the general partner |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
|
|
|
Lilly Bioventures, Eli Lilly & Company |
|
|
|
|
|
|
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|
|
|
|
By:
|
|
/s/ Darren J. Carroll
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Darren J. Carroll |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Executive Director |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
|
|
|
|
|
/s/ Bruce Burrows
Bruce Burrows
|
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
|
|
|
Biomedical Sciences Investment Fund Pte Ltd |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Chu Swee Yeok
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Chu Swee Yeok |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Director |
|
|
|
|
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|
|
|
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|
|
Singapore Bio-Innovations Pte Ltd |
|
|
|
|
|
|
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|
|
By:
|
|
/s/ Sim Sze Kuan |
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Name:
|
|
Sim Sze Kuan |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Director |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 2 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
|
|
|
|
|
|
|
|
|
Invus, L.P. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Invus Advisors LLC |
|
|
|
|
|
|
General Partner of Invus LP |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Aflalo Guimaraes
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Aflalo Guimaraes |
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Managing Director |
|
|
[Signature Page to Amendment No. 2 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES E PREFERED STOCK FINANCING
OCTOBER 10, 2007
|
|
|
|
|
|
|
|
|
|
|
Shares of Series E |
|
|
|
|
Name |
|
Preferred Stock |
|
|
Purchase Price |
|
FIDELITY CONTRAFUND: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIDELITY ADVISOR NEW INSIGHTS FUND |
|
|
481,170 |
|
|
$ |
1,924,679.00 |
|
|
|
|
|
|
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY CONTRAFUND |
|
|
4,389,865 |
|
|
$ |
17,559,461.00 |
|
|
|
|
|
|
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND II: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTRAFUND PORTFOLIO |
|
|
1,378,965 |
|
|
$ |
5,515,860.00 |
|
|
|
|
|
|
|
|
|
|
LEERICK SWANN HOLDINGS, LLC |
|
|
62,500 |
|
|
$ |
250,000.00 |
|
|
|
|
|
|
|
|
|
|
LEERICK SWANN CO-INVESTMENT FUND, LLC |
|
|
78,750 |
|
|
$ |
315,000.00 |
|
|
|
|
|
|
|
|
|
|
TOTALS |
|
|
6,391,250 |
|
|
$ |
25,565,000.00 |
|
FLUIDIGM CORPORATION
AMENDMENT NO. 3 TO
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 3 (the Amendment) to that certain Series E Preferred Stock Purchase
Agreement, dated as of June 13, 2006, as amended December 22, 2006 and further amended October 10,
2007, by and among Fluidigm Corporation, a California corporation (Fluidigm California) and the
Purchasers named therein (the Purchase Agreement), is made and entered into effective as of
October 26, 2007 (the Effective Date) by and among Fluidigm Corporation, a Delaware corporation
(the Company), and the Purchasers named herein. Capitalized terms used in this Amendment that
are not otherwise defined herein shall have the respective meanings assigned to them in the
Purchase Agreement.
RECITALS
WHEREAS, Fluidigm California previously sold and issued an aggregate of 1,250,000 shares of
Series E Preferred Stock (the Series E Preferred) pursuant to the terms of the Purchase Agreement
at the Initial Closing held on June 13, 2006, an additional 4,284,749 shares of Series E Preferred
at a Subsequent Closing held on December 22, 2006, an additional 480,750 shares of Series E
Preferred at a Subsequent Closing held on March 30, 2007, and an additional 6,391,250 shares of
Series E Preferred at a Subsequent Closing held on October 10, 2007;
WHEREAS, on July 18, 2007, Fluidigm California was merged with and into the Company, with the
Company being the surviving corporation such that the Company succeeded to all of Fluidigm
Californias rights and obligations under the Purchase Agreement and all outstanding shares of
Series E Preferred of Fluidigm California were exchanged on a one for one basis for shares of
Series E Preferred of the Company;
WHEREAS, the Company and the Purchasers now desire to amend the terms of the Purchase
Agreement to provide that the Company may sell and issue up to 2,153,695 additional shares of
Series E Preferred (the Additional Shares) pursuant to the Purchase Agreement, at one or more
additional Subsequent Closings, provided that any such additional Subsequent Closings shall take
place no later than December 31, 2007.
WHEREAS, pursuant to Section 6.5 of the Purchase Agreement, the terms of the Purchase
Agreement may be amended upon the written consent of the Company and the holder or holders of
greater than fifty percent (50%) of the outstanding Shares or the Conversion Shares;
WHEREAS, the Purchasers who have signed below hold greater than fifty percent (50%) of the
outstanding Shares purchased under the Purchase Agreement as of the Effective Date and consent to
the changes as set forth in this Amendment;
WHEREAS, in connection with the execution of this Amendment, the Company is amending the
Amended and Restated Certificate of Incorporation of the Company to increase the number of
authorized shares of capital stock of the Company to facilitate the sale of the Additional Shares.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
mutually agree as follows:
AGREEMENT
1. Amendment to Section 1.1. Section 1.1 (Authorization of the Shares) of the
Purchase Agreement is hereby amended and restated in its entirety as follows:
1.1 Authorization of the Shares. The Company will on or
before the Closing (as defined below) authorize the sale and issuance
pursuant to this Agreement of up to 18,498,531 shares (the Shares) of its
Series E Preferred Stock (the Series E Preferred), having the rights,
preferences and privileges as set forth in the Amended and Restated
Certificate of Incorporation, as amended by a Certificate of Amendment to
Amended and Restated Certificate of Incorporation dated October 10, 2007 and
a Certificate of Amendment to Amended and Restated Certificate of
Incorporation dated October 26, 2007, as attached hereto as EXHIBITS
B-1 AND B-2, respectively (together for purposes of this
Agreement, the Restated Certificate).
2. Amendment to Section 2.4. Solely in connection with the sale of Additional Shares
pursuant to this Amendment, Section 2.4 (Capitalization) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:
The authorized capital stock of the Company consists, or immediately
prior to the Closing will consist, of 87,385,839 shares of Common Stock
(Common Stock), of which 9,760,848 shares are issued and outstanding
immediately prior to the Closing and 60,114,780 shares of Preferred Stock
(Preferred Stock), 2,727,273 of which are designated Series A Preferred
Stock of which 2,727,273 are outstanding immediately prior to the Closing;
6,460,675 of which are designated Series B Preferred Stock of which
6,460,675 are outstanding immediately prior to the Closing; 16,854,624 of
which are designated Series C Preferred Stock, 16,364,832 of which are
issued and outstanding immediately prior to the Closing; and 13,962,261 of
which are designated Series D Preferred Stock, 13,353,333 of which are
issued and outstanding immediately prior to the Closing; and 20,109,947 of
which are designated Series E Preferred Stock, 15,361,086 of which are
issued and outstanding immediately prior to the Closing. All such issued
and outstanding shares have been duly
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authorized and validly issued in compliance with applicable laws, and
are fully paid and nonassessable.
The Company has reserved: (i) 18,498,531 shares of Series E Preferred
for issuance hereunder and 20,109,947 shares of Common Stock for issuance
upon conversion of all shares of Series E Preferred; (ii) 13,353,333 shares
of Common Stock for issuance upon conversion of the outstanding shares of
Series D Preferred; (iii) 408,928 shares of Series D Preferred for issuance
upon exercise of outstanding warrants and 408,928 shares of Common Stock for
issuance upon conversion of such Series D Preferred; (iv) 16,364,832 shares
of Common Stock for issuance upon conversion of the outstanding shares of
Series C Preferred Stock; (v) 289,792 shares of Series C Preferred Stock for
issuance upon exercise of outstanding warrants and 289,792 shares of Common
Stock for issuance upon conversion of such Series C Preferred Stock;
(vi) 6,460,675 shares of Common Stock for issuance upon conversion of the
outstanding Series B Preferred Stock; (vii) 2,727,273 shares of Common Stock
for issuance upon conversion of the outstanding Series A Preferred Stock;
and (viii) an aggregate of 12,800,000 shares of Common Stock for issuance to
employees and consultants of the Company pursuant to the Companys 1999
Stock Option Plan, pursuant to which options to purchase 7,247,691 shares
are granted and outstanding and 1,518,223 shares are available for future
grant. As of the date hereof and after giving effect to the purchase of
Shares hereunder, each share of each series of the Companys Preferred Stock
is convertible into one share of the Companys Common Stock. Other than
with respect to the shares reserved for issuance in this paragraph, or as
set forth in the Ancillary Agreements (as defined below), there are no
outstanding rights, options, warrants, conversion rights, preemptive rights,
rights of first refusal or similar rights for the purchase or acquisition
from the Company of any securities of the Company. There are no outstanding
obligations of the Company to repurchase or redeem any of its securities.
3. Amendment to Section 2.16. Solely in connection with the sale of Additional Shares
pursuant to this Amendment, Section 2.16 (Financial Statements) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:
The Company has made available to each Purchaser its audited balance
sheet dated as of December 31, 2004. The Company has also made available to
each Purchaser unaudited balance sheets dated December 31, 2005 and December
31, 2006 and the unaudited statements of operations for the fiscal years
then ended (collectively, the Financial Statements). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with generally
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accepted accounting principles applied on a consistent basis throughout
the periods indicated. The Financial Statements accurately set out and
describe the financial condition and operating results of the Company as of
the date, and during the periods, indicated therein. Except as set forth in
the Financial Statements, the Company has no material liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to December 31, 2006 and (ii) obligations
under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be
reflected in the Financial Statements, which, in both cases, individually or
in the aggregate are not material to the financial condition or operating
results of the Company.
4. Governing Law. This Amendment shall be governed in all respects by the laws of the
State of California, without regard to any provisions thereof relating to conflicts of laws among
different jurisdictions.
5. Purchase Agreement. Wherever necessary, all other terms of the Purchase Agreement
are hereby amended to be consistent with the terms of this Amendment. Except as specifically set
forth herein, the Purchase Agreement shall remain in full force and effect.
6. Counterparts; Facsimile. This Amendment may be executed in any number of
counterparts, each of which shall be an original, and all of which together shall constitute one
instrument. Executed signatures transmitted via facsimile will be accepted and considered duly
executed.
7. Effect of Execution of Amendment by Certain Purchasers. This Amendment, when
executed and delivered by the Company and a Purchaser purchasing shares of Series E Preferred at a
Subsequent Closing held on or after the date hereof, shall also constitute and shall be deemed a
counterpart signature page to the Purchase Agreement. Consequently, each undersigned Purchaser
purchasing shares of Series E Preferred at a Subsequent Closing held on or after the date hereof
acknowledges and agrees that he, she or it is bound by the terms and conditions contained in the
Purchase Agreement, as amended by this Amendment, with respect to the purchase of such shares.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3
to Series E Preferred Stock Purchase Agreement as of the Effective Date.
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COMPANY: |
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FLUIDIGM CORPORATION |
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a Delaware corporation |
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By:
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/s/ Gajus Worthington |
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Gajus Worthington, |
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President and Chief Executive Officer |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Fidelity Contrafund: |
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Fidelity Advisor New Insights Fund |
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By:
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/s/ Peter Lydecker
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Name:
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Peter Lydecker |
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Title:
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Assistant Treasurer |
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Fidelity Contrafund: Fidelity Contrafund |
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By:
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/s/ Peter Lydecker |
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Name:
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Peter Lydecker |
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Title:
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Assistant Treasurer |
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Variable Insurance Products Fund II: |
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Contrafund Portfolio |
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By:
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/s/ Peter Lydecker |
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Name:
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Peter Lydecker |
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Title:
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Assistant Treasurer |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Leerink Swann Holdings, LLC |
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By:
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/s/ Jeffrey Leerink |
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Name:
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Jeffrey Leerink |
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Title:
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Chairman |
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Leerink Swann Holdings, LLC |
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Co-Investment Fund, LLC |
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By:
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/s/ Donald D. Notman, Jr. |
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Name:
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Donald D. Notman, Jr. |
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Title:
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Managing Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
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PURCHASERS: |
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Cross Creek Capital, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC |
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Its Sole General Partner |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Karey Barker |
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Name:
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Karey Barker |
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Title:
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Vice President |
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Cross Creek Capital Employees Fund, L.P. |
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By:
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Cross Creek Capital GP, L.P. |
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Its Sole General Partner |
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By:
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Cross Creek Capital, LLC
Its Sole General Partner |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Karey Barker |
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Name:
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Karey Barker |
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Title:
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Vice President |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Wasatch Funds, Inc. |
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By:
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Wasatch Advisors, Inc. |
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Its Sole Member |
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By:
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/s/ Venice Edwards
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Name:
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Venice Edwards |
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Title:
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Secretary |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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SMALLCAP World Fund, Inc. |
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By:
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Capital Research and Management Company, |
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its, investment adviser |
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By:
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/s/ Paul Haaga
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Name:
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Paul Haaga |
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Title: |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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AllianceBernstein Venture Fund I, L.P. |
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By:
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AllianceBernstein ESG Venture |
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Management, L.P., its general partner |
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By:
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AllianceBernstein Global Derivatives |
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Corporation, its general partner |
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By:
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/s/ James D. Kiggen
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Name:
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James D. Kiggen |
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Title:
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Senior Vice President |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Versant Affiliates Fund 1-A, L.P. |
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Versant Affiliates Fund1-B, L.P. |
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Versant Side Fund I, L.P. |
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Versant Venture Capital I, L.P. |
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By:
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Versant Ventures I, LLC |
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its General Partner |
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By:
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/s/ Samuel D. Colella
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Name:
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Samuel D. Colella |
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Title:
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Managing Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Lehman Brothers Healthcare Venture Capital |
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L.P. |
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By:
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Lehman Brothers HealthCare Venture Capital |
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Associates L.P., |
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its General Partner |
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By:
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LB I Group Inc., its General Partner |
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By:
Name:
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/s/ Ashvin Rao
Ashvin Rao
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Its:
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Vice President |
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Lehman Brothers P.A. LLC |
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By:
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/s/ Deborah Nordell |
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Name:
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Deborah Nordell |
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Its:
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Vice President |
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Lehman Brothers Partnership Account 2000/2001, |
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L.P. |
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By:
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LB I Group Inc., its General Partner |
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By:
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/s/ Ashvin Rao |
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Name:
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Ashvin Rao |
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Its:
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Vice President |
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Lehman Brothers Offshore Partnership Account |
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2000/2001, L.P. |
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By:
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LB I Offshore Partners Group Ltd., its General Partner |
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By:
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/s/ Ashvin Rao |
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Name:
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Ashvin Rao |
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Its:
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Vice President |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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EuclidSR Partners, L.P. |
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By:
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EuclidSR Associates, L.P. |
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its
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General Partner |
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By:
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/s/ Elaine V. Jones
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Name:
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Elaine V. Jones |
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Title:
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General Partner |
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EuclidSR Biotechnology Partners, L.P. |
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By:
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EuclidSR Biotechnology Associates, L.P. |
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its General Partner |
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By:
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/s/ Elaine V. Jones |
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Name:
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Elaine V. Jones |
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Title:
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General Partner |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Interwest Partners VII, L.P. |
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By:
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InterWest Management Partners VII, LLC |
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its General Partner |
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By:
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/s/ Michael Sweeney
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Name:
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Michael Sweeney |
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Title:
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As agent for the general partner |
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Interwest Investors VII, L.P. |
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By:
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InterWest Management Partners VII, LLC |
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its General Partner |
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By:
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/s/ Michael Sweeney |
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Name:
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Michael Sweeney |
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Title:
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As agent for the general partner |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Lilly Bioventures, Eli Lilly & Company |
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By:
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/s/ Darren J. Carroll
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Name:
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Darren J. Carroll |
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Title:
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Executive Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Alloy Ventures 2005, L.P. |
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By:
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Alloy Ventures 2005, LLC |
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its General Partner |
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By:
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/s/ Tony DiBona |
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Name:
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Toni DiBona |
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Title:
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Managing Member of Alloy Ventures |
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2005 LLC |
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Alloy Ventures 2002, L.P. |
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Alloy Partners 2002, L.P. |
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By:
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Alloy Ventures 2002, LLC |
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its General Partner |
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By:
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/s/ Tony DiBona |
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Name:
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Tony DiBona |
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Title:
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Managing Member of Alloy Ventures |
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2002, LLC, the general partner of Alloy |
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Partners 2002, L.P. and Alloy Ventures |
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2002, L.P. |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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/s/ Bruce Burrows
Bruce Burrows
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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SightLine Healthcare Fund III, L.P. |
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By:
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/s/ Maureen Harder
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Name:
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Maureen Harder |
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Title:
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Managing Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Biomedical Sciences Investment Fund Pte Ltd |
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By:
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/s/ Chu Swee Yeok
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Name:
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Chu Swee Yeok |
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Title:
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Director |
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Singapore Bio-Innovations Pte Ltd |
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By:
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/s/ Sim Sze Kuan |
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Name:
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Sim Sze Kuan |
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Title:
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Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3 to
Series E Preferred Stock Purchase Agreement as of the Effective Date.
PURCHASERS:
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Invus, L.P. |
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By:
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Invus Advisors LLC |
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General Partner of Invus LP |
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By:
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/s/ Aflalo Guimaraes
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Name:
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Aflalo Guimaraes |
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Title:
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Managing Director |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES E PREFERRED STOCK FINANCING SECOND EXTENDED CLOSING
OCTOBER 26, 2007
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Shares of Series E |
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Name |
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Preferred Stock |
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Purchase Price |
CLIPPERBAY & CO. |
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SMALLCAP World Fund, Inc. |
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2,153,695 |
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$ |
8,614,780.00 |
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TOTALS |
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2,153,695 |
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$ |
8,614,780.00 |
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3
to Series E Preferred Stock Purchase Agreement as of the 31st day of December, 2007.
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COMPANY: |
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FLUIDIGM CORPORATION |
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a Delaware corporation |
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By:
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/s/ Gajus Worthington
Gajus Worthington,
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President and Chief Executive Officer |
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment No. 3
to Series E Preferred Stock Purchase Agreement as of the 31st day of December, 2007.
PURCHASER:
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/s/ Bruce Burrows
Bruce Burrows
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[Signature
Page to Amendment No. 3 to Fluidigm Corporation Series E Preferred Stock Purchase Agreement]
EXHIBIT A
SCHEDULE OF PURCHASER
SERIES E PREFERRED STOCK FINANCING THIRD EXTENDED CLOSING
DECEMBER 31, 2007
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Shares of Series E |
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Name |
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Preferred Stock |
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Purchase Price |
BRUCE BURROWS |
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250,000 |
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$ |
1,000,000.00 |
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TOTALS |
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250,000 |
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$ |
1,000,000.00 |
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EXHIBIT
B
FORM
OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
FORM OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
Gajus V. Worthington and William Smith each certify that:
1. They are the President and Secretary, respectively, of Fluidigm Corporation, a California
corporation (the Corporation).
2. The Amended and Restated Articles of Incorporation of the Corporation are hereby amended
and restated in full to read as set forth in EXHIBIT A attached hereto, which is
incorporated by reference as if fully set forth herein.
3. Said Amended and Restated Articles of Incorporation have been duly approved by the
Corporations Board of Directors.
4. Said Amended and Restated Articles of Incorporation have been duly approved by the required
vote of shareholders in accordance with Sections 902 and 903 of the Corporations Code. The total
number of outstanding shares of the corporation is 9,274,356 shares of Common Stock, 2,727,273
shares of Series A Preferred Stock, 6,460,675 shares of Series B Preferred Stock, 16,364,832 shares
of Series C Preferred Stock, and 11,714,048 shares of Series D Preferred Stock. The number of
shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote
required was more than 50% of the outstanding Common Stock, voting as a single class; more than 50%
of the outstanding Series A Preferred Stock, voting as a single class; at least 662/3% of the
outstanding Series B Preferred Stock, voting as a single class; at least 662/3% of the outstanding
Series C Preferred Stock, voting as a single class; at least 60% of the outstanding Series D
Preferred Stock, voting as a single class; more than 662/3% of the outstanding Preferred Stock,
voting as a single class; and more than 50% of the outstanding Common Stock and Preferred Stock,
voting together as a single class.
I further declare under penalty of perjury that the matters set forth in the foregoing
certificate are true and correct of my own knowledge.
Executed at Palo Alto, California, this ___ day of June 2006.
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Gajus V. Worthington |
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President |
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William M. Smith |
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Secretary |
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Exhibit A
FORM OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
ARTICLE I
The name of the corporation is Fluidigm Corporation.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of California other than the banking
business, the trust company business or the practice of a profession permitted to be incorporated
under the California Corporations Code.
ARTICLE III
The total number of shares of stock that the corporation shall have authority to issue is One
Hundred Twenty-Nine Million Five Hundred Forty-Five Thousand Ninety-Two (129,545,092) consisting of
Seventy-Seven Million Eight Hundred Fifty-Seven Thousand One Hundred Forty-Four (77,857,144) shares
of Common Stock, $0.001 par value per share, and Fifty-One Million Six Hundred Eighty-Seven
Thousand Nine Hundred Forty-Eight (51,687,948) shares of Preferred Stock, $0.001 par value per
share. The first series of Preferred Stock shall be designated Series A Preferred Stock and
shall consist of Two Million Seven Hundred TwentySeven Thousand Two Hundred SeventyThree
(2,727,273) shares. The second series of Preferred Stock shall be designated Series B Preferred
Stock and shall consist of Six Million Four Hundred Sixty Thousand Six Hundred Seventy-Five
(6,460,675) shares. The third series of Preferred Stock shall be designated Series C Preferred
Stock and shall consist of Seventeen Million (17,000,000) shares. The fourth series of Preferred
Stock shall be designated Series D Preferred Stock and shall consist of Fifteen Million Five
Hundred Thousand (15,500,000) shares. The fifth series of Preferred Stock shall be designated
Series E Preferred Stock and shall consist of Ten Million (10,000,000) shares.
ARTICLE IV
The terms and provisions of the Common Stock and Preferred Stock are as follows:
1. Definitions. For purposes of this Article IV, the following definitions shall
apply:
(a) Conversion Price shall mean $1.10 per share for the Series A Preferred Stock,
$1.78 per share for the Series B Preferred Stock, $2.58 per share for the Series C Preferred
Stock, $2.80 per share for the Series D Preferred Stock, and $4.00 for the Series E Preferred
Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(b) Convertible Securities shall mean any evidences of indebtedness, shares or other
securities (other than shares of Common Stock) convertible into or exchangeable for Common Stock.
(c) Corporation shall mean Fluidigm Corporation.
(d) Dividend Rate shall mean an annual rate of $0.11 per share for the Series A
Preferred Stock, an annual rate of $0.18 for the Series B Preferred Stock, an annual rate of $0.26
per share for the Series C Preferred Stock, an annual rate of $0.30 per share for the Series D
Preferred Stock, and an annual rate of $0.43 per share for the Series E Preferred Stock (each
subject to adjustment from time to time as set forth elsewhere herein).
(e) Liquidation Preference shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 per share for the Series B Preferred Stock, $2.58 per share for the Series C Preferred
Stock, $2.80 per share for the Series D Preferred Stock, and $4.00 per share for the Series E
Preferred Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(f) Options shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.
(g) Original Issue Price shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 for the Series B Preferred Stock, $2.58 per share for the Series C Preferred Stock,
$2.80 per share for the Series D Preferred Stock, and $4.00 per share for the Series E Preferred
Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(h) Preferred Stock shall mean the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stock, and the Series E Preferred
Stock.
2. Dividends.
(a) Series D and Series E Preferred Stock. The holders of outstanding shares of
Series D Preferred Stock and the holders of outstanding shares of Series E Preferred Stock shall be
entitled to receive dividends, when and as declared by the Board of Directors, out of any assets at
the time legally available therefor, at the Dividend Rates specified for such shares of Preferred
Stock, payable in preference and priority to any declaration or payment of any distribution on
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Common Stock
(collectively, the Junior Stock) of the Corporation other than a dividend payable solely in
Common Stock. No distributions shall be made with respect to the Junior Stock during any fiscal
year of the Corporation, other than dividends on the Common Stock payable solely in Common Stock,
until all dividends at the applicable Dividend Rate on the Series E Preferred Stock and Series D
Preferred Stock have been declared and paid or set apart for payment to the holders of Series E
Preferred Stock and the holders of Series D Preferred Stock. Payment of any dividends to the
holders of the Series E Preferred Stock and the Series D Preferred Stock shall be on a pro
rata, pari passu basis in proportion to the Dividend Rates for the Series E Preferred Stock
and Series D Preferred Stock, as applicable.
-2-
The right to receive dividends on shares of Series E Preferred Stock and Series D Preferred
Stock shall not be cumulative, and no right to such dividends shall accrue to holders of Series E
Preferred Stock and Series D Preferred Stock by reason of the fact that dividends on said shares
are not declared or paid in any year.
(b) Series C Preferred Stock. The holders of outstanding shares of Series C Preferred
Stock shall be entitled to receive dividends, when and as declared by the Board of Directors, out
of any assets at the time legally available therefor, at the Dividend Rate specified for such
shares of Preferred Stock payable in preference and priority to any declaration or payment of any
distribution on Series A Preferred Stock, Series B Preferred Stock or Common Stock of the
Corporation other than a dividend payable solely in Common Stock. No distributions shall be made
with respect to the Series A Preferred Stock, Series B Preferred Stock or Common Stock during any
fiscal year of the Corporation, other than dividends on the Common Stock payable solely in Common
Stock, until all dividends at the applicable Dividend Rate on the Series C Preferred Stock have
been declared and paid or set apart for payment to the holders of Series C Preferred Stock. The
right to receive dividends on shares of Series C Preferred Stock shall not be cumulative, and no
right to such dividends shall accrue to holders of Series C Preferred Stock by reason of the fact
that dividends on said shares are not declared or paid in any year.
(c) Series A Preferred Stock and Series B Preferred Stock. The holders of outstanding
shares of Series A Preferred Stock and the holders of outstanding shares of Series B Preferred
Stock shall be entitled to receive dividends, when and as declared by the Board of Directors, out
of any assets at the time legally available therefor, at the Dividend Rate specified for such
shares of Preferred Stock payable in preference and priority to any declaration or payment of any
distribution on Common Stock of the Corporation other than a dividend payable solely in Common
Stock. No distributions shall be made with respect to the Common Stock, other than dividends
payable solely in Common Stock, until all dividends at the applicable Dividend Rate on the
Preferred Stock have been declared and paid or set apart for payment to the Preferred Stock
holders. Payment of any dividends to the holders of the Series A Preferred Stock and Series B
Preferred Stock shall be on a pro rata, pari passu basis in proportion to the
Dividend Rates for the Series A Preferred Stock and Series B Preferred Stock, as applicable. The
right to receive dividends on shares of Series A Preferred Stock and Series B Preferred Stock shall
not be cumulative, and no right to such dividends shall accrue to holders of Series A Preferred
Stock or Series B Preferred Stock by reason of the fact that dividends on said shares are not
declared or paid in any year.
(d) Distribution. For purposes of this Section 2, unless the context otherwise
requires, a distribution shall mean the transfer of cash or other property without consideration
whether by way of dividend or otherwise, payable other than in Common Stock, or the purchase or
redemption of shares of the Corporation other than (i) repurchase of shares of Common Stock issued
to or held by employees, consultants, officers and directors of the Corporation or its subsidiaries
upon termination of their employment or services pursuant to agreements providing for the right of
said repurchase and at the original purchase price paid by such employees, consultants, officers
and directors; and (ii) repurchase of Common Stock issued to or held by employees, officers,
directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal
contained in agreements providing for such rights, provided that such repurchase is unanimously
approved by the Board of Directors; and (iii) any other repurchase or redemption of capital stock
of the corporation unanimously approved by the Board of Directors and approved by the holders of
the majority of the
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Common Stock and the holders of more than two-thirds (2/3) of the outstanding shares of the
Preferred Stock, voting as separate classes.
(e) Common Stock. Dividends may be paid on the Common Stock as and when declared by
the Board of Directors, subject to the prior dividend rights of the Preferred Stock and Section 6
below.
(f) Non-Cash Distributions. Whenever a distribution provided for in this Section 2
shall be payable in property other than cash, the value of such distribution shall be deemed to be
the fair market value of such property as determined in good faith by the Board of Directors.
(g) Consent to Certain Repurchases. As authorized by Section 402.5(c) of the
California Corporations Code, Sections 502 and 503 of the California Corporations Code shall not
apply with respect to payments made by the Corporation in connection with (i) repurchase of shares
of Common Stock issued to or held by employees, consultants, officers and directors of the
Corporation or its subsidiaries upon termination of their employment or services pursuant to
agreements providing for the right of said repurchase and at the original purchase price paid by
such employees, consultants, officers and directors, and (ii) repurchase of Common Stock issued to
or held by employees, officers, directors or consultants of the Corporation or its subsidiaries
pursuant to rights of first refusal contained in agreements providing for such rights, provided
that such repurchase is unanimously approved by the Board of Directors, and (iii) any other
repurchase or redemption of Common Stock unanimously approved by the Board of Directors and
approved by the holders of more than two-thirds (2/3) of the outstanding shares of Preferred Stock
voting together as a single class.
3. Liquidation Rights.
In the event of any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, distribution of the assets of the Corporation legally available for
distribution to the Corporations shareholders shall be made in the following manner:
(a) Series E Liquidation Preference. The holders of the Series E Preferred Stock
shall be entitled to receive, prior and in preference to any distribution of any of the assets of
the Corporation to the holders of the Common Stock, the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, or the Series D Preferred Stock, by reason of their
ownership of such stock, an amount per share for each share of Series E Preferred Stock held by
them equal to the sum of (i) the Liquidation Preference for such shares and (ii) all declared and
unpaid dividends on such share of Series E Preferred Stock. If the assets of the Corporation
legally available for distribution to the holders of the Series E Preferred Stock are insufficient
to permit the payment to such holders of the full amounts specified in this Section 3(a), then the
entire assets of the Corporation legally available for distribution shall be distributed with equal
priority and pro rata among the holders of the Series E Preferred Stock in
proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section
3(a).
(b) Series D Liquidation Preference. After payment to the holders of Series E
Preferred Stock of the full amounts specified in Section 3(a) above, the holders of the Series D
Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of
the
-4-
assets of the Corporation to the holders of the Common Stock, the Series A Preferred Stock,
the Series B Preferred Stock or the Series C Preferred Stock by reason of their ownership of such
stock, an amount per share for each share of Series D Preferred Stock held by them equal to the sum
of (i) the Liquidation Preference for such shares and (ii) all declared and unpaid dividends on
such share of Series D Preferred Stock. If the remaining assets of the Corporation legally
available for distribution to the holders of Series D Preferred Stock are insufficient to permit
the payment to such holders of the full amounts specified in this Section 3(b), then the entire
remaining assets of the Corporation legally available for distribution shall be distributed with
equal priority and pro rata among the holders of the Series D Preferred Stock in
proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section
3(b).
(c) Series C Liquidation Preference. After payment to the holders of Series E
Preferred Stock and to the holders of Series D Preferred Stock of the full amounts specified in
Sections 3(a) and 3(b) above, the holders of the Series C Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets of the Corporation to the
holders of the Common Stock, the Series A Preferred Stock or the Series B Preferred Stock by reason
of their ownership of such stock, an amount per share for each share of Series C Preferred Stock
held by them equal to the sum of (i) the Liquidation Preference for such shares and (ii) all
declared and unpaid dividends on such share of Series C Preferred Stock. If the remaining assets
of the Corporation legally available for distribution to the holders of the Series C Preferred
Stock are insufficient to permit the payment to such holders of the full amounts specified in this
Section 3(c), then the entire remaining assets of the Corporation legally available for
distribution shall be distributed with equal priority and pro rata among the
holders of the Series C Preferred Stock in proportion to the full amounts they would otherwise be
entitled to receive pursuant to this Section 3(c).
(d) Series B Liquidation Preference. After the payment to the holders of Series E
Preferred Stock, the holders of Series D Preferred Stock, and the holders of Series C Preferred
Stock of the full amounts specified in Sections 3(a), 3(b), and 3(c) above, the holders of the
Series B Preferred Stock shall be entitled to receive, prior and in preference to any distribution
of any of the remaining assets of the Corporation to the holders of the Common Stock or Series A
Preferred Stock by reason of their ownership of such stock, an amount per share for each share of
Series B Preferred Stock held by them equal to the sum of (i) the Liquidation Preference for such
shares and (ii) all declared and unpaid dividends on such share of Series B Preferred Stock. If
the remaining assets of the Corporation legally available for distribution to the holders of the
Series B Preferred Stock are insufficient to permit the payment to such holders of the full amounts
specified in this Section 3(d), then the entire remaining assets of the Corporation legally
available for distribution shall be distributed with equal priority and pro rata
among the holders of the Series B Preferred Stock in proportion to the full amounts they would
otherwise be entitled to receive pursuant to this Section 3(d).
(e) Series A Liquidation Preference. After the payment to the holders of Series E
Preferred Stock, the holders of Series D Preferred Stock, the holders of Series C Preferred Stock,
and the holders of Series B Preferred Stock of the full amounts specified in Sections 3(a), 3(b),
3(c) and 3(d) above, the holders of the Series A Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any of the remaining assets of the Corporation to
the holders of the Common Stock by reason of their ownership of such stock, an amount per share for
each share of
-5-
Series A Preferred Stock held by them equal to the sum of (i) the Liquidation Preference for
such shares and (ii) all declared and unpaid dividends on such share of Series A Preferred Stock.
If the remaining assets of the Corporation legally available for distribution to the holders of the
Series A Preferred Stock are insufficient to permit the payment to such holders of the full amounts
specified in this Section 3(e), then the entire remaining assets of the Corporation legally
available for distribution shall be distributed with equal priority and pro rata
among the holders of the Series A Preferred Stock in proportion to the full amounts they would
otherwise be entitled to receive pursuant to this Section 3(e).
(f) Remaining Assets. After the payment to the holders of Preferred Stock of the full
amounts specified in Sections 3(a), 3(b), 3(c), 3(d) and 3(e) above, the entire remaining assets of
the Corporation legally available for distribution shall be distributed pro rata to
holders of the Common Stock of the Corporation in proportion to the number of shares of Common
Stock held by them.
(g) Shares Not Treated as Both Preferred Stock and Common Stock in Any Distribution.
Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in
order to participate in any distribution, or series of distributions, as shares of Common Stock,
without first foregoing participation in the distribution, or series of distributions, as shares of
Preferred Stock.
(h) Reorganization. For purposes of this Section 3, a liquidation, dissolution or
winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the
acquisition of the Corporation by another entity by means of any transaction or series of related
transactions (including, without limitation, any stock acquisition, reorganization, merger or
consolidation but excluding any merger effected exclusively for the purpose of changing the
domicile of the Corporation) other than a transaction or series of transactions in which the
holders of the voting securities of the Corporation outstanding immediately prior to such
transaction or series of transactions continue to retain (either by such voting securities
remaining outstanding or by such voting securities being converted into voting securities of the
surviving entity), as a result of shares in the Corporation held by such holders prior to such
transaction, at least fifty percent (50%) of the total voting power represented by the voting
securities of the Corporation or such surviving entity outstanding immediately after such
transaction or series of transactions; or (ii) a sale, transfer, lease or other conveyance of all
or substantially all of the assets of the Corporation.
(i) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed
to shareholders in connection with any liquidation, dissolution, or winding up of the Corporation
are other than cash, then the value of such assets shall be their fair market value as determined
in good faith by the Board of Directors, except that any securities to be distributed to
shareholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as
follows:
(i) If the securities are then traded on a national securities exchange or the Nasdaq Stock
Market System (or a similar national quotation system), then the value of the securities shall be
deemed to be to the average of the closing prices of the securities on such exchange or system over
the ten (10) trading day period ending five (5) trading days prior to the distribution;
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(ii) if the securities are actively traded over-the-counter, then the value of the securities
shall be deemed to be the average of the closing bid prices of the securities over the ten (10)
trading day period ending five (5) trading days prior to the distribution; or
(iii) if there is no active public market for the securities, then the value of the securities
shall be deemed to be the fair market value thereof as determined in good faith by the Board of
Directors which determination shall include consideration of the illiquidity of the securities.
In the event of a merger or other acquisition of the Corporation by another entity, the
distribution date shall be deemed to the date such transaction closes.
For the purposes of this Section 3(i), trading day shall mean any day on which the exchange
or system on which the securities to be distributed are traded is open, and closing prices or
closing bid prices shall be deemed to be: (i) for securities traded primarily on the New York
Stock Exchange, the American Stock Exchange or Nasdaq, the last reported trade price or sale price,
as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or
traded on other exchanges, markets and systems, the market price as of the end of the regular
hours trading period that is generally accepted as such for such exchange, market or system. If,
after the date hereof, the benchmark times generally accepted in the securities industry for
determining the market price of a stock as of a given trading day shall change from those set forth
above, the fair market value shall be determined as of such other generally accepted benchmark
times.
4. Conversion. The holders of the Preferred Stock shall have conversion rights as
follows (the Conversion Rights):
(a) Right to Convert. Subject to Section 4(c), each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of issuance of such
share at the office of the Corporation or any transfer agent for the Preferred Stock, into that
number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original
Issue Price for the relevant series by the Conversion Price for such series. (The number of shares
of Common Stock into which each share of Preferred Stock of a series may be converted is
hereinafter referred to as the Conversion Rate for each such series.) Upon any decrease or
increase in the Conversion Price for any series of Preferred Stock, as described in this Section 4,
the Conversion Rate for such series shall be appropriately increased or decreased.
(b) Automatic Conversion. Each share of Preferred Stock shall automatically be
converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion
Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial
public offering on Form S-1 (or successor form) filed under the Securities Act of 1933, as amended
(the Securities Act), covering the offer and sale of the Corporations Common Stock, provided
that the offering price per share is not less than $5.69 (as adjusted for subdivisions and
combinations of the Common Stock and changes in the Common Stock as set forth in Sections 4(e) and
4(g)) and the aggregate gross proceeds to the Corporation are not less than $25,000,000, or (ii)
upon the receipt by the Corporation of a written consent or request for such conversion from the
holders of two-thirds of the shares of Preferred Stock then outstanding, or, if later, the
effective date for
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conversion specified in such requests (each of the events referred to in (i) and (ii) being
hereinafter referred to as an Automatic Conversion Event).
(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued
upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then
fair market value of a share of Common Stock as determined by the Board of Directors. For such
purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated,
and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of
Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to
receive certificates therefor, he shall either surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock,
or notify the Corporation or its transfer agent that such certificate or certificates have been
lost, stolen or destroyed and execute an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection with such certificate or certificates, and
shall give written notice to the Corporation at such office that he elects to convert the same;
provided, however, that on the date of an Automatic Conversion Event, the
outstanding shares of Preferred Stock shall be converted automatically without any further action
by the holders of such shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided further, however, that the
Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares
of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the
holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation
from any loss incurred by it in connection with such certificates. On the date of the occurrence
of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be
deemed to be the holder of record of the Common Stock issuable upon such conversion,
notwithstanding that the certificates representing such shares of Preferred Stock shall not have
been surrendered at the office of the Corporation, that notice from the Corporation shall not have
been received by any holder of record of shares of Preferred Stock, or that the certificates
evidencing such shares of Common Stock shall not then be actually delivered to such holder.
The Corporation shall, as soon as practicable after such delivery, or after such agreement and
indemnification, issue and deliver at such office to such holder of Preferred Stock, a certificate
or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the
converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or holders of such shares of
Common Stock on such date; provided, however, that if the conversion is in
connection with an underwritten offer of securities registered pursuant to the Securities Act the
conversion may, at the option of any holder tendering Preferred Stock for conversion, be
conditioned upon the closing of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the
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Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have
converted such Preferred Stock until immediately prior to the closing of the sale of such
securities.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definition. For purposes of this Section 4(d), Additional Shares of
Common shall mean all shares of Common Stock issued (or, pursuant to Section 4(d)(iii), deemed to
be issued) by the Corporation after the filing of these Articles of Incorporation, other than:
(1) [omitted];
(2) shares of Common Stock issued or issuable to officers, directors and employees of, or
consultants and other service providers to, the Corporation pursuant to stock grants, option plans,
purchase plans or other employee stock incentive programs or arrangements approved by the Board of
Directors or upon exercise of options or warrants granted to such parties pursuant to any such
plan, program or arrangement;
(3) shares of Common Stock issued upon the exercise or conversion of Options or Convertible
Securities outstanding as of the date of the filing of these Articles of Incorporation;
(4) shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock
or pursuant to any event for which adjustment is made pursuant to Section 4(e), 4(f) or 4(g)
hereof;
(5) shares of Common Stock issued in a registered public offering under the Securities Act
pursuant to which all outstanding shares of Preferred Stock are automatically converted into Common
Stock pursuant to an Automatic Conversion Event;
(6) shares of Common Stock issued or issuable pursuant to the acquisition of another
corporation by the Corporation by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances are unanimously
approved by the Board of Directors;
(7) shares of Common Stock issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a commercial leasing or debt financing transaction approved by the Board
of Directors;
(8) shares of Common Stock issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other similar agreements, or
strategic partnerships or relationships, if the issuance is approved by the Board of Directors; and
(9) shares of Common Stock issued or issuable upon conversion of up to $18 million in
aggregate principal amount (plus interest) of convertible promissory notes originally issued or
issuable to Biomedical Sciences Investment Fund Pte Ltd. or its affiliates (BMSIF) and upon
conversion of up to $3 million in aggregate principal amount (plus interest) of convertible
promissory notes originally issued or issuable to Invus, L.P. or its affiliates, provided
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that with respect to any shares of Common Stock issued or issuable upon conversion of
convertible promissory notes issued or issuable to BMSIF after the filing of these Articles of
Incorporation with an aggregate principal amount in excess of $3.0 million, such shares of Common
Stock shall only be excluded from the definition of Additional Shares of Common pursuant to this
section if and to the extent the applicable conversion price for such shares equals or exceeds
$3.60 (as adjusted for stock splits, subdivisions, combinations or stock dividends).
(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a
particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares
of Common unless the consideration per share (as determined pursuant to Section 4(d)(vii)) for an
Additional Share of Common issued or deemed to be issued by the Corporation is less than the
Conversion Price in effect on the date of, and immediately prior to such issue, for such series of
Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common. In the event the Corporation at
any time or from time to time after the date of the filing of these Articles of Incorporation shall
issue any Options or Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating thereto without regard
to any provisions contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible Securities, the
conversion or exchange of such Convertible Securities or, in the case of Options for Convertible
Securities, the exercise of such Options and the conversion or exchange of the underlying
securities, shall be deemed to have been issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record date, provided that
in any such case in which shares are deemed to be issued:
(1) no further adjustment in the Conversion Price of the Preferred Stock shall be made upon
the subsequent issue of Convertible Securities or shares of Common Stock in connection with the
exercise of such Options or conversion or exchange of such Convertible Securities pursuant to the
terms of such Options or Convertible Securities;
(2) if no adjustment in the Conversion Price of the Preferred Stock was made upon the original
issue of (or upon the occurrence of a record date with respect to) such Options or Convertible
Securities and such Options or Convertible Securities are revised to provide, or by their terms
provide, with the passage of time or otherwise, for any increase or decrease in the consideration
payable to the Corporation, or any increase or decrease in the number of shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof, then such Options or Convertible
Securities as so revised (and the Additional Shares of Common subject thereto) shall be deemed to
have been issued effective upon such increase or decrease becoming effective;
(3) if such Options or Convertible Securities are revised to provide, or by their terms
provide, with the passage of time or otherwise, for any increase or decrease in the consideration
payable to the Corporation, or any increase or decrease in the number of shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof, the Conversion Price of the Preferred
Stock computed upon the original issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based thereon,
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shall, upon any such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the rights of conversion or exchange
under such Convertible Securities;
(4) no readjustment pursuant to clause (3) above shall have the effect of increasing the
Conversion Price of the Preferred Stock to an amount which exceeds the lower of (i) the Conversion
Price of the Preferred Stock on the original adjustment date, or (ii) the Conversion Price of the
Preferred Stock that would have resulted from any issuance of Additional Shares of Common between
the original adjustment date and such readjustment date;
(5) upon the expiration of any such Options or any rights of conversion or exchange under such
Convertible Securities which shall not have been exercised, the Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect thereto) and any
subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:
(A) in the case of Convertible Securities or Options for Common Stock, the only Additional
Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise
of such Options or the conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for the issue of such
exercised Options plus the consideration actually received by the Corporation upon such exercise or
for the issue of all such Convertible Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Corporation upon such conversion or
exchange, and
(B) in the case of Options for Convertible Securities, only the Convertible Securities, if
any, actually issued upon the exercise thereof were issued at the time of issue of such Options,
and the consideration received by the Corporation for the Additional Shares of Common deemed to
have been then issued was the consideration actually received by the Corporation for the issue of
such exercised Options, plus the consideration deemed to have been received by the Corporation
(determined pursuant to Section 4(d)(vii)) upon the issue of the Convertible Securities with
respect to which such Options were actually exercised; and
(6) if such record date shall have been fixed and such Options or Convertible Securities are
not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which
became effective on such record date shall be canceled as of the close of business on such record
date, and thereafter the Conversion Price shall be adjusted pursuant to this Section 4(d)(iii) as
of the actual date of their issuance.
(iv) Adjustment of Conversion Price of Series E Preferred Stock Upon Issuance of
Additional Shares of Common.
(1) For so long as the Conversion Price of the Series E Preferred Stock is greater than $2.58
(as adjusted for subdivisions and combinations of the Common Stock and changes in the Common Stock
as set forth in Sections 4(e) and 4(g)) (the Series D/E Ratchet Amount), in the event this
Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed
to be issued pursuant to Section 4(d)(iii)) for a consideration
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per share less than the applicable Conversion Price of the Series E Preferred Stock in effect
on the date of and immediately prior to such issue, but for a consideration per share equal to or
greater than the Series D/E Ratchet Amount, then the Conversion Price of the Series E Preferred
Stock shall be reduced concurrently with such issue to a price (calculated to the nearest cent)
equal to the per share price of the Additional Shares of Common.
(2) In the event this Corporation shall issue Additional Shares of Common (including
Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) without
consideration or for a consideration per share less than the Series D/E Ratchet Amount, then the
Conversion Price of the Series E Preferred Stock immediately prior to such issue shall be deemed to
be equal to the Series D/E Ratchet Amount (the Series E Adjusted Conversion Price), and such
Series E Adjusted Conversion Price shall be further reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying such Series E Adjusted Conversion
Price by a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of shares of Common Stock which the
aggregate consideration received by the Corporation for the total number of Additional Shares of
Common so issued would purchase at such Adjusted Conversion Price, and the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the
number of such Additional Shares of Common so issued. For the purposes of this Section
4(d)(iv)(2), all shares of Common Stock issuable upon exercise of outstanding Options or the
conversion of outstanding Convertible Securities and shares of Preferred Stock, and all Additional
Shares of Common deemed issued pursuant to Section 4(d)(iii) hereof, shall be deemed to be
outstanding. Section 4(d)(iv)(3) shall govern adjustments to the Conversion Price of the Series E
Preferred Stock after the first adjustment to the Conversion Price of the Series E Preferred Stock
pursuant to this Section 4(d)(iv)(2).
(3) After any adjustment to the Conversion Price of the Series E Preferred Stock pursuant to
Section 4(d)(iv)(2), in the event this Corporation shall issue Additional Shares of Common
(including Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) without
consideration or for a consideration per share less than Conversion Price of the Series E Preferred
Stock in effect on the date of and immediately prior to such issue, then, the Conversion Price of
the Series E Preferred Stock shall be reduced concurrently with such issue, to a price (calculated
to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding immediately prior to such issue
plus the number of shares of Common Stock which the aggregate consideration received by the
Corporation for the total number of Additional Shares of Common so issued would purchase at such
Conversion Price, and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional Shares of Common so
issued. For the purposes of this Section 4(d)(iv)(3), all shares of Common Stock issuable upon
exercise of outstanding Options or the conversion of outstanding Convertible Securities and shares
of Preferred Stock, and all Additional Shares of Common deemed issued pursuant to Section 4(d)(iii)
hereof, shall be deemed to be outstanding.
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(v) Adjustment of Conversion Price of Series D Preferred Stock Upon Issuance of Additional
Shares of Common.
(1) For so long as the Conversion Price of the Series D Preferred Stock is greater than the
Series D/E Ratchet Amount, in the event this Corporation shall issue Additional Shares of Common
(including Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) for a
consideration per share less than the applicable Conversion Price of the Series D Preferred Stock
in effect on the date of and immediately prior to such issue, but for a consideration per share
equal to or greater than the Series D/E Ratchet Amount, then the Conversion Price of the Series D
Preferred Stock shall be reduced concurrently with such issue to a price (calculated to the nearest
cent) equal to the per share price of the Additional Shares of Common.
(2) In the event this Corporation shall issue Additional Shares of Common (including
Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) without
consideration or for a consideration per share less than the Series D/E Ratchet Amount, then the
Conversion Price of the Series D Preferred Stock immediately prior to such issue shall be deemed to
be equal to the Series D/E Ratchet Amount (the Series D Adjusted Conversion Price), and such
Series D Adjusted Conversion Price shall be further reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying such Series D Adjusted Conversion
Price by a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of shares of Common Stock which the
aggregate consideration received by the Corporation for the total number of Additional Shares of
Common so issued would purchase at such Series D Adjusted Conversion Price, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common so issued. For the purposes of this Section
4(d)(v)(2), all shares of Common Stock issuable upon exercise of outstanding Options or the
conversion of outstanding Convertible Securities and shares of Preferred Stock, and all Additional
Shares of Common deemed issued pursuant to Section 4(d)(iii) hereof, shall be deemed to be
outstanding. Section 4(d)(v)(3) shall govern adjustments to the Conversion Price of the Series D
Preferred Stock after the first adjustment to the Conversion Price of the Series D Preferred Stock
pursuant to this Section 4(d)(v)(2).
(3) After any adjustment to the Conversion Price of the Series D Preferred Stock pursuant to
Section 4(d)(v)(2), in the event this Corporation shall issue Additional Shares of Common
(including Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) without
consideration or for a consideration per share less than Conversion Price of the Series D Preferred
Stock in effect on the date of and immediately prior to such issue, then, the Conversion Price of
the Series D Preferred Stock shall be reduced concurrently with such issue, to a price (calculated
to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding immediately prior to such issue
plus the number of shares of Common Stock which the aggregate consideration received by the
Corporation for the total number of Additional Shares of Common so issued would purchase at such
Conversion Price, and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional Shares of Common so
issued. For the purposes of this Section 4(d)(v)(3), all shares of Common Stock issuable upon
exercise of outstanding Options or the conversion of outstanding Convertible
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Securities and shares of Preferred Stock, and all Additional Shares of Common deemed issued
pursuant to Section 4(d)(iii) hereof, shall be deemed to be outstanding.
(vi) Adjustment of Conversion Price of Series A, B and C Preferred Stock. In the
event this Corporation shall issue Additional Shares of Common (including Additional Shares of
Common deemed to be issued pursuant to Section 4(d)(iii)) without consideration or for a
consideration per share less than the applicable Conversion Price of the Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock in effect on the date of and immediately prior
to such issue, then, the Conversion Price of the Series A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock (if affected) shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying such Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional Shares of Common so
issued would purchase at such Conversion Price, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common so issued. For the purposes of this Section 4(d)(vi), all shares of
Common Stock issuable upon exercise of outstanding Options or the conversion of outstanding
Convertible Securities and shares of Preferred Stock, and all Additional Shares of Common deemed
issued pursuant to Section 4(d)(iii) hereof, shall be deemed to be outstanding.
(vii) Determination of Consideration. For purposes of this Section 4(d), the
consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares
of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation before deducting reasonable discounts, commissions or other expenses allowed, paid
or incurred by the Corporation for any underwriting or otherwise in connection with such issue (or
deemed issue);
(B) insofar as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common are issued together with other shares or
securities or other assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as
reasonably determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration per share received by the
Corporation for Additional Shares of Common deemed to have been issued pursuant to Section
4(d)(iii) shall be determined by dividing
(X) the total amount, if any, received or receivable by the Corporation as consideration for
the issue of such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating
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thereto, without regard to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion or exchange of such
Convertible Securities by
(Y) the maximum number of shares of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(e) Adjustments for Subdivisions or Combinations of Common Stock. In the event the
outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock
dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of
each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently
with the effectiveness of such subdivision, be proportionately decreased. In the event the
outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a
lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such
combination shall, concurrently with the effectiveness of such combination, be proportionately
increased.
(f) Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the
outstanding shares of Preferred Stock or a series of Preferred Stock shall be subdivided (by stock
split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred
Stock, the Dividend Rate, Original Issue Price and Liquidation Preference of the affected series of
Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the
effectiveness of such subdivision, be proportionately decreased. In the event the outstanding
shares of Preferred Stock or a series of Preferred Stock shall be combined (by reclassification or
otherwise) into a lesser number of shares of Preferred Stock, the Dividend Rate, Original Issue
Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately
prior to such combination shall, concurrently with the effectiveness of such combination, be
proportionately increased.
(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3
above (Liquidation Rights), if the Common Stock issuable upon conversion of the Preferred Stock
shall be changed into the same or a different number of shares of any other class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares provided for above), then, in any such event, in lieu of the number of
shares of Common Stock which the holders would otherwise have been entitled to receive, each holder
of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock
into a number of shares of such other class or classes of stock which a holder of the number of
shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately
before that change would have been entitled to receive in such reorganization or reclassification,
all subject to further adjustment as provided herein with respect to such other shares.
(h) No Impairment. The Corporation will not through any reorganization, transfer of
assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or
seek
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to avoid the observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but will at all times in good faith assist in the carrying out of all
the provisions of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against
impairment. Notwithstanding the foregoing, nothing in this Section 4(h) shall prohibit the
Corporation from amending its Articles of Incorporation with the requisite consent of its
shareholders and the board of directors.
(i) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Preferred Stock.
(j) Notices of Record Date. In the event that this Corporation shall propose at any
time:
(i) to declare any dividend or distribution upon its Common Stock, whether in cash, property,
stock or other securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus;
(ii) to effect any reclassification or recapitalization of its Common Stock outstanding
involving a change in the Common Stock; or
(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a
liquidation, dissolution or winding up of the corporation pursuant to Section 3(f);
then, in connection with each such event, this Corporation shall send to the holders of the
Preferred Stock at least 14 days prior written notice of the date on which a record shall be taken
for such dividend or distribution (and specifying the date on which the holders of Common Stock
shall be entitled thereto) or for determining rights to vote in respect of the matters referred to
in (ii) and (iii) above.
Each such written notice shall be given by first class mail, postage prepaid, addressed to the
holders of Preferred Stock at the address for each such holder as shown on the books of this
Corporation.
The right of the holders of the Preferred Stock to notice hereunder may be waived by the
holders of more than two-thirds (2/3) of the outstanding shares of the Preferred Stock voting
together as a single class.
(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common Stock solely
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for the purpose of effecting the conversion of the shares of the Preferred Stock, such number
of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of
all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Preferred Stock, the Corporation will take such corporate action as may,
in the opinion of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(l) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the
contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be
waived by the consent or vote of the holders of more than two-thirds (2/3) of the outstanding shares
of such series. Any such waiver shall bind all future holders of shares of such series of
Preferred Stock.
5. Voting.
(a) Restricted Class Voting. Except as otherwise expressly provided herein or as
required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together
and not as separate classes.
(b) No Series Voting. Other than as provided herein or required by law, there shall
be no series voting.
(c) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number
of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock
held by such holder could be converted as of the record date. The holders of shares of the
Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be
entitled to vote. Holders of Preferred Stock shall be entitled to notice of any shareholders
meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Preferred Stock held by each holder could be converted), shall be
disregarded.
(d) Common Stock. Each holder of shares of Common Stock shall be entitled to one vote
for each share thereof held.
(e) Election of Directors. So long as at least 2,000,000 shares of Series D Preferred
Stock (as adjusted for stock splits, subdivisions, combinations or stock dividends with respect to
such shares) remain outstanding, the holders of the Series D Preferred Stock, voting as a separate
class, shall be entitled to elect two (2) members of the Corporations Board of Directors at each
meeting or pursuant to each consent of the Corporations shareholders for the election of
directors. So long as at least 2,000,000 shares of Series C Preferred Stock (as adjusted for stock
splits, subdivisions, combinations or stock dividends with respect to such shares) remain
outstanding, the holders of Series C Preferred Stock, voting as a separate class, shall be entitled
to elect three (3) members of the Corporations Board of Directors at each meeting or pursuant to
each consent of the Corporations shareholders for the election of directors. Any additional
members of the Corporations Board of Directors shall be elected by the holders of Common Stock,
Series A
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Preferred Stock, Series B Preferred Stock, and Series E Preferred Stock, voting together as a
single class.
6. Amendments and Changes Requiring Approval of Preferred Stock. As long as any of
the Preferred Stock shall be issued and outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent as provided by law) of the holders of at least
two-thirds (2/3) of the outstanding shares of the Preferred Stock voting together as a single class:
(a) amend, alter or repeal any provision of the Articles of Incorporation or By-laws of the
Corporation if such action would adversely alter the rights, preferences, privileges or powers of,
or restrictions provided for the benefit of the Preferred Stock or any series thereof;
(b) enter into any transaction or series of related transactions deemed to be a liquidation,
dissolution or winding up of the Corporation pursuant to Section 3(f) above;
(c) voluntarily liquidate or dissolve;
(d) declare or pay any distribution (as defined in Section 2(d) except for distributions upon
a liquidation or dissolution) with respect to the Common Stock of the Corporation;
(e) permit any subsidiary of the Corporation to sell securities to a third party (other than
directors qualifying shares in the case of subsidiaries outside the United States);
(f) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Preferred Stock;
(g) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, liquidation, redemption,
conversion or other rights senior to or on a parity with any series of Preferred Stock or with
respect to voting senior to any series of Preferred Stock;
(h) increase or decrease the authorized number of directors of the Corporation; or
(i) amend this Section 6.
7. Amendments and Changes Requiring the Approval of the Series E Preferred Stock.
(a) As long as any of the Series E Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of at least 60% of the outstanding shares of the Series E Preferred Stock:
(i) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series E Preferred Stock in a manner different from
any other series of Preferred Stock; or
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(ii) amend this Section 7(a).
(b) As long as any of the Series E Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of at least a majority of the outstanding shares of the Series E Preferred
Stock:
(i) declare or pay any distribution (as defined in Section 2(d) except for distributions upon
a liquidation or dissolution) with respect to the Common Stock or Preferred Stock of the
Corporation; or
(ii) amend this Section 7(b).
(c) As long as any of the Series E Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of at least 66 2/3% of the outstanding shares of the Series D Preferred
Stock and Series E Preferred Stock voting together as a single class on an as converted to Common
Stock basis:
(i) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series E Preferred Stock;
(ii) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series E Preferred Stock or with respect to
voting senior to the Series E Preferred Stock; or
(iii) amend this Section 7(c).
8. Amendments and Changes Requiring the Approval of the Series D Preferred Stock.
(a) As long as any of the Series D Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of at least 60% of the outstanding shares of the Series D Preferred Stock:
(i) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series D Preferred Stock in a manner different from
any other series of Preferred Stock; or
(ii) amend this Section 8(a).
(b) As long as any of the Series D Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of at least a majority of the outstanding shares of the Series D Preferred
Stock:
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(i) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series D Preferred Stock;
(ii) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series D Preferred Stock or with respect to
voting senior to the Series D Preferred Stock;
(iii) declare or pay any distribution (as defined in Section 2(d) except for distributions
upon a liquidation or dissolution) with respect to the Common Stock or Preferred Stock of the
Corporation;
(iv) increase the authorized number of directors of the Corporation above eleven (11); or
(v) amend this Section 8(b).
9. Amendments and Changes Requiring the Approval of the Series C Preferred Stock. As
long as any of the Series C Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of at least two-thirds (2/3) of the outstanding shares of the Series C Preferred Stock:
(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series C Preferred Stock in a manner different from
any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series C Preferred Stock;
(c) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series C Preferred Stock or with respect to
voting senior to the Series C Preferred Stock;
(d) declare or pay any distribution (as defined in Section 2(d) except for distributions upon
a liquidation or dissolution) with respect to the Common Stock or Preferred Stock of the
Corporation;
(e) increase the authorized number of directors of the Corporation above eleven (11); or
(f) amend this Section 9.
10. Amendments and Changes Requiring the Approval of the Series B Preferred Stock. As
long as any of the Series B Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of at least two-thirds of the outstanding shares of the Series B Preferred Stock:
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(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series B Preferred Stock in a manner different from
any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series B Preferred Stock; or
(c) amend this Section 10.
11. Status of Converted Stock. In the event any shares of Preferred Stock shall be
converted pursuant to Article 4 hereof, then the shares so converted shall be cancelled and shall
not be issuable by the Corporation. The Articles of Incorporation shall be appropriately amended
to effect the corresponding reduction in the Corporations authorized capital stock.
12. Notices. Any notice required by the provisions of this Article IV to be given to
the holders of Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at such holders address appearing on the
books of the Corporation.
ARTICLE V
1. Limitation of Directors Liability. The liability of the directors of this
Corporation for monetary damages shall be eliminated to the fullest extent permissible under
California law.
2. Indemnification of Corporate Agents. This Corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with agents, votes of shareholders or disinterested directors or
otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California
Corporations Code, subject only to the applicable limits set forth in Section 204 of the California
Corporations Code with respect to actions for breach of duty to this Corporation and its
shareholders.
3. Repeal or Modification. Any repeal or modification of the foregoing provisions of
this Article V shall not adversely affect any right of indemnification or limitation of liability
permitted under California law relating to acts or omissions occurring prior to such repeal or
modification.
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EXHIBIT
C
SCHEDULE
OF EXCEPTIONS
FLUIDIGM CORPORATION
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
UPDATED SCHEDULE OF EXCEPTIONS
October 26, 2007
FLUIDIGM CORPORATION, a Delaware corporation (the Company), hereby makes the
following exceptions and additional disclosure to the representations and warranties set forth in
Section 2 of the Series E Preferred Stock Purchase Agreement dated as of June 13, 2007 between the
Company and the Purchasers thereunder, as amended by that certain Amendment No.1 dated December 22,
2006, and further amended by Amendment No. 2 dated October 10, 2007 and Amendment No. 3 dated
October 26, 2007 (as amended, the Agreement). Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Agreement. The section
numbers below correspond to the section numbers of the representations and warranties in the
Agreement; provided that any information disclosed herein under any section number shall be deemed
to be disclosed and incorporated under any other section number under the Agreement where such
disclosure would be appropriate.
Nothing in this Schedule of Exceptions is intended to broaden the scope of any representation
or warranty contained in the Agreement or to create any covenant. Inclusion of any item in this
Schedule of Exceptions (1) does not represent a determination that such item is material or
establish a standard of materiality, (2) does not represent a determination that such item did not
arise in the ordinary course of business, (3) does not represent a determination that the
transactions contemplated by the Agreement require the consent of third parties, and (4) shall not
constitute, or be deemed to be, an admission to any third party concerning such item. This
Schedule of Exceptions includes brief descriptions or summaries of certain agreements and
instruments, copies of which are available upon reasonable request. Such descriptions do not
purport to be comprehensive, and are qualified in their entirety by reference to the text of the
documents described.
This Schedule of Exceptions reflects exceptions and additional disclosure to the
representations and warranties made by the Company set forth in Section 2 of the Agreement as of
October 26, 2007, and has not been updated for Subsequent Closings. The Purchaser acknowledges
that there may be changes to such exceptions and additional disclosure since October 26, 2007, and
accepts the Schedule of Exceptions as of October 26, 2007.
2.1 Organization, Good Standing and Qualification
On July 18, 2007, Fluidigm Corporation, a California corporation (Fluidigm California) was
merged with and into the Company, with the Company being the surviving corporation such that the
Company succeeded to all of Fluidigm Californias rights and obligations, including those under the
Purchase Agreement.
2.3 Subsidiaries
The Company has a wholly-owned subsidiary in Singapore, Fluidigm Singapore Pte. Ltd.
The Company has a wholly-owned subsidiary in the Netherlands, Fluidigm Europe, B.V., which has
a wholly-owned subsidiary in France, Fluidigm France, S.A.R.L.
The Company has a wholly-owned subsidiary in Japan, Fluidigm Japan K.K.
2.4 Capitalization
The Company has extended offers of option grants for up to approximately 200,000 shares of
Common Stock to certain of the Companys employees and consultants in addition to the options that
are currently outstanding. In addition, the Company is currently negotiating or has entered into
agreements with consultants and employees for the issuance of options to purchase shares of the
Companys Common Stock under the Companys 1999 Stock Option Plan.
In connection with a Development Collaboration and License Agreement (the Collaboration
Agreement) entered into on September 22, 2003 between the Company and Glaxo Group Limited
(Glaxo) and SmithKline Beecham Corporation (SKB), the Company issued warrants to purchase
90,000 shares of Series C Preferred Stock and 90,000 shares of Series C Preferred Stock to Glaxo
and warrants to purchase 110,000 and 110,000 shares of Series C Preferred Stock to SKB. One of the
warrants to purchase 90,000 shares of Series C Preferred Stock issued to Glaxo and one of the
warrants to purchase 110,000 shares of Series C Preferred Stock issued to SKB expired pursuant to
their terms and are not shown as outstanding in the Agreement.
The Company entered into various agreements with Lighthouse Capital Partners V, L.P.
(Lighthouse) as described in Section 2.14 below. In connection with these transactions, the
Company borrowed $13,000,000 under the loan and security agreement and issued a warrant to
Lighthouse to purchase 371,428 shares of the Companys Series D Preferred Stock. As of September
30, 2007, the Company owed approximately $9,601,037 under the notes.
The Company is a party to a License Agreement between the Company and the California Institute
of Technology (Caltech) dated May 1, 2000, which was amended and restated in June 2002 effective
as of May 1, 2002, further amended in June 2003, with a restatement date of May 1, 2004, as further
amended March 29, 2007 (collectively, the Caltech License Agreement). Pursuant to the Caltech
License Agreement, the Company was obligated on an annual basis to issue to Caltech 50,000 shares
of the Companys Common Stock on each occasion that the Company determined to add patent rights to
the license.
The Company and Biomedical Sciences Investment Fund Pte Ltd. (BMSIF) are parties to a
Convertible Note Purchase Agreement dated as of December 18, 2003, as amended by Amendment No. 1 to
Convertible Note Purchase Agreement dated December 17, 2004 and as further amended by a letter
agreement dated June 30, 2005 (collectively, the CNPA). Pursuant to the CNPA, the Company
issued a Convertible Promissory Note, as amended by Amendment to Convertible Promissory Note dated
December 17, 2004, and as further amended by Amendment No. 2 to Convertible Promissory Note dated
June 30, 2005 (collectively, the Note) to BMSIF in exchange for $2,000,000. In December 2005,
upon the successful completion of certain specified milestones by the Company, the principal amount
of and the accrued interest under the Note were converted into 832,635 shares of Series D Preferred
Stock at a conversion price per share of $2.80.
In addition, as a result of the Companys achieving of such specified milestones, the Company
has required BMSIF to purchase an additional convertible promissory note (the Supplemental Note)
in the aggregate principal amount of $3,000,000 on June 20, 2006.
The principal amount of and interest on the Supplemental Note was convertible into shares of
Series D Preferred Stock of the Company at a conversion price of $2.80 per share (subject to
adjustment) upon the earlier of an initial public offering in connection with which the Companys
Preferred Stock has converted into Common Stock or the satisfaction of certain specified
milestones. In addition, BMSIF may electively convert the Supplemental Note into shares of Series
D Preferred Stock at any time. The principal amount and interest under the Supplemental Note could
not be prepaid except under limited circumstances. In July, 2007 upon completion of certain
specified milestones by the Company, the principal amount of and the accrued interest under the
Supplemental Note were converted into 1,157,142 shares of Series D Preferred Stock at a conversion
price per share of $2.80.
The Company and Invus, L.P. are parties to a Convertible Note Agreement dated December 18,
2003, as amended by Amendment No. 1 to Convertible Note Agreement executed in November 2005 (the
CNA). The CNA provides that in the event the Company issues to BMSIF Supplemental Notes in the
aggregate principal amount of $3,000,000 upon the happening of certain events, Invus has the right
to purchase a convertible promissory note in the principal amount of $3,000,000 (the Invus Note)
from the Company. Recently, Invus, L.P. and the Company decided not to issue the Invus Note.
The Company and BMSIF entered into a Convertible Note Purchase Agreement, dated as of August
7, 2006, as amended by that certain Letter Agreement dated November 15, 2006 and as further amended
by that certain Letter Agreement dated January 31, 2007 (as amended, the 2006 CNPA). The 2006
CNPA permits the Company to borrow up to $15 million in three $5 million tranches, subject to
availability based on the achievement of specified milestones. The Company has sold and issued to
BMSIF all three convertible promissory notes, each in the principal amount of $5 million. The
initial two convertible promissory notes converted into 1,460,730 and 1,493,607 shares of Series E
Preferred Stock on March 31, 2007. Upon conversion of the second convertible promissory note,
BMSIF purchased the third (and final) convertible promissory note in the principal amount of $5
million.
In March 2003, the Company entered into (i) a Master Closing Agreement (the Master Closing
Agreement) with Oculus Pharmaceuticals, Inc. (Oculus) and the University of Alabama Research
Foundation (UABRF); (ii) a License Agreement with UABRF; and (iii) a Sponsored Research Agreement
with UABRF. The Company is obligated to issue up to $2,100,000 of additional shares of its stock
to UABRF in connection with the satisfaction of certain milestones. If the Company is a private
Company at the time a milestone is achieved, upon achievement of a milestone, the Company is to
issue shares of the series of Preferred Stock that was issued in the Companys most recent
financing and the shares are to be valued at the price the shares were sold in such financing. If
the Company is a public company at the time a milestone is achieved, upon achievement of a
milestone, the Company is to issue shares of Common stock valued at the average closing price of
the Companys Common Stock over the five trading days preceding the achievement of the milestone.
In February 2005, UABRF sent a letter to the Company requesting issuance of the shares in relation
to the milestones. The Company replied in writing that the milestones had not been satisfied and
that it had no obligation to issue the shares at that time. The Company achieved a milestone in
2006 and as a result issued $600,000 worth of shares of its Series D Preferred Stock to UABRF and
other designated parties. Following the satisfaction of the milestone, the parties have been
negotiating the Companys continuing obligations, if any, under the agreements identified above,
which may include an obligation on the part of the Company to issue additional shares of its stock
to UABRF.
The Company is party to an offer letter with Richard DeLateur, the Companys Chief Financial
Officer, which provides that in the event of a Change of Control (as defined in the offer letter)
50% of the shares subject to the option granted to Mr. DeLateur in connection with his acceptance
of
employment with the Company that are unvested at the time of such Change of Control shall
become immediately vested.
The Company has approved an issuance of 6,000 shares of the Companys Common Stock to Stanford
University. Such issuance has not been completed.
See Section 2.10(f) regarding Dr. Stephen R. Quake.
2.7 Government Consents
The Company makes no representation or warranty with respect to any consent, approval, order
or authorization of, or registration, qualification, designation, declaration or filing with any
foreign governmental entity and has assumed for purposes of the Agreement that none of the
foregoing is required.
2.8 Litigation
See Section 2.10(a).
The Company has received a letter from a supplier of certain materials used in the Companys
Topaz and certain other products requesting that the Company cease and desist using a lid with the
materials or obtain a license from the supplier for using the design of the lid. Upon
investigation, the Company determined that it had developed the lid design independently from the
supplier and also began developing alternates to the materials, which are currently approved for
manufacturing. The Company wrote a letter explaining these opinions to the supplier and the
parties have been in negotiations regarding this matter resulting in the supplier providing a
proposed settlement agreement with a $55,000 buy-out option for the Company and the Company replied
with a revised draft settlement agreement. The Company is currently waiting for the supplier to
comment on the revised draft settlement agreement.
2.9 Employees
William Smith, the Companys general counsel, is currently working for the Company and also
remains a partner at Townsend and Townsend and Crew LLP. Mr. Smith serves on the Board of
Directors of two private companies, Theracos Corporation and Arbor Vita Corporation.
Richard DeLateur, the Companys Chief Financial Officer, currently works four days a week and
it is anticipated that Mr. DeLateurs service will decrease and his employment with the Company
will terminate. Mr. DeLateur and the Company do not have a schedule for the eventual termination
of Mr. DeLateurs employment.
2.10 Patents and Other Intangible Assets
2.10(a)
The Company has rights to the patents, trademarks and applications listed on Schedule
2.10 attached hereto, although some of the patent rights listed may not currently be being
utilized by the Company in, and may not be necessary for, the Companys business as now conducted.
The Companys registered domain names are fluidigm.com, fluidigm.net, fluidigm.biz, fluidigm.info
and mycometrix.com.
The Company currently is selling two product lines: (i) the Topaz crystallization
microprocessors (also referred to as Integrated Fluidic Circuits or IFCs) and certain associated
apparatuses; and (ii) the BioMark System, including certain IFCs, such as Dynamic Array chips,
Digital Array chips (also referred to as DID chips) and ImmunoMatrix chips, as well as certain
associated apparatuses. The Company has not completed investigations with respect to the
Intellectual Property Rights required for the BioMark System product line or for additional
applications of the Companys technology. In conjunction with this analysis, the Company has
sought and will continue to seek opinions from counsel with respect to potentially relevant third
party patent rights directed to, e.g., certain RealTime PCR and other PCR reagents and instruments,
such as assigned to Roche Molecular Systems and/or Applied BioSystems, an Applera Corporation
Business. The Company, therefore, may need to acquire additional Intellectual Property Rights to
pursue those lines of business, particularly with respect to microfluidic devices for PCR and other
assays, although the Company has not presently determined that blocking Intellectual Property
Rights of others exist in this regard.
The Company has entered into a Collaboration Agreement dated January 24, 2005 (the CTI
Collaboration Agreement) with CTI Molecular Imaging, Inc. (subsequently acquired by Siemens)
(CTI), under which the parties are to develop microfluidic chips and associated apparatuses for
use in positron emission tomography (PET). Under the CTI Collaboration Agreement, both CTI and
the Company have granted licenses to the other as necessary to conduct the research and development
program contemplated by the CTI Collaboration Agreement. The Company has also granted CTI an
option under certain of the Companys intellectual property to manufacture chips developed during
the collaboration. The Company also has rights to intellectual property developed under the
Collaboration Agreement, subject to certain restrictions under which CTI and certain other
collaborating entities have specified rights in the defined PET and associated fields. Recently,
Siemens notified the Company that it does not intend to exercise the option or continue the
research and development program. Discussions are underway relating to the early termination of
the Collaboration Agreement, and for the Company to obtain all rights to intellectual property
developed under the CTI Collaboration Agreement, including intellectual property rights arising
from (i) a patent application filed by Siemens and Caltech in which the Company believes that
certain Company scientists should have been named as co-inventors; (ii) additional patent
applications in the PET field allegedly filed by or on behalf of Siemens potentially with Caltech
inventors; and (iii) CTI activities with third parties. The Company and Siemens have agreed
starting in 2007 to not engage in further funded research under the CTI Collaboration Agreement.
The Company is licensee under a series of agreements with the President and Fellows of Harvard
College, under which the Company pays royalties to Harvard. The Company renegotiated the terms of
its agreements with Harvard and reduced the number of licenses from five to three, effective in
January 2005. The Company and Harvard will be discussing potential royalty obligations of the
Company to Harvard relating to transactions where the Company has received revenue but has not
directly charged for product transfers, such as for certain microfluidic chips.
In January 2003, the Company entered into a Patent License Agreement with Gyros pursuant to
which the Company received a non-exclusive license to certain patents from Gyros relating to the
Companys products. In exchange for the license, the Company has made certain payments to Gyros.
In January 2004, the Company exercised an option to add an additional field of use to the scope of
the license agreement in exchange for a cash payment. In January 2007, the Company did not elect
or pay for another additional field for, e.g., ImmunoMatrix chips, for which the Company has
conducted and is continuing to conduct research and development activities. The Company and Gyros
have had discussions regarding the extension of the field and Gyros has offered such extension
pursuant to the terms of the Patent License Agreement. In addition, the Company is obligated to
make royalty
payments on certain Company products incorporating the technology licensed from Gyros. The
amounts otherwise paid by the Company may be used as a credit with respect to the royalty payments.
The agreement provides for certain indemnity obligations of the Company.
With respect to certain patent filings then-controlled by Oculus Pharmaceuticals with
overlapping claims to the Syrrx patent referred to in the paragraph below, the Company entered into
in March 2003 (i) the Master Closing Agreement; (ii) a License Agreement with UABRF (the UABRF
License Agreement); and (iii) a Sponsored Research Agreement with UABRF. The license is an
exclusive license, subject to certain exceptions (including rights UABRF may have previously
granted Diversified Scientific, Inc. so that Diversified Scientific could perform research
obligations under grants). UABRF and affiliated entities have the right to internal use of the
intellectual property rights and to fulfill obligations under a National Institutes of Health
grant. Pursuant to the Master Closing Agreement, the Company made an up-front payment to UABRF and
granted UABRF shares of the Companys Series C Preferred Stock. The Company is obligated to issue
additional shares of its stock to UABRF in the event certain milestones are achieved as described
in Section 2.4 hereof. In connection with the satisfaction of a milestone, the Company may become
obligated to enter into a non-transferable site license so that an entity will have the right to
use the technology licensed to the Company for internal drug discovery efforts. Pursuant to the
Sponsored Research Agreement, the Company agreed to support a UABRF research program. The
Sponsored Research Program Agreement contains certain terms relating to the license of intellectual
property rights arising out of the program. The Company has certain indemnification obligations
pursuant to the agreements referred to in this paragraph.
In conjunction with the development of the Companys protein crystallization microprocessor
prototype, the Company became aware of U.S. Patent no. 6,296,673, issued to the Regents of the
University of California (the Regents) and apparently exclusively licensed to Syrrx Corporation
(note: Sam Colella of Versant Ventures, Chairman of the Companys Board of Directors, used to be
Chairman of Syrrx, which has been acquired by Takeda Pharmaceutical Company Limited). Based on
Syrrxs contentions of infringement with respect to the patent, related patent applications and the
Companys products, the Company has sought and obtained a patent opinion from counsel with respect
to the patent and entered into license negotiations with Syrrx for a license/sublicense to the
patent and other patent filings assigned to the Regents and Syrrx. In December 2003, the Company
entered into a license agreement with Syrrx (the Syrrx License Agreement), pursuant to which, in
exchange for a field restricted and nonexclusive license under intellectual property owned or
controlled by Syrrx, the Company issued Syrrx shares of the Companys Common Stock, made an
up-front payment and annual minimum payments. In addition, the Company is obligated to pay a
royalty in connection with the sale of certain products of the Company that incorporate the
intellectual property licensed and is obligated to indemnify Syrrx for matters relating to the
practice by the Company of any license or sublicense under the agreement. In January 2006, an
interference was declared by the USPTO between a patent application licensed to the Company under
the UABRF License Agreement and the above-identified patent and other related patents. While the
interference was ongoing, the Company, Syrrx, UABRF and Athersys, Inc. (a company that allegedly
acquired certain rights from Oculus) were in negotiations to settle the interference and modify the
parties obligations under the Syrrx License Agreement, the Master Closing Agreement, and the UABRF
License Agreement. Recently, in an appealable decision, the USPTO invalidated all claims of both
parties in the interference, and Syrrx decided not to appeal. Due to this decision and these
negotiations, the Company may decide not to maintain the Syrrx License Agreement in 2008.
The Company is aware of patents and patent applications controlled by Micronics Corporation
and Diversified Scientific, Inc. that potentially relate to the Companys protein crystallization
product
line. The Company has sought and obtained opinions from patent counsel regarding such patents
and has conducted preliminary discussions with each of these entities regarding the possibility of
obtaining a license to the relevant intellectual property. The necessity of obtaining a license
from each and the outcome of such negotiations remain uncertain although in certain Micronics
patent applications watched by the Company, the claims have been amended to not cover the Companys
protein crystallization product line. In February 2005, Diversified Scientific announced a plan to
auction its recently broadened (by USPTO re-examination) patent and other intellectual property
related to crystal image analysis. The Company indicated interest to Diversified Scientific in
submitting a bid. Diversified Scientific replied that it would respond to the Company and
additional interested bidders after checking with their counsel on certain legal issues relating to
the apparently improper broadening of patents by re-examination. The Company has not received a
further response from Diversified Scientific.
With respect to the patents and patent filings described in the foregoing paragraph, those
relating to the BioMark System described above and those not subject to the CTI Collaboration
Agreement, there can be no assurance that the Company will be able to obtain licenses on terms
acceptable to the Company. In addition, there can be no assurance that the holders of such patents
or patent filings will not initiate and prevail in litigation against the Company with respect to
the patents or patent filings.
The Company routinely investigates patents held by third parties to determine whether there
may be any conflict with the Company Intellectual Property Rights. While such investigations are
ongoing, the Company is not currently aware of any conflict except as disclosed herein.
With respect to certain microfluidics protein crystallization technology licensed to the
Company from Caltech, a University of California scientist, Dr. James Berger, is a co-inventor of
this technology along with certain Caltech scientists. Therefore, the Regents of the University
of California own certain rights in the invention which the Company understands have been licensed
to Caltech. The Company has sublicensed these rights from Caltech. As the Company is a
sublicensee, if Caltechs license from the Regents were to be revoked or terminated for any reason,
the Companys ability to practice and license this technology internationally would be subject to
certain limitations.
See also the discussion of the possible new collaboration agreement in Section 2.17 below, the
Companys license agreement with Caltech in Section 2.10(b) below and the discussion of the
Companys letter from a supplier in Section 2.8 above.
2.10(b)
See Section 2.10(a) above and Schedule 2.10 attached hereto. In addition, in
connection with sales of the Companys products, the Companys standard terms and conditions
include limited licenses to use the Companys products, including licenses to the Companys
software. The Company also has entered into (i) several prototype and other evaluation agreements
and material transfer agreements with third parties, which agreements provide for the third partys
use of the Companys products for a limited period of time typically in return for grant-back
licenses to the Company of improvements, and (ii) material transfer agreements in which the parties
may assign to each other certain intellectual property rights. The Company has sold BioMark System
prototypes and products and is entering into agreements with respect to additional sales,
evaluations and development agreements relating to the BioMark System. The Company typically
negotiates either standstill, grant-back or other rights to certain inventions made by the Company
or third parties using the prototypes. The Company intends to continue to negotiate collaboration
or other agreements with third parties.
The Exclusive Patent License Agreement dated November 2, 2000 with the Regents listed in
Schedule 2.10 requires the Company to make efforts to commercialize products relating to
the technology licensed to the Company. The Regents sent the Company a notice of termination of
the agreement in part due to the alleged failure of the Company to make such efforts. The Regents
rescinded the notice of termination and the Company intended to renegotiate the agreement to modify
the requirement that the Company make efforts to commercialize the technology. The Company has
received a request from the Regents for reports and diligence relating to the agreement. The
Company and Regents agreed to terminate the agreement with no further obligations of either party.
In connection with entering into the most recent amendment to the Caltech License Agreement,
and in response to a request from Caltech, the Company terminated its license of certain patent
rights that it deemed not material to the Companys business as currently conducted in exchange for
a cash payment from Caltech and a reduction in the Companys potential obligation to issue stock to
Caltech. The Company understands that Caltech has licensed these patent rights to another entity,
Helicos Biosciences Corporation. Dr. Steve Quake, a former director of and former consultant to
the Company, co-founded Helicos, and Versant Ventures, a significant investor in the Company, is
also a significant investor in Helicos. The Company believes that a conflict could exist between
the license Caltech granted to Helicos and Caltechs license of patent rights to the Company, if
Caltechs license with Helicos does not specifically exclude the patent rights granted to the
Company. The patent rights licensed from Caltech to Helicos include a cross-reference to, and
disclosure relating to, the patent rights the Company licenses from Caltech. Effective April 23,
2007, as amended May 11, 2007, the Company executed an Intellectual Property Agreement with Caltech
and Helicos.
2.10(c)
See discussions in Sections 2.10(a) and (b) above.
2.10(d)
The Company utilizes certain inventions developed by Steve Quake (See discussions in Section
2.10(f) below) prior to the formation of the Company and the inventions of certain employees
developed while they were working or studying at Caltech. The Company has rights to these
inventions pursuant to its license agreements with Caltech described in Schedule 2.10
attached hereto.
See discussion in Section 2.9 relating to William Smith. Townsend and Townsend and Crew LLP
from time to time provides legal services to Caltech and other parties with whom the Company has
business relationships.
2.10(e)
See discussion in Section 2.10(b).
Steve Quake and certain employees of the Company who previously worked at or studied at
Caltech have a right, pursuant to their agreements with Caltech, to receive a portion of the
royalties Caltech receives under its license agreements with the Company described in Schedule
2.10 attached hereto.
The Company has license agreements with shareholders of the Company. Those license agreements
are listed on Schedule 2.10 attached hereto.
The Companys employees have executed proprietary information and invention assignment
agreements in favor of the Company. The Company has executed consulting agreements with its
consultants and non-disclosure agreements with third parties.
From time to time university collaborators may be on the Companys premises conducting
research with the Companys chips. The Company typically does not enter into agreements relating
to these arrangements. The Company has entered into an agreement with a collaborator from Regents.
2.10(f)
See discussion in Sections 2.10(a), 2.10(b) and Section 2.10(e).
The Companys rights with respects to the research and development efforts of Steve Quake are
limited to those rights it has obtained through its licenses with Caltech described in Schedule
2.10 attached hereto and its consulting agreement with Steve Quake. As Dr. Quake has
transferred to Stanford University effective in early 2005, the Company negotiated with Caltech to
modify the Companys right to receive license rights from the Quake laboratory at Caltech. The
Company also has negotiated a Material Transfer Agreement with Stanford University to obtain, for a
limited term, license rights to certain inventions made by the Quake laboratory at Stanford
University and is in negotiations for additional such agreements. Dr. Quake has been appointed an
investigator by the Howard Hughes Medical Institute (HHMI). In connection with such appointment,
Dr. Quakes affiliation with the Company (including, without limitation, stock ownership and status
as a member of the Board of Directors of the Company) and the Companys rights to inventions from
the Quake laboratory at Stanford University and Caltech have been eliminated or substantially
curtailed. The Company has negotiated a new consulting agreement with Dr. Quake in accordance with
HHMI guidelines; such consulting agreement provides for certain guaranteed payments over a
multi-year time period. In addition, Dr. Quake has resigned from the Companys Board of Directors
and on June 5, 2006 the Company has repurchased 123,974 shares of Dr. Quakes Common Stock holding
in the Company to comport with HHMI guidelines.
2.10(h)
The Company notes that it has given the opportunity to the Purchasers to conduct any due
diligence investigation that such Purchasers deemed necessary and has provided each Purchaser with
all of the information that such Purchaser has requested.
2.11 Compliance with Other Instruments
See discussions in Section 2.10(a) regarding the Syrrx License Agreement and in Section
2.10(b).
2.12 Permits
The Companys subsidiary in Singapore has applied for various permits relating to the conduct
of business in Singapore, some of which may not been granted.
2.13 Environmental and Safety Laws
The Company has received the following environmental reports pertaining to property that the
Company leases.
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1. |
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ENVIRONMENTAL DUE DILIGENCE REVIEW OF THE SIERRA POINT ASSOCIATES
TWO PROPERTIES BRISBANE AND SOUTH SAN FRANCISCO, CALIFORNIA, dated February 4,
1998, prepared by ENVIRON Corporation, Emeryville, California |
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2. |
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UPDATE OF ENVIRONMENTAL DUE DILIGENCE REVIEW, PARCEL 10,
SHORELINE COURT, SIERRA POINT, SOUTH SAN FRANCISCO, CALIFORNIA, dated December
14, 1998, prepared by Harding Lawson Associates, Novato, California |
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3. |
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FIRST AMENDED AND RESTATED DECLARATION OF COVENANTS, CONDITIONS
AND ENVIRONMENTAL RESTRICTIONS RELATING TO ENVIRONMENTAL COMPLIANCE FOR SIERRA
POINT, dated August 5, 1999, recorded by Luce, Forward, Hamilton and Scripps,
San Diego, California |
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4. |
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SUPPLEMENTAL ENVIRONMENTAL DUE DILIGENCE, PARCEL 10, SHORELINE
COURT, SIERRA POINT, SOUTH SAN FRANCISCO, CALIFORNIA, dated August 24, 1999,
prepared by Harding Lawson Associates, Novato, California |
Each of the reports has been made available to the Purchasers. The Company has not
investigated any of the matters contained in the reports.
2.14 Title to Property and Assets
The Company and General Electric Capital Corporation (GECC) entered into a Master Security
Agreement (which was amended in February 2004), pursuant to which the Company has borrowed an
aggregate principal amount of $6,230,152 (out of an aggregate available under the Master Security
Agreement of $11,000,000) from GECC pursuant to the terms of the Master Security Agreement and
series of promissory notes. The loans relate to purchases of the Company of certain equipment and
software (subject to certain restrictions). The notes bear interest at rates between 8% and 9% per
annum and are repaid in periodic monthly installments over 42 months from the date of issuance of
each respective promissory note (except with respect to loans relating to computer equipment and
software, which must be paid over 36 months). The Companys obligations under the notes and Master
Security Agreement are secured by a lien on fixed assets financed with the loans. In addition,
Comerica Bank has issued a letter of credit in the amount of $500,000 for the benefit of GECC as
security for the loans, which is secured by a $500,000 cash account of the Companys at Comerica
Bank. As of September 30, 2007, the Company owed approximately $1,340,433 under the notes.
In March 2005, the Company and Lighthouse entered into a Loan and Security Agreement, a
Management Rights letter agreement, a Negative Pledge Agreement and certain other agreements
(collectively, the Lighthouse Agreements). Pursuant to the Lighthouse Agreements, the Company
has borrowed $13,000,000 from Lighthouse, $9,601,037 of which was outstanding as of September 30,
2007. The amounts loaned bear interest at the prime rate plus 2.5% and are to be repaid in 48
monthly installments from the execution date of March 2005. Pursuant to the Loan and Security
Agreement, the Company granted Lighthouse a lien on and security interest in all of the Companys
assets (subject to certain limited exceptions and excluding intellectual property rights (but not
proceeds from the sale thereof) as set forth in the Lighthouse Agreements). Pursuant to the
Negative Pledge Agreement, the Company is generally prohibited from transferring or encumbering
intellectual property and certain other assets. The Lighthouse Agreements contain various
affirmative and negative covenants of the
Company. In connection with the Lighthouse Agreements, the Company issued to Lighthouse a
warrant as described in Section 2.4 hereof. The Companys ability to pay amounts that may arise
under convertible promissory notes issued, or that may be issued, to BMSIF and Invus is limited
under the Lighthouse Agreements, and BMSIF and Invus entered into a Subordination Agreement with
Lighthouse (which limits their right to receive payment on the convertible promissory notes).
The Company has issued letters of credit of $250,000 and $137,527 for security deposits under
the subleases for its headquarters facility in South San Francisco, California (see Section
2.15(b)). In addition, the Company has issued a letter of credit for the benefit of GECC in the
amount of $500,000. These letters of credit are secured by cash accounts of the Company in those
amounts.
2.15 Agreements; Actions
2.15(a)
The Company has been a party to consulting agreements with Lincoln McBride, the Companys
former Chief Technology Officer and vice president of engineering, and Paul Wyatt, the Companys
former vice president of Topaz development and operations.
See 2.10(f) regarding Dr. Steve Quakes consulting agreements.
The Company has entered or intends to enter into indemnification agreements with each of the
Companys existing officers and directors.
The Company is a party to offer letters with each of its officers.
The Company has entered into agreements relating to confidentiality and assignment of
inventions with employees and enters into various agreements with employees of its subsidiaries
(including, without limitation, employment agreements) customary in the jurisdiction of
incorporation of the subsidiary.
The Company and/or a subsidiary of the Company have entered into agreements with third parties
relating to their service on the Board of Directors of subsidiaries of the Company (due to
requirements that a citizen of the place of incorporation of the subsidiary be a member of the
subsidiarys Board of Directors). Among other things, such agreements contain provisions relating
to indemnification.
The Company has entered into a letter agreement with Marc Unger, an employee, regarding Mr.
Ungers ownership of shares and options to purchase shares of the Companys Common Stock.
In connection with the October 2001 Series C Preferred Stock financing, the Company entered
into letter agreements with GE Equity Capital Investments, Inc., containing certain confidentiality
and indemnification provisions and with Piper Jaffray Healthcare Venture Fund III, L. P. providing
for certain matters with regard to the Small Business Investment Act.
In January 2004, the Company lent Gajus V. Worthington, the Companys Chief Executive Officer,
$250,000 to be used in connection with Mr. Worthingtons purchase of a residence. The loan bears
interest at a rate of 3.52% per annum and the principal and interest are not due and payable for 7
years after the date of the loan (or earlier upon the happening of certain events). The loan is
secured by 833,334 shares of the Companys Common Stock, which are the only recourse of the Company
in the event of a default under the loan. The number of shares of Common Stock that secure the
loan is
subject to reduction at Mr. Worthingtons election in the event that fair market value of the
Companys Common Stock (as determined by the Companys Board of Directors) exceeds the outstanding
principal and interest due under the loan.
See Sections 2.4 and 2.15(b) below relating to agreements with BMSIF.
2.15(b)
See Schedule 2.10 attached hereto and discussion in Section 2.10. Each of the
agreements described or listed on Schedule 2.10 or in Section 2.10 may involve payments or
obligations in excess of $100,000 and/or the license of proprietary rights.
See Section 2.14 regarding the GECC and Lighthouse loans.
In March 2004, the Company entered into a new sublease agreement with Genome Therapeutics
Corporation (now Oscient Pharmaceuticals) relating to a portion of the Companys headquarters in
South San Francisco, California. The term of the sublease expires in December 2007. The monthly
rental payments were approximately $70,000 per month between March 2004 through September 2004.
The monthly payments thereafter decreased to approximately $44,000 per month and increased
approximately 3.5% annually beginning January 2006. In addition to these amounts, the Company is
obligated to pay its share of common area maintenance and other costs and taxes.
In addition to the sublease agreement with Genome Therapeutics, the Company entered into a
second sublease in March 2004 with MJ Research, Inc. (subsequently assigned to Are-San Francisco
No. 17, LLC) relating to an additional portion of the Companys headquarters in South San
Francisco, California. The term of the sublease expires in December 2007. The monthly rental
payments were approximately $56,000 between April 2004 through December 2004. The monthly payments
thereafter increased to approximately $58,000 per month and further increase annually by
approximately 3.5% beginning in April 2005. In addition to these amounts, the Company is obligated
to pay its share of common area maintenance and other costs and taxes.
The Company has entered into negotiations to extend each of the above leases from January 2008
to February 2011.
The Company has entered into leases or subleases relating to its subsidiaries in Osaka, Japan,
Tokyo, Japan, Singapore and Hamburg, Germany, the last of which has terminated.
See Section 2.4, in particular with respect to the Company and BMSIF in conjunction with the
convertible notes.
In certain instances, the Company has agreed to indemnify purchasers of the Companys products
and certain of the Companys suppliers (such as Eppendorf AG) with respect to infringements of
proprietary rights.
2.15(e)
A limited number of the Companys employees hold corporate purchasing credit cards. The
Company is liable to the credit card company for the amounts charged.
2.15(f)
The Company has from time to time had discussions regarding mergers, acquisitions and sales of
all or substantially all of the assets of the Company.
2.16 Financial Statements
The Company has made available unaudited Financial Statements for the periods ended December
31, 2005 and December 31, 2006.
The unaudited Financial Statements do not contain the footnotes required by generally accepted
accounting principles and are subject to year-end audit adjustments.
2.17 Changes
Changes are reflected since December 31, 2007.
See Section 2.10 and Schedule 2.10 attached hereto.
The Company has entered into licenses of its intellectual property in the ordinary course of
business.
The Company may enter into a collaboration agreement related to the development of certain
specialized Dynamic Array chips for a third party that may involve revenue and liabilities in
excess of $100,000, such as for indemnification.
2.18 Brokers or Finders
The Company entered into an engagement letter with Leerink Swann & Company, dated August 13,
2007.
In June 2006, Fluidigm was the recipient of a Small Technology Transfer Innovation Research
(STTR) grant from the National Institutes of Health in the amount of $1,000,000 over two years.
Under the grant, the Company will perform research and development activities to design a
diffraction capable Topaz screening chip.
2.19 Qualified Small Business Stock
With respect to the qualification of the Shares as qualified small business stock under
Section 1202(c) of the Code, the Company makes the following representations, each as of the date
hereof: (a) the Company is a domestic C corporation, provided that the Company wholly owns non-U.S.
corporate subsidiaries; (b) the Companys gross assets have not exceeded $50 million in value at
any time through the time immediately following the issuance of the Shares within the meaning of
Section 1202(d); (c) the Company has not made any purchases of its own stock during the one-year
period preceding the Closing with an aggregate value exceeding 5% of the aggregate value of all its
stock as of the beginning of such period, disregarding de minimus redemptions within the meaning of
Treasury Regulation Section 1.1202-2(b)(2); (d) the Company is engaged in a qualified trade or
business as defined in Section 1202(e); and (e) 80% of the Companys assets are used in the active
conduct of that qualified trade or business.
2.20 Employee Benefit Plans
The Company offers health, vision and dental benefits, paid time off and sick leave.
The Companys subsidiaries are subject to certain statutory requirements in their jurisdiction
of incorporation relating to employee benefits. Such requirements differ from requirements in the
United States.
2.21 Tax Matters
The Companys subsidiaries in the Netherlands and Singapore have received extensions to file
tax returns in the respective countries.
2.24 Disclosure
The Company notes that it has given the opportunity to the Purchasers to conduct any due
diligence investigation that such Purchasers deemed necessary.
The Company has provided projections to certain Purchasers at their request. For purposes of
these projections, the Company has assumed, among other things, that the Company is granted tax
incentives and research and development grants in Singapore that are acceptable to the Company and
that the workforce to be employed at the Companys subsidiary in Singapore is capable of delivering
upon the Companys plans in Singapore. In addition, the Companys revenues were lower than the
Companys plan/forecasts. Moreover, actuals provided are currently under audit and subject to
revision. The Company is unable to predict with any certainty its revenue for any future period,
including the present quarter, and its ability to generate revenue is subject to risks and
uncertainties.
EXHIBIT D
FORM OF EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
FLUIDIGM CORPORATION
FORM
OF
EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
June 13, 2006
TABLE OF CONTENTS
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SECTION 1 Restrictions on Transferability; Registration Rights |
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1 |
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1.1 |
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Certain Definitions |
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1 |
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1.2 |
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Restrictions |
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4 |
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1.3 |
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Restrictive Legend |
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5 |
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1.4 |
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Notice of Proposed Transfers |
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5 |
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1.5 |
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Requested Registration |
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6 |
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1.6 |
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Company Registration |
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8 |
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1.7 |
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Registration on Form S-3 |
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9 |
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1.8 |
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Expenses of Registration |
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10 |
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1.9 |
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Registration Procedures |
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10 |
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1.10 |
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Indemnification |
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12 |
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1.11 |
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Information by Holder |
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14 |
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1.12 |
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Reports Under Securities Exchange Act of 1934 |
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14 |
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1.13 |
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Transfer of Registration Rights |
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15 |
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1.14 |
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Standoff Agreement |
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15 |
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1.15 |
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No Right to Delay Registration |
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16 |
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1.16 |
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Termination of Rights |
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16 |
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1.17 |
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Limitations on Subsequent Registration Rights |
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16 |
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SECTION 2 Affirmative Covenants of the Company |
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16 |
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2.1 |
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Delivery of Financial Statements |
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17 |
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2.2 |
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Additional Information Rights |
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17 |
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2.3 |
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Confidentiality |
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18 |
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2.4 |
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Visitation Rights |
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18 |
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2.5 |
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Stock Option Vesting |
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18 |
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2.6 |
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Insurance |
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18 |
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2.7 |
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Proprietary Information Agreements |
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19 |
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2.8 |
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Invention Assignments |
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19 |
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2.9 |
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Key-Man Life Insurance |
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19 |
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2.10 |
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Compliance with Laws |
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19 |
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2.11 |
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Termination of Covenants |
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SECTION 3 Right of First Offer For Company Securities |
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19 |
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3.1 |
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Right of First Offer |
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19 |
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3.2 |
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Sale of Securities by Company |
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20 |
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3.3 |
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Offer Amount |
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20 |
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3.4 |
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Financing |
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20 |
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3.5 |
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Termination of Right of First Offer |
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21 |
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SECTION 4 Right of First Offer with Respect to Founder Shares |
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22 |
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4.1 |
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Notice of Sales |
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22 |
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TABLE OF CONTENTS
(continued)
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4.2 |
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Purchase Right |
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22 |
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4.3 |
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Sale of Securities by Founder |
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23 |
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4.4 |
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Termination and Transfer |
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23 |
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4.5 |
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Prohibited Transfer |
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23 |
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SECTION 5 Right of Co-Sale |
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23 |
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5.1 |
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Notice of Sales |
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23 |
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5.2 |
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Participation Right |
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24 |
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5.3 |
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Sale of Securities by Founder |
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25 |
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5.4 |
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Termination and Transfer |
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25 |
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5.5 |
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Prohibited Transfers |
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25 |
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SECTION 6 Miscellaneous |
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26 |
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6.1 |
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Governing Law; Jurisdiction |
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26 |
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6.2 |
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Successors and Assigns |
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26 |
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6.3 |
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Notices, Etc |
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26 |
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6.4 |
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Delays or Omissions |
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27 |
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6.5 |
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Third Parties |
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27 |
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6.6 |
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Severability |
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27 |
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6.7 |
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Amendment and Waiver |
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27 |
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6.8 |
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Rights of Holders |
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28 |
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6.9 |
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Counterparts |
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28 |
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6.10 |
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Titles and Subtitles |
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28 |
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6.11 |
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Amendment and Restatement of Prior Agreement |
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28 |
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6.12 |
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Waiver of Right of First Offer |
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28 |
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6.13 |
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Aggregation of Stock |
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28 |
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6.14 |
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Jury Trial |
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29 |
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EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the Agreement) is entered into
as of June , 2006 by and among Fluidigm Corporation, a California corporation (the Company),
the persons set forth on EXHIBIT A hereto (the New Investors), the persons set forth on
the Schedule of Founders attached hereto as EXHIBIT B (the Founders), and the persons set
forth on EXHIBIT C hereto (the Prior Investors). The Prior Investors and the New
Investors are referred to herein collectively as the Investors.
RECITALS
WHEREAS, the Company and the New Investors have entered into a Series E Preferred Stock
Purchase Agreement of even date herewith (the Purchase Agreement) pursuant to which the Company
shall sell, and the New Investors shall acquire, shares of the Companys Series E Preferred Stock;
WHEREAS, the Company has granted certain registration rights and other rights to the Founders
and the Prior Investors pursuant to that certain Seventh Amended and Restated Investor Rights
Agreement dated August 16, 2005 (the Prior Agreement); and
WHEREAS, as an inducement to the New Investors to purchase shares of the Companys Series E
Preferred Stock pursuant to the Purchase Agreement, the Company, the Prior Investors and the
Founders desire to amend and restate the Prior Agreement to allow the New Investors to become a
party to this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth,
the parties agree as follows:
SECTION 1
Restrictions on Transferability; Registration Rights
1.1 Certain Definitions. As used in this Agreement, the following terms shall have
the following meanings:
Affiliate shall have the meaning set forth in Rule 405 of the Securities Act;
provided that for AllianceBernstein L.P. and its permitted transferees, the
definition of Affiliate shall also include (i) any general partner, officer or director of such
person, (ii) any private equity or venture capital fund now or hereafter existing (a Fund) for
which such person or an Affiliate of such person is a general partner or management company, and
(iii) if such person is a Fund, any other Fund that is directly or indirectly controlled by or
under common control with one or more general partners of such person, or that shares the same
management company with such person or an Affiliated management company.
Commission shall mean the Securities and Exchange Commission or any other federal agency at
the time administering the Securities Act.
Eligible Securities shall mean (i) the Series A Preferred Stock issued pursuant to the
Series A Preferred Stock Purchase Agreement dated December 1, 1999; (ii) the Series B Preferred
Stock issued pursuant to the Series B Preferred Stock Purchase Agreement dated July 5, 2000; (iii)
the Series C Preferred Stock issued pursuant to the Series C Preferred Stock Purchase Agreement
dated October 23, 2001; (iv) the Series C Preferred Stock issued pursuant to the Series C Preferred
Stock Purchase Agreement dated November 1, 2002; (v) the Series C Preferred Stock issued pursuant
to the Series C Preferred Stock and Warrant Purchase Agreement dated September 22, 2003; (vi) the
Series D Preferred Stock issued pursuant to the Series D Preferred Stock Purchase Agreement dated
December 18, 2003; (vii) the Series D Preferred Stock issued pursuant to the Series D Preferred
Stock Purchase Agreement dated August 16, 2005; (viii) the Series D Preferred Stock issued upon
conversion of convertible promissory note(s) issued pursuant to the Convertible Promissory Note
Purchase Agreement (the CNPA) dated December 18, 2003, as amended by Amendment No. 1 to
Convertible Note Purchase Agreement dated December 17, 2004, between the Company and Biomedical
Sciences Investment Fund Pte Ltd (the BMSIF); (ix) the Series D Preferred Stock issued upon
conversion of convertible promissory note(s) issued in connection with the Convertible Note
Agreement (the CNA) dated December 18, 2003, between the Company and Invus, L.P. (the Invus);
(x) the Series E Preferred Stock issued pursuant to the Purchase Agreement; (xi) all Securities
acquired by any Investor pursuant to the rights of first offer described in Sections 3 or 4 of this
Agreement; and (xii) any Securities issued with respect to the foregoing upon any stock split,
stock dividend, recapitalization, or similar event or upon any exercise or conversion, as
applicable.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all as the same shall
be in effect at the time.
Founders Shares shall mean the shares of Common Stock of the Company issued to the Founders
as of the date of this Agreement or at any time in the future.
Holder shall mean (i) any Investor and any person to whom registration rights under this
Agreement have been transferred in accordance with Section 1.13 hereof, (ii) for the purposes of
Section 1.6 (and other portions of this Section 1, to the extent they relate to rights of
registration under Section 1.6), any Founder or holder of Other Shares and (iii) for the purposes
of Sections 1.5, 1.6 and 1.7 (and other portions of this Section 1, to the extent they relate to
rights of registration under Sections 1.5, 1.6 and 1.7), Warrantholders.
Initial Public Offering shall mean the first sale of Securities of the Company pursuant to
an effective registration statement under the Securities Act.
Initiating Holders shall mean Holders who in the aggregate hold a majority of the
Registrable Securities then held by Holders assuming conversion or exercise, as applicable, of all
Eligible Securities.
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Lighthouse Preferred Warrant shall mean the Preferred Stock Purchase Warrant dated March 29,
2005, pursuant to which Lighthouse Capital Partners V, L.P. (Lighthouse) may purchase shares of
the Companys authorized Series D Preferred Stock.
Other Shares shall mean the shares of Common Stock of the Company issued pursuant to the
Common Stock Purchase Agreements dated July 17, 2001 and February 2005 by and between the Company
and President and Fellows of Harvard College.
Permitted Transferee shall mean (i) any general partner or retired general partner of any
Holder which is a partnership; (ii) any family member of a Holder or trust for the benefit of any
individual Holder; (iii) any Investor; (iv) an Affiliate of an Investor; or (v) any transferee who
acquires at least 40,000 shares of Eligible Securities.
The terms register, registered and registration refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
Registration Expenses shall mean all expenses incurred by the Company in complying with
Sections 1.5, 1.6 and 1.7 hereof, including, without limitation, all registration, qualification,
stock exchange and filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company and accountants and other persons retained by or for the Company (including the
fees of one counsel for the Holders, not to exceed $25,000), blue sky fees and expenses, accounting
fees and the expense of any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall be paid in any event by
the Company).
Registrable Securities means (i) any shares of Common Stock which are Eligible Securities,
(ii) any shares of Common Stock issuable upon the exercise or conversion, as applicable, of
Eligible Securities, (iii) for the purposes of Section 1.6 (and other portions of this Section 1,
to the extent they relate to rights of registration under Section 1.6) any shares of Common Stock
which are Founder Shares or Other Shares, and (iv) for the purposes of Sections 1.5, 1.6 and 1.7
(and other portions of this Section 1, to the extent they relate to rights of registration under
Sections 1.5, 1.6 and 1.7) any shares of Common Stock which are Warrant Shares; provided,
however, that shares of Common Stock shall be treated as Registrable Securities only if and
so long as they have not been (A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof
so that all transfer restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale or (C) sold in a transaction in which the rights granted under this
Section 1 are not assigned in accordance with this Agreement.
Restricted Securities shall mean the securities of the Company required to bear the legends
set forth in Section 1.3 hereof.
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Securities shall mean shares of, or securities convertible into or exercisable for any
shares of, any class of capital stock of the Company.
Securities Act shall mean the Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
Selling Expenses shall mean all underwriting discounts and selling commissions and
applicable to the securities registered by the Holders and any fees and disbursements of counsel
for the Holders not included in the definition of Registration Expenses.
Voting Agreement shall mean the Second Amended and Restated Voting Agreement dated August
16, 2005 among the Company and certain stockholders of the Company.
Warrant Shares shall mean the shares of Common Stock of the Company issued or issuable upon
conversion of the (i) Series C Preferred Stock issued or issuable upon exercise or conversion of
(A) the warrant to purchase up to 17,500 shares of Series C Preferred Stock issued to TBCC Funding
Trust II (TBCC) pursuant to the Master Loan and Security Agreement dated March 27, 2002 by and
between the Company and Transamerica Technology Finance Corporation; (B) the warrant to purchase
up to 31,008 shares of Series C Preferred Stock issued to General Electric Capital Corporation (GE
Capital) in connection with the Master Security Agreement dated as of November 8, 2002, as amended
(the Master Security Agreement) by and between the Company and GE Capital; (C) the warrants to
purchase an aggregate of up to 90,000 shares of Series C Preferred Stock issued to Glaxo Group
Limited (GGL) in connection with the Development Collaboration and License Agreement dated
September 22, 2003 (the License Agreement); and (D) the warrants to purchase an aggregate of up
to 110,000 shares of Series C Preferred Stock issued to SmithKline Beecham Corporation (SBC) in
connection with the License Agreement; and (ii) the Series D Preferred Stock issued or issuable
upon exercise or conversion of (A) the warrant to purchase up to 37,500 shares of Series D
Preferred Stock dated March 18, 2004 and issued to GE Capital in connection with extensions of
credit to the Company; (B) the warrant to purchase up to 380,556 shares of Series D Preferred Stock
dated June 30, 2004 and issued to In-Q-Tel, Inc. (In-Q-Tel); (C) the Lighthouse Preferred
Warrant; and (D) the warrant to purchase up to 126,851 shares of Series D Preferred Stock dated
June 30, 2004 and issued to In-Q-Tel Employee Fund, LLC (Employee Fund) . GGL, SBC, TBCC, GE
Capital, In-Q-Tel, Employee Fund, and Lighthouse are collectively referred to herein as
Warrantholders.
Worthington Shares shall mean the Founder Shares issued to Gajus Worthington.
1.2 Restrictions. No Restricted Securities shall be sold, assigned, transferred or
pledged except upon the conditions specified in this Agreement. Each Holder will cause any
proposed purchaser, assignee, transferee or pledgee of its Restricted Securities to agree in
writing to
take and hold such securities subject to the provisions and upon the conditions specified in
this Agreement, including, without limitation, Section 1.14, except where such Restricted
Securities would cease to be Restricted Securities in connection with such proposed purchase,
assignment, transfer or pledge.
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1.3 Restrictive Legend. Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of Section 1.4 below) be stamped or otherwise
imprinted with a legend in the following form (in addition to any legend required under applicable
state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES ACT). SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY), OR OTHER EVIDENCE, REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MARKET STAND-OFF
AGREEMENT IN THE EVENT OF A PUBLIC OFFERING, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
Each Holder consents to the Company making a notation on its records and giving instructions
to any transfer agent of the Restricted Securities in order to implement the restrictions on
transfer established in this Section 1.
1.4 Notice of Proposed Transfers. Each Holder of each certificate representing
Restricted Securities, by acceptance thereof, agrees to comply in all respects with the
restrictions on transfer contained in Sections 1.2, 1.3, 1.4 and 1.14 of this Agreement. Solely
for purposes of the foregoing sentence and for the sake of clarification, the term Holder shall
also include and the term Restricted Securities shall also apply to any Founder, holder of Other
Shares or Warrantholders. Prior to any proposed sale, assignment, transfer or pledge of any
Restricted Securities (other than any transfer not involving a change in beneficial ownership),
unless there is in effect a registration statement under the Securities Act covering the proposed
transfer, the Holder thereof shall give written notice to the Company of such Holders intention to
effect such transfer, sale, assignment or
pledge. Each such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied at such
Holders expense by either (i) a written opinion of legal counsel who shall, and whose legal
opinion shall be, reasonably satisfactory to the Company, addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without registration under
the Securities Act and applicable state securities laws, or (ii) a no action letter from the
Commission
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to the effect that the transfer of such securities without registration will not result
in a recommendation by the staff of the Commission that action be taken with respect thereto, or
(iii) any other evidence reasonably satisfactory to counsel to the Company, whereupon the Holder of
such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance
with the terms of the notice delivered by the Holder to the Company; provided,
however, that no such legal opinion, no action letter or other evidence shall be required
with respect to a transfer to an Affiliate. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in Section 1.3 above, except that such certificate shall
not bear such restrictive legend if, in the opinion of counsel for such Holder and reasonably
acceptable to the Company, such legend is not required in order to establish compliance with any
provisions of the Securities Act or this Agreement.
1.5 Requested Registration.
(a) Request for Registration. In case the Company shall receive from Initiating
Holders a written request that the Company effect any registration with respect to a public
offering of at least 50% of the Registrable Securities, the reasonably anticipated aggregate price
to the public of which, net of underwriting discounts and commissions, would exceed $20,000,000,
the Company will:
(i) promptly give written notice of the proposed registration to all other Holders; and
(ii) use its best efforts to effect as soon as practicable such registration (including,
without limitation, the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other governmental requirements
or regulations) as may be so requested and as would permit or facilitate the sale and distribution
of all or such portion of such Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any Holder or Holders joining in such
request as are specified in a written request received by the Company within 15 days after receipt
of the written notice from the Company; provided, however, that the Company shall
not be obligated to take any action to effect any such registration pursuant to this Section 1.5:
(1) Prior to six months following the closing of the Companys Initial Public Offering;
(2) During the period starting with the date 60 days prior to the Companys estimated date of
filing of, and ending on the date three months immediately following the effective date of, any
registration statement (other than a registration of Securities in a Rule 145 transaction or with
respect to an employee benefit plan) pertaining to Securities of the Company (subject to Section
1.6(a) hereof), provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to be filed and become effective and that the Company
provides the Initiating Holders written notice of its intent to file such
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registration statement
within 30 days of receiving the request for registration from the Initiating Holders and provided
further, however, that the Company may not utilize this right more than once in any 12-month
period.
(3) After the Company has effected two registrations pursuant to this Section 1.5; or
(4) If the Company shall furnish to such Holders a certificate, signed by the President of the
Company, stating that in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for a registration statement to be filed in the near
future, in which case the Companys obligation to use its best efforts to register under this
Section 1.5 shall be deferred for a period not to exceed 90 days from the date of receipt of
written request from the Initiating Holders; provided, however, that the Company may not utilize
this right more than once in any 12-month period.
(b) Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company
as part of their request made under Section 1.5(a), and the Company shall so advise the Holders as
part of the notice given pursuant to Section 1.5(a)(i). The right of any Holder to registration
pursuant to Section 1.5 shall be conditioned upon such Holders participation in the underwriting
arrangements required by this Section 1.5 and the inclusion of such Holders Registrable Securities
in the underwriting, to the extent requested and provided herein.
The Company shall (together with all Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Company and a majority of the Holders.
Notwithstanding any other provision of this Section 1.5, if the managing underwriter advises the
Company in writing that marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all Holders of Registrable Securities who indicated
their intent to participate in the registration in a timely manner, and the number of shares of
Registrable Securities that may be included in the registration and underwriting shall be allocated
among such Holders in proportion, as nearly as practicable, to the respective number of Registrable
Securities held by such Holders at the time of filing the registration statement, provided,
however, that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all Worthington Shares, all Other Shares and all other
Securities that are not Registrable Securities (other than Securities to be sold for the account of
the Company) are first
entirely excluded from the underwriting. No Registrable Securities excluded from the
underwriting by reason of the underwriters marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the above provisions, the
Company or the underwriters may round the number of shares allocated to any Holder to the nearest
100 shares.
If any Holder of Registrable Securities disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the managing underwriter
and the Initiating Holders. The Registrable Securities so withdrawn shall also be withdrawn from
registration.
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1.6 Company Registration.
(a) Notice of Registration. If at any time or from time to time, the Company shall
determine to register any Common Stock, either for its own account or the account of a security
holder or holders other than (i) a registration relating to employee benefit plans, (ii) a
registration relating to the offer and sale of debt securities, (iii) a registration relating to a
Commission Rule 145 transaction, or (iv) a registration pursuant to Sections 1.5 or 1.7 hereof, the
Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable Securities specified in
a written request or requests made within 15 days after receipt of such written notice from the
Company by any Holder.
(b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so advise the Holders in a
written notice given pursuant to this Section 1.6. In such event, the right of any Holder to
registration pursuant to this Section 1.6 shall be conditioned upon such Holders participation in
such underwriting and the inclusion of Registrable Securities in the underwriting to the extent
provided herein.
All Holders proposing to distribute their securities through such underwriting shall (together
with the Company and the other holders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing underwriter selected for
such underwriting by the Company. Notwithstanding any other provision of this Section 1.6, if the
managing underwriter advises the Company in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Company shall so advise all Holders of
Registrable Securities and the number of shares of Registrable Securities that may be included in
the registration and underwriting shall be allocated among all Holders thereof in proportion, as
nearly as practicable, to the respective number of Registrable Securities held by such Holders at
the time of filing the registration statement; provided, however, that, no
Registrable Securities shall be excluded until all Worthington Shares, all Other Shares and all
other Securities that are not Registrable Securities
(other than Securities to be sold for the account of the Company) are first excluded, and
provided further, that, except in the case of the Companys Initial Public Offering
(where Registrable Securities may be excluded entirely), the number of Registrable Securities
included in such underwriting shall not be reduced below 25% of the total number of shares in the
underwriting. No Registrable Securities excluded from the underwriting by reason of the
underwriters marketing limitation shall be included in such registration. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the underwriters may
round the number of shares allocated to any Holder to the nearest 100 shares. The Company may
include shares of Common Stock held by shareholders other than Holders in a registration statement
pursuant to this Section 1.6 to the extent that the amount of Registrable Securities otherwise
includible in such registration statement would not thereby be diminished.
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If any Holder or other holder disapproves of the terms of any such underwriting, he or she may
elect to withdraw therefrom by written notice to the Company and the managing underwriter. The
Registrable Securities so withdrawn shall also be withdrawn from such registration and, in the case
of the Companys Initial Public Offering, shall be subject to Section 1.14.
(c) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.6 prior to the effectiveness of such
registration, whether or not any Holder has elected to include securities in such registration.
1.7 Registration on Form S-3.
(a) If any Holder or Holders request that the Company file a registration statement on Form
S-3 (or any successor form to Form S-3) for a public offering of Registrable Securities, the
reasonably anticipated aggregate price to the public of which, net of underwriting discounts and
commissions, would exceed $2,000,000, and the Company is then entitled to use Form S-3 under
applicable Commission rules to register the Registrable Securities for such an offering, the
Company will:
(i) promptly give written notice of the proposed registration to all other Holders; and
(ii) use its best efforts to effect as soon as practicable such registration (including,
without limitation, the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other governmental requirements
or regulations) as may be so requested and as would permit or facilitate the sale and distribution
of all or such portion of such Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any Holder or Holders joining in such
request as are specified in a written request received by the Company within 15 days after receipt
of the written notice from the Company; provided, however, that the Company shall
not be obligated to take any action to effect any such registration pursuant to this Section 1.7:
(1) if the Company, within ten (10) days of the receipt of the request for registration
pursuant to this Section 1.7, gives notice of its bona fide intention to effect the filing of a
registration statement with the Commission within ninety (90) days of receipt of such request
(other than with respect to a registration statement relating to a Rule 145 transaction or an
employee benefit plan or any other registration which is not appropriate for the registration of
Registrable Securities);
(2) during the period starting with the date sixty (60) days prior to the Companys estimated
date of filing of, and ending on the date three months immediately following, the effective date of
any registration statement pertaining to Securities of the Company (other than with respect to a
registration statement relating to a Rule 145 transaction or an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to cause such
registration statement to be filed and become effective; or
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(3) if the Company shall furnish to such Holder or Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of Directors it would
be seriously detrimental to the Company or its shareholders for registration statements to be filed
in the near future, then the Companys obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed 90 days from the receipt of the request to
file such registration by such Holder or Holders; provided further, however, that
the Company may not utilize the rights provided for in subsections (1) and (2) above and this
subsection (3) more than once in total in any twelve month period. For the avoidance of doubt, if
the Company utilizes any of the rights provided for in subsections (1), (2) and (3), it shall not
have the right to utilize the same right again; nor shall it have the right to utilize any of the
other rights provided in subsections (1), (2) and (3) for twelve months.
(b) Underwriting. If the Holders requesting registration intend to distribute the
Registrable Securities covered by their request by means of an underwriting, they shall so advise
the Company as part of their request made under Section 1.7(a), and the Company shall so advise the
Holders as part of the notice given pursuant to Section 1.7(a)(i). The substantive provisions of
Section 1.5(b) shall otherwise apply to such registration.
1.8 Expenses of Registration. All Registration Expenses incurred in connection with
any registration pursuant to Sections 1.5, 1.6 and 1.7 shall be borne by the Company. If a
registration proceeding is begun upon the request of Holders pursuant to Section 1.5 or 1.7, but
such request is subsequently withdrawn at the request of the Holders, then the Holders of
Registrable Securities to have been registered may either: (i) bear all Registration Expenses of
such proceeding, pro rata on the basis of the number of shares to have been registered, in which
case the Company shall be deemed not to have effected a registration pursuant to Section 1.5(a) or
1.7(a) of this Agreement as applicable; provided, however, that the Company, and
not the Holders, shall be required to pay for the Registration Expenses if the Holders learn of a
materially adverse change in the condition, business, or prospects of the Company from that known
to the Holders at the time of their request and have withdrawn the request promptly following
discovery of such material adverse
change; or (ii) if the registration is being effected pursuant to Section 1.5, require the
Company to bear all Registration Expenses of such proceeding, in which case the Company shall be
deemed to have effected a registration pursuant to Section 1.5(a). Unless otherwise stated, all
other Selling Expenses relating to securities registered on behalf of the Holders shall be borne by
the Holders of the registered securities included in such registration pro rata on the basis of the
number of shares so registered, provided that to the extent a Holder elects to
retain its own counsel (an Additional Counsel) separate from the counsel for all the Holders
permitted pursuant to the definition of Registration Expenses under Section 1.1, then such Holder
shall exclusively bear the costs of such Additional Counsel.
1.9 Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Section 1, the Company will keep each Holder
advised in writing as to the initiation of each registration, qualification and compliance and as
to the completion thereof. At its expense the Company will, as expeditiously as reasonably
possible:
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(a) Prepare and file with the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for a period of up to one hundred
twenty (120) days or until the distribution described in the registration statement has been
completed; provided, however, that such 120-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Common Stock (or other securities) of the Company.
(b) Prepare and file with the Commission, in consultation with the Holders, such amendments
and supplements to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration statement.
(c) Furnish to the Holders participating in such registration and to the underwriters of the
securities being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such securities.
(d) Use its best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act.
(e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. Each Holder participating in such underwriting shall also enter
into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading or
incomplete in light of the circumstances then existing, and at the request of any such Holder,
prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such
shares, such prospectus shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing.
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(g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange, or quoted in a U.S. automated inter-dealer quotation system, as the case may
be, on which similar securities issued by the Company are then listed or quoted.
(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration.
(i) In the event of any underwritten public offering, cooperate with the selling Holders, the
underwriters participating in the offering and their counsel in any due diligence investigation
reasonably requested by the selling Holders or the underwriters in connection therewith, and
participate, to the extent reasonably requested by the managing underwriter for the offering or the
selling Holder, in efforts to sell the Registrable Securities under the offering (including,
without limitation, participating in roadshow meetings with prospective investors) that would be
customary for underwritten primary offerings of a comparable amount of equity securities by the
Company.
1.10 Indemnification.
(a) The Company will indemnify and defend each Holder, each of its officers and directors and
partners, and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance is being effected
pursuant to this Section 1, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in any registration
statement, prospectus, preliminary prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration, qualification or compliance, or
based on any
omission (or alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation or any alleged violation by the Company of the Securities Act or
the Exchange Act or any state securities law, or any rule or regulation promulgated thereunder,
applicable to the Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and directors, and each
person controlling such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or action, as such
expenses are incurred, provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument duly executed by such
Holder, controlling person or underwriter and stated to be specifically for use therein.
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(b) Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being effected, indemnify
the Company, each of its directors and officers, each underwriter, if any, of the Companys
securities covered by such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder,
each of its officers and directors and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to
the extent, but only if and to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written information furnished to
the Company by an instrument duly executed by such Holder and stated to be specifically for use
therein; provided, however, that the liability of any Holder shall be limited to
the net proceeds received by such Holder from the sale of Securities pursuant to such registration.
(c) Each party entitled to indemnification under this Section 1.10 (the Indemnified Party)
shall give notice to the party required to provide indemnification (the Indemnifying Party)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such partys expense; provided, however,
that an Indemnified Party (together with all other Indemnified Parties which may be represented
without conflict by one counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by
the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party represented by such counsel
in such proceeding. The failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 1 unless, and only to the
extent that, the failure to give such notice is materially prejudicial to an Indemnifying Partys
ability to defend such action. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.
(d) If the indemnification provided for in this Section 1.10 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any loss,
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liability, claim,
damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant equitable considerations
(except to the extent that contribution is not permitted under Section 11(f) of the Securities
Act); provided, however, that, no Holder will be required to pay any amount under
this subsection 1.10(d) in excess of the net proceeds from the sale of all Registrable Securities
offered and sold by such Holder pursuant to such registration statement. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission to state
a material fact relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control with respect to the rights and obligations of each of the
parties to such underwriting agreement.
(f) The obligations of the Company and Holders under this Section 1.10 shall survive the
completion of any offering of Registrable Securities in a registration statement under this Section
1, and otherwise.
1.11 Information by Holder. The Holder or Holders of Registrable Securities included
in any registration shall furnish to the Company such information regarding such Holder or Holders,
the Securities held by them and the distribution proposed by such Holder or Holders as the Company
may reasonably request in writing and as shall be required in connection with any registration
referred to in this Section 1.
1.12 Reports Under Securities Exchange Act of 1934. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the Commission that may at any time permit a Holder to sell securities of the Company
to the public without registration or pursuant to a registration on Form S-3, the Company agrees to
use its best efforts to:
(a) make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, at all times after the effective date that the Company becomes
subject to the reporting requirements of the Securities Act or the Exchange Act;
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(b) file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements);
(c) register its Common Stock under Section 12 of the Exchange Act at such time as it is
required to do so pursuant to the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information in the possession of or
reasonably obtainable by the Company as may be reasonably requested in availing any Holder of any
rule or regulation of the Commission which permits the selling of any such securities without
registration or pursuant to such form.
1.13 Transfer of Registration Rights. The rights to cause the Company to register
Registrable Securities granted to the Investors under Sections 1.5, 1.6 and 1.7 may be assigned to
a transferee or assignee in connection with any transfer or assignment of Eligible Securities by an
Investor; provided that (a) such transfer may otherwise be effected in accordance with applicable
securities laws, (b) notice of such assignment is given to the Company, (c) such transferee is a
Permitted Transferee and (d) such transferee or assignee agrees to be bound by and subject to the
terms and conditions of this Agreement.
1.14 Standoff Agreement.
(a) Each Holder agrees in connection with the first sale of the Companys Common Stock in a
firm commitment underwritten public offering pursuant to an effective registration statement under
the Securities Act, upon notice by the Company or the underwriters managing such public offering,
not to sell, make any short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any
option for the purchase of, or otherwise directly or indirectly dispose of any Securities (other
than those included in the registration) without the prior written consent of the Company and such
managing underwriters for such period of time as the Board of Directors establishes pursuant to its
good faith negotiations with such managing underwriters; provided, however that:
(i) such agreement shall not exceed one hundred eighty (180) days;
(ii) such agreement shall not apply to transfers to an Affiliate, provided that such Affiliate
agrees to be bound by the terms of such agreement, to the same extent as if such transferee were
the original party thereunder;
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(iii) a Holder shall not be subject to such agreement unless (A) all executive officers and
directors of the Company, (B), all shareholders of the Company holding more than 1% of the
Companys outstanding capital stock; and (C) all other Holders and holders of other registration
rights, are subject to or obligated to enter into similar agreements; and
(iv) if and when any person identified in clause (iii) is released, in whole or in part, from
such agreement (whether or not such release is contemplated at the time of the offering) or if any
such agreement is terminated, the Holder shall be concurrently released on a pro rata basis based
on the number of shares held by such person and the Holder.
(b) Each Holder agrees that prior to the Initial Public Offering it will not transfer
securities of the Company unless each transferee agrees in writing to be bound by all of the
provisions of this Section 1.14; provided that this Section 1.14(b) shall not apply to transfers
pursuant to a registration statement.
(c) Each Holder hereby consents to the placement of stop transfer orders with the Companys
transfer agent in order to enforce the foregoing provision and agrees to execute a market standoff
agreement with said underwriters in customary form consistent with the provisions of this Section
1.14.
1.15 No Right to Delay Registration. No holder shall restrain, enjoin, or otherwise
delay any registration hereunder, notwithstanding any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
1.16 Termination of Rights. No Holder shall be entitled to exercise any right
provided for in this Section 1 after the earlier of (i) five (5) years following the consummation
of the Initial Public Offering, and (ii) that date following the Initial Public Offering upon which
each Holder holds less than 1% of the then issued and outstanding shares of capital stock of the
Company and all such shares may be sold under Section 5 of the Securities Act whether pursuant to
Rule 144 or another applicable exemption during any 90 day period. All other provisions hereof
relating to registration rights shall continue to be effective despite any termination of such
registration rights pursuant to this section.
1.17 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not enter into any agreement granting any holder or prospective holder
of any securities of the Company registration rights with respect to such securities unless (i)
such new registration rights, are subordinate to the registration rights granted Holders hereunder
and include similar market stand-off obligations or (ii) such new registration rights are approved
by the Holders of 50% of the Registrable Securities then held by Holders (assuming exercise or
conversion of all outstanding Eligible Securities); provided, however, that
Warrantholders may enter into this Agreement by executing and delivering a counterpart signature
page to this Agreement.
SECTION 2
Affirmative Covenants of the Company
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The Company hereby covenants and agrees as follows:
2.1 Delivery of Financial Statements. The Company will furnish to each Investor who
holds at least 40,000 shares of Eligible Securities (as adjusted for stock splits and
combinations):
(a) as soon as reasonably practicable, an income statement for such fiscal year, a balance
sheet of the Company and statement of shareholders equity as of the end of such year, and a cash
flow statement for such year, such year-end financial reports to be in reasonable detail, prepared
in accordance with generally accepted accounting principles (GAAP), and audited and certified by
independent public accountants of nationally recognized standing selected by the Company; and
(b) as soon as practicable, but in any event within forty-five (45) days after the end of each
of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement,
cash flow statement for such fiscal quarter and an unaudited balance sheet as of the end of such
fiscal quarter.
2.2 Additional Information Rights.
(a) Budget and Operating Plan. The Company will furnish to each Investor who holds at
least 750,000 shares of Eligible Securities (as adjusted for stock splits and
combinations) as soon as practicable upon approval or adoption by the Companys Board of
Directors, and in any event within 15 days prior to the start of a fiscal year, the Companys
budget and operating plan for such fiscal year.
(b) Other Information. The Company will furnish to each Investor who holds at least
750,000 shares of Eligible Securities (as adjusted for stock splits and combinations) such other
information relating to the financial condition, business, prospects or corporate affairs of the
Company as such Investor may from time to time request; provided, however, that the
Company shall not be obligated under this subsection (b) or any other subsection of Section 2.2 to
provide information which it deems in good faith to be a trade secret or similar confidential
information.
(c) Inspection. The Company shall permit each Investor who holds at least 750,000
shares of Eligible Securities (as adjusted for stock splits and combinations), at such Investors
expense, to visit and inspect the Companys properties, to examine its books of account and records
and to discuss the Companys affairs, finances and accounts with its officers, all at such
reasonable times and during normal working hours as may be requested by such Investor;
provided, however, that the Company shall not be obligated under this subsection
(c) or any other subsection of Section 2.2 to provide access to information which it deems in good
faith to be a trade secret or similar confidential information.
(d) Monthly Financial Statements. The Company will furnish to each Investor who holds
at least 750,000 shares of Eligible Securities (as adjusted for stock splits and combinations),
upon the request of such Investors, within thirty (30) days of the end of each month,
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an unaudited
income statement and cash flow statement and unaudited balance sheet for and as of the end of such
month, in reasonable detail.
2.3 Confidentiality. Each Investor agrees to use commercially reasonable efforts to
maintain the confidentiality of information obtained pursuant to this Section 2, provided that such
obligation shall not apply to (i) information previously in possession or independently developed
by Investor, (ii) information publicly available other than as a result of breach of this provision
(iii) information required to be disclosed by statute, regulation or court or administrative order.
2.4 Visitation Rights. One representative chosen collectively by LB I Group Inc.,
Lehman Brothers P.A. LLC, Lehman Brothers Partnership Account 2000/2001, L.P. and Lehman Brothers
Offshore Partnership Account 2000/2001, L.P. (collectively, Lehman), one representative chosen
collectively by EuclidSR Partners, L.P. and EuclidSR Biotechnology Partners, L.P. (collectively,
EuclidSR), one representative chosen by Piper Jaffray Healthcare Fund III, L.P. (Piper
Jaffray), one representative chosen by GE Capital Equity Investments, Inc. (GE Capital), one
representative chosen collectively by Interwest Investors VII, L. P. and Interwest Partners VII,
L.P. (collectively, Interwest), one representative chosen by AllianceBernstein L.P. (Alliance),
and one representative chosen by BMSIF shall have the right to attend all meetings of the Board of
Directors, including meetings of any committee of the Board and including the right to participate
in any telephonic board meetings, so long as such Investor holds at least 750,000 shares
of Eligible Securities (as adjusted for stock splits and combinations and the like). Said
representative(s) shall be provided with notice of the meetings in the same manner at the same time
as the members of the Board of Directors and shall be provided with any materials distributed to
the Board of Directors in connection with board meetings. The foregoing visitation rights may be
limited by the Board of Directors if (i), upon the advice of counsel, the Board of Directors
determines that exclusion is required by third party confidentiality agreements, (ii) the Board is
discussing engaging Investor or an affiliate of Investor as a financial advisor or underwriter; or
(iii) the Board is discussing a material transaction with an entity in which Investor or a private
equity fund affiliated with Investor is a 5% or greater shareholder, or (iv) the Board determines
in good faith upon advice of counsel that limitations are required to maintain attorney-client
privilege.
2.5 Stock Option Vesting. Unless otherwise decided by the Board of Directors, all
option grants to employees shall vest over a four-year period with 25% of the shares subject to
each option vesting a year after commencement of employment and the remainder of the shares vesting
in equal amounts on a monthly basis thereafter.
2.6 Insurance. The Company shall, subject to the approval of the Board of Directors,
maintain such fire, casualty and general liability insurance with coverages and in amounts as shall
be determined by the Board of Directors. The Company agrees to maintain in full force and effect
directors and officers liability insurance with coverage in the aggregate amount of amount of $2
million covering all of its directors. The Company will maintain coverage for the Series C
Directors (as defined in the Voting Agreement) and the Series D Directors (as defined in the Voting
Agreement) under such directors and officers liability insurance at all times commencing upon the
Closing (as defined in the Purchase Agreement).
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2.7 Proprietary Information Agreements. Unless otherwise determined by the Board of
Directors, all future employees and consultants of the Company shall be required to execute and
deliver a proprietary information and invention assignment agreement.
2.8 Invention Assignments. The Company agrees to use commercially reasonable efforts
to obtain from each of the individual contributing inventors for each invention that forms any part
of any patent or patent application owned by or licensed to the Company, executed invention
assignments in favor of the Company or the appropriate third party licensor, as the case may be.
2.9 Key-Man Life Insurance. The Company shall obtain and maintain key-man life
insurance in such amount as is determined by the Companys Board of Directors, on Gajus
Worthington. Such policy shall name the Company as loss payee and shall not be cancelable by the
Company without prior unanimous approval of the Board of Directors.
2.10 Compliance with Laws. The Company shall use its best efforts to comply with the
requirements of all applicable laws, rules, regulations and orders of any governmental authority,
where noncompliance would have a material adverse effect on the Companys business and financial
condition.
2.11 Termination of Covenants. The covenants set forth in Section 2 shall terminate
on, and be of no further force or effect after, the closing of the Companys Initial Public
Offering. The rights granted pursuant to this Section 2 are not transferable other than to
Affiliates of Holders.
SECTION 3
Right of First Offer For Company Securities
3.1 Right of First Offer. Subject to the terms and conditions specified in this
Section 3, the Company hereby grants to each Investor a right of first offer with respect to future
sales by the Company of its Securities. An Investor shall be entitled to apportion the right of
first offer hereby granted among itself and its partners and Affiliates in such proportions as it
deems appropriate.
Each time the Company proposes to offer any Securities in a Financing (as defined below), the
Company shall first make an offering of such Securities to each Investor in accordance with the
following provisions:
(a) The Company shall deliver a notice (Notice) to each Investor stating (i) its intention
to offer such Securities for sale, (ii) the number of such Securities to be offered (the Offered
Securities), (iii) the price, if any, for which it proposes to offer such Securities, (iv) the
terms of such offer and (v) the Offer Amount (as defined below).
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(b) Within fifteen (15) calendar days after receipt of the Notice, each Investor may elect to
purchase, at the price and on the terms specified in the Notice, such Securities in an amount up to
the Offer Amount by providing the Company with written notice of its election.
(c) An election by an Investor pursuant to Section 3.1(b) to purchase Offered Securities shall
not be considered a binding commitment on the Investor unless and until the Company receives
binding commitments to purchase on the terms and conditions contained in the Notice substantially
all of the Offered Securities which the Investors have not elected to purchase.
Notwithstanding the foregoing, the Company and each of the Investors acknowledge and agree
that Lighthouse shall have the opportunity to invest not less than $250,000 in connection with the
first Financing completed after the date of this Agreement that involves the sale and issuance by
the Company of shares of the Companys convertible preferred stock with aggregate gross proceeds to
the Company of at least $3 million. In the event that Lighthouses right to purchase Offered
Securities as otherwise set forth in this Section 3.1 would not permit such $250,000 investment,
then each of the Investors agrees that its respective right to purchase Offered Securities pursuant
to this Section 3.1 may be cut-back (proportionately with all other Investors based on the number
of shares of Eligible Securities held by the Investors) in such amounts as may be necessary to
permit the exercise of Lighthouses rights as set forth herein.
3.2 Sale of Securities by Company. Within 60 days of the expiration of the period
described in Section 3.1(b), any Offered Securities which the Investors have not elected to
purchase may be sold by the Company to any person or persons at a price not less than, and upon
terms no more favorable to the offeree than, those specified in the Notice. If the Company does
not complete the sale of all such Offered Securities within said 60-day period, the rights of the
Investors with respect to any such unsold Offered Securities shall be deemed to be revived.
3.3 Offer Amount. The Offer Amount shall equal that percentage of the Offered
Securities equal to the number of shares of Eligible Securities held by an Investor which are
Registrable Securities divided by the total number of outstanding shares of Common Stock of the
Company. For the purposes of the foregoing calculations, all outstanding options and warrants
shall be deemed to be exercised and all Preferred Stock shall be deemed to have been converted into
Common Stock at the prevailing conversion rate.
3.4 Financing. Financing shall mean an offering or series of related offerings of
Securities by the Company for purposes of raising working capital in a minimum amount of $250,000.
Financing shall not include (i) the issuance or sale of shares of Common Stock or options to
purchase Common stock to employees, officers, directors or consultants for the primary purpose of
soliciting or retaining their services in such amount as shall have been approved by the Board of
Directors, (ii) the issuance or sale of Securities to leasing entities or financial institutions in
connection with commercial leasing or borrowing transactions approved by the Board of Directors,
(iii) the issuance or sale of Securities to third party providers of goods or services in
connection with transactions approved by the Board of Directors; (iv) the sale of Securities in a
registered public offering, (v) any issuances of Securities in connection with any stock split,
stock dividend or recapitalization by the Company, (vi) the issuance of Securities at a price (on
an as converted to
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Common Stock basis) below the original issue price of the Companys Series E
Preferred Stock (as adjusted for stock splits, recapitalizations and like events) in connection
with sponsored research, collaboration, technology license, development, OEM, marketing or other
similar agreements or any joint venture or strategic alliance, if such issuance is approved
unanimously by the Board of Directors, provided that the issuance of the Companys
Series E Preferred Stock to BMSIF or any Affiliate thereof or any related entity to the Singapore
Economic Development Board pursuant to Section 3.4(xii) below at a price below the original issue
price of the Companys Series E Preferred Stock (as adjusted for stock splits, recapitalizations
and like events) shall also not be a Financing hereunder, (vii) the issuance of Securities at a
price (on an as converted to Common Stock basis) at or above the original issue price of the
Companys Series E Preferred Stock (as adjusted for stock splits, recapitalizations and like
events) in connection with sponsored research, collaboration, technology license, development, OEM,
marketing or other similar agreements or any joint venture or strategic alliance, if such issuance
is approved by the Board of Directors, (viii) the issuance of Securities at a price (on an as
converted to Common Stock basis) below the original issue price of the Companys Series E Preferred
Stock (as adjusted for stock splits, recapitalizations and like events) in connection with the
acquisition of another corporation by the Company by merger, consolidation, or purchase of all or
substantially all of the assets or shares of such corporation unanimously approved by the Board of
Directors, (ix) the issuance of Securities at a price (on an as
converted to Common Stock basis) at or above the original issue price of the Companys Series
E Preferred Stock (as adjusted for stock splits, recapitalizations and like events) in connection
with the acquisition of another corporation by the Company by merger, consolidation, or purchase of
all or substantially all of the assets or shares of such corporation approved by the Board of
Directors; (x) shares of Series E Preferred Stock issued pursuant to the terms of the Purchase
Agreement; (xi) interest-bearing convertible promissory notes in the aggregate principal amount of
$8 million issued or issuable pursuant to the CNPA and/or the CNA and any Securities issued on
conversion thereof; and (xii) additional interest-bearing convertible promissory notes to be issued
after the date hereof in the aggregate principal amount of up to $15 million to BMSIF or any
Affiliate thereof or any related entity to the Singapore Economic Development Board, and any
Securities issued on conversion thereof.
3.5 Termination of Right of First Offer. The right of first offer contained in this
section shall not apply to and shall terminate upon the closing of an Initial Public Offering. The
right of first offer granted under this Section 3 is transferable to transferees of at least
750,000 shares of Registrable Securities (as adjusted for stock splits, combinations and the like)
or to Affiliates.
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SECTION 4
Right of First Offer with Respect to Founder Shares
4.1 Notice of Sales. Should a Founder (a Seller) propose to accept one or more bona
fide offers (collectively, the Purchase Offer) from any persons (Purchasers) to purchase
Founders Shares from such Seller (other than as set forth 4.2(d) hereof), then such Seller shall,
promptly after exercise or termination of any rights of first refusal held by the Company, deliver
a notice (the Notice) to the Company and all Investors holding more than 750,000 shares of
Eligible Securities (Eligible Investors).
4.2 Purchase Right. Each Eligible Investor shall have the right, exercisable upon
written notice to such Seller within ten (10) business days after receipt of the Notice, to
purchase Founders Shares on the terms and conditions specified in the Purchase Offer. To the
extent an Eligible Investor exercises its right to purchase such shares in accordance with the
terms and conditions set forth below, the number of shares of stock which such Seller may sell to
the Purchasers pursuant to the Purchase Offer shall be correspondingly reduced. The purchase right
of each Eligible Investor shall be subject to the following terms and conditions:
(a) Calculation of Shares. Each Eligible Investor may purchase all or any part of
that number of Founder Shares equal to the number obtained by multiplying (i) the aggregate number
of Founders Shares covered by the Purchase Offer by (ii) a fraction, the numerator of which is the
number of shares of Common Stock of the Company at the time owned by such Eligible Investor and the
denominator of which is the number of shares of Common Stock of the Company then outstanding. For
the purposes of the foregoing calculations, all outstanding options and
warrants shall be deemed to be exercised and all Preferred Stock shall be deemed to have been
converted into Common Stock at the prevailing conversion rate.
(b) Delivery of Consideration. Each Eligible Investor may effect its purchase right
by promptly delivering to such Seller a written notice and a check or wire transfer equal to the
purchase price specified in the Purchase Offer for the number of shares the Eligible Investor
desires to purchase pursuant to this Section 4.2.
(c) Certificate. Within ten (10) business days of receipt of Eligible Investors
funds pursuant to Section 4.2(c), Seller shall deliver to such Eligible Investor a certificate or
certificates representing the shares of Founder Shares purchased by such Eligible Investor.
(d) Permitted Transactions. The participation rights in this Section 4 shall not
pertain or apply to:
(i) Any transfer to a revocable grantor trust with respect to which the Founder and members of
his family are the sole beneficiaries;
(ii) Any repurchase of Founders Shares by the Company;
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(iii) Any exercise by the Company of a right or remedy under the terms of any loan, security
or stock pledge agreement where the Founders Shares serve as security for a loan made by the
Company;
(iv) Any transfer to any ancestors or descendants or spouse of a Founder or to a trustee for
their benefit or to a custodian for the benefit of a Founders issue; or
(v) Any bona fide gift;
provided, however, that such Founder shall inform the Eligible Investors of such transfer or gift
(other than a transfer pursuant to clause (ii) or (iii)) prior to effecting it and the transferee
or donee (if other than the Company) shall furnish the Company and the Eligible Investors with a
written agreement to be bound by and comply with all applicable provisions of this Agreement.
4.3 Sale of Securities by Founder. Within 60 days of the expiration of the period
described in the first paragraph of Section 4.2, any Founders Shares covered by the Purchase Offer
which the Eligible Investors have not elected to purchase may be sold by the Seller to the
Purchasers on the terms and conditions of the Purchase Offer. If the Seller does not complete the
sale of all Founders Shares covered by the Purchase Offer within such period, the rights of the
Eligible Investors with respect to any such unsold Founders Shares shall be deemed to be revived.
4.4 Termination and Transfer. The restrictions imposed and rights granted by this
Section 4 shall not apply to and shall terminate immediately prior to the closing of the Companys
Initial Public Offering. Securities received pursuant to any stock dividend, stock split,
recapitalization, or exercise of a conversion right shall be subject to this Section 4 to the
same extent as the shares of the Company with respect to which they were issued. The right of
first offer granted under this Section 4 is transferable to transferees of at least 750,000 shares
of Registrable Securities (as adjusted for stock splits, combinations and the like) or to
Affiliates.
4.5 Prohibited Transfer. Any attempt by a Founder to transfer Founders Shares in
violation of Section 4 hereof shall be void and the Company agrees it will not effect such a
transfer nor will it treat any alleged transferee(s) as the holder of such shares, without the
written consent of two-thirds (2/3) in interest of the Eligible Investors.
SECTION 5
Right of Co-Sale
5.1 Notice of Sales. Should a Founder (a Seller) propose to accept one or more bona
fide offers (collectively, the Purchase Offer) from any persons (Purchasers) to purchase
Founders Shares from such Seller (other than as set forth 5.2(d)), then such Seller shall, promptly
after exercise or termination of any rights of first refusal held by the Company or the Eligible
Investors, deliver a notice (the Notice) to the Company and all Eligible Investors describing the
terms and conditions of the Purchase Offer.
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5.2 Participation Right. Each Eligible Investor shall have the right, exercisable
upon written notice to such Seller within fifteen (15) business days after receipt of the Notice,
to participate in such Sellers sale of stock pursuant to the specified terms and conditions of
such Purchase Offer. To the extent an Eligible Investor exercises such right of participation in
accordance with the terms and conditions set forth below, the number of shares of stock which such
Seller may sell pursuant to such Purchase Offer shall be correspondingly reduced. The right of
participation of each Eligible Investor shall be subject to the following terms and conditions:
(a) Calculation of Shares. Each Eligible Investor may sell all or any part of that
number of shares of Common Stock of the Company equal to the number obtained by multiplying (i) the
aggregate number of Founders Shares covered by the Purchase Offer by (ii) a fraction, the numerator
of which is the number of shares of Common Stock of the Company at the time owned by such Eligible
Investor and the denominator of which is the number of shares of Common Stock of the Company then
outstanding. For the purposes of the foregoing calculations, all outstanding options and warrants
shall be deemed to be exercised and all Preferred Stock shall be deemed to have been converted into
Common Stock at the prevailing conversion rate.
(b) Delivery of Certificates. Each Eligible Investor may effect its participation in
the sale by delivering to such Seller for transfer to the Purchaser(s) one or more certificates,
properly endorsed for transfer, which represent at least the number of shares of Common Stock which
such Eligible Investor elects to sell pursuant to this Section 5.2.
(c) Transfer. The stock certificate or certificates which the Eligible Investor
delivers to such Seller pursuant to Section 5.2 shall be delivered by the Seller to the
Purchaser(s) in consummation of the sale of the Securities pursuant to the terms and conditions
specified in the Notice, and such Seller shall promptly thereafter remit to such Eligible Investor
that portion of the sale proceeds to which such Eligible Investor is entitled by reason of its
participation in such sale.
(d) Permitted Transactions. The participation rights in this Section 5 shall not
pertain or apply to:
(i) Any transfer to a revocable grantor trust with respect to which the Seller and members of
his family are the sole beneficiaries;
(ii) Any repurchase of Founders Shares by the Company;
(iii) Any exercise by the Company of a right or remedy under the terms of any loan, security
or stock pledge agreement where the Founders Shares serve as security for a loan made by the
Company;
(iv) Any transfer to any ancestors or descendants or spouse of a Founder or to a trustee for
their benefit or to a custodian for the benefit of a Founders issue; or
(v) Any bona fide gift;
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provided, however, that such Founder shall inform the Eligible Investors of such transfer or gift
(other than a transfer pursuant to clause (ii) or (iii)) prior to effecting it and the transferee
or donee (if other than the Company) shall furnish the Company and the Eligible Investors with a
written agreement to be bound by and comply with all applicable provisions of this Agreement.
5.3 Sale of Securities by Founder. Within 45 days of the expiration of the period
described in the first paragraph of Section 5.2, any Founders Shares covered by the Purchase Offer
which the Eligible Investors have not elected to purchase may be sold by the Seller to the
Purchasers on the terms and conditions of the Purchase Offer. If the Seller does not complete the
sale of all Founders Shares covered by the Purchase Offer within such period, the rights of the
Eligible Investors with respect to any such unsold Founders Shares shall be deemed to be revived.
5.4 Termination and Transfer. The restrictions imposed and rights granted by this
Section 5 shall not apply to and shall terminate immediately prior to the closing of the Companys
Initial Public Offering. Securities received pursuant to any stock dividend, stock split,
recapitalization, or exercise of a conversion right shall be subject to this Section 5 to the same
extent as the shares of the Company with respect to which they were issued. The co-sale right
granted under this Section 5 is transferable to transferees of at least 750,000 shares of
Registrable Securities (as adjusted for stock splits, combinations and the like) or to Affiliates.
5.5 Prohibited Transfers.
(a) In the event any Founder should sell any Founders Shares in contravention of the co-sale
rights of the Investors under Section 5 (a Prohibited Transfer), the Investors, in addition to
such other remedies as may be available at law, in equity or hereunder, shall have the put option
provided below, and the Founder shall be bound by the applicable provisions of such option.
(b) In the event of a Prohibited Transfer, each Eligible Investor shall have the right to sell
to the Founder the type and number of shares of Common Stock equal to the number of shares that
such Eligible Investor would have been entitled to transfer to the third-party transferee(s) under
Section 5.2 hereof had the Prohibited Transfer been effected pursuant to and in compliance with the
terms thereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be sold to the Founder shall be equal to
the price per share paid by the third-party transferee(s) to the Founder in the Prohibited
Transfer. Such price per share shall be paid to the Eligible Investor in cash if the Founder
received cash for his shares. If the Founder did not receive cash but received other property
instead, the price per share to be paid to the Eligible Investor shall be paid (A) in the form of
the property received by the Founder for his shares, or (B) in cash equal to the fair market value
of the property received by such Founder as determined in good faith by the Companys Board of
Directors, at the option of the Eligible Investor. The Founder shall also reimburse each Eligible
Investor for any and all fees and expense, including legal fees and expenses, incurred pursuant to
the exercise or the attempted exercise of the Eligible Investors rights under Section 5.
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(ii) Within thirty (30) days after the later of the dates on which the Eligible Investor (A)
received notice of the Prohibited Transfer or (B) otherwise became aware of the Prohibited
Transfer, each Eligible Investor shall, if exercising the option created hereby, deliver to the
Founder the certificate or certificates representing shares to be sold, each certificate to be
properly endorsed for transfer.
(iii) The Founder shall, upon receipt of the certificate or certificates for the shares to be
sold by an Eligible Investor pursuant to this Section 5, pay the aggregate purchase price therefor
and the amount of reimbursable fees and expenses, as specified in subparagraph 5.5(b)(i), in cash
or by other means acceptable to the Eligible Investor.
(c) Notwithstanding the foregoing, any attempt by a Founder to transfer Founders Shares in
violation of Section 5 hereof shall be void and the Company agrees it will not effect such a
transfer nor will it treat any alleged transferee(s) as the holder of such shares, without the
written consent of two-thirds (2/3) in interest of the Eligible Investors.
SECTION 6
Miscellaneous
6.1 Governing Law; Jurisdiction. This Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of California, as applied to
agreements entered into, and to be performed entirely in such state, between residents of such
state.
The parties hereto agree to submit to the jurisdiction of the federal and state courts of San
Mateo County, California with respect to the breach or interpretation of this Agreement or the
enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations
between the parties arising under this Agreement.
6.2 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.
6.3 Notices, Etc. All notices and other communications required or permitted
hereunder, shall be in writing and shall be sent by facsimile personally delivered, mailed by
registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by
a nationally-recognized overnight courier, addressed (a) if to an Investor, at Investors facsimile
number or address as set forth in the records of the Company or (b) if to any other holder of any
Eligible Securities, 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 Eligible Securities who has so furnished an address or facsimile number to the
Company, or (c) if to a Founder, at such Founders facsimile number or address set forth on
EXHIBIT B hereto, or a such other address as such Founder shall have furnished to the
Company in writing, or (d) if to the Company, at its facsimile number or address set forth on the
signature page hereto addressed to the attention of the Corporate Secretary, or at such other
address as the Company
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shall have furnished to the Investors. Any such notice or communication
shall be deemed to have been received (A) in the case of personal delivery, on the date of such
delivery, (B) in the case of a nationally-recognized overnight courier, on the next business day
after the date when sent, (C) in the case of mailing, on the third business day following that on
which the piece of mail containing such communication is posted and (D) in the case of delivery via
facsimile, one (1) business day after the date of transmission provided that said transmission is
confirmed telephonically on the date of transmission.
6.4 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any holder of any Eligible Securities 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 of or 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 holder 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 or as provided in this Agreement. All remedies, either under this Agreement or
by law or otherwise afforded to any holder, shall be cumulative and not alternative.
6.5 Third Parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto, and their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein.
6.6 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, portions of such provisions, or such provisions in their
entirety, to the extent necessary, shall be severed from this Agreement, and the balance of this
Agreement shall be enforceable in accordance with its terms.
6.7 Amendment and Waiver. Any provision of this Agreement may be amended or waived
with the written consent of the Company and the Holders of at least two-thirds of the outstanding
shares of the Registrable Securities then held by Holders (assuming the exercise or conversion of
all outstanding Eligible Securities); provided, however, (i) that in the event such
amendment or waiver adversely affects the rights and/or obligations of the Founders under this
Agreement in a different manner than the other Holders, such amendment or waiver shall also require
written consent of the Founders holding a majority of the then outstanding Founders Shares, (ii)
that in the event such amendment or waiver adversely affects the rights and/or obligations of
Lehman, EuclidSR, Piper Jaffray, GE Capital, Interwest, Alliance, and BMSIF under Section 2.4 of
this Agreement, such amendment or waiver shall not be effective as to Lehman, EuclidSR, Piper
Jaffray, GE Capital, Interwest or BMSIF, as the case may be, without the written consent of such
party, and (iii) that in the event such amendment or waiver adversely affects the rights and/or
obligations of Warrantholders under this Agreement in a different manner than the other Holders,
such amendment or waiver shall also require the written consent of Warrantholders holding a
-27-
majority of the then outstanding Warrant Shares. Notwithstanding the foregoing, any purchaser of
Series E Preferred Stock pursuant to the Purchase Agreement may become a party to this Agreement by
executing and delivering an additional counterpart signature page to this Agreement and such
purchaser shall be deemed a Holder and an Investor hereunder. The parties agree that Exhibit
A shall be updated automatically without any formal amendment to reflect the addition of any
such additional party. Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each Holder, the Founders, the holder of the Other Shares, Warrantholders and the
Company. In addition, the Company may waive performance of any obligation owing to it, as to some
or all of the Holders, or agree to accept alternatives to such performance, without obtaining the
consent of any other Holder. In the event that an underwriting agreement is entered into between
the Company and any Holder, and such underwriting agreement contains terms differing from this
Agreement, as to any such Holder the terms of such underwriting agreement shall govern.
6.8 Rights of Holders. Each Holder 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,
including, without limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such holder shall not incur any liability to any other holder of any
Securities as a result of exercising or refraining from exercising any such right or rights.
6.9 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.
6.10 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this
Agreement are for convenience of reference only and are not to be considered in construing this
Agreement.
6.11 Amendment and Restatement of Prior Agreement. The undersigned Prior Investors
who in the aggregate hold at least two-thirds of the outstanding Registrable Securities (as defined
in the Prior Agreement) and the undersigned Founders hereby amend and restate the Prior Agreement
pursuant to Section 6.7 thereof.
6.12 Waiver of Right of First Offer. The undersigned Prior Investors who in the
aggregate hold at least two-thirds of the outstanding Registrable Securities (as defined in the
Prior Agreement) hereby waive on behalf of all Prior Investors any rights of participation or
notice under Section 3 of this Agreement and the Prior Agreement with respect to the securities
sold pursuant to the Purchase Agreement. By its execution below, Lighthouse waives any right of
participation or notice under Section 3 of this Agreement and Section 3 of the Prior Agreement with
respect to securities sold under the Purchase Agreement.
6.13 Aggregation of Stock. All shares of Eligible Securities held or acquired by
Affiliated entities or persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
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6.14 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.
[Remainder
of Page Left Blank Intentionally]
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FLUIDIGM
CORPORATION
FORM OF
AMENDMENT NO. 1 TO
EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 (this Amendment) to that certain Eighth Amended and Restated Investor
Rights Agreement, dated as of June 13, 2006 (the Rights Agreement), by and among Fluidigm
Corporation, a California corporation (the Company), and the Investors and Founders named therein
is entered into this 22nd day of December, 2006 by and among the Company and the undersigned,
collectively the Holders of at least two-thirds of the outstanding shares of the Registrable
Securities then held by Holders (assuming the exercise or conversion of all outstanding Eligible
Securities). Capitalized terms not defined herein have the meanings set forth in the Rights
Agreement.
RECITALS
A. It is contemplated that the Company will sell and issue additional shares of the Companys
Series E Preferred Stock (Series E Preferred Stock) pursuant to that certain Series E Preferred
Stock Purchase Agreement, dated as of June 13, 2006 (the Purchase Agreement), by and among the
Company and the Purchasers named therein.
B. In connection with the sale of additional shares of Series E Preferred Stock, the Company
and the Investors desire to (i) provide that the standoff agreement in Section 1.14 of the Rights
Agreement shall not apply to securities of the Company purchased by certain Holders in the Initial
Public Offering or in the public market for the Companys securities following the Initial Public
Offering, and (ii) grant visitation rights pursuant to Section 2.4 of the Rights Agreement
collectively to Cross Creek Capital, L.P., Cross Creek Capital Employees Fund, L.P. and Wasatch
Small Cap Growth.
C. The Company and the undersigned Holders of at least two-thirds of the outstanding shares of
the Registrable Securities then held by Holders (assuming the exercise or conversion of all
outstanding Eligible Securities) have agreed to amend the Rights Agreement to provide for the
foregoing changes to the standoff agreement in Section 1.14 and the visitation rights in Section
2.4.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, all of the parties
hereto mutually agree as follows:
SECTION 7 Amendment to Section 1.14. Section 1.14 (Standoff Agreement) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
1.14 Standoff Agreement.
(a) Each Holder agrees in connection with the first sale of the Companys
Common Stock in a firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act, upon notice by the
Company or the underwriters managing such public offering, not to sell, make any
short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any option
for the purchase of, or otherwise directly or indirectly dispose of any Securities
(other than those included in the registration) without the prior written consent of
the Company and such managing underwriters for such period of time as the Board of
Directors establishes pursuant to its good faith negotiations with such managing
underwriters; provided, however that:
(i) such agreement shall not exceed one hundred eighty (180) days;
(ii) such agreement shall not apply to transfers to an Affiliate, provided that
such Affiliate agrees to be bound by the terms of such agreement, to the same extent
as if such transferee were the original party thereunder;
(iii) such agreement shall not apply to securities of the Company purchased by
AllianceBernstein Venture Fund I, L.P., SmallCap World Fund, Inc., Cross Creek
Capital, L.P., Cross Creek Capital Employees Fund, L.P. or Wasatch Small Cap Growth
or their respective Affiliates in the Initial Public Offering or in the public
market for the Companys securities following the Initial Public Offering;
(iv) a Holder shall not be subject to such agreement unless (A) all executive
officers and directors of the Company, (B), all shareholders of the Company holding
more than 1% of the Companys outstanding capital stock; and (C) all other Holders
and holders of other registration rights, are subject to or obligated to enter into
similar agreements; and
(v) if and when any person identified in clause (iv) is released, in whole or
in part, from such agreement (whether or not such release is contemplated at the
time of the offering) or if any such agreement is terminated, the Holder shall be
concurrently released on a pro rata basis based on the number of shares held by such
person and the Holder.
(b) Each Holder agrees that prior to the Initial Public Offering it will not
transfer securities of the Company unless each transferee agrees in writing to be
bound by all of the provisions of this Section 1.14; provided that this Section
1.14(b) shall not apply to transfers pursuant to a registration statement.
(c) Each Holder hereby consents to the placement of stop transfer orders with
the Companys transfer agent in order to enforce the foregoing provision and agrees
to execute a market standoff agreement with said
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underwriters in customary form consistent with the provisions of this Section 1.14.
SECTION 8 Amendment to Section 2.4. Section 2.4 (Visitation Rights) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
2.4 Visitation Rights. One representative chosen collectively by LB I Group
Inc., Lehman Brothers P.A. LLC, Lehman Brothers Partnership Account 2000/2001, L.P. and
Lehman Brothers Offshore Partnership Account 2000/2001, L.P. (collectively, Lehman), one
representative chosen collectively by EuclidSR Partners, L.P. and EuclidSR Biotechnology
Partners, L.P. (collectively, EuclidSR), one representative chosen by Piper Jaffray
Healthcare Fund III, L.P. (Piper Jaffray), one representative chosen by GE Capital Equity
Investments, Inc. (GE Capital), one representative chosen collectively by Interwest
Investors VII, L. P. and Interwest Partners VII, L.P. (collectively, Interwest), one
representative chosen by AllianceBernstein Venture Fund I, L.P. (Alliance), one
representative chosen collectively by Cross Creek Capital, L.P., Cross Creek Capital
Employees Fund, L.P. and Wasatch Small Cap Growth (collectively, Wasatch), and one
representative chosen by BMSIF shall have the right to attend all meetings of the Board of
Directors, including meetings of any committee of the Board and including the right to
participate in any telephonic board meetings, so long as such Investor holds at least
750,000 shares of Eligible Securities (as adjusted for stock splits and combinations and the
like). Said representative(s) shall be provided with notice of the meetings in the same
manner at the same time as the members of the Board of Directors and shall be provided with
any materials distributed to the Board of Directors in connection with board meetings. The
foregoing visitation rights may be limited by the Board of Directors if (i), upon the advice
of counsel, the Board of Directors determines that exclusion is required by third party
confidentiality agreements, (ii) the Board is discussing engaging Investor or an affiliate
of Investor as a financial advisor or underwriter; or (iii) the Board is discussing a
material transaction with an entity in which Investor or a private equity fund affiliated
with Investor is a 5% or greater shareholder, or (iv) the Board determines in good faith
upon advice of counsel that limitations are required to maintain attorney-client privilege.
SECTION 9 Amendment to Section 6.7. Section 6.7 (Amendment and Waiver) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
6.7 Amendment and Waiver. Any provision of this Agreement may be amended
or waived with the written consent of the Company and the Holders of at least
two-thirds of the outstanding shares of the Registrable Securities then held by
Holders (assuming the exercise or conversion of all outstanding Eligible
Securities); provided, however, (i) that in the event such amendment
or waiver adversely affects the rights and/or obligations of the Founders under this
Agreement in a different manner than the other Holders, such amendment or waiver
shall also require written consent of the Founders holding a majority of the
-3-
then outstanding Founders Shares, (ii) that in the event such amendment or waiver
adversely affects the rights and/or obligations of Lehman, EuclidSR, Piper Jaffray,
GE Capital, Interwest, Alliance, Wasatch or BMSIF under Section 2.4 of this
Agreement, such amendment or waiver shall not be effective as to Lehman, EuclidSR,
Piper Jaffray, GE Capital, Interwest, Alliance, Wasatch or BMSIF, as the case may
be, without the written consent of such party, and (iii) that in the event such
amendment or waiver adversely affects the rights and/or obligations of
Warrantholders under this Agreement in a different manner than the other Holders,
such amendment or waiver shall also require the written consent of Warrantholders
holding a majority of the then outstanding Warrant Shares. Notwithstanding the
foregoing, any purchaser of Series E Preferred Stock pursuant to the Purchase
Agreement may become a party to this Agreement by executing and delivering an
additional counterpart signature page to this Agreement and such purchaser shall be
deemed a Holder and an Investor hereunder. The parties agree that Exhibit A
shall be updated automatically without any formal amendment to reflect the addition
of any such additional party. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder, the Founders, the holder of the
Other Shares, Warrantholders and the Company. In addition, the Company may waive
performance of any obligation owing to it, as to some or all of the Holders, or
agree to accept alternatives to such performance, without obtaining the consent of
any other Holder. In the event that an underwriting agreement is entered into
between the Company and any Holder, and such underwriting agreement contains terms
differing from this Agreement, as to any such Holder the terms of such underwriting
agreement shall govern.
SECTION 10 Governing Law. This Amendment shall be construed in accordance with, and
governed in all respects by, the laws of the State of California, as applied to agreements entered
into, and to be performed entirely in such state, between residents of such state.
SECTION 11 Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
[Remainder of Page Intentionally Blank]
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FLUIDIGM CORPORATION
AMENDMENT NO. 2 TO
EIGHTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDMENT NO. 2 (this Amendment) to that certain Eighth Amended and Restated Investor
Rights Agreement, dated as of June 13, 2006, as amended December 22, 2006 (the Rights Agreement),
by and among Fluidigm Corporation, a California corporation (Fluidigm California), and the
Investors and Founders named therein is entered into effective as of October 10, 2007 by and among
Fluidigm Corporation, a Delaware corporation (the Company), the undersigned Investors, and the
undersigned Holders, collectively the Holders of at least two-thirds of the outstanding shares of
the Registrable Securities held by Holders (assuming the exercise or conversion of all outstanding
Eligible Securities). Capitalized terms not defined herein have the meanings set forth in the
Rights Agreement.
RECITALS
WHEREAS, on July 18, 2007, Fluidigm California was merged with and into the Company, with the
Company being the surviving corporation such that the Company succeeded to all of Fluidigm
Californias rights and obligations under the Rights Agreement;
WHEREAS, it is contemplated that the Company will sell and issue additional shares of the
Companys Series E Preferred Stock (Series E Preferred Stock) pursuant to that certain Series E
Preferred Stock Purchase Agreement, dated as of June 13, 2006, as amended December 22, 2006 and
further amended on the date hereof (the Purchase Agreement), by and among the Company and the
Purchasers named therein;
WHEREAS, in connection with the sale of additional shares of Series E Preferred Stock, the
Company and the Holders desire to amend the Rights Agreement to include the additional shares of
Series E Preferred Stock to be issued pursuant to the Purchase Agreement and make certain other
changes as set forth herein; and
WHEREAS, pursuant to Section 6.7 of the Rights Agreement, the Rights Agreement may be amended
with the written consent of the Company and Holders of at least two-thirds of the outstanding
shares of the Registrable Securities then held by Holders (assuming the exercise or conversion of
all outstanding Eligible Securities) and the Company and the undersigned Holders have agreed to
amend the Rights Agreement to provide for the foregoing changes.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, all of the parties
hereto mutually agree as follows:
AGREEMENT
SECTION 12 Amendment to Recital. The first Recital of the Rights Agreement is hereby
amended and restated in its entirety as follows:
WHEREAS, the Company and the New Investors have entered into a Series E Preferred Stock
Purchase Agreement of even date herewith, as amended from time to time (such agreement, as
amended from time to time, the Purchase Agreement), pursuant to which the Company shall
sell, and the New Investors shall acquire, shares of the Companys Series E Preferred
Stock;
SECTION 13 Amendment to Section 1.14. Subsection (a)(i) of Section 1.14 (Standoff
Agreement) of the Rights Agreement is hereby amended and restated in its entirety as follows:
(i) such agreement shall not exceed one hundred and eighty (180) days (or such greater
period, not to exceed 17 days, as may be requested by the Company or an underwriter to
accommodate regulatory restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including, but not limited to, the
restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto);
SECTION 14 Deletion of Section 1.15. The Rights Agreement is hereby amended to delete
Section 1.15 (No Right to Delay Registration) in its entirety.
SECTION 15 Amendment to Section 2.4. Section 2.4 (Visitation Rights) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
2.4 Visitation Rights. One representative chosen collectively by LB I Group
Inc., Lehman Brothers P.A. LLC, Lehman Brothers Partnership Account 2000/2001, L.P. and
Lehman Brothers Offshore Partnership Account 2000/2001, L.P. (collectively, Lehman), one
representative chosen collectively by EuclidSR Partners, L.P. and EuclidSR Biotechnology
Partners, L.P. (collectively, EuclidSR), one representative chosen by Piper Jaffray
Healthcare Fund III, L.P. (Piper Jaffray), one representative chosen by GE Capital Equity
Investments, Inc. (GE Capital), one representative chosen collectively by Interwest
Investors VII, L. P. and Interwest Partners VII, L.P. (collectively, Interwest), one
representative chosen by AllianceBernstein Venture Fund I, L.P. (Alliance), one
representative chosen collectively by Cross Creek Capital, L.P., Cross Creek Capital
Employees Fund, L.P. and Wasatch Small Cap Growth (collectively, Wasatch), one
representative chosen by BMSIF, and one representative chosen collectively by the holders of
a majority of the Shares purchased under Amendment No. 2 to the Purchase Agreement
(collectively, the October 2007 Representative) shall have the right to attend all
meetings of the Board of Directors, including meetings of any committee of the Board and
including the right to participate in any telephonic board meetings, so long as such
Investor or the October 2007 Representative holds at least
750,000 shares of Eligible Securities (as adjusted for stock
-2-
splits and combinations and the like). Said representative(s) shall be provided with
notice of the meetings in the same manner at the same time as the members of the Board of
Directors and shall be provided with any materials distributed to the Board of Directors in
connection with board meetings. The foregoing visitation rights may be limited by the Board
of Directors if (i), upon the advice of counsel, the Board of Directors determines that
exclusion is required by third party confidentiality agreements, (ii) the Board is
discussing engaging Investor or an affiliate of Investor as a financial advisor or
underwriter; or (iii) the Board is discussing a material transaction with an entity in which
Investor or a private equity fund affiliated with Investor is a 5% or greater shareholder,
or (iv) the Board determines in good faith upon advice of counsel that limitations are
required to maintain attorney-client privilege.
SECTION 16 Amendment to Section 6.7. Section 6.7 (Amendment and Waiver) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
6.7 Amendment and Waiver. Any provision of this Agreement may be amended or
waived with the written consent of the Company and the Holders of at least two-thirds of the
outstanding shares of the Registrable Securities then held by Holders (assuming the exercise
or conversion of all outstanding Eligible Securities); provided, however,
(i) that in the event such amendment or waiver adversely affects the rights and/or
obligations of the Founders under this Agreement in a different manner than the other
Holders, such amendment or waiver shall also require written consent of the Founders holding
a majority of the then outstanding Founders Shares, (ii) that in the event such amendment or
waiver adversely affects the rights and/or obligations of Lehman, EuclidSR, Piper Jaffray,
GE Capital, Interwest, Alliance, Wasatch, BMSIF or the October 2007 Representative under
Section 2.4 of this Agreement, such amendment or waiver shall not be effective as to Lehman,
EuclidSR, Piper Jaffray, GE Capital, Interwest, Alliance, Wasatch, BMSIF or the October 2007
Representative, as the case may be, without the written consent of such party, and (iii)
that in the event such amendment or waiver adversely affects the rights and/or obligations
of Warrantholders under this Agreement in a different manner than the other Holders, such
amendment or waiver shall also require the written consent of Warrantholders holding a
majority of the then outstanding Warrant Shares. Notwithstanding the foregoing, any
purchaser of Series E Preferred Stock pursuant to the Purchase Agreement may become a party
to this Agreement by executing and delivering an additional counterpart signature page to
this Agreement and such purchaser shall be deemed a Holder and an Investor hereunder. The
parties agree that Exhibit A shall be updated automatically without any formal
amendment to reflect the addition of any such additional party. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each Holder, the Founders,
the holder of the Other Shares, Warrantholders and the Company. In addition, the Company
may waive performance of any obligation owing to it, as to some or all of the Holders, or
agree to accept alternatives to such performance, without obtaining the
consent of any other Holder. In the event that an underwriting agreement is entered
into between the Company and any Holder, and such underwriting agreement contains terms
-3-
differing from this Agreement, as to any such Holder the terms of such underwriting
agreement shall govern.
SECTION 17 Addition of Section 6.15. The Rights Agreement is hereby amended to add
the following Section 6.15 which reads in its entirety as follows:
6.15 Reincorporation. Each Investor and Founder acknowledges that the Company
completed a reincorporation into the State of Delaware on July 18, 2007 and each Investor
and Founder hereby consents to the assignment of this Agreement to Fluidigm Corporation, a
Delaware corporation, effective as of July 18, 2007.
SECTION 18 Governing Law. This Amendment shall be construed in accordance with, and
governed in all respects by, the laws of the State of California, as applied to agreements entered
into, and to be performed entirely in such state, between residents of such state.
SECTION 19 Rights Agreement. Wherever necessary, all other terms of the Rights
Agreement are hereby amended to be consistent with the terms of this Amendment. Except as
specifically set forth herein, the Rights Agreement shall remain in full force and effect
SECTION 20 Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
SECTION 21 Effect of Execution of Amendment by Investor. This Amendment, when
executed and delivered by the Company and an Investor purchasing shares of Series E Preferred
pursuant to the Purchase Agreement as contemplated in the Recitals, shall also constitute and shall
be deemed a counterpart signature page to the Rights Agreement. Consequently, each undersigned
Investor purchasing shares of Series E Preferred acknowledges and agrees that he, she or it is
bound by the terms and conditions contained in the Rights Agreement, as amended by this Amendment.
[Remainder of Page Intentionally Blank]
-4-
FOUNDERS
Gajus V. Worthington
Stephen R. Quake
INVESTORS
Alejandro Berenstein, M.D.
Alfred J. Mandel
Allan Johnson
Allen May, Trustee, Intervivos Trust Dated 5/14/91
AllianceBernstein Venture Fund I, L.P.
Alloy Partners 2002, L.P.
Alloy Ventures 2002, L.P.
Alloy Ventures 2005, L.P.
Analiza, Inc.
Athersys, Inc.
Beveren Company
Biomedical Sciences Investment Fund Pte Ltd
Bradford S. Goodwin and Cathy W. Goodwin As Trustees of the Goodwin Family Trust U/A/D 7/30/97
Bradford W. Baer
Bruce Burrows
Burr & Forman LLP
Burwen Family Trust U/D/T Dated 9/30/88
Charles C. Moore
Charles R. Engles
Clark-Boyd Family Trust
Cross Creek Capital Employees Fund, L.P.
Cross Creek Capital, L.P.
David S. Frampton and Gaja Roberta Frampton, as Trustees of the Frampton Family Trust Dtd 4/25/03
Dwayne Hardy
Edward R. LeMoure
Erick Vanderburg
Erik T. Engelson, Trustee of the Elisabeth North Kuechler Engelson Trust UTA dated January 17, 2001
Erik T. Engelson, Trustee of the Erik T. Engelson Trust UTD dated March 29, 2000
EuclidSR Biotechnology Partners, L.P.
EuclidSR Partners, L.P.
Ferguson/Egan Family Trust Dated 6/28/99
Fidelity Contrafund: Fidelity Advisor New Insights Fund
Fidelity Contrafund: Fidelity Contrafund
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Frances H. Arnold
Fred St. Goar
Fredrick Stern
Gary R. Bang
GE Capital Equity Investments, Inc.
General Electric Capital Corporation
George S. Taylor
Glaxo Group Limited
Health Care Administration Company
Heath Lukatch
Henry P. Massey, Jr. TTEE Massey Family Trust U/A DTD 7/06/88
Herbert L. Heyneker
Howard R. Engelson
Howard R. Engelson and Mariam T. Engelson, Ttees Engelson Fam Tr UA DTD 5/26/94
In-Q-Tel Employee Fund, LLC
In-Q-Tel, Inc.
Interwest Investors VII, L.P.
Interwest Partners VII, L.P.
Invus, L.P.
J.F. Shea Co., Inc. As Nominee 1999-114
Jacaranda Partners
James H. Eberwine
James W. Larrick, M.D.
John E. Strobeck, Ph.D., M.D.
John East
John M. Harland
Jonathan S. Hoot and Andrea T. Hoot, Trustees of the Hoot Family Revocable Trust DTD 3/16/99
Joseph M. Jacobson
Kenneth A. Clark
Kiley Revocable Trust
Kristin T. McClanahan Trust
Leerink Swann Co-Investment Fund, LLC
Leerink Swann Holdings, LLC
Lehman Brothers Healthcare Venture Capital L.P.
Lehman Brothers Offshore Partnership Account 2000/2001, L.P.
Lehman Brothers P.A. LLC
Lehman Brothers Partnership Account 2000/2001, L.P.
Leo J. Parry, Jr. and Roberta J. Parry TTEES Parry Family Revocable Trust DTD 01/22/97
Lighthouse Capital Partners V, L.P.
Lilly Bio Ventures, Eli Lilly and Company
Markwell Partners
Matthew Collier
Matthew Frank
Michael H. McKay
Michael J. Reardon Trust Agreement dated June 5, 1996
Needle & Rosenberg PC
Newman Family Investment Partnership
Oculus Pharmaceuticals, Inc.
Pamela East
Pat and Betsy Collins Revocable Trust
Patrick Tenney
Paul Machle
Pauline van Ysendoorn
Peter B. Dervan
Peter S. Heinecke
Rhett E. Brown
Robert D. McCulloch and Kathleen M. McCulloch, Trustee, or their successor(s)
Robert F. Kornegay, Jr. Revocable Trust u/d/t dated May 27, 2004, Robert F. Kornegay, Jr., Trustee
Security Trust Co., Custodian FBO Frank Ruderman IRA/RO
SightLine Healthcare Fund III, L.P.
Singapore Bio-Innovations Pte Ltd.
SMALLCAP World Fund, Inc.
SmithKline Beecham Corporation
Stanley D. Hayden, and his successor(s), as the Trustee of the Stanley D. Hayden Family Trust
Stephen J. Weiss
Stephen J. Weiss and Ursula G. Weiss, Trustees of the Weiss Family 1996 Trust
Stephen L. Parry
Technogen Liquidating Trust
The Condon Family Trust
The Heckmann Family Trust
The UAB Research Foundation
The V Foundation for Cancer Research
Thomas J. Parry
Thomas L. Barton
Tim L. Traff Trust
Timothy P. Lynch
TTC Fund I, LLC
Variable Insurance Products Fund II: Contrafund Portfolio
Versant Affiliates Fund 1-A, L.P.
Versant Affiliates Fund 1-B, L.P.
Versant Side Fund I, L.P.
Versant Venture Capital I, L.P.
Wasatch Funds, Inc.
William L. Caton III, M.D.
William L. Traff Trust
William S. Brown and Barbara G. Brown, or their successors, as Trustees of the Brown FRT DTD
3/10/99
WS Investment Company 2000B
WS Investment Company 99B
WS Investment Company, LLC (2001D)
EXHIBIT
E
FORM
OF LEGAL OPINION
June , 2006
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
Ladies and Gentlemen:
Reference is made to the Series E Preferred Stock Purchase Agreement dated as of June , 2006
(the Agreement) by and among Fluidigm Corporation, a California corporation (the Company), and
the persons and entities listed in Exhibit A to the Agreement (the Investors), which provides for
the issuance by the Company to the Investors of shares of Series E Preferred Stock of the Company
(the Shares). This opinion is rendered to the Investors in the Initial Closing pursuant to
Section 4.5 of the Agreement, and all terms used herein have the meanings defined for them in the
Agreement unless otherwise defined herein. Reference in this opinion to the Agreement excludes any
schedule or substantive agreement attached as an exhibit to the Agreement, unless otherwise
indicated herein.
We have acted as counsel for the Company in connection with the negotiation of the Agreement
and the Investor Rights Agreement (collectively, the Transaction Documents) and the issuance of
the Shares. As such counsel, we have made such legal and factual examinations and inquiries as we
have deemed advisable or necessary for the purpose of rendering this opinion. In addition, we have
examined originals or copies of such corporate records of the Company, certificates of public
officials and such other documents which we consider necessary or advisable for the purpose of
rendering this opinion. In such examination we have assumed the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted to us as
originals, the conformity to original documents of all copies submitted to us and the due execution
and delivery of all documents (except as to due execution and delivery by the Company) where due
execution and delivery are a prerequisite to the effectiveness thereof.
As used in this opinion, the expression to our knowledge, known to us or similar language
with reference to matters of fact refers to the current actual knowledge of attorneys of this firm
who have worked on matters for the Company in connection with the Agreement and the transactions
contemplated thereby. Except to the extent expressly set forth herein or as we otherwise believe
to be necessary to our opinion, we have not undertaken any independent investigation to determine
the existence or absence of any fact, and no inference as to our knowledge of the existence or
absence of any fact should be drawn from our representation of the Company or the rendering of the
opinion set forth below.
AllianceBernstein L.P.
Dated as of June , 2006
Page 2
For purposes of this opinion, we are assuming that each Investor has all requisite power and
authority, and has taken any and all necessary corporate or partnership action, to execute and
deliver the Transaction Documents and to effect any and all transactions related to or contemplated
thereby. In addition, we are assuming that the Investors have purchased the Shares for value, in
good faith and without notice of any adverse claims within the meaning of the California Uniform
Commercial Code.
We are members of the Bar of the State of California and we express no opinion as to any
matter relating to the laws of any jurisdiction other than the federal laws of the United States of
America and the laws of the State of California.
In rendering the opinion in paragraph 6 below, we note that we have not conducted a docket
search in any jurisdiction with respect to litigation that may be pending against the Company or
any of its officers or directors. We further note the disclosure under Section 2.10 of the
Schedule of Exceptions to the Agreement. Please be advised that we have not represented the
Company with respect to the matters disclosed in Section 2.10 of the Schedule of Exceptions and
express no opinion with respect to any matter discussed therein.
The opinions hereinafter expressed are subject to the following additional qualifications:
(a) We express no opinion as to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar federal or state laws affecting the rights of
creditors.
(b) We express no opinion as to the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies (regardless of whether any such remedy
is considered in a proceeding at law or in equity).
(c) This opinion is qualified by the limitations imposed by statutes and principles of law and
equity that provide that certain covenants and provisions of agreements are unenforceable where
such covenants or provisions are unconscionable or contrary to public policy or where enforcement
of such covenants or provisions under the circumstances would violate the enforcing partys implied
covenant of good faith and fair dealing.
(d) Our opinion in the first sentence of paragraph 1 below is based solely on the certificates
of public officials and filing officers as to the corporate and tax good standing of the Company in
the State of California.
(e) Our opinions set forth in paragraph 3 below relating to the outstanding capital stock of the
Company and outstanding options, warrants or similar rights to acquire shares of the Companys
capital stock are based solely on (i) our review of a report from eProsper, Inc., the
AllianceBernstein L.P.
Dated as of June , 2006
Page 3
Companys transfer agent, detailing the holders of securities of the Company and the number
and type of securities held by such holders (the Transfer Agent Report) and (ii) a certificate
delivered to us by the Company regarding factual matters underlying the opinions set forth herein.
Our opinion in paragraph 3 below that the issued and outstanding shares of Common Stock and
Preferred Stock of the Company are fully paid and non-assessable is based solely on a certificate
of an officer of the Company that the Company received, in payment for such shares, the full
consideration required by the resolutions of the Board of Directors of the Company authorizing the
issuance of such shares.
(f) For purposes of our opinions in paragraph 2 and paragraph 4 below, we have assumed that
the Transfer Agent Report is accurate and complete in all respects.
(g) We express no opinion as to compliance with the anti-fraud provisions of applicable
securities laws.
(h) We express no opinion as to the enforceability of any indemnification or contribution
provision, including, without limitation, the indemnification and contribution provisions of the
Investor Rights Agreement and the indemnification provision in the Agreement, to the extent the
provisions thereof may be subject to limitations of public policy and the effect of applicable
statutes and judicial decisions.
(i) We express no opinion as to the enforceability of choice of law provisions, waivers of
jury trial or provisions relating to venue or jurisdiction.
(j) We have made no inquiry into, and express no opinion with respect to, any federal or state
statute, rule, or regulation relating to any tax, antitrust, land use, safety, environmental,
hazardous material, patent, copyright, trademark or trade name matter, as to the statutes,
regulations, treaties or common laws of any other nation (other than the United States), state or
jurisdiction (other than the State of California), or the effect on the transactions contemplated
in the Transaction Documents of noncompliance under any such statues, regulations, treaties, or
common laws. Without limiting the foregoing, we express no opinion as to the effect of, or
compliance with, the Investment Advisors Act of 1940, as amended, or the Employee Retirement Income
Security Act of 1974, as amended. We further disclaim any opinion as to any statute, rule,
regulation, ordinance, order, or other promulgation of any regional or local governmental body or
as to any related judicial or administrative opinion.
(k) Our opinions relate solely to the express written provisions of the Transaction Documents,
and we express no opinion as to any other oral or written agreements or understandings between the
Company or any of the Investors.
AllianceBernstein L.P.
Dated as of June , 2006
Page 4
Based upon and subject to the foregoing, and except as set forth in the Schedule of Exceptions
to the Agreement, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly existing under, and by virtue
of, the laws of the State of California and is in good standing under such laws. The Company has
requisite corporate power to own and operate its properties and assets, and to carry on its
business as presently conducted.
2. The Company has all requisite legal and corporate power to execute and deliver the
Transaction Documents, to sell and issue the Shares under the Agreement, to issue the Common Stock
issuable upon conversion of the Shares and to carry out and perform its obligations under the terms
of the Transaction Documents.
3. The authorized capital stock of the Company consists of 77,857,144 shares of Common Stock,
9,274,356 shares of which are issued and outstanding, and 51,687,948 shares of Preferred Stock,
2,727,273 of which are designated Series A Preferred Stock, 2,727,273 shares of which are issued
and outstanding, 6,460,675 of which are designated Series B Preferred Stock, 6,460,675 shares of
which are issued and outstanding, 17,000,000 of which are designated Series C Preferred Stock,
16,364,832 shares of which are issued and outstanding, 15,500,000 shares of Series D Preferred
Stock, 11,714,048 of which are issued and outstanding, and 10,000,000 shares of Series E Preferred
Stock, none of which has been issued or outstanding immediately prior to the Initial Closing. All
such issued and outstanding shares of Common Stock and Preferred Stock have been duly authorized
and validly issued and are fully paid and nonassessable. The Company has reserved:
(i) 5,000,000 shares of Series E Preferred Stock for issuance pursuant to the Agreement and
5,000,000 shares of Common Stock for issuance upon conversion of such shares of Series E Preferred
Stock; (ii) 11,714,048 shares of Common Stock for issuance upon conversion of the Series D
Preferred Stock, (iii) 916,335 shares of Series D Preferred Stock for issuance upon exercise of
outstanding warrants and 916,335 shares of Common Stock for issuance upon conversion of such Series
D Preferred Stock; (iv) 16,364,832 shares of Common Stock for issuance upon conversion of the
Series C Preferred Stock; (v) 294,868 shares of Series C Preferred Stock for issuance upon exercise
of outstanding warrants and 294,868 shares of Common Stock for issuance upon conversion of such
Series C Preferred Stock; (vi) 6,460,675 shares of Common Stock for issuance upon
conversion of the Series B Preferred Stock; (vii) 2,727,273 shares of Common Stock for
issuance upon conversion of the Series A Preferred Stock; and (viii) an aggregate of 10,800,000
shares of Common Stock for issuance to employees and consultants of the Company pursuant to the
Companys 1999 Stock Option Plan (the Option Plan), pursuant to which options to purchase
5,597,763 shares are granted and outstanding and 1,554,643 shares are available for future grant.
The Common Stock issuable upon conversion of the Shares has been duly authorized and duly and
validly reserved, and when issued in accordance with the Companys Articles of Incorporation, will
AllianceBernstein L.P.
Dated as of June , 2006
Page 5
be validly issued, fully paid and nonassessable. The Shares issued under the
Agreement are duly authorized, validly issued, fully paid and nonassessable and are free of any
liens, encumbrances and preemptive or similar rights contained in the Articles of Incorporation or
Bylaws of the Company, or, to our knowledge, in any written agreement to which the Company is a
party, except as specifically provided in the Agreement (including its Exhibits) and except for
liens or encumbrances created by or imposed upon the Investors; provided, however, that
the Shares (and the Common Stock issuable upon conversion thereof) are subject to restrictions on
transfer under applicable state and federal securities laws. To our knowledge, except for rights
described above, in the Transaction Documents (including the Schedule of Exceptions to the
Agreement) or in the Articles of Incorporation of the Company, as of the date of the Agreement,
there are no other options, warrants, conversion privileges or other rights in writing presently
outstanding to purchase or otherwise acquire any authorized but unissued shares of capital stock or
other securities of the Company, or any other written agreements of the Company to issue any such
securities or rights; provided, however, we note the Companys intent to comply
with Section 3 of the Investor Rights Agreement following the Initial Closing.
4. All corporate action on the part of the Company, its directors and shareholders necessary
for the authorization, execution and delivery of the Transaction Documents by the Company, the
authorization, sale, issuance and delivery of the Shares (and the Common Stock issuable upon
conversion thereof) and the performance by the Company of its obligations under the Transaction
Documents (other than those registration obligations contained in Section 1 of the Investor Rights
Agreement) has been taken. The Transaction Documents have been duly and validly executed and
delivered by the Company and constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with their terms.
5. The execution and delivery by the Company of the Transaction Documents, the performance by
the Company of its obligations under the Transaction Documents, and the issuance of the Shares (and
the Common Stock issuable upon conversion thereof) do not violate any provision of the Articles of
Incorporation or Bylaws, or any provision of any applicable federal or state law, rule or
regulation known to us to be customarily applicable to transactions of this nature. The execution
and delivery by the Company of the Transaction Documents, the performance by the Company of its
obligations under the Transaction Documents, and the issuance of the Shares (and the Common Stock
issuable upon conversion thereof) do not violate any judgment or decree known to us that is binding
upon the Company.
6. Except as identified in the Agreement (including the Schedule of Exceptions), to our
knowledge, there are no actions, suits, proceedings or investigations pending against the Company
or its properties before any court or governmental agency nor, to our knowledge, has the Company
received any written threat thereof.
AllianceBernstein L.P.
Dated as of June , 2006
Page 6
7. No consent, approval or authorization of or designation, declaration or filing with any
governmental authority on the part of the Company is required in connection with the valid
execution and delivery of the Transaction Documents, or the offer, sale or issuance of the Shares
(and the Common Stock issuable upon conversion thereof) or the consummation by the Company of any
other transaction contemplated by the Transaction Documents, except (a) the filing of the Amended
and Restated Articles of Incorporation in the Office of the Secretary of State of the State of
California, and (b) subject to the accuracy of the representations and warranties of the Investors
in Section 3 of the Agreement, (i) the filing after the Closing of a Form D pursuant to Regulation
D, promulgated by the United States Securities and Exchange Commission (the SEC) under the
Securities Act of 1933, as amended (the Securities Act), with the SEC, and (ii) the post-Closing
qualification (or the taking of such action post-Closing as may be necessary to secure an exemption
from qualification) under applicable state securities laws of the offer and sale of the Shares (and
the Common Stock issuable upon conversion thereof). The filing referred to in clause (a) above has
been accomplished and is effective. Our opinion herein is otherwise subject to the timely and
proper completion of all filings and other actions contemplated herein where such filings and
actions are to be undertaken on or after the date hereof.
8. Subject to the accuracy of the Investors representations in Section 3 of the Agreement,
the offer, sale and issuance of the Shares (and the Common Stock issuable upon
conversion thereof) in conformity with the terms of the Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act.
This opinion is furnished to the Investors solely for their benefit in connection with the
purchase of the Shares, and may not be relied upon by any other person or for any other purpose
without our prior written consent. We assume no obligation to inform you of any facts,
circumstances, events or changes in the law that may arise or be brought to our attention after the
date of this opinion that may alter, affect or modify the opinions expressed herein.
exv4w4
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 4.4
Loan
and Security Agreements
This
Loan and Security Agreement No. 4561 (this Agreement) is entered into as of March
29, 2005, by and between
Lighthouse Capital
Partners V, L.P. (Lender) and
Fluidigm
Corporation, a California corporation (Borrower or sometimes referred to herein as Debtor)
and sets forth the terms and conditions upon which Lender will lend and Borrower will repay money.
In consideration of the mutual covenants herein contained, the parties agree as follows:
1. Definitions and Construction
1.1 Definitions. Initially capitalized terms used and not otherwise defined herein are
defined in the California Uniform Commercial Code (UCC).
ACH means the Automated Clearing House electronic funds transfer system.
Advance means a Loan advanced by Lender to Borrower hereunder.
Basic Rate means a variable per annum rate of interest equal to the Index plus the Interest
Margin which shall be subject to adjustment as provided in the Loan Agreement and/or the Note. On
and after the Loan Commencement Date the Basic Rate shall be fixed and not subject to any further
adjustments.
Borrowers Books means all of Borrowers books and records, including records concerning
Collateral, Borrowers assets, liabilities, business operations or financial condition, on any
media, and the equipment containing such information.
Change
of Management or Board Composition means that (i) Borrowers senior management shall not
include Gajus Worthington; (ii) Versant Ventures shall cease to have a representative (currently
Samuel Colella) serving on Borrowers Board of Directors; or(iii) Lehman Brothers shall cease to
have a representative (currently Hingge Hsu) serving on Borrowers Board of Directors;.
Collateral means: (i) all property listed on Exhibit A attached hereto; and (ii) all products
and proceeds of the foregoing, including proceeds of insurance and proceeds of proceeds, provided
that, notwithstanding anything to the contrary contained in this Agreement, the term Collateral
shall not include (a) any property that is subject to a Lien that is otherwise permitted pursuant
to subsection (v) of the definition of Permitted Liens and Lender agrees to execute any
instruments or documents necessary to evidence the intent of the foregoing; (b) more than 65% of
the issued and outstanding voting securities of any Subsidiary of Borrower that is not
incorporated or organized in the United States; or (c) any of the Companys Intellectual Property
(as defined below).
Commitment means
$13,000,000.
Commitment Fee means $10,000.
Commitment Termination Date means the earliest to occur of (i) the earlier to occur of (a) June
1, 2005, if Borrower has not borrowed at least $2,000,000 by such date; (b) September 1, 2005, if
Borrower has not borrowed an additional $3,000,000 by such date or (c) December 1, 2005; (ii) any
Default or Event of Default that has not been cured by Borrower or waived in writing by Lender, or
(iii) Change of Management or Board Composition (unless Lender has waived this condition in
writing).
Control Agreement means an agreement substantially in the form of Exhibit I or otherwise
reasonably acceptable to Lender.
Default means any event that with the passing of time or the
giving of notice or both would become an Event of Default.
Default Rate means the lesser of
5% per annum above the otherwise applicable rate or the highest rate permitted by applicable
law.
Disclosure Schedule means the Disclosure Schedule, dated as of the date hereof, and delivered to
Lender in connection with the execution and delivery of this Agreement.
Event of Default is defined in Section 8.
Funding Date means any date on which an Advance is made to or on account of Borrower hereunder.
Indebtedness means (i) all indebtedness for borrowed money or the deferred purchase of property
or services, (ii) all obligations evidenced by notes, bonds, debentures or similar instruments,
(iii) all capital lease obligations, and (iv) all contingent obligations, consisting of guaranties
of Indebtedness of other persons and obligations of reimbursement with respect to letters of
credit.
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Incumbency Certificate means the document in the form of Exhibit E.
Index means the prevailing variable Prime Rate of annual interest as quoted from time to time in
the western edition of the Wall Street Journal.
Intellectual Property means, collectively, all rights, priorities and privileges of the Borrower
relating to intellectual property, in any medium, of any kind or nature whatsoever, now or
hereafter owned or acquired or received by Borrower, or in which Borrower now holds or hereafter
acquires or receives any right or interest, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, any and all property of the Borrower
that is subject to, listed in or otherwise described in the Negative Pledge Agreement dated March
29, 2005 between Borrower and Lender, and shall include, in any event, all copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses, trade secrets, internet domain
names (including any right related to the registration thereof), proprietary or confidential
information, mask works, sources object or other programming codes, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge, know-how,
software, data base, data, skill, expertise, recipe, experience, process, models, drawings,
materials or records. Notwithstanding the foregoing, Intellectual Property as defined above does
not include proceeds or other revenue consisting of accounts, accounts receivable, royalties,
licensing fees, or payment intangibles, obtained or owed from or on account of the licensing or
other exploitation or disposition of Intellectual Property, and all of which are included as
Collateral in the security interest granted by Borrower to Lender.
Interest Margin means 2.5% per annum.
Lenders Expenses means all reasonable costs or expenses (including reasonable attorneys fees
and expenses) incurred in connection with the preparation, negotiation, modification,
administration, or enforcement of the Loan or Loan Documents, or the exercise or preservation of
any rights or remedies by Lender, whether or not suit is brought. Lender will apply deposits
(including the Commitment Fee) received by Lender, if any, towards Lenders Expenses.
Lien means any lien, security interest, pledge, bailment, lease, mortgage, hypothecation,
conditional sales and title retention agreement, charge, claim, or other encumbrance.
Liquidation Event means any of: (i) a merger of Borrower with another entity, other than a
merger whereby the shareholders of Borrower immediately prior to such merger own at least 50% of
the outstanding voting securities of Borrower immediately after such merger; (ii) the sale (in one
or a series of related transactions) of all or substantially all of Borrowers assets; or (iii)
any transaction (or series of related transactions) whereby the shareholders of Borrower
immediately prior to such transaction(s) own less than 50% of the outstanding voting securities of
Borrower immediately after such transaction(s).
Loan means all of the Advances, however evidenced, and all other amounts due or to
become due hereunder.
Loan
Commencement Date means March 1, 2006.
Loan Documents means, collectively, this Agreement, the Warrant, the Notes, the Financing
Statement and Security Agreement in the form attached as Exhibit A and all other documents,
instruments and agreements entered into between Borrower and Lender in connection with the Loan,
all as amended or extended from time to time.
Negative Pledge Agreement means an agreement, dated as of the date hereof, in the form of Exhibit
H.
Note means each Secured Promissory Note in the form of Exhibit B, delivered in connection with
each Advance.
Notice
of Borrowing means the form attached as Exhibit D.
Obligations means all Loans, debt, principal, interest, fees, charges, Lenders Expenses and
other amounts, obligations, covenants, and duties owing by Borrower to Lender of any kind or
description (whether pursuant to the Loan Documents or otherwise (with the exception of the
Warrant), and whether or not for the payment of money), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and including any of the same
obtained by Lender by assignment or otherwise, and all amounts Borrower is required to pay or
reimburse by the Loan Documents, by law, or otherwise.
Permitted Indebtedness means: (i) the Loan; (ii) unsecured trade debt incurred in the ordinary
course of Borrowers business; (iii) Indebtedness secured by clause (ii) and (v) of Permitted
Liens; (iv) Subordinated Indebtedness; (v) Indebtedness existing as of the date hereof and listed
on the Disclosure Schedule; (vi) Indebtedness arising from the endorsement of negotiable
instruments for deposits or
collections or similar transactions in the ordinary course of business; (vii) other Indebtedness
consisting of letters of credit and
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reimbursement obligations in an amount not to exceed $250,000; (viii) Indebtedness of (A) Borrower
to any Subsidiary that is unsecured, (B) one Subsidiary to another Subsidiary, or (C) any
Subsidiary to Borrower in an amount not to exceed $4,500,000 in the aggregate; (ix) other
Indebtedness in an outstanding principal amount not to exceed $150,000 in the aggregate; and (x)
Indebtedness incurred in connection with the extension, renewal or refinancing of any Indebtedness
of the type described in clauses (i) through (ix) above, provided that the principal amount of such
Indebtedness does not increase other than any reasonable premium in connection therewith.
Notwithstanding the foregoing, the restrictions on Indebtedness for Subordinated Indebtedness and
referenced in clause (v) of the definition of Permitted Liens shall cease at the effective date of
a public offering of Borrowers capital stock which results in proceeds of at least $25,000,000.
Permitted Liens means: (i) Liens in favor of Lender; (ii) Liens disclosed in the Disclosure
Schedule; (iii) Liens for taxes, fees, assessments or other governmental charges or levies not
delinquent or being contested in good faith by appropriate proceedings, that do not jeopardize
Lenders interest in any Collateral; (iv) Liens to secure payment of workers compensation,
employment insurance, old age pensions or other social security obligations of Borrower on which
Borrower is current and are in the ordinary course of its business; provided none of the same
diminish or impair Lenders rights and remedies respecting the Collateral; and (v) Liens upon or
in any equipment (including any accessions, attachments, replacements, improvements or proceeds
thereto) acquired or held by Borrower to secure the purchase price of such equipment or
Indebtedness incurred solely for the purposes of financing such equipment, provided that the
aggregate outstanding principal amount of all such financing shall not exceed $5,000,000, (vi)
license or sublicenses of Intellectual Property granted in the ordinary course of business; (vii)
bankers Liens, rights of setoff and similar Liens incurred on deposit and securities accounts in
the ordinary course of business; (viii) Liens arising from judgments in circumstances not
constituting and Event of Default; (ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of customs duties in connections with the importation of
goods; (x) Liens on insurance proceeds in favor of insurance companies granted solely as security
for financed premiums; (xi) carriers, warehousemens, mechanics, landlords, materialmens,
repairmens or other similar Liens arising in the ordinary course of business which are not
delinquent or remain payable without penalty or which are being contested in good faith and by
appropriate proceedings; (xii) Liens with respect to cash collateral to secure Indebtedness
otherwise permitted pursuant to clause (vii) of the definition of Permitted Indebtedness; and
(xiii) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness
secured by Liens of the type described in clauses (i) through (xi) above, provided that any
extension, renewal, or replacement Lien shall be limited to the collateral securing the existing
Lien and the principal amount of such Indebtedness does not increase other than any reasonable
premium in connection therewith.
Regulated Substance means any substance, material or waste the use, generation, handling,
storage, treatment or disposal of which is regulated by any local or state government authority,
including any of the same designated by any authority as hazardous, genetic, cloning, fetal, or
embryonic.
Responsible Officer means each person as authorized by the board of directors of Borrower as set
forth on the Incumbency Certificate.
Subordinated Indebtedness means Indebtedness of Borrower to Singapore EDB and Invus Group that
is subordinated in both security and right of payment to the Obligations on terms and conditions
reasonably satisfactory to Lender in an amount not to exceed $6,000,000.
Subsidiary shall mean any entity of which a majority of the outstanding equity interests
entitled to vote for the election of directors is owned by Borrower.
Term means the period from and after the date hereof until the full, final and indefeasible
payment and performance of all Obligations.
Warrant means the Warrant, dated as of the date hereof, in favor of Lender and its affiliates to
purchase securities of Borrower substantially in the form of Exhibit C.
1.2 Interpretation. References to Articles, Sections, Exhibits, and Schedules are to
articles, sections, exhibits and schedules herein and hereto unless otherwise indicated. Hereof,
herein and hereunder refer to this Agreement as a whole. Including is not limiting. All
accounting and financial computations shall be computed in accordance with generally accepted
accounting principles consistently applied (GAAP). Or is not necessarily exclusive. All
interest computation interest shall be based on a 360-day year and actual days elapsed.
2. The Loans
2.1
Commitment. Subject to the terms hereof, Lender will make Advances to Borrower up to the principal amount of the Commitment,
before the Commitment Termination Date. Notwithstanding anything in the Loan Documents to the contrary, Lenders obligation to make any Advances or to lend the undisbursed portion of the Commitment shall terminate on the Commitment Termination Date. Repaid principal of the Advances may not be re-borrowed.
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2.2 The Advances. A Note setting forth the specific terms of repayment will evidence each
Advance. No Advance will be made for
less than $1,000,000, unless less than $1,000,000 remains available under the Commitment for
borrowing. Absence of a Note evidencing
any portion of the Loan shall not impair Borrowers obligation to repay it to Lender.
2.3
Terms of Payment, Repayment.
(a) Repayment. Borrower shall repay the principal and pay interest on each Advance on the
terms set forth in the applicable Note. Amounts not paid when due hereunder or under the Note shall bear interest
at the Default Rate. If a court of competent jurisdiction determines that Lender has received payments that, if interest, would
exceed the maximum lawfully permitted, Lender will instead apply such money to fees and expenses and then to early prepayment of
principal (provided that notwithstanding anything contained in any Loan Document, any such prepayment shall not trigger any
Prepayment Fees).
(b) ACH. All payments due to Lender must be, at Lenders option, paid to Lender in cash or
through ACH. Borrower
shall execute and deliver the ACH Authorization Form substantially in the form of Exhibit G.
Lender shall provide Borrower an
invoice for any Obligations that are to be transferred by ACH at least 10 days in advance of
the date of any ACH funds transfer with
respect to Obligations which have become due and payable and are to be transferred by ACH.
If the ACH payment arrangement is
terminated for any reason, Borrower shall make all payments due to Lender at Lenders
address specified in Section 11.
(c) Default Rate. While an Event of Default has occurred and is continuing, interest on the
Loan shall be increased to
the Default Rate. Lenders failure to charge or accrue interest at the Default Rate during
the existence of a Default shall not be deemed
a waiver by Lender of its right or claim thereto.
(d) Date. Whenever any payment due under the Loan Documents is due on a day other than a
business day, such
payment shall be made on the next succeeding business day, and such extension of time shall
be included in the computation of interest or fees, as the case may be.
2.4 Fees. Borrower shall pay to Lender the following:
(a) Commitment Fee. The Commitment Fee, which has been previously paid by Borrower,
and shall be applied by Lender to Lenders Expenses and other Obligations;
(b) Late Fee. On demand, a late charge on any sums due hereunder that are not paid when due,
in an amount equal to 2%
of the past due amount, payable on demand.
(c) Lenders Expenses. The payment of all Lenders Expenses, which may become due to Lender
by Borrower
hereunder shall be payable by Borrower as set forth in Section 2.3(b). Lenders Expenses not
paid when due shall bear interest as
principal at the Default Rate.
3. Conditions of Advances; Procedure for Requesting Advances
3.1 Conditions Precedent to any and all Advances. The obligation of Lender to make any Advances is
subject to each and
every of the following conditions precedent in form and substance satisfactory to Lender in its
sole discretion: (i) this Agreement, a
Note evidencing the Advance, the Warrant, and all other UCC financing statements, and other
documents required or as specified herein
have been duly authorized, executed and delivered; (ii) no Default or Event of Default has
occurred and is continuing; (iii) delivery of a
Notice of Borrowing with respect to the proposed Advance; (iv) Lenders security interests in the
Collateral are valid and first priority,
except for Permitted Liens; and (v) all such other items as Lender may reasonably deem necessary
or appropriate have been delivered or
satisfied. The extension of an Advance prior to the receipt by Lender of any of the foregoing
shall not constitute a waiver by Lender of
Borrowers obligation to deliver such item.
3.2 Procedure for Making Advances. For any Advance, Borrower shall provide Lender an irrevocable
Notice of Borrowing at
least 7 business days prior to the desired Funding Date and Lender shall only be required to make
Advances hereunder based upon
written requests which comply with the terms and exhibits of this Loan Agreement (as the same may
be amended from time to time),
and which are submitted and signed by a Responsible Officer. Borrower shall execute and deliver to
Lender a Note and such other
documents and instruments as Lender may reasonably require for each Advance made.
4. Creation of Security Interest
4.1
Grant of Security Interest. Borrower grants to Lender a valid, first priority,
continuing security interest in all present and future Collateral in order to secure prompt,
full, faithful and timely payment and performance of all Obligations.
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4.2 Inspections. Lender shall have the right upon reasonable prior notice to inspect Borrowers
Books, including computer files,
and to make copies, and to test, inspect and appraise the Collateral, in order to verify any matter
relating to Borrower or the Collateral.
4.3 Authorization to File Financing Statements. Borrower irrevocably authorizes Lender at any time
and from time to time to
file in any jurisdiction any financing statements and amendments that: (i) name Collateral as
collateral thereunder, regardless of
whether any particular Collateral falls within the scope of the UCC; (ii) contain any other
information required by the UCC for
sufficiency or filing office acceptance, including organization identification numbers; and (iii)
contain such language as Lender
determines helpful in protecting or preserving rights against third parties. Borrower ratifies any
such filings made prior to the date
hereof.
5. Representations and Warranties
Except as set forth on the Disclosure Schedule, Borrower represents and warrants as follows:
5.1 Due Organization and Qualification. Borrower is a corporation duly formed, existing and in good
standing under the laws
of its state of incorporation and qualified and licensed to do business in, and is in good standing
in, any state in which the conduct of its
business or its ownership of property requires that it be so qualified or in which the Collateral
is located, except to the extent that such
non-compliance would not reasonably be expected to result in an adverse effect on Borrowers
business.
5.2 Authority. Borrower has all corporate power and authority, and has taken all actions, and has
obtained all third party
consents necessary to execute, deliver, and perform the Loan Documents.
5.3 Disclosure Schedule. All information on the Disclosure Schedule is true, correct and complete.
5.4 Authorization; Enforceability. The execution and delivery hereof, the granting of the security
interest in the Collateral, the
incurring of the Obligations, the execution and delivery of all Loan Documents and the consummation
of the transactions herein and
therein contemplated have been duly authorized by all necessary action by Borrower. The Loan
Documents constitute legal, valid and
binding obligations of Borrower, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy or
similar laws relating to enforcement of creditors rights generally.
5.5 Name and Location. Borrower has not done business under any name other than that specified on
the signature page hereof.
The chief executive office, principal place of business, and the place where Borrower maintains its
records concerning the Collateral
is set forth in Section 11. The Collateral is presently located at the address(es) set forth in
Section 11 and on the Disclosure Schedule
or any other location that Borrower has provided Lender with written notice thereof.
5.6 Litigation. All actions or proceedings pending by or against Borrower that could reasonably
be expected to result in a
material adverse effect on Borrowers business before any court or administrative agency are set
forth on the Disclosure Schedule.
5.7 Financial Statements. All financial statements delivered by Borrower to Lender present fairly
in all material respects
Borrowers financial condition for the periods indicated. All statements respecting Collateral that
have been or may hereafter be
delivered by Borrower to Lender are true, complete and correct in all material respects for the periods indicated.
5.8 Solvency. Borrower is solvent and able to pay its debts (including trade debts) as they come due.
5.9 Taxes. Borrower has filed and will file all required tax returns, and has paid and will pay all
taxes it owes other than where
the failure to comply would not reasonably be expected to have a material adverse effect on
Borrower.
5.10 Rights; Title to Assets. To Borrowers knowledge, Borrower possesses, owns, or has the right
to use all necessary assets,
rights, trademarks, trade names, copyrights, patents, patent rights, franchises and licenses which
are required to conduct of its business
as now operated, except where the failure to possess or own could not reasonably be expected to
have a material adverse effect on
Borrowers business. Borrower has good title to its assets, free and clear of any Liens, except for
Permitted Liens.
5.11 Full Disclosure. No written representation, warranty or other statement made by Borrower in
any Loan Document, certificate
or statement furnished to Lender contains any untrue statement of a material fact or omits to state
a material fact necessary in order to
make the statements contained in such certificates or statements not misleading (it being
recognized by Lender that projections and
estimates as to future events are not to be viewed as facts and the actual results during the
period or periods covered by any such
projections and estimates may differ from projected or estimated results).
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5.12 Regulated Substances. Borrower complies and will comply with all laws respecting Regulated
Substances, except where the
failure to comply could not reasonably be expected to have an adverse effect on Borrowers
business.
5.13
Reaffirmation. Each Notice of Borrowing will constitute (i) a warranty and representation in
favor of Lender that there does
not exist any Default and (ii) subject to any amended Disclosure Schedule delivered to Lender or
any other written disclosure required
to be sent to Lender pursuant to the terms hereof, a reaffirmation as of the date thereof of all of
the representations and warranties
contained in this Agreement and the Loan Documents.
6. Affirmative Covenants
So long as any Obligations (other than inchoate indemnity obligations) remain outstanding,
Borrower covenants and agrees that it shall do all of the following:
6.1 Good Standing and Compliance. Borrower shall maintain all governmental licenses, rights and
agreements necessary for its
operations or business and comply in all respects with all statutes, laws, ordinances and
government rules and regulations to which it is
subject except where the failure to comply would not reasonably be expected to result in a material
adverse effect on Borrower.
6.2 Financial Statements, Reports, Certificates. Borrower shall deliver to Lender: (i) as soon as
prepared, and no later than 30
days after the end of each calendar month, a balance sheet, income statement and cash flow
statement covering Borrowers operations
during such period; (ii) as soon as prepared, but no later than 90 days after the end of the fiscal
year, or such other timeframe formally
approved by Borrowers audit committee, audited financial statements prepared in accordance with
GAAP, together with an opinion
that such financial statements fairly present Borrowers financial condition by an independent
public accounting firm reasonably
acceptable to Lender; (iii) immediately upon notice thereof, a report of any legal or
administrative action pending or threatened in
writing against Borrower which is likely to result in liability to Borrower in excess of $100,000
(provided that Borrower shall not be
required to report notices of possibly relevant third party patents, or proposals or demands to
license intellectual property); and
(iv) such other financial information as Lender may reasonably request from time to time. Financial
statements delivered pursuant to
subsections (i) and (ii) above shall be accompanied by a certificate signed by a Responsible
Officer (each an Officers Certificate) in
the form of Exhibit F.
6.3 Notice of Defaults. Upon any Default or Event of Default, an Officers Certificate setting
forth the facts relating to or giving
rise thereto, and the Borrowers proposed action with respect thereto.
6.4
Use; Maintenance. Borrower, at its expense, shall (i) maintain the tangible Collateral in good condition, reasonable wear
and tear excepted, and will comply in all material respects with all laws, rules and regulations
regarding use and operation of the
tangible Collateral and (ii) repair or replace any lost or damaged Collateral except to the extent
that Borrower in its good faith
judgment deems it to be in its best interest not to repair or replace such lost or damaged
Collateral, so long as applied to a purchase or
acquisition useful to Borrowers business.
6.5 Insurance. Borrower, at its own expense, shall maintain insurance in amounts and coverages reasonably satisfactory to
Lender. Each insurance shall: (i) name Lender loss payee or additional insured, as appropriate,
(ii) provide for insurers waiver of its
right of subrogation against Lender and Borrower, (iii) provide that such insurance shall not be
invalidated by any action of, or breach
of warranty by, Borrower and waive set-off, counterclaim or offset against Lender, (iv) be primary
without a right of contribution of
Lenders insurance, if any, or any obligation on the part of Lender to pay premiums of Borrower,
and (v) require the insurer to give
Lender at least 30 days prior written notice of cancellation. Borrower shall furnish all
certificates of insurance required by Lender.
6.6 Loss Proceeds. So long as no Event of Default has occurred and is continuing, any proceeds of
insurance on or
condemnation of Collateral shall, at Borrowers election and so long as Lenders security interest
in such proceeds remains first
priority, be used either to repair or replace such Collateral or otherwise applied to the purchase
or acquisition of property useful to
Borrowers business.
6.7 Further Assurances. At any time and from time to time, Borrower shall execute and deliver such further instruments and
take such further action as Lender may reasonably request to effect the intent and purposes hereof,
to perfect and continue perfected
and of first priority Lenders security interests in the Collateral, and to effect and maintain ACH
payment arrangements.
7. Negative Covenants
So long as any Obligations (other than inchoate indemnity obligations) remain outstanding, Borrower
will not do any of the following:
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7.1 Location of Collateral. Change its chief executive office or principal place of business or
remove, except in the ordinary course of Borrowers business, the Collateral or Borrowers Books
from the premises listed in Section 11 and the Disclosure Schedule (or otherwise provided to Lender
in writing pursuant to this Section 7.1) without giving 30 days prior written notice to Lender.
Borrowers practice of delivering and maintaining inventory at a customers location pending
testing, validation and/or acceptance of such inventory by such customer shall be deemed to be in
the ordinary course of business for purposes of this Agreement.
7.2 Extraordinary Transactions. Enter into any transaction not in the ordinary course of
Borrowers business, including the sale, lease, license or other disposition of its assets, other
than (i) sales of inventory in the ordinary course of
Borrowers business; and (ii) licenses of
intellectual property assets entered into in the ordinary course of business (provided that
licensing arrangements involving universities, governmental agencies, research institutions and
corporate partners shall be deemed in the ordinary course of business). The parties hereto
agree (a) strategic partnerships, strategic collaborations, sponsored research collaborations and
development transactions, (b) transactions otherwise permitted in this Article 7, and (c)
transactions for fair value involving the sale or exclusive licensing of Intellectual Property,
that is outside the scope of Borrowers business in the biotechnology field, that is not being
commercialized or monetized by the Borrower; in each case, shall be deemed to be in the ordinary
course of business for purposes of this Agreement.
7.3 Restructure. Make any material change in Borrowers corporate structure or business other than
the business of the type conducted by Borrower as of the date of this Agreement or any business
reasonably related or incidental thereto; or suspend operation of Borrowers business.
7.4 Liens. Create, incur, assume or suffer to exist any Lien of any kind with respect to any of its
property, whether now owned or hereafter acquired, except for Permitted Liens.
7.5 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, other than Permitted
Indebtedness or cause or suffer any Subsidiary to create, incur, assume or suffer to exist any
Indebtedness, other than Permitted Indebtedness.
7.6 Distributions. Pay any dividends or distributions, or redeem or purchase, any capital stock,
except for (i) repurchases of capital stock from employees, consultants or directors, under
incentive stock option plans, restricted stock purchase agreements, repurchase agreements or other
similar agreements approved by the Borrowers Board of Directors
and (ii) dividends payable solely
in capital stock.
7.7 Transactions with Affiliates. Directly or indirectly enter into any transaction with any
affiliate which is on terms less favorable to Borrower than would be obtained in an arms length
transaction with a non-affiliated entity; provided, any such transaction shall not be a breach of
this Section 7.7 if (i) approved by a disinterested majority of the Borrowers Board of Directors,
or (ii) such transaction involves sales, licensing or other transfers of property between Borrower
and its Subsidiaries, or between Subsidiaries if the consideration for such sale or transfer is not
less than cost (or the fair market value of such property, if lower),
or (iii) such transaction
involves intercompany loans that are otherwise permitted by Section 7.5.
7.8
Compliance. (i) Become regulated as an investment company under the Investment Company Act of
1940 or extend credit to purchase or carry margin stock; (ii) fail to meet the minimum funding
requirements of ERISA; (iii) permit a Reportable Event or Prohibited Transaction, as defined in
ERISA, to occur; (iv) fail to comply with the Federal
Fair Labor Standards Act; or (v) violate any
other material law or material regulation.
7.9 UCC Effectiveness. Change its name, jurisdiction of organization, or take any other action
that could render Lenders financing statements misleading under the Code, without giving Lender 30
days advance written notice.
7.10 Deposit and Securities Accounts. Maintain any deposit accounts or accounts holding securities
owned by Borrower except accounts in which Lender has obtained a perfected first priority security
interest with the exception of (i) account number [***] with Silicon Valley Bank or a
successor account with Wells Fargo Bank securing a letter of credit in favor of Borrowers landlord
in an amount not to exceed $250,000 in principal amount; (ii) account number [***] with
Comerica Bank or a successor account with Wells Fargo Bank securing a letter of credit in favor of
a lender providing equipment financing to Borrower in an amount not to exceed $500,000 in principal
amount; or (iii) account number [***] with Wells Fargo Bank securing a letter of credit in favor
of Borrowers landlord in an amount not to exceed $137,527 in
principal amount; or (iv) any other
accounts at Silicon Valley Bank or Comerica Bank (other than those specified in clause (i) or (ii)
of this Section 7.10, provided that such accounts are closed and such funds are move to deposit or
securities accounts in which Lender has a perfect first priority security interest, on or before
June 30, 2005.
8. Events of Default
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Any one or more of the following shall constitute an Event of Default by Borrower hereunder:
8.1
Payment. Borrower fails to pay when due and payable in accordance with the Loan Documents any
portion of the Obligations, or cancels an ACH payment or transfer Lender has initiated in
conformity with the terms hereof provided, however, that an Event of Default shall not occur on
account of a failure to pay due solely to an administrative or operational error if Borrower had
the funds to make the payment when due and makes the payment the business day following Borrowers
knowledge of such failure to pay.
8.2 Certain Covenant Defaults. Borrower fails to perform any obligation under Section 6.5 or 6.6,
or violates any of the covenants contained in Section 7.
8.3 Other Covenant Defaults. Borrower fails or neglects to perform, keep, or observe any other
term, provision, condition, covenant, or agreement contained in this Agreement, in any of the other
Loan Documents, or in any other present or future agreement between Borrower and Lender and has
failed to cure such failure within 30 days after its occurrence.
8.4 Attachment. Any material portion of Borrowers assets is attached, seized, subjected to a
government levy, lien, writ or distress warrant, or comes into the possession of any trustee or
receiver and the same is not returned, removed, waived, stayed, discharged or rescinded within 15
days.
8.5 Other Agreements. There is a default in any agreement to which Borrower is a party resulting in
a right by a third party, whether or not exercised, to accelerate the maturity of any Indebtedness,
in an amount greater than $ 100,000.
8.6 Judgments. One or more judgments for an aggregate of at least $100,000 is rendered against
Borrower and remains unsatisfied and unstayed for more than 30 days.
8.7 Injunction. Borrower is enjoined, restrained, or in any way prevented by court order from
continuing to conduct any material part of its business affairs, or if a judgment or other claim
becomes a Lien upon any material portion of Borrowers assets.
8.8 Misrepresentation. Any representation, statement, or report made to Lender by Borrower was
false or misleading when made in any material respect.
8.9 Enforceability. Lenders ability to enforce its rights against Borrower or any Collateral is
impaired in any material respect, or Borrower asserts that any Loan Document is not a legal, valid
and binding obligation of Borrower enforceable in accordance with its terms.
8.10 Involuntary Bankruptcy. An involuntary bankruptcy case remains undismissed or unstayed for 60
days or, if earlier, an order granting the relief sought is entered.
8.11 Voluntary Bankruptcy or Insolvency. Borrower commences a voluntary case under applicable
bankruptcy or insolvency law, consents to the entry of an order for relief in an involuntary case
under any such law, or consents or is subject to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian or other similar official of Borrower or any
substantial part of its property, or makes an assignment for the benefit of creditors, or fails
generally or admits in writing to its inability to pay its debts as they become due, or takes any
corporate action in furtherance of any of the foregoing.
8.12 Merger without Assumption. Borrower or all or substantially all of Borrowers assets are
acquired by or merged into any other business entity where more than 50% of Borrowers voting power
is transferred by existing shareholders of Borrower, and such acquirer or resulting entity either:
(i) does not pay off the Obligations at the closing of
the acquisition, merger or sale; or (ii)
does not provide an unconditional, unlimited guaranty of the Obligations in form and substance
satisfactory to Lender and is of a credit quality unacceptable to Lender.
8.13
Liquidation Event. Borrower consummates a Liquidation Event where the acquirer or resulting
entity either: (i) does not pay off the Obligations at the closing of the acquisition, merger or
sale; or (ii) does not provide an unconditional, unlimited guaranty of the Obligations in form and
substance satisfactory to Lender and is of a credit quality unacceptable to Lender.
8.14 General Electric Capital Corporation Indebtedness. The outstanding principal balance of
Borrower owed to General Electric Capital Corporation in connection with any equipment financing
shall be greater than $2,500,000 at any time after December 31, 2006.
9. Lenders Rights and Remedies
8
9.1 Rights and Remedies. Upon the occurrence and continuance of any Event of Default, Lender
may, at its election, without notice of election and without demand, do any one or more of the
following, all of which are authorized by Borrower: (i) accelerate and declare the Loan and all
Obligations immediately due and payable; (ii) make such payments and do such acts as Lender
considers necessary or reasonable to protect its security interest in the Collateral, with such
amounts becoming Obligations bearing interest at the Default Rate;
(iii) exercise any and all other
rights and remedies available under the UCC or otherwise; (iv) require Borrower to assemble the
Collateral at such places as Lender may designate; (v) enter premises where any Collateral is
located, take, maintain possession of, or render unusable the
Collateral or any part of it; (vi)
without notice to Borrower, set off and recoup against any portion of
the Obligations; (vii) ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell
the Collateral, in connection with which Borrower hereby grants Lender a license to use without
charge Borrowers premises, labels, name, trademarks, and other property necessary to complete,
advertise, and sell any Collateral; and (viii) sell the Collateral at one or more public or private
sales.
9.2 Power of Attorney in Respect of the Collateral. Borrower hereby irrevocably appoints Lender
(which appointment is coupled with an interest) its true and lawful attorney in fact with full
power of substitution, for it and in its name to, during the
existence of an Event of Default: (i)
ask, demand, collect, receive, sue for, compound and give acquittance for any and all Collateral
with full power to settle, adjust or compromise any claim, (ii) receive payment of and endorse the
name of Borrower on any items of Collateral, (iii) make all demands, consents and waivers, or take
any other action with respect to, the Collateral, (iv) file any claim or take any other action, in
Lenders or Borrowers name, which Lender may reasonably deem appropriate to protect its rights in
the Collateral, or (v) otherwise act with respect to the Collateral as though Lender were its
outright owner.
9.3 Charges. If Borrower fails to pay any amounts required hereunder to be paid by Borrower to any
third party, Lender may at its option pay any part thereof and any amounts so paid including
Lenders Expenses incurred shall become Obligations, immediately due and payable, bearing interest
at the Default Rate, and secured by the Collateral. Any such payments by Lender shall not
constitute an agreement to make similar payments or a waiver of any Event of Default.
9.4 Remedies Cumulative. Lenders rights and remedies under the Loan Documents and all other
agreements with Borrower shall be cumulative. Lender shall have all other rights and remedies as
provided under the UCC, by law, or in equity. No exercise by Lender of one right or remedy shall be
deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing
waiver. No delay by Lender shall constitute a waiver, election, or acquiescence.
9.5 Application of Collateral Proceeds. Lender will apply proceeds of sale, to the extent
actually received in cash, in the manner and order it determines in its sole discretion, and as
prescribed by applicable law.
10. Waivers; Indemnification
10.1 Waivers. Without limiting the generality of the other waivers made by Borrower herein, to the
maximum extent permitted under applicable law, Borrower hereby irrevocably waives all of the
following: (i) any right to assert against Lender as a defense, counterclaim, set-off or
crossclaim, any defense (legal or equitable), set-off, counterclaim, crossclaim and/or other claim
(a) which Borrower may now or at any time hereafter have against any party liable to Lender in any
way or manner, or (b) arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity and/or enforceability of any Loan Document, or
any security interest; (ii)
notice of presentment, dishonor, notice of intent to accelerate, protest, default, nonpayment,
maturity; (iii) the benefit of all marshalling,
valuation, appraisal and exemption laws; (iv) the
right, if any, to require Lender to (a) proceed against any person liable for any of the
Obligations as a condition to or before proceeding hereunder; or (b) foreclose upon, sell or
otherwise realize upon or collect or apply any other property, real or personal, securing any of
the Obligations, as a condition to, or before proceeding hereunder;
(v) any demand for possession
before the commencement of any suit or action to recover possession
of Collateral; and (vi) any
requirement that Lender retain possession and not dispose of Collateral until after trial or final
judgment.
10.2 Lenders Liability for Collateral. Lender shall not in any way or manner be liable or
responsible for: (i) the safekeeping of any Collateral (except to the extent mandated by the UCC);
(ii) any loss or damage thereto occurring or arising in
any manner or fashion from any cause; (iii)
any diminution in the value thereof; or (iv) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other person or entity whomsoever. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower. Lender will have no responsibility for
taking any steps to preserve rights against any parties respecting any Collateral. Lenders powers
hereunder are conferred solely to protect its interest in the Collateral and do not impose any duty
to exercise any such powers. None of Lender or any of its officers, directors, employees, agents or
counsel will be liable for any action lawfully taken or omitted to be taken hereunder or in
connection herewith (excepting gross negligence or willful misconduct), nor under any circumstances
have any liability to Borrower for lost profits or other special, indirect, punitive, or
consequential damages. Lender retains any documents delivered by Borrower only for its purposes and
for such period as Lender, at its sole discretion, may determine necessary, after which time Lender
may destroy such records without notice to or consent from Borrower.
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10.3 Indemnification. Borrower shall, on an after tax basis, defend, indemnify, and
hold Lender and each of its officers, directors, employees, counsel, partners, agents and
attorneys-in-fact (each, an Indemnified Person) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including Lenders Expenses and reasonable attorneys fees and the
allocated cost of in-house counsel) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and thereby, with respect to noncompliance with
laws or regulations respecting Regulated Substances, government secrecy or technology export, or
any Lien not created by Lender or right of another against any Collateral, even if the Collateral
is foreclosed upon or sold pursuant hereto, and with respect to any investigation, litigation or
proceeding before any agency, court or other governmental authority relating to this Agreement or
the Advances or the use of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the Indemnified Liabilities); provided, that Borrower
shall have no obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such Indemnified Person. The
obligations in this Section shall survive the Term. At the election of any Indemnified Person,
Borrower shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified
Person, at the sole cost and expense of Borrower. All amounts owing under this Section shall be
paid within 30 days after written demand.
11. Notices
All notices shall be in writing and personally delivered or sent by certified mail, postage
prepaid, return receipt requested, or by confirmed facsimile, at the respective addresses set
forth below:
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If to Borrower:
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If to Lender: |
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Fluidigm Corporation
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Lighthouse Capital Partners V, LP |
7100 Shoreline Court
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500 Drakes Landing Road |
South San Francisco, California 94080
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Greenbrae, California 94904 |
Attention:
General Counsel,
Director of
Finance
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Attention: Contract Administrator |
FAX: (650)871-7152
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FAX: (415)925-3387 |
12. General Provisions
12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the parties
respective successors and permitted assigns. Borrower may not assign any rights hereunder without
Lenders prior written consent, which consent may be granted or withheld in Lenders sole
discretion. Lender shall have the right without the consent of or notice to Borrower to sell,
transfer, negotiate, or grant participations in all or any part of any Loan Document, provided that
Lender shall not sell, transfer, negotiate, or grant participations in all or any part of any Loan
Document to any competitor of Borrower.
12.2 Time of Essence. Time is of the essence for the performance of all Obligations.
12.3 Severability of Provisions. Each provision hereof shall be severable from every other
provision in determining its legal enforceability.
12.4 Entire Agreement. This Agreement and each of the other Loan Documents dated as of the date
hereof, taken together, constitute and contain the entire agreement between Borrower and Lender
with respect to their subject matter and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications between the parties, whether written or oral.
This Agreement is the result of negotiations between and has been reviewed by the Borrower and
Lender as of the date hereof and their respective counsel; accordingly, this Agreement shall be
deemed to be the product of the parties hereto, and no ambiguity shall be construed in favor of or
against Borrower or Lender. This Agreement may only be modified with the written consent of Lender.
Any waiver or consent with respect to any provision of the Loan Documents shall be effective only
in the specific instance and for the specific purpose for which it was given. No notice to or
demand on Borrower in any one case shall entitle Borrower to any other or further notice or demand
in similar or other circumstances.
12.5 Reliance by Lender. All covenants, agreements, representations and warranties made herein
by Borrower shall, notwithstanding any investigation by Lender, be deemed to be material to and to
have been relied upon by Lender.
12.6 No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Agreement or any of the
other Loan Documents shall be payable without notice or demand and shall be payable in United
States Dollars without set-off or reduction of any manner whatsoever.
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12.7 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which, when taken together, shall constitute
one and the same original instrument.
12.8 Survival. All covenants, representations and warranties made in this Agreement shall continue
in full force and effect so long as any Obligations (other than inchoate indemnity obligations)
remain outstanding.
12.9 No
Original Issue Discount. Borrower and Lender acknowledge and agree that the Warrant is part
of an investment unit within the meaning of Section 1273(c)(2) of the Internal Revenue Code, which
includes the Loan. Borrower and Lender further agree as between them, that the fair market value of
the Warrant is $100 and that, pursuant to Treas. Reg. § 1.1273-2(h), $100 of the issue price of the
investment unit will be allocable to the Warrant and the balance shall be allocable to the Loans.
Borrower and Lender agree to prepare their federal income tax returns in a manner consistent with
the foregoing and, pursuant to Treas. Reg. § 1.1273, the original issue discount on the Loan shall
be considered to be zero.
12.10 Relationship of Parties. The relationship between Borrower and Lender is, and at all times
shall remain, solely that of a borrower and lender. Lender is not a partner or joint venturer of
Borrower; nor shall Lender under any circumstances be deemed to be in a relationship of confidence
or trust or have a fiduciary relationship with Borrower or any of its affiliates, or to owe any
fiduciary duty to Borrower or any of its affiliates. Lender does not undertake or assume any
responsibility or duty to Borrower or any of its affiliates to select, review, inspect, supervise,
pass judgment upon or otherwise inform any of them of any matter in connection with its or their
property, the Loans, any Collateral or the operations of Borrower or any of its affiliates.
Borrower and each of its affiliates shall rely entirely on their own judgment with respect to such
matters, and any review, inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by Lender in connection with such matters is solely for the protection of
Lender and neither Borrower nor any affiliate is entitled to rely thereon.
12.11
Choice of Law and Venue; Jury
Trial Waiver. This Agreement shall be governed by and construed in
accordance with, the internal laws of the State of California,
without regard to principles of conflicts of law. Each of Borrower
and Lender hereby submits to the exclusive jurisdiction of the State
and Federal courts located in the City and County of San Francisco,
State of California. Borrower and lender hereby waive their
respective rights to a jury trial of any claim or cause of action
based upon or arising out of any of the Loan Documents or any of the
transactions contemplated therein, including contract claims, tort
claims, breach of duty claims, and all other common law or statutory
claims. Each party further waives any right to consolidate any action
in which a jury trial has been waived with any other action in which
a jury trial cannot be or has not been waived.
12.12 Termination. Upon the full, faithful and indefeasible payment and performance of all
Obligations(other than inchoate indemnity obligations) and the termination of any commitment to
extend credit under this Agreement, the security interest granted herein and under the other Loan
Documents shall terminate and this Agreement and the other Loan Documents (other than the Warrant)
shall terminate, except for any inchoate indemnity obligations under
Section 10.3 of this
Agreement.
In
Witness Whereof, the parties hereto have executed this Agreement as of the date first above written.
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Fluidigm
Corporation |
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Lighthouse Capital Partners V, L.P. |
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By:
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Lighthouse
Management Partners V, L.L.C.,
its general partner |
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By:
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/s/ Gajus Worthington
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By:
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/s/ Thomas Conneely
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Name:
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Gajus Worthington |
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Name:
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Thomas Conneely |
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Title:
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PRESIDENT & CEO |
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Title:
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Vice President |
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Exhibit A Collateral Description
Exhibit B Form of Note
Exhibit C Form of Preferred Stock Warrant
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Incumbency Certificate
Exhibit F Form of Officers Certificate
Exhibit G ACH Authorization
Exhibit H Form of Negative Pledge Agreement
Exhibit I Control Agreement
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Exhibit A
Collateral
This FINANCING STATEMENT and SECURITY AGREEMENT covers all of Debtors interests in all of the
following types or items of property described on this Exhibit A (collectively, the Collateral),
wherever located and whether now owned or hereafter acquired, and Debtor hereby grants Secured
Party a security interest therein as collateral for the payment and performance of all present and
future indebtedness, liabilities, guarantees and obligations of Debtor to Secured Party, howsoever
arising. Debtor agrees that said security interest may be enforced by Secured Party in accordance
with the terms of all security and other agreements between Secured Party and Debtor, the
California Uniform Commercial Code, or both, and that this document shall be fully effective as a
security agreement, even if there is no other security or other agreement between Secured Party or
Debtor:
All assets of the Debtor; all personal property of Debtor;
All accounts, general intangibles, chattel paper, contract rights, documents,
instruments, deposit accounts, inventory, farm products, fixtures and equipment, as
such terms are defined in Division 9 of the California Uniform Commercial Code in effect on the
date hereof;
All general intangibles of every kind, including without limitation, federal, state and local tax
refunds and claims of all kinds; all rights as a licensee or any kind; all customer lists,
telephone numbers, and purchase orders, and all rights to purchase, lease sell, or otherwise
acquire or deal with real or personal property and all rights relating thereto;
All returned and repossessed goods and all rights as a seller of goods; all collateral securing
any of the foregoing; all deposit accounts, special and general, whether on deposit with Secured
Party or others;
All life and other insurance policies, claims in contract, tort or otherwise, and all judgments now
or hereafter arising therefrom;
All right, title and interest of Debtor, and all of Debtors rights, remedies, security and liens,
in, to and in respect of all accounts and other collateral, including, without limitation, rights
of stoppage in transit, replevin, repossession and reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, and all guarantees and other contracts of suretyship with
respect to any accounts and other collateral, and all deposits and other security for any accounts
and other collateral, and all credit and other insurance;
All notes, drafts, letters of credit, contract rights, and things in action; all drawings,
specifications, blueprints and catalogs; and all raw materials, work in process, materials used or
consumed in Debtors business, goods, finished goods, returned goods and all other goods and
inventory of whatsoever land or nature, any and all wrapping, packaging, advertising and shipping
materials, and all documents relating thereto, and all labels and other devices, names and marks
affixed or to be affixed thereto for purposes of selling or identifying the same or the seller or
manufacturer thereof;
All inventory wherever located; all present and future claims against any supplier of any of the
foregoing, including claims for defective goods or overpayments to or undershipments by suppliers;
all proceeds arising from the lease or rental of any of the foregoing;
All equipment and fixtures, including without limitation all machinery, machine tools, motors,
controls, parts, vehicles, workstations, tools, dies, jigs, furniture, furnishings and fixtures;
and all attachments, accessories, accessions and property now or hereafter affixed to or used in
connection with any of the foregoing, and all substitutions and replacements for any of the
foregoing; all warranty and other claims against any vendor or lessor of any of the foregoing;
All investment property;
All books, records, ledger cards, computer data and programs and other property and general
intangibles at any time evidencing or relating to any or all of the foregoing; and
All cash and non-cash products and proceeds of any of the foregoing, in whatever form, including
proceeds in the form of inventory, equipment or any other form of personal property, including
proceeds of proceeds and proceeds of insurance, and all claims by Debtor against third parties for
loss or damage to, or destruction of, or otherwise relating to, any or all of the foregoing.
NOTICE PURSUANT TO AN AGREEMENT BETWEEN DEBTOR AND SECURED PARTY, DEBTOR HAS AGREED NOT TO
FURTHER ENCUMBER THE COLLATERAL DESCRIBED HEREIN (EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO SUCH
AGREEMENT), THE FURTHER ENCUMBERING OF WHICH MAY CONSTITUTE THE TORTIOUS INTERFERENCE
1
WITH SECURED PARTYS RIGHTS BY SUCH ENCUMBRANCER. IN THE EVENT THAT ANY ENTITY IS GRANTED A
SECURITY INTEREST IN DEBTORS ACCOUNTS, CHATTEL PAPER, GENERAL INTANGIBLES OR OTHER ASSETS CONTRARY
TO THE ABOVE, THE SECURED PARTY ASSERTS A CLAIM TO ANY PROCEEDS THEREOF RECEIVED BY SUCH ENTITY.
Notwithstanding any of the foregoing, this Financing Statement and Security Agreement does not
cover any of Debtors interests in, and the Collateral shall not under any circumstance include,
and no security interest is granted in, (i) any property that is subject to a Lien that is
otherwise permitted pursuant to subsection (v) of the definition of Permitted Liens as defined
in that certain Loan and Security Agreement, dated as of March 29, 2005, by and between Secured
Party and Debtor, and Secured Party agrees to execute any instruments or documents necessary to
evidence the intent of the foregoing, (ii) more than 65% of the issued and outstanding voting
securities of any subsidiary of Debtor that is not incorporated or organized in the United States,
or (iii) Debtors Intellectual Property, including, without limitation, any and all property of
the Debtor that is subject to, listed in or otherwise described in the Negative Pledge Agreement
dated March 29, 2005 between the Secured Party and the Debtor. Intellectual Property means,
collectively, all rights, priorities and privileges of the Debtor relating to intellectual
property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or
received by Debtor, or in which Debtor now holds or hereafter acquires or receives any right or
interest, whether arising under United States, multinational or foreign laws or otherwise, and
shall include, in any event, all copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, trade secrets, internet domain names (including any right related
to the registration thereof), proprietary or confidential information, mask works, sources object
or other programming codes, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data base, data, skill,
expertise, recipe, experience, process, models, drawings, materials or records. Notwithstanding
the foregoing, Intellectual Property as defined above does not include proceeds or other revenue
consisting of accounts, accounts receivable, royalties, licensing fees, or payment intangibles
obtained or owed from or on account of the licensing or other exploitation or disposition of
Intellectual Property, none of which are excluded, and all of which are included as collateral in
the security interest granted by Debtor to Secured Party.
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Debtor |
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Secured
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Fluidigm Corporation, a California corporation |
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Lighthouse Capital Partners V, L.P. |
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By:
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Lighthouse
Management Partners V, L.L.C.,
its general partner |
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By: |
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Name:
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By: |
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Title:
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Name: |
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2
Exhibit B
[ ]
Secured Promissory Note
This
Secured Promissory Note
(this Note) is made
,
200 ,
by Fluidigm Corporation
(Borrower) in favor
of Lighthouse
Capital Partners V, L.P. (collectively with its assigns, Lender).
Initially capitalized terms used and not otherwise defined herein are defined in that certain Loan
and Security Agreement No. 4561 between Borrower and Lender
dated March 29, 2005 (the Loan
Agreement).
For Value Received, Borrower promises to pay in lawful money of the United States, to the
order of Lender, at 500 Drakes Landing Road, Greenbrae, California 94904, or such other place as
Lender may from time to time designate (Lenders Office), the principal
sum of $ (the Advance), including interest on the unpaid balance and all other amounts due or to
become due hereunder according to the terms hereof and of the Loan Agreement.
Basic Rate means a variable per annum rate of interest equal to the Index plus the Interest
Margin which shall be subject to adjustment as provided herein. On and after the Loan Commencement
Date the Basic Rate shall be fixed and not subject to any further adjustments.
Final Payment means 9% of the Advance.
Index means the prevailing variable Prime Rate of annual interest as quoted from time to time in
the western edition of the Wall Street Journal.
Interest
Margin means 2.5% per annum.
Loan
Commencement Date means March 1, 2006.
Maturity Date means the last day of the Repayment Period, or if earlier, the date of prepayment
under the Note.
Payment Date means the first day of each calendar month.
Prepayment
Fee means (i) if prepaid in the calendar year 2006, 3% of the outstanding principal
amount being prepaid; (ii) if prepaid in the calendar year 2007, 2% of the outstanding principal
amount being prepaid; and (iii) if prepaid in the calendar year 2008 or 2009, 1% of the
outstanding principal amount being prepaid.
Repayment Period means the period beginning on the Loan Commencement Date and continuing for 36
calendar months.
1. Repayment. Borrower shall pay principal and interest due hereunder from the Funding Date, until
this Note is paid in full, on
each Payment Date pursuant to the terms of the Loan Agreement and this Note. Prior to the Loan
Commencement Date, Borrower
shall pay to Lender, monthly in advance on each Payment Date, interest calculated using the Basic
Rate prevailing on the first business
day of such calendar month. Beginning on the Loan Commencement Date and on each Payment Date
thereafter during the Repayment
Period, Borrower shall make equal installments of principal and interest in advance, calculated at
the Basic Rate. On the Maturity
Date, Borrower shall pay, in addition to all unpaid principal and interest outstanding hereunder,
the Final Payment.
2. Interest. Interest not paid when due will, to the maximum extent permitted under applicable law,
become part of principal, at
Lenders option, and thereafter bear like interest as principal. Interest shall be computed on the
basis of a 360 day year. All
Obligations not paid when due shall bear interest at the Default Rate unless waived in writing by
Lender. All amounts paid hereunder
will be applied to the Obligations in Lenders discretion and as provided in the Loan Agreement.
3.
Voluntary Prepayment. Borrower may prepay the Note if and only if
Borrower pays to Lender (i)
the outstanding principal
amount of this Note and any unpaid accrued interest
(ii) the Final Payment, (iv) the Prepayment
Fee, and (v) all other sums, if any, that
shall have become due and payable hereunder with respect to this Note.
4. Collateral. This Note is secured by the Collateral.
1
5. Waivers. Borrower, and all guarantors and endorsers of this Note, regardless of the time, order or
place of signing, hereby
waive notice, demand, presentment, protest, and notices of every kind, presentment for the purpose
of accelerating maturity, diligence
in collection to the fullest extent permitted by law.
6.
Choice of Law; Venue. This
Note shall be governed by, and construed in accordance with the
internal
laws of the State of
California, without regard to principles of conflicts of law. Each of
Borrower and Lender hereby submits to the exclusive jurisdiction of
the State and Federal courts
located in the City and County of San Francisco, State of California.
Borrower and Lender each
hereby waive their respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Note. Each party further waives any right to consolidate any action in which a
jury trial has been waived with any other action in which a jury trial cannot be or has not been
waived.
7.
Miscellaneous. The Note
may be modified only by
a writing signed by Borrower and
Lender. Each provision hereof is severable from every other provision hereof and of the Loan Agreement when determining its
legal enforceability. Sections and
subsections are titled for convenience, and not for construction. Hereof, herein, hereunder,
and similar words refer to this Note
in its entirety. Or is not necessarily exclusive. Including is not limiting. The terms and
conditions hereof inure to the benefit of
and are binding upon the parties respective permitted successors and assigns. This Note is subject
to all the terms and conditions of
the Loan Agreement.
In Witness Whereof, Borrower has caused this Note to be executed by a duly authorized
officer as of the day and year first above written.
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Fluidigm Corporation |
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By: |
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Name:
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Title:
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2
NEITHER THIS WARRANT NOR THE SHARES OF CAPITAL STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
1933 ACT), OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE COMPANY, TO THE EFFECT THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS.
PREFERRED STOCK PURCHASE WARRANT
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Warrant No.
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Number of Shares: initially, 185,714 |
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Series D Preferred Stock |
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subject to increase as set forth below |
Fluidigm
Corporation
Effective
as of March 29, 2005
Void after March 29, 2012
1. Issuance.
This Preferred Stock Purchase Warrant (the Warrant)
is issued to Lighthouse
Capital Partners V, L.P. by
Fluidigm Corporation, a California corporation
(hereinafter with its successors
called the Company).
2. Purchase Price; Number of Shares.
(a) The registered holder of this Warrant (the Holder), commencing on the date hereof, is
entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the
principal office of the Company, to purchase from the Company, at a price per share of $2.80 (the Purchase
Price), 185,714 fully
paid and nonassessable shares of the Companys Series D Preferred Stock, (the Exercise
Quantity), $0.001 par
value (the Preferred Stock).
(b) On the Commitment Termination Date, the Exercise Quantity shall automatically be increased
by
such additional number of shares (rounded to the nearest whole share) of Series D Preferred
Stock, if any, as is equal
to the amount determined by dividing (A) 4% of the Aggregate Advances under the Loan
Agreement, if any, by (B)
the Purchase Price
In addition to other terms which may be defined herein, the following terms, as used in this
Warrant, shall have the following meanings:
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Aggregate Advances means the aggregate original dollar amount of all
Advances made under the Loan Agreement, whether such Advances are outstanding or
prepaid, at the time of any scheduled adjustment to the Exercise Quantity. |
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Loan Agreement means that certain Loan and Security Agreement No. 4561 dated
March 29, 2005 between the Company and Lighthouse Capital Partners V, L.P.. |
Any capitalized term not defined herein shall have the meaning as set forth in the Loan Agreement.
1.
Until such time as this Warrant is exercised in full or expires, the Purchase Price and the
securities issuable upon exercise of this Warrant are subject to adjustment as hereinafter
provided. The person or persons in whose name or names any certificate representing shares of
Preferred Stock is issued hereunder shall be deemed to have become the holder of record of the
shares represented thereby as at the close of business on the date this Warrant is exercised with
respect to such shares, whether or not the transfer books of the Company shall be closed.
3. Payment
of Purchase Price. The Purchase Price may be paid (i) in cash or by check, (ii) by
the
surrender by the Holder to the Company of any promissory notes or other obligations issued by
the Company, with
all such notes and obligations so surrendered being credited against the Purchase Price in an
amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or (iii) by any
combination of the foregoing.
4. Net
Issue Election. The Holder may elect to receive, without the payment by the Holder of
any
additional consideration, shares of Preferred Stock equal to the value of this Warrant or any
portion hereof by the
surrender of this Warrant or such portion to the Company, with the net issue election notice
annexed hereto duly
executed, at the principal office of the Company. Thereupon, the Company shall issue to the
Holder such number of
fully paid and nonassessable shares of Preferred Stock as is computed using the following
formula:
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where:
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X =
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the number of shares of Preferred Stock to be issued to the
Holder pursuant to this Section 4. |
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Y =
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the number of shares of Preferred Stock covered by this
Warrant in respect of which the net issue election is made
pursuant to this Section 4. |
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A =
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the Fair Market Value (defined below) of one share of
Preferred Stock, as determined at the time the net issue
election is made pursuant to this Section 4. |
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B =
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the Purchase Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section 4. |
Fair Market Value of a share of Preferred Stock (or fully paid and nonassessable shares of
the Companys common stock, $0.001 par value (the Common Stock) if the Preferred Stock has been
automatically converted into Common Stock) as of the date that the net issue election is made (the
Determination Date) shall mean:
(i) If the net issue election is made in connection with and contingent upon the closing of the
sale of the Companys Common Stock to the public in a public offering pursuant to a Registration
Statement under the Securities Act of 1933, as amended (a Public Offering), and if the Companys
Registration Statement relating to such Public Offering (Registration Statement) has been
declared effective by the Securities and Exchange Commission, then the initial Price to Public
specified in the final prospectus with respect to such offering multiplied by the number of shares
of Common Stock into which each share of Preferred Stock is then convertible.
(ii)
If the net issue election is not made in connection with and
contingent upon a Public Offering, then as follows:
(a) If traded on a securities exchange or the Nasdaq National Market, the fair
market value of the Common Stock shall be deemed to be the average of the closing or last reported
sale prices of the Common Stock on such exchange or market over the five day period ending five
trading days prior to the Determination Date, and the fair market value of the Preferred Stock
shall be deemed to be such fair market value of the Common Stock multiplied by the number of
shares of Common Stock into which each share of Preferred Stock is then convertible;
2.
(b) If otherwise traded in an over-the-counter market, the fair market value
of the
Common Stock shall be deemed to be the average of the closing ask prices of the Common Stock over
the five day period ending five trading days prior to the Determination Date, and the fair market
value of the Preferred Stock shall be deemed to be such fair market value of the Common Stock
multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then
convertible; and
(c) If
there is no public market for the Common Stock, then fair market value shall
be determined in good faith by the Companys Board of Directors.
5. Partial Exercise. This Warrant may be exercised in part, and the Holder shall be entitled
to
receive a new warrant, which shall be dated as of the date of this Warrant, covering the
number of shares in respect
of which this Warrant shall not have been exercised.
6. Fractional Shares. In no event shall any fractional share of Preferred Stock be issued upon
any
exercise of this Warrant. If, upon exercise of this Warrant in its entirety, the Holder would,
except as provided in
this Section 6, be entitled to receive a fractional share of Preferred Stock, then the Company
shall issue the next
higher number of full shares of Preferred Stock, issuing a full share with respect to such
fractional share.
7. Expiration Date; Automatic Exercise. This Warrant shall expire at the close of
business on
March 29, 2012, and shall be void thereafter (the Expiration Date). Notwithstanding the
term of this Warrant
fixed pursuant to this Section 7, and provided Holder has received advance written notice of
at least twenty (20)
days and has not earlier exercised this Warrant, and provided this Warrant has not been
assumed by the successor
entity (or parent thereof), upon the consummation of a Merger (as defined below), this Warrant
shall automatically
be exercised pursuant to Section 4 hereof, without any action by Holder. Merger means: (i)
a sale of all or
substantially all of the Companys assets to an Unaffiliated Entity (as defined below), or
(ii) the merger,
consolidation or acquisition of the Company with, into or by an Unaffiliated Entity (other
than a merger or
consolidation for the principle purpose of changing the domicile of the Company or a bona fide
round of preferred
stock equity financing), that results in the Companys shareholders immediately prior to such
merger, consolidation,
or acquisition holding, immediately thereafter, less than a majority of the outstanding
voting securities of the
successor corporation or its parent. Unaffiliated Entity means any entity that is owned or
controlled by parties
who own less than twenty percent (20%) of the combined voting power of the voting securities
of the Company
immediately prior to such merger or sale of assets, consolidation or acquisition.
Notwithstanding the foregoing, in
the event that any outstanding warrants to purchase equity securities of the Company (it being
acknowledged and
agreed that options to acquire common stock issued to officers, directors, employees and
consultants shall not be
deemed warrants) are assumed by the successor entity of a Merger (or parent thereof), this
Warrant shall also be
similarly assumed and the automatic exercise provision in this Section 7 shall have no effect.
The Company agrees
to give the Holder written notice promptly after it has entered into a definitive agreement
relating to any proposed
Merger and written notice of termination of any definitive agreement relating to any proposed
Merger.
Notwithstanding anything to the contrary in this Warrant, (i) the Holder may expressly make
any voluntary exercise
of this Warrant contingent on, and effective immediately prior to, the consummation of such
Merger and (ii) any
automatic exercise of this Warrant in connection with a Merger shall be conditioned on
consummation of such
Merger and shall be effective immediately prior thereto.
8. Reserved Shares; Valid Issuance. The Company covenants that it will at all times from and
after
the date hereof reserve and keep available such number of its authorized shares of Preferred
Stock and Common
Stock free from all preemptive or similar rights therein, as will be sufficient to permit,
respectively, the exercise of
this Warrant in full and the conversion into shares of Common Stock of all shares of Preferred
Stock receivable
upon such exercise. The Company further covenants that such shares as may be issued pursuant
to such exercise
and/or conversion will, upon issuance, be duly and validly issued, fully paid and
nonassessable and free from all
taxes, liens and charges with respect to the issuance thereof.
9. Stock Splits and Dividends. If after the date hereof the Company shall subdivide the
Preferred
Stock, by split-up or otherwise, or combine the Preferred Stock, or issue additional shares of
Preferred Stock in
payment of a stock dividend on the Preferred Stock, the number of shares of Preferred Stock
issuable on the exercise
3.
of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination, and the Purchase Price shall
forthwith be proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination.
10. Adjustments for Diluting Issuances. The antidilution rights applicable to the Series D
Preferred
Stock of the Company are set forth in the Amended and Restated Articles of Incorporation, as
amended from time to
time (the Articles), a true and complete copy in its current form which has been made
available to Holder. Such
rights shall not be restated, amended or modified in any manner which affects the Holder
differently than the holders
of outstanding Series D Preferred Stock without such Holders prior written consent. The
Company shall provide
the Holder hereof with any restatement, amendment or modification to the Articles promptly
after the same has been
made.
11. Mergers and Reclassifications. (a) Except as set forth in Section 7, If after the
date hereof the Company shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the Holder, so that
the Holder shall thereafter have the right to purchase, at a total price not to exceed that
payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and
other securities and property receivable upon such Reorganization by a holder of the number of
shares of Preferred Stock which might have been purchased by the Holder immediately prior to such
Reorganization, and in any such case appropriate provisions shall be made with respect to the
rights and interest of the Holder to the end that the provisions hereof (including without
limitation, provisions for the adjustment of the Purchase Price and the number of shares issuable
hereunder and the provisions relating to the net issue election) shall thereafter be applicable in
relation to any shares of stock or other securities and property thereafter deliverable upon
exercise hereof. For the purposes of this Section 11, the term Reorganization shall include
without limitation any reclassification, capital reorganization or change of the Preferred Stock
(other than as a result of a subdivision, combination or stock dividend provided for in Section 9
hereof), or any consolidation of the Company with, or merger of the Company into, another
corporation or other business organization (other than a merger in which the Company is the
surviving corporation and which does not result in any reclassification or change of the
outstanding Preferred Stock), or any sale or conveyance to another corporation or other business
organization of all or substantially all of the assets of the Company.
(b) Notwithstanding any other provision of this Warrant, in the event of an automatic
conversion of the Companys outstanding Series D Preferred Stock into Common Stock in accordance
with the Companys Articles, as in effect from time to time, this Warrant shall thereafter
represent the right to acquire for the aggregate Purchase Price (as then in effect) the number of
shares of Common Stock into which the number of shares of Preferred Stock issuable upon exercise
of this Warrant would have then been convertible.
12. Certificate of Adjustment. Whenever the Purchase Price is adjusted, as herein provided,
the
Company shall promptly deliver to the Holder a certificate of the Companys chief financial
officer (or other
appropriate officer) setting forth the Purchase Price after such adjustment and setting forth
a brief statement of the
facts requiring such adjustment.
13. Notices of Record Date, Etc. In the event of:
(a) any taking by the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any dividend or other
distribution, or any right
to subscribe for, purchase, sell or otherwise acquire or dispose of any shares of stock of any
class or any other
securities or property, or to receive any other right;
(b) any reclassification of the capital stock of the Company, capital reorganization of the
Company, consolidation or merger involving the Company, or sale or conveyance of all or
substantially all of its
assets; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
4.
then in each such event the Company will provide or cause to be provided to the Holder a written
notice thereof. Such notice shall be provided at least twenty (20) business days prior to the date
specified in such notice on which any such action is to be taken.
14. Representations, Warranties and Covenants. This Warrant is issued and delivered by the
Company and accepted by each Holder on the basis of the following representations, warranties
and covenants made
by the Company:
(a) The Company has all necessary corporate power and authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder. This Warrant has been duly
authorized issued,
executed and delivered by the Company and is the valid and binding obligation of the Company,
enforceable in
accordance with its terms, except as enforceability may be limited by bankruptcy or similar
laws relating to the
enforcement of creditors rights generally.
(b) The shares of Preferred Stock issuable upon the exercise of this Warrant have been duly
authorized and reserved for issuance by the Company and, when issued in accordance with the
terms hereof, will be
validly issued, fully paid and nonassessable.
(c)
The issuance, execution and delivery of this Warrant do not, and the issuance of the shares of Preferred Stock upon the exercise of this Warrant in accordance with the terms
hereof will not, (i) violate
or contravene the Companys Articles or by-laws, or any law, statute, regulation, rule,
judgment or order applicable
to the Company, (ii) violate, contravene or result in a breach or default under any contract,
agreement or instrument
to which the Company is a party or by which the Company or any of its assets are bound or
(iii) require the consent
or approval of or the filing of any notice or registration with any person or entity (other
than such notices or filings
as may be required under applicable securities laws).
(d) As long as this Warrant is, or any shares of Preferred Stock issued upon exercise of this
Warrant or any shares of Common Stock issued upon conversion of such shares of Preferred Stock
are, issued and
outstanding, the Company will provide to the Holder the financial and other information
described in that certain
Loan and Security Agreement No. 4561 between the Company and Lighthouse Capital Partners
V, L.P. dated as of
March 29, 2005.
(e) As of the date hereof, the authorized capital stock of the Company consists of (i)
65,500,000 shares of Common Stock, of which 8,909,357 shares are issued and outstanding and
185,714 shares are
reserved for issuance upon the exercise of this Warrant with respect to Common Stock and the
conversion of the
Preferred Stock into Common Stock if this Warrant is exercised with respect to Preferred
Stock, (ii) 2,727,273
shares of Series A Preferred Stock, of which 2,727,273 are issued and outstanding shares,
(iii) 6,460,675 shares of
Series B Preferred Stock, of which 6,460,675 are issued and outstanding shares, (iv)
20,551,163 shares of Series C
Preferred Stock, of which 16,364,832 are issued and outstanding shares, and (v) 13,887,716
shares of Series D
Preferred Stock, of which 7,292,127 are issued and outstanding shares. Company has delivered
a capitalization
table to Holder summarizing the capitalization of the Company. At the request of Holder, not
more than once per
calendar quarter, the Company will provide Holder with a current capitalization table
indicating changes, if any, to
the number of outstanding shares of common stock and preferred stock.
15. Registration Rights. The Company grants to the Holder all the rights of a Holder [and
an
Investor] under the Companys Amended and Restated Investors Rights Agreement dated as of
December 18,
2003 (the Rights Agreement), including, without limitation, the registration rights
contained therein, and agrees to
amend the Rights Agreement so that (i) the shares of Common Stock issuable upon conversion of
the shares of
Preferred Stock issuable upon exercise of this Warrant shall be Registrable Securities, and
(ii) the Holder shall be
a Holder [and an Investor"] for all purposes of such Rights Agreement.
16. Amendment. The terms of this Warrant may be amended, modified or waived only with the
written consent of the Holder and the Company.
5.
17. Representations and Covenants of the Holder. This Warrant has been entered into by the
Company in reliance upon the following representations and covenants of the Holder, which by its
execution hereof the Holder hereby confirms:
(a) Investment Purpose. The right to acquire Preferred Stock or the Preferred Stock
issuable upon exercise of the Holders rights contained herein will be acquired for investment and
not with a view to the sale or distribution of any part thereof, and the Holder has no present
intention of selling or engaging in any public distribution of the same except pursuant to a
registration or exemption.
(b) Accredited Investor. Holder is an accredited investor within the meaning of Rule 501 of
Regulation D, promulgated under the 1933 Act as presently in effect.
(c) Private Issue. The Holder understands (i) that neither the issuance of this Warrant nor
the issuance of any shares of the Companys capital stock issuable upon exercise of the Holders
rights contained herein has been registered under the 1933 Act or qualified under applicable state
securities laws on the ground that the issuances contemplated by this Warrant will be exempt from
the registration and qualifications requirements thereof, and (ii) that the Companys reliance on
such exemption is predicated on the representations of the Holderset forth in this Section 17.
(d) Financial Risk. The Holder has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment and has the ability
to bear the economic risks of its investment.
18. Notices, Transfers, Etc.
(a) Any notice or written communication required or permitted to be given to the Holder may be
given by certified mail or delivered to the Holder at the address most recently provided by the
Holder to the Company.
(b) Subject to compliance with applicable federal and state securities laws, this Warrant may
be transferred by the Holder with respect to any or all of the shares purchasable hereunder. Upon
surrender of this Warrant to the Company, together with the assignment notice annexed hereto duly
executed, for transfer of this Warrant as an entirety by the Holder, the Company shall issue a new
warrant of the same denomination to the assignee. Upon surrender of this Warrant to the Company,
together with the assignment hereof properly endorsed, by the Holder for transfer with respect to a
portion of the shares of Preferred Stock purchasable hereunder, the Company shall issue a new
warrant to the assignee, in such denomination as shall be requested by the Holder hereof, and shall
issue to such Holder a new warrant covering the number of shares in respect of which this Warrant
shall not have been transferred.
(c) In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall
issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and
substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of
any Warrant lost, stolen or destroyed, upon receipt of an affidavit of the Holder or other evidence
reasonably satisfactory to the Company of the loss, theft or destruction of such Warrant.
19. No Impairment. The Company will not, by amendment of its Articles or through any
reclassification, capital reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance of performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder. In no event shall any
reclassification, capital reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other transaction be deemed an
impairment for purposes of this Section 18 if the shares of the Companys capital stock issuable
upon exercise of this Warrant are affected thereby in the same manner as outstanding shares of such
capital stock.
6.
20. Governing Law. The provisions and terms of this Warrant shall be governed by and construed
in accordance with the internal laws of the State of California without giving effect to its
principles regarding conflicts of laws.
21. Successors and Assigns. This Warrant shall be binding upon the Companys successors and
assigns and shall inure to the benefit of the Holders successors, legal representatives and
permitted assigns.
22. Business Days. If the last or appointed day for the taking of any action required or the
expiration of any rights granted herein shall be a Saturday or Sunday or a legal holiday in
California, then such action may be taken or right may be exercised on the next succeeding day
which is not a Saturday or Sunday or such a legal holiday.
23. Value. The Company and the Holder agree that the value of this Warrant on the date of
grant is $100.
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Fluidigm Corporation |
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By: |
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7.
Subscription
The undersigned hereby subscribes for shares of Preferred Stock covered by this Warrant. The
certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise
indicated below:
1.
Net Issue Election Notice
The undersigned hereby elects under Section 4 to surrender the right to purchase shares of
Preferred Stock pursuant to this Warrant. The certificate(s) for such shares issuable upon such
net issue election shall be issued in the name of the undersigned or as otherwise indicated below:
1.
Assignment
For value received hereby sells, assigns and transfers unto
[Please print or typewrite name and address of Assignee]
the within Warrant, and does hereby irrevocably constitute and appoint
its attorney to transfer the within Warrant on the books of the within named Company with full
power of substitution on the premises.
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Dated: |
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Signature |
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Name for Registration |
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In the Presence of: |
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1.
Exhibit A
Amended and Restated Articles of Incorporation
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
Gajus V. Worthington and William Smith certify that:
1. They are the President and Secretary, respectively, of Fluidigm Corporation, a California
corporation (the Corporation).
2. The Articles of Incorporation of the Corporation are amended and restated in full to read
as set forth in EXHIBIT A attached hereto and incorporated by reference as if fully set
forth herein.
3. Said Amended and Restated Articles of Incorporation have been duly approved by the
Corporations Board of Directors.
4. Said Amended and Restated Articles of Incorporation have been duly approved by the required
vote of shareholders in accordance with Sections 902 and 903 of the Corporations Code. The total
number of outstanding shares of the corporation is 7,753,917 shares of Common Stock, 2,727,273
shares of Series A Preferred Stock, 6,460,675 shares of Series B Preferred Stock and 14,315,608
shares of Series C Preferred Stock. The number of shares voting in favor of the amendment equaled
or exceeded the vote required. The percentage vote required was more than 50% of the outstanding
Common Stock, voting as a single class, more than 66 2/3% of the outstanding Series C Preferred
Stock, voting as a single class, more than 66 2/3% of the outstanding Preferred Stock voting as a
single class and more than 50% of the outstanding Common Stock and Preferred Stock, voting together
as a single class.
I further declare under penalty of perjury that the matters set forth in the foregoing
certificate are true and correct of my own knowledge.
Executed
at Palo Alto, California, this ___ day of October, 2002.
Gajus V. Worthington
President
William Smith
Secretary
Exhibit A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
ARTICLE I
The name of the corporation is Fluidigm Corporation.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of California other than the banking
business, the trust company business or the practice of a profession permitted to be incorporated
under the California Corporations Code.
ARTICLE III
The total number of shares of stock that the corporation shall have authority to issue is
Seventy-Four Million Three Hundred Ninety Thousand Two Hundred Seventy-Four (74,390,274),
consisting of Forty-Four Million Six Hundred Fifty-One Thousand One Hundred Sixty-Three
(44,651,163) shares of Common Stock, $0.001 par value per share, and Twenty-Nine Million Seven
Hundred Thirty-Nine Thousand One Hundred Eleven (29,739,111) shares of Preferred Stock, $0.001 par
value per share. The first series of Preferred Stock shall be designated Series A Preferred
Stock and shall consist of Two Million Seven Hundred TwentySeven Thousand Two Hundred
SeventyThree (2,727,273) shares. The second series of Preferred Stock shall be designated
Series B Preferred Stock and shall consist of Six Million Four Hundred Sixty Thousand Six Hundred
Seventy-Five (6,460,675) shares. The third series of Preferred Stock shall be designated Series C
Preferred Stock and shall consist of Twenty Million Five Hundred Fifty-One Thousand One Hundred
Sixty-Three (20,551,163) shares.
ARTICLE IV
The terms and provisions of the Common Stock and Preferred Stock are as follows:
1. Definitions. For purposes of this Article IV, the following definitions shall
apply:
(a) Conversion Price shall mean $1.10 per share for the Series A Preferred Stock,
$1.78 per share for the Series B Preferred Stock and $2.58 per share for the Series C Preferred
Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(b) Convertible Securities shall mean any evidences of indebtedness, shares or other
securities (other than shares of Preferred Stock) convertible into or exchangeable for Common
Stock.
(c) Corporation shall mean Fluidigm Corporation.
(d) Dividend Rate shall mean an annual rate of $0.11 per share for the Series A
Preferred Stock, an annual rate of $0.18 for the Series B Preferred Stock and an annual rate of
$0.26 per share for the Series C Preferred Stock (each subject to adjustment from time to time as
set forth elsewhere herein).
(e) Liquidation Preference shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 per share for the Series B Preferred Stock and $2.58 per share for the Series C
Preferred Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(f) Options shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.
(g) Original Issue Price shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 for the Series B Preferred Stock and $2.58 per share for the Series C Preferred Stock
(each subject to adjustment from time to time as set forth elsewhere herein).
(h) Preferred Stock shall mean the Series A Preferred Stock, Series B Preferred
Stock and the Series C Preferred Stock.
2. Dividends.
(a) Series C Preferred Stock. The holders of outstanding shares of Series C Preferred
Stock shall be entitled to receive dividends, when and as declared by the Board of Directors, out
of any assets at the time legally available therefor, at the Dividend Rate specified for such
shares of Preferred Stock payable in preference and priority to any declaration or payment of any
distribution on Series A Preferred Stock, Series B Preferred Stock or Common Stock (collectively,
the Junior Stock) of the Corporation other than a dividend payable solely in Common Stock. No
distributions shall be made with respect to the Junior Stock during any fiscal year of the
Corporation, other than dividends on the Common Stock payable solely in Common Stock, until all
declared dividends on the Series C Preferred Stock have been paid or set apart for payment to the
Series C Preferred Stock holders. The right to receive dividends on shares of Series C Preferred
Stock shall not be cumulative, and no right to such dividends shall accrue to holders of Series C
Preferred Stock by reason of the fact that dividends on said shares are not declared or paid in any
year.
(b) Series A Preferred Stock and Series B Preferred Stock. The holders of outstanding
shares of Series A Preferred Stock and Series B Preferred Stock shall be entitled to receive
dividends, when and as declared by the Board of Directors, out of any assets at the time legally
available therefor, at the Dividend Rate specified for such shares of Preferred Stock payable in
preference and priority to any declaration or payment of any distribution on Common Stock of the
Corporation other than a dividend payable solely in Common Stock. No distributions shall be made
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with respect to the Common Stock, other than dividends payable solely in Common Stock, until
all declared dividends on the Preferred Stock have been paid or set apart for payment to the
Preferred Stock holders. Payment of any dividends to the holders of the Series A Preferred Stock
and Series B Preferred Stock shall be on a pro-rata, pari passu basis in proportion to the Dividend
Rates for the Series A Preferred Stock and Series B Preferred Stock, as applicable. The right to
receive dividends on shares of Series A Preferred Stock and Series B Preferred Stock shall not be
cumulative, and no right to such dividends shall accrue to holders of Series A Preferred Stock or
Series B Preferred Stock by reason of the fact that dividends on said shares are not declared or
paid in any year.
(c) Distribution. For purposes of this Section 2, unless the context otherwise
requires, a distribution shall mean the transfer of cash or other property without consideration
whether by way of dividend or otherwise, payable other than in Common Stock, or the purchase or
redemption of shares of the Corporation other than (i) repurchase of shares of Common Stock issued
to or held by employees, consultants, officers and directors of the Corporation or its subsidiaries
upon termination of their employment or services pursuant to agreements providing for the right of
said repurchase and at the original purchase price paid by such employees, consultants, officers
and directors; and (ii) repurchase of Common Stock issued to or held by employees, officers,
directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal
contained in agreements providing for such rights, provided that such repurchase is unanimously
approved by the Board of Directors; and (iii) any other repurchase or redemption of capital stock
of the corporation unanimously approved by the Board of Directors and approved by the holders of
the majority of the Common Stock and the holders of more than two-thirds (2/3) of the outstanding
shares of the Preferred Stock, voting as separate classes.
(d) Common Stock. Dividends may be paid on the Common Stock as and when declared by
the Board of Directors, subject to the prior dividend rights of the Preferred Stock and Section 6
below.
(e) Non-Cash Distributions. Whenever a distribution provided for in this Section 2
shall be payable in property other than cash, the value of such distribution shall be deemed to be
the fair market value of such property as determined in good faith by the Board of Directors.
(f) Consent to Certain Repurchases. As authorized by Section 402.5(c) of the
California Corporations Code, Sections 502, 503 and 506 of the California Corporations Code shall
not apply with respect to payments made by the Corporation in connection with (i) repurchase of
shares of Common Stock issued to or held by employees, consultants, officers and directors of the
Corporation or its subsidiaries upon termination of their employment or services pursuant to
agreements providing for the right of said repurchase and at the original purchase price paid by
such employees, consultants, officers and directors, and (ii) repurchase of Common Stock issued to
or held by employees, officers, directors or consultants of the Corporation or its subsidiaries
pursuant to rights of first refusal contained in agreements providing for such rights, provided
that such repurchase is unanimously approved by the Board of Directors, and (iii) any other
repurchase or redemption of capital stock of the Corporation unanimously approved by the Board of
Directors and approved by the holders of more than two-thirds (2/3) of the outstanding shares of
the Preferred Stock voting together as a single class.
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3. Liquidation Rights.
(a) Series C Liquidation Preference. In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, the holders of the Series C
Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of
the assets of the Corporation to the holders of the Common Stock, the Series A Preferred Stock and
the Series B Preferred Stock by reason of their ownership of such stock, an amount per share for
each share of Series C Preferred Stock held by them equal to the sum of (i) the Liquidation
Preference for such shares and (ii) all declared and unpaid dividends on such share of Series C
Preferred Stock. If upon the liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation legally available for distribution to the holders of the Series C Preferred
Stock are insufficient to permit the payment to such holders of the full amounts specified in this
Section 3(a), then the entire assets of the Corporation legally available for distribution shall be
distributed with equal priority and pro rata among the holders of the Series C
Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive
pursuant to this Section 3(a).
(b) Series B Liquidation Preference. After the payment to the holders of Series C
Preferred Stock of the full amounts specified in Section 3(a) above, the holders of the Series B
Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of
the remaining assets of the Corporation to the holders of the Common Stock and the Series A
Preferred Stock by reason of their ownership of such stock, an amount per share for each share of
Series B Preferred Stock held by them equal to the sum of (i) the Liquidation Preference for such
shares and (ii) all declared and unpaid dividends on such share of Series B Preferred Stock. If
the remaining assets of the Corporation legally available for distribution to the holders of the
Series B Preferred Stock are insufficient to permit the payment to such holders of the full amounts
specified in this Section 3(b), then the entire remaining assets of the Corporation legally
available for distribution shall be distributed with equal priority and pro rata
among the holders of the Series B Preferred Stock in proportion to the full amounts they would
otherwise be entitled to receive pursuant to this Section 3(b).
(c) Series A Liquidation Preference. After the payment to the holders of Series C
Preferred Stock and the holders of Series B Preferred Stock of the full amounts specified in
Sections 3(a) and 3(b) above, the holders of the Series A Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the remaining assets of the
Corporation to the holders of the Common Stock by reason of their ownership of such stock, an
amount per share for each share of Series A Preferred Stock held by them equal to the sum of
(i) the Liquidation Preference for such shares and (ii) all declared and unpaid dividends on such
share of Series A Preferred Stock. If remaining assets of the Corporation legally available for
distribution to the holders of the Series A Preferred Stock are insufficient to permit the payment
to such holders of the full amounts specified in this Section 3(c), then the entire remaining
assets of the Corporation legally available for distribution shall be distributed with equal
priority and pro rata among the holders of the Series A Preferred Stock in
proportion to the full amounts they would otherwise be entitled to receive pursuant to this
Section 3(c).
(d) Remaining Assets. After the payment to the holders of Preferred Stock of the full
amounts specified in Sections 3(a), 3(b) and 3(c) above, the entire remaining assets of the
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Corporation legally available for distribution shall be distributed pro-rata to
holders of the Common Stock of the Corporation in proportion to the number of shares of Common
Stock held by them.
(e) Shares Not Treated as Both Preferred Stock and Common Stock in Any Distribution.
Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in
order to participate in any distribution, or series of distributions, as shares of Common Stock,
without first foregoing participation in the distribution, or series of distributions, as shares of
Preferred Stock.
(f) Reorganization. For purposes of this Section 3, a liquidation, dissolution or
winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the
acquisition of the Corporation by another entity by means of any transaction or series of related
transactions (including, without limitation, any stock acquisition, reorganization, merger or
consolidation but excluding any merger effected exclusively for the purpose of changing the
domicile of the Corporation) other than a transaction or series of transactions in which the
holders of the voting securities of the Corporation outstanding immediately prior to such
transaction or series of transactions continue to retain (either by such voting securities
remaining outstanding or by such voting securities being converted into voting securities of the
surviving entity), as a result of shares in the Corporation held by such holders prior to such
transaction, at least fifty percent (50%) of the total voting power represented by the voting
securities of the Corporation or such surviving entity outstanding immediately after such
transaction or series of transactions; or (ii) a sale, transfer, lease or other conveyance of all
or substantially all of the assets of the Corporation.
(g) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed
to shareholders in connection with any liquidation, dissolution, or winding up of the Corporation
are other than cash, then the value of such assets shall be their fair market value as determined
in good faith by the Board of Directors, except that any securities to be distributed to
shareholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as
follows:
(i) If the securities are then traded on a national securities exchange or the Nasdaq Stock
Market System (or a similar national quotation system), then the value of the securities shall be
deemed to be to the average of the closing prices of the securities on such exchange or system over
the ten (10) trading day period ending five (5) trading days prior to the distribution;
(ii) if the securities are actively traded over-the-counter, then the value of the securities
shall be deemed to be the average of the closing bid prices of the securities over the ten (10)
trading day period ending five (5) trading days prior to the distribution; or
(iii) if there is no active public market for the securities, then the value of the securities
shall be deemed to be the fair market value thereof as determined in good faith by the Board of
Directors which determination shall include consideration of the illiquidity of the securities.
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In the event of a merger or other acquisition of the Corporation by another entity, the
distribution date shall be deemed to the date such transaction closes.
For the purposes of this subsection 3(g), trading day shall mean any day on which the
exchange or system on which the securities to be distributed are traded is open, and closing
prices or closing bid prices shall be deemed to be: (i) for securities traded primarily on the
New York Stock Exchange, the American Stock Exchange or Nasdaq, the last reported trade price or
sale price, as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities
listed or traded on other exchanges, markets and systems, the market price as of the end of the
regular hours trading period that is generally accepted as such for such exchange, market or
system. If, after the date hereof, the benchmark times generally accepted in the securities
industry for determining the market price of a stock as of a given trading day shall change from
those set forth above, the fair market value shall be determined as of such other generally
accepted benchmark times.
4. Conversion. The holders of the Preferred Stock shall have conversion rights as
follows (the Conversion Rights):
(a) Right to Convert. Subject to Section 4(c), each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of issuance of such
share at the office of the Corporation or any transfer agent for the Preferred Stock, into that
number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original
Issue Price for the relevant series by the Conversion Price for such series. (The number of shares
of Common Stock into which each share of Preferred Stock of a series may be converted is
hereinafter referred to as the Conversion Rate for each such series.) Upon any decrease or
increase in the Conversion Price for any series of Preferred Stock, as described in this Section 4,
the Conversion Rate for such series shall be appropriately increased or decreased.
(b) Automatic Conversion. Each share of Preferred Stock shall automatically be
converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion
Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial
public offering on Form S-1 (or successor form) filed under the Securities Act of 1933, as amended
(the Securities Act), covering the offer and sale of the Corporations Common Stock, provided
that the offering price per share is not less than $7.10 (as adjusted for stock splits or stock
dividends) and the aggregate gross proceeds to the Corporation are not less than $25,000,000, or
(ii) upon the receipt by the Corporation of a written request for such conversion from the holders
of two-thirds of the shares of Preferred Stock then outstanding, or, if later, the effective date
for conversion specified in such requests (each of the events referred to in (i) and (ii) being
hereinafter referred to as an Automatic Conversion Event).
(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued
upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then
fair market value of a share of Common Stock as determined by the Board of Directors. For such
purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated,
and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of
Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and
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to receive certificates therefor, he shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock,
and shall give written notice to the Corporation at such office that he elects to convert the same;
provided, however, that on the date of an Automatic Conversion Event, the
outstanding shares of Preferred Stock shall be converted automatically without any further action
by the holders of such shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided further, however, that the
Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares
of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the
holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation
from any loss incurred by it in connection with such certificates. On the date of the occurrence
of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be
deemed to be the holder of record of the Common Stock issuable upon such conversion,
notwithstanding that the certificates representing such shares of Preferred Stock shall not have
been surrendered at the office of the Corporation, that notice from the Corporation shall not have
been received by any holder of record of shares of Preferred Stock, or that the certificates
evidencing such shares of Common Stock shall not then be actually delivered to such holder.
The Corporation shall, as soon as practicable after such delivery, or after such agreement and
indemnification, issue and deliver at such office to such holder of Preferred Stock, a certificate
or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the
converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or holders of such shares of
Common Stock on such date; provided, however, that if the conversion is in connection with
an underwritten offer of securities registered pursuant to the Securities Act the conversion may,
at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the
closing of the sale of securities pursuant to such offering, in which event the person(s) entitled
to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be
deemed to have converted such Preferred Stock until immediately prior to the closing of the sale of
such securities.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definition. For purposes of this paragraph 4(d), Additional Shares of
Common shall mean all shares of Common Stock issued (or, pursuant to paragraph 4(d)(iii), deemed
to be issued) by the Corporation after the filing of these Articles of Incorporation, other than:
(1) shares of Common Stock issued or issuable upon conversion of shares of Preferred Stock;
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(2) shares of Common Stock issued or issuable to officers, directors and employees of, or
consultants and other service providers to, the Corporation pursuant to stock grants, option plans,
purchase plans or other employee stock incentive programs or arrangements approved by the Board of
Directors or upon exercise of options or warrants granted to such parties pursuant to any such
plan, program or arrangement;
(3) shares of Common Stock issued upon the exercise or conversion of Options or Convertible
Securities outstanding as of the date of the filing of these Articles of Incorporation;
(4) shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock
or pursuant to any event for which adjustment is made pursuant to paragraph 4(e), 4(f) or 4(g)
hereof;
(5) shares of Common Stock issued in a registered public offering under the Securities Act
pursuant to which all outstanding shares of Preferred Stock are automatically converted into Common
Stock pursuant to an Automatic Conversion Event;
(6) shares of Common Stock issued or issuable pursuant to the acquisition of another
corporation by the Corporation by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances are unanimously
approved by the Board of Directors; and
(7) shares of Common Stock issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a commercial leasing or debt financing transaction approved by the Board
of Directors.
(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a
particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares
of Common unless the consideration per share (as determined pursuant to paragraph 4(d)(v)) for an
Additional Share of Common issued or deemed to be issued by the Corporation is less than the
Conversion Price in effect on the date of, and immediately prior to such issue, for such series of
Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common. In the event the Corporation at
any time or from time to time after the date of the filing of these Articles of Incorporation shall
issue any Options or Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating thereto without regard
to any provisions contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible Securities, the
conversion or exchange of such Convertible Securities or, in the case of Options for Convertible
Securities, the exercise of such Options and the conversion or exchange of the underlying
securities, shall be deemed to have been issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record date, provided that
in any such case in which shares are deemed to be issued:
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(1) no further adjustment in the Conversion Price of the Preferred Stock shall be made upon
the subsequent issue of Convertible Securities or shares of Common Stock in connection with the
exercise of such Options or conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities by their terms provide, with the passage of time
or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price of the Preferred Stock computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the rights of conversion or exchange
under such Convertible Securities;
(3) no readjustment pursuant to clause (2) above shall have the effect of increasing the
Conversion Price of the Preferred Stock to an amount which exceeds the lower of (i) the Conversion
Price of the Preferred Stock on the original adjustment date, or (ii) the Conversion Price of the
Preferred Stock that would have resulted from any issuance of Additional Shares of Common between
the original adjustment date and such readjustment date;
(4) upon the expiration of any such Options or any rights of conversion or exchange under such
Convertible Securities which shall not have been exercised, the Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect thereto) and any
subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:
(A) in the case of Convertible Securities or Options for Common Stock, the only Additional
Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise
of such Options or the conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for the issue of such
exercised Options plus the consideration actually received by the Corporation upon such exercise or
for the issue of all such Convertible Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Corporation upon such conversion or
exchange, and
(B) in the case of Options for Convertible Securities, only the Convertible Securities, if
any, actually issued upon the exercise thereof were issued at the time of issue of such Options,
and the consideration received by the Corporation for the Additional Shares of Common deemed to
have been then issued was the consideration actually received by the Corporation for the issue of
such exercised Options, plus the consideration deemed to have been received by the Corporation
(determined pursuant to Section 4(d)(v)) upon the issue of the Convertible Securities with respect
to which such Options were actually exercised; and
(5) if such record date shall have been fixed and such Options or Convertible Securities are
not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which
became effective on such record date shall be canceled as of the close of
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business on such record date, and thereafter the Conversion Price shall be adjusted pursuant
to this paragraph 4(d)(iii) as of the actual date of their issuance.
(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In
the event this Corporation shall issue Additional Shares of Common (including Additional Shares of
Common deemed to be issued pursuant to paragraph 4(d)(iii)) without consideration or for a
consideration per share less than the applicable Conversion Price of a series of Preferred Stock in
effect on the date of and immediately prior to such issue, then, the Conversion Price of the
affected series of Preferred Stock shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common so issued would purchase at
such Conversion Price, and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional Shares of Common so
issued. For the purposes of this Subsection 4(d)(iv), all shares of Common Stock issuable upon
exercise of outstanding Options or the conversion of outstanding Convertible Securities and shares
of Preferred Stock, and all Additional Shares of Common deemed issued pursuant to
Subsection 4(d)(iii) hereof, shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes of this subsection 4(d), the
consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares
of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation excluding amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common are issued together with other shares or
securities or other assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as
reasonably determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration per share received by the
Corporation for Additional Shares of Common deemed to have been issued pursuant to
paragraph 4(d)(iii) shall be determined by dividing
(X) the total amount, if any, received or receivable by the Corporation as consideration for
the issue of such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating
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thereto, without regard to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion or exchange of such
Convertible Securities by
(Y) the maximum number of shares of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(e) Adjustments for Subdivisions or Combinations of Common Stock. In the event the
outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock
dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of
each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently
with the effectiveness of such subdivision, be proportionately decreased. In the event the
outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a
lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such
combination shall, concurrently with the effectiveness of such combination, be proportionately
increased.
(f) Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the
outstanding shares of Preferred Stock or a series of Preferred Stock shall be subdivided (by stock
split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred
Stock, the Dividend Rate, Original Issue Price and Liquidation Preference of the affected series of
Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the
effectiveness of such subdivision, be proportionately decreased. In the event the outstanding
shares of Preferred Stock or a series of Preferred Stock shall be combined (by reclassification or
otherwise) into a lesser number of shares of Preferred Stock, the Dividend Rate, Original Issue
Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately
prior to such combination shall, concurrently with the effectiveness of such combination, be
proportionately increased.
(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3
above (Liquidation Rights), if the Common Stock issuable upon conversion of the Preferred Stock
shall be changed into the same or a different number of shares of any other class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares provided for above), then, in any such event, in lieu of the number of
shares of Common Stock which the holders would otherwise have been entitled to receive each holder
of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock
into a number of shares of such other class or classes of stock which a holder of the number of
shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately
before that change would have been entitled to receive in such reorganization or reclassification,
all subject to further adjustment as provided herein with respect to such other shares.
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(h) No Impairment. The Corporation will not through any reorganization, transfer of
assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but will at all times in good faith assist in the carrying out of all
the provisions of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against
impairment. Notwithstanding the foregoing, nothing in this Section 4(h) shall prohibit the
Corporation from amending its Articles of Incorporation with the requisite consent of its
shareholders and the board of directors.
(i) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Preferred Stock.
(j) Notices of Record Date. In the event that this Corporation shall propose at any
time:
(i) to declare any dividend or distribution upon its Common Stock, whether in cash, property,
stock or other securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus;
(ii) to effect any reclassification or recapitalization of its Common Stock outstanding
involving a change in the Common Stock; or
(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a
liquidation, dissolution or winding up of the corporation pursuant to Section 3(f);
then, in connection with each such event, this Corporation shall send to the holders of the
Preferred Stock at least 14 days prior written notice of the date on which a record shall be taken
for such dividend, distribution or subscription rights (and specifying the date on which the
holders of Common Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (ii) and (iii) above.
Each such written notice shall be given by first class mail, postage prepaid, addressed to the
holders of Preferred Stock at the address for each such holder as shown on the books of this
Corporation.
The right of the holders of the Preferred Stock to notice hereunder may be waived, either
prospectively or retroactively and either generally or in a particular instance, by the holders of
more
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than two-thirds (2/3) of the outstanding shares of the Preferred Stock voting together as a
single class.
(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common Stock solely for the
purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares
of Common Stock as shall from time to time be sufficient to effect the conversion of all then
outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.
(l) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the
contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be
waived, either prospectively or retroactively and either generally or in a particular instance, by
the consent or vote of the holders of more than two-thirds (2/3) of the outstanding shares of such
series. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.
5. Voting.
(a) Restricted Class Voting. Except as otherwise expressly provided herein or as
required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together
and not as separate classes.
(b) No Series Voting. Other than as provided herein or required by law, there shall
be no series voting.
(c) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number
of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock
held by such holder could be converted as of the record date. The holders of shares of the
Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be
entitled to vote. Holders of Preferred Stock shall be entitled to notice of any shareholders
meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Preferred Stock held by each holder could be converted), shall be
disregarded.
(d) Common Stock. Each holder of shares of Common Stock shall be entitled to one vote
for each share thereof held.
(e) Election of Directors. So long as at least 2,000,000 shares (as adjusted for
Recapitalizations) of Preferred Stock remain outstanding, the holders of Series C Preferred Stock,
voting as a separate class, shall be entitled to elect three (3) members of the Corporations Board
of Directors at each meeting or pursuant to each consent of the Corporations shareholders for the
election of directors. Any additional members of the Corporations Board of Directors shall be
elected by the holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock,
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voting together as a single class. If a vacancy on the Board of Directors is to be filled by
the Board of Directors, only directors elected by the same class or classes of shareholders as
those who would be entitled to vote to fill such vacancy shall vote to fill such vacancy.
6. Amendments and Changes Requiring Approval of Preferred Stock. As long as any of
the Preferred Stock shall be issued and outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent as provided by law) of the holders of more than
two-thirds (2/3) of the outstanding shares of the Preferred Stock voting together as a single
class:
(a) amend, alter or repeal any provision of the Articles of Incorporation or By-laws of the
Corporation if such action would adversely alter the rights, preferences, privileges or powers of,
or restrictions provided for the benefit of the Preferred Stock or any series thereof;
(b) enter into any transaction or series of related transactions deemed to be a liquidation,
dissolution or winding up of the Corporation pursuant to Section 3(f) above.
(c) voluntarily liquidate or dissolve;
(d) declare or pay any distribution (as defined in Section 2(c)) with respect to the Common
Stock of the Corporation;
(e) permit any subsidiary of the Corporation to sell securities to a third party;
(f) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Preferred Stock;
(g) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, liquidation, redemption,
conversion or other rights senior to or on a parity with any series of Preferred Stock or with
respect to voting senior to any series of Preferred Stock;
(h) increase or decrease the authorized number of directors of the Corporation; or
(i) amend this Section 6.
7. Amendments and Changes Requiring the Approval of the Series C Preferred Stock. As
long as any of the Series C Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of two-thirds of the outstanding shares of the Series C Preferred Stock:
(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series C Preferred Stock in a manner different from
any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series C Preferred Stock;
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(c) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series C Preferred Stock or with respect to
voting senior to the Series C Preferred Stock;
(d) declare or pay any distribution (as defined in Section 2(c)) with respect to the Common
Stock or Preferred Stock of the Corporation;
(e) increase the authorized number of directors of the Corporation above nine (9); or
(f) amend this Section 7.
8. Amendments and Changes Requiring the Approval of the Series B Preferred Stock. As
long as any of the Series B Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of two-thirds of the outstanding shares of the Series B Preferred Stock:
(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series B Preferred Stock in a manner different from
any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series B Preferred Stock; or
(c) amend this Section 8.
9. Status of Converted Stock. In the event any shares of Preferred Stock shall be
converted pursuant to Article 4 hereof, then the shares so converted shall be cancelled and shall
not be issuable by the Corporation. The Articles of Incorporation shall be appropriately amended
to effect the corresponding reduction in the Corporations authorized capital stock.
10. Notices. Any notice required by the provisions of this Article IV to be given to
the holders of Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at such holders address appearing on the
books of the Corporation.
ARTICLE V
1. Limitation of Directors Liability. The liability of the directors of this
Corporation for monetary damages shall be eliminated to the fullest extent permissible under
California law.
2. Indemnification of Corporate Agents. This Corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with agents, votes of shareholders or disinterested directors or
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otherwise, in excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in Section 204 of the
California Corporations Code with respect to actions for breach of duty to this Corporation and its
shareholders.
3. Repeal or Modification. Any repeal or modification of the foregoing provisions of
this Article V shall not adversely affect any right of indemnification or limitation of liability
of an agent of this Corporation relating to acts or omissions occurring prior to such repeal or
modification.
(THE GREAT SEAL OF THE STATE OF CALIFORNIA - OFFICE OF THE SECRETARY OF STATE)
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Exhibit d
Notice of Borrowing
, ________
Lighthouse
Capital Partners V, L.P.
500 Drakes Landing Road
Greenbrae, CA 94904-3011
Ladies and Gentlemen:
Reference
is made to the Loan and Security Agreement No. 4561 dated as of March 29, 2005 (as
it has been and may be amended from time to time, the Loan Agreement, initially capitalized
terms used herein as defined therein), between Lighthouse Capital Partners V, L.P. and
Fluidigm Corporation (the Company)
The undersigned is the President and CEO of the Company, and hereby irrevocably requests an
Advance under the Loan Agreement, and in that connection certifies as follows:
1. The amount of the proposed Advance is $ . The business day of the proposed Advance is .
2. The
Loan Commencement Date for this Advance shall be March 1, 2006.
3. As of this date, no Event of Default, or event which with notice or the passage of time
would constitute an Event of Default, has occurred and is continuing, or will result from the
making of the proposed Advance, and the representations and warranties of the Company contained in
Section 5 of the Loan Agreement are true and correct in all material respects.
4. No event that could reasonably be expected to have a material adverse effect on the
ability of Borrower to fulfill its obligations under the Loan Agreement has occurred since the
date of the most recent financial statements, submitted to you by the Company.
The Company agrees to notify you promptly before the funding of the Advance if any of the
matters to which I have certified above shall not be true and correct
on the Funding Date.
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Very truly yours, |
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Fluidigm Corporation |
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By: |
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Name: |
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1
Exhibit e
Incumbency Certificate
The undersigned, William Smith, hereby certifies that:
1. He/She is the duly elected and acting General Counsel and Vice
President of Legal Affairs of
Fluidigm
Corporation, a California
corporation (the Company).
2. That on the date hereof, each person listed below holds the office in the Company indicated
opposite his or her name and that the signature appearing thereon is the genuine signature of each
such person:
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SIGNATURE |
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Gajus Worthington
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President and CEO |
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William Smith
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General Counsel and Vice
President of Legal Affairs |
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3.
Attached hereto as Exhibit A is a true and correct copy of the Articles of Incorporation of the
Company, as amended, as in effect as of the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the Bylaws of the Company, as
amended, as in effect as of the date hereof.
5. Attached hereto as Exhibit C is a copy of the resolutions of the Board of Directors of the
Company authorizing and approving the Companys execution, delivery and performance of a loan
facility with Lighthouse Capital Partners V, L.P.
IN WITNESS WHEREOF, the undersigned has executed this Incumbency Certificate on March
29, 2005.
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Fluidigm Corporation |
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By: |
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Name:
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William Smith
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General Counsel and Vice President of Legal Affairs |
I, the President and CEO of the Company, do hereby certify that William Smith is the duly
qualified, elected and acting General Counsel and Vice President of Legal Affairs of the Company
and that the above signature is his or her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Officers Certificate on
March 29, 2005.
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Fluidigm Corporation |
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By: |
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Name:
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Gajus Worthington
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President and CEO |
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1
Exhibit f
Officers Certificate
The undersigned, to induce Lighthouse Capital Partners V, L.P. (Lender), to extend or
continue financial accommodations to Fluidigm Corporation, a California corporation (the
Borrower) pursuant to the terms of that certain
Loan and Security Agreement dated March 29, 2005
(the Loan Agreement), hereby certifies that on the date hereof:
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I am the duly elected and acting of Borrower. |
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I am a Responsible Officer as that term is defined in the Loan Agreement. |
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The information submitted herewith complies with Sections
5.7 and 6.2 of the Loan
Agreement. |
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The financial statements delivered herewith fairly present the financial condition of
Borrower |
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Borrower is currently able to meet its obligations as they come due. |
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I understand that Lender is relying upon the truthfulness, accuracy and
completeness hereof in connection with the Loan Agreement. |
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I will advise you if it comes to my attention that, as of the date hereof, the
information submitted herewith was not in fact true, correct and complete. |
IN WITNESS WHEREOF, the undersigned has executed this Officers Certificate on .
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Fluidigm Corporation |
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By: |
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Name:
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1
Exhibit g
Authorization for Automatic Payment
The
undersigned Fluidigm
Corporation (Borrower) authorizes
Lighthouse Capital Partners
V, L.P.
and any and all affiliated funds (collectively, Lender) and the bank / financial institution
(Bank) named below to initiate variable debit and/or credit entries to Borrowers deposit,
checking or savings accounts as designated below and to cause funds transfers to an account of
Lender as payment of any and all amounts due under the Loan and Security Agreement between
Borrower and Lender dated March , 2005 (the Loan Agreement).
1. Lender is hereby authorized to initiate
variable debit and/or credit transactions and
resulting funds transfers in Borrowers designated accounts with respect to amounts calculated
by Lender to be due and owing to Lender by Borrower periodically under the Loan Agreement.
Borrower consents to all such debit and/or credit transactions and resulting funds transfers and
hereby authorizes Lender to take all such actions as may be required by Bank with respect to
such transactions. Borrower acknowledges and agrees that such credit and/or debit entries may be
made in amounts due under the Loan Agreement in order to cause timely payments as required by
the terms of the Loan Agreement.
2. Borrower hereby authorizes Lender to
release to Bank all information concerning Borrower that
may be necessary or desirable for Bank to investigate or recover any erroneous funds transfers
that may occur.
3. Borrower acknowledges and agrees that
all such debit and/or credit transactions and funds
transfers are intended to be made through an Automated Clearing House system and in compliance
with the NACHA Rules and in compliance with Banks security procedures.
4. Borrower represents and warrants that the account information set forth below is accurate and
complete and that each of the account(s) set forth below is a business account maintained in
Borrowers name and for Borrowers account.
This Consent shall be effective as of March 29, 2005 and shall remain in effect until the Loan
Agreement has been terminated. Any cancellation by Borrower of this consent shall (i) be made in
writing and (ii) delivered to Bank and Lender in such time as to afford Bank and Lender a
reasonable opportunity to act on said cancellation.
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Wells Fargo Bank
(Name of Borrowers Bank)
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420 Montgomery St.
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San Francisco
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(Address of Bank)
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Bank Routing Number
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[***]
(between these symbols /: :/ on bottom left of check)
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Account Number: [***] (checking /deposit /savings) (circle one)
Copy of a voided check is attached to this form
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Borrower Name: |
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Fluidigm
Corporation |
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Borrower Address: |
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7100 Shoreline
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South San Francisco.
CA 94080 |
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Authorized by: |
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Its: |
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Internal ACH Authorizations from Lender:
Approved by:
Date:
1
Exhibit h
Negative Pledge Agreement
This Negative Pledge Agreement is made as of March 29, 2005, by and between
Fluidigm Corporation (Borrower) and Lighthouse Capital Partners V, L.P.
(Lender).
In consideration of the Loan and Security Agreement between the parties of proximate date herewith
(the Loan Agreement), Borrower agrees as follows:
Except as otherwise permitted in the Loan Agreement, Borrower shall not sell, transfer, assign,
mortgage, pledge, lease, grant a security interest in, or encumber any of Borrowers owned
intellectual property, including, without limitation, the following:
(a) Any and all copyright rights, copyright applications, copyright registration and like
protection in each work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held (collectively, the Copyrights);
(b) Any and all trade secrets, and any and all intellectual property rights in computer software
and computer software products now or hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Borrower now or hereafter existing,
created, acquired or held;
(d) All patents, patent applications and like protections, including, without limitation,
improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part
of the same, including, without limitation, the patents and patent applications (collectively, the
Patents);
(e) Any trademark and servicemark rights, whether registered or not, applications to register and
registrations of the same and like protections, and the entire goodwill of the business of
Borrower connected with and symbolized by such trademarks (collectively, the Trademarks);
(f) Any and all claims for damages by way of past, present and future infringements of any of the
rights included above, with the right, but not the obligation, to sue for an collect such damages
for said use or infringement of the intellectual property rights identified above;
(g) Any and all licenses or other rights to use any of the Copyrights, Patents or Trademarks and
all license fees and royalties arising from such use to the extent permitted by such license or
rights
(h) Any and all amendments, extensions, renewals and extensions of any of the Copyrights,
Patents or Trademarks; and
(i) Any and all proceeds and products of the foregoing, including, without limitation, all payments
under insurance or any indemnity or warranty payable in respect of
any of the foregoing.
It shall be an Event of Default under the Loan Agreement if there is a breach of any term of this
Negative Pledge Agreement. Borrower agrees to properly execute all documents reasonably required
by Lender in order to fulfill the intent and purposes hereof.
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Fluidigm Corporation |
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Lighthouse Capital Partners V, L.P. |
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By: |
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By: Lighthouse Management Partners V, L.L.C., its |
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general partner |
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Name: |
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By: |
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Title:
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1
Exhibit I
Control Agreement
[In form and substance acceptable to Lender in its reasonable discretion]
1
RESTRICTED ACCOUNT AGREEMENT
(ACCOUNT RESTRICTED AFTER INSTRUCTIONS Standing Wire Transfers)
This Restricted Account Agreement (the Agreement), dated as of the date specified at the end of
this Agreement, is entered into among Fluidigm Corporation (Company), Lighthouse Capital Partners
V, L.P. (Secured Party) and the Wells Fargo Bank identified in the signature block at the end of
this Agreement (Bank), and sets forth the rights of Secured Party and the obligations of Bank
with respect to the deposit account(s) of Company at Bank identified at the end of this Agreement
as the Restricted Account(s). As used in this Agreement, the term Restricted Account refers,
individually and collectively, to each such deposit account.
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Secured Partys Interest in Restricted Account. Secured Party represents that it is either
(i) a lender who has extended credit to Company and has been granted a security interest in
the Restricted Account or (ii) such a lender and the agent for a group of such lenders (the
Lenders). Company hereby confirms, and Bank hereby acknowledges, the security interest
granted by Company to Secured Party in all of Companys right, title and interest in and to
the Restricted Account and all sums now or hereafter on deposit in or payable or withdrawable
from the Restricted Account (the Account Funds). Except as specifically provided otherwise
in this Agreement, Company has given Secured Party complete control over the Account Funds. Secured
Party hereby appoints Bank as agent for Secured Party only for the purpose of perfecting
the security interest of Secured Party in the Account Funds while they are in the
Restricted Account. Company and Secured Party would like to use the Restricted Account
Service of Bank described in this Agreement (the Service) to further the arrangements
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Access to Restricted Account. Secured Party agrees that Company will be allowed access to the
Account Funds until Bank receives written instructions from Secured Party directing that
Company no longer have access to any Account Funds (the Instructions). Company agrees that
the Account Funds should be paid to Secured Party after Bank receives the Instructions, and
hereby irrevocably authorizes Bank to comply with the Instructions even if Company objects in
any way to the Instructions. Company further agrees that after Bank receives the Instructions,
Company will not have access to any Account Funds. |
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Balance Reports. Bank agrees, at the telephone request of Secured Party on any Business Day
(a day on which Bank is open to conduct its regular banking business, other than a Saturday,
Sunday or public holiday), to make available to Secured Party a report (Balance Report)
showing the opening available balance in the Restricted Account as of the beginning of such
Business Day, either on-line or by facsimile transmission, at Banks option. Company expressly
consents to this transmission of information. Secured Party and Company understand and agree
that the opening available balance in the Restricted Account at the beginning of any Business
Day will be determined after deducting from the Restricted Account the face amount of all
Returned Items (as defined in Section 8 of this Agreement). |
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Transfers to Secured Party. Bank agrees that on each Business Day after it receives the
Instructions it will transfer to the Secured Partys account specified at the end of this
Agreement |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 1 |
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with the bank specified at the end of this Agreement (the Secured Party Account) the full
amount of the opening available balance in the Restricted Account at the beginning of such
Business Day. Bank will use the Fedwire system to make each funds transfer unless for any
reason the Fedwire system is unavailable, in which case Bank will determine the funds
transfer system to be used in making each funds transfer and the means by which each
transfer will be made. Bank, Secured Party and Company each agree that Bank will comply with
instructions given to Bank by Secured Party directing disposition of funds in the Restricted
Account without further consent by Company, subject otherwise to the terms of this Agreement
and Banks standard policies, procedures and documentation in effect from time to time
governing the type of disposition requested. Company authorizes all such transfers. Except
as otherwise required by law, Bank will not agree with any third party to comply with
instructions for disposition of funds in the Restricted Account originated by such third
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Delays in Making Funds Transfers. Secured Party and Company understand that a funds transfer
may be delayed or not made if (a) the transfer would cause Bank to exceed any limitation on
its intra-day net funds position established in accordance with Federal Reserve or other
regulatory guidelines or to violate any other Federal Reserve or other regulatory risk control
program, or (b) the funds transfer would otherwise cause Bank to violate any applicable law or
regulation. If a funds transfer cannot be made or will be delayed, Bank will notify Secured
Party by telephone. |
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Reliance on Identifying Numbers. If Secured Party indicates a name and an identifying number
for the bank of the person or entity to receive funds transfers out of the Restricted Account,
Secured Party and Company understand and agree that Bank may rely on the number Secured Party
indicates even if that number identifies a bank different from the bank Secured Party named.
If Secured Party indicates a name and an account number for the person or
entity to receive funds transfers out of the Restricted Account, Secured Party and Company
understand and agree that Bank may rely on the account number Secured Party indicates
even if that account number is not the account number for the person or entity who is to
receive the transfers. |
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Reporting Errors in Transfers. If Secured Party or Company learns of any error in a funds
transfer or any unauthorized funds transfer, then the party learning of such error or
unauthorized transfer (the Informed Party) must notify Bank as soon as possible by telephone
at (800) AT- WELLS (which is a recorded line), and provide written confirmation to Bank of
such telephonic notice within two Business Days at the address given for Bank on the signature
page of this Agreement. In no case may such notice to Bank by an Informed Party be made more
than fourteen (14) calendar days after such Informed Party learns of the erroneous or
unauthorized transfer. If a funds transfer is made in error and Bank suffers a loss because an
Informed Party breached its agreement to notify Bank of such error within the time limits
specified in this Section 7, then such Informed Party shall reimburse Bank for the loss
promptly upon demand by Bank; provided, however, that in the event both Secured Party and
Company breach this notification requirement, Secured Party shall not be obligated to
reimburse Bank for the loss unless Company fails to satisfy Banks demand for reimbursement
within fifteen (15) calendar days after demand is made on Company. |
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8. |
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Returned Item Amounts. Secured Party and Company understand and agree that the face amount
(Returned Item Amount) of each Returned Item will be paid by Bank debiting the Restricted
Account, without prior notice to Secured Party or Company. As used in this Agreement, the term
Returned Item means (i) any item deposited to the Restricted Account and returned unpaid,
whether for insufficient funds or for any other reason, and without regard to the timeliness
of such return or the occurrence or timeliness of any drawees
notice of non-payment; (ii) any
item subject to a claim against Bank of breach of transfer or presentment warranty under the
Uniform Commercial Code, as adopted in the applicable state; (iii) any automated clearing
house (ACH) entry credited to the Restricted Account and returned unpaid |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 2 |
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or subject to an adjustment entry under applicable clearing house rules, whether for
insufficient funds or for any other reason, and without regard to the timeliness of such
return or adjustment; (iv) any credit to the Restricted Account from a merchant card
transaction, against which a contractual demand for chargeback has been made; and (v) any
credit to the Restricted Account made in error. Company agrees to pay all Returned Item
Amounts immediately on demand, without setoff or counterclaim, to the extent there are not
sufficient funds in the Restricted Account to cover the Returned Item Amounts on the day
they are to be debited from the Restricted Account. Secured Party agrees to pay all Returned
Item Amounts within thirty (30) calendar days after demand, without setoff or counterclaim,
to the extent the Returned Item Amounts are not paid in full by Company within fifteen (15)
calendar days after demand on Company by Bank, and to the extent Secured Party received
proceeds from the corresponding Returned Items. |
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9. |
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Bank Fees. Company agrees to pay all Banks fees and charges for the maintenance and
administration of the Restricted Account and for the treasury management and other account
services provided with respect to the Restricted Account (collectively Bank Fees),
including, but not limited to, the fees for (a) the Balance Reports provided on the Restricted
Account, (b) the wire transfer services received with respect to the Restricted Account, (c)
Returned Items, (d) funds advanced to cover overdrafts in the Restricted Account (but without
Bank being in any way obligated to make any such advances), and (e) duplicate bank statements
on the Restricted Account. Before Bank receives the Instructions, the Bank Fees will be paid
by Bank debiting the Restricted Account, and after Bank receives the Instructions the Bank
fees will be paid by Bank debiting one or more of the demand deposit operating accounts of
Company at Bank specified at the end of this Agreement (the Operating Accounts). All such
debits will be made on the Business Day that the Bank Fees are due without notice to Secured
Party or Company. If there are not sufficient funds in the Restricted Account, or after Bank
receives the Instructions, the Operating Accounts, to cover fully the Bank Fees on the Business Day they
are debited from the Restricted Account or the Operating Accounts, or if no Operating
Accounts are indicated at the end of this Agreement, such shortfall or the amount of
such Bank Fees will be paid by Company sending Bank a check in the amount of such
shortfall or such Bank Fees, without setoff or counterclaim, within fifteen (15)
calendar days after demand of Bank. After Bank receives the Instructions, Secured Party
agrees to pay the Bank Fees within thirty (30) calendar days after demand, without
setoff or counterclaim, to the extent such Bank Fees are not paid in full by Company by
check within fifteen (15) calendar days after demand on Company by Bank. Bank may, in
its discretion, change the Bank Fees upon thirty (30) calendar days prior written notice
to Company and Secured Party. |
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10. |
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Account Documentation. Secured Party and Company agree that, except as specifically provided
in this Agreement, the Restricted Account will be subject to, and Banks operation of the
Restricted Account will be in accordance with, the terms and provisions of Banks deposit
account agreement governing the Restricted Account (Account
Agreement), a copy of which
Company and Secured Party acknowledge having received. |
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11. |
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Bank Statements. After Bank receives the Instructions, Bank will, if so indicated on the
signature page of this Agreement, send to Secured Party by United States mail, at the address
indicated for Secured Party after its signature to this Agreement, duplicate copies of all
bank statements on the Restricted Account which are sent to Company. Company and/or Secured
Party will have thirty (30) calendar days after receipt of a bank statement to notify Bank of
an error in such statement. Banks liability for such errors is limited as provided in the
Limitation of Liability section of this Agreement. |
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12. |
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Partial Subordination of Banks Rights. Bank hereby subordinates to the security interest of
Secured Party in the Restricted Account (i) any security interest which Bank may have or
acquire in the Restricted Account, and (ii) any right which Bank may have or acquire to set
off or otherwise apply any Account Funds against the payment of any indebtedness from time to
time |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 3 |
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owing to Bank from Company, except for debits to the Restricted Account permitted under this
Agreement for the payment of Returned Item Amounts or Bank Fees. |
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13. |
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Bankruptcy Notice; Effect of Filing. If Bank at any time receives notice of the commencement
of a bankruptcy case or other insolvency or liquidation proceeding by or against Company (a
Bankruptcy Notice), Bank will continue to comply with its obligations under this Agreement,
except to the extent that any action required of Bank under this Agreement is prohibited under
applicable bankruptcy laws or regulations or is stayed pursuant to the automatic stay imposed
under the United States Bankruptcy Code or by order of any court or agency. With respect to
any obligation of Secured Party hereunder which requires prior demand upon Company, the
commencement of a bankruptcy case or other insolvency or liquidation proceeding by or against
Company shall automatically eliminate the necessity of such demand
upon Company by Bank, and
shall immediately entitle Bank to make demand on Secured Party with the same effect as if
demand had been made upon Company and the time for Companys performance had expired. |
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14. |
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Legal Process, Legal Notices and Court Orders. Bank will comply with any legal process, legal
notice or court order it receives if Bank determines in its sole discretion that the legal
process, legal notice or court order is legally binding on it. |
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15. |
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Indemnification for Following Instructions. Secured Party and Company each agree that,
notwithstanding any other provision of this Agreement, except to the extent caused by Banks
gross negligence or willful misconduct Bank will not be liable to Secured Party or Company for
any losses, liabilities, damages, claims (including, but not limited to, third party claims),
demands, obligations, actions, suits, judgments, penalties, costs or expenses, including, but
not limited to, attorneys fees, (collectively, Losses and Liabilities) suffered or incurred
by Secured Party or Company as a result of or in connection with, (a) Bank complying with any
binding legal process, legal notice or court order referred to in Section 14 of this
Agreement, (b) Bank following any instruction or request of Secured Party, or (c) Bank
complying with its obligations under this Agreement. Further, Company, and to the extent
not paid by Company within fifteen (15) calendar days after demand, Secured Party, will
indemnify Bank against any Losses and Liabilities Bank may suffer or incur as a result of
or in connection with any of the circumstances referred to in clauses (a) through (c) of
the preceding sentence. |
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16. |
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No Representations or Warranties of Bank. Bank agrees to perform its obligations under this
Agreement in a manner consistent with the quality provided when Bank performs similar services
for its own account. However, Bank will not be responsible for the errors, acts or omissions
of others, such as communications carriers, correspondents or clearinghouses through which
Bank may perform its obligations under this Agreement or receive or transmit information in
performing its obligations under this Agreement. Secured Party and Company also understand
that Bank will not be responsible for any loss, liability or delay caused by wars, failures in
communications networks, labor disputes, legal constraints, fires, power surges or failures,
earthquakes, civil disturbances or other events beyond Banks control. BANK MAKES NO EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICE OTHER THAN THOSE
EXPRESSLY SET FORTH IN THIS AGREEMENT. |
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17. |
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Limitation of Liability. In the event that Secured Party, Company or Bank suffers or incurs
any Losses and Liabilities as a result of, or in connection with, its or any other partys
performance or failure to perform its obligations under this Agreement, the affected parties
shall negotiate in good faith in an effort to reach a mutually satisfactory allocation of such
Losses and Liabilities, it being understood that Bank will not be responsible for any Losses
and Liabilities due to any cause other than its own negligence or breach of this Agreement, in
which case its liability to Secured Party and Company shall, unless otherwise provided by any
law which cannot be |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 4 |
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varied by contract, be limited to direct money damages in an amount not to exceed ten (10)
times all the Bank Fees charged or incurred during the calendar month immediately preceding
the calendar month in which such Losses and Liabilities occurred (or, if no Bank Fees were
charged or incurred in the preceding month, the Bank Fees charged or incurred in the month
in which the Losses and Liabilities occurred). Company will indemnify Bank against all
Losses and Liabilities suffered or incurred by Bank as a result of third party claims;
provided, however, that to the extent such Losses and Liabilities are directly caused by
Banks negligence or breach of this Agreement such indemnity will only apply to those Losses
and Liabilities which exceed the liability limitation specified in the preceding sentence.
The limitation of Banks liability and the indemnification by Company set out above will not
be applicable to the extent any Losses and Liabilities of any party to this Agreement are
directly caused by Banks gross negligence or willful misconduct. IN NO EVENT WILL BANK BE
LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, WHETHER ANY
CLAIM IS BASED ON CONTRACT OR TORT, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN TO BANK
AND REGARDLESS OF THE FORM OF THE CLAIM OR ACTION, INCLUDING, BUT NOT LIMITED TO, ANY CLAIM
OR ACTION ALLEGING GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FAILURE TO EXERCISE REASONABLE CARE
OR FAILURE TO ACT IN GOOD FAITH. Any action against Bank by Company or Secured Party under
or related to this Agreement must be brought within twelve months after the cause of action
accrues. |
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18. |
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Termination. This Agreement and the Service may be terminated by Secured Party or Bank at any
time by either of them giving thirty (30) calendar days prior written notice of such
termination to the other two parties to this Agreement at their contact addresses specified
after their signatures to this Agreement; provided, however, that this Agreement and the
Service may
be terminated immediately upon written notice from Bank to Company and Secured Party
should Secured Party fail to make any payment when due to Bank from Secured Party under
the terms of this Agreement. Secured Party and Company agree that the Restricted Account
may be closed by Bank as provided in the Account Agreement. Companys and Secured
Partys obligation to report errors in funds transfers and bank statements and to pay
the Bank Fees, as well as the indemnifications made, and the limitations on the
liability of Bank accepted, by Company and Secured Party under this Agreement will
continue after the termination of this Agreement and/or the closure of the Restricted
Account with respect to all the circumstances to which they are applicable existing or
occurring before such termination or closure, and any liability of any party to this
Agreement, as determined under the provisions of this Agreement, with respect to acts or
omissions of such party prior to such termination or closure will also survive such
termination or closure. Upon any termination of this Agreement and the Service or
closure of the Restricted Account all collected and available balances in the Restricted
Account on the date of such termination or closure will be transferred to Secured Party
as requested by Secured Party in writing to Bank. |
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19. |
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Modifications, Amendments, and Waivers. This Agreement may not be modified or amended, or any
provision thereof waived, except in a writing signed by all the parties to this Agreement;
provided, however, that the Bank Fees may be changed after thirty (30) calendar days prior
written notice to Company and Secured Party. |
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20. |
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Notices. All notices from one party to another shall be in writing, or be made by a telecommunications
device capable of creating a written record, shall be delivered to Company,
Secured Party and/or Bank at their contact addresses specified after their signatures to this
Agreement, or any other address of any party notified to the other parties in writing, and
shall be effective upon receipt. Any notice sent by one party to this Agreement to another
party shall also be sent to the third party to this Agreement. Bank is authorized by Company
and Secured Party to act on any instructions or notices received by Bank if (a) such
instructions or notices |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 5 |
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purport to be made in the name of Secured Party, (b) Bank reasonably believes that they are
so made, and (c) they do not conflict with the terms of this Agreement as such terms may be
amended from time to time, unless such conflicting instructions or notices are supported by
a court order. |
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21. |
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Successors and Assigns. Neither Company nor Secured Party may assign or transfer its rights
or obligations under this Agreement to any person or entity without the prior written consent
of Bank, which consent will not be unreasonably withheld. Bank may not assign its rights or
obligations under this Agreement to any person or entity without the prior written consent of
Secured Party, which consent will not be unreasonably withheld; provided, however, that no
such consent will be required if the assignee is a bank affiliate of Bank. |
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22. |
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Governing Law. Company and Secured Party understand that Banks provision of the Service
under this Agreement is subject to federal laws and regulations. To the extent that such
federal laws and regulations are not applicable this Agreement shall be governed by and be
construed in accordance with the laws of the state in which the office of Bank that maintains
the Restricted Account is located, without regard to conflict of laws principles. |
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23. |
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Severability. To the extent that this Agreement or the Service to be provided under this
Agreement are inconsistent with, or prohibited or unenforceable under, any applicable law or
regulation, they will be deemed ineffective only to the extent of such prohibition or
unenforceability and be deemed modified and applied in a manner consistent with such law or
regulation. Any provision of this Agreement which is deemed unenforceable or invalid in any
jurisdiction shall not affect the enforceability or validity of the remaining provisions of
this Agreement or the same provision in any other jurisdiction. |
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24. |
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Usury. It is never the intention of Bank to violate any applicable usury or interest rate
laws. Bank does not agree to, or intend to contract for, charge, collect, take, reserve or
receive (collectively, charge or collect) any amount in the nature of interest or in the
nature of a fee, penalty or other charge which would in any way or event cause Bank to charge
or collect more than the maximum Bank would be permitted to charge or collect by any
applicable federal or state law. Any such excess interest or unauthorized fee shall,
notwithstanding anything stated to the contrary in this Agreement, be applied first to reduce
the amount owed, if any, and then any excess amounts will be refunded. |
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25. |
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Counterparts. This Agreement may be executed in any number of counterparts each of which
shall be an original with the same effect as if the signatures thereto and hereto were upon
the same instrument. |
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26. |
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Entire Agreement. This Agreement, together with the Account Agreement, contains the entire
and only agreement among all the parties to this Agreement and between Bank and Company, and
Bank and Secured Party, with respect to (a) the Service, (b) the interest of Secured Party and
the Lenders in the Account Funds and the Restricted Account, and (c) Banks obligations to
Secured Party and the Lenders in connection with the Account Funds and the Restricted Account. |
This Agreement has been signed by the duly authorized officers or representatives of Company,
Secured Party and Bank on the date specified below.
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Restricted Account Agreement
(Revised 09/21/01)
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Page 6 |
Date:
March 29, 2005
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Restricted Account Number(s):
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[***] |
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Operating Account Number(s):
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[***] |
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Secured Party Account Number:
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[***] |
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Bank of Secured Party Account:
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Comerica
Bank
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Secured Party is to be sent duplicate Bank Statements.
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[Company] FLUIDIGM CORPORATION
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[Secured Party] LIGHTHOUSE CAPITAL |
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PARTNERS V, L.P. |
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BY: LIGHTHOUSE MANAGEMENT |
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PARTNERS V, L.L.C. ITS GENERAL |
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PARTNER |
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By:
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By: |
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Name: Gajus Worthington |
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Name: Thomas Conneely |
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Title: CEO |
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Title: Vice President |
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Address For All Notices: |
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Address For All Notices: |
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Fluidigm Corporation |
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Lighthouse Capital Partners V, L.P. |
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Attn: James Neesen |
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500 Drakes Landing Road |
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7100 Shoreline Court |
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Greenbrae, CA 94904 |
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Attn: Contracts Administration |
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WELLS FARGO BANK
, N.A. |
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By: |
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Name: Scott M. Van Gorder |
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Title: Vice President, Senior Relationship Manager |
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Address For All Notices: |
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420 Montgomery
Street,
9th
Floor |
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MAC A0101-096 |
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San Francisco, CA 94108 |
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Restricted Account Agreement
(Revised 09/21/01)
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Page 7 |
March 29,
2005
Morgan Stanley & Co. Incorporated (the Broker)
555 California Street 14th Floor
San Francisco, CA 94104
Re: Notice of Pledge and Security
Gentlemen:
Please be advised that the undersigned, Fluidigm Corporation (Pledgor), has pledged a security
interest in Account No. [***] (the Account) held by Broker, as securities intermediary,
and in all of the securities, proceeds, cash or other assets now or hereafter held in the Account
(collectively, the Collateral), to Lighthouse Capital Partners V, L.P. (Pledgee) pursuant to
the terms and provisions of a certain Loan and Security Agreement (the Agreement), dated March
29, 2005.
Broker,
Pledgor and Pledgee, by signing this letter, hereby agree as follows:
a) The
Account shall be retitled Fluidigm Corporation Pledgor/
Lighthouse Capital Pledgee;
b) Pledgee has a security interest in the Collateral and is authorized to instruct the Broker
with regard to the Account without further consent needed by Pledgor;
c) Broker is hereby notified of Pledgees security interest, and agrees to comply with all
instructions and entitlement orders of Pledgee with regard to the Account. Broker shall
not comply with instructions and entitlement orders with respect to the Collateral or the
Account that are originated by the Pledgor except as described in Paragraph D below.
Broker is also hereby authorized and agrees to send duplicate copies of any and all
statements and confirmations, as well as any other appropriate correspondence, relating to
the Account directly to the Pledgee at the address indicated below, or to such other
address as Pledgee may designate in writing. This pledge will remain in full force and
effect until Pledgee notifies Broker in writing to the contrary;
d) Pledgee hereby instructs Broker that until further instruction in writing from an
Authorized Officer of Pledgee (as defined below) that Pledgee is assuming exclusive
control over the Account (Notice of Exclusive Control), the Broker shall comply with
directions of Pledgor with respect to any transactions, including withdrawals, in the
Account. Notwithstanding anything contained herein, upon receipt of a Notice of
Exclusive Control (it being understood that Broker shall have no duty or obligation
whatsoever to investigate or determine whether the Notice of Exclusive Control was
rightfully or legally issued), Broker shall only follow the directions and instructions of
Pledgee with regard to the Account. In that case, if Pledgee so requests, Broker will proceed to
liquidate the assets of the Account in accordance with Pledgees instructions and to deliver the
proceeds to Pledgee.
For purposes of this Agreement, Authorized Officer of Pledgee shall refer to any one of
the following individuals: Richard Stubblefield and Thomas Conneely. If Pledgee finds it
necessary to designate a replacement for any of the designated Authorized Officers of Pledgee,
written notice of replacement shall be given to Broker, which notice shall be signed by the
President, an Executive Vice President, a Senior Vice President, or such other officer of Pledgee
as Broker may approve. However, Broker shall be entitled to rely on any notice it receives from
someone whom it reasonably believes is an Authorized Officer of Pledgee;
e) Broker shall have no obligation to monitor the Account for any purpose in connection
with the pledge granted hereunder. The Pledgee accepts and acknowledges full
responsibility for reviewing daily confirmations and monthly statements to ensure that it
is adequately secured;
f) Pledgor and Pledgee hereby agree to indemnify and hold harmless Broker, its affiliates,
officers, and employees from and against any and all claims, causes of actions, liabilities,
lawsuits, demands, and/or damages, including, without limitation, any and all court costs and
reasonable attorneys fees, that might result by reason of the actions of Broker under this
Agreement. Broker shall not be responsible for any losses, claims, damages, liabilities and
expenses incurred by Pledgor or Pledgee, except to the extent that such losses, claims,
damages, liabilities or expenses arise out of the bad faith, gross negligence, or criminal
acts or omissions on the part of Broker;
g) Broker may terminate this Agreement at any time by canceling the Account and
transferring all funds and securities in the Account to Pledgee;
h) As of the date hereof, the Collateral has not been paid to or withdrawn by the Pledgor; Broker
is not in receipt of any notice of withdrawal or redemption with regard to the Collateral or
notice not to renew the Account, and Broker has not given any notice that the Account will not be
renewed or extended, as the case may be;
i) Brokers records indicate that the value of the Collateral, as of the date hereof, is
approximately [***].
j) Broker subordinates any right of offset Broker may now or hereafter have against the
Collateral for any indebtedness now or hereafter owing to Broker by the Pledgors to the security
interest of Pledgee; provided that Broker shall continue to have a first perfected
security interest in the Collateral with respect to any charges incurred in connection with the
operation of the Account, including, but not limited to, fees, commissions and any costs related
to unsettled securities transactions.
k) This Agreement shall be governed by the law of the State of New York, excluding its conflict of
law rules. The parties hereby agree that (i) the securities intermediarys jurisdiction with
respect to the Account and the Collateral is New York and (ii) the parties shall not agree with any
other person that such securities intermediarys jurisdiction is any jurisdiction other than New
York.
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Very truly yours,
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FLUIDIGM CORPORATION |
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By: James Neeson |
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Title: Controller |
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Read and Agreed to:
MORGAN STANLEY & CO. INCORPORATED
LIGHTHOUSE CAPITAL PARTNERS V, L.P.
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By:
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Lighthouse Management Partners V, L.L.C. |
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its general partner |
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By |
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Name: Thomas Conneely
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Title: Vice President |
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Address: 500 Drakes Landing Road |
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Greenbrae, CA 94904 |
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SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT (this Agreement), dated as of March 29, 2005, is between, on
the one hand, each undersigned holder (each a Holder and collectively the Holders) of
Convertible Promissory Notes issued pursuant to those certain Convertible Note Purchase Agreement
dated December 18, 2003, as amended from time to time (each a Note and collectively the Notes)
issued by Fluidigm Corporation, a California corporation (Company), and, on the other
hand, Lighthouse Capital
Partners V, L.P., a Delaware limited partnership (LCP), lender
under that certain Loan and Security Agreement No. 4561, dated March 29, 2005 (the Loan
Agreement) with Company (all obligations of payment and performance due or to become due pursuant
to the Obligations or the Loan Documents as those terms are defined therein, as the same may be
amended from time to time, are the LCP Obligations), with reference to the following:
WHEREAS, in order to induce LCP to enter into the Loan Agreement, the Holders agree to enter
into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties
hereby agree as follows:
1. Subordination. Each Holder agrees that it shall not receive any payment of any
amounts on account of the Notes until the LCP Obligations have been paid and performed in
full.
Regardless of (i) any agreement of any Holder or LCP with Company, (ii) the time, place,
manner or order of attachment, perfection, or the filing of UCC-1 filings or other documents,
or
(iii) the giving or failure to give notice, each Holder does hereby subordinate payment by
Company on its Notes to the full and final payment to LCP of the LCP Obligations. Each Holder
agrees that all payments and the proceeds received by Holders on account of the Notes shall be
held by them in trust for LCP for the payment of the LCP Obligations, and turned over to LCP
in
kind upon receipt of notice from LCP that Company has failed to pay LCP any of the LCP Obligations. Holders hereby agree they have no security interest in any property of the Company.
Notwithstanding anything in this Agreement, (i) in the event the Convertible Note, dated as of
December 18, 2003 (the Initial EDB Note), issued by Company to Biomedical Sciences Investment Fund
Pte Ltd (BMSIF) has not been converted according to the terms set forth in Section 2 of such
Initial EDB Note by the Payment Date (as defined in such Initial EDB Note), BMSIF may receive
payment by the Company in an amount not to exceed 50% of the principal amount outstanding under
such Initial EDB Note, and (ii) each Holder may convert any Note into capital stock of the Company
and accept cash in lieu of fractional shares in connection with any such conversion. Upon
conversion of any Note into capital stock of the Company and acceptance of cash in lieu of
fractional shares in connection with any such conversion, this Agreement shall terminate with
respect to such Note and any proceeds received by a Holder in connection with the conversion of
such Note.
2. Bankruptcy. (Subject to paragraph (1) above), Each Holder agrees that upon any
distribution of assets or readjustment of indebtedness of Company, whether by liquidation,
bankruptcy, assignment for the benefit of creditors, or otherwise, LCP shall receive payment in
full on the LCP Obligations before Holder receives payment of any amounts due under the Notes and
Holders shall pay over to LCP any amounts so received by them related to the Notes until the LCP
Obligations are paid in full. In furtherance thereof, each Holder authorizes LCP to make and vote
(without LCP being obligated to make or vote) any and all proofs of claim respecting the Notes in
any such proceeding and to receive and collect all dividends or other payments thereupon; provided
that LCP will pay over to Holders a pro rata distribution of amounts received by it in excess of
that necessary for the full and final satisfaction of the LCP Obligations. Holders agree to execute
such instruments of assignment and other documents as may be necessary to enforce such claims and
collect such dividends or to otherwise carry out the intent and purpose hereof.
3. Representations. Each party hereto warrants and represents to the others
that it has full power and authority to enter hereinto and to perform all obligations hereunder,
that this Agreement is valid, binding and enforceable in accordance with its terms and that
execution and performance hereof does not violate any agreement with any other person or entity.
Each Holder represents and warrants that it (i) is the owner of the Notes, free and clear of the
claims of any others, (ii) has not heretofore subordinated or assigned the Notes or its interest
therein to any entity, (iii) will not transfer any Notes to any entity other than one which agrees
to be bound hereby, and (iv) waives any rights to claim that the enforceability of this Agreement
may be affected by any subsequent modification, release, extension,
or change in LCP obligations.
4. No Third Party Beneficiaries. Company has no rights hereunder. This
Agreement is made only for the benefit of Holders and LCP and their successors and assigns, and may
not be relied upon by any other third party, including Company or any successor thereto or any
judgment lien creditor thereof. Nothing herein shall constitute a commitment or agreement by either
of LCP or Holder to provide funds to Company.
5. Miscellaneous. This Agreement: (i) may only be amended by a writing signed by
LCP and the affected Holder; (ii) contains the entire agreement between Holders and LCP with
respect to its subject matter, and all prior negotiations, documents and discussions are
superseded
hereby; (iii) shall be governed by the laws of the state of California; (iv) may be executed
in
counterparts delivered by telefacsimile, all of which, when taken together, shall constitute
one
and the same original document; and (v) may be attached to a Form UCC-1 and filed in the
public records of any jurisdiction; and (vi) shall terminate upon the full, final and
indefeasible
payment and performance by Company to LCP of all LCP Obligations.
6. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
Lighthouse
Capital Partners V, L.P.
a Delaware limited partnership
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by:
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Lighthouse Management Partners V, L.L.C.
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its general partner |
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by:
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/s/ Thomas Conneely |
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Thomas Conneely |
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Vice President |
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500 Drakes Landing Road |
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Greenbrae, CA 94904 |
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Attn: Contracts Administration |
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Tel: (415) 464-5900 |
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Fax: (415) 925-3387 |
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HOLDERS:
Biomedical
Sciences Investment Fund Ptd
Ltd
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By:
Title:
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/s/ Lily Chan
Director
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20 Biopolis Way |
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#09-01 Centros |
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Singapore 138668 |
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Attn: Lily Chan, PhD |
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Tel: 65-6395-7700 |
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Fax: 65-6395-7796 |
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Invus,
L.P.
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By:
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Invus Advisors, LLC
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Its general partner |
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By: |
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Title:
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135 East 57th Street |
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New York, NY 10022 |
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Attn: Phillipe J. Amouyal |
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Tel: (212) 371-1717 |
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Fax: (212) 371-1829 |
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Company hereby acknowledges and consents to the Agreement, promises to take all such action as may
be necessary to fulfill its essential intent and purpose, agrees that failure to do so shall be an
Event of Default under the LCP Obligations, and acknowledges that in the transactions referenced
herein it has been advised to seek, and has selected, counsel of its own choosing, namely Wilson,
Sonsini, Goodrich & Rosati of Palo Alto, California.
Fluidigm
Corporation
Signature page to Fluidigm Corporation
Subordination Agreement
Fluidigm Confidential
HOLDERS:
Biomedical
Sciences Investment Fund Ptd Ltd
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By: |
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Title:
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20 Biopolis Way |
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#09-01 Centros |
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Singapore 138668 |
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Attn: General Manager |
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Tel: 65-6395-7700 |
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Fax: 65-6395-7796 |
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Invus,
L.P.
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By:
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Invus Advisors, LLC
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Its general partner |
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By:
Title:
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/s/ Aflalo Guimaraes
Managing Director
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135 East
57th Street |
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New York, NY 10022 |
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Attn: Phillipe J. Amouyal |
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Tel: (212) 371- 1717 |
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Fax: (212) 371-1829 |
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Company hereby acknowledges and consents to the Agreement, promises to take all such action as may
be necessary to fulfill its essential intent and purpose, agrees that failure to do so shall be an
Event of Default under the LCP Obligations, and acknowledges that in the transactions referenced
herein it has been advised to seek, and has selected, counsel of its own choosing, namely Wilson,
Sonsini, Goodrich & Rosati of Palo Alto, California.
Fluidigm
Corporation
HOLDERS:
Biomedical
Sciences Investment Fund Ptd
Ltd
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By: |
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Title:
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20 Biopolis Way |
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#09-01 Centros |
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Singapore 138668 |
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Attn: General Manager |
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Tel: 65-6395-7700 |
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Fax: 65-6395-7796 |
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Invus,
L.P.
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By:
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Invus Advisors, LLC
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Its general partner |
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By: |
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Title:
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135 East 57th Street |
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New York, NY 10022 |
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Attn: Phillipe J. Amouyal |
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Tel: (212) 371-1717 |
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Fax: (212) 371-1829 |
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Company hereby acknowledges and consents to the Agreement, promises to take all such action as may
be necessary to fulfill its essential intent and purpose, agrees that failure to do so shall be an
Event of Default under the LCP Obligations, and acknowledges that in the transactions referenced
herein it has been advised to seek, and has selected, counsel of its own choosing, namely Wilson,
Sonsini, Goodrich & Rosati of Palo Alto, California.
Fluidigm Corporation
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By
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/s/ Gajus Worthington
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Its
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President & CEO |
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AMENDMENT NO. 01 (Amendment)
TO LOAN AND SECURITY AGREEMENT NO. 4561
Entered into as of August 4, 2006 by and between
Lighthouse Capital Partners V, L.P. (Lender) and Fluidigm Corporation (Borrower).
RECITALS
WHEREAS, Borrower and Lender have previously entered into that certain Loan and Security
Agreement No. 4561 dated as of March 29, 2005 (the Loan and Security Agreement; all initially
capitalized terms not otherwise defined herein shall have the meanings given to such terms in
the Loan and Security Agreement), together with the other agreements and instruments entered
into in connection therewith (collectively, the Loan Documents); and
WHEREAS, Borrower and Lender each have agreed to amend the Loan Documents subject to
Borrowers performance of the terms and conditions hereof; and
WHEREAS, as of August 31, 2006, Borrower and Lender mutually agree that the outstanding
principal balance of the Loans is $11,093,832.04;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, the parties hereby agree to modify the Loan Documents by entering into this Amendment
and Borrower agrees to perform such other covenants and conditions as follows:
A) Loan and Security Agreement
(i) Definitions The definition of Subordinated Indebtedness, shall be amended and
restated to read as follows:
Subordinated Indebtedness means Indebtedness of Borrower to Singapore EDB (including
its investment fund BioMedical Sciences Investment Fund Ptd Ltd) and Invus Group that is
subordinated in both security and right of payment to the Obligations on terms and
conditions reasonably satisfactory to Lender in an amount not to exceed $8,000,000.
B) Secured Term Promissory Note
(i) Definitions The following definitions shall be added to the Notes, and to the
extent these terms are already defined in the Loan Documents, they shall be deleted in their
entirety and replaced with the following:
Final Payment means 11.25% of the Advance.
Basic Rate means a variable per annum rate of interest equal to the Index plus the
Interest Margin which shall be subject to adjustment as provided herein. On and after March 1,
2006 through and including August 31, 2006, the Basic Rate shall be fixed at 10.00%. On and
after September 1, 2006, the Basic Rate shall be fixed at 9.75%.
Repayment
Period means the period beginning on the Loan Commencement Date and continuing
for 48 calendar months.
C) Additional Terms and Conditions
1.
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Repayment. Notwithstanding anything contained in any Note issued in connection
with the Loan and Security Agreement, Section 1 of each such Note shall be superseded by the following payment
terms: for and on account of all of the Notes, from March 1, 2006 through and including August 31,
2006, Borrower will pay Lender $416,006.71 per month. On and after September 1, 2006 through February 28,
2010, Borrower shall pay Lender $310,305.95 per month. In addition to all other amounts due or to
become due hereunder, the Final Payment is due on the earliest to occur of the Maturity Date or March
1, 2009. |
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Restructure Fee. In addition to all other amounts due or to become due
hereunder, on the earliest to occur of (i) the Maturity Date; (ii) the date of prepayment of all of the Notes, or (ii) March 1,
2009, Borrower shall pay to Lender a restructure fee in the amount of $150,000, in cash. |
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Expenses. Borrower shall pay reasonable fees and expenses incurred by
Lenders legal counsel in connection with the preparation and negotiation of documentation related to this Amendment.
Such restructure expenses are due and payable when billed. |
D) Acknowledgments; Representations and Warranties. Borrower warrants and represents to
Lender, as a material inducement to Lenders entering hereinto, as follows:
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No Further Funding Obligations. Lender has no obligations to make further Advances to
Borrower. |
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No Waivers. Lender has made no separate oral or written waiver of any existing
or future Default or Event of Default by Borrower under any Loan
Document. |
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No Set-Off. Borrower has no claims or rights of set-off against Lender of any
kind under any Loan Document or otherwise. Borrower has no defenses to payments of any amounts owed to Lender as
the same become due and payable. |
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Representations and Warranties of Borrower. The representations and warranties contained in the Loan Agreement are true and complete in all material respects as of the date hereof, except with
respect to any such representation or warranty which speak only as of a specific date prior to the date
hereof. Borrower warrants and represents that no Events of Default have occurred. Borrower warrants and
represents that it has not reached any settlement with any other creditor of Borrower that has not been
disclosed in writing to Lender. |
E. Release. Borrower for itself and for its agents, partners, stockholders, employees and
affiliates and its or their successors and assigns hereby (a) agrees to waive, release and further
discharge Lender and its officers, directors, stockholders, partners, successors, assigns, agents
and employees of and from any and all manner of claims arising in connection with the Loan
Documents for damages at law or in equity with respect to any matter occurring prior to the date
hereof which Borrower or such other releasing party may have had, and (b) waives California Civil
Code Section 1542, which reads: A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor. Each provision of this
release shall be severable from every other provision when determining its legal enforceability.
2.
Except as amended hereby, the Loan Documents remain unmodified and unchanged and ratified by
Borrower as though fully set forth herein. In the event of any contradiction between any term
of this Amendment with any other Loan Document, the terms under this Amendment shall control
Lender and Borrower have executed this Amendment as of the date first written above.
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Borrower: |
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Lender: |
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Fluidigm Corporation |
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Lighthouse Capital Partners V, L.P. |
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By:
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Lighthouse Management |
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Partners
V, L.L.C., its general partner |
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By:
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/s/ Gajus Worthington
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By:
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/s/ Thomas Conneely
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Name:
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Gajus Worthington
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Name:
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Thomas Conneely |
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Title:
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CEO
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Title:
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Vice President |
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3.
AMENDMENT NO. 02 (Amendment)
TO LOAN AND SECURITY AGREEMENT NO. 4561
Entered
into as of November 16, 2006 by and between
Lighthouse Capital Partners V, L.P. (Lender) and Fluidigm Corporation (Borrower).
Without limiting or amending any other provisions of the Agreement, as amended, Lender and Borrower
agree to the following:
Section 1.1 of the Agreement, the definition of Subordinated Indebtedness, shall be amended and
restated to read as follows:
Subordinated Indebtedness means Indebtedness of Borrower to Singapore EDB (including its
investment fund BioMedical Sciences Investment Fund Ptd Ltd) and Invus Group that is
subordinated in both security and right of payment to the Obligations on terms and
conditions reasonably satisfactory to Lender in an amount not to exceed $13,000,000.
All capitalized terms not otherwise defined herein shall have the meanings given to such terms in
the Agreement.
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Borrower: |
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Lender: |
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Fluidigm Corporation |
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Lighthouse Capital Partners V, L.P. |
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By:
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Lighthouse Management |
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Partners
V, L.L.C., its general partner |
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By:
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/s/ Rich Delateur
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By:
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/s/ Darren Haggerty
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Name:
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Rich Delateur
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Name:
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Darren Haggerty |
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Title:
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Chief Financial Officer
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Title:
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Director of Portfolio Analysis |
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1.
AMENDMENT NO. 03
Dated August 8, 2007
TO
that certain Loan and Security Agreement No. 4561
dated as of March 29, 2005, as amended (Agreement), by and between
Lighthouse Capital Partners V, L.P. (Lender) and
Fluidigm Corporation, a Delaware corporation (formerly a California corporation) (Borrower).
(All capitalized terms not otherwise defined herein shall have the meanings given to such terms in
the Agreement.)
Without limiting or amending any other provisions of the Loan Documents, Lender and Borrower
agree to the following:
Effective
March 29, 2007, Borrowers state of incorporation has reincorporated from the State
of California to the State of Delaware.
Except as amended hereby, the Loan Documents remains unmodified and unchanged.
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BORROWER: |
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LENDER: |
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Fluidigm Corporation |
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Lighthouse Capital Partners V, L.P. |
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By:
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Lighthouse Management |
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Partners V, L.L.C., its general partner |
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By:
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/s/ Gajus Worthington
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By:
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/s/ Tom Conneely
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Name:
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Gajus Worthington
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Name:
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Tom Conneely |
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Title:
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President & CEO
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Title: |
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Vice President |
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ORIGINAL
AMENDMENT NO. 04
Dated February 15, 2008
TO
that certain Loan and Security Agreement No. 4561
dated as of March 29, 2005, as amended (Agreement), by and between
Lighthouse Capital Partners
V, L.P. (Lender) and
Fluidigm
Corporation (Borrower).
this Amendment No. 04 (Amendment 04) to that certain Loan and Security Agreement
No. 4561 dated March 29, 2005 (as amended to date, the Agreement) is entered into as of February
15, 2008, by and between
Lighthouse Capital Partners V, L.P. (Lender) and Fluidigm
Corporation, a Delaware corporation
(Borrower).
WHEREAS, Borrower and Lender have previously entered into and amended the Agreement; and
WHEREAS, Borrower has requested Lender provide an additional term loan financing, which
Lender has agreed to provide subject to the terms of this Amendment 04.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
the parties hereby agree to modify the Agreement and to perform such other covenants and conditions
as follows:
(All capitalized terms not otherwise defined herein shall have the meanings given to such terms in
the Agreement.)
I. Section 1.1, the following definitions shall be added to the Agreement:
Change
of Management or Board Composition means that (i) Borrowers senior management shall not
include Gajus Worthington; (ii) Versant Ventures or any of its affiliated funds shall cease to
have a representative (currently Samuel Colella) serving on Borrowers Board of Directors; or
(iii) Alloy Ventures or any of its affiliated funds shall cease to have a representative
(currently Mike Hunkapiller) serving on Borrowers Board of Directors.
Commitment One means the Commitment as that term is used in the Agreement prior to the
effect of this Amendment 04.
Commitment Two means $10,000,000.
Commitment Two Warrant mean the Warrant in favor of Lender to purchase securities of Borrower,
substantially in the form of Exhibit C-2 attached to this Amendment 04 and issued in conjunction
with Commitment Two.
II. Section 1.1, the following definitions of the Agreement shall be deleted in its entirety and
replaced with the following:
Basic Rate (i) under Commitment One, as defined in the Notes, as amended pursuant to Amendment
No. 01, and (ii) under Commitment Two, as defined in the Notes for Advances under Commitment Two.
Commitment means Commitment One and Commitment Two.
Commitment Fee means $10,000 under Commitment One and $10,000 under Commitment Two.
Commitment Termination Date has occurred for Commitment One, and for Commitment Two it means the
earliest to occur of (i) July 1, 2008; (ii) any Default or Event of Default, or (iii) Change of
Management or Board Composition (unless Lender has waived this condition in writing).
Disclosure Schedule means the Disclosure Schedule delivered to Lender in connection with the
execution and delivery of Amendment No. 04 to this Agreement.
Loan Commencement Date means (i) for Advances under Commitment One, as defined in the Notes, as
amended pursuant to Amendment No. 01, and (ii) for Advances under Commitment Two, as defined in
the Notes for Advances under Commitment Two.
1
Note means (i) in connection with Advances under Commitment One, Secured Promissory Notes in the
form of Exhibit B, and (ii) in connection with Advances under Commitment Two, Secured Promissory
Notes in the form of Exhibits B-2 to Amendment 04.
Notice of Borrowing means (i) in connection with Advances under Commitment One, the form
attached as Exhibit D, and (ii) in connection with Advances under Commitment Two in the form of
Exhibit D-2 attached to Amendment 04.
Warrant means (i) all Warrants issued by Borrower to Lender prior to the date of Amendment 04,
and (ii) the Commitment Two Warrant.
III. Section 6.2 Section 6.2 of the Agreement shall be amended deleted in its entirety and
replaced with the following:
6.2
Financial Statements, Reports, Certificates. Borrower shall deliver to Lender: (i) as soon as
prepared, and no later than 30 days after the end of each calendar quarter, a balance sheet,
income statement and cash flow statement covering Borrowers operations for each of the three
months during such period, provided for each calendar month ending after the calendar quarter
ending on September 30, 2008, Borrower shall deliver to Lender as soon as prepared, and no later
than 30 days after the end of each calendar month, a balance sheet, income statement and cash flow
statement covering Borrowers operations during such period; (ii) as soon as prepared, but no
later than 90 days after the end of the fiscal year, or such other timeframe formally approved by
Borrowers audit committee, audited financial statements prepared in accordance with GAAP,
together with an opinion that such financial statements fairly present Borrowers financial
condition by an independent public accounting firm reasonably acceptable to Lender; (iii)
immediately upon notice thereof, a report of any legal or administrative action pending or
threatened in writing against Borrower which is likely to result in liability to Borrower in
excess of $100,000 (provided that Borrower shall not be required to report notices of possibly
relevant third party patents, or proposals or demands to license intellectual property); and (iv)
such other financial information as Lender may reasonably request from time to time. Financial
statements delivered pursuant to subsections (i) and (ii) above shall be accompanied by a
certificate signed by a Responsible Officer (each an Officers Certificate) in the form of
Exhibit F.
IV. Section 3 Conditions of Advances; Procedure for requesting Advances; the following new
Sections 3.2 and 3.3 shall be added:
3.2 Procedure for Making Advances. For any Advance, Borrower shall provide Lender an irrevocable
Notice of Borrowing at least 15 business days prior to the desired Funding Date and Lender shall
only be required to make Advances hereunder based upon written requests which comply with the
terms and exhibits of this Loan Agreement (as the same may be amended from time to time), and
which are submitted and signed by a Responsible Officer. Borrower shall execute and deliver to
Lender a Note and such other documents and instruments as Lender may reasonably require for each
Advance made.
3.3. Conditions Precedent to Initial Advance under Commitment Two. The obligation of Lender to
make the Initial Advance under Commitment Two is subject the satisfaction of each of the following
conditions:
(a) This Amendment 04 duly executed by Borrower.
(b) The Commitment Two Warrant to be issued to Lender duly executed by
Borrower.
(c) Delivery to Ledner of an officers certificate of Borrower with copies of
the following documents
attached: (i) the certificate of incorporation and by-laws or other organizational documents of
Borrower certified by Borrower as being in full force and effect as of the date of Amendment 04,
(ii) incumbency and representative signatures, and (iii) resolutions authorizing the execution and
delivery of Amendment 04 and each of the other Loan Documents.
(d) Delivery to Lender of a good standing certificate from Borrowers state of
incorporation or formation
and the state in which Borrowers principal place of business is located, together with
certificates of the applicable governmental authorities stating that Borrower is in compliance with
the franchise tax laws of each such state, each dated as of a recent date.
(e) Borrower has obtained all necessary consents of shareholders, members, and
other third parties with
respect to the execution, delivery and performance of the Agreement, Amendment 04, the Commitment
Two Warrant, and the other Loan Documents.
(f) Borrower shall have satisfied all the conditions set forth in Section 3.1
and 3.2 of the Agreement.
3.4 Reaffirmation Subject to the Disclosure Schedule attached hereto as Schedule 1, Borrower
reaffirms the representations and warranties made to Lender in the Agreement as of the date hereof
as though fully set forth herein.
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3.5 Existing Notes Notes for Advances under Commitment Two are not affected by
Amendment No. 01 and Notes for Advances under Commitment One remain subject to Amendment No.
01
V. Further Terms and Conditions of this Amendment 04.
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Representations and Warranties of Borrower. Borrower warrants and
represents, as a significant material inducement to
Lender to enter hereinto, that: (i) no Events of Default have occurred and are
continuing that have not been disclosed to
Lender by Borrower in writing; (ii) it is not and has no reason to believe it may be
named as a party to any judicial or administrative proceeding, litigation or
arbitration, and has not received any written communication from any person or entity
(whether
private or governmental) threatening or indicating the same, except
to the extent that
any such written communication could not
reasonably be expected to result in a material adverse effect on Borrowers business;
and (iii) it is in full compliance with Section
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No Control. Borrower warrants and represents, as a significant material
inducement to Lender to enter hereinto, that none of
Lender nor any affiliate, officer, director, employee, agent, or attorney of Lender,
have at any time, from Borrowers date of
formation through to the date hereof, (i) exercised management or other control over the
Borrower, (ii) exercised undue influence
over Borrower or any of its officers, employees or directors, (iii) made any
representation or warranty, express or implied, to any
party on behalf of Borrower, (iv) entered into any joint venture, agency relationship,
employment relationship, or partnership with
Borrower, (v) directed or instructed Borrower on the manner, method, amount, or identity
of payee of any payment made to any
creditor of Borrower, and further, Borrower warrants and represents that by entering
hereinto with Lender has not, are not and will
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Integration Clause. This Agreement represents and documents the entirety
of the agreement and understanding of the parties
hereto with respect to its subject matter. All prior understandings, whether oral or
written, other than the Loan Documents,
are hereby merged hereinto. NEITHER THE LOAN AND SECURITY AGREEMENT NOR THIS AGREEMENT
MAY BE MODIFIED EXCEPT BY A WRITING SIGNED BY LENDER AND BORROWER. Each provision hereof
shall be severable from every other provision when determining its legal enforceability
such that Lenders rights and
remedies under this Agreement and the Loan Documents may be enforced to the maximum
extent permitted under applicable
law. This Agreement shall be binding upon, and inure to the benefit of, each partys
respective permitted successors and
assigns. This Agreement may be executed in counterpart originals, all of which, when
taken together, shall constitute one
and the same original document. No provision of any other document between Lender and
Borrower shall limit the
effectiveness hereof or the rights and remedies of Lender against Borrower. In the
event of any contradiction or
inconsistency among the terms and conditions of this Agreement or any Loan Document, the
interpretation most favorable to
the interests of Lender shall prevail. |
Except as amended hereby, the Agreement remains unmodified and unchanged.
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BORROWER: |
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LENDER: |
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FLUIDIGM CORPORATION |
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LIGHTHOUSE CAPITAL PARTNERS V, L.P. |
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By:
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/s/ Gajus Worthington
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By:
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LIGHTHOUSE MANAGEMENT PARTNERS V, L.L.C., |
Name:
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Gajus Worthington |
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its general partner |
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President and CEO |
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By:
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/s/ Thomas Conneely
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Name:
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Thomas Conneely |
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Title:
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Vice President |
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3
Exhibit B-2
(Commitment Two)
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Secured Promissory Note
This
Secured Promissory
Note (this Note) is
made , 2008, by Fluidigm Corporation
(Borrower) in favor of Lighthouse Capital Partners V, L.P. (collectively with its assigns, Lender). Initially
capitalized terms used and not otherwise defined herein are defined in that certain Loan and
Security Agreement No. 4561 between Borrower and Lender dated
March 29, 2005, as amended (the Loan
Agreement).
For
Value Received, Borrower promises to pay in lawful money of the United States, to the
order of Lender, at 500 Drakes Landing Road, Greenbrae, California 94904, or such other place as
Lender may from time to time designate (Lenders Office), the principal
sum of
$
(the Advance), including interest on the unpaid balance and all other amounts due or to
become due hereunder according to the terms hereof and of the Loan Agreement.
Basic Rate means a fixed per annum rate of interest equal 8.5%.
Final Payment means 6.5% of the Advance.
Loan Commencement Date means January 1,2009.
Maturity Date means the last day of the Repayment Period, or if earlier, the date of prepayment
under the Note.
Payment Date means the first day of each calendar month.
Prepayment Fee means (i) if prepaid in the calendar years 2008 or 2009, 3% of the outstanding
principal amount being prepaid; (ii) if prepaid in the calendar year 2010, 2% of the outstanding
principal amount being prepaid; and (iii) if prepaid in the calendar year 2011 or thereafter, 1%
of the outstanding principal amount being prepaid.
Repayment Period means the period beginning on the Loan Commencement Date and continuing for 30
calendar months.
1. Repayment. Borrower shall pay principal and interest due hereunder from the Funding Date, until
this Note is paid in full,
on each Payment Date pursuant to the terms of the Loan Agreement and this Note. Borrower shall
pay to Lender, monthly in
advance on each Payment Date, interest calculated using the Basic Rate. Beginning on the Loan
Commencement Date and on each
Payment Date thereafter during the Repayment Period, Borrower shall make equal installments of
principal and interest in advance,
calculated at the Basic Rate. On the Maturity Date, Borrower shall pay, in addition to all unpaid
principal and interest outstanding
hereunder, the Final Payment.
2.
Interest. Interest not paid when due will, to the maximum extent permitted under applicable law,
become part of principal,
at Lenders option, and thereafter bear like interest as principal. Interest shall be computed on
the basis of a 360 day year. All
Obligations not paid when due shall bear interest at the Default Rate unless waived in writing by
Lender. All amounts paid hereunder
will be applied to the Obligations in Lenders discretion and as provided in the Loan Agreement.
3. Voluntary Prepayment. Borrower may prepay the Note if and only if Borrower pays to Lender (i)
the outstanding principal
amount of this Note and any unpaid accrued interest (ii) the Final Payment, (iv) the Prepayment
Fee, and (v) all other sums, if any, that
shall have become due and payable hereunder with respect to this Note.
4. Collateral. This Note is secured by the Collateral.
5. Waivers. Borrower, and all guarantors and endorsers of this Note, regardless of the time, order
or place of signing, hereby
waive notice, demand, presentment, protest, and notices of every kind, presentment for the purpose
of accelerating maturity, diligence
in collection to the fullest extent permitted by law.
6. Choice of Law; Venue. This Note shall be governed by, and construed in accordance with the
internal
laws of the State of California, without regard to principles of conflicts of law. Each of
Borrower and
Lender hereby submits to the exclusive jurisdiction of the State and Federal courts located in
the City and
1
County of San Francisco, State of California. Borrower and Lender each hereby waive their
respective rights to a jury trial of any claim or cause of action based upon or arising out of this
Note. Each party further waives any right to consolidate any action in which a jury trial has been
waived with any other action in which a jury trial cannot be or has not been waived.
7. Miscellaneous. This Note may be modified only by a writing signed by Borrower and
Lender. Each provision
hereof is severable from every other provision hereof and of the Loan Agreement when determining
its legal enforceability. Sections and subsections are titled for convenience, and not for
construction. Hereof, herein, hereunder, and similar words refer to this Note in its
entirety. Or is not necessarily exclusive. Including is not limiting. The terms and conditions
hereof inure to the benefit of and are binding upon the parties respective permitted successors
and assigns. This Note is subject to all the terms and conditions of the Loan Agreement.
In Witness Whereof, Borrower has caused this Note to be executed by a duly authorized
officer as of the day and year first above written.
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Fluidigm Corporation |
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By: |
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Name: |
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2
Exhibit d
Notice of Borrowing
, ________
Lighthouse
Capital Partners V, L.P.
500 Drakes Landing Road
Greenbrae, CA 94904-3011
Ladies and Gentlemen:
Reference
is made to the Loan and Security Agreement No. 4561 dated as of March 29, 2005 (as
it has been and may be amended from time to time, the Loan Agreement, initially capitalized
terms used herein as defined therein), between Lighthouse Capital Partners V, L.P. and
Fluidigm Corporation (the Company)
The undersigned is the President and CEO of the Company, and hereby irrevocably requests an
Advance under the Loan Agreement, and in that connection certifies as follows:
1. The amount of the proposed Advance is $ . The business day of the proposed Advance is .
2. The
Loan Commencement Date for this Advance shall be March 1, 2006.
3. As of this date, no Event of Default, or event which with notice or the passage of time
would constitute an Event of Default, has occurred and is continuing, or will result from the
making of the proposed Advance, and the representations and warranties of the Company contained in
Section 5 of the Loan Agreement are true and correct in all material respects.
4. No event that could reasonably be expected to have a material adverse effect on the
ability of Borrower to fulfill its obligations under the Loan Agreement has occurred since the
date of the most recent financial statements, submitted to you by the Company.
The Company agrees to notify you promptly before the funding of the Advance if any of the
matters to which I have certified above shall not be true and correct
on the Funding Date.
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Very truly yours, |
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Fluidigm Corporation |
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1
exv4w5xay
Exhibit 4.5A
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES ACT). SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY), OR OTHER EVIDENCE, REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT. THIS NOTE MAY ONLY BE TRANSFERRED UPON
THE TERMS AND CONDITIONS CONTAINED IN THE NOTE AND IN AN AGREEMENT BETWEEN HOLDER
AND THE COMPANY
Fluidigm Corporation
a California corporation
CONVERTIBLE PROMISSORY NOTE
NOTE NUMBER E-3 (REVISED)
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US$5,000,000
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April 19, 2007 |
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South San Francisco, California |
1. Principal and Interest. Fluidigm Corporation (the Company), a
California corporation, for value received, hereby promises to pay to the order of Biomedical
Sciences Investment Fund Pte Ltd (the Holder) in lawful money of the United States of
America, the principal amount of Five Million Dollars (US$5,000,000), or such lesser amount as
shall equal the outstanding principal amount hereof, together with interest from the date of this
Note on the unpaid principal balance at a rate equal to 8.00% per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days, compounded annually.
This Convertible Promissory Note (Note) is the third Note issued pursuant to that
certain Convertible Note Purchase Agreement dated August 7, 2006 (as amended, modified or
supplemented, the Note Purchase Agreement) between the Company and the Holder. Unless
defined herein, capitalized terms shall have the same meanings ascribed to them in the Note
Purchase Agreement.
Unless converted in accordance with Section 3, this Note shall become due and payable as to
both accrued interest and principal on the Payment Date (as defined in Section 3). This Note may
be prepaid by Company at any time, in accordance with the terms of Section 2 of this Note. Upon
payment in full of all principal and interest payable hereunder (including upon any conversion),
this Note shall be surrendered to the Company for cancellation. All payments hereon shall be
applied first to accrued interest and second to the reduction of principal.
2. Prepayment of Note. Upon five days prior written notice to Holder (the
Prepayment Notice), the Company may prepay this Note in whole or in part; provided that
any such prepayment will be applied first to the payment of expenses due under this Note, second to
interest accrued on this Note and third, if the amount of prepayment exceeds the amount of all such
expenses and accrued interest, to the payment of principal of this Note. In the event that the
Holder desires to avoid prepayment of the Note by the Company, the Holder must within five days of
its receipt of the Prepayment Notice deliver to the Company the Conversion Notice pursuant to
Section 3(c)(iii) electing to convert this Note, in which case this Note will not be prepaid as
provided in the Prepayment Notice and will instead be converted into shares of Series E Preferred
Stock of the Company in accordance with Section 3 of this Note.
3. Conversion.
(a) Conversion Events. Upon the earlier to occur of (i) an Initial Public Offering
(as defined below) or (ii) satisfaction of each of the Milestones pursuant to Section 3(b)(iv)
below (either, a Conversion Event), all of the then outstanding principal and accrued
interest owing under this Note shall convert into that number of shares of Series E Preferred Stock
of the Company determined by dividing (i) the aggregate principal and accrued interest owing under
this Note as of the date of such Conversion Event by (ii) the Conversion Price (as defined below).
Notwithstanding the foregoing, by complying with Section 3(c)(iii) hereof, the Holder may at any
time earlier elect to convert this Note into that number of shares of Series E Preferred Stock
determined by dividing (i) the aggregate principal and accrued interest owing under this Note as of
the date of the Conversion Notice (as defined in Section 3(c)(iii)) by (ii) the Conversion Price
(as defined below).
(b) Definitions. For purposes of this Note, the following terms shall have the
following meanings:
(i) The term Change of Control Transaction shall mean (i) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including,
without limitation, any stock acquisition, reorganization, merger or consolidation but excluding
any merger effected exclusively for the purpose of changing the domicile of the Corporation) other
than a transaction or series of transactions in which the holders of the voting securities of the
Company outstanding immediately prior to such transaction or series of transactions continue to
retain (either by such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares in the Company
held by such holders prior to such transaction, at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such transaction or series of transactions; or (ii) a sale, transfer, lease or
other conveyance of all or substantially all of the assets of the Corporation.
(ii) The term Conversion Price shall mean US$3.60, subject to adjustment as set
forth in Section 5 below.
(iii) The term Initial Public Offering shall mean the first sale of securities of
the Company pursuant to an effective registration statement under the Securities Act of 1933 (the
Securities Act) after or in connection with which the outstanding shares of Preferred
Stock of the
Company have been converted into Common Stock pursuant to the Companys then existing Articles
of Incorporation or otherwise.
(iv) Unless otherwise agreed in writing between the Company and the Holder, the term
Milestones shall mean satisfaction of the following on or before April 30, 2008:
(1) The
Company will have released the BioMark II Chip Loader to
manufacturing, as
demonstrated by a Manufacturing Release approval form duly signed-off. The approval is typically
characterized by having completed standard prototype development,
including building and testing of
suitable prototypes;
(2) The
approved BioMark II Chip Loader (or a subsequent version thereof)
will be made
generally available to customers, as demonstrated by a Company
product announcement;
(3) The
Subsidiary will also have
produced prototype BioMark II End Point Readers and made
them available to at least three (3) customers;
(4) The
Subsidiary will have at least maintained the number of Research and Development
Engineers hired to achieve Milestones in the First Note and the
Milestones in the Second Note; and
(5) The
Company will be manufacturing the BioMark II Chip Loader through the Subsidiary in
Singapore, and the Companys then-current financial and
business plan will provide for the
manufacturing of the BioMark II End Point Readers through the
Subsidiary in Singapore; provided
that if the Holder provides the Company with a
Milestone Response Notice pursuant to Section
3(c)(ii) below, then the Company shall have 30 days following the Companys receipt of the
Milestone Response Notice (the Milestones Cure
Period) to cure any failure to satisfy the
Milestones identified by the Holder in the
Milestone Response Notice.
(v) The term Payment Date shall mean April 19, 2009 or such later date as may be
mutually agreed in writing by Holder and the Company.
(c) Conversion Procedure.
(i) Conversion in Connection with Initial Public Offering. Upon the occurrence of an
Initial Public Offering as set forth in Section 3(a), this Note shall convert automatically without
further action on the part of the Holder hereof. Written notice shall be delivered to Holder at
the address last shown on the records of Company for Holder or given by Holder to Company for the
purpose of notice notifying Holder of the conversion effected or to be effected, specifying the
Conversion Price, the date on which such conversion occurred or is expected to occur and calling
upon such Holder to surrender to Company, in the manner and at the place designated, the Note.
(ii) Conversion in Connection with Satisfaction of Milestones. If the Company
reasonably believes that it has satisfied all of the Milestones, it may send written notice thereof
(the Milestone Completion Notice) to the Holder (at the address last shown on the records
of the Company for the Holder or given by Holder to Company for the purpose of notice)
specifying the Conversion Price, the date on which the Company reasonably believes all of the
Milestones were satisfied (the Notified Milestone Completion Date), together with a duly
executed compliance certificate dated as of the Notified Milestone Completion Date substantially in
the form attached hereto as Exhibit A (the Compliance Certificate), and calling
upon Holder to surrender to the Company the Note. In the event that the Holder reasonably believes
that any of (i) the Milestones have not been satisfied or (ii) the representations and warranties
made in the Compliance Certificate are inaccurate in any material respect, the Holder may provide
written notice (the Milestone Response Notice) to the Company of such disagreement and/or
inaccuracy within 30 days of its receipt of the Milestone Completion Notice. The Milestone
Response Notice shall specify in reasonable detail the reasons for such disagreement and/or basis
for belief that any of the representations and warranties made in the Compliance Certificate are
inaccurate and shall be accompanied by reasonably available support documentation evidencing the
basis for such disagreement or belief. If the Holder shall fail to provide the Milestone Response
Notice within such time period, the Milestones shall be deemed satisfied as of the Notified
Milestone Completion Date and this Note shall be automatically converted as set forth in
Section 3(a). If the Holder shall have timely provided the Milestone Response Notice, the Company
and the Holder shall in good faith attempt to resolve their disagreement as to the satisfaction of
the Milestones and/or the accuracy of the representations and warranties in the Compliance
Certificate. If the Company and Holder are unable to resolve their disagreement within the
Milestones Cure Period, the Company may pay to the Holder the principal and interest owing under
this Note as of the Notified Milestone Completion Date (in which case the Note shall be cancelled
and surrendered) or may pursue any other remedy that may be available to it under applicable law.
(iii) Elective Conversion. If the Holder wishes to voluntarily convert this Note as
set forth in Section 3(a) hereof prior to a Conversion Event, the Holder shall surrender this Note
to the Company and provide the Company with a written notice (the Conversion Notice) to
that effect.
(iv) Certificate; Time of Conversion. Upon conversion of this Note, the Holder shall
promptly surrender this Note, duly endorsed, at the principal office of Company. At its expense,
the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such
principal office a certificate or certificates for the number of shares to which Holder shall be
entitled upon such conversion (bearing such legends as are required by this Note and the Note
Purchase Agreement and applicable state and federal securities laws in the opinion of counsel to
Company), together with any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note, including a check payable to Holder for any cash amounts
payable as described in Section 3(d). Any such conversion of this Note shall be deemed to have
been made immediately prior to the Conversion Event as described in Section 3(a) (or in the case of
delivery of the Conversion Notice as set forth in Section 3(c)(iii), upon the Companys receipt of
such Conversion Notice); provided, however, the Holder shall not be deemed a record
holder of such shares or a purchaser of such shares until the Holder has delivered the Note for
conversion. On and after such date, the Holder shall be treated as a purchaser of such shares
under the Note Purchase Agreement and shall be bound by the applicable terms of this Note and Note
Purchase Agreement.
(d) Fractional Shares. No fractional shares will be issued upon any conversion of
this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the
Company will pay to the Holder in cash that amount of the unconverted principal and interest
balance of this Note.
(e) Reservation of Shares. The Company will at all times reserve and keep available
out of its authorized but unissued shares or shares held in treasury, sufficient shares of Series E
Preferred Stock or other securities to permit the full conversion of the outstanding principal and
interest of this Note pursuant to the terms of this Note. In the event the Company shall have
insufficient shares of Series E Preferred Stock or other securities to permit the full conversion
of the outstanding principal and accrued interest of this Note pursuant to the terms hereof, the
Company hereby covenants and agrees that the Company shall use its commercially reasonable efforts
to seek board and shareholder approval of an amendment to the Companys Articles of Incorporation
in order to authorize an increase in the number of authorized shares of Series E Preferred Stock or
other securities of the Company in a sufficient amount so that the aggregate number of shares of
Series E Preferred Stock or other securities issuable upon conversion of this Note will then be
authorized and available for issuance.
4. Change of Control Transaction. The Company shall provide the Holder with 15 days
written notice of the closing of a Change of Control Transaction, specifying in reasonable detail
the terms of such Change of Control Transaction. If the Holder shall not have voluntarily elected
to convert this Note as set forth in Section 3(c)(iii) within such 15 day period, the Company may
prepay the entire principal amount and interest owing under this Note as of the date of such
prepayment. The Holder shall thereafter promptly return the Note to the Company for cancellation.
5. Change in Series E Preferred Stock.
(a) Split, Subdivision or Combination of Series E Preferred Stock. In the event the
Company should at any time or from time to time after the date of issuance hereof split or
subdivide the outstanding shares of its Series E Preferred Stock (or other securities issuable upon
conversion of this Note) or issue additional shares of Series E Preferred Stock (or other
securities issuable upon conversion of this Note) to the holders thereof as a dividend or make any
other distribution payable in additional shares of Series E Preferred Stock (or other securities
issuable upon conversion of this Note) to the holders thereof without payment of any consideration
by such holder for the additional shares of Series E Preferred Stock (or such other securities),
then, as of the date of such dividend, distribution, split or subdivision, the Conversion Price of
this Note shall be appropriately decreased so that the number of shares of Series E Preferred Stock
or other securities issuable upon conversion of this Note shall be increased in proportion to such
increase of outstanding shares of Series E Preferred Stock or other securities issuable upon
conversion of this Note, as applicable. If the number of shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note) outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note), then, following the record date of such
combination, the Conversion Price for this Note shall be appropriately increased so that the number
of shares of Series E Preferred Stock or other securities issuable on conversion hereof shall be
decreased in proportion to such
decrease in outstanding shares of Series E Preferred Stock or other securities issuable upon
conversion of this Note, as applicable.
(b) Reclassification etc. In case of any reclassification, capital reorganization, or
change in the Series E Preferred Stock (or other securities issuable upon conversion of this Note)
of the Company, including conversion of such shares pursuant to the Companys Articles of
Incorporation then in effect (other than as a result of a split, subdivision, combination, or stock
dividend provided for in Section 5(a) above), then appropriate adjustment shall be made to the
Conversion Price and kind of securities or other property issuable upon conversion of this Note so
that this Note shall be convertible upon the terms set forth herein into the kind and amount of
shares of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of shares of Series E
Preferred Stock or other securities as are issuable on conversion of this Note.
(c) Merger or Consolidation. Other than a Change of Control Transaction in connection
with which this Note has been converted or prepaid, if at any time there shall be an acquisition of
the Company by merger, consolidation or otherwise where the Company is not the surviving
corporation or as a result of which all of the outstanding capital stock of the Company is
exchanged for capital stock of another corporation, then, as a part of such acquisition, the
Conversion Price and kind of securities issuable upon conversion hereof shall be appropriately
adjusted so that the Holder shall receive upon conversion of this Note, the number of shares of
stock or other securities or property of the surviving or successor corporation resulting from such
acquisition (or the corporation the capital stock of which is issued in exchange for the capital
stock of the Company), to which a holder of the securities issuable upon conversion of this Note
would have been entitled in such acquisition if this Note had been converted immediately before
such acquisition.
6. Payment Due Date. If not previously converted into shares of Series E Preferred
Stock pursuant to Section 3 hereof and if not sooner prepaid by the Company pursuant to Section 2
hereof or accelerated and declared due and owing by the Holder pursuant to Section 7 hereof, the
principal amount and any accrued interest due thereon then outstanding under this Note will become
due and payable on the Payment Date.
7. Default. The Company shall be deemed to be in default under this Note in the event
(i) the Company shall fail to materially perform any covenant or agreement of the Company contained
in Section 4 of the Note Purchase Agreement for a period of 30 days after written notice of such
failure from Holder; (ii) the Company shall have failed to make payment of principal or interest
due on the Note when such principal and interest becomes due; or (iii) the Company shall commence,
whether voluntarily or involuntarily a case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or other proceeding
commenced against it. In the case of an event of default, the Holder may, by written notice to the
Company, declare the unpaid principal amount of this Note, all interest accrued and unpaid hereon,
and all other amounts payable hereunder to be immediately due and payable, without presentment,
demand, protest, or further notice of any kind, as well as enforce all other rights and
remedies available to the Holder under applicable law.
8. Notices. Any notice, request, other communication, or payment required or
permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally by facsimile, or by recognized overnight courier service, or five days
after deposit, if deposited in the United States mail for mailing by registered or certified mail,
postage prepaid, and addressed as follows:
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If to Holder: |
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Biomedical Sciences Investment Fund Pte Ltd |
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20 Biopolis Way |
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#09-01 Centros |
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Singapore 138668 |
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Attention: Chu Swee Yeok |
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Tel: 65-6336-2288 |
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Fax: 65-6334-8478 |
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If to the Company: |
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Fluidigm Corporation |
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7100 Shoreline Court |
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South San Francisco, California 94080 |
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Attention: Chief Executive Officer |
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Tel: (650) 266-6000 |
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Fax: (650) 871-7195 |
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with a copy to: |
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Wilson Sonsini Goodrich & Rosati, P.C. |
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650 Page Mill Road |
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Palo Alto, California 94304-1050 |
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Attention: Ken Clark and Robert Kornegay |
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Tel: (650) 493-9300 |
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Fax: (650) 493-6811 |
Each of the above addressees may change its address or facsimile number for purposes of this
paragraph by giving to the other addressee notice of such new address in conformity with this
paragraph.
9. Amendments. This Note may be amended and any provision hereof waived with the
consent of the Company and the Holder.
10. No Rights as Shareholder. Nothing in this Note shall be construed as conferring
upon the Holder or any other person the right to vote or to consent or to receive notice as a
shareholder in respect of meetings of shareholders for the election of directors of the Company or
any other matters or any rights whatsoever as a shareholder of the Company until, and only to the
extent that, this Note shall have been converted.
11. Successors and Assigns. Subject to the restrictions on transfer described in
Section 12 and in the Note Purchase Agreement, the rights and obligations of the Company and
Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
12. Transfer of Note and Securities Issuable on Conversion Hereof. Prior to the
conversion of this Note, this Note (or the underlying securities issuable upon conversion hereof)
may not be sold, assigned, transferred, pledged or otherwise disposed of by the Holder, in whole or
in part, without the prior written consent of the Company. With respect to any sale, assignment,
transfer, pledge or other disposition of the securities into which this Note may be converted after
conversion of this Note, the Holder may only transfer such securities pursuant to, and on the
conditions set forth in that certain Eighth Amended and Restated Investor Rights Agreement dated
June 13, 2006 between the Company and certain investors in the Company (including Holder), as may
be amended from time to time (the Rights Agreement). The Holder shall cause any proposed
purchaser, assignee, transferee or pledgee of such securities to agree in writing to take and hold
such securities subject to and upon the conditions specified in this Note, the Note Purchase
Agreement, and the Rights Agreement, including, without limitation, Sections 1.2, 1.3, 1.4, and
1.14 of the Rights Agreement.
13. Highest Lawful Rate. Anything herein to the contrary notwithstanding, if during
any period for which interest is computed hereunder, the amount of interest computed on the basis
provided for in this Note, together will all fees, charges, and other payments or rights which are
treated as interest under applicable law, as provided for herein or in any other document executed
in connection herewith, would exceed the amount of such interest computed on the basis of the
Highest Lawful Rate, the Company shall not be obligated to pay, and the Holder shall not be
entitled to charge, collect, receive, reserve, or take, interest in excess of the Highest Lawful
Rate, and during any such period the interest payable hereunder shall be computed on the basis of
the Highest Lawful Rate. As used herein, Highest Lawful Rate means the maximum
non-usurious rate of interest, as in effect from time to time, which may be charged, contracted
for, reserved, received, or collected by the Holder in connection with this Note under applicable
law. In accordance with this section, any amounts received in excess of the Highest Lawful Rate
shall be applied towards the prepayment of principal then outstanding.
14. Miscellaneous. The Company agrees to pay on demand all of the losses, costs, and
expenses (including, without limitation, attorneys fees and disbursements) which the Holder incurs
in connection with enforcement of this Note, or the protection or preservation of the Holders
rights under this Note, whether by judicial proceeding or otherwise. Such costs and expenses
include, without limitation, those incurred in connection with any workout or refinancing, or any
bankruptcy, insolvency, liquidation, or similar proceedings. The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice of protest, and
notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right. This Note is being delivered in and shall be
construed in accordance with the laws of the State of California without regard to the conflicts of
law provisions thereof. Any reference to dollars or $ in this Note shall refer to the lawful
money of the United States of America.
IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed by
its officer thereunto duly authorized as of the date first above written.
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Dated: April 19, 2007 |
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Fluidigm Corporation |
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a California corporation |
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By:
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/s/ Gajus V. Worthington
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Name:
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Gajus Worthington
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Title:
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Chief Executive Officer
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Acknowledged and Agreed: |
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Holder |
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Biomedical Sciences Investment Fund Pte Ltd |
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By:
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/s/ Chu Swee Yeok
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Name:
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Chu Swee Yeok
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Title:
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Director
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exv5w1
Exhibit 5.1
September 15, 2008
Fluidigm Corporation
7000 Shoreline Court, Suite 100
South San Francisco, CA 94080
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We are acting as counsel to Fluidigm Corporation, a Delaware corporation (the Company), in
connection with the registration of 6,095,000 shares of the Companys Common Stock, par value
$0.001 per share, including 795,000 shares subject to an over-allotment option (collectively, the
Shares), pursuant to a Registration Statement on Form S-1 (Registration No. 333-150227), as
amended (the Registration Statement), filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
As counsel for the Company, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for the purposes of rendering this
opinion. In our examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that the Shares to be registered for sale by
the Company have been duly authorized by the Company and, when issued, delivered and paid for in
accordance with the terms of the underwriting agreement referred to in the Registration Statement
and in accordance with the resolutions adopted by the Board of Directors of the Company, will be,
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration Statement, and we
consent to the reference of our name under the caption Legal Matters in the Prospectus forming a
part of the Registration Statement.
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Very truly yours, |
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WILSON SONSINI GOODRICH & ROSATI
Professional Corporation |
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/s/ Wilson Sonsini Goodrich & Rosati, P.C. |
exv10w8
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 10.8
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PATENT LICENSE AGREEMENT
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3950.LICI.001 Gyros AB |
This Agreement, effective as of January 9, 2003, is made by and between GYROS AB having its
principal office at Uppsala Science Park, SE-751 83 Uppsala, Sweden, a corporation organized and
existing under the laws of Sweden (hereinafter referred to as
Licensor), and FLUIDIGM Corporation
having its principal office at 7100 Shoreline Court, South San Francisco, CA 94080, a corporation
organized and existing under the laws of the state of California, U.S.A (hereinafter referred to as
the Licensee).
RECITALS
WHEREAS, the Licensor is the holder of intellectual property pertaining to, and possesses a special
expertise in the field of fluidic microsystems.
WHEREAS, the Licensor is active in the field of microfluidics and microfluidic applications,
primarily within the Life Sciences and Diagnostics.
WHEREAS, the Licensor is the owner of certain patents and patent applications pertaining to
microfluidics and microfluidic applications.
WHEREAS, Licensor is willing to grant Licensee a royalty-bearing non-exclusive licence to such
patents on the terms and conditions given below.
NOW, THEREFORE, in consideration of the promises and the faithful performance of the covenants
herein contained IT IS AGREED;
ARTICLE 1 DEFINITIONS
1.1 |
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Affiliate shall mean any corporation, partnership, or other business entity
controlled by, or controlling, or under common control with any party or signatory to this
Agreement, with control meaning direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting power, or of the interest in the income of such corporation,
partnership or other entity, or having the power to appoint the majority of its directors or
otherwise having the power to direct its business activities. |
1.2 Competitor of Licensor shall mean a company in the business of making and selling
compact disc-like structures in which fluids are moved by centrifugal force.
1.3 Net Sales shall mean the gross selling price charged by Licensee for Products
manufactured or sold by the Licensee in a country in which the Product is covered by a Patent
(i.e., a country in which, but for the license granted herein, the Product would infringe a valid,
enforceable, unexpired claim of a Patent) less:
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allowances for damaged and returned goods; |
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(b) |
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discounts actually credited to customers or commissions paid to third parties in amounts
customary in the trade; |
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(c) |
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custom duties, forwarding insurance premiums, sales, excise, and other taxes actually paid by
the Licensee or otherwise included in the gross selling price with respect to the sale of Products; |
A Product shall be considered sold hereunder in accordance with extant GAAP accounting procedures
and guidelines.
If the Products are sold in combination with, or as a component of, other products not licensed
hereunder, Net Sales for purposes of determining royalty hereunder shall be calculated by
multiplying the Net Sales from the combined product by the fraction
A/B, where A is the invoice price of the Products sold separately and B is the invoice price of the
combined product. If the Products are not sold separately, the Net Sales for purposes of
calculating royalties hereunder shall be reasonably determined by agreement of Licensor and the
Licensee promptly after such combination products are sold by Licensee. The parties agree to use
good faith in negotiating the appropriate adjustment to Net Sales of any combined product within
thirty (30) days after the Licensee notifies Licensor of sales of a combination product. The Net
Sales of any Products sold by the Licensee to any Affiliate of the Licensee or any other person or
organization enjoying a special course of dealing with the Licensee, shall be determined by
reference to the Net Sales which would be applicable under this Article 1.2 in an arms length sale
of such Products by the Licensee to a third party.
1.4 Patents shall mean the patents listed in Exhibit A, attached hereto, together with
any other corresponding patents/ patent applications in any country owned or controlled by the
Licensor.
1.5 Covered Products shall mean all products now or hereafter manufactured, assembled, used
or sold by or on behalf of the Licensee or its Affiliates and which are covered by any of the
Patents.
It is hereby acknowledged that any and all products consisting of compact discs (CDs) and
CD-like structures where a centrifugal force is utilized to move the liquids within the CD are
explicitly excluded from this definition.
1.6 |
Option Field of Use means each of (i) [***] and (ii) [***]. |
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Licensed Fields of Use means [***] and each Option Field of Use for which
Licensee exercises the option as set forth in Section 5.2 below. |
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1.8 |
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Product means each Covered Product useful, used, or for use in a Licensed Field of Use. |
ARTICLE 2 GRANT
2.1 Upon the terms and subject to the conditions of this Agreement, Licensor hereby grants
to the Licensee and its Affiliates, and the Licensee and its Affiliates accept from Licensor, a
restricted, perpetual, irrevocable (except as set forth in
Section 9.1), non-exclusive,
non-transferable (except as set forth in Section 7.4), royalty-bearing license under the Patents
for the term hereof solely to make, have made, import, use, offer for sale, and sell Products. No
other license is granted to the Licensee expressly, impliedly or by estoppel, except as explicitly
set forth in Section 5.2 below.
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The Licensee expressly acknowledges and agrees that the Licensee shall have no right to sublicense,
assign, or otherwise transfer any or all of the license granted to it under the Patents, except as
set forth in Section 9.1, provided that Licensee can sublicense Patents to a third party other than
a Competitor of Licensor (as defined in Section 7.4) in conjunction with a license from Licensee to
make and sell any of Licensees Products. Licensor reserves the right to practice the Patents
itself, and to sublicense, assign or otherwise transfer the Patents to others for any purposes
whatsoever, provided that such transfer or assignment shall be subject to the licenses granted to
Licensee in this Agreement. |
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Licensor hereby irrevocably releases Licensee and its Affiliates, and each of their
subcontract manufactures and direct and indirect customers, of and from all claims of infringement
of Patents, known or unknown, which claims have been made or might have
been made at any time, with respect to any apparatus made, used, imported, offered for sale, or
sold, or any method or process practiced, before the effective date of this Agreement, which
apparatus, method, or process would have been licensed had it been made, used, imported, offered
for sale, or sold, or practiced after effective date of this Agreement. A corresponding release
will be deemed made in relation to each of the Option Fields of Use when and if exercised under
Section 5.2 below. |
ARTICLE 3 PATENT MARKING
Beginning two (2) years after the effective date of this Agreement, Licensee shall display or cause
to be displayed proper patent notices on the documentation, inserts, packages or containers of all
Products which shall indicate that the Product is sold or manufactured under a patent license from
Licensor. The Licensee shall provide Licensor for its review prior to use,
representative samples containing such patent notices and the parties agree to use good faith in
determining the requirements for and adequacy of such notices under the controlling patent laws.
ARTICLE 4 RESTRICTIONS ON PUBLICATION
Upon the signing of this Agreement and upon exercise of any of the Option Fields of Use under 5.2,
both parties shall be entitled to make public through a press
release or otherwise - that Licensee
has taken a license to the Patents from the Licensor. Such press-release or similar shall be in a
form reasonably acceptable to the other party and shall not disclose any of the financial terms
agreed in this Agreement. Within thirty (30) days of the effective date of this Agreement, Licensee
will publish on its corporate website that it has taken a license from Licensor under the Patents.
Under all other circumstances, neither party shall use the others name nor any variation thereof,
nor any emblem, logo, trademark or variation thereof, nor the name of any employee in any press
releases, advertising, promotional or sales literature, or in any securities reports required by
the Securities and Exchange Commission, without the prior written consent of the other party in
each case; provided however, that both parties (a) may refer to publications by employees of the
other party in the scientific literature, (b) may only state that a non-exclusive, royalty-bearing
patent license from Licensor to Licensee has been granted (excluding financial terms) and (c) may
make such disclosures as required by law.
ARTICLE 5 ROYALTIES AND PAYMENT
5.1 In consideration of the rights granted by Licensor to the Licensee under this Agreement, the
Licensee agrees to pay to Licensor:
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a non-refundable sum of [***] payable on March 31,
2003 (Annual Payment Date). The foregoing payment includes full payment for all sales by the
Licensee of Products before the effective date of this Agreement; |
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a sum of [***] payable on each anniversary of the
Annual Payment Date during the term of this Agreement; and |
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a royalty of [***] of the Net Sales of all Products sold by the Licensee during the
term of this Agreement. Sums paid under Subsections 5.1 (a) and (b) above, and Section 5.2 below,
shall be fully creditable against such royalties, regardless of the year in which such royalties
accrue. |
5.2 At any time(s) during the first twelve (12) months of the term of this Agreement, Licensee
shall be entitled, at its option, to add one or both Option Fields of Use to the
Licensed Field of Use under this Agreement, and upon each such exercise, each such Option Field of
Use shall become a Licensed Field of Use under this Agreement. If Licensee has not, during the
first
twelve (12) month period of the term of this Agreement, added both Option Fields of Use to the
Licensed Field of Use, then during the second twelve (12) month period of the term of this
Agreement, Licensee shall be entitled, at its option, to add one Option Field of Use to the
Licensed Field of Use under this Agreement. Each such exercise of this option by Licensee shall be
by written notice to Licensor, referencing this Agreement and specifying the Option Field(s) of Use
to be added. Within thirty (30) days after such exercise, Licensee shall pay an additional
[***] license fee for the first added Option Field of Use, and an additional [***]
license fee for the second added Option Field of Use. For the avoidance of doubt, during the first
twelve (12) month period of the term of this Agreement, Licensee may exercise this option for one
or both Option Fields of Use and on one or two occasions.
5.3 Within thirty (30) days of the end of each calendar quarter the Licensee shall pay to Licensor
the royalty having accrued on the Products sold during such calendar quarter to the extent the
royalty exceeds the credited sums paid by Licensee. Such payments shall be made in US Dollars by
wire transfer, at the Licensees cost, to such bank as shall be notified by Licensor. Payments of
royalties accrued on sales in other currencies than US Dollars shall be made in US Dollars at the
rate of exchange quoted by a first class commercial bank in the Licensees country on the last day
of the relevant calendar quarter.
5.4 If the Licensee fails to make the payments as provided for herein, such amounts shall bear
interest from and after the due date at the rate of [***] above the one month LIBOR
for the currency of payment.
5.5 Withholding or other taxes assessed on Licensor in connection with the payment of royalties
and other consideration due hereunder and which the Licensee is required by law to deduct and
withhold when making payments, may be deducted from royalty payments hereunder (including without
limitation payments under Sections 5.1(a), 5.1(b), and 5.2) and shall be paid by the Licensee to
the competent authority on behalf of Licensor. The originals of the official government receipt for
such taxes paid by the Licensee on Licensors behalf, shall so indicate such fact and shall be sent
by the Licensee to Licensor not later than fifteen (15) working days after the date of payment,
indicating net payment of royalties to which such taxes relate, and in accordance with the
instructions given by Licensor. The sums so paid by the Licensee shall be credited by Licensor in
partial discharge of the Licensees obligation for gross royalties as provided for herein.
ARTICLE 6 RECORDS, AUDITS AND REPORTS
6.1 The Licensee agrees to maintain accurate, complete and up to date records, until five (5)
years after a royalty payment has been made, in sufficient detail to enable the royalties payable
by the Licensee to be determined. Licensor shall have the right, at its own expense and during
regular business hours, at any time upon sixty (60) days prior written notice to Licensee, during
the term of this Agreement and for one (1) year thereafter, to have such records examined, in its
own discretion, by an independent auditor of its own choice, provided such auditor is bound by
confidentiality in writing to Licensee and reasonably acceptable to the
Licensee. The auditor shall not disclose the contents of the examination to any other entity and
shall use the information only to verify proper reporting and payment of royalties under this
Agreement.
6.2 Once Licensees royalty obligations have exceeded the sums paid under Subsections 5.1(a) and
(b) above or in the event of a completed initial public offering of Licensees common stock, then
Licensee agrees to deliver to Licensor within forty-five (45) days of the end of each subsequent
calendar quarter a confidential written report, in a format to be agreed by the parties and made an
exhibit to this Agreement, of all Products sold by it during such quarter in sufficient detail to
permit a calculation of the royalties due thereon. Licensor shall not disclose the contents of the
report to any other entity and shall use the information only to verify proper reporting and
payment of royalties under this Agreement. Such report shall include, but not be limited to,
information of the total quantities of Products sold and the Net Sales thereof on a country by
country basis, and the amount of royalties due.
ARTICLE 7 TERM AND TERMINATION
7.1 Unless otherwise terminated as provided for in this Agreement, the license shall run to the
end of the life of the last to expire of the Patents.
7.2 The Licensee shall have the right to terminate this Agreement and surrender the license
granted hereunder at any time by giving thirty (30) days written notice to Licensor.
7.3 If Licensor or the Licensee is in default in the performance of any of its respective
obligations under this Agreement, including the failure by the Licensee to make any of the payments
provided for at the times specified herein, and such default is not cured within ninety (90) days
after the aggrieved party has given to the other a written notice specifying the nature of the
default, the aggrieved party shall have the right to terminate this Agreement by giving written
notice of termination to the other, subject to the remainder of this section. Upon the giving of
such notice this Agreement shall terminate; provided, however, that if there is a dispute as to the
alleged default (including as to whether there is a default, or whether it has been cured), the
aggrieved party alleging the default shall not be entitled to terminate unless and until a further
notice of termination after (i) an agreed dispute resolution entity has determined that there was a
default, as specified in the aggrieved partys notice of default, that was not cured within the
applicable cure period and (ii) the defaulting party does not cure the default within thirty (30)
days after such determination.
7.4 If during the term of this Agreement, Licensee effects a Competitor Assignment (as defined in
Section 9.1), or a change of control over Licensee takes place meaning that fifty percent (50%) or
more of the shares in Licensee come under common control of a third party Competitor of Licensor or
Affiliates of such Competitor of Licensor, or if Licensee and/or certain of its shareholders enter
into an arrangement of a similar effect, Licensor shall be entitled to terminate this Agreement on
sixty (60) days prior written notice to Licensee. Upon such termination by Licensor, Licensor shall
promptly refund to Licensee (or its successor) a
pro rata (on a day for day basis) the annual payment made by Licensee for that year
under Section 5.1(a), 5.1(b), or 5.2, as applicable.
7.5 If during the term of this Agreement, the Licensee becomes bankrupt or insolvent, or if the
business of Licensor or the Licensee is placed in the hands of a receiver or trustee, whether by
voluntary act or otherwise, this Agreement shall immediately and automatically terminate.
7.6 The following rights and obligations shall survive any termination to the degree necessary to
permit their complete fulfilment or discharge:
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the Licensees obligation to supply a final report on each impacted Product in accordance
with Section 6.2 above with respect to the terminated license; |
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Licensors right to receive or recover and the Licensees obligation to pay royalties,
including minimum royalties, if any, accrued or accruable for payment at the time of any
termination; |
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the Licensees obligation to maintain records and to allow Licensor to audit such records
as provided for herein. |
ARTICLE 8 RESTRICTED WARRANTY AND INDEMNITY
8.1 The Licensor represents and warrants that it has full authority to enter into this
Agreement, that it has not granted, and will not grant, any rights or licenses that would conflict
with the rights and licenses granted in this Agreement, that it is not aware of any third party
claims with respect to any Patent, and that it has no knowledge of any third party rights that
would affect its ability to grant the license hereunder. Licensor further represents and warrants
that the Patents are the only patent filings owned or controlled by Licensor or its Affiliates, or
which Licensor or its Affiliates otherwise have the right to enforce, license or sublicense, which
pertain to microfluidics based on multilayer soft lithography or its uses. However, the Licensor
makes no representation or warranty, express or implied, as to the validity of the Patents nor to
the merchantability or satisfactory quality of the Products that are or may be sold by the
Licensee. Licensor does not assume any liability for any infringement or alleged infringement of
any patent or other rights of third parties due to the Licensees activities under the license set
forth herein.
8.2 The Licensee shall assume full responsibility for its use of the Patents and shall defend
Licensor and its officers, directors, agents, and employees (Indemnified Parties) against any
claims or actions arising out of this Agreement by reason of death, personal injury, illness or
property damage, or any other injury or damage arising out of the use by the Licensee of the
Patents or the preparation of, use or sale of Products, including but not limited to, use or
reliance upon such Products by the Licensees customers, and Licensee shall indemnify the
Indemnified Parties against all liability, costs, damages, and expenses awarded against the
Indemnified Parties with respect to such claims or actions.
ARTICLE 9 MISCELLANEOUS
9.1 Assignment. This Agreement is personal to the Licensee who shall not have any right
to assign or transfer the Agreement, in whole or in part, or the license granted hereunder, without
the prior written consent of Licensor, which shall not be unreasonably withheld; provided, however,
that Licensee may transfer or assign its rights and obligations under this Agreement to a successor
to all or substantially all of Licensees Product business relating to one or more Licensed Fields
of Use, whether
by sale, merger or otherwise, provided further that that Licensee shall not have the right to
transfer or assign this Agreement to a Competitor of Licensor (Competitor Assignment) without the
prior written consent of Licensor . Notwithstanding the foregoing, Licensor shall have the right to
assign or transfer this Agreement, in whole or in part, to any Affiliate.
9.2 Entire Agreement. This Agreement constitutes the entire agreement between the
parties as to the subject matter hereof, and all prior negotiations, representations, agreements
and understandings are merged into, extinguished by and completely expressed by it. This Agreement
may be modified or amended only by a writing executed by authorized officers of each of the
parties.
9.3 Waiver. The waiver by either Licensor or the Licensee of any right or failure to
perform or of any breach by the other shall not be deemed as a waiver of any other right hereunder
or of any other breach or failure by the other, whether of a similar nature or otherwise.
9.4 Notices. Any notice or other communication relating to this Agreement shall be sent
registered mail or overnight express prepaid or telefax/telecopier to the address of the party to
be served therewith which is shown below and shall be deemed to have been given upon the date the
notice or communication was sent:
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If to Licensor:
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Gyros AB
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Att: Maris Hartmanis |
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President & CEO |
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Uppsala Science Park |
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S-751 83 Uppsala, Sweden |
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Telefax: +46 (18) 56 6350 |
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with a copy to:
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rambe legal consultants
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Att: Lars J. Rambe, LL.M |
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Telefax +46-8-6508835 |
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If to the Licensee:
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Fluidigm Corporation |
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Att: Gajus Worthington |
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President & CEO |
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7100 Shoreline Court |
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South San Francisco |
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CA 94080 |
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Telefax: (650) 871-7152 |
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with a copy to:
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Fluidigm General Counsel
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Att: William M. Smith |
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Telefax: (650) 871-7195 |
Such addresses may be changed by notice so given.
9.5 Severability. If any provision of this Agreement is held to be unenforceable for any
reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the
parties to the extent possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent possible consistent with the intent of the parties.
9.6 Governing Law. This Agreement and its effects shall be subject to and shall be
construed and enforced in accordance with the laws of the state of New York, U.S.A.
9.7 Disputes. Any dispute in connection with this Agreement shall be first elevated to
each partys respective President for a period of thirty (30) days prior to giving a notice of
default under section 9.3 above, who shall convene a face-to-face meeting prior to pursuing any
legal courses of action.
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives
to execute this Agreement the day and year first above written.
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Gyros AB |
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Fluidigm Corporation |
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By:
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/s/ Maris Hartmanis
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By:
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/s/ Gajus Worthington |
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Maris Hartmanis
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Gajus Worthington |
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By:
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/s/ (ILLEGIBLE)
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By: |
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Exhibit A
Patent family:
[***]
exv10w9
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 10.9
MASTER CLOSING AGREEMENT
By and Among
FLUIDIGM CORPORATION,
a California corporation,
OCULUS PHARMACEUTICALS, INC.,
a Delaware corporation,
and
THE UAB RESEARCH FOUNDATION
dated
March 7, 2003
TABLE OF CONTENTS
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Page |
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ARTICLE I DEFINITIONS |
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1 |
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1.1 |
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Affiliate |
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1 |
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1.2 |
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Ancillary Documents |
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2 |
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1.3 |
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Assigned Rights |
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2 |
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1.4 |
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Cash Consideration |
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2 |
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1.5 |
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Closing |
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2 |
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1.6 |
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Closing Cash Consideration |
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2 |
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1.7 |
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Closing Date |
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2 |
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1.8 |
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Encumbrances |
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2 |
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1.9 |
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Fluidigm Series C Preferred Stock |
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2 |
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1.10 |
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License Agreement |
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2 |
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1.11 |
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New License Agreement |
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2 |
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1.12 |
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Sponsored Research Agreement |
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2 |
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1.13 |
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Technology |
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2 |
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1.14 |
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Transfer Taxes |
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2 |
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ARTICLE II TRANSFER OF ASSIGNED RIGHTS AND LICENSE OF TECHNOLOGY |
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3 |
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2.1 |
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Transfer of Rights and License of Technology |
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3 |
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2.2 |
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Excluded Assets and Liabilities |
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3 |
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2.3 |
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Payment |
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3 |
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2.4 |
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Taxes |
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3 |
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2.5 |
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Assigned Rights |
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3 |
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2.6 |
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Unassignable Rights |
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3 |
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ARTICLE III THE CLOSING |
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4 |
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3.1 |
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The Closing |
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4 |
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3.2 |
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Termination of License Agreement |
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4 |
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3.3 |
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Agreements Between Fluidigm and UABRF |
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5 |
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3.4 |
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Other Documents |
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5 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OCULUS |
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5 |
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4.1 |
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Organization |
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5 |
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4.2 |
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Authorization |
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5 |
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4.3 |
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No Conflicts; Consents |
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5 |
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4.4 |
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Title to Assigned Rights |
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6 |
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4.5 |
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No Assignment |
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6 |
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4.6 |
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Litigation and Claims |
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6 |
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4.7 |
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Distribution Agreement |
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6 |
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF FLUIDIGM |
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7 |
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5.1 |
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Organization |
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7 |
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5.2 |
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Authorization |
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7 |
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5.3 |
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No Conflicts; Consents |
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7 |
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5.4 |
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Litigation and Claims |
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8 |
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i
TABLE OF CONTENTS
(continued)
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Page |
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5.5 |
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Securities Laws Exemptions |
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8 |
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF UABRF |
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8 |
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6.1 |
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Authorization |
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8 |
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6.2 |
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No conflicts; Consents |
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8 |
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6.3 |
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Title to Technology |
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9 |
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6.4 |
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Litigation and Claims |
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9 |
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6.5 |
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Distribution Agreement |
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9 |
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6.6 |
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Investment Representations |
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10 |
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6.7 |
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Restrictions |
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10 |
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6.8 |
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Restrictive Legend |
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10 |
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6.9 |
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Notice of Proposed Transfers |
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11 |
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6.10 |
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Standoff Agreement |
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11 |
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ARTICLE VII COVENANTS OF OCULUS |
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12 |
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7.1 |
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Conduct of Business |
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12 |
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7.2 |
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Access to Information |
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13 |
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7.3 |
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Regulatory Approvals |
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13 |
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7.4 |
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Satisfaction of Conditions Precedent |
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13 |
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ARTICLE VIII COVENANTS OF UABRF |
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13 |
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8.1 |
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Conduct of Business |
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13 |
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8.2 |
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Access to Information |
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14 |
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8.3 |
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Regulatory Approvals |
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14 |
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8.4 |
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Satisfaction of Conditions Precedent |
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14 |
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ARTICLE IX COVENANTS OF FLUIDIGM |
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14 |
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9.1 |
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Regulatory Approvals |
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14 |
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9.2 |
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Satisfaction of Conditions Precedent |
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15 |
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ARTICLE X MUTUAL COVENANTS |
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15 |
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10.1 |
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Confidentiality |
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15 |
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10.2 |
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Publicity |
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15 |
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10.3 |
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Governmental Filings |
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15 |
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ARTICLE XI CONDITIONS TO CLOSING |
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15 |
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11.1 |
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Conditions to Each Partys Obligations |
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15 |
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11.2 |
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Conditions to Obligations of Oculus and UABRF |
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16 |
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11.3 |
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Conditions to Obligations of Fluidigm |
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16 |
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ARTICLE XII POST-CLOSING MATTERS |
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17 |
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12.1 |
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Additional Payments by Fluidigm |
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17 |
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12.2 |
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Settlement of Lawsuit |
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18 |
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ii
TABLE OF CONTENTS
(continued)
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Page |
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ARTICLE XIII TERMINATION OF AGREEMENT |
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18 |
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13.1 |
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Termination by Fluidigm |
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18 |
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13.2 |
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Termination by UABRF |
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18 |
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13.3 |
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Mutual Consent |
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18 |
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13.4 |
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Effect of Termination |
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19 |
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ARTICLE XIV SURVIVAL OF REPRESENTATIONS AND WARRANTIES |
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19 |
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14.1 |
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Survival of Representations and Warranties |
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19 |
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ARTICLE XV GENERAL |
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19 |
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15.1 |
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Governing Law |
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19 |
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15.2 |
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Assignment; Binding upon Successors and Assigns |
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19 |
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15.3 |
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Severability |
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19 |
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15.4 |
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Entire Agreement |
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20 |
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15.5 |
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Counterparts |
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20 |
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15.6 |
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Expenses |
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20 |
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15.7 |
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Other Remedies |
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20 |
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15.8 |
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Amendment |
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20 |
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15.9 |
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Waiver |
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20 |
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15.10 |
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Informal Resolution |
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21 |
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15.11 |
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Mediation |
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21 |
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15.12 |
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Notices |
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21 |
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15.13 |
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Construction and Interpretation of Agreement |
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22 |
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15.14 |
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No Joint Venture |
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22 |
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15.15 |
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Absence of Third Party Beneficiary Rights |
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22 |
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15.16 |
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Further Assurances |
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23 |
|
iii
EXHIBITS AND SCHEDULES
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Exhibit |
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Description |
A
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Amended and Restated Articles of Incorporation of Fluidigm |
B
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Form of New License Agreement |
C
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Form of Sponsored Research Agreement |
D
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Description of Technology |
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Schedule
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|
Description |
4.6
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|
Pending Litigation |
iv
MASTER CLOSING AGREEMENT
THIS
MASTER CLOSING AGREEMENT is entered into as of March 7, 2003 by and among FLUIDIGM
CORPORATION, a California corporation (Fluidigm), OCULUS PHARMACEUTICALS, INC., a Delaware
corporation (Oculus), and THE UAB RESEARCH FOUNDATION (UABRF).
RECITALS
A. Oculus and UABRF have entered into a license agreement dated September 21,
2001 (together with all amendments and modifications thereto, the License Agreement)
under which Oculus was granted an exclusive license to practice the intellectual property and
technology relating to nanovolume crystallization arrays described in Schedule A to the
License Agreement.
B. The parties hereto have entered into a binding letter agreement dated
December 19, 2002 (the Letter Agreement) under which Oculus and UABRF have agreed to
terminate the License Agreement, UABRF has agreed to grant to Fluidigm an exclusive license
to practice the intellectual property and technology relating to nanovolume crystallization
arrays covered by the License Agreement, and Fluidigm and UABRF have agreed to enter into a
sponsored research agreement. In exchange for the rights to be acquired by Fluidigm as
contemplated by the Letter Agreement, Fluidigm has paid cash in the amount of [***]
pursuant to the Letter Agreement and has agreed to the payment of additional cash and
securities as specified in the Letter Agreement.
C. The parties desire to enter into this Agreement to set out additional terms and
conditions related to the closing of the transactions, and the payments to be made by
Fluidigm, contemplated by the Letter Agreement.
NOW, THEREFORE, in consideration of the representations, warranties and agreements herein
contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth or
referenced below:
1.1 Affiliate of any specified person shall mean any other person directly or
indirectly controlling or controlled by or under direct or indirect common control with such
specified person. For purposes of this definition, control when used with respect to any
specified person means the power to direct or cause the direction of the management and policies of
such person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms controlling and controlled have meanings correlative to
the foregoing.
-1-
1.2 Ancillary Documents shall mean all documents or agreements required by this
Agreement to be executed or delivered by any party hereto.
1.3 Assigned Rights shall mean any intellectual property rights owned by Oculus that
pertain in any way to the Technology, including without limitation any Inventions (as such term is
defined in Section 11 of the License Agreement) and any other patent rights and other intellectual
property rights therein owned by Oculus.
1.4 Cash Consideration shall mean the sum of cash in the amount of [***] paid in
accordance with the Letter Agreement and the Closing Cash Consolidation.
1.5 Closing shall mean the closing of the transactions contemplated by this
Agreement.
1.6 Closing Cash Consideration shall mean cash in the amount of [***].
1.7
Closing Date shall mean March 7, 2003, or such other date to which the parties
shall mutually agree in writing.
1.8 Encumbrances shall mean restrictions on or conditions to transfer or assignment,
claims, liabilities, licenses, immunities from lawsuits to third parties, liens, pledges, mortgages
or security interests of any kind, whether accrued, absolute, contingent, or otherwise.
1.9 Fluidigm Series C Preferred Stock shall mean the Series C Preferred Stock of
Fluidigm having the rights, preferences and privileges set forth in Fluidigms Articles of
Incorporation attached hereto as Exhibit A.
1.10 License Agreement shall mean the license agreement between Oculus and
UABRF as described in Recital A.
1.11 New License Agreement shall mean the license agreement between Fluidigm and
UABRF in the form of Exhibit B attached hereto.
1.12 Sponsored Research Agreement shall mean the sponsored research agreement
between Fluidigm and UABRF in the form of Exhibit C attached hereto.
1.13 Technology shall mean all intellectual property and other rights relating
to nanovolume crystallization arrays described in Exhibit D attached hereto.
1.14
Transfer Taxes shall mean all sales taxes, use taxes, conveyance taxes,
transfer taxes, filing fees, recording fees, reporting fees and other similar duties, taxes and
fees, if any, imposed upon, or resulting from, the transfer of the Assigned Rights hereunder,
except federal, state or local income or similar taxes based upon or measured by revenue, income,
profit or gain from the transfer of the Assigned Rights or the operation of Oculus business prior
to the Closing or by any increase in the value of any of the Assigned Rights through the Closing
Date.
-2-
ARTICLE II
TRANSFER OF ASSIGNED RIGHTS AND LICENSE OF TECHNOLOGY
2.1
Transfer of Rights and License of Technology. Oculus and UABRF have mutually
terminated the License Agreement as of January 30, 2003 and Oculus has surrendered all rights under
the License Agreement to UABRF. Subject to and upon the terms and conditions of this Agreement,
effective as of the Closing, Fluidigm and UABRF will enter into the New License Agreement. It is
the intent of the parties that all intellectual property rights subject to the License Agreement as
of November 27, 2002 shall be transferred and/or assigned to Fluidigm, and that all such rights
owned by UABRF shall be licensed to Fluidigm under the New License Agreement, subject to the
reservation by UABRF of certain rights as set forth in the License Agreement.
2.2 Excluded Assets and Liabilities. Notwithstanding the provisions of Section 2.1,
(a) Fluidigm and Oculus expressly acknowledge and agree that Oculus shall not sell, transfer,
assign, convey or deliver to Fluidigm, and Fluidigm shall not purchase, acquire or accept from
Oculus, any right, title or interest of Oculus in or to any other property or assets of Oculus, and
(b) Fluidigm does not assume, and Oculus does not transfer or assign, any liabilities or
obligations, whether presently fixed and determined, contingent or otherwise, of Oculus.
2.3 Payment. In
consideration of the execution of the New License Agreement and the
transfer of the rights thereunder, Fluidigm will deliver to UABRF the Closing Cash Consideration
and [ * * * ] shares of Fluidigm Series C
Preferred Stock valued at 2.58 per share, the price at
which Fluidigm sold and issued shares of its Series C Preferred Stock to other investors.
2.4 Taxes. Fluidigm and Oculus shall each pay (or reimburse the other for) one-half of
all Transfer Taxes, whether imposed by law on Fluidigm and Oculus or otherwise.
2.5 Assigned Rights. Oculus hereby sells, assigns and transfers to Fluidigm
all Assigned Rights, free and clear of all Encumbrances (except to the extent that the
settlement agreement pertaining to the Lawsuit (as such term is defined in Section 6.3) may
include an immunity from lawsuits for conduct arising prior to the date of the settlement
agreement).
2.6 Unassignable Rights.
(a) Notwithstanding any provision of this Agreement or any of the Ancillary Documents, but
subject to Section 11.3(c), to the extent that any of the Assigned Rights are not assignable or
otherwise transferable to Fluidigm, or if such assignment or transfer would constitute a breach
thereof or a violation of any applicable law, then neither this Agreement nor such Ancillary
Documents shall constitute an assignment or transfer (or an attempted assignment or transfer)
thereof until such consent, approval or waiver of such party or parties has been duly obtained.
(b) If any consent required to transfer the Assigned Rights to Fluidigm has not been obtained
as of the Closing Date and Fluidigm nevertheless determines to proceed with the
-3-
Closing, Oculus and UABRF shall, at their own expense, continue to cooperate with Fluidigm and use
commercially reasonable efforts to obtain such consent after the Closing.
(c) If any Assigned Right is not transferred to Fluidigm at the Closing pursuant to this
Agreement, Oculus and Fluidigm shall cooperate with each other in any reasonable arrangement
designed to provide for Fluidigm all of the benefits of such Assigned Rights. At Fluidigms
request, Oculus shall take all reasonable actions requested by Fluidigm to enforce for the benefit
of Fluidigm any and all rights of Oculus with respect to any such Assigned Right that is not
otherwise transferred pursuant to the provisions of this Agreement. Oculus agrees to hold in trust
for, and remit promptly to, Fluidigm all future collections or payments received by Oculus in
respect of all such Assigned Rights (net of all costs and expenses incurred by Oculus in respect
thereto); provided, however, that nothing herein shall create or provide any rights or
benefits in or to third parties.
(d) If any intellectual property rights that are described in the New License Agreement cannot
be licensed to Fluidigm by UABRF under the New License Agreement without the consent of any third
party or without resulting in a breach or default of any agreement affecting such rights, UABRF
covenants and agrees that it shall not sue or otherwise take any legal action to restrict or
prevent Fluidigm and Fluidigms permitted assignees and sublicensees from practicing such
intellectual property rights as purported to be granted under the terms of the New License
Agreement.
(e) If, subsequent to the Closing, a claim brought by any party challenging any of the
transactions contemplated hereby results in any ruling or order which has the result of frustrating
in a material way the transfer of any of the Assigned Rights hereunder to Fluidigm or the grant of
rights to Fluidigm under the New License Agreement or Fluidigms use thereof as provided herein,
Oculus and UABRF shall cooperate with Fluidigm in any reasonable arrangement designed to give
Fluidigm, as nearly as practicable, the same economic benefits as if such transfer or license, as
the case may be, had been consummated in accordance with the provisions hereof.
(f) Nothing in this Section 2.6 shall be deemed to modify in any respect any of the
representations or warranties of Oculus and UABRF set forth herein or the conditions to Fluidigms
obligations contained in this Agreement, be deemed a waiver by Fluidigm of its right to have
received on or before the Closing Date an effective assignment of all of the Assigned Rights or be
deemed to constitute an agreement to exclude any assets from the Assigned Rights.
ARTICLE III
THE CLOSING
3.1 The Closing. The Closing shall take place at the offices of Gray Cary Ware &
Freidenrich llp, 400 Hamilton Avenue, Palo Alto, California, at 11:00 a.m., Pacific Time,
on the Closing Date, or at such other time and place as Oculus, Fluidigm and UABRF may agree.
3.2 Termination of License Agreement. On or before the Closing, Oculus and UABRF
shall deliver to Fluidigm an agreement and acknowledgment that the License
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Agreement has been terminated and such other agreements and instruments as may be necessary or
appropriate to evidence the return by Oculus to UABRF of all rights under the License Agreement.
3.3
Agreements Between Fluidigm and UABRF. At the Closing, Fluidigm and UABRF shall execute and deliver the New License Agreement and the
Sponsored Research Agreement.
3.4 Other Documents. Each party shall deliver to the other at the Closing such other
documents, certificates, schedules, agreements and instruments required by this Agreement to
be delivered at such time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OCULUS
Oculus hereby represents and warrants to Fluidigm as follows:
4.1 Organization. Oculus is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all requisite corporate power to
own, lease and operate its properties and to conduct its business as it is currently being
conducted. Oculus is duly qualified or licensed to do business as a foreign corporation in
each jurisdiction in which the failure to be so qualified or licensed would have a material adverse
effect on Oculus.
4.2 Authorization. This Agreement and all of the Ancillary Documents to which
Oculus is or will be a party have been, or upon their execution and delivery hereunder will have
been, duly and validly executed and delivered by Oculus and constitute, or will constitute, valid
and binding agreements of Oculus, enforceable against Oculus in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors rights generally or by principles of public policy
or general equitable principles or the exercise of judicial discretion in accordance with such
principles. Oculus has the requisite corporate power and authority to execute and deliver this
Agreement and the Ancillary Documents to which Oculus is or will be a party and, at the time of the
Closing, will have the requisite corporate power and authority to carry out the transactions
contemplated by this Agreement and the Ancillary Documents. The execution, delivery and performance
by Oculus of this Agreement and the Ancillary Documents have been duly and validly approved and
authorized by the Board of Directors and shareholders of Oculus.
4.3 No Conflicts; Consents. The execution and delivery by Oculus of this Agreement
and the Ancillary Documents to which Oculus is or will be a party do not, and the consummation
of the transactions contemplated hereby and thereby and compliance by Oculus with the
provisions hereof and thereof will not, contravene, conflict with, result in a breach of,
constitute a default (with or without notice or lapse of time, or both) under or violation of, or result
in the creation of any Encumbrance pursuant to, (i) any provision of the Certificate of Incorporation
or Bylaws of Oculus, (ii) any judgment, order, decree, rule, law or regulation of any court or
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governmental authority, foreign or domestic, applicable to Oculus or to any of the Assigned Rights,
except where any such contravention, conflict, breach or default could not reasonably be expected
to have a material adverse effect on Fluidigms ownership of the Assigned Rights, or (iii) any
provision of any material agreement, instrument or understanding to which Oculus is a party or by
which Oculus is bound or any of the Assigned Rights are affected, except where any such
contravention, conflict, breach or default could not reasonably be expected to have a material
adverse effect on Fluidigms ownership of the Assigned Rights, nor will such actions give to any
other person or entity any interests or rights of any kind, including rights of termination,
acceleration or cancellation, in or with respect to any of the Assigned Rights, or result in the
creation of any Encumbrance on any of the Assigned Rights. No consent, approval, order or
authorization of, or registration, declaration or filing with, any third party or any governmental
authority is required to be obtained on the part of Oculus to permit the consummation of the
transactions contemplated by this Agreement or the Ancillary Documents.
4.4 Title to Assigned Rights. Oculus has good and marketable title to all of the
Assigned Rights. All of the Assigned Rights are free and clear of any Encumbrances (except to the
extent that the settlement agreement pertaining to the Lawsuit (as such term is defined in Section
6.3) may include an immunity from lawsuits for conduct arising prior to the date of the settlement
agreement). At the Closing, Oculus will sell, convey, assign, transfer and deliver to Fluidigm
good, valid and marketable title and all right and interest in and to all of the Assigned Rights,
free and clear of any Encumbrances.
4.5 No Assignment. Oculus has not sublicensed or otherwise transferred any material
rights under the License Agreement to any third party. As of
December 19, 2002, the License
Agreement was in full force and effect in accordance with its terms. Prior to the termination of
the License Agreement, no provisions of the License Agreement had been waived in any
material respect. Exhibit D lists all of the patent filings subject to the License
Agreement. To the knowledge of Oculus, UABRF is the owner of the patent rights within the
technology and inventions subject to the License Agreement and has not granted a license to such
technology and inventions to any person or entity other than Oculus.
4.6 Litigation and Claims. Except as set forth on Schedule 4.6 attached hereto, there
are no claims, actions, suits, proceedings arbitrations or investigations in progress or pending
(or, to the knowledge of Oculus, threatened) before any court, tribunal or governmental agency
against Oculus that relate to any of the Assigned Rights. Oculus is not a party to any judgment,
decree, order or arbitration award (or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect to any of the Assigned Rights.
4.7 Distribution Agreement. Oculus has entered into a mutually acceptable
agreement with UABRF regarding the distribution of any and all consideration to be paid by
Fluidigm in connection with the transactions contemplated by this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF FLUIDIGM
Fluidigm hereby represents and warrants to Oculus and UABRF as follows:
5.1 Organization. Fluidigm is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has all requisite corporate power to
own, lease and operate its properties, to conduct its business as it is currently being conducted.
Fluidigm is duly qualified or licensed to do business as a foreign corporation in each jurisdiction
in which the failure to be so qualified or licensed would have a material adverse effect on
Fluidigm.
5.2
Authorization. This Agreement and all of the Ancillary Documents to which Fluidigm
is or will be a party have been, or upon their execution and delivery hereunder will have been,
duly and validly executed by Fluidigm and constitute, or will constitute, valid and binding
agreements of Fluidigm, enforceable against Fluidigm in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors rights generally or by principles of public policy or general
equitable principles or the exercise of judicial discretion in accordance with such principles.
Fluidigm has the requisite corporate power and authority to execute and deliver this Agreement and
the Ancillary Documents to which Fluidigm is or will be a party and, at the time of the Closing,
will have the requisite corporate power and authority to sell, issue and deliver the Securities
pursuant to this Agreement and to carry out the other transactions contemplated by this Agreement
and the Ancillary Documents. The execution, delivery and performance by Fluidigm of this Agreement
and the Ancillary Documents have been duly and validly approved and authorized by Fluidigms Board
of Directors and by all requisite action of Fluidigms stockholders.
5.3
No Conflicts; Consents. The execution and delivery by Fluidigm of this Agreement
and the Ancillary Documents to which Fluidigm is or will be a party do not, and the consummation of
the transactions contemplated hereby and thereby and compliance by Fluidigm with the provisions
hereof and thereof will not, contravene, conflict with, result in a breach of, constitute a default
(with or without notice or lapse of time, or both) under or violation of, or result in the creation
of any Encumbrance pursuant to, (i) any provision of the Articles of Incorporation or Bylaws of
Fluidigm, (ii) any judgment, order, decree, rule, law or regulation of any court or governmental
authority, foreign or domestic, applicable to Fluidigm except where such any such contravention,
conflict, breach or default could not reasonably be expected to have a material adverse effect on
the consummation of the transactions contemplated hereby, or
(iii) any provision of any agreement, instrument or understanding to which Fluidigm is a party or
by which Fluidigm is bound, except where such any such contravention, conflict, breach or default
could not reasonably be expected to have a material adverse effect on the consummation of the
transactions contemplated hereby. No consent, approval, order or authorization of, or registration,
declaration or filing with, any third party or any governmental authority is required to be
obtained on the part of Fluidigm to permit the consummation of the transactions contemplated by
this Agreement or the Ancillary Documents.
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5.4 Litigation and Claims. There are no claims, actions, suits, proceedings,
arbitrations or investigations in progress or pending (or, to Fluidigms knowledge, threatened,
other than potential claims relating to the Interfering Patent (as such term is defined in Section
12.1(a) below), including, but not limited to, a possible interference) before any court, tribunal
or governmental agency, against or relating to Fluidigm, which, if determined adversely to
Fluidigm, would be likely to have a material adverse effect upon Fluidigms financial condition or
materially impair its ability to carry out and perform its obligations hereunder.
5.5 Securities Laws Exemptions. Based in part on the representations of UABRF
contained in Section 6.5, the issuance of the Securities pursuant to the terms of this Agreement
will be exempt from the registration requirements of the Securities Act and the regulations
thereunder, and the registration, permit or qualification requirements of any applicable state
securities laws.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF UABRF
To the best knowledge of the UABRF Director and Dr. Larry DeLucas, UABRF hereby represents to
Fluidigm as follows:
6.1 Authorization. This Agreement and the Ancillary Documents to which UABRF is
or will be a party have been, or upon their execution and delivery hereunder will have been, duly
and validly executed and delivered by UABRF and constitute, or will constitute, valid and binding
agreements of UABRF, enforceable against UABRF in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally or by principles of public policy or general equitable
principles or the exercise of judicial discretion in accordance with such principles. UABRF has
full power and authority to execute and deliver this Agreement and the Ancillary Documents to which
UABRF is or will be a party and, at the time of the Closing, will have all requisite power and
authority to carry out the transactions contemplated by this Agreement and the Ancillary Documents.
All university, foundation and other internal approvals necessary for UABRF to consummate the
transactions contemplated by this Agreement and the Ancillary Documents to which UABRF is or will
be a party have been obtained.
6.2 No Conflicts; Consents. The execution and delivery by UABRF of this Agreement
and the Ancillary Documents to which UABRF is or will be a party do not, and the consummation of
the transactions contemplated hereby and thereby and compliance by UABRF with the provisions hereof
and thereof will not, contravene, conflict with, result in a breach of, constitute a default (with
or without notice or lapse of time, or both) under or violation of, or result in the creation of
any Encumbrance pursuant to, (i) any provision of the charter documents of UABRF, (ii) any
judgment, order, decree, rule, law or regulation of any court or governmental authority, foreign or
domestic, applicable to UABRF or to the Technology, except where any such contravention, conflict,
breach or default could not reasonably be expected to have a material adverse effect on Fluidigms
rights under the New License Agreement or the consummation of the transactions contemplated hereby,
or (iii) any provision of any agreement, instrument or understanding to which UABRF is a party or
by which UABRF is bound or any of
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the Technology is affected, except where such any such contravention, conflict, breach or default
could not reasonably be expected to have a material adverse effect on Fluidigms rights under the
New License Agreement or the consummation of the transactions contemplated hereby, nor will such
actions give to any other person or entity any interests or rights of any kind, including rights
of termination, acceleration or cancellation, in or with respect to any of the Technology, or
result in the creation of any Encumbrance on any of the Technology. No consent, approval, order or
authorization of, or registration, declaration or filing with, any third party or any governmental
authority is required to be obtained on the part of the UABRF to permit the consummation of the
transactions contemplated by this Agreement or the Ancillary Documents.
6.3 Title to Technology. UABRF is the sole owner of the technology, inventions and
patent rights in the Technology and subject to the License Agreement and has not granted a
license to such technology, inventions and patent rights to any person or entity other than
Oculus. The License Agreement has been mutually terminated by UABRF and Oculus and
neither Oculus nor any other party has any rights thereunder. UABRF has the right to grant an
exclusive license to the technology, inventions, patent rights and other rights under the New
License Agreement to Fluidigm, free and clear of any Encumbrances of any nature whatsoever,
subject to those liens, encumbrances or restrictions which may arise as a result of the
settlement of the litigation between Oculus and Syrrx, Inc. (Syrrx) described in Schedule 4.6
(the Lawsuit), provided that Syrrx shall have no rights that may be exercised after the
Closing to practice the technology, inventions, patent rights and
other rights subject to the New License Agreement, and the potential infringement by Diversified Scientific, Inc. of the Licensed IP
Rights (as such term is defined in the New License Agreement) described in Section 2.2.3 of
the New License Agreement. Exhibit D lists all of the patent filings subject to the
License Agreement. UABRF is not aware of any third-party challenges to the ownership, validity or
entitlement to priority date of any of the patent filings subject to the License Agreement or
the New License Agreement, except for the Lawsuit between Oculus and Syrrx and the settlement
agreement related to said Lawsuit provided to Fluidigm pursuant to Section 7.2 of this
Agreement.
6.4 Litigation and Claims. Except as set forth on Schedule 4.6 attached hereto, there
are no claims, actions, suits, proceedings, arbitrations or investigations in progress or
pending (or, to the knowledge of UABRF, threatened) before any court, tribunal or governmental agency
against UABRF that relate to any of the Technology. UABRF is not a party to any judgment,
decree, order or arbitration award (or agreement entered into in any administrative, judicial
or arbitration proceeding with any governmental authority) with respect to any of the Technology,
except to the extent that UABRF may be deemed to be a party thereto as a result of UABRFs
status as a shareholder of Oculus and having a member on the Board of Directors of Oculus as
well as the status of Dr. Larry DeLucas as a member of the Board of Directors of Oculus and a
shareholder of Oculus.
6.5 Distribution Agreement. UABRF has entered into a mutually acceptable
agreement with Oculus regarding the distribution of any and all consideration to be paid
by Fluidigm in connection with the transactions contemplated by this Agreement.
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6.6 Investment Representations
(a) UABRF is acquiring the shares of Fluidigm capital stock to be issued
hereunder (the Securities) for investment and not with the view to the public resale
or distribution thereof, and UABRF has no present intention of selling, granting any
participation in, or otherwise distributing the Securities, other than in accordance with the terms of a
Termination Agreement dated as of ____, 2003 between UABRF and Oculus.
UABRF understands that the Securities have not been registered under the Securities Act by reason
of a specific exemption thereunder, which depends upon, among other things, the bona fide nature of
UABRFs investment intent as expressed herein.
(b) UABRF acknowledges that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or Fluidigm receives an opinion of counsel
satisfactory to Fluidigm that such registration is not required. UABRF is aware of the provisions
of Rule 144 promulgated under the Securities Act which permit limited resale of stock purchased in
a private placement subject to the satisfaction of certain conditions.
(c) UABRF understands that no public market now exists for the Securities and that there can
be no assurance that a public market will ever exist for the Securities.
(d) UABRF is an accredited investor as defined in the Securities Act, and has such knowledge
and experience in financial and business matters that it is capable of evaluating the merits and
risks of the investment in the Securities.
(e) UABRF has been given the opportunity to obtain any information or documents related to,
and ask questions and receive answers about Fluidigm and its business, prospects and risks which
UABRF deems necessary, to evaluate the merits and risks related to UABRFs investment in the
Securities and to verify the information UABRF received.
(f) UABRFs financial condition is such that it can afford to bear the economic risk of
holding the Securities for an indefinite period of time, and it has adequate means of providing for
its current needs and contingencies and to suffer a complete loss of its investment in such
Securities.
6.7 Restrictions. No Securities shall be sold, assigned, transferred or pledged except
upon the conditions specified in this Agreement. UABRF will cause any proposed purchaser, assignee,
transferee or pledgee of the Securities to agree in writing to take and hold such securities
subject to the provisions and upon the conditions specified in this Agreement.
6.8 Restrictive Legend. Each certificate representing the Securities shall (unless
otherwise permitted by the provisions of Section 6.9 below) be stamped or otherwise imprinted with
a legend in the following form (in addition to any legend required under applicable state
securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE SECURITIES ACT). SUCH
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SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE
OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) OR OTHER EVIDENCE
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MARKET
STAND-OFF AGREEMENT IN THE EVENT OF A PUBLIC OFFERING, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.
UABRF consents to Fluidigm making a notation on its records and giving instructions to any
transfer agent of the Securities in order to implement the restrictions on transfer established in
Sections 6.7 through 6.10 of this Agreement.
6.9 Notice of Proposed Transfers. UABRF and any transferee of any certificate
representing the Securities, by acceptance thereof, agrees to comply in all respects with the
restrictions on transfer contained in Sections 6.7 through 6.10 of this Agreement. Prior to any
proposed sale, assignment, transfer or pledge of any Securities (other than any transfer not
involving a change in beneficial ownership), unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the holder thereof shall give written
notice to Fluidigm of such holders intention to effect such transfer, sale, assignment or pledge.
Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied at such holders expense by
either (i) a written opinion of legal counsel who shall, and whose legal opinion shall be,
reasonably satisfactory to Fluidigm, addressed to Fluidigm, to the effect that the proposed
transfer of the Securities may be effected without registration under the Securities Act, or (ii) a
no action letter from the Securities and Exchange Commission (the Commission) to the effect
that the transfer of such Securities without registration will not result in a recommendation by
the staff of the Commission that action be taken with respect thereto, or (iii) any other evidence
reasonably satisfactory to counsel to Fluidigm, whereupon the holder of such Securities shall be
entitled to transfer such Securities in accordance with the terms of the notice delivered by the
holder to Fluidigm; provided, however, that no such legal opinion, no action letter or other
evidence shall be required with respect to a transfer to an affiliate of the holder. Each
certificate evidencing the Securities transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144, the appropriate restrictive legend set forth in Section 6.8
above, except that such certificate shall not bear such restrictive legend if, in the opinion of
counsel for such holder and Fluidigm, such legend is not required in order to establish compliance
with any provisions of the Securities Act or this Agreement.
6.10 Standoff Agreement. UABRF agrees in connection with Fluidigms initial sale of
securities pursuant to an effective registration statement, upon notice by Fluidigm or the
underwriters managing such offering, not to sell, make any short sale of, loan, pledge (or
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otherwise encumber or hypothecate), grant any option for the purchase of, or otherwise directly or
indirectly dispose of any Securities (other than those included in the registration) without the
prior written consent of Fluidigm and such managing underwriters for such period of time as
Fluidigms Board of Directors establishes pursuant to its good faith negotiations with such
managing underwriters; provided, however that:
(i) such agreement shall not exceed one hundred eighty (180) days;
(ii) such agreement shall not apply to transfers to an affiliate, provided that such
affiliate agrees to be bound by the terms of such agreement, to the same extent as if such
transferee were the original party thereunder;
(iii) UABRF shall not be subject to such agreement unless (A) all executive officers and
directors of Fluidigm, (B) all shareholders of Fluidigm holding more than 1% of Fluidigms
outstanding capital stock and (C) all holders of registration rights, are subject to or obligated
to enter into similar agreements; and
(iv) if and when any person identified in clause (iii) is released, in whole or in part,
from such agreement (whether or not such release is contemplated at the time of the offering) or if
any such agreement is terminated, UABRF shall be concurrently released on a pro rata basis based on
the number of Securities held by such person and UABRF.
(b) UABRF agrees that prior to the initial public offering it will not transfer
securities of Fluidigm unless each transferee agrees in writing to be bound by all of the
provisions of this Section 6.10, provided that this Section 6.10 shall not apply to transfers
pursuant to a registration statement.
UABRF hereby consents to the placement of stop transfer orders with Fluidigms transfer agent
in order to enforce the foregoing provision and agrees to execute a market standoff agreement with
said underwriters in customary form consistent with the provisions of this Section 6.10.
ARTICLE VII
COVENANTS OF OCULUS
7.1 Conduct of Business. During the period from the date of this Agreement to the
Closing, Oculus will conduct its business in the ordinary course consistent with past
practices. During the period from the date of this Agreement to the Closing, Oculus will not
without the prior written consent of Fluidigm:
(a) encumber or permit to be encumbered any of the Technology or Assigned Rights;
(b) dispose of any of the Technology or Assigned Rights;
(c) waive or release any right or claim relating to any Technology or Assigned Rights; or
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(d) agree to do any of the things described in the preceding clauses of this Section 7.1.
Fluidigm agrees that the foregoing restrictions will not prevent Oculus from entering into a
settlement agreement with Syrrx to settle the Lawsuit, provided that such settlement does not
involve the sale, transfer or assignment of the Technology or the Assigned Rights, or any rights in
any of the foregoing, or result in the creation of any Encumbrance on the Technology, the Assigned
Rights, or any rights in any of the foregoing.
7.2 Access to Information. Until the earlier of the termination of this Agreement or
the Closing, Oculus will allow Fluidigm and its agents reasonable access upon reasonable notice and
during normal working hours to its files, books, records, and offices relating to the Technology
and Assigned Rights, except where prohibited by contract or protected by privilege. In furtherance
of the above, Fluidigm and its counsel and advisors shall have reasonable access during normal
business hours to pertinent contracts of Oculus, including an unsigned final version of the
settlement agreement between Oculus and Syrrx related to the Lawsuit, and drafts of such settlement
agreement (to the extent it is permissible under applicable confidentiality terms and with the
understanding that Oculus may be required to obtain the return or destruction by Fluidigm of the
final version and drafts of such settlement agreement prior to its execution), as well as all
scientific notebooks, invention records and other documents related to the conception and reduction
to practice and prosecution of the patent filings listed on
Exhibit D, including, without
limitation, all patent searches, patent file wrappers, legal and scientific investigations and
research related to the Technology, the License Agreement and the New License Agreement.
7.3 Regulatory Approvals. Prior to the Closing, Oculus will execute and file, or join
in the execution and filing of, any application or other document that may be reasonably necessary
in order to obtain the authorization, approval or consent of any governmental entity that may be
required in connection with the consummation of the transactions contemplated by this Agreement.
Oculus will use commercially reasonable efforts to obtain all such authorizations, approvals and
consents.
7.4
Satisfaction of Conditions Precedent. Oculus will use commercially reasonable
efforts to satisfy or cause to be satisfied all the conditions precedent to the Closing hereunder,
and to cause the transactions contemplated hereby to be consummated, and, without limiting the
generality of the foregoing, to obtain all consents and authorizations of third parties and to make
all filings with, and give all notices to, third parties which may be necessary or reasonably
required on its part in order to effect the transactions contemplated hereby.
ARTICLE VIII
COVENANTS OF UABRF
8.1 Conduct of Business. During the period from the date of this Agreement to
the Closing, UABRF will not without the prior written consent of Fluidigm:
(a) encumber or permit to be encumbered any of the Technology;
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(b) dispose
of any of the Technology;
(c) waive or release any right or claim relating to any Technology; or
(d) agree to do any of the things described in the preceding clauses of this
Section 8.1.
Fluidigm agrees that the foregoing restrictions will not prevent UABRF from consenting to a
settlement agreement between Oculus and Syrrx to settle the Lawsuit, provided that such
settlement does not involve the sale, transfer or assignment of the Technology or the
Assigned Rights, or any rights in any of the foregoing, or result in the creation of any
Encumbrance on the Technology, the Assigned Rights, or any rights in any of the foregoing.
8.2 Access to Information. Until the earlier of the termination of this
Agreement or the Closing, UABRF will allow Fluidigm and its agents reasonable access upon
reasonable notice and during normal working hours to its files, books, records, and offices
relating to the Technology and Assigned Rights, except where prohibited by contract or
protected by privilege. In furtherance of the above, Fluidigm and its counsel and advisors
shall have reasonable access during normal business hours to pertinent scientific notebooks,
invention records and other documents related to the conception and reduction to practice
and prosecution of the patent filings listed on Exhibit D, including, without
limitation, all patent searches, patent file wrappers, legal and scientific investigations
and research related to the Technology, the License Agreement and the New License Agreement.
8.3 Regulatory Approvals. Prior to the Closing, UABRF will execute and file, or
join in the execution and filing of, any application or other document that may be
reasonably necessary in order to obtain the authorization, approval or consent of any governmental entity
that may be required in connection with the consummation of the transactions contemplated by
this Agreement. UABRF will use commercially reasonable efforts to obtain all such
authorizations, approvals and consents.
8.4 Satisfaction of Conditions Precedent. UABRF will use commercially
reasonable efforts to satisfy or cause to be satisfied all the conditions precedent to the Closing
hereunder, and to cause the transactions contemplated hereby to be consummated, and, without
limiting the generality of the foregoing, to obtain all consents and authorizations of third parties
and to make all filings with, and give all notices to, third parties which may be necessary or
reasonably required on its part in order to effect the transactions contemplated hereby.
ARTICLE IX
COVENANTS OF FLUIDIGM
9.1 Regulatory Approvals. Prior to the Closing, Fluidigm will execute and
file, or join in the execution and filing of, any application or other document that may be
reasonably necessary in order to obtain the authorization, approval or consent of any
governmental entity that may be required in connection with the consummation of the
transactions contemplated by this Agreement. Fluidigm will use its commercially reasonable
efforts to obtain all such authorizations, approvals and consents.
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9.2 Satisfaction of Conditions Precedent. Fluidigm will use commercially reasonable
efforts to satisfy or cause to be satisfied all the conditions precedent to the Closing hereunder,
and to cause the transactions contemplated hereby to be consummated, and, without limiting the
generality of the foregoing, to obtain all consents and authorizations of third parties and to make
all filings with, and give all notices to, third parties which may be necessary or reasonably
required on its part in order to effect the transaction contemplated hereby.
ARTICLE X
MUTUAL COVENANTS
10.1 Confidentiality. The parties acknowledge that the Confidential Disclosure
Agreement dated as of October 8, 2002 between Fluidigm and Oculus and the Confidential Disclosure
Agreement dated December 19, 2002 between Fluidigm, Oculus and UABRF are binding upon the parties
hereto and in full force and effect, except to the extent that the provisions hereof supersede
provisions to similar effect contained in the Confidential Disclosure Agreements. The terms of the
Confidential Disclosure Agreements (exclusive of such superseded provisions) are incorporated in
this Agreement by this reference.
10.2 Publicity. Except as may otherwise be required by law, none of the parties hereto
shall make or cause to be made any public announcements in respect of this Agreement or the
transactions contemplated herein or otherwise communicate with any news media without the prior
written consent of the other party, provided, however, that following the Closing Fluidigm may
issue a press release to announce the closing of the transactions contemplated hereby and the
execution and delivery of the New License Agreement and Sponsored Research Agreement with UABRF
provided that such press release shall not be issued prior to the execution by Syrrx
of a settlement agreement with Oculus to settle the litigation described in Schedule 4.6 but in any
event the press release may be issued no later than 30 days from the execution date of the New
License Agreement. Except for the press release issued by Fluidigm, none of the parties hereto will
make any public disclosure prior to the Closing or with respect to the Closing unless all parties
agree on the text and timing of such public disclosure, except as required by law. Nothing
contained in this Section shall prevent any party at any time from furnishing any information
pursuant to the requirements of any governmental entity; provided, however, that
if such party is required to furnish such information, it will provide a copy to the other parties.
10.3 Governmental Filings. As promptly as practicable after the execution of this
Agreement, each party shall make any and all governmental filings required with respect to the
transactions contemplated in this Agreement and the Ancillary Documents.
ARTICLE XI
CONDITIONS TO CLOSING
11.1 Conditions to Each Partys Obligations. The respective obligations of each party
to effect the transactions to be performed by such party at the Closing are subject to the
satisfaction at or prior to the Closing of the following conditions any of which may be waived in
writing by each party:
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(a) No order shall have been entered, and not vacated, by a court or administrative agency
of competent jurisdiction, in any action or proceeding which enjoins, restrains or prohibits the
sale of the Assigned Rights, the grant of rights under the New License Agreement or the
consummation of any other transaction contemplated hereby.
(b) All permits, authorizations, approvals and orders required to be obtained under all
applicable statutes, codes, ordinances, rules and regulations in connection with the transactions
contemplated hereby shall have been obtained and shall be in full force and effect at the Closing
Date.
(c) There shall be no litigation pending or threatened by any regulatory body or private
party in which (i) an injunction is or may be sought against the transactions contemplated hereby,
or (ii) relief is or may be sought against any party hereto as a result of this Agreement and in
which, in the good faith judgment of the Board of Directors of either Fluidigm, Oculus or UABRF
(relying on the advice of their respective legal counsel), such regulatory body or private party
has the probability of prevailing and such relief would have a material adverse affect upon such
party.
11.2 Conditions to Obligations of Oculus and UABRF. The obligations of Oculus and UABRF
to effect the transactions to be performed by Oculus and UABRF at the Closing are subject to the
satisfaction at or prior to the Closing of the following additional conditions any of which may be
waived in writing by Oculus and UABRF:
(a) All of the representations and warranties of Fluidigm set forth in Article V hereof
shall be true in all material respects on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, except for changes contemplated by this Agreement.
(b) All of the terms, covenants and conditions of this Agreement to be complied with and
performed by Fluidigm at or prior to the Closing shall have been duly complied with and performed
in all material respects.
11.3 Conditions to Obligations of Fluidigm. The obligations of Fluidigm to effect the
transactions to be performed by it at the Closing are subject to the satisfaction at or prior to
the Closing of the following additional conditions any of which may be waived in writing by
Fluidigm:
(a) All of the representations and warranties of Oculus and UABRF set forth in Articles IV
and VI hereof shall be true in all material respects on and as of the Closing Date with the same
force and effect as if they had been made at the Closing, except for changes contemplated by this
Agreement.
(b) All of the terms, covenants and conditions of this Agreement to be complied with and
performed by Oculus and UABRF at or prior to the Closing shall have been duly complied with and
performed in all material respects.
(c) All required consents from third parties required to allow the consummation of the sale
of the Assigned Rights, the grant of rights under the New License
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Agreement and the other transactions contemplated hereby shall have been obtained and delivered to
Fluidigm.
(d) Fluidigm shall have received an opinion from the attorney(s) prosecuting the patent
filings listed on Exhibit D, in form and substance reasonably acceptable to Fluidigm, as to
the following matters: (i) assignments of the inventions covered by the patent filings to UABRF
have been properly filed with the United States Patent and Trademark Office (USPTO), (ii) UABRF
is named as the sole owner of the inventions covered by the patent filings listed on Exhibit
D, (iii) a declaration of interference was timely requested with at least one of the pending
U.S. patent applications listed on Exhibit D and U.S. Patent No. 6,296,673 with the USPTO
in accordance with U.S.C. Section 135, (iv) none of the patents listed on Exhibit D have
been held to be permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed
for appeal, and none of the patents listed on Exhibit D have been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise, and (v) the patent applications listed on
Exhibit D were filed in good faith and have not been abandoned or finally disallowed
without the possibility of appeal or refiling of such application.
ARTICLE XII
POST-CLOSING MATTERS
12.1 Additional Payments by Fluidigm. In addition to the consideration delivered by
Fluidigm at the Closing, Fluidigm will pay the following amounts to UABRF upon the achievement of
the following milestones:
(a)
Milestone 1. Milestone 1 shall be satisfied [***]. Within
[***] days after [***], Fluidigm will issue shares of its stock having a
value of [***] (based on the fair value of the stock at the time Milestone 1 is achieved),
subject to compliance with applicable securities laws.
(b)
Milestone 2. Milestone 2 shall be satisfied [***].
Within [***] days after [***], Fluidigm will issue shares of its stock having a value of [***]
(based on the fair value at the time Milestone 2 is achieved), subject to compliance with
applicable securities laws. In addition, (i) [***]
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[***]
(c) Stock to
be Issued. If Fluidigm is a private company at the time a milestone is
achieved, upon achievement of a milestone Fluidigm will issue shares of the series of Fluidigm
Preferred Stock that was issued in Fluidigms most recent financing and the shares will be valued
at the price at which the shares were sold in such financing. If Fluidigm is a public company at
the time a milestone is achieved, upon achievement of a milestone Fluidigm will issue shares of
Fluidigm Common Stock and the shares will be valued at the average closing price of Fluidigms
Common Stock over the five trading days preceding the achievement of the milestone.
12.2
Settlement of Lawsuit. If the Lawsuit has not been settled or dismissed as of the
Closing Date:
(a) Oculus agrees that Fluidigm and its counsel and advisors shall have reasonable access
during normal business hours to the final version of the settlement agreement between Oculus and
Syrrx related to the Lawsuit, and drafts of such settlement agreement (to the extent permissible
under applicable confidentiality terms), in the manner contemplated by Section 7.2 of this
Agreement, until the Lawsuit is settled or dismissed.
(b) Oculus and UABRF agree that if a settlement agreement related to the Lawsuit is entered
into after the Closing Date, the settlement will not involve the sale, transfer or assignment of
the Technology or the Assigned Rights, or any rights in any of the foregoing, or result in the
creation of any Encumbrance on the Technology, the Assigned Rights, or any rights in any of the
foregoing.
ARTICLE XIII
TERMINATION OF AGREEMENT
13.1 Termination by Fluidigm. This Agreement may be terminated at any time before the
Closing by action of the Board of Directors of Fluidigm upon written notice to Oculus and UABRF,
specifying the basis for such termination, if (i) Oculus or UABRF shall have breached in any
material respect any of their covenants or agreements contained in this Agreement, or (ii) any
representation or warranty of Oculus or UABRF contained in this Agreement shall have been
materially inaccurate.
13.2 Termination by UABRF. This Agreement may be terminated at any time before the
Closing by action of the Board of Directors or other governing body of UABRF upon written notice to
Fluidigm, specifying the basis for such termination, if (i) Fluidigm shall have breached in any
material respect any of its covenants or agreements contained in this Agreement, or (ii) any
representation or warranty of Fluidigm contained in this Agreement shall have been materially
inaccurate.
13.3 Mutual Consent. This Agreement may be terminated at any time before the Closing,
by the mutual written consent of Fluidigm, Oculus and UABRF.
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13.4
Effect of Termination. Upon any termination of this Agreement, all parties hereto
shall be relieved of all further obligations under this Agreement, except for the provisions of
Section 2.5 regarding the assignment by Oculus to Fluidigm of Assigned Rights, together with all
patent rights and all other intellectual property rights therein, Section 15.6 regarding the
payment of certain expenses and Section 10.1 regarding the continuing obligations of the parties
under the Confidential Disclosure Agreements.
ARTICLE XIV
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
14.1 Survival of Representations and Warranties. The representations and warranties set forth
in this Agreement shall survive the Closing for a period equal to the greater of 12 months after
the Closing Date or the date on which both Milestones specified in Section 12.1 have been achieved.
After the expiration of such period, such representations and warranties shall expire and be of no
further force and effect.
ARTICLE XV
GENERAL
15.1
Governing Law. It is the intention of the parties hereto that the internal laws of
the State of California (irrespective of its choice of law principles) shall govern the validity of
this Agreement, the construction of its terms, and the interpretation and enforcement of the rights
and duties of the parties hereto; provided, however, that any disputes involving UABRF shall be
governed by the internal laws of the State of Alabama (irrespective of its choice of law principles
and any disputes involving UABRF shall be resolved Birmingham, Alabama in accordance with the
provisions of Section 15.11 and UABRF shall have the right to raise all of the defenses available
to the University of Alabama at Birmingham.
15.2
Assignment; Binding upon Successors and Assigns. None of the parties hereto may
assign any of its rights or obligations hereunder (whether by operation of law or otherwise)
without the prior written consent of the other party; provided, however, that any party may assign
its rights and obligations under covenants and agreements to be performed after the Closing in
connection with the sale of all or substantially all of such partys business. This Agreement will
be binding upon and inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
15.3
Severability. If any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable,
the remainder of this Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances shall be interpreted so as best to reasonably effect
the intent of the parties hereto. The parties further agree to replace such illegal, void or
unenforceable provision of this Agreement with a valid and enforceable provision which will
achieve, to the extent possible, the economic, business and other purposes of the illegal, void or
unenforceable provision.
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15.4 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) the
Ancillary Agreements, the documents and instruments and other agreements among the parties hereto
referenced herein and therein, and the exhibits thereto, constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements or understandings, inducements or conditions, express or
implied, written or oral, between the parties with respect hereto and thereto including, without
limitation, the Letter Agreement. To the extent that any provision of this Agreement conflicts with
any provision of the New License Agreement or the Sponsored Research Agreement between Fluidigm and
UABRF, the applicable provision of the New License Agreement or the Sponsored Research Agreement,
as the case may be, shall control and supersede the applicable provision of this Agreement.
15.5 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
instrument.
15.6 Expenses.
(a) The parties shall each pay their own legal, accounting and financial advisory fees and
other out-of-pocket expenses incurred incident to the negotiation, preparation and carrying out of
this Agreement and the transactions herein contemplated, whether or not the transactions
contemplated hereby are consummated.
(b) Each party shall indemnify the other against, and agrees to hold the other harmless from,
all liabilities and expenses (including reasonable attorneys fees) in connection with
any claim by any person for compensation as a broker, finder or in any similar capacity, by
reason of services allegedly rendered to the indemnifying party in connection with the
transactions contemplated hereby.
15.7 Other Remedies. Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other
remedy conferred hereby or by law on such party, and the exercise of any one remedy shall not
preclude the exercise of any other.
15.8 Amendment. Any term or provision of this Agreement may be amended by a written
instrument signed by Fluidigm, Oculus and UABRF; provided that any term or provision that pertains
only to UABRF and Fluidigm may be amended by a written instrument signed by UABRF and Fluidigm.
15.9 Waiver. Any party hereto may, by written notice to the other party: (i) waive any
of the conditions to its obligations hereunder or extend the time for the performance of any of the
obligations or actions of another party; (ii) waive any inaccuracies in the representations of
another party contained in this Agreement or in any documents delivered pursuant to this Agreement;
(iii) waive compliance with any of the covenants of the other contained in this Agreement; or (iv)
waive or modify performance of any of the obligations of another party. Except as specifically
contemplated by this Agreement, no action taken pursuant to this Agreement, including without
limitation any investigation by or on behalf of any party, shall be
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deemed to constitute a waiver by the party taking such action of compliance with any
representation, warranty, condition or agreement contained herein. Waiver of the breach of any one
or more provisions of this Agreement shall not be deemed or construed to be a waiver of other
breaches or subsequent breaches of the same provisions.
15.10
Informal Resolution. In the event of any controversy or claim arising under this
Agreement, officers or comparable officials of UABRF, Oculus and Fluidigm shall promptly meet and
attempt in good faith to reach a resolution of such controversy or claim.
15.11
Mediation. Any controversy or claim between any of the parties hereto arising out
of or relating to this Agreement that is not resolved by the parties within thirty (30) days after
delivery of notice of such controversy or claim, upon written notice of either Fluidigm, Oculus or
UABRF, shall be submitted for resolution by mediation in accordance with commercial mediation
guidelines. Any mediation proceeding shall be conducted in the County of Cook, City of Chicago, in
the State of Illinois. The mediation shall be concluded within a ninety (90) day period after
notice.
15.12
Notices. All notices and other communications hereunder will be in writing and will
be deemed given (i) upon receipt if delivered personally (or if mailed by registered or certified
mail), (ii) the next business day after dispatch if sent by overnight delivery
service, (iii) upon dispatch if transmitted by facsimile (and confirmed by a copy delivered in
accordance with clause (i) or (ii)), properly addressed to the parties at the following addresses:
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Fluidigm:
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Fluidigm Corporation |
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7100 Shoreline Court |
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South San Francisco, CA 94080 |
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Attention: President |
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Facsimile No.: (650) 871-7192 |
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with a copy to:
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Fluidigm Corporation |
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7100 Shoreline Court |
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South San Francisco, CA 94080 |
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Attention: General Counsel |
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Facsimile No.: (650) 871-7195 |
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Oculus:
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Oculus Pharmaceuticals, Inc. |
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1601 12th Avenue South |
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Birmingham, AL 35205 |
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Attention: B.J. Lehman |
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Facsimile No: (216) 361-9495 |
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and |
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Oculus Pharmaceuticals, Inc. |
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3201 Carnegie Avenue |
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Cleveland, OH 44115 |
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Attention: B.J. Lehman |
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Facsimile No.: (216) 361-9495 |
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UABRF:
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The UAB Research Foundation |
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1120G Administration Building |
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701 20th Street South |
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Birmingham, AL 35294-0111 |
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Attention: Director |
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Facsimile No.: (205) 975-5560 |
Any party may change its address for such communications by giving notice thereof to the other
party in conformity with this Section.
15.13 Construction and Interpretation of Agreement.
(a) This Agreement has been negotiated by the parties hereto and their respective attorneys,
and the language hereof shall not be construed for or against any party.
(b) The titles and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement, which shall be considered as a
whole.
(c) Any reference to a material adverse effect with respect to any entity or group of
entities means a material adverse effect on the business, assets (including intangible assets),
financial condition, properties, liabilities, results of operations or prospects of such entity.
(d) Any reference to a partys knowledge means such partys actual
knowledge after reasonable inquiry of its directors, officers and other management level employees
that have responsibility for the referenced matters.
(e) When reference is made to a Section or Article, such reference shall be to a Section or
Article of the Agreement, unless otherwise indicated.
15.14 No Joint Venture. Nothing contained in this Agreement shall be deemed or construed
as creating a joint venture or partnership between any of the parties hereto. No party is by virtue
of this Agreement authorized as an agent, employee or legal representative of any other party. No
party shall have the power to control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent contractors with respect to each
other. No party shall have any power or authority to bind or commit any other. No party shall hold
itself out as having any authority or relationship in contravention of this Section.
15.15 Absence of Third Party Beneficiary Rights. No provisions of this Agreement are
intended, nor shall be interpreted, to provide or create any third party beneficiary rights or any
other rights of any kind in any client, customer, affiliate, shareholder, partner of any party
hereto or any other person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof shall be personal solely between the parties to this Agreement.
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15.16 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each party shall execute and deliver any additional documents and instruments
and perform any additional acts that may be reasonably necessary or appropriate to effectuate and
perform the provisions of this Agreement and such transactions and the intention of the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth
above.
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FLUIDIGM CORPORATION |
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By:
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/s/ Gajus Worthington |
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Title: |
President & CEO |
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OCULUS PHARMACEUTICALS, INC. |
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By:
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/s/ (ILLEGIBLE) |
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Title: |
President & CEO |
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THE UAB RESEARCH FOUNDATION |
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By:
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/s/ (ILLEGIBLE) |
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Director |
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Acknowledged and agreed to |
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this March 7, 2003. |
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/s/ Dr. Larry DeLucas
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Dr. Larry DeLucas |
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SCHEDULE 4.6
Lawsuit filed by Syrrx, Inc. against Oculus on April 30, 2002 in the United States District Court
for the District of Delaware Syrrx and Oculus may enter into a settlement agreement to settle the
Lawsuit prior to the Closing under the Agreement; as part of the settlement a judgment or other
order will be entered against Oculus by the court in which the Lawsuit was filed.
EXHIBIT A
Amended and Restated
Articles of Incorporation of Fluidigm
Superseded by Exhibit 3.1 filed with Registration Statement on April 14, 2008.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
Gajus V. Worthington and William Smith certify that:
1. They are the President and Secretary, respectively, of Fluidigm Corporation, a California
corporation (the Corporation).
2. The Articles of Incorporation of the Corporation are amended and restated in full to read
as set forth in EXHIBIT A attached hereto.
3. Said Amended and Restated Articles of Incorporation have been duly approved by the
Corporations Board of Directors.
4. Said Amended and Restated Articles of Incorporation have been duly approved by the required
vote of shareholders in accordance with Sections 902 and 903 of the Corporations Code. The total
number of outstanding shares of the corporation is 8,363,318 shares of Common Stock, 2,727,273
shares of Series A Preferred Stock, 6,460,675 shares of Series B Preferred Stock and 16,364,832
shares of Series C Preferred Stock. The number of shares voting in favor of the amendment equaled
or exceeded the vote required. The percentage vote required was more than 50% of the outstanding
Common Stock, voting as a single class, more than 66 2/3% of the outstanding Series C Preferred
Stock, voting as a single class, more than 66 2/3% of the outstanding Preferred Stock voting as a
single class and more than 50% of the outstanding Common Stock and Preferred Stock, voting together
as a single class.
I further declare under penalty of perjury that the matters set forth in the foregoing
certificate are true and correct of my own knowledge.
Executed at Palo Alto, California, this 17th day of December, 2003.
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/s/ Gajus V. Worthington
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Gajus V. Worthington |
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President |
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/s/ William Smith
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William Smith |
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Secretary |
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Exhibit A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
FLUIDIGM CORPORATION
ARTICLE I
The name of the corporation is Fluidigm Corporation.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of California other than the banking
business, the trust company business or the practice of a profession permitted to be incorporated
under the California Corporations Code.
ARTICLE III
The total number of shares of stock that the corporation shall have authority to issue is One
Hundred Nine Million One Hundred Twenty-Six Thousand Eight Hundred Twenty-Seven (109,126,827),
consisting of Sixty-Five Million Five Hundred Thousand (65,500,000) shares of Common Stock, $0.001
par value per share, and Forty-Three Million Six Hundred Twenty-Six Thousand Eight Hundred
Twenty-Seven (43,626,827) shares of Preferred Stock, $0.001 par value per share. The first series
of Preferred Stock shall be designated Series A Preferred Stock and shall consist of Two Million
Seven Hundred TwentySeven Thousand Two Hundred SeventyThree (2,727,273) shares. The second
series of Preferred Stock shall be designated Series B Preferred Stock and shall consist of Six
Million Four Hundred Sixty Thousand Six Hundred Seventy-Five (6,460,675) shares. The third
series of Preferred Stock shall be designated Series C Preferred Stock and shall consist of
Twenty Million Five Hundred Fifty-One Thousand One Hundred Sixty Three (20,551,163) shares. The
fourth series of Preferred Stock shall be designated Series D Preferred Stock and shall consist
of Thirteen Million Eight Hundred Eighty-Seven Thousand Seven Hundred Sixteen (13,887,716) shares.
ARTICLE IV
The terms and provisions of the Common Stock and Preferred Stock are as follows:
1. Definitions. For purposes of this Article IV, the following definitions shall
apply:
(a) Conversion Price shall mean $1.10 per share for the Series A Preferred Stock,
$1.78 per share for the Series B Preferred Stock, $2.58 per share for the Series C Preferred Stock
and $2.80 per share for the Series D Preferred Stock (each subject to adjustment from time to time
as set forth elsewhere herein).
(b) Convertible Securities shall mean any evidences of indebtedness, shares or other
securities (other than shares of Common Stock) convertible into or exchangeable for Common Stock.
(c) Corporation shall mean Fluidigm Corporation.
(d) Dividend Rate shall mean an annual rate of $0.11 per share for the Series A
Preferred Stock, an annual rate of $0.18 for the Series B Preferred Stock, an annual rate of $0.26
per share for the Series C Preferred Stock and an annual rate of $0.30 per share for the Series D
Preferred Stock (each subject to adjustment from time to time as set forth elsewhere herein).
(e) Liquidation Preference shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 per share for the Series B Preferred Stock, $2.58 per share for the Series C Preferred
Stock and $2.80 per share for the Series D Preferred Stock (each subject to adjustment from time to
time as set forth elsewhere herein).
(f) Options shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.
(g) Original Issue Price shall mean $1.10 per share for the Series A Preferred
Stock, $1.78 for the Series B Preferred Stock, $2.58 per share for the Series C Preferred Stock and
$2.80 per share for the Series D Preferred Stock (each subject to adjustment from time to time as
set forth elsewhere herein).
(h) Preferred Stock shall mean the Series A Preferred Stock, Series B Preferred
Stock, the Series C Preferred Stock and the Series D Preferred Stock.
2. Dividends.
(a) Series D Preferred Stock. The holders of outstanding shares of Series D Preferred
Stock shall be entitled to receive dividends, when and as declared by the Board of Directors, out
of any assets at the time legally available therefor, at the Dividend Rate specified for such
shares of Preferred Stock payable in preference and priority to any declaration or payment of any
distribution on Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Common Stock (collectively, the Junior Stock) of the Corporation other than a dividend payable
solely in Common Stock. No distributions shall be made with respect to the Junior Stock during any
fiscal year of the Corporation, other than dividends on the Common Stock payable solely in Common
Stock, until all declared dividends on the Series D Preferred Stock have been paid or set apart for
payment to the holders of Series D Preferred Stock. The right to receive dividends on shares of
Series D Preferred Stock shall not be cumulative, and no right to such dividends shall accrue to
holders of Series D Preferred Stock by reason of the fact that dividends on said shares are not
declared or paid in any year.
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(b) Series C Preferred Stock. The holders of outstanding shares of Series C Preferred
Stock shall be entitled to receive dividends, when and as declared by the Board of Directors, out
of any assets at the time legally available therefor, at the Dividend Rate specified for such
shares of Preferred Stock payable in preference and priority to any declaration or payment of any
distribution on Series A Preferred Stock, Series B Preferred Stock or Common Stock of the
Corporation other than a dividend payable solely in Common Stock. No distributions shall be made
with respect to the Series A Preferred Stock, Series B Preferred Stock or Common Stock during any
fiscal year of the Corporation, other than dividends on the Common Stock payable solely in Common
Stock, until all declared dividends on the Series C Preferred Stock have been paid or set apart for
payment to the holders of Series C Preferred Stock. The right to receive dividends on shares of
Series C Preferred Stock shall not be cumulative, and no right to such dividends shall accrue to
holders of Series C Preferred Stock by reason of the fact that dividends on said shares are not
declared or paid in any year.
(c) Series A Preferred Stock and Series B Preferred Stock. The holders of outstanding
shares of Series A Preferred Stock and Series B Preferred Stock shall be entitled to receive
dividends, when and as declared by the Board of Directors, out of any assets at the time legally
available therefor, at the Dividend Rate specified for such shares of Preferred Stock payable in
preference and priority to any declaration or payment of any distribution on Common Stock of the
Corporation other than a dividend payable solely in Common Stock. No distributions shall be made
with respect to the Common Stock, other than dividends payable solely in Common Stock, until all
declared dividends on the Preferred Stock have been paid or set apart for payment to the Preferred
Stock holders. Payment of any dividends to the holders of the Series A Preferred Stock and
Series B Preferred Stock shall be on a pro-rata, pari passu basis in proportion to the Dividend
Rates for the Series A Preferred Stock and Series B Preferred Stock, as applicable. The right to
receive dividends on shares of Series A Preferred Stock and Series B Preferred Stock shall not be
cumulative, and no right to such dividends shall accrue to holders of Series A Preferred Stock or
Series B Preferred Stock by reason of the fact that dividends on said shares are not declared or
paid in any year.
(d) Distribution. For purposes of this Section 2, unless the context otherwise
requires, a distribution shall mean the transfer of cash or other property without consideration
whether by way of dividend or otherwise, payable other than in Common Stock, or the purchase or
redemption of shares of the Corporation other than (i) repurchase of shares of Common Stock issued
to or held by employees, consultants, officers and directors of the Corporation or its subsidiaries
upon termination of their employment or services pursuant to agreements providing for the right of
said repurchase and at the original purchase price paid by such employees, consultants, officers
and directors; and (ii) repurchase of Common Stock issued to or held by employees, officers,
directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal
contained in agreements providing for such rights, provided that such repurchase is unanimously
approved by the Board of Directors; and (iii) any other repurchase or redemption of capital stock
of the corporation unanimously approved by the Board of Directors and approved by the holders of
the majority of the Common Stock and the holders of more than two-thirds (2/3) of the outstanding
shares of the Preferred Stock, voting as separate classes.
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(e) Common Stock. Dividends may be paid on the Common Stock as and when declared by
the Board of Directors, subject to the prior dividend rights of the Preferred Stock and Section 6
below.
(f) Non-Cash Distributions. Whenever a distribution provided for in this Section 2
shall be payable in property other than cash, the value of such distribution shall be deemed to be
the fair market value of such property as determined in good faith by the Board of Directors.
(g) Consent to Certain Repurchases. As authorized by Section 402.5(c) of the
California Corporations Code, Sections 502 and 503 of the California Corporations Code shall not
apply with respect to payments made by the Corporation in connection with (i) repurchase of shares
of Common Stock issued to or held by employees, consultants, officers and directors of the
Corporation or its subsidiaries upon termination of their employment or services pursuant to
agreements providing for the right of said repurchase and at the original purchase price paid by
such employees, consultants, officers and directors, and (ii) repurchase of Common Stock issued to
or held by employees, officers, directors or consultants of the Corporation or its subsidiaries
pursuant to rights of first refusal contained in agreements providing for such rights, provided
that such repurchase is unanimously approved by the Board of Directors, and (iii) any other
repurchase or redemption of capital stock of the Corporation unanimously approved by the Board of
Directors and approved by the holders of more than two-thirds (2/3) of the outstanding shares of
the Preferred Stock voting together as a single class.
3. Liquidation Rights.
In the event of any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, distribution of the assets of the Corporation legally available for
distribution to the Corporations shareholders shall be made in the following manner:
(a) Series D Liquidation Preference. The holders of the Series D Preferred Stock
shall be entitled to receive, prior and in preference to any distribution of any of the assets of
the Corporation to the holders of the Common Stock, the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock by reason of their ownership of such stock, an
amount per share for each share of Series D Preferred Stock held by them equal to the sum of
(i) the Liquidation Preference for such shares and (ii) all declared and unpaid dividends on such
share of Series D Preferred Stock. If the assets of the Corporation legally available for
distribution to the holders of the Series D Preferred Stock are insufficient to permit the payment
to such holders of the full amounts specified in this Section 3(a), then the entire assets of the
Corporation legally available for distribution shall be distributed with equal priority and
pro rata among the holders of the Series D Preferred Stock in proportion to the
full amounts they would otherwise be entitled to receive pursuant to this Section 3(a).
(b) Series C Liquidation Preference. After payment to the holders of Series D
Preferred Stock of the full amounts specified in Section 3(a) above, the holders of the Series C
Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of
the assets of the Corporation to the holders of the Common Stock, the Series A Preferred Stock and
the Series B Preferred Stock by reason of their ownership of such stock, an amount per share for
each
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share of Series C Preferred Stock held by them equal to the sum of (i) the Liquidation
Preference for such shares and (ii) all declared and unpaid dividends on such share of Series C
Preferred Stock. If the remaining assets of the Corporation legally available for distribution to
the holders of the Series C Preferred Stock are insufficient to permit the payment to such holders
of the full amounts specified in this Section 3(b), then the entire remaining assets of the
Corporation legally available for distribution shall be distributed with equal priority and
pro rata among the holders of the Series C Preferred Stock in proportion to the
full amounts they would otherwise be entitled to receive pursuant to this Section 3(b).
(c) Series B Liquidation Preference. After the payment to the holders of Series D
Preferred Stock and Series C Preferred Stock of the full amounts specified in Sections 3(a) and
3(b) above, the holders of the Series B Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the remaining assets of the Corporation to the holders of
the Common Stock and the Series A Preferred Stock by reason of their ownership of such stock, an
amount per share for each share of Series B Preferred Stock held by them equal to the sum of
(i) the Liquidation Preference for such shares and (ii) all declared and unpaid dividends on such
share of Series B Preferred Stock. If the remaining assets of the Corporation legally available
for distribution to the holders of the Series B Preferred Stock are insufficient to permit the
payment to such holders of the full amounts specified in this Section 3(c), then the entire
remaining assets of the Corporation legally available for distribution shall be distributed with
equal priority and pro rata among the holders of the Series B Preferred Stock in
proportion to the full amounts they would otherwise be entitled to receive pursuant to this
Section 3(c).
(d) Series A Liquidation Preference. After the payment to the holders of Series D
Preferred Stock, the holders of Series C Preferred Stock and the holders of Series B Preferred
Stock of the full amounts specified in Sections 3(a), 3(b) and 3(c) above, the holders of the
Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution
of any of the remaining assets of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, an amount per share for each share of Series A Preferred Stock held
by them equal to the sum of (i) the Liquidation Preference for such shares and (ii) all declared
and unpaid dividends on such share of Series A Preferred Stock. If the remaining assets of the
Corporation legally available for distribution to the holders of the Series A Preferred Stock are
insufficient to permit the payment to such holders of the full amounts specified in this
Section 3(d), then the entire remaining assets of the Corporation legally available for
distribution shall be distributed with equal priority and pro rata among the
holders of the Series A Preferred Stock in proportion to the full amounts they would otherwise be
entitled to receive pursuant to this Section 3(d).
(e) Remaining Assets. After the payment to the holders of Preferred Stock of the full
amounts specified in Sections 3(a), 3(b), 3(c) and 3(d) above, the entire remaining assets of the
Corporation legally available for distribution shall be distributed pro-rata to holders of
the Common Stock of the Corporation in proportion to the number of shares of Common Stock held by
them.
(f) Shares Not Treated as Both Preferred Stock and Common Stock in Any Distribution.
Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in
order to participate in any distribution, or series of distributions, as shares of Common
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Stock, without first foregoing participation in the distribution, or series of distributions,
as shares of Preferred Stock.
(g) Reorganization. For purposes of this Section 3, a liquidation, dissolution or
winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the
acquisition of the Corporation by another entity by means of any transaction or series of related
transactions (including, without limitation, any stock acquisition, reorganization, merger or
consolidation but excluding any merger effected exclusively for the purpose of changing the
domicile of the Corporation) other than a transaction or series of transactions in which the
holders of the voting securities of the Corporation outstanding immediately prior to such
transaction or series of transactions continue to retain (either by such voting securities
remaining outstanding or by such voting securities being converted into voting securities of the
surviving entity), as a result of shares in the Corporation held by such holders prior to such
transaction, at least fifty percent (50%) of the total voting power represented by the voting
securities of the Corporation or such surviving entity outstanding immediately after such
transaction or series of transactions; or (ii) a sale, transfer, lease or other conveyance of all
or substantially all of the assets of the Corporation.
(h) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed
to shareholders in connection with any liquidation, dissolution, or winding up of the Corporation
are other than cash, then the value of such assets shall be their fair market value as determined
in good faith by the Board of Directors, except that any securities to be distributed to
shareholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as
follows:
(i) If the securities are then traded on a national securities exchange or the Nasdaq Stock
Market System (or a similar national quotation system), then the value of the securities shall be
deemed to be to the average of the closing prices of the securities on such exchange or system over
the ten (10) trading day period ending five (5) trading days prior to the distribution;
(ii) if the securities are actively traded over-the-counter, then the value of the securities
shall be deemed to be the average of the closing bid prices of the securities over the ten (10)
trading day period ending five (5) trading days prior to the distribution; or
(iii) if there is no active public market for the securities, then the value of the securities
shall be deemed to be the fair market value thereof as determined in good faith by the Board of
Directors which determination shall include consideration of the illiquidity of the securities.
In the event of a merger or other acquisition of the Corporation by another entity, the
distribution date shall be deemed to the date such transaction closes.
For the purposes of this Section 3(h), trading day shall mean any day on which the exchange
or system on which the securities to be distributed are traded is open, and closing prices or
closing bid prices shall be deemed to be: (i) for securities traded primarily on the New York
Stock Exchange, the American Stock Exchange or Nasdaq, the last reported trade price or sale price,
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as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or
traded on other exchanges, markets and systems, the market price as of the end of the regular
hours trading period that is generally accepted as such for such exchange, market or system. If,
after the date hereof, the benchmark times generally accepted in the securities industry for
determining the market price of a stock as of a given trading day shall change from those set forth
above, the fair market value shall be determined as of such other generally accepted benchmark
times.
4. Conversion. The holders of the Preferred Stock shall have conversion rights as
follows (the Conversion Rights):
(a) Right to Convert. Subject to Section 4(c), each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of issuance of such
share at the office of the Corporation or any transfer agent for the Preferred Stock, into that
number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original
Issue Price for the relevant series by the Conversion Price for such series. (The number of shares
of Common Stock into which each share of Preferred Stock of a series may be converted is
hereinafter referred to as the Conversion Rate for each such series.) Upon any decrease or
increase in the Conversion Price for any series of Preferred Stock, as described in this Section 4,
the Conversion Rate for such series shall be appropriately increased or decreased.
(b) Automatic Conversion. Each share of Preferred Stock shall automatically be
converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion
Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial
public offering on Form S-1 (or successor form) filed under the Securities Act of 1933, as amended
(the Securities Act), covering the offer and sale of the Corporations Common Stock, provided
that the offering price per share is not less than $5.69 (as adjusted for stock splits or stock
dividends) and the aggregate gross proceeds to the Corporation are not less than $25,000,000, or
(ii) upon the receipt by the Corporation of a written consent or request for such conversion from
the holders of two-thirds of the shares of Preferred Stock then outstanding, or, if later, the
effective date for conversion specified in such requests (each of the events referred to in (i) and
(ii) being hereinafter referred to as an Automatic Conversion Event).
(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued
upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then
fair market value of a share of Common Stock as determined by the Board of Directors. For such
purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated,
and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of
Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to
receive certificates therefor, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and
shall give written notice to the Corporation at such office that he elects to convert the same;
provided, however, that on the date of an Automatic Conversion Event, the
outstanding shares of Preferred Stock shall be converted automatically without any further action
by the holders of such shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided further, however, that the
Corporation shall not be obligated to issue
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certificates evidencing the shares of Common Stock issuable upon such Automatic Conversion
Event unless either the certificates evidencing such shares of Preferred Stock are delivered to the
Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its
transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. On the date of the occurrence of an Automatic Conversion Event,
each holder of record of shares of Preferred Stock shall be deemed to be the holder of record of
the Common Stock issuable upon such conversion, notwithstanding that the certificates representing
such shares of Preferred Stock shall not have been surrendered at the office of the Corporation,
that notice from the Corporation shall not have been received by any holder of record of shares of
Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be
actually delivered to such holder.
The Corporation shall, as soon as practicable after such delivery, or after such agreement and
indemnification, issue and deliver at such office to such holder of Preferred Stock, a certificate
or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the
converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or holders of such shares of
Common Stock on such date; provided, however, that if the conversion is in connection with
an underwritten offer of securities registered pursuant to the Securities Act the conversion may,
at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the
closing of the sale of securities pursuant to such offering, in which event the person(s) entitled
to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be
deemed to have converted such Preferred Stock until immediately prior to the closing of the sale of
such securities.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definition. For purposes of this Section 4(d), Additional Shares of
Common shall mean all shares of Common Stock issued (or, pursuant to Section 4(d)(iii), deemed to
be issued) by the Corporation after the filing of these Articles of Incorporation, other than:
(1) shares of Common Stock issued or issuable upon conversion of shares of Preferred Stock;
(2) shares of Common Stock issued or issuable to officers, directors and employees of, or
consultants and other service providers to, the Corporation pursuant to stock grants, option plans,
purchase plans or other employee stock incentive programs or arrangements approved by the Board of
Directors or upon exercise of options or warrants granted to such parties pursuant to any such
plan, program or arrangement;
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(3) shares of Common Stock issued upon the exercise or conversion of Options or Convertible
Securities outstanding as of the date of the filing of these Articles of Incorporation;
(4) shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock
or pursuant to any event for which adjustment is made pursuant to Section 4(e), 4(f) or 4(g)
hereof;
(5) shares of Common Stock issued in a registered public offering under the Securities Act
pursuant to which all outstanding shares of Preferred Stock are automatically converted into Common
Stock pursuant to an Automatic Conversion Event;
(6) shares of Common Stock issued or issuable pursuant to the acquisition of another
corporation by the Corporation by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances are unanimously
approved by the Board of Directors;
(7) shares of Common Stock issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a commercial leasing or debt financing transaction approved by the Board
of Directors;
(8) shares of Common Stock issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other similar agreements, or
strategic partnerships or relationships, if the issuance is approved by the Board of Directors; and
(9) shares of Common Stock issued or issuable upon conversion of up to $5 million in aggregate
principal amount (plus interest) of convertible promissory notes originally issued or issuable to
Biomedical Sciences Investment Fund Pte Ltd. or its affiliates and upon conversion of up to $3
million in aggregate principal amount (plus interest) of convertible promissory notes originally
issued or issuable to Invus, L.P. or its affiliates.
(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a
particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares
of Common unless the consideration per share (as determined pursuant to Section 4(d)(vi)) for an
Additional Share of Common issued or deemed to be issued by the Corporation is less than the
Conversion Price in effect on the date of, and immediately prior to such issue, for such series of
Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common. In the event the Corporation at
any time or from time to time after the date of the filing of these Articles of Incorporation shall
issue any Options or Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating thereto without regard
to any provisions contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
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Securities, the conversion or exchange of such Convertible Securities or, in the case of
Options for Convertible Securities, the exercise of such Options and the conversion or exchange of
the underlying securities, shall be deemed to have been issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on such record date,
provided that in any such case in which shares are deemed to be issued:
(1) no further adjustment in the Conversion Price of the Preferred Stock shall be made upon
the subsequent issue of Convertible Securities or shares of Common Stock in connection with the
exercise of such Options or conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities by their terms provide, with the passage of time
or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price of the Preferred Stock computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the rights of conversion or exchange
under such Convertible Securities;
(3) no readjustment pursuant to clause (2) above shall have the effect of increasing the
Conversion Price of the Preferred Stock to an amount which exceeds the lower of (i) the Conversion
Price of the Preferred Stock on the original adjustment date, or (ii) the Conversion Price of the
Preferred Stock that would have resulted from any issuance of Additional Shares of Common between
the original adjustment date and such readjustment date;
(4) upon the expiration of any such Options or any rights of conversion or exchange under such
Convertible Securities which shall not have been exercised, the Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect thereto) and any
subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:
(A) in the case of Convertible Securities or Options for Common Stock, the only Additional
Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise
of such Options or the conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for the issue of such
exercised Options plus the consideration actually received by the Corporation upon such exercise or
for the issue of all such Convertible Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Corporation upon such conversion or
exchange, and
(B) in the case of Options for Convertible Securities, only the Convertible Securities, if
any, actually issued upon the exercise thereof were issued at the time of issue of such Options,
and the consideration received by the Corporation for the Additional Shares of Common deemed to
have been then issued was the consideration actually received by the Corporation for the issue of
such exercised Options, plus the consideration deemed to have been
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received by the Corporation (determined pursuant to Section 4(d)(v)) upon the issue of the
Convertible Securities with respect to which such Options were actually exercised; and
(5) if such record date shall have been fixed and such Options or Convertible Securities are
not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which
became effective on such record date shall be canceled as of the close of business on such record
date, and thereafter the Conversion Price shall be adjusted pursuant to this Section 4(d)(iii) as
of the actual date of their issuance.
(iv) Adjustment of Conversion Price of Series D Preferred Stock Upon Issuance of
Additional Shares of Common.
(1) For so long as the Conversion Price of the Series D Preferred Stock is greater than $2.58
(as adjusted for subdivisions and combinations of the Common Stock and changes in the Common Stock
as set forth in Sections 4(e) and 4(g)) (the Series D Ratchet Amount), in the event this
Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed
to be issued pursuant to Section 4(d)(iii)) for a consideration per share less than the applicable
Conversion Price of the Series D Preferred Stock in effect on the date of and immediately prior to
such issue, but for a consideration per share equal to or greater than the Series D Ratchet Amount,
then, the Conversion Price of the Series D Preferred Stock shall be reduced concurrently with such
issue to a price (calculated to the nearest cent) equal to the per share price of the Additional
Shares of Common.
(2) In the event this Corporation shall issue Additional Shares of Common (including
Additional Shares of Common deemed to be issued pursuant to Section 4(d)(iii)) without
consideration or for a consideration per share less than the Series D Ratchet Amount, then, the
Conversion Price of the Series D Preferred Stock immediately prior to such issue shall be deemed to
be equal to the Series D Ratchet Amount (the Adjusted Conversion Price) and such Adjusted
Conversion Price shall be further reduced, concurrently with such issue, to a price (calculated to
the nearest cent) determined by multiplying such Adjusted Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common so issued would purchase at
such Adjusted Conversion Price, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares
of Common so issued. For the purposes of this Section 4(d)(iv)(2), all shares of Common Stock
issuable upon exercise of outstanding Options or the conversion of outstanding Convertible
Securities and shares of Preferred Stock, and all Additional Shares of Common deemed issued
pursuant to Section 4(d)(iii) hereof, shall be deemed to be outstanding. Section 4(d)(iv)(3) shall
govern adjustments to the Conversion Price of the Series D Preferred Stock after the first
adjustment to the Conversion Price of the Series D Preferred Stock pursuant to this Section
4(d)(iv)(2).
(3) After any adjustment to the Conversion Price of the Series D Preferred Stock pursuant to
Section 4(d)(iv)(2), in the event this Corporation shall issue Additional Shares of Common
(including Additional Shares of Common deemed to be issued pursuant to
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Section 4(d)(iii)) without consideration or for a consideration per share less than Conversion
Price of the Series D Preferred Stock in effect on the date of and immediately prior to such issue,
then, the Conversion Price of the Series D Preferred Stock shall be reduced concurrently with such
issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price
by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional Shares of Common so
issued would purchase at such Conversion Price, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common so issued. For the purposes of this Section 4(d)(iv)(3), all shares of
Common Stock issuable upon exercise of outstanding Options or the conversion of outstanding
Convertible Securities and shares of Preferred Stock, and all Additional Shares of Common deemed
issued pursuant to Section 4(d)(iii) hereof, shall be deemed to be outstanding.
(v) Adjustment of Conversion Price of Series A, B and C Preferred Stock. In the event
this Corporation shall issue Additional Shares of Common (including Additional Shares of Common
deemed to be issued pursuant to Section 4(d)(iii)) without consideration or for a consideration per
share less than the applicable Conversion Price of the Series A Preferred Stock, Series B Preferred
Stock or Series C Preferred Stock in effect on the date of and immediately prior to such issue,
then, the Conversion Price of the Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock (if affected) shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common so issued would purchase at
such Conversion Price, and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional Shares of Common so
issued. For the purposes of this Section 4(d)(v), all shares of Common Stock issuable upon
exercise of outstanding Options or the conversion of outstanding Convertible Securities and shares
of Preferred Stock, and all Additional Shares of Common deemed issued pursuant to Section 4(d)(iii)
hereof, shall be deemed to be outstanding.
(vi) Determination of Consideration. For purposes of this Section 4(d), the
consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares
of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation before deducting reasonable discounts, commissions or other expenses allowed, paid
or incurred by the Corporation for any underwriting or otherwise in connection with such issue (or
deemed issue);
(B) insofar as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board of Directors; and
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(C) in the event Additional Shares of Common are issued together with other shares or
securities or other assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as
reasonably determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration per share received by the
Corporation for Additional Shares of Common deemed to have been issued pursuant to
Section 4(d)(iii) shall be determined by dividing
(X) the total amount, if any, received or receivable by the Corporation as consideration for
the issue of such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such consideration) payable to the
Corporation upon the exercise of such Options or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible Securities by
(Y) the maximum number of shares of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(e) Adjustments for Subdivisions or Combinations of Common Stock. In the event the
outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock
dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of
each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently
with the effectiveness of such subdivision, be proportionately decreased. In the event the
outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a
lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such
combination shall, concurrently with the effectiveness of such combination, be proportionately
increased.
(f) Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the
outstanding shares of Preferred Stock or a series of Preferred Stock shall be subdivided (by stock
split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred
Stock, the Dividend Rate, Original Issue Price and Liquidation Preference of the affected series of
Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the
effectiveness of such subdivision, be proportionately decreased. In the event the outstanding
shares of Preferred Stock or a series of Preferred Stock shall be combined (by reclassification or
otherwise) into a lesser number of shares of Preferred Stock, the Dividend Rate, Original Issue
Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately
prior to such combination shall, concurrently with the effectiveness of such combination, be
proportionately increased.
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(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3
above (Liquidation Rights), if the Common Stock issuable upon conversion of the Preferred Stock
shall be changed into the same or a different number of shares of any other class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares provided for above), then, in any such event, in lieu of the number of
shares of Common Stock which the holders would otherwise have been entitled to receive, each holder
of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock
into a number of shares of such other class or classes of stock which a holder of the number of
shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately
before that change would have been entitled to receive in such reorganization or reclassification,
all subject to further adjustment as provided herein with respect to such other shares.
(h) No Impairment. The Corporation will not through any reorganization, transfer of
assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but will at all times in good faith assist in the carrying out of all
the provisions of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against
impairment. Notwithstanding the foregoing, nothing in this Section 4(h) shall prohibit the
Corporation from amending its Articles of Incorporation with the requisite consent of its
shareholders and the board of directors.
(i) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Preferred Stock.
(j) Notices of Record Date. In the event that this Corporation shall propose at any
time:
(i) to declare any dividend or distribution upon its Common Stock, whether in cash, property,
stock or other securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus;
(ii) to effect any reclassification or recapitalization of its Common Stock outstanding
involving a change in the Common Stock; or
(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a
liquidation, dissolution or winding up of the corporation pursuant to Section 3(f);
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then, in connection with each such event, this Corporation shall send to the holders of the
Preferred Stock at least 14 days prior written notice of the date on which a record shall be taken
for such dividend or distribution (and specifying the date on which the holders of Common Stock
shall be entitled thereto) or for determining rights to vote in respect of the matters referred to
in (ii) and (iii) above.
Each such written notice shall be given by first class mail, postage prepaid, addressed to the
holders of Preferred Stock at the address for each such holder as shown on the books of this
Corporation.
The right of the holders of the Preferred Stock to notice hereunder may be waived, either
prospectively or retroactively and either generally or in a particular instance, by the holders of
more than two-thirds (2/3) of the outstanding shares of the Preferred Stock voting together as a
single class.
(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common Stock solely for the
purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares
of Common Stock as shall from time to time be sufficient to effect the conversion of all then
outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.
(l) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the
contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be
waived, either prospectively or retroactively and either generally or in a particular instance, by
the consent or vote of the holders of more than two-thirds (2/3) of the outstanding shares of such
series. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.
5. Voting.
(a) Restricted Class Voting. Except as otherwise expressly provided herein or as
required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together
and not as separate classes.
(b) No Series Voting. Other than as provided herein or required by law, there shall
be no series voting.
(c) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number
of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock
held by such holder could be converted as of the record date. The holders of shares of the
Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be
entitled to vote. Holders of Preferred Stock shall be entitled to notice of any shareholders
meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be
permitted
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and any fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Preferred Stock held by each holder could be converted), shall be
disregarded.
(d) Common Stock. Each holder of shares of Common Stock shall be entitled to one vote
for each share thereof held.
(e) Election of Directors. So long as at least 2,000,000 shares of Series D Preferred
Stock (as adjusted for stock splits, subdivisions, combinations or stock dividends with respect to
such shares) remain outstanding, the holders of the Series D Preferred Stock, voting as a separate
class, shall be entitled to elect one (1) member of the Corporations Board of Directors at each
meeting or pursuant to each consent of the Corporations shareholders for the election of
directors. So long as at least 2,000,000 shares of Series C Preferred Stock (as adjusted for stock
splits, subdivisions, combinations or stock dividends with respect to such shares) remain
outstanding, the holders of Series C Preferred Stock, voting as a separate class, shall be entitled
to elect three (3) members of the Corporations Board of Directors at each meeting or pursuant to
each consent of the Corporations shareholders for the election of directors. Any additional
members of the Corporations Board of Directors shall be elected by the holders of Common Stock,
Series A Preferred Stock and Series B Preferred Stock, voting together as a single class.
6. Amendments and Changes Requiring Approval of Preferred Stock. As long as any of
the Preferred Stock shall be issued and outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent as provided by law) of the holders of more than
two-thirds (2/3) of the outstanding shares of the Preferred Stock voting together as a single
class:
(a) amend, alter or repeal any provision of the Articles of Incorporation or By-laws of the
Corporation if such action would adversely alter the rights, preferences, privileges or powers of,
or restrictions provided for the benefit of the Preferred Stock or any series thereof;
(b) enter into any transaction or series of related transactions deemed to be a liquidation,
dissolution or winding up of the Corporation pursuant to Section 3(f) above;
(c) voluntarily liquidate or dissolve;
(d) declare or pay any distribution (as defined in Section 2(d)) with respect to the Common
Stock of the Corporation;
(e) permit any subsidiary of the Corporation to sell securities to a third party (other than
directors qualifying shares in the case of subsidiaries outside the United States);
(f) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Preferred Stock;
(g) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, liquidation, redemption,
conversion or other rights senior to or on a parity with any series of Preferred Stock or with
respect to voting senior to any series of Preferred Stock;
-16-
(h) increase or decrease the authorized number of directors of the Corporation; or
(i) amend this Section 6.
7. Amendments and Changes Requiring the Approval of the Series D Preferred Stock.
(a) As long as any of the Series D Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of 60% of the outstanding shares of the Series D Preferred Stock:
(i) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series D Preferred Stock in a manner different from
any other series of Preferred Stock; or
(ii) amend this Section 7(a).
(b) As long as any of the Series D Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written consent as provided
by law) of the holders of a majority of the outstanding shares of the Series D Preferred Stock:
(i) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series D Preferred Stock;
(ii) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series D Preferred Stock or with respect to
voting senior to the Series D Preferred Stock;
(iii) declare or pay any distribution (as defined in Section 2(d)) with respect to the Common
Stock or Preferred Stock of the Corporation;
(iv) increase the authorized number of directors of the Corporation above eleven (11); or
(v) amend this Section 7(b).
8. Amendments and Changes Requiring the Approval of the Series C Preferred Stock. As
long as any of the Series C Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of two-thirds of the outstanding shares of the Series C Preferred Stock:
(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
-17-
restrictions provided for the benefit of the Series C Preferred Stock in a manner different
from any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series C Preferred Stock;
(c) authorize or create (by reclassification or otherwise) any new class or series of capital
stock having rights, preferences or privileges with respect to dividends, payments upon liquidation
or other rights senior to or on a parity with the Series C Preferred Stock or with respect to
voting senior to the Series C Preferred Stock;
(d) declare or pay any distribution (as defined in Section 2(c)) with respect to the Common
Stock or Preferred Stock of the Corporation;
(e) increase the authorized number of directors of the Corporation above eleven (11); or
(f) amend this Section 8.
9. Amendments and Changes Requiring the Approval of the Series B Preferred Stock. As
long as any of the Series B Preferred Stock shall be issued and outstanding, the Corporation shall
not, without first obtaining the approval (by vote or written consent as provided by law) of the
holders of two-thirds of the outstanding shares of the Series B Preferred Stock:
(a) amend, alter or repeal any provision of the Articles of Incorporation of the Corporation
if such action would adversely alter the rights, preferences, privileges or powers of, or
restrictions provided for the benefit of the Series B Preferred Stock in a manner different from
any other series of Preferred Stock;
(b) increase or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series B Preferred Stock; or
(c) amend this Section 9.
10. Status of Converted Stock. In the event any shares of Preferred Stock shall be
converted pursuant to Article 4 hereof, then the shares so converted shall be cancelled and shall
not be issuable by the Corporation. The Articles of Incorporation shall be appropriately amended
to effect the corresponding reduction in the Corporations authorized capital stock.
11. Notices. Any notice required by the provisions of this Article IV to be given to
the holders of Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at such holders address appearing on the
books of the Corporation.
-18-
ARTICLE V
1. Limitation of Directors Liability. The liability of the directors of this
Corporation for monetary damages shall be eliminated to the fullest extent permissible under
California law.
2. Indemnification of Corporate Agents. This Corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with agents, votes of shareholders or disinterested directors or
otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California
Corporations Code, subject only to the applicable limits set forth in Section 204 of the California
Corporations Code with respect to actions for breach of duty to this Corporation and its
shareholders.
3. Repeal or Modification. Any repeal or modification of the foregoing provisions of
this Article V shall not adversely affect any right of indemnification or limitation of liability
permitted under California law relating to acts or omissions occurring prior to such repeal or
modification.
(THE GREAT SEAL OF THE STATE OF CALIFORNIA - OFFICE OF THE SECRETARY OF STATE)
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EXHIBIT B
Form of New License Agreement
Superseded by Exhibit 10.9A filed with the Registration Statement on April 14, 2008.
EXHIBIT C
Form of Sponsored Research Agreement
8805.SRA.001
UAB Research Foundation
FORM OF
SPONSORED RESEARCH AGREEMENT
THIS SPONSORED RESEARCH AGREEMENT (this Agreement) dated as of March , 2003 (the Effective
Date), is entered into between The UAB Research Foundation, an Alabama not for profit organization
(the UABRF), having a place of business at 1120G Administration Building, 704 20th Street,
Birmingham, Alabama 35294, and Fluidigm Corporation, a California corporation (Fluidigm), having
a place of business at 7100 Shoreline Court, South San Francisco, California 94080. The parties
agree as follows:
1. DEFINITIONS
1.1 Confidential Information shall mean, with respect to a party, all information of
any kind whatsoever, and all tangible and intangible embodiments thereof of any kind whatsoever,
which is disclosed by such party to the other party and is marked, identified as or otherwise
acknowledged to be confidential at the time of disclosure to the other party. Notwithstanding the
foregoing, Confidential Information of a party shall not include information which the other party
can establish by written documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing party to the other party, (b) to have become publicly known, without
fault on the part of the other party, subsequent to disclosure of such information by the
disclosing party to the other party, (c) to have been received by the other party at any time from
a source, other than the disclosing party, rightfully having possession of and the right to
disclose such information, (d) to have been otherwise known by the other party prior to disclosure
of such information by the disclosing party to the other party, or (e) to have been independently
developed by employees or agents of the other party without access to or use of such information
disclosed by the disclosing party to the other party (each, a Confidentiality Exception).
1.2 Derived or derived shall mean obtained, developed, created, designed,
derived or resulting from, based upon or otherwise generated (whether directly or indirectly, or in
whole or in part).
1.3 Master Closing Agreement shall mean a Master Closing Agreement between Fluidigm,
UABRF and Oculus Pharmaceuticals, Inc. of even date hereof.
1.4 Materials shall mean the proprietary materials provided by one party to the
other under this Agreement, together with all derivatives and parts thereof.
1.5
Principal Investigator shall mean [***].
1.6 Program shall mean the research program described in Section
2.1.
1.7 Program Period shall mean the period commencing on the Effective Date, and
continuing through the fifth (5th) anniversary of the Effective Date, unless terminated earlier as
provided below.
1
1.8 Program Technology shall mean, collectively, all inventions,
discoveries, data and information (whether patentable or not patentable) generated in connection
with the Program, excluding the Materials. Unless subject to a Confidentiality Exception, all
Program Technology shall be Confidential Information of UABRF.
1.9 Research Plan shall mean the annual written research workplan for the Program.
2. SPONSORED RESEARCH
2.1 Statement of Work. During the Program Period, UABRF shall conduct the Program in
accordance with the Research Plan. The Research Plan for the first (1st) year of the Program is
attached hereto as Exhibit A. No later than ninety (90) days prior to each anniversary of
the Effective Date (other than the fifth (5th) anniversary thereof) during the term
of this Agreement the parties shall mutually agree upon the Research Plan for the upcoming year of
the Program and shall amend Exhibit A by attaching such mutually agreed upon Research Plan
thereto. Except as provided in this Section 2.1 or except by the mutual written agreement of the
parties, the Research Plan shall not be altered.
2.2 Principal Investigator. UABRF shall conduct the Program under the
direction of the Principal Investigator. The Principal Investigator shall be responsible for the
supervision and administration of the Program, including all budgeting and revisions to the budget
in accordance with all applicable policies of UABRF. Fluidigm shall consider in good faith
utilizing on mutually acceptable terms and conditions the engineering capability available at the
Principal Investigators laboratory for the continuing development of Fluidigms Topaz
microprocessor product line as reasonably required by, but at the sole discretion of, Fluidigm at
additional compensation over and above the amounts set forth in Section 4.1 of this Agreement.
2.3 Records and Reports.
2.3.1 UABRF shall keep complete and accurate records of the work performed under this
Agreement in accordance with established good laboratory practices and appropriate for patent
purposes. Fluidigm shall have the right, upon reasonable notice and during reasonable business
hours, to inspect and make copies of such accounts, notes, data and records.
2.3.2
Within [***] after the end of each calendar quarter
during the Program Period, UABRF shall prepare and provide Fluidigm with quarterly written reports
describing the work performed during such calendar quarter under this Agreement and all resulting
Program Technology. Within [***] after the expiration or earlier termination of the
Program Period, UABRF shall prepare and provide Fluidigm with a comprehensive written report
describing all work performed under this Agreement and all resulting Program Technology. At
Fluidigms request, upon reasonable notice, UABRF also shall provide interim summary reports and
copies of all data generated under this Agreement.
2.4 Informal Consultations. At reasonable times during the Program Period, Fluidigms
representatives may consult informally with the Principal Investigator regarding the Program
personally, by telephone, email or other means of communication.
2
3. MATERIAL TRANSFER
3.1 Materials. Each party shall provide to the other party (the Recipient) those
Materials required to be provided under the Research Plan. The Recipient of any Materials hereby
acknowledges that, as between the parties, the other party is the sole owner or licensee of such
Materials.
3.2 Permitted Use. The Recipient shall use the Materials solely as permitted under
the Research Plan and not for any other purpose. THE RECIPIENT UNDERSTANDS THAT THE MATERIALS ARE
PROVIDED SOLELY FOR CERTAIN RESEARCH USE ONLY AND HAVE NOT BEEN APPROVED FOR HUMAN USE. THE
RECIPIENT SHALL NOT ADMINISTER THE MATERIALS TO HUMANS IN ANY MANNER OR FORM. Provided however,
upon the Fluidigm Materials becoming commercially available (Commercial Fluidigm Materials), the
restrictions of this Section 3.2 shall terminate as to the Commercial Fluidigm
Materials, and the UABRF /UAB shall have the right to use the Commercial Fluidigm
Materials on the same terms and conditions as Fluidigm generally makes the Commercial Fluidigm
Materials commercially available to third parties.
3.3 No Transfer. The Recipient shall not transfer the Materials to any third party
without the prior express written consent of the other party. The Recipient shall limit transfer
and disclosure of the Materials on a need to know basis, as reasonably necessary for the conduct
of the Program, to its directors, officers and employees who are bound by written agreements with
the Recipient to not use or transfer the Materials for any purpose other than those permitted by
this Agreement. The Recipient shall notify the other party promptly upon discovery of any
unauthorized use or transfer thereof.
3.4 Return of Materials. Upon expiration or termination of the Program Period,
the Recipient shall promptly return or destroy (as requested by the other party) all
remaining Materials to the other party.
3.5 No Warranty. THE RECIPIENT ACKNOWLEDGES THAT THE MATERIALS ARE EXPERIMENTAL IN
NATURE AND ARE PROVIDED AS IS. THE PARTY PROVIDING THE MATERIALS MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRES OR IMPLIED, WITH RESPECT TO THE MATERIALS OR THE USE THEREOF, AND DISCLAIMS ALL
IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
4. FUNDING
4.1 Budget and Payment. Subject to the terms and conditions of this Agreement,
Fluidigm shall support the Program by an aggregate grant to UABRF of [***], payable in [***] equal quarterly installments of [***] on or before the thirtieth (30th) day of each calendar quarter after the Effective Date.
Fluidigm shall have no obligation to provide funds to UABRF in excess of such amount. All payments
by Fluidigm to UABRF under this Agreement shall be originated from a United States bank located in
the United States and made by bank wire transfer
3
to the following account: Account Name: UAB Research Foundation; Bank Name: First
Commercia1 Bank; ABA Number: [***], Account Number: [***].
4.2 Accounting. Upon request by Fluidigm, UABRF shall provide to Fluidigm
a report of expenditures shown by major cost categories.
5. PROGRAM TECHNOLOGY
5.1 Ownership.
5.1.1 All right, title and interest in all Program Technology (a) made or
conceived solely by employees or others acting on behalf of UABRF (the UABRF Inventions)
shall be owned solely by UABRF; (b) made or conceived solely by employees or others acting
on behalf of Fluidigm (the Fluidigm Inventions) shall be owned solely by Fluidigm; and
(c) made or conceived jointly by employees or others acting on behalf of Fluidigm and by
employees or others acting on behalf of UABRF (the Joint Inventions) shall be owned jointly
by Fluidigm and UABRF. Each party shall have the right, subject to the provisions of this
Agreement, to freely exploit, transfer, license or encumber its rights in any Joint
Inventions, and the patent rights and other intellectual property rights therein, without the
consent of, or payment or accounting to, the other party.
5.1.2 The transfer of physical possession of any materials or technology
owned by, and the physical possession and use of any materials or technology by, Fluidigm or
UABRF, as the case may be, shall not be (nor construed as) a sale, lease, offer to sell or
lease, or
other transfer of title of such materials or technology to UABRF or Fluidigm, as the case
may be.
5.2 Disclosure. UABRF promptly shall disclose to Fluidigm any Program
Technology made or conceived by or on behalf of UABRF, and provide Fluidigm with copies of
all information available to UABRF regarding such Program Technology.
5.3 Options and Licenses.
5.3.1 UABRF hereby grants to Fluidigm a nonexclusive, worldwide,
royalty-free license (together with the right to grant sublicenses), under UABRFs rights in the
Program Technology, to use all unpatented Program Technology for all purposes.
5.3.2 With respect to each discovery or invention comprising Program
Technology, UABRF hereby grants to Fluidigm an exclusive option to obtain an exclusive,
worldwide, royalty-bearing license (with the exclusive right to sublicense) under any issued
patents relating to such discovery or invention for all purposes. The option with respect to
each
such discovery or invention shall be exercisable for the [***] following disclosure
to
Fluidigm of all information available to UABRF regarding such discovery or invention. The
license shall be on mutually acceptable terms and conditions. Upon exercise by Fluidigm of
the
option with respect to each such discovery or invention, the parties shall negotiate in good
faith,
and shall use good faith efforts to execute a written agreement evidencing such license prior
to
the expiration of [***] days following the expiration of the one-year
option
term described above. The actual royalty rate shall be negotiated in good faith based on
reasonable factors including without limitation [***]
4
[***]. Fluidigm shall have the right to control the filing,
prosecution, maintenance and enforcement of all patent applications and patents that are so
licensed to Fluidigm.
5.3.3 If Fluidigm fails to obtain a license under Section 5.3.2 with respect to any patent
rights, during the [***] day negotiation period under Section 5.3.2 (Option
Negotiation Period), UABRF for a [***] month period following the expiration of the Option
Negotiation Period shall [***].
5.4 Patent Rights
5.4.1 UABRF shall control the preparation, filing, prosecution and
maintenance of all patents and patent applications to the extent they claim UABRF Inventions or
Joint Inventions. Fluidigm shall advise UABRF no later than ninety (90) days after disclosure by
UABRF of a UABRF Invention or a Joint Invention whether it intends to reimburse UABRF for the
reasonable out of pocket costs of preparing, filing and prosecuting patent applications covering
such UABRF Invention or Joint Invention. If Fluidigm declines to reimburse UABRF for all reasonable
costs of preparing, filing and prosecuting a patent application for a patentable UABRF Invention or
Joint Invention in any jurisdiction, UABRF may do so at its sole cost, but such patent application
and patent shall be excluded from Fluidigms option to license under Section 5.3 above; provided,
however, UABRF shall not file or prosecute a patent application when Fluidigm has demonstrated to
UABRF that the filing or prosecution of such patent application would be prejudicial to the
optimization of such UABRF Invention or Joint Invention. UABRF shall give Fluidigm an opportunity
to review the text of, and shall reasonably consider Fluidigms comments with respect to, each
patent application for a UABRF Invention or a Joint Invention before filing, and shall supply
Fluidigm with a copy of such application as filed, together with notice of its filing date and
serial number. UABRF shall prepare, file and prosecute patent applications covering UABRF
Inventions or Joint Inventions in all jurisdictions requested by Fluidigm, provided that Fluidigm
has not declined to reimburse UABRF for all reasonable costs of preparing, filing and prosecuting
such patent applications.
5.4.2 Fluidigm shall control, at its sole expense, the preparation, filing,
prosecution and maintenance of all patents and patent applications to the extent they claim
Fluidigm Inventions.
5.4.3 Each party shall cooperate with the other party, execute all lawful
papers and instruments and make all rightful oaths and declarations as may be necessary in the
preparation, filing, prosecution maintenance and enforcement of all patents and patent
applications described in this Section 5.4.
5
6. CONFIDENTIALITY AND PUBLICATION
6.1 Confidential Information. During the term of this Agreement, and for a
period of five (5) years following the expiration or earlier termination hereof, each party
shall
maintain in confidence all Confidential Information disclosed by the other party, and shall
not
use, disclose or grant the use of the Confidential Information except on a need-to-know
basis to
those directors, officers, employees, consultants, clinical investigators, contractors,
(sub)licensees, distributors or permitted assignees, to the extent such disclosure is
reasonably
necessary in connection with such partys activities as expressly authorized by this
Agreement.
To the extent that disclosure is authorized by this Agreement, prior to disclosure, each
party
hereto shall obtain agreement of any such person or entity to hold in confidence and not
make
use of the Confidential Information for any purpose other than those permitted by this
Agreement. Each party shall notify the other promptly upon discovery of any unauthorized use
or disclosure of the other partys Confidential Information.
6.2 Terms of this Agreement. Except as otherwise provided in Section 6.1 or
6.3, neither party shall disclose any terms or conditions of this Agreement to any third
party
without the prior consent of the other party. Notwithstanding the foregoing, prior to
execution of
this Agreement, the parties shall agree upon the substance of information that can be used
to
describe the terms of this transaction, and each party may disclose such information, as
modified
by mutual agreement from time to time, without the other partys consent.
6.3 Permitted Disclosures. The confidentiality obligations contained in this
Section 6 shall not apply to the extent that the receiving party is required (a) to disclose
information by law, order or regulation of a governmental agency or a court of competent
jurisdiction, or (b) to disclose information to any governmental agency for purposes of
obtaining
approval to test or market a Product, provided in either case that the receiving party shall
provide
written notice thereof to the other party and sufficient opportunity to object to any such
disclosure or to request confidential treatment thereof.
6.4 Publication. Fluidigm acknowledges UABRFs interest in publishing
certain results of the Program to obtain recognition within the scientific community and to
advance the state of scientific knowledge. Each party also recognized their mutual interest
in
obtaining valid patent protection and protecting business interests. Consequently, if UABRF
desires to make a publication (including any oral disclosure made without obligation of
confidentiality) of any results of the Program, UABRF shall provide Fluidigm with a copy of
the
proposed written publication at least [***] days prior to submission for
publication, or
an outline of such oral disclosure at least [***] days prior to presentation.
Fluidigm shall
have the right (a) to propose modifications to the publication for patent reasons, and (b)
to
request a reasonable delay in publication in order to protect patentable information. If
Fluidigm
requests such a delay, UABRF shall delay submission or presentation of the publication for a
period of [***] days to enable patent applications to be prepared and filed. Upon the
expiration of such [***] day period (in the case of proposed written disclosures)
or
[***] day period (in the case of proposed oral disclosures) from receipt by Fluidigm,
UABRF shall be free to proceed with the written publication or the presentation,
respectively,
unless Fluidigm has requested the delay described above.
6
7. TERM
7.1 Expiration. Unless terminated earlier pursuant to Section 7.2, this
Agreement shall expire on the expiration of the Program Period.
7.2 Termination for Cause. A party may terminate this Agreement upon or
after a material breach of this Agreement by the other party, if the breaching party has not
cured
such breach within thirty (30) days after notice thereof from the other party.
7.3 Effect of Expiration and Termination. Expiration or termination of this
Agreement shall not relieve the parties of any obligation accruing prior to such expiration or
termination. The provisions of Sections 5, 6 and 8 shall survive the expiration or termination
of this Agreement. Except as the parties otherwise agree in writing, termination of this
Agreement shall not affect the Master Closing Agreement.
7.4 Outstanding Commitments. Upon the giving of notice of termination by
either party, UABRF shall use best efforts to limit or terminate any outstanding
commitments in
connection with the Program. Fluidigm shall reimburse UABRF for all direct costs incurred by
it for all work performed through the effective termination date, and for all
outstanding
obligations which cannot be cancelled; provided, however, that Fluidigms aggregate
funding
obligation under this Agreement shall not exceed the amount set forth in Section 4.1 above.
Within thirty (30) days after the effective date of termination, UABRF shall furnish Fluidigm
with a final statement for settlement of all costs to be reimbursed. This statement may
include
costs incurred before the notice of termination was given but which were not yet billed. If
funds
received by UABRF exceed expenses incurred, UABRF shall reimburse Fluidigm for any such
excess funds at the time such final statement is furnished to Fluidigm.
8. INDEMNIFICATION
8.1 Indemnification.
8.1.1 Fluidigm shall defend, indemnify and hold UABRF harmless from
all losses, liabilities, damages and expenses (including reasonable attorneys fees and costs)
resulting from any claims, demands, actions and other proceedings by any unaffiliated third
party
to the extent resulting from Fluidigms gross negligence or willful misconduct under this
Agreement or use of the UABRF Materials or UABRF Confidential Information.
8.1.2 UABRF shall (to the fullest extent to which University of Alabama
at Birmingham has the right under applicable law to do so) defend, indemnify and
hold Fluidigm
harmless from all losses, liabilities, damages and expenses (including reasonable
attorneys, fees
and costs) resulting from any claims, demands, actions and other proceedings by any
unaffiliated
third party to the extent resulting from UABRFs gross negligence or willful misconduct under
the Agreement, or use of the Fluidigm Materials or Fluidigm Confidential
Information.
8.1.3 A party (the Indemnitee) that intends to claim indemnification
under this Section 8.1 shall promptly notify the other party (the Indemnitor) of any
liability or
action in respect of which the Indemnitee intends to claim such indemnification, and the
Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so
desires,
7
jointly with any other indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor; provided, however, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnitor, if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other party represented by such
counsel in such proceedings. The indemnity agreement in this Section 8.1 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed.
The failure to deliver notice to the Indemnitor within a reasonable time after the commencement of
any such action, if prejudicial to its ability to defend such action, shall relieve the Indemnitor
of any liability to the Indemnitee under this Section 8.1, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to the Indemnitee otherwise
than under this Section 8.1. The Indemnitor may not settle the action or
otherwise consent to an adverse judgment in such action that diminishes the rights or interests of
the Indemnitee without the express written consent of the Indemnitee. The Indemnitee, its employees
and agents, shall cooperate fully with the Indemnitor and its legal representatives in the
investigation and defense of any action, claim or liability covered by this indemnification.
8.2 Representation. UABRF hereby represents that to the knowledge of UABRF and
the Principal Investigator the rights and obligations of UABRF under this Agreement do not conflict
with rights and obligations provided under other agreements which it has with third parties,
including the federal and local governments. During the Program Period (or while Fluidigm is
providing any subsequent funding), neither UABRF nor the Principal Investigator shall enter into
any other agreements which conflict with rights and obligations provided hereunder, including any
rights and obligations which survive termination hereto. UABRF shall enter into written agreements
with its employees. consultants and such others as is necessary to obtain ownership of inventions,
discoveries and other useful research results, products and processes made by them pursuant to
activity carried out in connection with the Program.
9. MISCELLANEOUS
9.1 Notices. Any consent, notice or report required or permitted to be given or
made under this Agreement by one of the parties to the other shall be in writing and addressed to
such other party at its address indicated below, or to such other address as the addressee shall
have last furnished in writing to the addressor, and shall be effective upon receipt by the
addressee.
|
If to UABRF: |
|
UAB Research Foundation
1120G Administration Building
704 20th Street Birmingham, Alabama 35294
Attention: Director |
8
|
If to Fluidigm: |
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Fluidigm Corporation 7100 Shoreline Court
South San Francisco, California 94080 Attention: President |
|
|
with a copy to: |
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Fluidigm Corporation 7100 Shoreline Court
South San Francisco, California 94080 Attention: General Counsel |
9.2 Assignment. Except as otherwise expressly provided under this
Agreement neither this Agreement nor any right or obligation hereunder may be assigned or
otherwise transferred (whether voluntarily, by operation of law or otherwise), without the
prior
express written consent of the other party; provided, however, that either party may,
without such consent, assign this Agreement and its rights and obligations hereunder in
connection with the transfer or sale of all or substantially all of its business, or in the
event of its merger, consolidation, change in control or similar transaction. Any permitted
assignee shall assume all obligations of its assignor under this Agreement. Any purported
assignment or transfer in violation of this Section 9.2 shall be void.
9.3 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama, without regard to the conflicts of law
principles thereof.
9.4 Entire Agreement. This Agreement and the Master Closing Agreement
(together with the Ancillary Agreements, as defined in the Master Closing Agreement) contain
the entire understanding of the parties with respect to the subject matter hereof. All express
or
implied representations, agreements and understandings, either oral or written, heretofore
made
are expressly superseded by this Agreement and the Master Closing Agreement.
9.5 Independent Contractors. Each party hereby acknowledges that the parties
shall be independent contractors and that the relationship between the parties shall not
constitute
a partnership, joint venture or agency. Neither party shall have the authority to make any
statements, representations or commitments of any kind, or to take any action, which shall be
binding on the other party, without the prior consent of the other party to do so.
9.6 Waiver. The waiver by a party of any right hereunder, or of any failure to
perform or breach by the other party hereunder, shall not be deemed a waiver of any other
right
hereunder or of any other breach or failure by the other party hereunder whether of a similar
nature or otherwise.
9.7 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.
9
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date
first written above.
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UAB RESEARCH FOUNDATION
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By: |
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Title: |
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FLUIDIGM CORPORATION
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By: |
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Title: |
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Acknowledged and agreed to this
March , 2003.
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Dr. [***], |
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Principal Investigator |
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10
EXHIBIT A
RESEARCH PLAN
[***]
11
APPENDIX 1
(To Exhibit A
(Research Plan)
[***]
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Part Number |
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Item |
|
Quantity |
[***] |
|
[***] |
|
[***] |
[***] |
|
[***] |
|
[***] |
[***] |
|
[***] |
|
[***] |
[***] |
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[***] |
|
[***] |
[***] |
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[***] |
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[***] |
[***] |
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[***] |
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[***] |
[***] |
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[***] |
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[***] |
[***] |
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[***] |
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[***] |
[***] |
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[***] |
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[***] |
Other Materials included: [***]
12
EXHIBIT D
PATENTS AND PATENT APPLICATIONS
[***]
exv10w10
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 10.10
COY-15-RISC/F269-1
S05/1-25730208
27 March 2008
Ms Grace Yow
General Manager
Fluidigm Singapore Pte Ltd
Block 1026, #07-3532
Tai Seng Avenue
Singapore 534413
Dear Ms Grace Yow,
APPLICATION FOR INCENTIVES UNDER THE RESEARCH INCENTIVE SCHEME FOR COMPANIES (RISC)
This is with reference to your application of 15 June 2005 and subsequent revisions for
incentives under the Research Incentive Scheme for Companies. This letter amends, restates and
replaces our original letter agreement dated 7 October 2005 (the Prior Letter), provided that the
Supplement to the Prior Letter dated 11 January 2006 (the Supplement) shall remain in full force
and effect and all references in the Supplement to the Prior Letter or LOF shall be considered
references to this amended and restated letter.
2 We are pleased to inform you that the Economic Development Board (hereinafter called EDB) has
agreed to provide a grant not exceeding S$9,926,000 in total to Fluidigm Singapore Pte Ltd
(hereinafter called the Company) under the RISC for your project on the development of the
Fluidigm R&D centre (hereinafter called the Development Project), as described in your
application. This grant shall be subject to the following conditions:
|
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Project Implementation |
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(a) |
|
The Company shall implement the Development Project as indicated in the Companys
application dated 15 June 2005 and subsequent revisions. |
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(b) |
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The Development Project shall meet the project milestones, deliverables and headcount
commitment as shown in Annex 1. |
|
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(c) |
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The Company shall carry out the entire Development Project in Singapore unless
otherwise stated. |
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(d) |
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The Company shall employ at least 16 Research Scientists and Engineers in Singapore by 31
December 2007. |
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(e) |
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The Company shall employ at least 24 Research Scientists and Engineers in Singapore by 31
December 2009. |
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(f) |
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The Company shall incur annual R&D spending of at least S$6.5 million by 31 December 2008
and at least S$8 million by 31 December 2010. |
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(g) |
|
The Company shall be the legal and economic owner of all intellectual property (IP) arising
from this project. |
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(h) |
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The Company shall engage a Singapore-based IP or legal firm(s) to file, draft and manage
all patent applications arising from this project. |
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(i) |
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The Company shall manufacture all products developed from this RISC project in Singapore
for the lifetime of the products. |
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Supported Period |
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(j) |
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Only expenses incurred during the qualifying period, which shall be from 1 August 2005 to
31 July 2010, will be supported. |
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Grant Support |
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(k) |
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All manpower, equipment, materials & software, professional services and intellectual
property rights supported under this RISC grant shall be used exclusively for the Development
Project and shall follow the administrative guidelines laid out in Annex 2. |
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(l) |
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The Company shall not sell, lease, dispose or otherwise transfer the equipment & software
supported under this RISC grant to another party during the execution of the Development
Project without first obtaining the written approval of EDB, which if so granted, shall be on
such terms as EDB deems fit. The Company shall at all times maintain proper records with
respect to the assets acquired through the grant. |
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(m) |
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The Company shall not seek or receive funds from any other incentives offered by other
agencies of the Government of Singapore for funding of this Development Project. |
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(n) |
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All grant monies received shall be used solely for the implementation of this Development
project. |
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Project Management & Co-ordination |
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(o) |
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The Company shall appoint a person (hereinafter called the Principal Investigator) to
lead the Development Project. The Principal Investigator shall be responsible for the
proper management, co-ordination and progress of the Development Project, the management of
grants disbursed and all other matters pertaining to the Development Project, including the
preparation of claims, submission of audited statements and progress reports. |
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(p) |
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The Principal Investigator shall be deemed as an agent of the Company throughout the
Development Project and EDB shall at all times have access to the Principal Investigator
with regards to all matters pertaining to the Development Project. |
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(q) |
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The Company shall inform EDB in writing of any change in the Principal Investigator. |
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Other Conditions |
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(r) |
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The Company shall permit EDB officers to inspect the premises where the development
work is carried out, the Companys accounts on the development expenditures and the records
on the progress of the Development Project. |
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(s) |
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The Company shall be required to provide, through responses to surveys or any other
such studies carried out by EDB, relevant information on the Development Project, as and
when requested by EDB. |
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(t) |
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If required by EDB, the Company shall submit a report comparing its projections in the
application form with the actual realised figures. The template for this report and the
timeline for submission will be provided by EDB. |
3 In the event the Project is aborted, the Company is to inform EDB in writing immediately.
4 EDB reserves the right to recover from the Company the total amount of grant released to the
Company for any breach of condition under which the RISC grant was approved.
5 The Company shall keep the terms and conditions of this RISC grant confidential.
Such information shall not be released to any external party, the public or the press unless prior
written consent from EDB is given.
6 EDB reserves the right to change the terms and conditions of this offer from time to time as may
be specified and deemed necessary by EDB.
7 If you are prepared to accept this amended and restated offer of a grant under the conditions
stipulated above, please sign below and return it to EDB within 1 month from the date of this
letter, failing which this offer shall be deemed to have lapsed.
8 If you have any queries, please contact Ih-Ming CHAN at 6395 7794. For queries on claims, please
call the EDAS hotline at 6832 6416. We wish you every success in this project.
Yours sincerely
DR BEH SWAN GIN
DIRECTOR
BIOMEDICAL SCIENCES CLUSTER
Enclosures:
Annex 1 Project Milestones and Deliverables
Annex 2 Administrative Guidelines
Accepted and Agreed
FLUIDIGM CORPORATION
Name:
Title:
Annex 1
PROJECT MILESTONES AND DELIVERABLES
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(a) |
|
The Company shall employ at least 16 Research Scientists and Engineers in Singapore by 31
December 2007. |
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(b) |
|
The Company shall employ at least 24 Research Scientists and Engineers in Singapore by 31
December 2009. |
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(c) |
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The Company shall incur annual R&D spending of at least
S$6.5 million by 31 December 2008 and
at least S$8.0 million by 31 December 2010. |
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(d) |
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The Company shall be the legal and economic owner of all intellectual property (IP) arising
from this project. The economic benefits resulting from the exploitation of the IP arising from
this project shall accrue to the Company. |
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(e) |
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The Company shall engage a Singapore-based IP or legal firm(s) to file, draft and manage all
patent applications arising from this project. |
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(f) |
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The Company shall manufacture all products developed from this RISC project in Singapore for
the lifetime of the products. |
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(g) |
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The Company shall fulfil the following project milestones as indicated below: |
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Milestones |
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Date of Completion |
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TOPAZ Screening Chip |
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|
[***] |
|
[***] |
[***] |
|
[***] |
TOPAZ Next Generation Screening Chip |
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|
[***] |
|
[***] |
[***] |
|
[***] |
[***] |
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[***] |
TOPAZ Diffraction Chip |
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[***] |
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[***] |
[***] |
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[***] |
[***] |
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[***] |
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Milestones |
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Date of Completion |
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Dynamic Array IFCs |
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[***] |
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[***] |
[***] |
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[***] |
[***] |
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[***] |
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Next Generation IFCs (Immunoassays, PET Synthesis, DID, Pathogen Detection) |
|
|
[***] |
|
[***] |
Annex 2
ADMINISTRATIVE GUIDELINES
|
1. |
|
The grant shall cover 50% of the actual qualifying manpower costs and 30% of the actual
qualifying costs for equipment, materials & software, professional services and intellectual
property rights incurred by the Company on the Development Project during the qualifying
period. In the event where qualifying cost items are not used exclusively for the Development
Project, the qualifying costs items shall be suitably pro-rated. The qualifying cost items are
listed below, but shall be subject to a total maximum grant of S$9,926,000. Virement from one
qualifying cost item to another will not be considered and the grant shall not cover GST
payments. |
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|
Category |
|
Approved Grant (S$) |
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Manpower |
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4,675,380 |
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Equipment, Materials and Software |
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|
4,963,380 |
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Professional services |
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288,000 |
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Total |
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9,926,760 |
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|
Total Approved Grant
(Rounded down to nearest thousand dollars) |
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|
9,926,000 |
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|
2. |
|
The qualifying cost for equipment (less its residual value, if any) is pro-rated based on the
number of months the equipment is used for the project (this refers to the date of delivery to
the end of qualifying period) over the approved useful life of equipment. |
|
|
|
The qualifying cost of equipment is based on the actual expenses, residual value, number of
months that the equipment is used for the project and approved useful life of equipment. |
|
|
|
The qualifying cost for intellectual property rights (IPR) is pro-rated based on the
project duration over the approved useful life of IPR. |
|
|
|
The qualifying cost of IPR is based on the cost of acquiring IPR, project duration and the
approved useful life of IPR. |
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3. |
|
Disbursements shall be made on a reimbursement basis upon application by the Company at
quarterly intervals. Claims must be submitted using the prescribed forms and shall be
certified by the Companys Chief Financial Officer and the Principal Investigator. The amount
disbursed shall be based on the actual
qualifying cost item incurred by the Company on the Development Project during the
qualifying period. |
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The grant will be disbursed as follows: |
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(i) |
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Disbursements of up to a cumulative total 70% of the approved grant amount shall be
made upon application by the Company. |
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(ii) |
|
The remaining 30% of the grant may be released upon application by the Company on
completion of the Development Project. |
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4. |
|
For all claims (except for the final claim), the first 50% of the amount claimed will be
disbursed to the Company upon receipt of claim and the remaining 50% will be disbursed upon
the completion of checks. |
|
5. |
|
The final claim must be submitted within 6 months with complete documentation from the end of
the qualifying period (31 July 2010), failing which any claim will be disqualified. |
6. |
|
For total approved grant exceeding S$100,000, all claims must be externally audited. The
audited statement of accounts shall be submitted on an annual basis, as well as when the
Development Project is completed or terminated. The Company shall make available to its
auditor this Letter of Offer and its accompanying annexes. The Company shall ensure that the
external auditor forwards a copy of the audited accounts directly to EDB upon completion of
the audit. In the event that the external auditor cannot issue an unqualified report, EDB
shall have direct access to the external auditor to gather details with regard to the audit
findings. |
7. |
|
The Company shall submit progress reports to EDB at half-yearly intervals. The disbursement
of any grant shall be subject to the Company achieving the project milestones as stated in the
Offer Letter. The final report is to be submitted upon completion of the project. |
exv10w11
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 10.11
COY-15-RISC/F269-2
S06/1-39831633
27 March 2008
Ms Grace Yow
General Manager
Fluidigm Singapore Pte Ltd
Block 1026, #07-3532
Tai Seng Avenue
Singapore 534413
Dear Ms Grace Yow,
APPLICATION FOR INCENTIVES UNDER THE RESEARCH INCENTIVE SCHEME FOR COMPANIES (RISC)
This is with reference to your application of 26 March 2006 and subsequent revisions for
incentives under the Research Incentive Scheme for Companies. This letter amends, restates and
replaces our original letter agreement dated 12 February 2007 (the Prior Letter) and all
references in the Prior Letter shall be considered references to this amended and restated letter.
2 We are pleased to inform you that the Economic Development Board (hereinafter called EDB) has
agreed to provide a grant not exceeding S$3,715,000 in total to Fluidigm Singapore Pte Ltd
(hereinafter called the Company) under the RISC for your project on the development of the
Fluidigm Instrumentation R&D Project (hereinafter called the Development Project), as described
in your application. This grant shall be subject to the following conditions:
Project Implementation
|
a) |
|
The Company shall implement the Development Project as follows: |
|
(i) |
|
The Company shall implement the Development Project as indicated in the Companys
application dated 26 March 2006 and subsequent revisions. |
|
|
(ii) |
|
The Company shall manufacture all products developed from the Development
Project in Singapore for the lifetime of the products. |
|
|
(iii) |
|
The Company shall be the legal and economic owner of all intellectual property
(IP) arising from the Development Project. |
1
|
(iv) |
|
The Company shall engage a Singapore-based IP or legal firm(s) to file, draft
and manage all patent applications arising from the Development Project. |
|
|
|
(v) |
|
The Company shall employ at least 10 new Research Scientists and Engineers (RSEs)
in Singapore by 31 May 2009 for the Development Project. |
|
|
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|
(vi) |
|
The Company shall employ at least 12 new RSEs in Singapore by 31 May 2011 for
the Development Project. |
|
|
|
|
(vii) |
|
The Company shall incur total annual R&D spending of at least S$6.5 million by
31 May 2009 for the Development Project. |
|
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(viii) |
|
The Company shall incur total annual R&D spending of at
least S$9 million by
31 May 2011 for the Development Project. |
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(ix) |
|
The Company shall maintain at least 12 RSEs in total at its R&D Centre in
Singapore until 31 May 2013. |
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|
(x) |
|
Fluidigm Corporation shall raise a minimum of US $45 million in new funding
between 1 Jan 2006 and 31 Dec 2008. |
|
|
|
(xi) |
|
The Development Project shall meet the project milestones and deliverables as
shown in Annex 1. |
|
b) |
|
The Company shall carry out the entire Development Project in Singapore unless otherwise
stated. |
|
|
|
|
Supported Period |
|
|
c) |
|
Only expenses incurred during the qualifying period, which shall be from 1 June 2006 to 31
May 2011, will be supported. |
|
|
|
|
Grant Support |
|
|
d) |
|
All manpower, equipment, materials & software, professional services and intellectual
property rights supported under this RISC grant shall be used
exclusively for the Development Project and shall follow the administrative guidelines laid
out in Annex 2. |
|
|
e) |
|
The Company shall not sell, lease, dispose or otherwise transfer the equipment & software
supported under this RISC grant to another party during the execution of the Development
Project without first obtaining the written approval of EDB, which if so granted, shall be on
such terms as EDB deems fit. The Company shall at all times maintain proper records with
respect to the assets acquired through the grant. |
2
|
f) |
|
The Company shall not seek or receive funds from any other incentives offered by other
agencies of the Government of Singapore for funding of this Development Project. |
|
|
g) |
|
All grant monies received shall be used solely for the implementation of this Development
project. |
|
|
|
|
Project Management & Co-ordination |
|
|
h) |
|
The Company shall appoint a person (hereinafter called the Principal Investigator) to
lead the Development Project. The Principal Investigator shall be responsible for the proper
management, co-ordination and progress of the Development Project, the management of grants
disbursed and all other matters pertaining to the Development Project, including the
preparation of claims, submission of audited statements and progress reports. |
|
|
i) |
|
The Principal Investigator shall be deemed as an agent of the Company throughout the
Development Project and EDB shall at all times have access to the Principal Investigator with
regards to all matters pertaining to the Development Project. |
|
|
j) |
|
The Company shall inform EDB in writing of any change in the Principal Investigator. |
|
|
|
|
Other Conditions |
|
|
k) |
|
The Company shall permit EDB officers to inspect the premises where the development work
is carried out, the Companys accounts on the development expenditures and the records on the
progress of the Development Project. |
|
|
l) |
|
The Company shall be required to provide, through responses to surveys or any other such
studies carried out by EDB, relevant information on the Development Project, as and when
requested by EDB. |
|
|
m) |
|
If required by EDB, the Company shall submit a report comparing its projections in the
application form with the actual realised figures. The template for this report and the
timeline for submission will be provided by EDB. |
3 In the event the Project is aborted, the Company is to inform EDB in writing immediately.
4 EDB reserves the right to recover from the Company the total amount of grant released to the
Company for any breach of condition under which the RISC grant was approved.
3
5 The Company shall keep the terms and conditions of this RISC grant confidential.
Such information shall not be released to any external party, the public or the press unless prior
written consent from EDB is given.
6 EDB reserves the right to change the terms and conditions of this offer from time to time as may
be specified and deemed necessary by EDB.
7 If you are prepared to accept this amended and restated offer of a grant under the conditions
stipulated above, please sign below and return it to EDB within
1 month from the date of this
letter, failing which this offer shall be deemed to have lapsed.
8 If you have any queries, please contact Ih-Ming CHAN at 6395 7794. For queries on claims, please
call the EDAS hotline at 6832 6416. We wish you every success in this project.
Yours sincerely
YEOH KEAT CHUAN
EXECUTIVE DIRECTOR
BIOMEDICAL SCIENCES CLUSTER
Enclosures:
Annex 1 Project Milestones and Deliverables
Annex 2 Administrative Guidelines
Accepted and Agreed
FLUIDIGM CORPORATION
/s/ Gajus
Worthington
Name: Gajus Worthington
Title: President & CEO
4
Annex 1
PROJECT MILESTONES AND DELIVERABLES
The Company shall meet the following R&D milestones:
|
|
|
Milestones |
|
Completion Date |
AIX Gen II development |
|
|
|
|
|
[***]
|
|
[***] |
[***]
|
|
[***] |
BioMark II Chip Loader development |
|
|
|
|
|
[***]
|
|
[***] |
[***]
|
|
[***] |
[***]
|
|
[***] |
BioMark II End Point Reader development |
|
|
|
|
|
[***]
|
|
[***] |
[***] |
|
|
[***]
|
|
[***] |
BioMark Next Generation Instrument Development |
|
|
|
|
|
[***]
|
|
[***] |
[***] |
|
[***] |
[***]
|
|
[***] |
5
Annex 2
ADMINISTRATIVE GUIDELINES
|
1. |
|
The grant shall cover 50% of the actual qualifying manpower costs and 30% of the actual
qualifying costs for equipment, materials & software, professional services and intellectual
property rights incurred by the Company on the Development Project during the qualifying
period. In the event where qualifying cost items are not used exclusively for the Development
Project, the qualifying costs items shall be suitably pro-rated. The qualifying cost items are
listed below, but shall be subject to a total maximum grant of S$3,715,000. Virement from one
qualifying cost item to another will not be considered and the grant shall not cover GST
payments. |
|
|
|
|
|
|
Category |
|
Approved Grant (S$) |
|
Manpower |
|
|
2,093,592 |
Equipment, Materials and Software |
|
|
1,188,672 |
Professional services |
|
|
433,500 |
|
|
Total |
|
|
3,715,764 |
|
|
Total
Approved Grant (Rounded down to nearest thousand dollars)
|
|
|
3,715,000 |
|
2. |
|
The qualifying cost for equipment (less its residual value, if any) is pro-rated based on the
number of months the equipment is used for the project (this refers to the date of delivery to the end of qualifying period) over the approved useful life of
equipment. |
|
|
|
The qualifying cost of equipment is based on the actual expenses, residual value, number of
months that the equipment is used for the project and approved useful life of equipment. |
|
|
|
The qualifying cost for intellectual property rights (IPR) is pro-rated based on the
project duration over the approved useful life of IPR. |
|
|
|
The qualifying cost of IPR is based on the cost of acquiring IPR, project duration and the
approved useful life of IPR. |
|
3. |
|
Disbursements shall be made on a reimbursement basis upon application by the Company at
quarterly intervals. Claims must be submitted using the prescribed forms and shall be
certified by the Companys Chief Financial Officer and the Principal Investigator. The amount
disbursed shall be based on the actual qualifying cost item incurred by the Company on the
Development Project during the qualifying period. |
|
|
|
The grant will be disbursed as follows: |
|
|
(i) |
|
Disbursements of up to a cumulative total 70% of the approved grant amount
shall be made upon application by the Company. |
|
|
|
|
(ii) |
|
The remaining 30% of the grant may be released upon application by the Company
on completion of the Development Project. |
|
|
4. |
|
For all claims (except for the final claim), the first 50% of the amount claimed will be
disbursed to the Company upon receipt of claim and the remaining 50% will be disbursed upon
the completion of checks. |
|
|
5. |
|
The final claim must be submitted within 6 months with complete documentation from the end of
the qualifying period (31 May 2011), failing which any claim will be disqualified. |
|
6. |
|
For total approved grant exceeding S$100,000, all claims must be externally audited. The
audited statement of accounts shall be submitted on an annual basis, as well as when the
Development Project is completed or terminated. The Company shall make available to its
auditor this Letter of Offer and its accompanying annexes. The Company shall ensure that the
external auditor forwards a copy of the audited accounts directly to EDB upon completion of
the audit. In the event that the external auditor cannot issue an unqualified report, EDB
shall have direct access to the external auditor to gather details with regard to the audit
findings. |
|
7. |
|
The Company shall submit progress reports to EDB at half-yearly intervals. The disbursement
of any grant shall be subject to the Company achieving the project milestones as stated in the
Offer Letter. The final report is to be submitted upon completion of the project. |
7
exv10w12
Exhibit 10.12
[***] Indicates
text has been omitted from this Exhibit pursuant to a confidential
treatment request and has been filed separately with the Securities and Exchange Commission.
Distribution Agreement
This Agreement, effective as of April 1,
2005 (Effective Date), is made by and between Fluidigm
Corporation, a corporation of the State of California, having an office at 7100 Shoreline Court,
South San Francisco CA 94080, United States of America (FC), and Eppendorf AG, a German
corporation, having its headquarter at Barkhausenweg 1, D-22339 Hamburg, Germany (EAG), each
hereinafter referred to as the Party or collectively called the Parties.
WHEREAS, FC is specialized in development
and manufacturing of systems with integrated fluidic
circuits for life-science research,
WHEREAS, EAG is a biotechnology company
with a broad range of applications and products, mainly in
the fields of bio tools, molecular technologies and complementary products,
WHEREAS, the Parties intend to engage in a
mutually beneficial relationship concerning new FC
applications which include the Eppendorf product Mastercycler personal for thermal control of
microfluidic components;
NOW, THEREFORE, in consideration of the
premises and the mutual agreements and covenants contained
herein, the Parties hereto hereby agree as follows:
§ 1 |
|
Subject Matter of the Agreement |
|
|
|
The object of this Agreement is the development, manufacture and delivery by EAG to FC of a
special brand version of Eppendorf Mastercycler personal for the exclusive handling of FC
microfluidic chips and licensed for PCR thermocycling practiced in fields of research and
development, quality assurance or control, environmental testing, plant diagnostics,
identity testing (other than parentage testing for humans) and forensics (PCR Field) and
hereinafter referred to as Product - in accordance with the description of Product
(Enclosure 1). EAG grants FC the right to commercially use, market, import, offer to sell,
sell and/or distribute (including through one or more tiers of sub-distributors) the
Product under the EAG label as an Authorized Thermal Cycler on a worldwide basis. |
|
|
|
The use, marketing, distribution and/or selling of the Product (i) for PCR thermocycling
outside the PCR Field as defined above and/or (ii) for real time PCR thermocycling as
covered by United States Patent No. 6,814,934 (the
Higuchi Patent) is not authorized
under this Agreement, whereas EAG does not restrict FC to use, market, distribute and sell
the Product in all other fields of use outside the PCR thermocycling. It is the duty of FC
to determine the freedom to operate the Product in such cases and not to infringe third
party patents. The Parties acknowledge that FC acts as a distributor of the Product
(including without limitation [***]. |
|
§ 2 |
|
Up-front payment |
|
|
|
Up-front payment of FC for EAG R&D of the Product is EURO [***] and it is due as
follows: |
|
|
|
EURO [***] already received ([***] USD) |
|
|
|
EURO [***] already received |
|
|
|
EURO [***] due in July 2005 against separate invoice. |
Page 1 of 34
|
|
The up-front payment for R&D further includes
manufacturing of [ * * * ]. One of these units will remain in its
final serial execution in EAGs engineering as a basic reference
unit. One unit will be a life unit in EAGs R&D used for
measuring, testing, modification evaluation, etc. One licensed unit
will be for FC for acceptance and release of serial production. It
will also serve as a reference unit for Fluidigm. |
|
§ 3 |
|
Execution and Delivery |
|
|
|
Delivery of PRODUCT by EAG will be to a worldwide maximum of three (3) addresses, which
are detailed below. |
|
|
|
1- Fluidigm Corporation
7100 Shoreline Court
South San Francisco, CA 94080 |
|
|
|
United States of America |
|
|
|
2- Fluidigm KK
Attn: Takeshi Iwabuchi
Ginza TK Building 5F
1-1-7 Shintomi
Chuo-ku, Tokyo 104-0041 |
|
|
|
Japan |
|
|
|
3- Fluidigm Europe, BV
Attn: Anja Wienecke
Flughafenstrasse 52a, Haus C
D-22335 Hamburg |
|
|
|
Germany |
|
|
|
FC shall order the Product in a purchase order (Purchase Order) and EAG shall confirm
each order in writing, by e-mail or fax within 14 calendar days, provided that EAG must
accept all Purchase Orders that fall within FCs forecast specified in Section 6 below.
Each order shall identify the quantity of Products being ordered and the required delivery
date and delivery address. Deliveries shall be within 6 weeks after the effective date of
the order (or such longer period as may be specified in FCs order), unless a later date
was previously agreed by the Parties in writing. |
|
|
|
EAG is permitted to make partial deliveries and no penalty for minimum delivery will be
applied in this case. EAG agrees to notify FC promptly of any factor, occurrence or event
coming to its attention that may impact EAGs ability to meet any deliveries or other
requirements set forth in this Agreement, particularly that may cause a material delay in
delivery of Products, including any loss or reassignment of key employees, threat of strike
or major equipment failure. |
|
|
|
The Products manufactured and delivered by EAG will be inspected and tested, as required,
by FC within forty-five (45) days of receipt (the Acceptance Period). If during the
Acceptance Period any Products are found to be not new, defective in material or
workmanship and/or fail to meet the specifications set forth in Enclosure 1 below,
Reclaimed Products will be repaired or replaced, as outlined in Section 11 hereafter. |
Page 2 of 34
§ 4 |
|
Minimum Quantity and Minimum Delivery Lot |
|
|
|
Subject to the terms and conditions of this Agreement, FC shall order, and subject to
timely delivery of conforming units, will buy and take delivery of a total of [ * * * ]. The orders
for the following minimum number of Products per calendar year are to be purchased by FC
in good time to allow delivery before the end of the specified calendar year: |
|
|
|
[ * * * ] |
|
|
|
[ * * * ] |
|
|
|
[ * * * ] |
|
|
|
[ * * * ] |
|
|
|
[ * * * ] |
|
|
|
Minimum delivery lot per single order is [ * * * ]. In the event FC orders
deliveries with fewer than [ * * * ] per delivery lot, each such delivery lot will
be regularly invoiced plus a lump sum penalty of [ * * * ] per delivery lot. |
|
|
|
EAGs sole remedy for FCs failure to meet the minimum purchase requirements as set forth
in this Section 4 shall be as follows: Should the ordered number of units be less than [ * * * ]
of the above minimum number for each of [ * * * ], then EAG shall have the
right to terminate this Agreement on written notice to FC within [ * * * ] after the
end of [ * * * ]. |
|
§ 5 |
|
Forecast |
|
|
|
A revolving [ * * * ] forecast will be given from FC to EAG. The forecast covers [ * * * ] and will be given [ * * * ]
before the [ * * * ] forecast period
begins. It will be submitted on the appropriate form Enclosure 3 or a similar form. |
|
|
|
The forecasted unit orders for the next [ * * * ] represent a firm order to be delivered in
that [ * * * ]. The corresponding written order is to be enclosed with the forecast. |
|
|
|
The figure forecasted for [ * * * ], may vary by [ * * * ] before used in next regular
forecast as firm order. |
|
|
|
The figure forecasted for [ * * * ], may vary by [ * * * ] before used in next regular
forecast as figure for [ * * * ]. |
|
|
|
The figure forecasted for the [ * * * ], is considered [ * * * ] |
|
|
|
The forecast is used by EAG to control the production of the Product and EAG agrees to
delivery within [ * * * ] weeks of receiving FCs order (or such longer period as may be
specified in FCs order). |
|
§ 6 |
|
Conditions of Prices, Packaging and Payment |
|
|
|
The prices are to be understood exclusive of VAT/sales tax, administrative or other fees,
deductions, customs charges, transport and insurance. The prices are including solid
cardboard packing and vary in accordance with the staggered price list (Enclosure 2). |
|
|
|
Price conditions: net, for delivery EXW Hamburg (Incoterms 2000). |
|
|
|
|
|
|
|
Export packing:
|
|
Product in cardboard box on a pallet suitable for
airfreight, transportation by truck or by sea freight in an LCL container. |
|
|
|
|
|
|
|
Payment:
|
|
net in EUROS by check or wire transfer, within 30 days from date of invoice. |
|
|
Place of Delivery: EXW EAG warehouse (Incoterms 2000). |
Page 3 of 34
§ 7 |
|
Staggered Prices |
|
|
|
The Product price depends on the effectively delivered quantity within a calendar year.
The valid prices are shown in the staggered price list (Enclosure 2). |
|
|
|
The first units to be delivered in each calendar year are invoiced at a unit price as per
staggered price list for the number of units to be delivered. Each additional set of units
to be delivered later within the same calendar year will be invoiced at an actual
staggered unit price (ASUP) resulting from the staggered price list for the sum of all
units actually delivered in the respective calendar year. |
|
|
|
ASUP will also be applied for all units having been delivered and invoiced earlier in that
calendar year. For this purpose, each invoice for new orders within a calendar year will
be accompanied by a credit note for the difference between previously invoiced prices and
ASUP, if applicable. |
|
§ 8 |
|
Price Adjustment to Cost Situation |
|
|
|
Prices of Staggered Price List can be reviewed and adjusted once annually, beginning as of
January 1, 2007. Thereafter, EAG is entitled to change prices if justified by a change in
costs pertaining to the manufacture of the Product. Changes in price must be announced at
least 3 months before the price change becomes effective. |
|
|
|
Annual changes in price may not exceed the changes contained in the index published by the
German Federal Office of Statistics (GFOS) as part of the specialist series 17, sub-series
II, Prices and price indices for commercial products (manufacturing prices) under no.
33205 of the GP systematic Instrument, apparatus and devices for certain chemical and
physical measuring or examinations. The index multiplier is the change of the annual mean
value, published each year by the GFOS. |
|
§ 9 |
|
Documentation |
|
|
|
FC shall be entitled to receive from EAG software files of user documentation in EAGs
standard form, to enable FC to modify such software for its applications. After return of
modified files to EAG, EAG will ensure that the modified documentation is included with the
Product. |
|
|
|
FC shall also receive software files of technical illustrations, test instructions, parts
lists, etc., which pertain to the Product. The copyright remains with EAG, but is hereby
licensed to FC in accordance with FCs distribution and other specified rights under this
Agreement. FC shall use the documentation exclusively with respect to this Agreement. |
|
|
|
Any Product supplied will be accompanied by a certificate as shown in Enclosure 4 (which
Enclosure shall be updated from time to time to accurately reflect the then current
situation). Any related marketing material produced by FC needs to show in prominent
position the disclaimer as given in Enclosure 5 (which Enclosure shall be updated from
time to time to accurately reflect the then current situation). |
|
§ 10 |
|
Modifications |
|
|
|
Applications for modifications to the Product must be made in writing to FC and the
modifications must be authorized in writing by FC. Modifications carried out without prior
written confirmation from FC are not permissible. FC shall not unreasonably withhold
agreement to any reasonable proposal made by EAG for Product modifications.
|
Page 4 of 34
|
|
Should FC make a written request for modifications to the Product, it is in EAGs
discretion to effect these modifications, provided that EAG shall not unreasonably
withhold agreement to any reasonable proposal made by FC for product modification. All
pre-approved costs related to the modifications requested by FC will be covered by FC. EAG
is not obliged to carry out modifications to Products which have already been manufactured
or delivered. |
|
§ 11 |
|
Warranty |
|
|
|
|
EAG warrants to be owner of licensed rights outlined in
Section 1 above.
This includes
limited licenses for FCs end users to use the Product as an Authorized
Thermal Cycler under all patent or contract rights controlled
by Applied Biosystems (aka Applera Corporation)
and/or Roche Molecular Systems as defined in
Authorization Notice Enclosure 4. EAG is not aware of any third party patent rights that the sale or use of the Products
may be infringing in view of the licenses granted hereunder. |
|
|
|
|
|
EAG represents and warrants that all Products will be new, will conform to the specifications
set forth herein (or as may otherwise be mutually agreed by the Parties in writing) and will be free
from defects in material and workmanship for a period of 15 months
from the delivery date of the Products to FC. |
|
|
|
|
|
EAG shall have discretion as to whether the defective Product or accessories or any part thereof should be replaced or are to be repaired by FC without
FC bearing the costs of the materials. This
warranty does not cover defects, over which EAG has no
influence, such as natural wear and tear, acts of God, incorrect treatment, tampering by FC or
a third party, excessive use, or extreme ambient influences. |
|
|
|
|
FC will report all warranty and replaced service parts via [***] (as specified in Section 15
below) reporting to EAG. |
|
|
|
|
Deliveries to EAG of unsatisfactory warranty Products,
clearly labeled as such, shall be
made at FC expenses. Replacement deliveries from EAG to
FC shall be made at EAGs expense. |
|
|
§ 12 |
|
Liability |
|
|
|
|
12.1 IN NO EVENT WILL EITHER PARTYS LIABILITY ARISING OUT OF THIS
AGREEMENT EXCEED THE GREATER OF (a) TWO HUNDRED FIFTY THOUSAND DOLLARS (US $250,000) OR
(b) THE AGGREGATE AMOUNTS PAID OR PAYABLE BY FC TO EAG UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY
BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, OR INCIDENTAL
DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER
OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, ARISING OUT OF THIS AGREEMENT. |
|
|
|
12.2 The limitations of Section 12.1, however,
shall not apply to
(i) liability to Applied Biosystems for infringement of
intellectual property rights under Section 22,
(ii) any other liability to Applied Biosystems under Section 22, or
(iii) breaches of the CDA with respect to confidential information disclosed in connection with this Agreement |
|
|
§ 13 |
|
No Compete Clause |
|
|
|
FC shall refrain from manufacturing and/or selling products, in standalone form, of another
make that are identical or similar to the Product. FC shall also abstain in every other
respect from any direct or indirect competition for the Product, for sale in standalone
form, with EAG, including by means of trusts or third parties, legal and commercial
entities or private individuals; this includes any entity that is
controlled by or controls FC including those, which are acquired at a later date or granted a controlling
influence. |
Page 5 of 34
|
|
In particular FC shall not, directly or indirectly, act as distributor, dealer, commission
merchant or commercial agent for a third party with regard to identical or similar products
for sale in standalone form. Exceptions require the prior written consent of EAG. FC at the
date hereof, is not preparing and not engaged in the production or distribution of other
similar items to the Products. |
|
|
|
Notwithstanding the foregoing in this Section 13, in the case of EAGs sustained inability
to supply for reasons other than Force Majeure, as specified in Section 14, both Parties
will co-operate in good faith to resolve the difficulty to both Parties satisfaction, or
if unable to so resolve the difficulty, to use the documentation and convey rights (only to
the extent EAG is so able) necessary for production to enable FC or third party to make or
have made the Product involved. It is the duty of FC to determine the freedom to operate in
such cases and especially not to infringe ABIs IP rights. |
|
|
|
EAG agrees not to sell or otherwise provide the Product (or any identical or similar
product that has been specifically adapted to receive FC microfluidic chips) to any person
or entity other than FC, during and two (2) years after the term of this Agreement. |
|
§ 14 |
|
Force Majeure |
|
|
|
No failure or omission by the Parties hereto in the performance of any obligation of this
Agreement shall be deemed a breach of this Agreement or create any liability if the same
shall arise from any cause or causes beyond the control of the Parties, including but not
limited to the following: act of God; acts of omissions of any government; any rules,
regulations or orders issued by any governmental authority or by any officer, department,
agency or instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot, strikes and lockouts; and invasion; and provided that such
failure or omission resulting from one of the above causes is cured as soon as practicable
after the occurrence of one or more of the above-mentioned causes. |
|
|
|
This applies only if the disabled Party informs the other Party as soon as possible about
the extent and the grounds of the disabling cause or causes. |
|
|
|
Should the disabling circumstance(s) last longer than three (3) months, the other Party can
terminate the Agreement without a period of notice and/or proceed in accordance with
Section 13 Para. 3. |
|
§ 15 |
|
Service, Spare Parts |
|
|
|
FC is responsible for the service of the Products. FC may delegate service responsibility
to its distribution partners. EAG will support service by training of the trainers of FC as
per Section 16 below. |
|
|
|
FC will purchase and keep on stock a sufficient number of spare parts to fulfill service
needs. FC agrees to order minimum spare parts value of [***] - per spare parts
shipment. |
|
§ 16 |
|
Training of Service Trainers |
|
|
|
Not later than the date of signature of this Agreement FC shall supply EAG with the names
of up to three key service managers of FC with defined responsibilities for a training as
service trainers. They will each receive a training course by EAG of the technical service
for the Product in a way which enables them to commence service training themselves to service
engineers of FC or to service engineers of international
distribution partners of FC. |
Page 6 of 34
|
|
EAG shall provide this training course regarding the Product and regarding reporting
system via [***] for such key service personnel of FC in Hamburg,
Germany. EAG shall bear the cost of training, lodging and lunch within EAGs facilities.
Other expenses, traveling fees and salary shall be borne by FC. Should a trained key
service person leave FC then FC shall bear all costs for the renewed training of a
successor. |
|
|
|
Any training which may be requested by FC in addition to the aforesaid provision shall be
at the expense of FC. |
|
§ 17 |
|
Confidentiality - Publicity |
|
|
|
17.1 A Confidential Disclosure Agreement (CDA) has been signed by the Parties in Sept.
2004 (Enclosure 6). For purposes of this Agreement, the Purpose in the CDA shall include
the performance of obligations and the exercise of rights pursuant to this Agreement.
Additionally terms of this Agreement are confidential as set forth in Section 17.3.
Information about this Agreement shall be released only after mutual agreement of the
Parties, except as set forth in Section 17.3. |
|
|
|
17.2 With respect to FCs distribution of any written information to third parties,
including but not limited to advertising, brochures, catalogs, promotional and sales
material, and public relations material, EAG shall only have the right to prescribe changes
regarding references to, or descriptions of: Applied Biosystems, PCR, the amplification
patent rights, the amplification system patent rights, the PCR instrument patents, PCR
licenses or authorizations, or this Agreement. FC agrees to comply provided that such
prescriptions are reasonable in nature and documented by EAG as appropriate for accuracy. |
|
|
|
17.3 Except as provided in Enclosure 5 and Section17.2, each Party shall, to the extent
reasonably practicable, maintain the confidentiality of the provisions of this Agreement in
accordance with the CDA and shall refrain from disclosing the terms of this Agreement
without prior written consent of the other Party, except (i) to the extent either Party
concludes in good faith that such disclosure is required by any court or other governmental
body or is otherwise required under applicable law or regulation, in which case the other
Party shall be notified in advance; (ii)to legal counsel of the Parties; (iii) in
connection with the requirements of a public offering or securities filing; (iv) in
confidence, to accountants, banks, and financing sources and their advisors; (v) in
confidence, in connection with the enforcement of this Agreement or rights under this
Agreement; or (vi) in confidence, in connection with a merger or acquisition or proposed
merger or acquisition, or the like. |
|
§ 18 |
|
Compliance and Quality |
|
|
|
It shall be the duty of each Party to comply fully with all applicable laws, regulations
and ordinances and to obtain and keep in effect licenses, permits and other governmental
approvals (federal, state or local) necessary or appropriate to carry on activities
hereunder. |
|
§ 19 |
|
Assignment |
|
|
|
This Agreement shall not be assigned by either Party except in any assignment or transfer
of all or substantially all of such Partys business related to this Agreement. |
Page 7 of 34
§ 20 |
|
Duration of Agreement, Termination of Agreement with Good Reason |
|
|
|
20.1 This Agreement is valid as of Effective Date and will continue for a minimum of five
(5) calendar years after Effective Date provided terms and conditions are met by both
Parties. After five years from Effective Date, this Agreement may be terminated with a
period of written notice of not less than six months. |
|
|
|
|
20.2 The duration of Agreement automatically extends for another calendar year if not
cancelled by FC at least six (6) months before the end of minimum duration date or at least
six (6) months before the end of any Agreement extension period. Provided that FC meets or
exceeds unit forecasts, EAG will give FC at least one (1) year notice of termination before
the end of the minimum duration date or any Agreement extension period. |
|
|
|
|
20.3 Either Party can terminate the Agreement with good reason especially in the event of
the other Party not fulfilling one or more of its material contractual obligations and then
not rectifying this situation within sixty (60) days of receipt of a written warning to
this effect. Timely delivery of conforming Product units shall - amongst others be deemed
to be a material contractual obligation. |
|
|
|
20.4 Each Party may also terminate this Agreement with immediate effect and with no
liability for compensation in the event of the other Party becoming insolvent or filing for
bankruptcy. |
|
|
|
20.5 Should EAG terminate the Agreement with the reason of not having received orders for
at least the agreed minimum number minus 25% as of Section 4, FC has the right to place,
and EAG shall accept and fulfill, one final order for delivery within the commencing period
of termination. |
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20.6 FC shall be entitled to terminate this Agreement for its convenience on at least sixty
(60) days prior written notice to EAG, provided that no such termination shall be effective
prior to the second anniversary of the Effective Date. |
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20.7 At the time of termination of this Agreement, FC will buy all Products still on stock,
provided the stock is resulting from FCs forecast (Enclosure 3) |
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20.8 The Parties rights and obligations pursuant to the following sections shall survive
termination or expiration of this Agreement: Sections 1, 11, 12, 17, 18, 19, 21, 22, and
23. FC shall be entitled to distribute all Products purchased from EAG. All payment
obligations of FC under this Agreement shall survive termination or expiration. |
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§ 21 |
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Court of Jurisdiction and Applicable Law |
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21.1 This Agreement shall be governed by and interpreted in accordance with the laws of the
State of New York, U.S.A. without reference to conflict of laws principles. |
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21.2 All disputes arising out of this Agreement shall be finally settled by final and
binding arbitration in New York, New York before, and under the then current
commercial arbitration rules of, the International Chamber of Commerce, subject to the
additional limitations set forth herein. The arbitration shall be conducted by a single
arbitrator appointed in accordance with such rules. No discovery (e.g., document
production; depositions) will be permitted. The arbitration shall be conducted in the
English language, and all documentary evidence shall be presented in English;
documentary evidence not originally in English shall be presented both in the original
language and in English translation. The Parties agree that the decision of the arbitrator
shall be final and binding. The arbitration shall take no more than one day, and each Party
shall have a total of up to four (4) hours to present/rebut its case on that day, with the
arbitrator announcing the decision at the end of such presentations/rebuttals. Judgment on
any decision made by the arbitrator may be entered and enforced in any court of competent
jurisdiction. All fees and charges by the International Chamber of Commerce shall be
shared equally by the Parties unless otherwise specified by the arbitrator; each Party
shall be responsible for the payment of all fees and expenses
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Page 8 of 34
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connected with the presentation of its respective case, provided that the arbitrator may
in his/her discretion award to the prevailing Party the costs and expenses incurred by the
prevailing Party in connection with the arbitration proceeding. The arbitration shall be
confidential. |
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§ 22 |
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Indemnification |
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22.1 EAG holds limited license rights under U.S. Patents Nos. 5,038,852 and 5,333,675,
describing and claiming automated apparatus suitable for performing the PCR process, any
apparatus claim issuing from an application claiming priority of U.S. application Serial
No. 833,368 or U.S. application Serial No. 899,061 (both filed in 1986), and apparatus
claims in corresponding counterpart patents and patent applications in other
countries for PCR thermocycling practiced in fields of research and development, quality
assurance or control, environmental testing, plant diagnostics, identity testing (other
than parentage testing for humans) and forensics as defined in section 1. |
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22.2 EAG shall defend FC or assist FC at its own discretion in defending FC against any
claim or action, with the exemption of i) claims based on the Higuchi Patent ii) the flat
silver chuck and related vacuum system and iii) the functions of these two components, for:
(a) infringement by any Product, or the use thereof, of any third party patent, copyright,
trade secret or other intellectual property right other than those caused by product
specific modifications. (b) Defective Products manufactured by EAG, to the extent such
defects are caused by EAGs failure to manufacture the Products in conformance with the
specifications and with EAGs warranties as set forth in this Agreement, or by EAGs
misconduct or negligence; or (c) a breach by EAG of any license or other intellectual
property right of any third party licensor of the Products other than a breach by EAG of
any license or other intellectual property right of Applied Biosystems which breach was
solely caused by FC or by Product specific modifications. |
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22.3 FC shall reasonably cooperate in EAGs defense of any such claim or action, and FC
shall not engage in any actions or communications that negatively affect EAGs defense or
settlement of the claim or action. In no event shall FC defend or settle any such claim or
action without EAGs prior written approval. |
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22.4 (w) FC agrees to take all reasonable precautions to prevent death, personal injury,
illness and property damage from the use of Products. FC shall defend, at its expense
(including without limitation attorneys fees and court costs), EAG against any claim or
action for:(a) infringement by any Product, or the use thereof, of any third party patent,
copyright, trade secret or other intellectual property right solely due to the differences
between the Product and another Eppendorf Mastercycler; (b) the use of the Products and all
costs incurred as a result of a Product withdrawal or recall (collectively Customer
Losses) to the extent such Customer Losses are caused by FC, or by FCs misconduct or
negligence; or (c) a breach by FC or their partners of any license or other intellectual
property right of Applied Biosystems with respect to the Products. |
(x) FC shall
pay any amounts awarded against EAG, or settlements entered into by FC on
behalf of EAG, to the extent attributable to any such claim or action under (a), (b), or (c) of Section 22.2(w) above.
(y) As a
condition of FCs liability and obligations under this Section 22.2, however,
(i) EAG shall notify FC in writing of such claim or action promptly (and in no event later
than twenty (20) calendar days) after learning of such claim or action, (ii) except as set
forth hereinbelow, FC shall have the exclusive right to control the defense and settlement
of any such claim or action, provided that any settlement shall be subject to the prior
written approval of EAG, which shall not be unreasonably withheld or delayed, (iii) EAG
shall reasonably cooperate in FCs defense of any such claim or action, and (iv) EAG shall
not engage in any actions or communications that negatively
Page 9 of 34
affect
FCs defense or settlement of the claim or action. In
no event shall EAG defend or settle any such claim or action without
FCs prior written approval.
Notwithstanding
the foregoing, EAG shall be entitled to joint (with FC) control of
the defense and settlement of the claim or action, at EAGs
expense and through legal counsel of its choosing; in such event any
settlement shall be subject to the prior written approval of both
Parties, which shall not be unreasonably withheld or delayed.
(z) Notwithstanding
the foregoing, FC shall have no liability or obligation with
respect to any claim or action resulting from an actual or alleged breach by EAG of the
first paragraph of Section 11.
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22.3 EAG represents and warrants that EAGs
agreement(s) with Applied Biosystems is/are substantially similar to
the April 15, 2000 THERMO CYCLER SUPPLIER AGREEMENT
between PE Corporation and Cepheid page 1 to 20 as such agreement was
available as of August 02, 2005 at:
http://contracts.onecle.com/cepheid/pe.supplier.2000.04.15.shtml) as
attached as Enclosure 7 (http Reference Agreement) and
that any differences between EAGs agreement(s) with Applied
Biosystems and the Reference Agreement (other than differences
directly resulting from differences between Cepheid products and EAG
Products) will not increase FCs potential or actual liability
under this Agreement. |
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§ 23 |
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Final Clauses |
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23.1 This Agreement contains the entire and only agreement between the Parties and
supersedes and cancels all prior written and/or oral agreements, undertakings and
negotiations between the Parties with respect to the subject matter hereof. |
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23.2 No amendments, changes, modifications or alterations of the terms and conditions
of this Agreement shall be binding upon either Party unless in writing and signed by both
Parties. Any waiver of this provision shall be made in each specific case in writing.
Documents transmitted by fax are considered to be in writing. |
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23.3 Each Party represents and warrants that it has full power and authority to enter into
this Agreement and to take all actions required by this Agreement and that each Partys
obligations under the Agreement do not conflict with its obligations under any other
agreement to which EAG or FC is a party. |
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23.4 The headlines are for orientation purposes only and do not form part of the Agreement. |
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23.5 Should any provision of this Agreement be invalid or unenforceable or should the
Agreement contain an omission, the remaining provisions shall be valid. In the place of an
invalid provision, a valid provision is presumed to be agreed upon by the Parties, which
comes economically closest to the one actually agreed upon; the same shall apply in the
case of an omission. |
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23.6 The Parties shall endeavor to settle amicably any disputes which result from the
execution of this Agreement. |
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§ 24 |
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Enclosures |
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The enclosures are integral part of the Agreement.
Enclosure 1 Description of Product
Enclosure 2 Staggered Price List
Enclosure 3 Forecast Form
Enclosure 4 Authorization Notice
Enclosure 5 Disclaimer
Enclosure 6 Confidential Disclosure Agreement
Enclosure 7 http Reference Agreement
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Page 10 of 34
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
representatives.
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South San Francisco, the
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17 August 2005
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Fluidigm Corporation |
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President / CEO |
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/s/ Gajus V. Worthington
Gajus V. Worthington
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Hamburg, the 4 Aug. 2005
Eppendorf AG
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/s/ Heinz Gerhard Koehn, Ph. D.
Heinz Gerhard Koehn, Ph. D.
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/s/ Michael Schroeder, Ph. D.
Michael Schroeder, Ph. D.
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Board Member, Technology
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Board Member, Marketing and Sales |
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Page 11 of 34
Enclosure
1 Page 1
Description
of Product and Specifications
A. Description:
Special brand version of Eppendorf Mastercycler personal
Special brand version of Eppendorf Mastercycler personal for FC, licensed for
PCR-Applications for the Fields described in section 1. [***]
Special
brand version of Eppendorf Mastercycler personal [***] to create the
following features on the Product:
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[***] |
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[***] |
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[***] |
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[***] |
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[***] |
Remark: [***]
FC supplies the [***]
Page 12 of 34
Enclosure 1 Page 2
B. Specifications:
Performance
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¡ |
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[***] |
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¡ |
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[***] |
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¡ |
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[***] |
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¡ |
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[***] |
Mechanical features and facilities
Software
Testing
Page 13 of 34
Enclosure 1 Page 3
Photo
showing [***]
[***]
To page 13: sub-page 1 of 8
Enclosure 1 Page 4
[***]
Position of [***]
[***]
[***]
To page 13: sub-page 2 of 8
Enclosure 1 Page 5
[***]
To page 13: sub-page 3 of 8
Enclosure 1 Page 6
[***]
To page 13: sub-page 4 of 8
Enclosure 1 Page 7
[***]
[***]
To page 13: sub-page 5 of 8
Enclosure 1 Page 8
[***]
[***]
To page 13: sub-page 6 of 8
Enclosure 1 Page 9
[***]
[***]
To page 13:
Sub-page 7 of 8
Enclosure 1 Page 10
[***]
[***]
To page 13:
Sub-page 8 of 8
Enclosure
2
Staggered price list
Prices per number of products to be delivered within one
Agreement Year
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[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
[***] and more units/a |
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price per unit |
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Euro |
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[***] |
License condition of prices:
Prices include the newly reduced up-front-fee-component of PCR license (fixed license portion) as
pre-announced by EAGs licensor. Possible reductions (or elimination) of this license fee by the
PCR licensor shall result in reductions.
The prices include PCR license, neglecting a price value for a device providing vacuum. Should PCR
license also be requested for a vacuum providing device by the licensor, the requested license has
to be borne by FC and above staggered prices will be revised correspondingly.
The prices include PCR license for the Product calculated on basis of Enclosure 1, (Description of
Product) with the chuck supplied and invoiced to EAG as specified. Should the licensor request
another price value for the chuck for the calculation of the PCR license, the requested license has
to be borne by FC and above staggered prices will be revised accordingly.
Page 14 of 34
Enclosure 3
Forecast Form
Special brand version of Eppendorf Mastercycler personal Quarterly Forecast
Forecast period (12 Months), revolving quarterly:
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Number of units |
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Article number |
Period of forecast |
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Estimated number of |
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5332 000.480 |
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5332 000.405 |
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5332 000.430 |
mon. - mon. yyyy |
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units correspond to: |
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120 V U.S.A. |
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230 V int. |
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100 V Japan |
1. Quart. |
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A fixed order Signature see below. |
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2. Quart. |
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Estimation with +/- 25 % variability |
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3. Quart. |
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Estimation with +/- 50 % variability |
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4. Quart. |
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Orientation figure only |
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Confirmation:
Number of units forecasted above for delivery in 1. Quarter herewith are firmly ordered. The
definitive composition of individual delivery lots and the delivery address for each lot must be
conveyed to EAG with [6 weeks] notice.
Place / Date:
Fluidigm Corporation
(Signature)
Our production planning is controlled by forecast instruments. For this purpose the above forecast
system is used. Please return the completed form before the middle of running quarter, to ensure
punctual delivery for the next quarter.
The form contains an
overview about the coming [***]. The figures for the [***].
The figure for the following [***] with the following forecast as indicated.
The figure for the [***].
Eppendorf AG
Page 15 of 34
Enclosure 4 Page 1
Authorization Notice
Page 16 of 34
Enclosure 4 Page 2
4.1 |
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EAG will affix permanently and prominently to each Authorized Thermal Cycler the
designation Authorized Thermal Cycler, its Serial Number and a direction to consult
the users manual for the license information. |
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4.2 |
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FC agrees to instruct the ultimate purchaser that transfer of the thermal cycler without
the Serial Number or the Notice shall automatically terminate the authorization granted
by this Agreement and the thermal cycler shall cease to be an Authorized Thermal
Cycler. |
Page 17 of 34
Enclosure 5
Disclaimer
Wording of the Disclaimer
Practice of the patented polymerase chain reaction (PCR) process requires a license. The
Mastercycler is an Authorized Thermal Cycler and may be used with PCR licenses available from
Applied Biosystems. Its use with Authorized Reagents also provides a limited PCR license in
accordance with the label rights accompanying such reagents.
Page 18 of 34
Enclosure 6
Confidential Disclosure Agreement
Confidential Disclosure Agreement
This
Agreement, effective as of 11 August 2004 (Effective Date), is made by and between Fluidigm
Corporation a corporation of the State of California, having an office at 7100 Shoreline Court,
South San Francisco, CA 94080. United States of America
(FLUIDIGM), and Eppendort AG, a German
corporation, having its headquarters at Barkhausenweg 1. D-22339
Hamburg. Germany (EAG), each
hereinafter also referred to as the Party or collectively
called the Parties.
WHEREAS,
FLUIDIGM is specialised in development and manufacturing of systems
with integrated fluid c
circuits for life-science research with a concentration on protein
structure determination.
WHEREAS, EAG is a leading biotechnology
company with a broad range of applications and products,
mainly in the fields of biotools, molecular technologies and
complementary products.
WHEREAS,
the Parties intend to engage in discussions concerning a co-operation for a new FLUIDIGM
application which possibly may include components of the EAG product
Mastercycler ep 18.Aug.04 (Purpose).
NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants contained
herein the Parties hereto hereby agree
as follows.
Confidential information
(Information), as used herein, shall mean any and all
information,
know-how, data and experience in whatever form, be it verbally, in writing, in drawing,
samples, displays, in software, on tapes, hard disks, diskettes or otherwise furnished by
either Party (hereinafter referred to as the Disclosing
Party) to the other Party (hereinafter
referred to as the Receiving Party) either directly or indirectly and disclosed to the
Receiving Party under this Agreement.
2. |
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The Receiving Party undertakes to keep confidential any and
all information, except |
a.
Information, which the Receiving Party can establish by competent proof was at the time of
disclosure or became after disclosure, part of the public domain by publication, except by
breach of the undertakings hereunder by the Receiving Party;
b. Information which
the Receiving Party can establish by competent proof was in its
possession already at the time of disclosure, and which was not acquired, directly or
indirectly, from the Disclosing Party, and information which the Receiving Party can establish
by competent proof was later received from a third party, provided,
however, that such
information was not obtained by said third party directly or indirectly from the Disclosing
Party;
c.
Information which the Receiving Party can establish by competent proof was
independently developed by the Receiving Party without use of the Confidential Informal on of
the Disclosing Party; or
d.
Information which was required to be disclosed by law or court or
governmental order;
3. |
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The Receiving Party undertakes to use any and all information
only for the Purpose agreed
upon in writing with the Disclosing Party, and will not, directly or indirectly, exploit or
otherwise use information for any other purpose, unless and until the Disclosing Party from
case to case explicitly accepts in writing prior to the proposed use of information for such
other purpose. |
Page 19 of 34
4. |
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The Receiving Party undertakes only to disclose Information
to those employees who need to
make use of Information in order to carry out agreed upon work for the Purpose, and guarantees
that every such employee is aware of and will respect the
confidentiality of Information. |
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5. |
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The Receiving Party agrees that its affiliates will treat Information as if they were
themselves a Party to this Agreement. Affiliate in this Agreement means any and all company or
individual related to the Receiving Party, whether the relationship be that of employment or
ownership or other, including any company or organization owning,
owned by or under common
control with the Receiving Party. |
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6. |
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Within thirty (30) days after the Disclosing Partys request, the Receiving Party shall
return to the Disclosing Party all Information, including all copies
thereof, unless another
agreement covering the use of Information has been made between the
Parties. |
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7. |
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Nothing herein and nothing said or written in connection with
the disclosure of Information
constitutes a promise or an undertaking to enter into further
cooperation between the Parties. |
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8. |
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The Parties further agree that the furnishing of Information
under this Agreement shall
not constitute any grant or license of any rights now or
hereafter held by the Parties. |
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9. |
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All obligations of the Parties with respect to the confidential information disclosed
under this Agreement shall cease five (5) years from the
Effective Date. |
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This Agreement shall be construed in accordance with and
governed by substantive German law.
The place of jurisdiction is the place of business of the defendant. |
IN WITNESS
WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized
representatives.
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FLUIDIGM
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EAG |
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/s/ Gajus Worthington
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/s/ Dr. Heinz G. Kohn
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/s/ Ernst Tennstedt |
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Dr. Heinz G. Kohn
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Ernst Tennstedt
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Chief Executive Officer
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Board Member
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Head of Legal |
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Technology
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Department |
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Date: |
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Date: 20.8.2004 |
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Page 20 of 34
Enclosure 7 (1 of 14)
http Reference Agreement
THERMAL CYCLER SUPPLIER AGREEMENT
This Agreement, effective April 15, 2000, is made by and between PE
Biosystems, a division of PE Corporation, a corporation of the State of Delaware,
having an office at 850 Lincoln Centre Drive, Foster City, California 94404 (PE
CORP), and Cepheid, a corporation of the State of California, having an office at
1190 Borregas Avenue, Sunnyvale, California 94089 (Thermal Cycler Supplier)
hereafter collectively referred to as The Parties.
Whereas, PE CORP has the power to convey limited rights for research and in
certain other fields under U.S. Patents Nos. 4,683,195, 4,683,202 and 4,965,188,
describing and claiming gene amplification processes including, among others, a
process known as the polymerase chain reaction (PCR) process, which are owned by
Roche Molecular Systems, Inc., and amplification process claims in corresponding
counterpart patents and patent applications in other countries, owned by F.
Hoffmann-La Roche Ltd (both of which are referred to collectively herein as
Roche).
Whereas, PE CORP offers to PCR users commercial and non-commercial license
rights under these patents and patent applications for automated performance of
the PCR process for research and certain other fields that include, inter alia,
an up-front fee component based on the capacity of thermal cyclers used to
perform the process.
Whereas, PE CORP offers to thermal cycler suppliers license rights under those
patents, namely, an authorization to distribute their instruments with a label
conveying to their customers rights under the up-front fee component of the PCR
licenses described above, and the right to promote their instruments as
Authorized Thermal Cyclers for PCR.
Whereas, PE CORP owns US. Patents Nos. 5,038,852 and 5,333,675, describing
and claiming automated apparatus suitable for performing the PCR process, and
apparatus claims in corresponding counterpart patents and patent applications in
other countries.
Whereas, PE CORP owns U.S. Patent No. 5,475,610, describing and claiming
improvements in thermal cycling apparatus for- PCR, including a pressing heated
cover, and corresponding counterpart patents and patent applications in other
countries.
Whereas, PE CORP owns U.S. Patent No. 5,656,493, describing and claiming an
amplification system comprising PCR reagents and a thermal cycler programmed to carry
out a PCR protocol.
Whereas, PE CORP owns patents and applications outside the U.S. that claim
priority of U.S. application Serial No. 899,061 (filed in 1986) and that claim
automated performance of the PCR process using certain programmed thermal cyclers.
Whereas,
PE CORP offers to PCR users license rights for research and
Pages 21 of 34
Enclosure 7 (2 of 14)
certain other fields under its amplification system
claims and automated method claims, and offers to thermal cycler suppliers the
right to pass such rights to their thermal cycler customers.
Whereas, PE CORP has offered to Thermal Cycler Supplier the above Roche process
rights, and the PE CORP systems, apparatus, automated method and pressing heated
cover rights separately or in combinations, and Thermal Cycler Supplier has
requested rights under the above Roche PCR process patents and PE CORP systems
patent rights only, without rights under the above identified PE CORP apparatus,
automated method and pressing heated cover patents and applications.
NOW, THEREFORE, The Parties agree as follows:
1. Definitions
For the purpose of this Agreement the terms set forth
hereinafter shall be defined as fellows;
1.1 AFFILIATE of a party to this Agreement shall mean an organization: a)
whose voting stock is controlled or owned directly or indirectly to the extent of
fifty percent (50%) or more by the party; b) which directly or indirectly owns or
controls fifty percent (50%) or more of the voting stock of the party; c) whose
majority ownership is directly or indirectly common to that of the party; or d)
defined under (a), (b), or (c) above except the amount of said ownership is less
than fifty percent (50%) but that amount is the maximum amount permitted by law
and Thermal Cycler Supplier has effective control.
1.2 AMPLIFICATION PATENT RIGHTS shall mean the nucleic acid amplification
processes, including particularly the PCR process, covered by: United States
Patents Nos. 4,683,195, 4,683,202 and 4,965,188; and any corresponding
amplification process claim in patents and patent applications in other
countries claiming priority of any of them. Amplification Patent Rights include
rights only under the identified Roche patents and applications. They do not
include rights, expressly or by implication, under any other Roche or PE CORP
patent or application, or to any claim to reagents, apparatus, or a system of
reagents and apparatus.
1.3 AMPLIFICATION SYSTEM PATENT RIGHTS shall mean U.S. Patent No. 5,656,493,
which describes and claims an amplification system comprising PCR reagents and a
thermal cycler programmed to carry out a PCR protocol.
Amplification System Patent Rights include rights only under the identified PE
CORP patent. They do not include rights, expressly or by implication, under any
other Roche or PE CORP patent or application, or to any claim to reagents,
apparatus, or an amplification process, even if that process is a result of the
natural and intended operation of the system.
1.4 AUTHORIZED REAGENT shall mean a DNA polymerase whose use in performance of
the PCR process is covered by the running-royalty component of a PCR process license
under the Amplification Patent Rights for internal research and development. The
running-royalty component of that license may be obtained
Pages 22 of 34
Enclosure 7 (3 of 14)
through the purchase of reagents bearing a
valid label conveying the
running-royalty component; alternatively, it may be purchased from PE CORP.
Other PCR process licenses in the Fields also require use of Authorized
Reagents.
1.5 AUTHORIZED THERMAL CYCLER shall mean a thermal cycler or temperature
cycling instrument whose use in automated performance of the PCR process is covered
by the automated-capacity, up-front fee component of a PCR process license under
the Amplification Patent Rights for internal research and development. The up-front
fee component of that license may be obtained through the purchase of a thermal
cycler or temperature cycling instrument bearing a valid label conveying the
up-front component; alternatively, it may be purchased from PE CORP. Other PCR
process licenses in the Fields also require use of an instrument whose use is
similarly covered, i.e., an Authorized Thermal Cycler.
1.6 FIELDS shall mean research and development, quality assurance or
control, environmental testing, plant diagnostics, identity testing (other than
parentage testing for humans) and forensics. The Fields specifically exclude
human and veterinary diagnostics.
1.7 NET SALES PRICE for thermal cyclers, temperature cycling instruments
and add-on modules distributed under this Agreement shall refer to the sales
price charged to unrelated Third-Party end users as to whom the price is not
affected by any other purchase, by any other dealing or by any special course of
dealing, and shall mean the gross invoice price to such an end user less the
following deductions where applicable: (i) discounts allowed and taken, in
amounts customary in the trade, and (ii) sales and/or use taxes and/or duties for
particular sales. No allowance or deduction shall be made for commissions or
collections, by whatever name known. Thermal cyclers, temperature cycling
instruments and add-on modules subject to this Agreement shall be separately
invoiced items.
For distributions other than sales described by the preceding
paragraph, including any sale, loan, lease, consignment, gift or other
distribution (i) to an end user that is Thermal Cycler,
Supplier itself, an Affiliate or a distributor, (ii) to an end user that enjoys a
special course of dealing with Thermal Cycler Supplier, an Affiliate or
distributor, or (iii) is under a reagent rental agreement or other arrangement
that is not a sale to an unrelated Third-Party end user as to whom the price is
unaffected by other purchase, dealing or special course of dealing, the Net Sales
Price shall be determined by reference to the Net Sales Price which would be
applicable in an arms length sale to a similarly situated unrelated Third-Party
end user as to whom the price is not affected by any other purchase, by any other
dealing or by any special course of dealing.
Pages 23 of 34
Enclosure 7 (4 of 14)
Net Sales Price shall be calculated on the basis
of sales or transfers to end users by Thermal Cycler Supplier, its Affiliate
or a distributor of either, as the case may be. In the event Thermal Cycler
Supplier is unable to account for end-user sales by any distributor, the Net
Sales Price shall be calculated as the price to the final distributor
multiplied by [**], which factor represents a [**] margin on sales to end
users by the distributor.
1.8 TERRITORY shall mean worldwide.
1.9 THIRD PARTY shall mean a party other than The Parties.
1.10 TEMPERATURE CYCLING INSTRUMENT, as used in this Agreement, shall mean an
instrument, whether in single or multiple modules, that includes a thermal cycler as
defined in Article 1.11 and additional structure for performing one or more other
functions.
1.11 THERMAL CYCLER, as used in this Agreement, shall mean an
instrument, whether in single or multiple modules, that is capable in itself of
automatically cycling samples in the PCR process.
2. GRANT
2.1 Upon the terms and subject to the exceptions and conditions of this
agreement, PE CORP grants to Thermal Cycler Supplier the following personal,
non-transferable, royalty-bearing, non-exclusive rights in the Territory
under the Amplification Patent Rights:
(a) Thermal Cycler Supplier is hereby authorized to sell and
distribute to end users under Thermal Cycler Suppliers name and
trademarks the specific thermal cyclers and temperature cycling
instruments described in Exhibit 1 (i.e. the Smart Cycler(R)
System, Smart Cycler(R) XC System and GeneXpert(TM) Prototype,
in the configurations described) and any thermal cycler or
temperature cycling instrument containing one or more I-CORE(TM)
modules (as defined in Exhibit 1) manufactured by Thermal Cycler
Supplier, but not otherwise to sell or distribute to thermal
cycler suppliers, with a label conveying to end users (including
Thermal Cycler Supplier itself) in the Fields the up-front
rights of PCR process licenses under the Amplification Patent
Rights as specified in the label set forth in Section 5.1 below,
that is, with an Authorized Thermal Cycler label; and
(b) Thermal Cycler Supplier may advertise and promote such
thermal cyclers and temperature cycling instruments as
described in Exhibit 1 and so labeled as Authorized Thermal
Cyclers for PCR.
The grant of this Section 2.1 conveys no right or immunity, express or
implied, under the Amplification System Patent Rights.
2.2 Upon the terms and subject to the exceptions and conditions of this
Agreement, PE CORP grants to Thermal Cycler Supplier a personal,
Pages 24 of 34
Enclosure 7 (5 of 14)
non-transferable, royalty-bearing, non-exclusive right
under the Amplification System Patent Rights to convey to end-user customers
(including Thermal Cycler Supplier itself) of Thermal Cycler Suppliers Authorized
Thermal Cyclers a non-exclusive license to use the same in the Fields in the
Territory. The grant of this Section 2.2 includes no right or immunity, express or
implied, under the Amplification Patent Rights.
2.3 No right, immunity, authorization or license is granted, expressly or by
implication, for any other purpose, or in any other field, including: to make, have
made, use or sell any polymerase (such as Taq), amplification reagent or kit; or to
perform PCR or nucleic acid amplification that is not fully licensed under the
Amplification Patent Rights. No right, immunity, authorization or license is
granted, expressly or by implication, under any patent or patent application that
is not expressly included in the Amplification Patent Rights, or the Amplification
System Patent Rights. Specifically, but without limitation, no right, immunity,
authorization or license is granted, expressly or by implication, under patents and
applications of PE CORP or Roche that cover apparatus, methods, or reagents for
real-time detection (for example, U.S. Patent No. 5,928,907 and published European
patent applications EP 872562 and EP 512334) or for homogeneous assay (for example,
U.S. Patents Nos. 5,210,015, 5,487,972, 5,538,848, all related to the 5 nuclease
assay).
2.4 Rights granted to Thermal Cycler Supplier by this Agreement are
personal to Thermal Cycler Supplier alone. Thermal Cycler Supplier shall have
no right to sublicense, assign or otherwise transfer or share its rights
hereunder.
2.5 Notwithstanding the prohibition of Section 2.4, Thermal Cycler
Suppliers rights to sell to end users under the grants of Sections 2.1 and 2.2
include the right to sell through Affiliates (so long as Thermal Cycler Supplier
reports and pays under this Agreement on their behalf) and through distributors
of Thermal Cycler Supplier and such Affiliates, as well as directly.
2.6 Thermal Cycler Supplier agrees not to promote, directly or through
distributors, the unlicensed use of the Amplification Patent Rights by the sale
of unauthorized thermal cyclers or temperature cycling instruments, or by selling
add-on modules for thermal cyclers or temperature cycling instruments other than
as additions to Authorized Thermal Cyclers.
3. FEES, ROYALTIES, RECORDS AND REPORTS
3.1 For the licenses and rights granted under Article 2, Thermal
Cycler Supplier shall pay to PE CORP:
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license issue fee of US$[**]; |
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for each Smart Cycler(R) System or Smart Cycler(R) XC
System thermal cycler as described in Exhibit 1 |
Pages 25 of 34
Enclosure 7 (6 of 14)
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(including all modules and
components), or any thermal cycler or temperature cycling
instrument containing one or more I-CORE(TM) modules (as
defined in Exhibit 1) having a maximum capacity, if fully
expanded, of more than [**] individual samples, delivered
or invoiced by Thermal Cycler Supplier or an Affiliate
after the effective date of this Agreement, US$[**] plus
[**] percent ([**]%) of the Net Sales Price, and for each
add-on module, [**] percent ([**]%) of the Net Sales Price; |
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for each GeneXpert(TM) Prototype temperature cycling
instrument as described in Exhibit 1 (including all modules
and components), or any thermal cycler or temperature cycling
instrument containing one I-CORE(TM) module (as defined in
Exhibit 1) having a non-expandable capacity of no more than
[**] individual sample, delivered or invoiced by Thermal
Cycler Supplier or an Affiliate after the effective date of
this Agreement, US$[**] plus [**] percent ([**]%) of the Net
Sales Price; and |
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for each thermal cycler or temperature cycling instrument
containing one or more I-CORE(TM) modules (as defined in
Exhibit 1) having a maximum capacity, if fully expanded, of at
least [**] but no more than [**] individual samples, delivered
or invoiced by Thermal Cycler Supplier or an Affiliate after
the effective date of this Agreement, US$[**] plus [**]
[**] percent ([**]%) of the Net Sales Price, and
for each add-on module, [**] percent ([**]%) of the
Net Sales Price. |
The license issue fee shall be paid on the effective date of this Agreement.
The per-thermal cycler payments specified in this Section 3,1 shall be paid as
specified in Sections 3.4 and 3.5. Each thermal cycler or temperature cycling
instrument for which those payments are paid shall be an Authorized Thermal
Cycler and shall be so designated pursuant to Article 5 hereof.
3.2 All amounts payable hereunder shall be payable in United States dollars.
Sales in other countries shall be converted to U.S. dollars based on the New York
rate of exchange as quoted in the Wall Street Journal for the last business day
of the applicable quarter. If not so published, The Parties may agree on a
substitute publication. In the event there is no comparable publication, the
applicable rate for such date by the appropriate governmental agency in such
country shall apply.
3.3 Thermal Cycler Supplier shall keep, and shall require its pertinent
Affiliates to keep, full, true and accurate books of account containing all
particulars necessary to show the amount payable to PE CORP under this Agreement.
Such books and the supporting data shall be open at all reasonable times, for three
(3) years following the end of the calendar year to
Pages 26 of 34
Enclosure 7 (7 of 14)
which they pertain (and access shall not be denied
thereafter, if reasonably available), to the inspection of an independent
inspector retained by PE CORP. If in dispute, such records shall be kept until
the dispute is settled.
Inspection shall be at PE CORPs expense, unless the inspector concludes that the
amount payable that is stated in a report is understated by five percent (5%) or
more, in which case expenses shall be paid by Thermal Cycler Supplier.
3.4 Thermal Cycler Supplier shall within thirty (30) days after the first
of each January, April, July and October deliver to PE CORP a true and accurate
accounting report. This report shall be on a country-by-country basis and shall
give such particulars of the business conducted by Thermal Cycler Supplier in
each country during the preceding three (3) calendar months as are
pertinent to accounting under this Agreement and shall be in accordance with,
and include all information specified in, the royalty report form attached
hereto as Appendix A.
The correctness and completeness of each report shall be attested to
in writing by the responsible financial officer of Thermal Cycler
Supplier or by Thermal Cycler Suppliers external auditor.
3.5 Simultaneously with the delivery of each royalty report,
Thermal Cycler Supplier shall pay to PE CORP the monies then due under this
Agreement for the period covered by the report. Each report and payment shall be
sent by the due date to the following address:
PE Biosystems
PE Corporation
850 Lincoln Centre Drive
Foster City, California, 94404 U.S.A.
Attention: Director of Licensing
or to any address that PE CORP may advise in writing.
3.6 If Thermal Cycler Supplier shall fail to pay any amount owing under this
Agreement by the due date, the amount owed shall bear interest at two percent (2%)
over the Citibank NA base lending rate (prime rate) from the due date until
paid, provided, however, that if this interest rate is held to be unenforceable
for any reason, the interest rate shall be the maximum rate allowed by law at the
time the payment is due.
3.7 Failure of Thermal Cycler Supplier to pay any amount specified
under this Agreement within thirty (30) days after the due date will give PE
CORP the right to terminate under Section 6.7.
3.8 If all patents included in the Amplification Patent Rights expire
before all patents included in the Amplification System Patent Rights, or
vice versa, the per-thermal cycler payments
Pages 27 of 34
Enclosure 7 (8 of 14)
specified in Section 3.1 shall thereafter be reduced
to the amount PE CORP is then charging for the remaining claims.
4. PAST SALES SALES AND ACTIVITIES
4.1 On the effective date of this Agreement, Thermal Cycler Supplier shall
pay to PE CORP the sum of $[**]. In consideration thereof all thermal cyclers and
temperature cycling instruments delivered or invoiced by Thermal Cycler Supplier
and its Affiliates (including thermal cyclers and temperature cycling instruments
delivered to themselves for use) prior to the effective date of this Agreement
shall be considered Authorized Thermal Cyclers subject to the conditions of
Section 4.2 and 5.3; and all earlier use of such thermal cyclers or temperature
cycling instruments by customers, direct or indirect, of Thermal Cycler Supplier
shall be deemed to have been use of a thermal cycler or temperature cycling
instrument within the grant of this Agreement. This section does not apply to
thermal cyclers or temperature cycling instruments already authorized by PCR
users.
4.2 Thermal Cycler Supplier shall send to the original end-user customers of
the thermal cyclers and temperature cycling instruments that are the subject of
Section 4.1, Authorized Thermal Cycler notices in accord with Section 5.1 with a
means reasonably satisfactory to PE CORP to relate each such notice to the
appropriate thermal cycler or temperature cycling instrument. Any such thermal
cycler or temperature cycling instrument not having an authorization notice within
one hundred and twenty (120) days after the effective date of this Agreement shall
cease to be an Authorized Thermal Cycler unless Thermal Cycler Supplier establishes
to the reasonable satisfaction of PE CORP that (a) the thermal cycler or
temperature cycling instrument falls within Section 4.1 and (b) the Authorized
Thermal Cycler notice for the thermal cycler or temperature cycling instrument has
not been applied to another instrument.
5. AUTHORIZATION NOTICE
5.1 Thermal Cycler Supplier agrees to include prominently in the front of
the users manual for each Authorized Thermal Cycler, and for no other thermal
cycler or temperature cycling instrument, a Notice as specified from time to
time by PE CORP. Unless and until PE CORP reasonably instructs differently, the
Notice shall be:
AUTHORIZED THERMAL CYCLER
THIS INSTRUMENT, SERIAL NO. , IS AN AUTHORIZED THERMAL
CYCLER. ITS PURCHASE PRICE INCLUDES THE UP-FRONT FEE COMPONENT OF A LICENSE UNDER THE
PATENTS ON THE POLYMERASE CHAIN
REACTION (PCR) PROCESS, WHICH ARE OWNED BY ROCHE MOLECULAR SYSTEMS INC. AND F.
HOFFMANN-LA ROCHE LTD, TO PRACTICE THE PCR PROCESS FOR INTERNAL RESEARCH AND
DEVELOPMENT USING THIS INSTRUMENT. THE RUNNING ROYALTY COMPONENT OF THAT LICENSE MAY
BE PURCHASED FROM PE BIOSYSTEMS OR OBTAINED BY PURCHASING
AUTHORIZED REAGENTS. THIS INSTRUMENT IS ALSO AN AUTHORIZED THERMAL CYCLER FOR USE
WITH APPLICATIONS LICENSES AVAILABLE FROM PE BIOSYSTEMS. ITS USE WITH AUTHORIZED
REAGENTS ALSO
Pages 28 of 34
Enclosure 7 (9 of 14)
PROVIDES A LIMITED PCR LICENSE IN ACCORDANCE WITH THE LABEL RIGHTS ACCOMPANYING SUCH
REAGENTS. PURCHASE OF THIS PRODUCT DOES NOT ITSELF CONVEY TO THE PURCHASER A COMPLETE
LICENSE OR RIGHT TO PERFORM THE PCR PROCESS. FURTHER INFORMATION ON PURCHASING
LICENSES TO PRACTICE THE PCR PROCESS MAY BE OBTAINED BY CONTACTING THE DIRECTOR OF LICENSING AT PE
CORPORATION, 850 LINCOLN CENTRE DRIVE, FOSTER CITY, CALIFORNIA 94404.
NO RIGHTS ARE CONVEYED EXPRESSLY, BY IMPLICATION OR ESTOPPEL TO ANY PATENTS ON
REAL-TIME METHODS, INCLUDING BUT NOT LIMITED TO 5 NUCLEASE ASSAYS, OR TO ANY
PATENT CLAIMING A REAGENT OR KIT.
PE BIOSYSTEMS DOES NOT GUARANTEE THE PERFORMANCE OF THIS INSTRUMENT.
5.2 Thermal Cycler Supplier agrees to affix permanently and prominently to
each Authorized Thermal Cycler the designation Authorized Thermal Cycler, its
Serial Number and a direction to consult the users manual for license
information.
5.3 Thermal Cycler Supplier further agrees to instruct the ultimate
purchaser that transfer of the thermal cycler or temperature cycling instrument
without the Serial Number or the Notice shall automatically terminate the
authorization granted by this Agreement and the thermal cycler or temperature
cycling instrument shall cease to be an Authorized Thermal Cycler.
5.4 To avoid confusion among thermal cycler users, Thermal Cycler Supplier
agrees not to designate or refer to thermal cyclers or temperature cycling
instruments covered by this Agreement as licensed unless it fully and
simultaneously explains that the thermal cyclers or temperature cycling
instruments do not convey with their purchase a complete license under the
Amplification Patent Rights.
5.5 No Authorization Notice shall be supplied with an add-on module
or anything else which is less than a complete thermal cycler or
temperature cycling instrument.
6. TERM AND TERMINATION
6.1 This Agreement, unless sooner terminated, shall continue until the
expiration of the last-to-expire of the patents under which rights are
granted in this Agreement.
6.2 This Agreement shall terminate upon a holding of invalidity or
unenforceability of all patent claims licensed hereunder by a final court
decision from which no appeal is or can be taken.
6.3 Thermal Cycler Supplier may terminate this Agreement for any reason by
giving written notice to PE CORP and ceasing to advertise or promote its thermal
cyclers or temperature cycling instruments as described in Exhibit 1 as
Authorized Thermal Cyclers. Such termination shall be effective ninety (90)
days after said notice or
cessation, whichever is later.
Page 29 of 34
Enclosure 7 (10 of 14)
6.4 The decision of a Court or Administrative body finding PE CORP liable
or culpable due to Thermal Cycler Suppliers manufacture of thermal cyclers or
temperature cycling instruments covered by this Agreement or due to the sale or
distribution of those thermal cyclers or temperature cycling instruments by
Thermal Cycler Supplier, an Affiliate or a distributor shall give PE CORP the
right to terminate this Agreement immediately upon notice.
6.5 This Agreement shall terminate upon (i) an adjudication of Thermal
Cycler Supplier as bankrupt or insolvent, or Thermal Cycler Suppliers
admission in writing of its inability to pay its obligations as they mature;
(ii) an assignment by Thermal Cycler Supplier for the benefit of creditors;
(iii) the appointment of, or Thermal Cycler Suppliers applying for or
consenting
to the appointment of, a receiver, trustee or similar officer for a
substantial part of its property; (iv) the institution of or any act of
Thermal Cycler Supplier instituting any bankruptcy, insolvency arrangement,
or similar proceeding; (v) the issuance or levy of any judgment, writ,
warrant of attachment or execution or similar process against a substantial
part of the property of Thermal Cycler Supplier; or (vi) loss of Thermal
Cycler Suppliers federal or state licenses, permits or accreditation
necessary for distribution of Authorized Thermal Cyclers.
6.6 PE CORP may terminate this Agreement immediately on notice upon any
change in the ownership or control of Thermal Cycler Supplier or of its assets.
For such purposes, a change in ownership or control shall mean that 30% or more
of the voting stock of Thermal Cycler Supplier becomes subject to the ownership
or control of a person or entity, or any related group of persons or entities
acting in concert, which person(s) or entity(ies) did not own or control such
portion of voting stock on the Effective Date hereof. PE CORP shall have the same
right to terminate upon any transfer of 30% or more of the assets of Thermal
Cycler Supplier.
6.7 Upon any breach of or default of a material term under this
Agreement by Thermal Cycler Supplier, PE CORP may terminate this Agreement upon thirty
(30) days written notice. PE CORP will withdraw such notice if, during the notice
period, Thermal Cycler Supplier fully cures such breach or default to PE CORPs
reasonable satisfaction.
6.8 Upon expiration or termination of this Agreement, all rights granted
to Thermal Cycler Supplier shall revert to or be retained by PE CORP.
6.9 Thermal Cycler Suppliers obligations to report and pay
royalties as to activities under this Agreement shall survive termination
or expiration.
7. CONFIDENTIALITY
PUBLICITY
Page 30 of 34
Enclosure 7 (11 of 14)
7.1 In advertisements, catalogs, brochures, sales
literature and promotional literature for Authorized Thermal Cyclers, Thermal
Cycler Supplier, Affiliates and distributors shall state the following
prominently in type and location:
Practice of the patented polymerase chain reaction (PCR)
process requires a license. The <Suppliers Model>
Thermal Cycler is an Authorized Thermal Cycler and may be used
with PCR licenses available from PE Corporation. Its use with
Authorized Reagents also provides a limited PCR license in
accordance with the label rights accompanying such reagents.
7.2 With respect to Thermal Cycler Suppliers distribution of any written
information to Third Parties, including but not limited to advertising, brochures,
catalogs, promotional and sales material, and public relations material, PE CORP
shall have the right to prescribe changes regarding references to, or descriptions
of: PE CORP, PCR, the patents under which rights are granted in this Agreement, PCR
licenses or authorizations, or this Agreement. Thermal Cycler Supplier agrees to
comply with PE CORPs reasonable prescriptions.
7.3 Except as provided in Sections 7.1 and 7.2, Thermal Cycler Supplier
shall, to the extent reasonably practicable, maintain the confidentiality of the
provisions of this Agreement and shall refrain from disclosing the terms of this
Agreement without the prior written consent of PE CORP, except to the extent
Thermal Cycler Supplier concludes in good faith that such disclosure is required
under applicable law or regulation, in which case PE CORP shall be notified in
advance.
8. COMPLIANCE AND QUALITY
8.1 In the exercise of any and all rights and in performance hereunder, it
shall be the duty of Thermal Cycler Supplier, not PE CORP, to comply fully with
all applicable laws, regulations and ordinances and to obtain and keep in effect
licenses, permits and other governmental approvals (federal, state or local)
necessary or appropriate to carry on activities hereunder.
8.2 PE CORP does not approve or endorse thermal cyclers or temperature
cycling instruments of Thermal Cycler Supplier in any way or for any purpose,
including PCR Quality and quality control with respect to suitability for PCR,
according to standards and requirements that may exist in the marketplace from
time to time, are the sole responsibility of Thermal Cycler Supplier.
9. ASSIGNMENT
9.1 This Agreement shall not be assigned by Thermal Cycler Supplier
(including without limitation any assignment or transfer that would arise
from a sale or transfer of Thermal Cycler Suppliers business).
9.2 PE CORP may assign all or any part of its rights and obligations under
this Agreement at any time without the consent of Thermal Cycler Supplier.
Thermal Cycler Supplier agrees to execute such further acknowledgments or other
instruments as PE CORP may reasonably request in
connection with such assignment.
Page 31 of 34
Enclosure 7 (12 of 14)
10. NEGATION OF WARRANTIES AND INDEMNITY
10.1 Nothing in this Agreement shall be construed as: (a) a warranty or
representation by PE CORP as to the validity or scope of any patent; (b) a
warranty or representation that the practice under the Amplification Patent
Rights or the Amplification System Patent Rights is or will be free from
infringement of patents of Third Patties; (c) an authority or obligation to
sublicense or to sue
Third Parties for infringement; (d) except as expressly set forth herein, conferring
the right to use in advertising, publicity or otherwise, in any form, the name of,
or any trademark or trade name of, PE CORP or Roche; (e) conferring by implication,
estoppel or otherwise any license, immunity or right under any patent owned by or
licensed to PE CORP or Roche other than those specified, regardless of whether such
patent is dominant or subordinate to the patents under which rights are granted in
this Agreement; (f) an obligation to furnish any know-how; or (g) creating any
agency, partnership, joint venture or similar relationship between PE CORP or Roche
and Thermal Cycler Supplier.
10.2 PE CORP MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
10.3 Thermal Cycler Supplier agrees to take all reasonable precautions to
prevent death, personal injury, illness and property damage from the use of
Authorized Thermal Cyclers. Thermal Cycler Supplier shall assume full
responsibility for its operation under the patents under which rights are granted
in this Agreement, the manufacture of Authorized Thermal Cyclers and the use
thereof and shall defend, indemnify and hold PE CORP harmless from and against all
liability, demands, damages, expenses (including attorneys fees) and losses for
death, personal injury, illness, property damage or any other injury or damage,
including any damages or expenses arising in connection with state or federal
regulatory action, in view of the use by Thermal Cycler Supplier, its officers,
directors, agents and employees of the Amplification Patent Rights and the
Amplification System Patent Rights, and the manufacture and use of Authorized
Thermal Cyclers except that Thermal Cycler Supplier shall not be liable to PE CORP
for injury or damage arising solely because of PE CORPs negligence.
11. MOST FAVORED LICENSEE
11.1 If after signature of this Agreement, PE CORP grants to any
unrelated third party, other than Roche, a license of substantially the
same scope as granted to Thermal Cycler Supplier
herein but under more favorable royalty rates than those given to Thermal Cycler
Supplier under this Agreement, PE CORP shall promptly notify Thermal
Cycler
Page 32 of 34
Enclosure 7 (13 of 14)
Supplier of said more favorable royalty rates, and Thermal Cycler Supplier shall
have the right and option to substitute such more favorable royalty rates for the
royalty rates contained herein. Thermal Cycler Suppliers right to elect said
more favorable royalty rates shall extend only for so long as and shall be
conditioned on Thermal Cycler Suppliers acceptance of all the same conditions,
favorable or unfavorable, under which such more favorable royalty rates shall be
available to such other third party. Upon Thermal Cycler Suppliers acceptance of
all such terms of said third-party agreement, the more favorable royalty rates
shall be effective as to Thermal Cycler Supplier on the date of execution of such
other third party license agreement. Notwithstanding the foregoing, in the event
that PE CORP and/or Roche shall receive substantial other nonmonetary
consideration, for example, such as intellectual property rights, as a part of
the consideration for its granting of such license to a third party, then this
Section 11.1 shall not apply.
12. GENERAL
12.1 This Agreement constitutes the entire agreement between The Parties as to
the subject matter hereof, and all prior negotiations, representations, agreements
and understandings are merged into, extinguished by and completely expressed by it.
This Agreement may be modified or amended only by a writing executed by authorized
officers of each of The Parties.
12.2 Any notice required or permitted to be given by this Agreement
shall be given by postpaid, first class, registered or certified mail, or by
courier or facsimile, properly addressed to the other party at the
respective address as shown below:
If to PE CORP:
PE Biosystems
PE Corporation
850 Lincoln Centre Drive
Foster City, California 94404 U.S.A.
Attn.: Director of Licensing
If to Thermal Cycler Supplier:
Cepheid
1190 Borregas Avenue
Sunnyvale, California 94089
Attn.: President
Either party may change its address by providing notice to the other. A
notice shall be deemed given four (4) full business days after the day of
mailing, or one full day after the date of delivery to the courier, or the
date of facsimile transmission, as the case may be.
12.3 Governing Law and Venue. This Agreement shall be deemed made in the
State of Delaware, and it shall be construed and enforced in accordance with the
law of the State of Delaware. The Parties agree that the exclusive jurisdiction
and venue for any dispute or controversy arising from this Agreement shall be in
the state or federal courts in Delaware.
12.4
Nothing in this Agreement shall be construed to require the
Page 33 of 34
Enclosure 7 (14 of 14)
commission of any act contrary to law, and
wherever there is any conflict between any provision of this Agreement or
concerning the legal right of The Parties to enter into this contract and any
statute, law or ordinance, the latter shall prevail, but the provision shall
be limited only to the extent necessary.
12.5 If any provision of this Agreement is held or discovered to both
parties satisfaction to be illegal, invalid or unenforceable in any
jurisdiction or to render any patent in that jurisdiction unenforceable, the
provision as it applies to that jurisdiction only shall be replaced
automatically, as part of the document, by a provision as similar in terms
as possible but not subject to such infirmity, in order to achieve the
intent of the parties to the extent possible. In any event, as to that
jurisdiction all other provisions of this Agreement shall be deemed valid
and enforceable to the full extent possible.
IN WITNESS WHEREOF, The Parties hereto have duly executed this Agreement on the date(s)
indicated below.
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PE BIOSYSTEMS |
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CEPHEID
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(THERMAL CYCLER SUPPLIER)
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By: |
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/s/ [Signature Illegible]
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By:
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/s/ THOMAS L. GUTSHALL |
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Title: V. P., Intellectual
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Title: CEO & Chairman |
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Date: 4/13/00 |
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Date: 4/6/00 |
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Page 34 of 34
exv10w18
[***] Indicates text has been omitted from this Exhibit pursuant to a confidential treatment
request and has been filed separately with the Securities and Exchange Commission.
Exhibit 10.18
HARVARD UNIVERSITY
Office for Technology and Trademark Licensing
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Holyoke Center, Suite 727
1350 Massachusetts Avenue
Cambridge, MA 02138 USA
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t. 617.495.3067
f. 617.495.9568
www.techtransfer.harvard.edu |
December 22, 2004
William M. Smith
Vice President, Legal Affairs
Fluidigm Corporation
7100 Shoreline Court
South San Francisco, CA 94080
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Subject: |
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Letter Agreement between Fluidigm and Harvard Concerning
Harvard Case Numbers [***] |
Dear Bill,
Fluidigm Corporation (Fluidigm) has licensed a number of Harvard University (Harvard) owned
patents and patent applications in the area of [***]. In particular,
on
October 15, 2000, Fluidigm (then known as Mycometrix Corporation) licensed Harvard Case
Numbers [***], all exclusively or co-
exclusively. Fluidigm has since terminated the license to Case Numbers [***],
and the parties have mutually agreed in this letter to hereby terminate Fluidigms
licenses to Case Numbers [***]. Fluidigm is retaining its licenses to Case
Numbers [***].
Fluidigm is concerned that Harvard or a licensee of Harvard may file claims in the previously or
hereby terminated Case Numbers [***] or [***] that cover inventions that are not
separately patentable (as described in 37 CFR 1.601(n)) from inventions covered, as of the date
of this letter, by the pending or issued claims in Case Numbers [***]. Fluidigm
further is concerned that Harvard or a licensee of Harvard may file claims in the previously or
hereby terminated Case Numbers [***] that (a) cover inventions that (i) are
separately patentable (as described in 37 CFR 1.601(n)) from inventions covered, as of the date
of this letter, by the pending or issued claims in Case Numbers [***], and
(ii) would meet the criteria of 35 USC §§102, 103 and 112 for patentability in Case
Numbers [***], and (b) are not now pending in any of Case Numbers [***].
Fluidigm believes it has rights (through its co-exclusive license
agreements to Case Numbers [***],)) to the not separately patentable inventions
and the separately patentable inventions, each as described above. Harvard is willing to address
Fluidigms concerns through this letter agreement.
Therefore, Harvard and Fluidigm agree as follows:
A) |
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Harvard agrees not to file, or to permit any other to file, claims in the previously or
hereby terminated Case Numbers [***], that cover inventions
that are not |
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separately patentable (as described in 37 CFR 1.601(n)) from inventions covered, as of
the date of this letter, by the pending or issued claims in Case Numbers [***],
without the prior express written consent of Fluidigm given after the date of this
letter. |
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B) |
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Harvard agrees to first offer to Fluidigm for licensing any claims, filed after the date of
this letter, in Case Number [***] that (a) cover inventions that (i) are separately
patentable (as described in 37 CFR 1.601(n)) from inventions covered, as of the date of
this letter, by the pending or issued claims in Case Numbers [***], and
(ii) would meet the criteria of 35 USC §§102, 103 and 112 for patentability in Case
Numbers [***], and (b) are not now pending in any of Case Numbers [***].
Fluidigm agrees to inform Harvard within one month
after Fluidigm receives express written notice form Harvard of the existence of said
claims (together with a copy of such claims) whether it desires a license to said claims, or
else Harvard shall be free to license them to other parties. Any license agreement
between Fluidigm and Harvard for said claims shall be negotiated in good faith by the
parties, have a field no broader than that now pending in Fluidigms license to Case [***],
have commercially reasonably royalties and be substantially like Harvards then current
license agreement with diligence requirements based on an acceptable development plan
provided by Fluidigm; provided, however, if the parties have not entered into such
license agreement within [***] after Fluidigm receives express written notice
from Harvard of the existence of the applicable claims (together with a copy of such
claims), then any license agreement between Fluidigm and Harvard for said claims shall
be on the same terms and conditions, and in the same form, as the parties license
agreements with respect to Case Numbers [***], (as in effect as of the date
of this letter), except that the license will be a non-exclusive license. |
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C) |
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Harvard represents that all patent applications in Case Numbers [***] have been
abandoned as of the date of this letter. Harvard agrees not to revive any such patent
application or to file any other patent application under Case Number [***]. |
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D) |
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Fluidigm agrees to pay [***] of Harvards reasonable out-of-pocket patent
expenses, incurred after the date of this letter agreement, in Case Number [***], and
within [***] of receiving an invoice from Harvard, up to a maximum aggregate
amount of [***]. Harvard agrees to inform Fluidigm if any US patent or patent
application in Case Number [***] becomes involved in an interference proceeding in the
US Patent and Trademark Office before Harvard has incurred any expense to allow
Fluidigm to terminate this letter agreement. |
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E) |
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The parties mutually agree that the license to Case Numbers [***] hereby are
terminated, and in connection therewith, promptly following the first meeting of the
Board of Directors of Fluidigm after such date, Fluidigm shall issue to Harvard [***]
of Common Stock of Fluidigm. Fluidigm represents that, in its last institutional
round of financing, Fluidigm sold shares of its Series D Preferred Stock at a price of
$2.80 per share. Harvard makes to Fluidigm, as of the date of the issuance of such [***],
the same representations and warranties with respect to such shares as those
representations and warranties set forth in Paragraph 4.2(c)(ii)(1), (2) and (3) of the |
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license for Case Number [***] regarding the Shares. Paragraphs 4.2(c)(iii) and (iv) of the
license for Case Number [***] shall apply as well to such [***]. |
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Fluidigm may terminate this Letter Agreement in writing with thirty (30) days written
notice to Harvard and owe no patent expenses incurred by Harvard in Case Number [***]
after said thirty day notice period. |
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F) |
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Harvard may terminate this Letter Agreement for any material breach by Fluidigm of its
obligations under Paragraphs (D) or (E) of this letter if Harvard gives express written
notice to Fluidigm of such breach and such breach is not cured within thirty (30) days
after Fluidigms receipt of such notice. |
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G) |
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Any disputes between the parties regarding this letter shall be resolved in the same
manner as disputes are resolved under Fluidigms licenses to Case Numbers [***]. |
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H) |
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The parties acknowledge that each party may currently have a different interpretation of
certain aspects of the three remaining license agreements. With respect to the three
remaining license agreements, the provisions of this letter are intended by the parties
solely to provide specific protective mechanisms regarding the subject matter licensed by
Harvard to Fluidigm. This letter shall not prejudice either parties interpretation or intent
of the three remaining license agreements, and is not intended to constitute the parties
interpretation of the three remaining license agreements (including the original intent
thereof). |
Sincerely,
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/s/ Robert Benson
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Robert Benson, PhD
Associate Director
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Agreed to:
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PRESIDENT AND FELLOWS
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Fluidigm Corporation: |
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OF HARVARD COLLEGE: |
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/s/ Gajus Worthington
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Joyce Brinton
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Signature |
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Director |
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Office for Technology and
Trademark Licensing
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President and CEO
Title |
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Date: Dec. 23, 2004
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Date: 12/23/04 |
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3
exv10w19
Exhibit 10.19
Oscient
SUBLEASE
This SUBLEASE is made as of March 25, 2004, by and between Genome Therapeutics Corporation, a
Massachusetts corporation having a place of business at 100 Beaver Street, Waltham, Massachusetts
02453 (Sublessor) and Fluidigm Corporation, a California corporation having an address at 7100
Shoreline Court, San Francisco, California 94080 (Sublessee).
WITNESSETH:
WHEREAS, pursuant to that certain Agreement of Lease dated as of November 9, 1999, by and
between Mountain Cove Tech Center, L.L.C., as landlord, (Master Lessor) and MJ Research
Company, Inc., as tenant, (Prime Lessor) (the Master Lease), Master Lessor leases to Prime
Lessor the land and building known as and numbered 7000 Shoreline Court, San Francisco, California
(the Building) (all as more particularly described in the Master Lease a true and complete copy
of which is attached hereto as Exhibit A-1, the Master Premises); and
WHEREAS, pursuant to that certain Agreement of Lease dated as of October 6, 2000 by and
between Prime Lessor, as landlord and Sublessor, as tenant (as successor in interest to
Genesoft, Inc.), as amended by a First Amendment to Lease dated December 5, 2002 and a Second
Amendment to Lease dated March 25, 2004 (such lease, as so amended, and all renewals, modifications
and extensions thereof being hereinafter collectively referred to as the Prime Lease), a true
and complete copy of which is attached hereto as Exhibit A-2, Prime Lessor leases to
Sublessor approximately 68,460 rentable square feet of space located on the first, second and third
floors of the Building (all as more particularly described in the Prime Lease, the Premises); and
WHEREAS, Sublessee subleases other space in the Building directly from Prime Lessor pursuant
to that certain Sublease dated December 1, 2001 (as amended to date, the MJ Research Sublease);
and
WHEREAS, Sublessee desires to sublease a portion of the Premises from Sublessor and Sublessor
is willing to sublease the same, all on the terms and conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties covenant and agree as follows:
1. Sublease of Subleased Premises. For the rent and upon the terms and
conditions herein, Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from
Sublessor approximately 14,503 rentable square feet of office and lab space located on the 1st
floor of the Building as shown on Exhibit B attached hereto (the Subleased Premises).
Sublessee acknowledges that any reference to the square
footage of the Subleased Premises is an approximation. Nevertheless, the parties agree that such
approximation shall be final and binding for all purposes hereunder, and that no adjustment shall
be made to the Rent if the actual square footage of the Subleased Premises differs from any
reference to square footage contained herein. During the term hereof, Sublessee shall have access
to the Subleased Premises and the parking lot(s) adjacent to the Building twenty-four (24) hours a
day, 7 days a week, subject to the terms of the Prime Lease and this Sublease. Sublessor also
grants Sublessee the right to use, without additional charge during the term of this Sublease,
those items of personal property identified on Exhibit C attached hereto and made a part
hereof (the Furniture), together with the existing network wiring/equipment (including handsets)
and fixtures in the Subleased Premises as of the Commencement Date. Sublessee accepts possession of
the Furniture and said network wiring/equipment and fixtures as is, where is and in their current
condition, Sublessor having made no representation or warranty of any kind, express or implied
(including, but not limited to, any warranty of fitness for any particular use or purpose) with
respect to any of the same. Prior to the Commencement Date, Sublessee shall, upon prior notice to
the Sublessor, have the right to enter the Subleased Premises for the purposes of inspecting the
same, taking measurements, installing its furniture, fixtures and equipment, and preparing for the
move into the Subleased Premises. Sublessor shall have the right to have a representative present
any time such early entry right is exercised. If Sublessee enters the Subleased Premises prior to
the Commencement Date, Sublessee shall be responsible for complying with all of the terms of this
Sublease (other than the payment of Rent) and, to the extent incorporated herein by reference, the
Prime Lease.
2. Term. The Term of this Sublease (the Initial Term) shall commence on March
1, 2004 (the Commencement Date), and shall expire on December 31, 2007 (the Expiration Date) or
such earlier date upon which said Initial Term may expire, be canceled or be terminated pursuant to
any of the terms or provisions of the Prime Lease, this Sublease or applicable law. Sublessee shall
have one option to extend the term of this Sublease from January 1, 2008 until December 31, 2010
(the Extension Term) following the Initial Term on the same terms and conditions as herein
specified (other than the payment of Rent), which option shall be exercisable upon Sublessees
providing Sublessor with written notice no later than six (6) months prior to the Expiration Date,
time being of the essence. Failure on the part of Sublessee to give timely such notice exercising
the extension option for the Extension Term shall render said extension option void and of no
further force or effect.
On the conditions (any one or more of which conditions Sublessor may waive, at its election,
by written notice to Sublessee at any time) that at the time of option exercise Sublessee is not in
default of its covenants and obligations under this Sublease beyond all applicable cure periods,
Sublessee may elect to exercise its right to the Extension Term.
The Rent for the Extension Term shall be 95% of the then current fair market rental value
(FMRV) for comparable space in South San Francisco, California under a three (3) year sublease,
taking into account all relevant factors.
-2-
The FMRV shall be proposed by Sublessor within thirty (30) days of the receipt of Sublessees
notice that it intends to extend the term of the Sublease (the Sublessors Proposed Market
Rent). The Sublessors Proposed Market Rent shall be deemed to be the FMRV unless
Sublessee notifies Sublessor, within thirty (30) days of Sublessees receipt of the Sublessors
Proposed Market Rent notice, that the Sublessors Proposed Market Rent is not satisfactory to
Sublessee (the Sublessees Rejection Notice).
If the FMRV is not otherwise agreed upon by Sublessor and Sublessee within fifteen
(15) days after Sublessors receipt of the Sublessees Rejection Notice, then:
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(1) |
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If the MJ Research Sublease has been extended for a period coterminous
with the Extension Term hereunder and the fair market rent for such
extension has been determined in good faith under and pursuant to the
process set forth in Section 4 of the MJ Research Sublease, the FMRV
shall be determined by multiplying such fair market rent per rentable
square foot by the rentable square footage of the Subleased Premises.
However, if for any reason such fair market rent has not been so
determined as of the commencement of the Extension Term hereof, the
FMRV shall be determined as set forth in subparagraphs (2) through (8)
below. |
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(2) |
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Sublessor and Sublessee shall notify one another within ten (10) days
after the commencement of the Extension Term of the name and address
of the appraiser designated by each. Such two (2) appraisers shall, within
twenty (20) days after the designation of the second appraiser, make their
determination of the FMRV in writing and give notice thereof to each
other and to Sublessor and Sublessee. Such two (2) appraisers shall have
twenty (20) days after the receipt of notice of each others determinations
to confer with each other and to attempt to reach agreement as to the
determination of the FMRV. If such appraisers shall concur in such
determination within said twenty (20) day period, then they shall give
notice thereof to Sublessor and Sublessee and such concurrence shall be
final and binding upon Sublessor and Sublessee. If such appraisers shall
fail to concur as to such determination within said twenty (20) day
period, then they shall give notice thereof to Sublessor and Sublessee and
shall immediately designate a third appraiser. If the two (2) appraisers
shall fail to agree upon the designation of such third appraiser within five
(5) days after said twenty (20) day period, then they or either of them
shall give notice of such failure to agree to Sublessor and Sublessee and,
if Sublessor and Sublessee fail to agree upon the selection of such third
appraiser within five (5) days after the appraiser(s) appointed by the
parties give notice as aforesaid, then either party on behalf of both may
apply to the American Arbitration Association or any successor thereof
to designate a third appraiser, or on such associations failure, refusal or
inability to act, to a court of competent jurisdiction, for the designation of
such third appraiser. |
-3-
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(3) |
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All appraisers shall be commercial real estate brokers who shall have had
at least five (5) years continuous experience as a commercial real estate
broker, including some experience leasing biotech space, in the South
San Francisco, California area. |
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(4) |
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The third appraiser shall conduct such investigations as he or she may
deem appropriate and shall, within ten (10) days after the date of his or
her designation, make an independent determination of the FMRV. |
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(5) |
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If none of the determinations of the appraisers varies from the mean of
the determinations of the other appraisers by more than ten percent
(10%), the mean of the determinations of the three (3) appraisers shall be
the FMRV for the Subleased Premises. If, on the other hand, the
determination of any single appraiser varies from the mean of the
determinations of the other two (2) appraisers by more than ten percent
(10%), the mean of the determination of the two (2) appraisers whose
determinations are closest shall be the FMRV. |
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(6) |
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The determination of the appraisers, as provided above, shall be
conclusive upon the parties and shall have the same force and effect as a
judgment made in a court of competent jurisdiction. |
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(7) |
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Each party shall pay fees, costs and expenses of the appraiser selected by
it and its own counsel fees and one-half (1/2) of all other expenses
and fees of the third appraiser. |
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(8) |
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Should the arbitration process extend beyond the Initial Term the
monthly Rent will increase by 3.5% of the then monthly Rent until the
new monthly Rent is established by the appraisers as provided herein and
any Rent paid by Sublessee during such period shall be adjusted
accordingly based on the outcome of the arbitration process. |
References herein to the Term of this Sublease shall be deemed to mean and include the
Initial Term and the Extension Term (and the Expiration Date shall be deemed extended accordingly)
if and when Sublessee has given timely such notice exercising the same.
3. Appurtenant Rights. Sublessee shall have, as appurtenant to the Subleased
Premises, rights to use in common with Sublessor and others entitled thereto Sublessors rights in
driveways, walkways, hallways, stairways and passenger elevators convenient for access to the
Subleased Premises and the lavatories nearest thereto. In addition, Sublessor grants Sublessee the
right to use not less than 44 parking spaces in the lot(s) adjacent to the Building on a
non-exclusive basis. Sublessor shall not oversubscribe its parking rights under the Prime Lease.
-4-
4. Rent. Sublessee shall pay to Sublessor the following amounts
as rent (the Rent) during the Initial Term, which is intended to be full service
gross rent, during the term of this Sublease:
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Lease Period |
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Annual Rent |
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Monthly Rent |
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P.R.S.F. |
3/1/04 - 9/30/04 |
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N/A |
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$ |
69,904.46 |
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$ |
57.84 |
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10/01/04-12/31/04 |
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N/A |
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$ |
43,509.00 |
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$ |
36.00 |
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1/1/05 -12/31/05 |
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$ |
522,108.00 |
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$ |
43,509.00 |
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$ |
36.00 |
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1/1/06 -12/31/06 |
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$ |
540,381.78 |
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$ |
45,031.82 |
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$ |
37.26 |
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1/1/07-12/31/07 |
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$ |
559,235.68 |
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$ |
46,602.97 |
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$ |
38.56 |
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Rent includes the following: (i) all utility charges (including electricity consumed by
Sublessee in the Subleased Premises); (ii) janitorial and all cleaning charges Monday
through Friday (except federal holidays); (iii) non-hazardous waste disposal; (iv) RO/DI
water; (v) vacuum/compressed air; (vi) emergency/back-up generator power, which generator
shall provide at least the same amount of power that is currently available to Sublessee;
(vii) use of common shipping/receiving area; (viii) waste water PH neutralization system;
(ix) common on-site fitness room, lunch room and adjacent patio; (x) access cards; (xi)
Taxes and property insurance; (xii) use of existing telephone and data wiring
infrastructure; (xiii) common loading dock area; and (xiv) all maintenance and repair of
the Subleased Premises excluding, subject to paragraph 7 of this Sublease, damage caused
by the negligence or willful misconduct of Sublessee its employees, agents, contractors
and invitees. Sublessor shall promptly and diligently perform the services required of it
as set forth above. Rent does not include any Sublessee-specific operational items,
including, but not limited to: (a) telecom/high speed data service through local service
providers; (b) liquid nitrogen or any other specialty gas provisions; (c) hazardous waste
disposal; and (d) any Sublessee-specific operating license(s) requirement(s).
Environmental, health and safety and other consulting services are available through
Sublessor at additional cost on a per case or as needed basis. Sublessee shall begin
paying Rent to Sublessor on the Commencement Date. In addition to Rent, Sublessee shall
also pay to Sublessor the sum of $35,000.00 per month as tenant improvement recovery, up
to a total payment of (including the payment owing as of March 1, 2004 and all payments
owing through the final scheduled $35,000.00 payment in December 1, 2004) $350,000.00. All
monthly payments of Rent are due and payable in advance on the first day of each calendar
month, without demand, deduction, counterclaim or setoff. Rent for any partial month shall
be prorated and paid on the first of such month. Sublessee shall pay as additional rent
(Additional Rent) all sums of money or other charges required to be paid by Sublessee
under this Sublease whether or not such sums and other charges are specifically designated
as Additional Rent. Sublessor shall have the same remedies for a default in the payment
of Additional Rent as for a default in the payment of Rent.
5. Permitted Uses. Sublessee shall use the Subleased Premises for
research and development, light manufacturing and general office uses and uses accessory
thereto to the extent permitted by applicable law and under the Prime Lease, including
without limitation, Article 5 of the Prime Lease as and to the extent hereinafter
incorporated by reference and for no other purpose or purposes.
-5-
6. Condition of Subleased Premises. On the Commencement Date, the Subleased
Premises shall be delivered to Sublessee in the condition existing on the date hereof, with all
electrical, plumbing, gas, safety, security, sewer, fire suppression, restrooms, and water systems
in good operating condition. Sublessee acknowledges that it has had an opportunity thoroughly to
inspect the condition of the Subleased Premises, and Sublessee agrees that, subject only to the
foregoing, Sublessee is leasing the Subleased Premises on an AS IS basis, with all defects,
without any representation or warranty by Sublessor or its agents as to the condition of the
Subleased Premises or their fitness for Sublessees use, and subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and regulating the use of
the Subleased Premises, and any easements, covenants or restrictions of record. Sublessee
acknowledges that Sublessor and its agents have not made any representations or warranties that the
Subleased Premises or the Building comply with legal requirements, including, but not limited to,
the ADA, Title 24, any Transportation Management Plans, or any laws relating to hazardous
substances or materials, and as a material inducement to Sublessor, Sublessee assumes
responsibility for causing the Subleased Premises to comply with all legal requirements throughout
the Term to the extent and only to the extent the same become applicable as a result of the
introduction of hazardous substances to the Subleased Premises by Sublessee or any of its agents,
contractors or employees, special circumstances of Sublessees employees (and not generally
applicable to the Building under the ADA), Sublessees particular use of (or change of use from
that currently obtaining in) the Subleased Premises, or Sublessees construction of alterations in
the Subleased Premises. Sublessee acknowledges that it has satisfied itself that the Subleased
Premises are suitable for its intended use. Sublessor shall have no obligation to do any work in
and to the Subleased Premises in order to prepare the Subleased Premises for occupancy or use by
Sublessee.
Sublessee shall make no alterations, installations, removals, additions or improvements in or
to the Subleased Premises or any other portion of the Building except with the consent of (a)
Sublessor, which shall not be unreasonably withheld or delayed, (b) Prime Lessor in accordance with
and to the extent required by Article 10 of the Prime Lease and (c) Master Lessor in accordance
with and to the extent required by Article 10 of the Master Lease; provided, however, that, subject
to the last sentence of this paragraph, Sublessor shall be entitled to condition its consent upon
Sublessees removal of the proposed alterations upon the expiration or earlier termination of this
Sublease. Any alterations, installations, removals, additions or improvements consented to by
Sublessor, Prime Lessor and Master Lessor shall be performed at Sublessees sole cost. At the time
Sublessee submits plans to Sublessor for Sublessors approval, Sublessor shall, upon request of
Sublessee, inform Sublessee whether it will require any alteration or improvement to be removed
from the Subleased Premises upon the expiration of the Sublease term, provided, however, that
Sublessor shall not unreasonably require that any alteration or improvement be so removed.
All trade fixtures and personal property, including furniture, furnishings, and audio
visual or other similar technical or specialty installations, installed in the Subleased
Premises at Sublessees expense (Tenants Property) shall at all times remain Sublessees
property and Sublessee shall be entitled to all depreciation,
-6-
amortization and other tax benefits with respect thereto. Except for Tenants Property, which
cannot be removed without material injury to the Subleased Premises, at any time Sublessee may
remove Tenants Property from the Subleased Premises, provided Sublessee repairs all damage caused
by such removal and restores the Subleased Premises to a condition consistent with the then
condition of the balance of the Subleased Premises. Upon request, Sublessor shall execute a lien
waiver in reasonable form acknowledging its lack of any interest or title in Tenants Property.
Sublessee shall not misuse the Furniture, fixtures and equipment (other than Tenants
Property) and shall keep the same in clean condition, reasonable wear and tear and damage by fire
or other casualty, Master Lessor, Prime Lessor, Sublessor or their respective agents, employees and
contractors, and hazardous substances not introduced to the Subleased Premises by Sublessee or its
agents, employees or contractors excepted.
Notwithstanding anything to the contrary in this Sublease, Sublessee shall have no obligation
to perform, construct, repair, maintain, make or reimburse Sublessor for any improvement, (i)
necessitated by the acts or negligence of Sublessor, Master Lessor, Prime Lessor, any other
occupant of the building or the project, or their respective agents, employees, invitees or
contractors, (ii) occasioned by the exercise of the power of eminent domain or any peril that would
be covered by the customary form of so-called special form, extended coverage casualty insurance,
(iii) to the structure or common areas of the building or the project or the heating, ventilating,
air conditioning, electrical, water, sewer, and plumbing systems serving the Subleased Premises,
the building, or the project, unless caused by the acts or negligence of Sublessee or its agents,
employees or contractors, (iv) to any portion of the building or the project outside of the
demising walls of the Subleased Premises, unless caused by the acts or negligence of Sublessee or
its agents, employees or contractors, (v) occasioned by the presence of any hazardous substance on
or about the Subleased Premises, other than hazardous substances introduced into the Subleased
Premises by Sublessee or its agents, employees or contractors, or persons under its control, (vi)
which is expressly the obligation of the Prime Lessor under the Prime Lease or the Master Lessor
under the Master Lease, (vii) except to the extent Sublessees obligation under the first paragraph
of this Section 6, required as a consequence of any law, rule, regulation, ordinance, covenant,
condition or restriction or occasioned by any construction defect or legal violation of the
Subleased Premises, the building or the project, (viii) which would customarily be reimbursable
under any special form, extended coverage casualty insurance policy, or (ix) except to the extent
Sublessees obligation under the first paragraph of this Section 6, which could be treated as a
capital expenditure under generally accepted accounting principles.
7. Insurance. Sublessee shall maintain throughout the term of this Sublease such
insurance in respect of the Subleased Premises and the conduct and operation of business therein,
with Sublessor, Prime Lessor and Master Lessor (and Master Lessors members, property managers and
other parties in interest as Master Lessor may from time to time reasonably designate to Sublessee
in writing), listed as additional insureds on the liability coverage component thereof, as is
required of Tenant
-7-
pursuant to the terms of the Prime Lease (including, without limitation, Article 13 as and to the
extent hereinafter incorporated by reference) and the terms of the Master Lease with no penalty to
Sublessor, Prime Lessor or Master Lessor resulting from deductibles or self-insured retentions
effected in Sublessees insurance coverage, and with such other endorsements and provisions as
Prime Lessor or Master Lessor may reasonably request under and pursuant to the Prime Lease and
Master Lease, respectively. If Sublessee fails to procure or maintain such insurance and to pay all
premiums and charges therefor within five (5) days after notice from Sublessor, Sublessor may (but
shall not be obligated to) do so, whereupon Sublessee shall reimburse Sublessor upon demand. All
such insurance policies shall, to the extent obtainable, contain endorsements providing that (i)
such policies may not be canceled except upon thirty (30) days prior notice to Sublessor, and if
they are required hereunder to be named as additional insureds thereunder, Prime Lessor and Master
Lessor, (ii) no act or omission of Sublessee shall affect or limit the obligations of the insurer
with respect to any other named or additional insured and (iii) Sublessee shall be solely
responsible for the payment of all premiums under such policies and Sublessor, notwithstanding that
it is or may be a named insured, shall have no obligation for the payment thereof. Such insurance
shall otherwise be in both form and substance as is customarily carried by landlords of comparable
buildings in the South San Francisco, California area. On or before the Commencement Date,
Sublessee shall deliver to Sublessor, Prime Lessor and Master Lessor either a fully paid-for policy
or certificate, at Sublessees option, evidencing the foregoing coverages. Any endorsements to such
policies or certificates shall also be delivered to Sublessor, and if they are required hereunder
to be named as additional insureds thereunder, Prime Lessor and Master Lessor upon issuance
thereof. Sublessee shall procure and pay for renewals of such insurance from time to time before
the expiration thereof, and Sublessee shall deliver to Sublessor, Prime Lessor and Master Lessor
such renewal policies or certificates at least thirty (30) days before the expiration of any
existing policy. In the event Sublessee fails so to deliver any such renewal policy or certificate
at least thirty (30) days before the expiration of any existing policy, Sublessor shall have the
right, but not the obligation, to obtain the same where upon Sublessee shall reimburse Sublessor
upon demand.
Sublessee shall include in all such insurance policies any clauses or endorsements in favor of
Prime Lessor and Master Lessor including, but not limited to, waivers of rights of subrogation,
which Sublessor is currently required to provide pursuant to the provisions of the Prime Lease.
Notwithstanding anything to the contrary in this Sublease, Sublessee and Sublessor, for themselves
and their agents, employees, and contractors hereby waive any and all damages, losses, liabilities,
costs, and expenses, (i) to the extent the same would be covered by the standard form in California
of so-called full replacement cost, special form extended coverage casualty insurance and (ii) to
the extent the same are actually covered by insurance carried by said party.
Sublessor shall maintain the insurance required of it under Section 13.1(b) of the Prime
Lease.
8. Indemnification. Except to the extent arising out of the negligence,
willful misconduct or violation of law by Sublessor, Master Lessor, Prime Lessor or
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their respective agents, employees or contractors, or the breach of this Sublease, the Prime Lease
or the Master Lease by Sublessor, Master Lessor, or Prime Lessor, Sublessee agrees to protect,
defend (with counsel reasonably approved by Sublessor), indemnify and hold Sublessor, Prime Lessor
and Master Lessor and their respective officers, agents and employees harmless from and against any
and all claims, costs, expenses, losses and liabilities to the extent arising: (i) from the conduct
or management of or from any work or thing whatsoever done in the Subleased Premises during the
term hereof; (ii) from any condition arising, and any injury to or death of persons, damage to
property or other event occurring or resulting from an occurrence in the Subleased Premises during
the Term hereof; and (iii) from any breach or default on the part of Sublessee in the performance
of any covenant or agreement on the part of Sublessee to be performed pursuant to the terms of this
Sublease or from any willful misconduct or negligence on the part of Sublessee or any of its
agents, employees, licensees, invitees or assignees or any person claiming through or under
Sublessee. Sublessee further agrees to indemnify Sublessor, Prime Lessor and Master Lessor and
their respective officers, agents and employees from and against any and all damages, liabilities,
costs and expenses, including reasonable attorneys fees, incurred in connection with any such
indemnified claim or any action or proceeding brought in connection therewith. Except to the extent
arising out of the negligence, willful misconduct or violation of law by Sublessee, Master Lessor,
Prime Lessor or their respective agents, employees or contractors, or the breach of this Sublease,
the Prime Lease or the Master Lease by Sublessee, Master Lessor, or Prime Lessor, Sublessor agrees
to protect, defend (with counsel reasonably approved by Sublessee), indemnify and hold Sublessee
and its respective officers, agents and employees harmless from and against any and all claims,
costs, expenses, losses and liabilities to the extent arising from any willful misconduct or
negligence on the part of Sublessor or any of its agents, employees or contractors. Sublessor
further agrees to indemnify Sublessee and its officers, agents and employees from and against any
and all damages, liabilities, costs and expenses, including reasonable attorneys fees, incurred in
connection with any such indemnified claim or any action or proceeding brought in connection
therewith. The provisions of this Paragraph are intended to supplement any other indemnification
provisions contained in this Sublease and in the Prime Lease to the extent incorporated by
reference herein.
9. No Assignment or Subletting. Sublessee shall not assign, sell, mortgage,
pledge or in any manner transfer this Sublease or any interest herein, or the term or estate
granted hereby or the rentals hereunder, or sublet the Subleased Premises or any part thereof, or
grant any concession or license or otherwise permit occupancy of all or any part of the Subleased
Premises by any person, entity or any Competitor (as defined in Section 14.2 of the Prime Lease) of
Prime Lessor, without the prior written consent of Sublessor, which shall not be unreasonably
withheld or delayed and, if and to the extent required under the terms of the Master Lease or the
Prime Lease, the consent of Prime Lessor and Master Lessor. Notwithstanding anything to the
contrary in this Sublease, the consent of Sublessor shall not be required for any sublease of the
Subleased Premises or any assignment of this Sublease to any entity controlled by, under common
control with, or which controls Sublessee for so long as such entity is controlled by, under common
control with, or controls Sublessee, or in connection with any merger of
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Sublessee with any other entity (provided the surviving entity has at least the net worth of
Sublessee immediately prior to the merger) or the sale of substantially all of the assets of
Sublessee located in the Subleased Premise. Neither the consent of Sublessor, Prime Lessor or
Master Lessor to an assignment, subletting, concession, or license, nor the references in this
Sublease to assignees, subtenants, concessionaires or licensees, shall in any way be construed to
relieve Sublessee of the requirement of obtaining the consent of Sublessor, Prime Lessor and Master
Lessor to any further assignment or subletting or to the making of any assignment, subletting,
concession or license for all or any part of the Subleased Premises. Notwithstanding any assignment
or subletting, including, without limitation, any assignment or subletting permitted or consented
to, the original Sublessee named herein and any other person(s) who at any time was or were
Sublessee shall remain fully liable under this Sublease. If this Sublease is assigned, or if the
Subleased Premises or any part thereof is underlet or occupied by any person or entity other than
Sublessee, Sublessor may, after default by Sublessee following the lapse of any cure period,
collect rent from the assignee, undertenant or occupant, and apply the net amount collected to the
rents payable by Sublessee hereunder, but no assignment, underletting, occupancy or collection
shall be deemed a waiver of the provisions hereof, the acceptance of the assignee, undertenant or
occupant as tenant, or a release of Sublessee from the further performance by Sublessee of the
covenants hereunder to be performed on the part of Sublessee (except to the extent such amounts are
so applied). Any attempted assignment or subletting without the prior written consent of Sublessor,
Prime Lessor and Master Lessor, to the extent required, shall be void.
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10. |
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Primacy and Incorporation of Prime Lease. |
(a) This Sublease is and shall be subject and subordinate to the Prime Lease and to all
matters to which the Prime Lease is or shall be subject and subordinate, and to all amendments,
modifications, renewals, extensions and replacements of or to the Prime Lease that do not adversely
affect Sublessee, this Sublease or the rights of Sublessee, under this Sublease in the Subleased
Premises or the use thereof by Sublessee, and Sublessor purports hereby to convey, and Sublessee
takes hereby, no greater rights then those accorded to or taken by Sublessor as Tenant under the
terms of the Prime Lease. To the extent expressly incorporated herein below, Sublessee covenants
and agrees that it will perform and observe all of the provisions contained in the Prime Lease to
be performed and observed by Tenant thereunder as applicable to the Subleased Premises, except
that Rent shall be defined for purposes of this Sublease as set forth in Paragraph 4 hereof.
Notwithstanding the foregoing, Sublessee shall have no obligation to (i) cure any default of
Sublessor under the Prime Lease, (ii) perform any obligation of Sublessor under the Prime Lease
which arose prior to the Commencement Date and Sublessor failed to perform, (iii) repair any damage
to the Subleased Premises caused by Sublessor, (iv) remove any alterations or additions installed
within the Subleased Premises by Sublessor, (v) indemnify Sublessor or Prime Lessor with respect to
any negligence or willful misconduct of Sublessor, its agents employees or contractors, or (vi)
discharge any liens on the Subleased Premises or the Building which arise out of any work
performed, or claimed to be performed, by or at the direction of Sublessor. Except to the extent
inconsistent with the context hereof,
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capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in
the Prime Lease. Further, except as set forth below, the terms, covenants and conditions of the
following specified provisions of the Prime Lease are incorporated herein by reference as if such
terms, covenants and conditions were stated herein to be the terms, covenants and conditions of
this Sublease, so that except to the extent that they are inconsistent with or modified by the
provisions of this Sublease, for the purpose of incorporation by reference each and every
referenced term, covenant and condition of the Prime Lease binding upon or inuring to the benefit
of the Landlord thereunder shall, in respect of this Sublease and the Subleased Premises, be
binding upon or inure to the benefit of Sublessor, and each and every referenced term, covenant and
condition of the Prime Lease binding upon or inuring to the benefit of the Tenant thereunder
shall, in respect of this Sublease, be binding upon or inure to the benefit of Sublessee, with the
same force and effect as if such terms, covenants and conditions were completely set forth in this
Sublease: Articles/Sections: 2.3, 5.2, 5.3(a), 5.3(b), 5.3(c) (excluding the fourth, fifth, sixth
and seventh sentences), 5.3(d), 5.3(e), 5.3(f), 5.3(g), 5.3(h) through the word contractors, 5.4,
6.5, 6.6, the last two sentences of 7.8, 8, the fourth sentence of 10, 11, 12, 13.1 (excluding
13.1(b) and, subject to the additional qualification that Sublessor shall exercise its rights
thereunder only as and to the extent Prime Lessor exercises the same against Sublessor, 13.1(g),
13.2, 13.3, 13.4, 15 (excluding 15.5 and 15.6), 16 (as amended), 17, 19, 20, 22, 23.3, the first
paragraph of 24, 27.1, 27.2, 27.3, 27.4, 27.12 and 27.13, and Exhibits B, C and D. Notwithstanding
the foregoing, for purposes of this Sublease, as to such incorporated terms, covenants and
conditions:
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(i) |
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references in the Prime Lease to the Demised Premises shall be deemed
to refer to the Subleased Premises hereunder; |
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(ii) |
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references in the Prime Lease to Landlord and to Tenant shall be
deemed to refer to Sublessor and Sublessee hereunder, respectively, except that
where the term Landlord is used in the context of ownership or management of the
entire Building, such term shall be deemed to mean Prime Lessor; |
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(iii) |
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references in the Prime Lease to this Lease shall be deemed to refer
to this Sublease (except when such reference in the Prime Lease is, by its terms
(unless modified by this Sublease), a reference to any other section of the Prime
Lease, in which event such reference shall be deemed to refer to the particular
section of the Prime Lease); |
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(iv) |
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references in the Prime Lease to the Term Commencement Date shall be
deemed to refer to the Commencement Date hereunder; |
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(v) |
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references in the Prime Lease to the Yearly Fixed Rent, Fixed
Rent, Additional Rent and rent shall be deemed to refer to the Rent as defined
hereunder; |
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(vi) |
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Sublessee shall not be required to name Sublessor, Prime Lessor, Master
Lessor or any other party as an additional insured on its workers compensation,
business interruption or personal property insurance; and |
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(vii) |
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reference to Article 14 in Section 19.1 shall mean Paragraph 9 of
this Sublease. |
Notwithstanding the foregoing, the following provisions of the Prime Lease, Exhibits and
Schedules annexed thereto are not incorporated herein by reference and shall not, except as to
definitions set forth therein, have any applicability to this Sublease: Articles/Sections 1, 2.1,
2.2, 2.4, 3, 4, 5.1, the fourth, fifth, sixth and seventh sentences of 5.3(c), everything after the
word contractors in 5.3(h), 6 (excluding 6.5 and 6.6), 7 (except the last two sentences of 7.8),
9, 10 (except the fourth sentence), 13.1(b), 13.5, 14, 15.5, 15.6, 18, 21, 23.1, 23.2, the second
paragraph of 24, 25, 26, 27.5, 27.6, 27.7, 27.8, 27.9, 27.10, 27.11, 27.14, 28 and 29 and Exhibits
A, A-l, A-2, E, F, G and H.
Where reference is made in the following Sections to Landlord, the same shall be deemed to
refer to Master Lessor and Prime Lessor: Sections 7 (other than the last sentence of 7.8) 8,
13.5, 15.1 and 16.
Where reference is made in the following Section to Landlord, the same shall be deemed to
refer to Prime Lessor: the fourth sentence of Section 15.6.
Where reference is made in the following Sections to Landlord, the same shall be deemed to
refer to Master Lessor, Prime Lessor and Sublessor: Sections 5.3(b), 5.3(d), 5.3(f), 5.3(g),
5.4, the last two sentences of 7.8, 10, 11,13.1, 13.2, 13.3, 13.4, 15.2, 15.3, 15.6 (excluding the
fourth sentence), 15.7 and 17.
Where reference is made in the following Sections to Landlord, the same shall be deemed to
refer to Prime Lessor and Sublessor: Sections 5.3(c) and 5.3(e).
(b) (Intentionally omitted)
(c) Notwithstanding anything to the contrary contained in the Prime Lease,
the time limits (the Notice Periods) contained in the Prime Lease for the giving of
notices, making of demands or performing of any act, condition or covenant on the part
of the Tenant, thereunder, or for the exercise by the Tenant, thereunder of any right,
remedy or option, are changed for the purposes of incorporation herein by reference by
shortening the same in each instance by five (5) days, so that in each instance Sublessee
shall have five (5) fewer days to observe or perform hereunder than Sublessor has as the
Tenant under the Prime Lease; provided, however, that if the Prime Lease
allows a Notice Period of six (6) days or less, then Sublessee shall nevertheless be allowed the
number of days equal to one-half of the number of days in each Notice Period to give
any such notices, make any such demands, perform any such acts, conditions or
covenants or exercise any such rights, remedies or options; provided, further, that if one-half of the number of days in the Notice Period is not a whole number, Sublessee shall
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be allowed the number of days equal to one-half of the number of days in the Notice Period rounded
up to the next whole number.
(d) Notwithstanding anything to the contrary contained in this Sublease (including,
without limitation, the provisions of the Prime Lease incorporated herein by reference), Sublessor
makes no representations or warranties whatsoever with respect to the Subleased Premises, this
Sublease, Prime Lease or any other matter, either express or implied, except as set forth in this
Sublease, and except that Sublessor represents and warrants (i) that it is the sole holder of the
interest of the Tenant under the Prime Lease, (ii) that the Prime Lease is in full force and
effect and that there are no modifications of the Prime Lease which will affect Sublessees rights
or obligations hereunder, (iii) that no notices of default have been served on Sublessor under the
Prime Lease which have not been cured and to the best of Sublessors knowledge Sublessor is not
otherwise in default of its obligations under the Master Lease, and (iv) to the best of Sublessors
knowledge, Prime Lessor is not in default under the Prime Lease or the Master Lease and Master
Lessor is not in default under the Master Lease.
11. Certain Services and Rights. Except as otherwise expressly set forth herein, the
only services or rights to which the Sublessee is entitled hereunder, are those expressly set forth
herein and those services and rights to which Sublessor is entitled under the Prime Lease,
including without limitation those set forth in Sections 7.3, 7.4, 7.6 and 7.7(a) of the Prime
Lease. Notwithstanding anything to the contrary contained herein, in no event shall Sublessor be
deemed to be in default under this Sublease or liable to Sublessee for any failure of the Prime
Lessor to perform its obligations under the Prime Lease. With respect to all work, services,
utilities, repairs, restoration, maintenance, compliance with law, insurance, indemnification or
other obligations or services to be performed or provided by Prime Lessor under the Prime Lease,
Sublessors sole obligation shall be, without expense to itself, to exercise commercially
reasonable efforts to require Prime Lessor to comply with the obligations of Prime Lessor under the
Prime Lease, provided that in no event shall Sublessor be required to file suit against Prime
Lessor.
12. Compliance with Prime Lease. Sublessee shall neither do nor permit its agents,
employees or contractors to do anything which violates the Prime Lease and which would cause the
Prime Lease to be terminated or forfeited by reason of any right of termination or forfeiture
reserved or vested in Prime Lessor under the Prime Lease, and Sublessee shall defend, indemnify and
hold Sublessor harmless from and against any and all claims, liabilities, losses, damages and
expenses (including reasonable attorneys fees) of any kind whatsoever if the Prime Lease is
terminated or forfeited in whole or in part as a result of a breach or default on the part of
Sublessee. Sublessee covenants and agrees that Sublessee will not do anything which would
constitute a default under the provisions of the Prime Lease or omit to do anything which Sublessee
is obligated to do under the terms of this Sublease, which would constitute a default under the
Prime Lease. Except if the same results in whole or in part from a breach on the part of Sublessee
or any of its agents, employees or contractors of the obligations of Sublessee hereunder, Sublessor
shall not cause or permit the Prime Lease to be terminated or forfeited by reason of any default on
the part of Sublessor thereunder and
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Sublessor shall indemnify, defend and hold harmless Sublessee from any such termination
or forfeiture.
13. Default. In the event that Sublessee shall default in any of its obligations
hereunder beyond applicable cure periods, including any default of the nature described in the
herein incorporated provisions of the Prime Lease beyond applicable cure periods as modified by
Paragraph 10(c) hereof, Sublessor shall have available to it all of the rights and remedies
available to Prime Lessor under the Prime Lease, including without limitation Article 19 thereof as
incorporated herein by reference, as though Sublessor were the Landlord thereunder and Sublessee
the Tenant thereunder. Sublessee further agrees to reimburse Sublessor for all costs and expenses
incurred by Sublessor in asserting its rights hereunder against Sublessee or any other party. The
non-prevailing party shall also pay the attorneys fees and costs incurred by the prevailing party
in any post-judgment proceedings to collect and enforce the judgment. The covenant in the preceding
sentence is separate and several and shall survive the merger of this provision into any judgment
on this Sublease.
14. Brokerage. Sublessee and Sublessor represent that they have not dealt with any
broker in connection with this Sublease other than CRESA Partners (the Broker). Each party agrees
to indemnify and hold harmless the other from and against any and all liabilities, claims, suits,
demands, judgments, costs, interests and expenses (including, without being limited to, reasonable
attorneys fees and expenses) which the indemnified party may be subject to or suffer by reason of
any claim made by any person, firm or corporation other than the Broker for any commission, expense
or other compensation as a result of the execution and delivery of this Sublease, which is based on
alleged conversations or negotiations by said person, firm or corporation with the indemnifying
party. Sublessee shall pay the Broker the brokerage fees/commissions due under a separate agreement
between and among Sublessee and Broker. Each party shall indemnify and hold the other harmless from
and against any and all liabilities, claims, suits, demands, judgments, costs, interest and
expenses (including, without being limited, reasonable attorneys fees and expenses) which said
other party may be subject to or suffer by reason of any claim made by any other Broker for any
brokerage fees/commissions, expense of other compensation as a result of the execution and delivery
of this Sublease in breach of the indemnified parties representation.
15. Security Deposit. On January 1, 2005, the cash security deposit then currently
held by Sublessor for the Subleased Premises shall be released to Sublessee and exchanged for a
letter of credit in accordance with the following: Sublessee at its sole cost and expense shall
deliver to Sublessor, in a form and from a financial institution acceptable to Sublessor, an
irrevocable, unconditional standby letter of credit in the amount of $130,527.00 (the Letter of
Credit), as security for the full and faithful performance and observance by Sublessee of
Sublessees covenants and obligations under this Sublease (the Security Deposit). Sublessee shall
be solely responsible for all costs and expenses of obtaining, amending, renewing or replacing such
Letter of Credit. The Letter of Credit shall have an expiration date not earlier than thirty (30)
days following the expiration of the Term of this Sublease. If Sublessee defaults in the full and
prompt payment and performance of any of Sublessees covenants and
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obligations under this Sublease, including, but not limited to, the payment of Rent specified in
Paragraph 4 hereof, Sublessor may, after the giving of any required notices and the lapse of any
cure period, but without giving any other notice to Sublessee, draw upon the Letter of Credit to
the extent required for the payment of any Rent or any other sums as to which Sublessee is in
default or for any sum which Sublessor may expend or may be required to expend by reason of
Sublessees default in respect of any of the terms, covenants and conditions of this Sublease,
including, but not limited to, any damages or deficiency in the reletting of all or any portion of
the Subleased Premises, whether such damages or deficiency accrue before or after summary
proceedings or other re-entry by Sublessor. If Sublessor draws upon the Letter of Credit to cure
any default, Sublessee shall cause the Letter of Credit to be restored to its original amount (or
shall make a cash security deposit with Sublessor in said amount) within fifteen (15) days of such
drawing and failure to do so shall be deemed a default hereunder. Sublessee understands that its
potential liability under this Sublease is not limited to the amount of the Security Deposit. Use
of said Security Deposit by Sublessor shall not constitute a waiver, but is in addition to other
remedies to Sublessor under this Sublease and under law (except to the extent of the amount so
applied). In the event of any sale of Sublessors interest in the Premises, Sublessor shall either
return the Security Deposit to Sublessee or assign its interest in the Security Deposit to the
transferee or assignee and Sublessor shall thereupon be released by Sublessee from all liability
for the return or payment thereof; and Sublessee shall look solely to the new sublessor for the
return or payment of the same delivered to the new sublessor; and the provisions hereof shall apply
to every transfer or assignment made of the same to a new sublessor. Sublessee shall not assign or
encumber or attempt to assign of encumber the Security Deposit and neither Sublessor nor its
successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or
attempted encumbrance. Sublessee waives the provisions of California Civil Code Section 1950.7, and
all other provisions of law now in force or that become in force after the date of execution of
this Sublease that provide that Sublessor may claim from a security deposit only those sums
reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by
Sublessee, or to clean the Subleased Premises.
16. Notices. All notices, consents, approvals, demands, bills, statements and requests
which are required or desired to be given by either party to the other hereunder shall be in
writing and shall be governed by Article 25 of the Prime Lease as incorporated herein by reference,
except that the mailing addresses for Sublessor and Sublessee shall initially be those first set
forth above, except that after the Commencement Date the address for Sublessee shall be the
Subleased Premises or such other address as Sublessee shall designate by written notice to
Sublessor. Communications and payments to the Prime Lessor shall be given in accordance with, and
subject to, Article 25 of the Prime Lease. Communications to the Master Lessor shall be given in
accordance with, and subject to, Article 25 of the Master Lease.
17. Interpretation. This Sublease shall be construed without regard to any presumption
or other rule requiring construction against the party causing this Sublease to be drafted. Each
covenant, agreement, obligation or other provision of this Sublease shall be deemed and construed
as a separate and independent covenant of the party
-15-
bound by, undertaking or making the same, which covenant, agreement, obligation or other provision
shall be construed and interpreted in the context of the Sublease as a whole. All terms and words
used in this Sublease, regardless of the number or gender in which they are used, shall be deemed
to include any other number and any other gender as the context may require. The word person as
used in this Sublease shall mean a natural person or persons, a partnership, a corporation or any
other form of business or legal association or entity. Terms used herein and not defined shall have
the meaning set forth in the Prime Lease.
18. Fire or Casualty; Eminent Domain. In addition to the provisions of Article 16 of
the Prime Lease as and to the extent incorporated herein by reference, Sublessor also agrees if the
MJ Research Sublease is terminated by Prime Lessor, Master Lessor or Sublessee because of a fire or
other casualty, then Sublessee may terminate this Sublease. Sublessee may exercise the termination
right described in the previous sentence by giving written notice to Sublessor within thirty (30)
days of Sublessees receipt or giving of the termination notice under the MJ Research Sublease and
the effective date of the termination of this Sublease will be the same date as the termination
date of the MJ Research Sublease. Upon execution of this Sublease by Sublessee and Sublessor and
the delivery of the Consent described in Paragraph 28 hereof, Sublessor shall deliver to Sublessee
in electronic format and hard copy the plans in Sublessors possession as of the date hereof for
the tenant improvements and will assign any rights Sublessor has in such plans for purposes of
using such plans to rebuild any tenant improvements existing in the Subleased Premises as of the
date hereof. In the event of a fire or casualty to the Subleased Premises where Prime Lessor has
decided to restore the Building including the Subleased Premises, Sublessor shall turn over to
Prime Lessor the proceeds of insurance required to be carried by Sublessor under Section 13.1(b) of
the Prime Lease for the rebuilding of the tenant improvements by Prime Lessor, unless this Master
Lessor terminates the Master Lease, Prime Lessor terminates the Prime Lease, or Sublessor or
Sublessee terminates this Sublease.
19. Right to Cure Sublessees Defaults. If Sublessee shall at any time fail to make
any payment or perform any other obligation of Sublessee hereunder within fifteen (15) days (except
in the case of an emergency) of receiving Sublessors notice of such failure to make payment or to
perform, then Sublessor shall have the right, but not the obligation, after notice to Sublessee in
accordance with Paragraph 16 of this Sublease, or without notice to Sublessee in the case of any
emergency, and without waiving or releasing Sublessee from any obligations of Sublessee hereunder,
to make such payment or perform such other obligation of Sublessee in such manner and to such
extent as Sublessor shall deem necessary, and in exercising any such right, to pay any incidental
costs and expenses, employ attorneys, and incur and pay reasonable attorneys fees. Sublessee shall
pay to Sublessor upon demand all sums so paid by Sublessor and all incidental costs and expenses of
Sublessor in connection therewith, together with interest thereon at an annual rate equal to the
rate four percent (4%) above the base rate or prime rate then announced as such by Citibank, N.A.
or its successor, or the maximum rate permitted by law. Such interest shall be payable with respect
to the period commencing on the date such expenditures are made by Sublessor and ending on the date
such amounts are repaid by Sublessee. If Sublessor shall at any time fail to
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perform any obligations on its part to be performed under Paragraph 4 of this Sublease which
interfere (or are reasonably likely to imminently interfere with the use of the Subleased Premises
by Sublessee) and Sublessor shall fail to commence to cure such default within fifteen (15) days
(or such longer period of time as is reasonably necessary in the exercise of reasonable diligence
to cure such failure to perform) following written demand for such performance by Sublessee and
thereafter to diligently complete such cure, then, in addition to its other rights and remedies,
Sublessee shall have the right, but not the obligation, without waiving or releasing Sublessor from
any obligations of Sublessor hereunder, to perform such obligation of Sublessor. Notwithstanding
anything to the contrary in this Sublease, the cost reasonably incurred by Sublessee in completing
such cure shall be paid by Sublessor to Sublessee within five (5) days of receiving Sublessees
bill for the same. The foregoing, however, shall not apply to any of the services to be provided by
Prime Lessor directly to Sublessor as set forth in Paragraph 11 and, in such case, the obligations
of Sublessor subject to this Section shall be limited to the obligations of Sublessor under
Paragraph 11. The provisions of this Paragraph shall survive the Expiration Date or the sooner
termination of this Sublease.
20. Termination of Prime Lease. Subject to the rights, if any, of Sublessee to
recognition of Sublessees rights hereunder by Master Lessor or Prime Lessor, if for any reason the
term of the Prime Lease shall terminate prior to the Expiration Date, this Sublease shall thereupon
automatically terminate as to the premises demised under the Prime Lease and Sublessor shall not be
liable to Sublessee by reason thereof except in the event of a breach by Sublessor of its
obligations under Paragraph 12 hereof; provided, however, that Sublessor agrees
that so long as Sublessee is not in default hereunder beyond any applicable cure periods, Sublessor
shall not voluntarily surrender the Prime Lease except in accordance with the Prime Lease in the
event of a taking or casualty. Notwithstanding the foregoing, if the Prime Lease gives Sublessor
any right to terminate the Prime Lease in the event of the partial or total damage, destruction, or
condemnation of the Subleased Premises or the Building, the exercise of such right by Sublessor
shall not constitute a default or breach hereunder.
Upon the expiration or termination of this Sublease, whether by forfeiture, lapse of time or
otherwise, or upon the termination of Sublessees right of possession, Sublessee shall at once
surrender and deliver the Subleased Premises and the Furniture in the condition and repair required
by, and in accordance with the provisions of, this Sublease and the Prime Lease, including without
limitation Article 20 of the Prime Lease as incorporated herein by reference, including the
Furniture, which shall be in the same condition as at the date possession of the Subleased Premises
was delivered to Sublessee, reasonable wear and tear, alterations made by Sublessee in compliance
herewith that Sublessee is permitted to surrender, acts of God, casualties, condemnations,
hazardous materials not introduced to the Premises by Sublessee, its agents, employees or invitees
and the acts of Sublessor, Prime Lessor, Master Lessor or other occupants if the building (other
than Sublessee, its agents, employees or invitees) and their respective agents, employees and
contractors excepted.
21. Consents and Approvals. All references in this Sublease to the consent or approval
of Prime Lessor, Master Lessor and/or Sublessor shall be deemed to mean
-17-
the written consent or approval of Prime Lessor, Master Lessor and/or Sublessor, as the case may
be, and no consent or approval of Prime Lessor, Master Lessor and/or Sublessor, as the case may be,
shall be effective for any purpose unless such consent or approval is set forth in a written
instrument executed by Prime Lessor, Master Lessor and/or Sublessor, as the case may be. In all
provisions requiring the approval or consent of Sublessor (whether pursuant to the express terms of
this Sublease or the terms of the Prime Lease incorporated herein), Sublessee shall be required to
obtain the approval or consent of Sublessor and then to obtain like approval or consent of Prime
Lessor to the extent Prime Lessors consent is required under the Prime Lease and Master Lessor to
the extent Master Lessors consent is required under the Master Lease. Sublessor agrees its consent
shall not be unreasonably withheld or delayed, except as otherwise provided herein. If Sublessor is
required or has determined to give its consent or approval to a matter as to which consent or
approval has been requested by Sublessee, Sublessor shall cooperate reasonably with Sublessee in
endeavoring to obtain any required Prime Lessors or Master Lessors consent or approval upon and
subject to the following terms and conditions: (i) Sublessee shall reimburse Sublessor for any
reasonable out-of-pocket costs incurred by Sublessor in connection with seeking such consent or
approval, (ii) Sublessor shall not be required to make any payments to Prime Lessor or Master
Lessor or to enter into any agreements or to modify the Prime Lease, or this Sublease in any manner
which will prejudice Sublessor in order to obtain any such consent or approval, (iii) if Sublessee
agrees or is otherwise obligated to make any payments to Sublessor, Master Lessor or Prime Lessor
in connection with such request for such consent or approval, Sublessee shall have made
arrangements satisfactory to Sublessor for such payments and (iv) Sublessee shall indemnify and
hold Sublessor harmless from and against all liabilities, losses, damages or expenses, including,
without being limited to, reasonable attorneys fees and expenses Sublessor shall suffer or incur
in connection with seeking such consent or approval. Nothing contained in this Article shall be
deemed to require Sublessor to give any consent or approval merely because Prime Lessor or Master
Lessor has given such consent or approval. Sublessor shall promptly forward to Prime Lessor and
Master Lessor, as the case may be, such requests as Sublessee may submit for approval or consent
from Prime Lessor and Master Lessor.
22. No Privity of Estate. Nothing contained in this Sublease shall be construed to
create privity of estate or of contract between Sublessee and Prime Lessor and Master Lessor, and
Prime Lessor and Master Lessor are not obligated to recognize or to provide for the non-disturbance
of the rights of Sublessee hereunder except as expressly set forth in separate agreements, if any,
between said party or parties and Sublessee.
23. No Waiver. The failure of Sublessor or Sublessee to insist in any one or more
cases upon the strict performance or observance of any obligation of the other hereunder or to
exercise any right or option contained herein shall not be construed as a waiver or relinquishment
for the future of any such obligation, right or option. Sublessors receipt and acceptance of Rent
or Sublessors or Sublessees acceptance of performance of any other obligation by the other party,
with knowledge of a breach of any provision of this Sublease, shall not be deemed a waiver of such
breach. No waiver by Sublessor or Sublessee of any term, covenant or condition of this Sublease
shall be
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deemed to have been made unless expressed in writing and signed by the party to be charged. .
24. Complete Agreement. This Sublease constitutes the entire agreement between the
parties and there are no representations, agreements, arrangements or understandings, oral or
written, between the parties relating to the subject matter of this Sublease which are not fully
expressed in this Sublease. This Sublease cannot be changed or terminated orally or in any manner
other than by a written agreement executed by both parties. This Sublease shall not be binding upon
either party unless and until it is signed and delivered by and to both parties.
25. Successors and Assigns. The provisions of this Sublease, except as herein
otherwise specifically provided, shall extend to bind and inure to the benefit of the parties
hereto and their respective personal representatives, heirs, successors and permitted assigns.
26. Waiver of Jury Trial and Right to Counterclaim. To the extent permitted by law,
the parties hereto hereby waive any rights which they may have to trial by jury in any summary
action or other action, proceeding or counterclaim arising out of or in any way connected with this
Sublease, the relationship of Sublessor and Sublessee, the Subleased Premises and the use and
occupancy thereof, and any claim for injury or damages. Sublessee also hereby waives all right to
assert or interpose a counterclaim (other than mandatory counterclaims) in any summary proceeding
or other action or proceeding to recover or obtain possession of the Subleased Premises.
27. Estoppel Certificates. Sublessee and Sublessor shall each, within fifteen (15)
days after each and every request by the other party, execute, acknowledge and deliver to the other
party or any party reasonably designated by the other party, without cost or expense to the other
party, a statement in writing (a) certifying that this Sublease is unmodified and, to its
knowledge, is in full force and effect (or if there have been modifications, that the same is in
full force and effect as modified, and stating such modifications); (b) specifying the dates to
which Rent has been paid; (c) stating whether or not, to its knowledge, the other party is in
default in the performance or observance of such other partys obligations under this Sublease and,
if so, specifying each such default; (d) stating whether or not, to its knowledge, any event has
occurred which, with the giving of notice or passage of time, or both, would constitute a default
by the other party under this Sublease, and, if so, specifying each such default; (e) stating
whether or not, to its knowledge, any event has occurred which, with the giving of notice or
passage of time, or both, would constitute a default by the other party under this Sublease, and,
if so, specifying each such event; (f) stating whether or not, to its knowledge, any event has
occurred which, with the giving of notice or passage of time, or both, would constitute a default
by Prime Lessor under the Prime Lease with respect to the Subleased Premises, and, if so,
specifying such event; (g) describing all notices of default submitted by it to the other party and
Prime Lessor with respect to this Sublease, or the Prime Lease from and after the date hereof; and
(h) containing such other information with respect to the Subleased Premises or this Sublease as
the other party shall reasonably request. Each party hereby acknowledges and agrees that any such
statement delivered pursuant to this Paragraph may be relied upon by any prospective
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assignee, transferee or mortgagee of the leasehold or subleasehold estate of the other party
or any prospective lender or investor to the requesting party.
28. Consent of Prime Lessor. This Sublease is subject to the concurrent approval and
consent of Prime Lessor, which Sublessor agrees to use all reasonable efforts to obtain. This
Sublease shall not become effective unless and until a written approval and consent (the Consent)
is executed and delivered by the Prime Lessor, which Consent shall consent to this Sublease. After
the Sublessor receives the Consent
from the Prime Lessor, Sublessor agrees to promptly deliver a fully-executed original of the
Consent to Sublessee. The effect and commencement of this Sublease is subject to and
conditional upon the receipt by Sublessor and Sublessee of the Consent. To the extent that
Sublessor has not already done so, upon execution of this Sublease by Sublessee, Sublessor
will promptly apply to the Prime Lessor for the Consent and Sublessor will promptly inform
Sublessee as to receipt of the Consent (if and when it is received) and deliver to Sublessee a
copy of the same. If the Consent is not received by May 1, 2004 (the Sunset Date), then from
the Sunset Date this Sublease will cease to have any further effect and the parties hereto
will have no further obligations to each other with respect to this Sublease and any funds
paid hereunder by Sublessee shall be promptly refunded by Sublessor.
29. Holding Over. If Sublessee shall fail to surrender and deliver the Subleased
Premises as and when required hereunder, the Sublessee shall become a tenant at sufferance only,
subject to all of the terms, covenants and conditions herein specified. Sublessee agrees to
protect, defend (with counsel reasonably approved by Sublessor), indemnify and hold Sublessor and
its officers, agents and employees harmless from and against any and all claims, costs, losses,
damages, liabilities and expenses (including, without being limited to, reasonable attorneys fees)
that Sublessor may suffer by reason of any holdover by Sublessee hereunder.
30. Limitation of Liability. No director, officer, shareholder, employee, adviser or
agent of Sublessor shall be personally liable in any manner for the obligations of the Sublessor
under this Sublease. Except as set forth in Paragraph 29 hereof, in no event shall Sublessor or
Sublessee or any of their directors, officers, shareholders, employees, advisers or agents be
responsible for any indirect, special or consequential damages or interruption or loss of business,
income or profits, nor shall Sublessor be liable for loss of or damage to artwork, securities or
other property not in the nature of ordinary fixtures, furnishings and equipment used in general
administrative and executive office activities. No director, officer, shareholder, employee,
adviser or agent of Sublessee shall be personally liable in any manner for the obligations of the
Sublessee under this Sublease.
31. Conflict. In the event of any conflict between the obligations of Sublessee set
forth in this Sublease and the obligations of Sublessee under the Prime Lease as and to the extent
incorporated herein by reference, the more restrictive provision shall control.
32. Security. Sublessee expressly assumes all responsibility for security, in the
Subleased Premises, and, except to the extent arising out of the negligence, willful
-20-
misconduct, violation or law or breach of this Sublease or the Master Lease or Prime Lease by
Sublessor or its agents, employees or contractors, Sublessor shall not be liable for any damage to
goods, wares, merchandise or other property located in the Subleased Premises, or injury or death
to Sublessees employees, invitees, customers or any other person in or about the Subleased
Premises. The foregoing waiver includes criminal acts of third parties.
33. Recording. Sublessor and Sublessee agree that neither party may record this
Sublease.
34. Attorneys Fees. If either Sublessor or Sublessee shall bring any action or legal
proceeding for an alleged breach of any provision of this Sublease, to recover rent, to terminate
this Sublease or otherwise to enforce, protect or establish any term or covenant of this Sublease,
the prevailing party shall be entitled to recover as a part of such action or proceeding, or in a
separate action brought for that purpose, reasonable attorneys fees, court costs, and expert fees
as may be fixed by the court. Prevailing party as used in this Paragraph includes a party who
dismisses an action for recovery hereunder in exchange for sums allegedly due, performance of
covenants allegedly breached or considerations substantially equal to the relief sought in the
action.
35. Existing Sublease. The existing Sub-Sublease Agreement dated as of May 31, 2001 by
and between Sublessor and Sublessee (the Existing Sub-Sublease Agreement) is hereby terminated.
Sublessee agrees to deliver to Sublessor on or before the Commencement Date, the second and third
floor space that was the subject of said Existing Sub-Sublease Agreement (i) in broom clean
condition, (ii) with all of Sublessees machinery, furniture, fixtures, and equipment, and
hazardous materials removed from such space, and (iii) such space cleaned by Pass Janitorial
Service. When so surrendered, the surrender obligations of Sublessee for such space as set forth in
the existing sublease shall be deemed to have been performed in all required respects.
-21-
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as a sealed instrument
as of the date first written above.
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Genome Therapeutics Corporation
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By: |
/s/ Stephen Rauscher
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Name: |
Stephen Rauscher |
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Title: |
Sr VP+CEO |
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Fluidigm Corporation
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By: |
/s/ Gajus Worthington
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Name: |
Gajus Worthington |
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Title: |
CEO |
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FIRST AMENDMENT TO SUBLEASE
This First Amendment to Sublease is made as of the December 7, 2007 by and between Oscient
Pharmaceuticals Corporation (formerly known as Genome Therapeutics Corporation), a Massachusetts
corporation with a place of business at 1000 Winter Street, Suite 2200, Waltham, Massachusetts
02451 (Sublessor), and Fluidigm Corporation, a Delaware corporation, with a place of business at
7000 Shoreline Court, South San Francisco, California 94080 (Sublessee).
WITNESSETH THAT:
WHEREAS, pursuant to that certain Agreement of Lease dated as of October 6, 2000 by and
between ARE-San Francisco No. 17, LLC (Prime Lessor) (as successor in interest to Mountain Cove
Tech Center, L.L.C. by acquisition of the fee interest in the property, and MJ Research Company,
Inc., by an Assignment and assumption of Subleases dated as of October 4, 2004 to Mountain Cove
Tech Center, L.L.C.), as landlord and Sublessor, as tenant (as successor in interest to
Genesoft, Inc.), as amended by a First Amendment to Lease dated December 5, 2002 and a Second
Amendment to Lease dated March 25, 2004 (such lease, as so amended, and all renewals, modifications
and extensions thereof being hereinafter collectively referred to as the Prime Lease), a true and
complete copy of which is attached hereto as Exhibit A, Prime Lessor leases to Sublessor
approximately 68,460 rentable square feet of space located on the first, second and third floors of
the Building (all as more particularly described in the Prime Lease, the Premises); and
WHEREAS, pursuant to that certain Sublease Agreement dated as of March 25, 2004, by and
between Sublessor, as sublessor and Sublessee, as sublessee (the Sublease), a true and
complete copy of which is attached hereto as Exhibit B, Sublessor subleases to Sublessee
approximately 14,503 rentable square feet of office and lab space located on the first floor of the
Building (all as more particularly described in the Sublease, the Subleased Premises); and
WHEREAS, the term of the Sublease ends on December 31, 2007; and
WHEREAS, Sublessor and Sublessee desire to amend the Sublease to, among other things,
extend said term all subject to the provisions hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties covenant and agree as follows:
1. Term. Notwithstanding anything to the contrary in the Sublease, the term of
the Sublease is hereby extended for a period commencing on January 1, 2008 (the Extension
Effective Date) and expiring on February 28, 2011 (the Expiration Date) or such earlier date
upon which said term may expire, be cancelled or be terminated pursuant to any of the terms of
provisions of the Prime Lease, the Sublease, this First Amendment to Sublease or applicable law
(the Additional Term). Said extension shall be subject to all terms, covenants and conditions
contained in the Sublease except as otherwise set forth herein. References herein and in the
Sublease to the Term shall be deemed to mean and include the Initial Term and Additional Term
(and the Expiration Date shall be deemed extended accordingly). Sublessee acknowledges and agrees
that it has no further right to extend the term of the Sublease and that any such right set forth
in Section 2 of the Sublease is null and void.
2. Termination For Convenience. Sublessee is granted a one-time right to terminate
(Termination Right) the Sublease on July 1, 2009, Sublessee shall provide Sublessor written
notification of its intent to terminate no later than October 1, 2008. If Sublessee exercises
this Termination Right, Sublessee shall pay Sublessor an amount equal to $332,500.00 on or before
July 1, 2009.
3. Rent. Notwithstanding anything to the contrary contained in Section 4 of the
Sublease, commencing on January 1, 2008, the Rent due under the Sublease shall be equal to the
following amounts during the periods set forth below:
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Term Period |
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Monthly Rent |
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P.R.S.F. Per Year |
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1/1/08 12/31/08
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$ |
57,172.24 |
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$ |
47.305 |
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1/1/09 12/31/09
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$ |
58,477.51 |
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$ |
48.385 |
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1/1/10 12/31/10
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$ |
59,637.75 |
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$ |
49.345 |
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1/1/11 2/28/11
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$ |
60,943.02 |
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$ |
50.425 |
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The Rent specified above is inclusive of all services previously provided by Sublessor
pursuant to Section 4 of the Sublease as well as all other provisions contained in Sections 4 and
11 of the Sublease. Section 4 (ii) is hereby deleted. The parties agree that the Sublessee shall
be responsible for the janitorial and cleaning services. The fifth sentence from the bottom of
Section 4 is hereby deleted.
4. Assignment and Subletting. The references in the first two sentences of Section 9
of the Sublease to Competitors and to net worth shall be deleted.
5. Financial Statements. Section 27.13 of the Prime Lease, as incorporated into the
Sublease, shall be revised such that (a) Section 27.13 shall not apply if Sublessee is a publicly
traded company, (b) if Sublessee is not a publicly traded company, Sublessee shall only be required
to provide Sublessor with audited financial statements once they have been completed, provided
Sublessee uses commercially reasonable efforts to complete such statements with a reasonable time
frame and (c) Sublessor shall hold all of Sublessees financial statements confidential.
6. Proper Authority. Each party represents to the other that (i) it has not assigned,
encumbered or hypothecated any of its right, title or interest in the Sublease or any portion
thereof or interest therein, (ii) it is duly authorized to enter into and perform its obligations
under
this First Amendment to Sublease and to modify its rights under the Sublease as set forth in this
First Amendment to Sublease, and (iii) the parties executing this First Amendment to Sublease on
behalf of each party are duly authorized to bind the party they purport to represent.
7. Brokerage. Sublessee and Sublessor represent that they have not dealt with any
broker in connection with this First Amendment to Sublease other than CRESA Partners on behalf of
Sublessee. The Sublessor shall not be responsible for a commission or other fee, if any, is due to
CRESA Partners. Each party agrees to indemnify and hold harmless the other from and against any and
all liability, claims, suits, demands, judgments, costs, interest and expense (including, without
being limited to, reasonable attorneys fees and expenses) which the indemnified party may be
subject to or suffer by reason of any claim made by any person, firm or corporation for any
commission, expense or other compensation as a result of the execution and delivery of this First
Amendment to Sublease, which is based on alleged conversations or negotiations by said person, firm
or corporation with the indemnifying party.
8. Condition. This First Amendment to Sublease is subject to (a) approval and consent
of Prime Lessor in accordance with this Section 6 and (b) the full execution of the Third Amendment
to Lease currently being negotiated between Sublessee and Prime Lessor to extend the term of the MJ
Research Sublease (the MJ Research Amendment). This First Amendment to Sublease shall not become
effective unless and until a written approval and consent to this First Amendment to Sublease is
executed and delivered by Prime Lessor to Sublessor and the MJ Research Amendment is fully
executed. If the above conditions are not satisfied within ten (10) business days of Sublessees
execution of this First Amendment to Sublease, either party may terminate this First Amendment to
Sublease by delivering written notice to the other.
9. Security Deposit. Sublessee shall maintain in effect throughout the Additional Term
a Letter of Credit as required under Section 15 of the Sublease. Within ten (10) days of the
Extension Effective Date, Sublessee at its sole cost and expense shall deliver to Sublessor, an
extension of the existing Letter of Credit or a replacement of the existing Letter of Credit in a
form and from a financial institution reasonably acceptable to Sublessor. Sublessee may at any time
substitute a cash security deposit for the Letter of Credit, and upon such substitution, Sublessor
shall return the Letter of Credit to Sublessee.
10. Miscellaneous. Unless the context requires otherwise, the terms used herein shall
be construed in conformity with the definitions set forth in the Sublease. References in the
Sublease to the MJ Research Sublease shall mean the MJ Research Sublease as amended, including by
the MJ Research Amendment. As hereby modified, the Sublease is ratified and confirmed and remains
in full force and effect.
IN WITNESS WHEREOF, Sublessor and Sublessee have caused this instrument to be executed under
seal as of the day and year first above written.
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OSCIENT PHARMACEUTICALS CORPORATION a Massachusetts corporation
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By |
/s/ Ph. M. MAITRE
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Name: |
Ph. M. MAITRE |
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Title: |
SVP & CFO. |
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FLUIDIGM CORPORATION, a Delaware corporation
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By |
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Name: |
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Title: |
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IN WITNESS WHEREOF, Sublessor and Sublessee have caused this instrument to be executed under
seal as of the day and year first above written.
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OSCIENT PHARMACEUTICALS CORPORATION a Massachusetts corporation
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By |
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Name: |
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Title: |
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FLUIDIGM CORPORATION, a Delaware corporation
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By |
/s/ Gajus Worthington
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Name: |
Gajus Worthington |
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Title: |
CEO |
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AGREEMENT OF LEASE
AGREEMENT OF LEASE made as of the 6th day of October, 2000, by
and between MJ Research Company, Inc. (hereinafter referred to as Landlord)
and Genesoft, Inc. (hereinafter referred to as Tenant).
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord a portion
of the building (the Building) in South San Francisco, as described in Section
1.1(4) below and shown on the plan attached hereto as Exhibit A and made a part
hereof (hereinafter referred to as the Premises or the Demised Premises).
1.1 Definitions. Each reference in this Lease to any of the terms
and titles contained in this Article shall be deemed and construed to incorporate the
data stated following that term or title in this Article.
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1) Additional Rent:
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Sums or other charges payable by Tenant to Landlord
under this Lease, other than Yearly Fixed Rent, all of
which shall be payable as additional rent under this
Lease. |
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2) Broker:
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None. |
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3) Business Day:
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All days except Saturdays, Sundays, days defined as
legal holidays for the entire state under the laws of
the State of California, and such other days as Tenant
presently or in the future recognizes as holidays for
Tenants general staff. |
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4) Demised Premises:
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Space on the first, second and third floors of the
Building at 7000 Shoreline Court, South San Francisco,
California 94080 (the Building), which space is shown
on the plans attached as Exhibit A. |
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5) Environmental Laws:
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As defined in Section 5.3 (a) (1). |
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6) Event of Default:
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The occurrence of an event listed in Section 19.1. |
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7) Hazardous Materials:
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As defined in Section 5.3 (a) (2). |
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pigs and relocate such
animals off-site or,
within a reasonable period
of time (not to exceed two
(2) business days) make
such arrangements as are
necessary to eliminate
such picketing, signage or
other disruption. |
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16) Prime Landlord:
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Mountain Cove Tech Center
LLC, a California limited
liability company. |
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17) Prime Lease:
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The lease dated November
9, 1999 between Prime
Landlord and Landlord. |
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18) Property:
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The Land and Building. |
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19) Rent:
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Yearly Fixed Rent and
Additional Rent. |
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20) Rentable Area of the Demised Premises:
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Approximately 68,460
rentable square feet. The
rentable square footage of
the Demised Premises upon
completion of Landlords
Work shall be measured by
Landlord according to the
most recent BOMA
standards, but in any
event shall include for
computation purposes 50%
of all common areas of the
Building, including,
without limitation,
elevators, lobbies,
hallways, exercise room,
security desk, and lunch
room. If Tenant disagrees
with Landlords
computation of the
rentable square footage of
the Premises, Tenant may,
at its expense, by notice
given no later than ten
(10) days after written
notice by Landlord of the
rentable square feet of
the Demised Premises,
submit the matter of the
square footage as to
arbitration as set forth
in Section 27.7 herein.
The inclusion of
elevators, hallways, the
exercise room,
security
desk and lunchroom in the
computations of rentable
square footage shall not
be deemed to make Tenant
liable for such facilities
as if it were the
exclusive lessee thereof. |
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21) Security Deposit:
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One Years Yearly Fixed
Rent, subject to decrease
as provided in Section
28.3. |
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22) Tenants Address:
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Until the Term Commencement
Date, Two Corporate Drive
South, San Francisco,
California 94080, and
thereafter, the Demised
Premises. |
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23) Term Commencement Date:
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As defined in Section 3.2. |
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24) Term of this Lease:
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As defined in Section 3.1. |
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25) Termination Date:
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As defined in Section 3.1. |
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26) Yearly Fixed Rent:
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$4.50 per rentable square
foot per month for the
first lease year, which
amount shall be increased
annually commencing with
the third lease year by
three and one half percent
(3.5%) compounded annually. |
1.2 Exhibits. The following exhibits are attached hereto and made a part
hereof:
A Plan of Demised Premises
A-l Plans and Specifications for Landlords Work
A-2 Landlords Work Necessary for Tenant Improvement Work
B Cleaning Specifications
C Rules and Regulations
D Sign Criteria
E Form of Letter of Credit
F List of Environmental Reports Given to Tenant
G List of Permitted Hazardous Materials
H List of Fixtures and Equipment to be Removed
2. |
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DESCRIPTION OF DEMISED PREMISES |
2.1 Demised Premises. The Demised Premises are that portion of the
Building as described above (as the same may from time to time be constituted after
changes therein, additions thereto and eliminations therefrom pursuant to rights of
Landlord hereinafter reserved).
2.2 Appurtenant Rights. Tenant shall have, as appurtenant to the
Demised Premises, rights to use in common, subject to reasonable rules from time
to time made by Landlord of which Tenant is given notice, those common roadways,
walkways, elevators, hallways and stairways necessary for access to that portion of
the Building occupied by the Demised Premises. There is also appurtenant to the
Demised Premises at no additional charge the nonexclusive use, in common with
Landlord and other entitled thereto, of the parking lot appurtenant to the Building,
which lot is designed to have three (3) parking spaces per 1,000 rentable square feet
4
in the Building. Landlord agrees that such parking lot shall be on a non-exclusive basis for Tenant
and others entitled thereto and shall not exclusively assign portions of the parking area without
providing equivalent and comparable exclusive assignments to Tenant, provided that, subject to
casualty and eminent domain, in no event shall Tenant have the use (non-exclusive or otherwise) of
not less than nor more than, three (3) spaces per 1,000 rentable square feet of the Demised
Premises during the Term, provided that there shall be deducted from the parking available to
Tenant any parking spaces lost due to Tenants outside storage facility referred to in Section
5.3(c). Tenant may not store cars in the parking lot, i.e., leave cars parked for more than seven
(7) days.
2.3 Reservations. All the perimeter walls of the Demised Premises except the inner
surfaces thereof, any balconies, terraces or roofs adjacent to the Demised Premises, and any space
in or adjacent to the Demised Premises used for serving other portions of the Building exclusively
or in common with the Demised Premises, including without limitation (where applicable) shafts,
stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms, ducts, electric or other
utilities, sinks or other Building facilities, and the use thereof, as well as the right of access
through the Demised Premises for the purpose of operation, maintenance, decoration and repair, are
expressly reserved to Landlord.
2.4 Certain Amenities. The named Tenant, Genesoft, Inc. shall have access to on
a nonexclusive basis, the following facilities:
(a) The exercise room. Landlord may charge a reasonable fee for towel service and
janitorial service.
(b) A security desk in the main lobby of the Building to be staffed from 9:00 a.m.
through 5:00 p.m. on all Business Days.
(c) The lunchroom and adjacent patio.
In the event the named Tenant Genesoft occupies less than 50% of the Building,
Landlord may eliminate said amenities (other than the security desk) or assign them
exclusively to Landlord or other occupants of the Building. Such amenities shall not be
available to assignees or subtenants of Tenant unless permitted in writing by Landlord.
3.1 Term. The Term of this Lease is ten (10) years (or until such Term shall
sooner cease or expire) commencing on the Term Commencement Date and ending on the day
immediately prior to the tenth (10th) anniversary thereof, except that if the Term
Commencement Date shall be other than the first day of a calendar month, the Term of this Lease
shall end on the last day of the calendar month in which said 10th anniversary of the
Term Commencement Date shall fall (which date
5
on which the Term of this Lease is scheduled to expire is hereinafter referred to as the
Termination Date).
3.2 Term Commencement Date. The Term Commencement Date shall be the earlier of (a) the
date on which, pursuant to permission therefor duly given by Landlord, Tenant undertakes Use of
the Demised Premises for the purposes set forth in Article 1, (b) the date on which the Demised
Premises are ready for Tenants occupancy in accordance with the provisions of Section 4.2, or (c)
March 1, 2001, but in no event prior to the date on which Landlords Work (as defined herein) is
substantially completed, unless and only to the extent that the lack of such substantial completion
is due to the fault, delay, or inaction by Tenant or to the roof work necessitated by Tenants
mechanical and other equipment to be placed on the roof. Notwithstanding the foregoing to the
contrary, if the work set forth on Schedule A-2 is not substantially complete by January 1, 2000
and the lack of such substantial completion is not due to fault, delay or inaction of Tenant or to
roof work necessitated by Tenants mechanical and other equipment to be placed on the roof, then
for each day beyond January 1, 2001 for which the work on Schedule A-2 is not substantially
complete, the March 1, 2001 date shall be extended for one day. Further notwithstanding anything in
the foregoing to the contrary, for purposes of determining when the Premises are ready for
occupancy for purposes of determining the Term Commencement Date, the Premises shall not be deemed
ready for occupancy until Tenant has completed its Tenant improvement work and obtained a
certificate of occupancy therefor. Tenant further acknowledges that if Landlord has completed its
work on Schedule A-2 on or before January 1, 2000 and made the Premises available to Tenant, Tenant
assumes the risk of delay for Tenant improvement work and acknowledges that (subject to Landlords
obligations as to substantial completion of Landlords Work) the Term will commence on March 1,
2001 whether or not Tenant has completed its work and obtained such a certificate of occupancy.
3.3 Option to Extend. Provided Tenant is not in default of the terms and covenants of
this Lease beyond applicable notice and grace periods, and provided Tenant has not assigned this
lease or subleased all or any portion of the Premises, it shall have the option to extend the Term
for five (5) years, exercisable by written notice given to Landlord no later than twelve (12)
months before the expiration of the original Term. All of the terms, conditions and covenants of
this Lease shall apply to the option term, except that there shall be no further extension beyond
that permitted above and that yearly Fixed Rent for the option term shall be computed as set forth
in Section 6 herein.
4. |
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PREPARATION OF PREMISES; TENANTS ACCESS |
4.1 Plans and Specifications. Landlord shall construct the Demised Premises in
accordance with the plans and specifications (the Plans) referenced in Exhibit A-l attached
hereto and made a part hereof (Landlords Work). Tenant
6
acknowledges that Landlords Work will produce a so-called cold shell that will not be ready for
Tenants occupancy.
4.2 When Landlords Work is Done. Landlords Work shall be conclusively deemed
finished after Landlord gives notice to Tenant that Landlords Work has been substantially
completed by Landlord. Notwithstanding anything to the contrary in this Lease, the Landlords Work
shall not be deemed substantially completed prior to the date on which: (a) construction and
installation of the improvements listed on Exhibit A-1, attached hereto, have been
substantially completed; (b) Tenant has direct access from the street to the elevator lobby on the
first floor; and (c) utility services are ready to be furnished to the Premises consistent with the
work set forth on Exhibit A-l. Such work shall not be deemed incomplete if only minor or
insubstantial details of construction or mechanical adjustments remain to be done, or if a delay is
caused in whole or in part by Tenant. Landlords Architects certificate of substantial completion,
as hereinabove stated, given in good faith, or of any other facts pertinent to such work, shall be
deemed conclusive of the statements therein contained and binding upon Tenant.
4.3 Conclusiveness of Landlords Performance. Tenant shall be conclusively deemed to
have agreed that Landlord has performed all of its obligations under this Article 4 unless not
later than the end of the second calendar month next beginning after the Landlords notice of
substantial completion under Section 4.2 unless Tenant shall give Landlord written notice
specifying the respects in which Landlord has not performed such obligations.
4.4 Entry by Tenant; Interference With Construction; Applicability of Lease Terms.
The Demised Premises shall be made available by Landlord to Tenant on or before January 1, 2001
(the Estimated Tenant Improvement Commencement Date) to undertake such work as is to be
performed by Tenant pursuant and subject to this Lease in order to prepare the Demised Premises
for Tenants occupancy. Such entry shall be deemed to be pursuant to a license from Landlord to
Tenant and shall be at the risk of Tenant. In no event shall Tenant interfere with any
construction being performed by or on behalf of Landlord in or around the Building or with the use
of the Building by Landlord or any other occupants; without limiting the generality of the
foregoing, Tenant shall comply with all instructions issued by Landlords contractors relative to
the moving of Tenants equipment and other property into the Demised Premises and shall pay any
fees or costs imposed in connection therewith. Once Tenant makes such entry, Tenant will be bound
by all terms and conditions of this Lease as if the Term had commenced, excepting payment of Rent.
Landlord agrees to use its good faith and reasonable efforts to coordinate with Tenant the
build-out of the Building shell and the tenant improvements.
4.5 Tenant Plans. Tenant shall perform no construction work in the Building
unless and until Landlord has approved all plans, specifications and the
7
identity of contractors and major subcontractors therefor and such plans have been consented to by
Landlords mortgagee. Landlord agrees that unless it has disapproved any Tenant plans within ten
(10) business days after receipt thereof, the plans shall be deemed approved. Tenant shall, upon
Landlords request, provide payment performance and lien bonds in commercially reasonable amounts
and terms. All of the provisions of Articles 9, 10 and 11 shall apply to Tenants work hereunder.
4.6 Tenant Improvement Allowance. Provided Tenant is not in default hereunder,
Landlord will provide Tenant with a Tenant Improvement Allowance of $25.00 per rentable square
foot. There shall be deducted from said Tenant Improvement Allowance the following: (i) 50% of the
cost of purchase and installation of the emergency generator for the Building, (ii) 50% of all
costs of upgrading the power capacity of the Building from 3500 amps to 4000 amps, including,
without limitation, any delay costs (not to exceed $5,000.00) imposed upon Landlord under its
construction contract with Opus attributable to said power capacity upgrades, (iii) all costs to
Landlord associated with using the roofer under contract with Opus, Tenant acknowledging and
understanding that use of said roofer in connection with the installation of Tenants rooftop
equipment and screens is required in order to maintain the roof warranty on the Building, and (iv)
the cost of supporting, extending and connecting all screens on the roof, including, without
limitation, all new screens, vertical steel beams, secondary structural support and all related
costs. Landlord shall fund the Tenant Improvement Allowance on a pro rata basis as Tenant pays its
contractor for Tenants work. Landlords contribution shall be funded based on the fraction of each
construction draw, the numerator of which is $25.00 per rentable square foot and the denominator of
which is the total cost of all work by Tenant to prepare the Demised Premises for Tenants
occupancy. Landlord shall have the right to reasonably approve Tenants schedule of estimated
construction disbursements. Landlord shall require Tenant to provide appropriate lien waivers and
other evidence of payment contractors, subcontractors and material suppliers prior to funding any
of the Tenant Improvement Allowance.
4.7 Inspections and Scheduling. Tenant may inspect the Building and the Premises
during the construction of the Landlords Work as it progresses. Landlord agrees to be available to
Tenant from time to time, on reasonable prior notice, as necessary or desirable to review the
Landlords Work.
4.8 Permits and Approvals. Landlord, at its sole cost and expense, shall obtain all
approvals, permits and other consents required to commence, perform and complete the Landlords
Work. Landlord agrees that the Landlords Work will comply with all applicable laws and other
governmental regulations as of the date of substantial completion including, but not limited to,
the Americans With Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and the City of South San
Francisco and State of California Building and fire codes, as the same may be amended from time to
time.
8
4.9 Construction Guaranty. Landlord guaranties the Landlords Work against defective
workmanship and/or materials for a period of 11 months from the date of substantial completion of
the Landlords Work, and Landlord agrees, at its sole cost and expense, to repair or replace any
defective item occasioned by poor workmanship and/or materials during said 11 month period. Nothing
in this Section 4.9 shall limit Landlords other repair obligations under this Lease.
4.10 Walkthrough and Punch List. Tenant shall be entitled to a walkthrough and punch
list with Landlords architect with respect to Landlords Work. The determination of the punch list
shall be at the sole and exclusive approval of Landlords architect. Landlord shall remedy all
punch list items within a commercially reasonable time.
5.1 Permitted Use. Tenant shall occupy and use the Demised Premises for the Permitted
Use set forth in Article 1 and for no other purpose. Service and utility areas (whether or not a
part of the Demised Premises) shall be used only for the particular purpose for which they are
designated. Tenant shall have access to the Demised Premises 24 hours per day, 7 days per week.
5.2 Prohibited Uses. Tenant shall not use, or suffer or permit the use of, or suffer
or permit anything to be done in or anything to be brought into or kept in, the Demised Premises or
any part thereof (i) which would violate any of the covenants, agreements, terms, provisions and
conditions of this Lease, (ii) for any unlawful purposes or in any unlawful manner, or (iii) which,
in the reasonable judgment of Landlord shall in any way (a) impair or tend to impair the appearance
or reputation of the Building, (b) impair or interfere with or tend to impair or interfere with any
of the Building services or the proper and economic heating, cleaning, air conditioning or other
servicing of the Building or with the use of any of the other areas of the Building, or (c)
occasion discomfort, inconvenience or annoyance to any of the other tenants or occupants of the
Building, whether through the transmission of noise or odors or vibrations or dust or otherwise.
Without limiting the generality of the foregoing, no food shall be prepared or served for
consumption by the general public on or about the Demised Premises; no intoxicating liquors or
alcoholic beverages shall be sold or otherwise served for consumption by the general public on or
about the Demised Premises; no lottery tickets (even where the sale of such tickets is not illegal)
shall be sold and no gambling, betting or wagering shall otherwise be permitted on or about the
Demised Premises; no loitering shall be permitted on or about the Demised Premises; and no loading
or unloading of supplies or other material to or from the Demised Premises shall be permitted on
the Land except at times (excluding Business Days from 7:00 to 9:30 a.m. and from 4:00 to 6:00
p.m.) and in locations to be reasonably designated by Landlord, except for the freight elevator
described in Section 7.4, which Tenant may use at any time. The Demised Premises shall be
9
maintained in a sanitary condition. Tenant shall suitably store all trash and rubbish in the
Demised Premises or other locations designated by Landlord from time to time. All laboratory waste,
Hazardous Materials and medical waste must be disposed of in compliance with Section 5.3. Tenant
specifically agrees that its indemnification obligations pursuant to Section 13.2 shall extend to
any claim arising from the consumption of intoxicating liquors or alcoholic beverages on or about
the Demised Premises.
5.3 Hazardous Materials.
(a) Definitions.
(1) Environmental Law means any governmental statute, code ordinance,
regulation, rule or order and any amendment thereto governing or regulating
materials that are toxic, explosive, corrosive, flammable, radioactive,
carcinogenic, dangerous or otherwise hazardous. Environmental Laws include, without
limitation, the Comprehensive Environmental Response Compensation and Liability Act,
42 U.S.C. §9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901
et seq., the California Hazardous Substances Act at California Health and Safety
Code Section l08100 et seq., the provisions regarding hazardous waste control at
California Health and Safety Code Sections 25100 through 25250.25 and the California
Medical Waste Management Act at California Health and Safety Code §117600 et seq.
(2) Hazardous Materials shall mean any substance: (A) that now or in the future
is regulated or governed by, requires investigation or remediation under, or is
defined as a hazardous waste, medical waste, hazardous substance, pollutant or
contaminant under any Environmental Law or (B) that is toxic, explosive, corrosive,
flammable, radioactive, carcinogenic, dangerous or otherwise hazardous, including
gasoline, diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs),
asbestos, radon and urea formaldehyde foam insulation.
(b) Tenants Covenants. No Hazardous Materials shall be stored, placed,
handled, used or released by Tenant or its employees, contractors, sublessees, guests or
visitors at or about the Demised Premises or Property without Landlords prior written
consent, which consent shall not be withheld provided the Hazardous Materials comply with
the criteria set forth in 5.3(c) for Permitted Materials. Landlord shall, within five (5)
business days after receipt of the proposed HMIS, either approve the same or provide Tenant
written notice of the reasons for its disapproval. Tenant shall submit to Landlord for
prior approval as above any HMIS (defined in Section 5.3(c))
10
prior to submission to applicable governmental authority. Notwithstanding the foregoing, storage
and use of routine office and janitorial supplies in usual and customary quantities and the
Permitted Materials as defined in subsection (c) below are permitted without Landlords prior
written consent, provided that Tenants activities at or about the Demised Premises and Property
shall comply at all times with the laws all Environmental Laws. Tenant shall keep Landlord fully
and promptly informed of all storage, placement, handling, use or release by Tenant or its
employees, contractors , sublessees, guests or visitors of all Hazardous Materials. At the
expiration or termination of the Lease, Tenant shall remove from the Demised Premises all Hazardous
Materials brought or released in or on the Building as a result of the activities of Tenant or its
employees, agents, servants, invitees, visitors, customers, contractors, sublessees, and those
other persons for whom Tenant is legally responsible (collectively Tenant Parties). Landlord
shall have the right to perform an environmental assessment of the Demised Premises after such
removal, which assessment shall be conducted at Landlords expense, unless it reveals that Tenant
has not complied with the requirements set forth in this Section 5.3, in which case Tenant shall
reimburse Landlord for the reasonable cost thereof within ten days after Landlords request
therefor. Nothing in this Section 5.3 shall require Tenant to indemnify Landlord for any matters
arising out of or caused by the actions or omissions of Landlord, its employees, agents,
contractors, licensees, or invitees.. Tenant shall be responsible and liable for the compliance
with all of the provisions of this Section by all of Tenant Parties and all of Tenants obligations
under this Section (including its indemnification obligations under subsection (e) below) shall
survive the expiration or termination of this Lease.
(c) Landlord hereby authorizes Tenant to use and store, in connection with its Permitted
Use, those materials and medical supplies listed on the Hazardous Material Inventory Statement
(HMIS) to be provided to the City of South San Francisco by Tenant with regard to the Demised
Premises (the Permitted Materials), provided the classes and quantities of Permitted Materials
comply with all applicable laws and do not alter the legal classification of the laboratories and
storage room, and storage tanks, under the Allowable Class Facilities (defined below). Tenant will
operate under all applicable Federal, State and Local laws governing the use, storage and
management of hazardous materials for building Occupancy Groups A3, B and H Divisions 2, 3 and 7,
as allowable, including Title 22 of the CFR as defined under the Uniform Building Code and Uniform
Fire Code developed by the International Fire Code Institute (the Allowable Class Facilities).
Landlord shall have the right to approve in writing Tenants construction and operation of said
storage facilities, including, without limitation, fire suppression, seismic restraint, enclosure
and landscaping features. In addition, Tenant may construct an outside storage facility for
storage of up to a total of 2,000 gallons of waste materials, provided no single
11
tank shall exceed 1,000 gallons, such outside storage is in compliance with all applicable laws and
regulations and does not cover a footprint of greater than 250 square feet. Landlord shall have the
right to approve all fire, safety, and seismic restraints, as well as all other plans and
specifications for said outside storage. Additional rent for said outside storage area shall be
$5,000.00 per year. Any consent or approval by Landlord of Tenants proposed use, handling and
storage of the Permitted Materials and/or the installation and operation or maintenance of said
tank shall not constitute an assumption of risk by Landlord respecting the same nor warranty or
certification by Landlord that Tenants proposed use, handling and storage of the Permitted
Materials and/or the installation, operation or maintenance of the tanks is safe, reasonable or in
compliance with Environmental Laws. All references to Hazardous Materials in this Lease shall
include the Permitted Materials.
(d) Compliance. Tenant shall at Tenants expense promptly take all actions
required by any governmental agency or entity in connection with or as a result of the storage,
placement, handling, use or release by Tenant Parties of Hazardous Materials at or about the
Demised Premises or Property, including inspection and testing, performing all cleanup, removal and
remediation work required with respect to those Hazardous Materials, complying with all closure
Laws and postclosure monitoring, and filing all required reports or plans. All medical waste
regulated by any Environmental Laws that is brought to the Demised Premises shall be stored in
leak-proof, closeable containers, which containers shall be stored in a specified dirty storage
area of the Demised Premises that shall be protected from leaks or any other type of contamination
of the Demised Premises. Tenant shall never use any of the Landlords trash receptacles for
disposing of any medical waste. All of the foregoing work shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work and in a manner
that will not interfere with any other tenants quiet enjoyment of the Property or Landlords use,
operation, leasing and sale of the Property. Tenant shall deliver to Landlord prior to delivery to
any governmental agency, or promptly after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all other documents relating to the
storage, placement, handling, use or release by Tenant Parties of Hazardous Materials at or about
the Demised Premises or Property. Upon prior written notice from Landlord, Tenant shall make
available to Landlord for Landlords inspection and copying all of Tenants documents, materials,
data, inventories and other documentation (including, without limitation, Material Safety Data
Sheets relating to Hazardous Materials as may be present or suspected to be present in, on or about
the Demised Premises. If any lien attaches to the Demised Premises or the Property in connection
with or as a result of the storage, placement, handling, use or release by Tenant Parties of
Hazardous Materials; and
12
Tenant does not cause the same to be released, by payment, bonding or otherwise, within ten (10)
days after the attachment thereof, Landlord shall have the right but not the obligation to cause
the same to be released and any sums expended by Landlord in connection therewith shall be payable
by Tenant on demand. Notwithstanding anything in the foregoing to the contrary, Tenant shall not be
responsible for Hazardous Materials not introduced to the Premises, the Building or the Land by
Tenant Parties.
(e) Tenant shall give Landlord immediate telephone notice and prompt written notice
(which means as soon as practicable and, in no event, more than one (1) day following the
applicable event) of any (i) spill, discharge, dumping, or other release of any Hazardous Materials
(including, without limitation, the Permitted Materials) on, in, under or from the Demised
Premises, the Building, or any portion of the Project, or the groundwater thereof, (ii) any oral or
written notice from any governmental agency received by Tenant of any such spill, discharge,
dumping, or other release of any Hazardous Materials, and (iii) any oral or written notice of any
violation, warning, deficiency, non-compliance, or other alleged or actual failure by Tenant to
comply strictly with any Environmental Law and/or any requirement, provision, or stipulation of any
governmental permit, license, registrations, or approval.
(f) Landlords Rights. Subject to the provisions of Section 15.2, Landlord
shall have the right, but not the obligation, to enter the Demised Premises at any reasonable time
upon 24 hours notice except in case of emergency (i) to confirm Tenants compliance with the
provisions of this Section, and (ii) to perform Tenants obligations under this Section if Tenant
has failed to do so after reasonable notice to Tenant. Landlord shall also have the right to
engage qualified Hazardous Materials consultants to inspect the Demised Premises and review the
storage, placement, handling, use or release by Tenant or its employees, contractors, sublessees,
guests or visitors of Hazardous Materials, including review of all permits, reports, plans, and
other documents regarding same. Tenant shall pay to Landlord on demand the reasonable costs of
Landlords consultants fees if Tenant is found to have violated the terms of this Section 5.3 any
and all reasonable costs incurred by Landlord in performing Tenants obligations under this
section. Landlord shall use reasonable efforts to minimize any interference with Tenants business
caused by Landlords entry into the Demised Premises, but Landlord shall not be responsible for
any interference caused thereby, unless such interference arises out of or is caused by the gross
negligence or willful misconduct of Landlord, its employees, agents, contractors, licensees, or
invitees.
(g) Tenants Indemnification. Tenant agrees to indemnify, defend and hold
harmless Landlord and its members, managers, directors, officers,
13
agents and employees and their partners, members, managers, directors, officers,
shareholders, employees and agents from all shall mean all costs and expenses of any kind,
damages, including foreseeable and unforeseeable consequential damages, fines and penalties
incurred in connection with any violation of and compliance with the Environmental Laws by
Tenant Parties and all losses of any kind attributable to the diminution of value, loss of
use or adverse effects on marketability or use of any portion of the Demised Premises or
Property by Tenant Parties and all other claims, actions, losses, damages, liabilities,
costs and expenses of every kind, including reasonable attorneys, experts and consultants
fees and costs, incurred at any time and arising from or connection with the storage,
placement, handling, use or release by Tenant or its employees, contractors, sublessees,
guests or visitors of Hazardous Materials at or about the Property or Tenants failure to
comply in full with all Environmental Laws with respect to the Demised Premises and the
Property.
(h) Landlord shall be responsible (at Landlords cost and expense) for any
remediation (to the extent required by law) of any Hazardous Materials placed on the
Premises by Landlord or Landlords agents or contractors and existing contamination
disclosed in the environmental assessments set forth on Exhibit F attached hereto.
5.4 Licenses and Permits. If any governmental license or permit shall be required
for the property and lawful conduct of Tenants business, and if the failure to secure such license
or permit would in any way affect Landlord, Tenant, at Tenants expense, shall duly procure and
thereafter maintain such license or permit and submit the same to inspection by Landlord. Tenant,
at Tenants expense, shall at all times comply with the terms and conditions of each such license
or permit.
6.1
Yearly Fixed Rent. Tenant shall pay to Landlord, without any set-off or deduction,
at Landlords office, or to such other person or at such other place as Landlord may designate by
notice to Tenant, the Yearly Fixed Rent set forth in Article 1. The Yearly Fixed Rent shall be paid
in equal monthly installments in advance on or before the first Business Day of each calendar month
during the Term of this Lease and shall be apportioned for any fraction of a month in which the
Term Commencement Date or the last day of the Term of this Lease may fall.
6.2 Rent During Option Term. Yearly Fixed Rent for the five (5) year option term shall
be an amount equal to the greater of (i) 95% of the fair-market rent for the first year of the
option term, or (ii) 103.5% of the Yearly Fixed Rent payable (without abatement) for the last year
of the original term. If the parties are unable to agree upon a fair market rent prior to ten (10)
months before the commencement of the applicable option term, the matter shall be referred to
14
appraisal as set forth in the following sections. Yearly Fixed Rent during the option term shall
increase annually commencing with the second year of the option term by three and one-half percent
(3.5%) compounded annually. The term fair market rent, for purposes of this Section 6.2, shall be
deemed to be the fair market rent for the Demised Premises finished to a level of completion for
ready to occupy first class office space.
6.3 Appraisal. Whenever the issue of fair market rent shall be referred to
appraisal, such appraisal shall be by three disinterested appraisers, one to be appointed by the
Landlord, one to be appointed by the Tenant and the third to be appointed by the two appraisers so
named. Within thirty (30) days after the selection of the third appraiser, the three appraisals
shall be added together and their total divided by three; the resulting quotient shall be the fair
market rent for the Premises. If, however, the low appraisal and/or the high appraisal are more
than ten (10%) percent lower and/or higher than the middle appraisal, the low appraisal and/or high
appraisal shall be disregarded, as applicable. If only one appraisal is disregarded, the remaining
two appraisals shall be added together and their total divided by two; the resulting quotient shall
be the fair market rent for the Premises. If both the low appraisal and the high appraisal are
disregarded as stated in this paragraph, the middle appraisal shall be the fair market rent of the
Premises. Each party shall pay the costs of the appraiser selected by such party, and the parties
shall share equally the cost of the third appraiser. Each individual appraiser shall have at least
ten years of experience in appraising fair market rents of comparable properties and shall hold one
or more of the following designations: MAI of the American Institute of Real Estate Appraisers,
SREA from the Society of Real Estate Appraisers or ASA from the American Society of Appraisers.
6.4 Interim Rent. If the fair market rental value per year is not determined
prior to the commencement of the five year option term, the Tenant shall pay Fixed Rent as though
the Fixed Rent was that Fixed Rent in effect (without abatement) during the last year of said
preceding lease year period until such determination has been made. Following such determination,
the Tenant shall promptly pay the Landlord the difference, if any, between the aggregate rent
which would have been paid during said period and the aggregate rent actually paid. Thereafter,
all rent shall be computed and paid in accordance with Section 6.2.
6.5 Taxes. Tenant shall timely file business property statements with respect to
Tenants personal property and trade fixtures and pay when due all taxes imposed on such personal
property and trade fixtures. Tenant shall also pay all real estate taxes attributable to the
Demised Premises being improved to a standard in excess of first class office space.
6.6 Obligations Survive Termination. All obligations and liabilities of Tenant
relating to any period prior to the termination of the Term of this Lease,
15
including without limitation the obligation to pay any Additional Rent due pursuant to the
provisions of this Article, shall survive such termination.
6.7 Payment to Mortgagee. Landlord reserves the right to provide in any Mortgage given
by it or by Prime Landlord of the Property that some or all rents, issues, and profits and all
other amounts of every kind payable to the Landlord under this Lease shall be paid directly to the
Mortgagee for Landlords account and Tenant covenants and agrees that it will, after receipt by it
of notice from Landlord or Mortgagee designating such Mortgagee to whom payments are to be made by
Tenant, pay such amounts thereafter becoming due directly to such Mortgagee until excused therefrom
by notice from such Mortgagee.
6.8 Additional Rent. Tenant shall also pay as additional rent without notice, except
as required under this Lease, and without any abatement, deduction or setoff except as provided
herein, all sums, impositions, costs, expenses and other payments which Tenant in any of the
provisions of this Lease assumes or agrees to pay, and, in case of any nonpayment thereof, Landlord
shall have in addition to any other rights and remedies, all of the rights and remedies provided by
law or provided for in the Lease for the nonpayment of Yearly Fixed Rent.
6.9 Place of Payment of Rent. All payments of Rent shall be made by Tenant to Landlord
without notice or demand at such place as Landlord may from time to time designate in writing. The
initial place for payment of rent shall be 384 Oyster Point Blvd, So. San Francisco, CA 94080. Any
extension of time for the payment of any installment of rent, or the acceptance of rent after the
time at which it is due and payable shall not be a waiver of the rights of Landlord to insist on
having all other payments made in the manner and at the times herein specified.
6.10 Cleaning and Utilities. Tenant shall pay for all utilities used or consumed in
the Demised Premises, including without limitation water, gas, electricity, sewer, telephone, and
all electricity used in heating, ventilating and air conditioning the Demised Premises. In the
event such utilities are not separately billed by the applicable utility supplier, Tenant shall pay
its share of the amount of such bill for the entire Building as measured by submeters or check
meters measuring consumption of such utilities in the Demised Premises. In addition, Tenant shall
arrange for cleaning of the Tenant space in accordance with the cleaning schedule attached hereto
as Exhibit B with a cleaning contractor subject to Landlords approval, which approval shall not be
unreasonably withheld. Tenant shall pay all such costs of cleaning.
7. UTILITIES AND LANDLORDS SERVICES |
7.1 Electricity. Tenant shall purchase directly from the public utility serving the
Building all electrical energy that Tenant requires for operation of the lighting fixtures,
appliances and equipment servicing the Demised Premises. The
16
costs of initially installing any required meter, submeter or check meter and related installation
equipment shall be paid by Landlord. Landlord shall not be liable in any way to Tenant for any
failure or defect in the supply or character of electrical energy furnished to the Demised Premises
by reason of any requirement, act or omission of the public utility serving the Building.
Notwithstanding the foregoing, the design electrical capacity for the Building is 4000 amperes of
electricity, and Tenant shall be entitled to the use of half of the electricity available for
Tenant spaces, i.e., a minimum and a maximum of 2000 amperes. Tenants use of electrical energy in
the Demised Premises shall not at any time exceed the capacity of any of the electrical conductors
and equipment in or otherwise serving the Demised Premises. In order to insure that such capacity
is not exceeded and to avert possible adverse effect upon the Building electrical services Tenant
shall give notice to Landlord and obtain Landlords prior written consent whenever Tenant shall
connect to the Building electrical distribution system any fixtures, appliances or equipment other
than lamps, typewriters, personal computers and similar small machines. Landlords consent to the
plans for Tenants initial improvements shall, to the extent that Tenants electrical system and
loads are shown on said plans, suffice as consent for the purposes of this Section 7.1. Any feeders
or risers to supply Tenants electrical requirements, shall be installed by Landlord upon Tenants
request, at the sole cost and expense of Tenant, provided that such feeders and risers are
permissible under applicable laws and insurance regulations and the installation of such feeders or
risers will not cause permanent damage or injury to the Building or cause or create a dangerous
condition or unreasonably interfere with other tenants of the Building. Tenant agrees that it will
not make any alteration or addition to the electrical equipment in the Demised Premises without the
prior written consent of Landlord in each instance first obtained, which consent will not be
unreasonably withheld. Landlord, at Tenants expense, shall purchase, install and replace all light
fixtures, bulbs, tubes, lamps, lenses, globes, ballasts and switches used in the Demised Premises.
7.2 Water Charges. Landlord shall furnish cold water for ordinary cleaning, toilet,
drinking purposes in accordance with Exhibit A-l and hot and cold water for lavatory purposes.
Tenant shall pay for its share of water and related sewer charges in accordance with Section 6.10.
7.3 Heat and Air Conditioning. Landlord shall furnish to and distribute in the common
areas of the Building heat and air conditioning as normal seasonal changes may require on Business
Days from 8:00 a.m. to 6:00 p.m. and on Saturdays from 9:00 a.m. to 1:00 p.m., provided Landlord
may run common area HVAC on an economy mode on Saturdays. Tenant agrees to lower and close the
blinds or drapes when necessary because of the suns position whenever the air conditioning system
is in operation, and to cooperate fully with Landlord with regard to, and to abide by all the
regulations and requirements which Landlord may prescribe for the proper functioning and
protection of, the heating and air conditioning system. Without limiting the generality of the
foregoing, all windows
17
in the Demised Premises must remain closed at all times notwithstanding the fact that such windows
may be operable. The air conditioning system servicing the Building is designed to provide cooling
based upon an occupancy of not more than one person per one hundred (100) square feet of floor
area, and upon a combined lighting and standard electrical load not to exceed 3.0 watts per square
foot or 2,000 amperes for the entire Demised Premises. In the event Tenant exceeds such condition
or introduces into the Demised Premises equipment which overloads such system, or in any other way
causes such system not to adequately perform its proper functions, supplementary systems may at
Landlords option be provided by Landlord at Tenants expense. Tenant shall be responsible for
furnishing heat and air conditioning to the Demised Premises.
7.4 Elevator Service. Landlord shall provide non exclusive passenger elevator service
consisting of two (2) elevators to the Demised Premises on Business Days from 8:00 a.m. to 6:00
p.m. and on a reduced basis at all other times. Freight elevator service shall be available in
common with other tenants on Business Days from 9:30 a.m. to 4:00 p.m. and at other times at
reasonable charge. Tenant shall be responsible for constructing a freight elevator exclusively to
serve the Demised Premises.
7.5 Cleaning. Landlord shall furnish cleaning services to the common areas of the Building
substantially in accordance with the specifications attached hereto as Exhibit B and made a part
hereof.
7.6 Repairs and Other Services. Except as otherwise provided in Articles 8 and 16, and
subject to Tenants obligations in Article 12 and elsewhere in this Lease, Landlord shall at
Landlords expense (a) keep and maintain the roof, exterior walls, structural floor slabs and
columns of the Building in as good condition and repair as they are in on the Term Commencement
Date, reasonable use and wear excepted, (b) keep and maintain in workable condition the Buildings
sanitary, electrical, heating, air conditioning and other systems, (c) keep all walkways on the
Property clean and remove all snow and ice therefrom, (d) provide grounds maintenance to all
landscaped areas, (e) arrange for the extermination of rodents and vermin in the Building (other
than rodents arising out of Tenants small animal facility), and (f) keep and maintain the parking
lot adjacent to the Building in good condition and repair.
7.7 Landlords Further Responsibilities.
(a) Landlord shall be responsible at its sole cost and expense for the removal of
all trash and garbage (excluding Hazardous Materials, laboratory, biological and animal
waste) from the designated containers outside of the Building.
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(b) Landlord shall allow Tenant to have full access to and use of the largest
conference room on the third floor of the Building up to eight (8) days per year, as
reasonably agreed to in advance by Landlord and Tenant and upon payment of a reasonable fee
for each such use.
(c) Landlord shall comply with all obligations imposed on it in the CCRs (defined in
Section 27.12) and shall pay its share of any future costs of providing BART shuttle
service.
7.8 Interruption or Curtailment of Services. Landlord reserves the right to
interrupt, curtail, stop or suspend the furnishing of services and the operation of any Building
system, when necessary by reason of accident or emergency, or of repairs, alterations, replacements
or improvements in the reasonable judgment of Landlord desirable or necessary to be made, or of
difficulty or inability in securing supplies or labor, or of strikes, or of any other cause beyond
the reasonable control of Landlord, whether such other cause be similar or dissimilar to those
hereinabove specifically mentioned, until said cause has been removed. Landlord shall use
reasonable efforts to minimize interruption to Tenant by any such interruption or curtailment of
services. Landlord shall have no responsibility or liability for any such interruption,
curtailment, stoppage, or suspension of services or systems, except that Landlord shall exercise
reasonable diligence to eliminate the cause of same. Notwithstanding the foregoing, if utilities or
Building services are interrupted due to the fault of Landlord (Tenant acknowledging that Landlord
shall have no responsibility for failure of municipal or public utility suppliers to supply
utilities to the Building), and such disruption continues for more than seven (7) days, rent shall
abate if the Demised Premises are unusable and Tenant in fact vacates the Demised Premises.
8. |
|
CHANGES OR ALTERATIONS BY LANDLORD |
Landlord reserves the right, exercisable by itself or its nominee, including without
limitation Prime Landlord, at any time and from time to time without the same constituting an
actual or constructive eviction and without incurring any liability to Tenant therefor or
otherwise affecting Tenants obligations under this Lease, to make such changes, alterations,
additions, improvements, repairs or replacements in or to the Building and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, passages, elevators, and
stairways thereof, as it may deem necessary or desirable, and to change the arrangement and/or
location of entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets, or other public parts of the Building, provided, however, that there be no unreasonable
obstruction of the right of access to, or unreasonable interference with the use and enjoyment of,
the Demised Premises by Tenant, except that Landlord shall not be obligated to employ labor at
so-called over-time or other premium pay rates. Nothing contained in this Article shall be
deemed to relieve Tenant of any duty, obligation or liability of Tenant with respect to making or
causing to be made
19
any repair, replacement or improvement or complying with any law, order or requirement of any
governmental or other authority. Landlord reserves the right to prior to the Commencement Date
create two (2) addresses for the Building. Neither this Lease nor any use by Tenant shall give
Tenant any right or easement or the use of any door or any passage or any concourse connecting with
any other building or to any public convenience, and the use of such doors, passages and concourses
and of such conveniences may be regulated or discontinued at any time and from time to time by
Landlord without notice to Tenant and without affecting the obligations of Tenant hereunder or
incurring any liability to Tenant therefor.
9. |
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FIXTURES, EQUIPMENT AND IMPROVEMENTS REMOVAL BY TENANT |
All fixtures, equipment, leasehold improvements and appurtenances attached to or built into the
Demised Premises prior to or during the Term, whether by Landlord at its expense or at the expense
of Tenant (either or both) or by Tenant shall be and remain part of the Demised Premises and shall
not be removed by Tenant at the end of the Term unless otherwise expressly provided by notice from
Landlord to Tenant. Upon the request of Landlord, Tenant will remove such fixtures, equipment,
leasehold improvements and appurtenances as are directed by Landlord and shall restore any damage
caused by such removal. Notwithstanding the foregoing to the contrary, Tenant may, in
connection with the initial Tenant improvements or any other fixtures, alterations or additions to
the Demised Premises, upon presentation of detailed plans and specifications therefor, request in
writing that Landlord advise Tenant which of said improvements, alterations or additions Landlord
will require Tenant to remove at the end of the Term. Landlord shall advise Tenant in writing
within thirty (30) days after receipt of such written request and the accompanying plans and
specifications. If Landlord shall, in said written notice, require Tenant to remove an item at the
end of the Term, Landlord shall have the right to rescind that decision and require Tenant to leave
said item in place at the end of the Term by subsequent written
notice to Tenant. Tenant shall
remove the fixtures and equipment on Exhibit H and shall remediate all environmental contamination
and Hazardous Materials associated with said items. All such removal shall be done in a good and
workmanlike manner, and Tenant shall repair and restore any damage to the Building caused by such
removal. In addition, any duct work, controls and rooftop exhaust equipment associated with the
exhaust hoods must also be removed. Tenant shall structurally in-fill patch, flash and cap the roof
to a weather-tight condition consistent with the four-ply built-up construction so as not to void
the roof warranty. The in-wall and above ceiling copper and plastic piping associated with the
vacuum compressed air or DI system and any specialty gas piping must be removed and remediated if
any of the same is shown to be contaminated as provided in the environmental inspection of the
Demised Premises made pursuant to Section 5.3(b). Any contaminated rooftop HVAC units and
associated duct work shall also require removal at the Landlords discretion. Also, office
workstations must be removed and remediated.
20
10. |
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ALTERATIONS AND IMPROVEMENTS BY TENANT |
Tenant shall make no alterations, decorations, installations, removals, additions or
improvements in or to the Demised Premises without Landlords prior written consent and then only
by contractors or mechanics approved by Landlord. No such installations or other work shall be
undertaken or begun by Tenant until Landlord has approved written plans and specifications
therefor; and no amendments or additions to such plans and specifications shall be made without
prior written consent of Landlord. Such approval shall not be unreasonably withheld provided such
installations or work are non-structural, do not affect the exterior of the Building, and do not
interfere with or impair utilities and systems in the Building. Notwithstanding the foregoing,
Landlords consent shall not be required for any alteration, addition or improvement that either
(a) costs leas than Twenty-Five Thousand Dollars ($25,000.00) or (b) satisfies all of the following
criteria: (i) is of a cosmetic nature such as painting, wallpapering, hanging pictures and
installing carpeting, (ii) is not visible from the exterior of the Premises or Building, and (iii)
will not affect the systems or structure of the Building, provided, however, in any such instance
Tenant provides plans and specifications for such work not less than ten (10) days before
commencing such work. Any such alterations, decorations, installations, removals, additions and
improvements shall be done at the sole expense of Tenant and at such times and in such manner as
Landlord may from time to time reasonably designate. Subject to the terms of Section 9 herein, if
Tenant shall make any alterations, decorations, installations, removals, additions or improvements,
then Landlord may elect to require Tenant at the expiration of this Lease to restore the Demised
Premises to substantially the same condition as existed at the Term Commencement Date.
11. |
|
TENANTS CONTRACTORS MECHANICS AND OTHER
LIENS STANDARD OF TENANTS
PERFORMANCE COMPLIANCE WITH LAWS |
Whenever Tenant shall make any alterations, decorations, installations, removals, additions
or improvements or do any other work in or to the Demised Premises, Tenant will strictly observe
the following covenants and agreements:
(a) In no event shall any material or equipment be incorporated in or added to
the Demised Premises in connection with any such alteration, decoration, installation,
addition or improvement which is subject to any lien, charge, mortgage or other
encumbrance of any kind whatsoever or is subject to any security interest or any form of
title retention agreement. Any mechanics lien filed against the Demised Premises or the
Building for work claimed to have been done for, or materials claimed to have been
furnished to Tenant shall be discharged by Tenant within twenty (20) days thereafter, at
the expense of Tenant, by filing the bond required by law or otherwise. If
21
Tenant fails so to discharge any lien, Landlord may do so at Tenants expense and Tenant
shall reimburse Landlord for any expense or cost incurred by Landlord in so doing within
fifteen (15) days after rendition of a bill therefor.
(b) All installations or work done by Tenant under this or any other Article of this
Lease shall be at its own expense (unless expressly otherwise provided) and shall at all
times comply with (i) laws, rules, orders and regulations of governmental authorities having
jurisdiction thereof and (ii) plans and specifications prepared by and at the expense of
Tenant theretofore submitted to Landlord for its prior written approval.
(c) Tenant shall procure all necessary permits before undertaking any work in the
Demised Premises; do all such work in a good and workmanlike manner, employing materials of
good quality and complying with all governmental requirements, and defend, save harmless,
exonerate and indemnify Landlord from all injury, loss or damage to any person or property
occasioned by or growing out of such work.
(d) Tenant shall notify Landlord no later than ten (10) days prior to starting work on
any alterations so that Landlord shall have the opportunity to post a Notice of
nonresponsibility at the Demised Premises and record said notice in the county in which,
the Property is located pursuant to California Civil Code Section 3094.
(e) all contractors and subcontractors shall be approved by Landlord, which approval
shall not be unreasonably withheld, and all work by Tenant shall be performed by such
contractors and subcontractors and in such manner as to maintain harmonious labor relations.
Tenant, at its expense, shall keep or cause to be kept, all and singular, the Demised Premises
in good repair, order and condition, reasonable use and wear thereof and damage by fire or by
unavoidable casualty excepted. Without limiting the generality of the foregoing, Tenant shall keep
all interior windows and other glass whole, and shall replace the same whenever broken with glass
of the same quality and shall repair or replace all exterior windows if damaged by neglect or
wrongdoing of Tenant. Tenant hereby waives the benefits of California Civil Code Section 1932(1).
13. |
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INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION |
13.1 Tenants Insurance
(a) Liability Insurance. Tenant shall maintain in full force
throughout the Term commercial general liability and property damage
22
insurance providing coverage on an occurrence form basis with limits of not less than Five Million
Dollars ($5,000,000.00) each occurrence for bodily injury and property damage combined, Five
Million Dollars ($5,000,000.00) annual general aggregate, and Five Million Dollars ($5,000,000.00)
products and completed operations (if applicable) annual aggregate. Tenants liability insurance
policy or policies shall: (i) include premises and operations liability coverage, automobile,
products and completed operations liability coverage (if applicable), broad form property damage
coverage including completed operations (if applicable), blanket contractual liability coverage
with, to the maximum extent possible, coverage for the indemnification obligations of Tenant under
this Lease, and personal and advertising injury coverage; (ii) provide that the insurance company
has the duty to defend all insureds under the policy; (iii) provide that defense costs are paid in
addition to and do not deplete any of the policy limits; (iv) cover liabilities arising out of or
incurred in connection with Tenants use or occupancy of the Premises or the Property; and (v)
extend coverage to cover liability for the actions of Tenants employees, contractors, sublessees,
guests and visitors. Tenants required insurance may be maintained by a combination of underlying
and umbrella coverage.
(b) Leasehold Improvements Personal Property Insurance. Tenant shall at all
times maintain in effect with respect to Tenants leasehold improvements and fixtures, equipment
and personal property located at or within the Demised Premises, builders risk and commercial
property insurance providing coverage, at a minimum, for broad form perils, to the extent of
100% of the full replacement cost of covered property. Tenant may carry such insurance under a
blanket policy, provided that such policy provides equivalent coverage to a separate policy.
During the Term, the proceeds from any such policies of insurance shall be used for the repair or
replacement of such leasehold improvements, fixtures, equipment and personal property so insured.
Landlord shall be provided coverage under such insurance to the extent of its insurable interest
and, if requested by Landlord, both Landlord and Tenant shall sign all documents reasonably
necessary or proper in connection with the settlement of any claim or loss under such insurance.
Landlord shall have no obligation to carry insurance on any such Tenants leasehold improvements
or on Tenants fixtures, equipment or personal property.
(c) Workmens Compensation Insurance. Tenant shall maintain workers compensation
insurance as required by law and employers liability insurance in an amount not less than Five
Hundred Thousand Dollars ($500,000).
(d) Business Interruption/Extra Expense Insurance. Tenant shall maintain loss of
income, business interruption and extra expense insurance
23
in such amounts as will reimburse Tenant for direct or indirect loss of earnings and incurred costs
attributable to the perils commonly covered by Tenants property insurance described above but in
no event less than One Million Five Hundred Thousand Dollars ($1,500,000.00). Such insurance shall
be carried with the same insurer that issues the insurance for the personal property.
(e) Other Coverage. Tenant, at its cost, shall maintain such other insurance as
Landlord may reasonably require from time to time, but in no event may Landlord require any other
insurance which is (i) not then being required of comparable tenants leasing comparable amounts of
space in comparable buildings in the vicinity of the Building or (ii) not then available at
commercially reasonable rates.
(f) Insurance Criteria. Each policy of insurance required under this Section shall:
(i) be in a form, and written by an insurer, reasonably acceptable to Landlord, (ii) be maintained
at Tenants sole cost and expense, and (iii) require at least thirty (30) days written notice to
Landlord prior to any cancellation, nonrenewal or modification of insurance coverage. Insurance
companies issuing such policies shall have rating classifications of A or better and financial
size category ratings of XIII or better according to the latest edition of the A.M. Best Key
Rating Guide. All insurance companies issuing such policies shall be licensed to do business in the
State of California. Any deductible amount under such insurance shall not exceed maximum deductible
amounts currently required under similar leases for buildings in the vicinity of the Building, with
Tenant having the burden of proof. Tenant shall provide to Landlord, upon request, evidence that
the insurance required to be carried by Tenant pursuant to this Section, including any endorsement
affecting the additional insured status, is in full force and effect and that premiums therefore
have been paid.
(g) Increase in Amount of Insurance. Tenant shall increase the amounts of insurance as
required by any Mortgagee, and, not more frequently than once every three (3) years, as recommended
by Landlords insurance broker, if, in the reasonable opinion of either of them, the amount of
insurance then required under this Lease is not adequate. Any limits set forth in this Lease on the
amount or type of coverage required by Tenants insurance shall not limit the liability of Tenant
under this Lease.
(h) Insurance Provisions. Each policy of liability insurance required by this
Section shall: (i) contain a cross liability endorsement or separation of insureds clause; (ii)
provide that it is primary to and not contributing with, any policy of insurance carried by
Landlord or Prime Landlord covering the same loss; (iii) provide that any failure to comply with
the reporting provisions shall not affect coverage provided to Landlord, Prime Landlord,
24
their officers, directors, shareholders, members, property managers and mortgagees; and (iv)
name Prime Landlord, Mortgagees, Landlord, their officers, directors, employees,
shareholders, members, property managers and such other parties in interest as Landlord may
from time to time reasonably designate to Tenant in writing, as additional insureds. Such
additional insureds shall be provided the same extent of coverage as provided to Tenant under
such policies. All endorsements affecting such additional insured status shall be acceptable
to Landlord and shall be at least as broad as additional insured endorsement form number CG
20 11 11 85 promulgated by the Insurance Services Office.
(i) Evidence of Coverage. Prior to occupancy of the Premises by Tenant,
and not less than thirty (30) days prior to the expiration of any policy thereafter, Tenant
shall furnish to Landlord a certificate of insurance reflecting that the insurance required
by this Section is in force accompanied by an endorsement showing the required additional
insureds satisfactory to Landlord in substance and form. Notwithstanding the requirements of
this paragraph, Tenant shall, at Landlords request, provide to Landlord within a
commercially reasonable time a certified copy of each insurance policy required to be in
force at any time pursuant to the requirements of this Lease or its Exhibits. Tenants
failure to furnish Landlord with such certificates of insurance within a reasonable time (not
to exceed ten (10) days) after Landlords request shall be deemed a material default under
this Lease.
13.2 General. Tenant will save Landlord harmless, and will exonerate and indemnify
Landlord and Prime Landlord, from and against any and all claims, liabilities, penalties, damages
or expenses (including without limitation reasonable attorneys fees) asserted against or incurred
by Landlord or Prime Landlord:
(a) on account of or based upon any injury to person, or loss of or damage to property
sustained or occurring on the Demised Premises on account of or based upon the act,
omission, fault, negligence or misconduct of any person whomsoever (other than Landlord,
Prime Landlord or their agents, contractors or employees);
(b) on account of or based upon any injury to person or loss of or damage to property,
sustained or occurring elsewhere (other than on the Demised Premises) in or about the
Building (and, in particular, without limiting the generality of the foregoing on or about
the elevators, stairways, public corridors, sidewalks, roof, or other appurtenances and
facilities used in connection with the Building or Demised Premises) arising out of the use
or occupancy of the Building or Demised Premises by Tenant, or any person claiming by,
through or under Tenant;
25
(c) on account of or based upon (including moneys due on account of) any work or thing
whatsoever done (other than by Landlord, Prime Landlord or their contractors, or agents or
employees of any such party) in the Demised Premises during the Term of this Lease and
during the period of time, if any, prior to the Term Commencement Date that Tenant may have
been given access to the Demised Premises; and
(d) on account of or resulting from the failure of Tenant to perform and discharge any
of its covenants and obligations under this Lease;
and, in case any action or proceeding be brought against Landlord or Prime Landlord by reason of
any of the foregoing, Tenant upon notice from Landlord shall at Tenants expense resist or defend
such action or proceeding and employ counsel therefor reasonably satisfactory to Landlord, it being
agreed that such counsel as may act for insurance underwriters of Tenant engaged in such defense
shall be deemed satisfactory.
13.3 Property of Tenant. In addition to and not in limitation of the foregoing, and
subject only to provisions of applicable law, Tenant covenants and agrees that all merchandise,
furniture, fixtures and property of every kind, nature and description which may be in or upon the
Demised Premises or elsewhere on the Property during the Term of this Lease, shall be at the sole
risk and hazard of Tenant, and that if the whole or any part thereof shall be damaged, destroyed,
stolen or removed from any cause or reason whatsoever other than the negligence or misconduct of
Landlord or Prime Landlord or their contractors, or agents or employees of any such party, no part
of said damage or loss shall be charged to, or borne by Landlord or Prime Landlord.
13.4 Bursting of Pipes, etc. Landlord shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, seismic events, earthquakes, falling plaster or
tiles, steam, gas, electricity, electrical disturbance, water, rain or snow or leaks from any part
of the Building or from the pipes, appliances or plumbing works or from the roof, street or
sub-surface or from any other place or caused by any other cause of whatever nature, unless caused
by or due to the negligence of Landlord, its agents, servants or employees; nor shall Landlord or
its agents be liable for any such damage caused by other tenants or persons in the Building or
caused by operations in construction of any private, public or quasi-public work; nor shall
Landlord be liable for any latent defect in the Demised Premises or elsewhere in the Building.
13.5
Landlords Insurance. Landlord shall, at its sole expense, carry so-called all
risk full replacement cost casualty insurance on the Building (exclusive of Tenants leasehold
improvements, fixtures and equipment).
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14. |
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ASSIGNMENT, MORTGAGING, SUBLETTING, ETC. |
14.1 Generally. Tenant shall not voluntarily, involuntarily or by operation of law
assign, transfer, mortgage or otherwise encumber this Lease or any interest of Tenant therein, in
the whole or in part of the Premises or permit the Premises or any part thereof to be used or
occupied by others, without the prior written consent of Landlord and Landlords mortgagee. Except
in connection with a public stock offering, a transfer of any of Tenants stock or a transfer or
change of control of Tenant (if Tenant is a corporation), or a change in the composition of persons
or entities owning any interest in Tenant (if Tenant is not a corporation), or any transfer of
Tenants interest in the Lease by operation of law or by merger or consolidation of Tenant with or
into any other entity, firm or corporation, shall be deemed an assignment for purposes of this
Article 14. Notwithstanding anything to the contrary in this Lease, except with respect to
Corporate Transfers (hereinafter defined) to a Competitor (as defined in Section 14.2), Tenant
shall not be required to obtain Landlords consent, and the terms of Sections 14.2 and 14.3 of this
Lease shall not apply, to any transfer of Tenants stock or a transfer or change of control of
Tenant or other transfer to an entity which controls, is controlled by or is under common control
with Tenant or any successor to Tenant or which succeeds to substantially all of Tenants assets
and business by merger, consolidation, reorganization or purchase or in connection with an initial
public offering (collectively referred to as Corporate Transfers). Tenant shall give Landlord
written notice at least thirty (30) days prior to the effective date of such Corporate Transfer. As
used herein, the terms controlled or controls or control shall mean ownership of at least
fifty-one percent (51%) of voting control of the relevant entity.
14.2 Landlords Options. In connection with any request by Tenant for Landlords
consent to assignment or subletting, Tenant shall submit to Landlord in writing (Tenants
Sublease Notice) (i) the name of the proposed assignee or subtenant, (ii) such information as to
its financial responsibility and standing as Landlord may reasonably require, and (iii) all of
the terms and provisions upon which the proposed assignment or subletting is to be made. Within
ten (10) business days after receipt from Tenant of Tenants Sublease Notice and receipt of the
information required hereunder, Landlord shall have the following options: (a) reasonably
withholding its consent if the proposed sublease is at least 10,000 rentable square feet, or if
the proposed sublease is less than 10,000 rentable square feet, withholding consent in its sole
and absolute discretion; (b) withholding consent if the proposed assignee or sublessee is a
Competitor (as that term is hereinafter defined); (c) if the request is made after the third
(3rd) anniversary of the commencement of the Term and is to sublet a portion of the Premises, to
elect to match said offer and sublease the Demised Premises or relevant portion thereof on the
same terms and conditions as set forth in Tenants Sublease Notice; (d) if the request is made
after the third (3rd) anniversary of the commencement of the Term and is to assign this Lease or
sublet all of the Premises, elect to match said offer
27
and accept an assignment of this Lease on the same terms and conditions set forth in Tenants
Sublease Notice, or (e) consenting to the proposed assignment or such leasing. The term
Competitor, as used herein shall mean any person or entity engaged in the manufacture or sale of
instruments for DNA sequencing or amplification, including, without limitation, the following
businesses and any affiliates, subsidiaries, parents or successors thereto: PE Corp., Applera
Corporation, PE Biosystems, Inc., Applied Biosystems, Inc., Celera Genomics, Inc., Celera Genomics
Group, F. Hoffmann-LaRoche Ltd., Hoffmann-LaRoche, Inc., Roche Diagnostics Corporation, Roche
Molecular Systems, Inc., Amersham Pharmacia Biotech, Ltd., Molecular Dynamics, Inc., Perkin Elmer
Corporation, Strategene, Hybade Ltd., Ericomp, Techne Corporation, MWG Biotech AG, Whatman
Biometra, Labreco, Inc., Bio-Rad Laboratories, Inc., and Cepheid. In the event Landlord shall
exercise either option (c) or (d) above, Tenant shall sublease the Demised Premises or relevant
portion thereof or assign this Lease to Tenant upon the terms and conditions set forth in said
Tenants Sublease Notice. In the event Landlord elects to match this offer in Tenants Sublease
Notice as set forth in clause (d) above, Tenant shall remain responsible for removal of leasehold
improvements and equipment as required in Sections 9 and 10 at the end of the Term or earlier
termination of this Lease.
14.3 Conditions. Any subletting or assignment pursuant to this Article shall be
subject to and conditioned upon the following:
(a) at the time of any proposed subletting or assignment, Tenant shall not be in
default under any of the terms, covenants, or conditions of this Lease beyond applicable
grace periods;
(b) the sublessee or assignee shall conduct its business in accordance
with the Permitted Use;
(c) prior to occupancy, Tenant and its assignee or sublessee shall execute,
acknowledge and deliver to Landlord a fully executed counterpart of a written assignment of
lease or a written sublease, as the case may be, by the terms of which:
(1) in case of an assignment of this Lease in its entirety, Tenant shall assign
to such assignee Tenants entire interest in this Lease, together with all prepaid
rents hereunder, and the assignee shall accept said assignment and assume and agree
to perform directly for the benefit of Landlord, all of the terms, covenants and
conditions of this Lease on Tenants part to be performed; or
(2) in case of a subletting, the sublessee thereunder shall agree to be bound
by and to perform all of the terms, covenants and conditions of this Lease on the
Tenants part to be performed, except
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the payments of rents, charges and other sums reserved hereunder, which Tenant
shall continue to be obligated to pay and shall pay to Landlord;
(d) Tenant shall pay to Landlord monthly one-half of the excess of the rents and other
charges received by Tenant pursuant to the assignment or sublease over the rents and other
charges reserved to Landlord under this Lease attributable to the space assigned or sublet,
less the reasonable costs and expenses of subleasing and less the unamortized cost of
Tenants leasehold improvements (but not trade fixtures or equipment) paid for by Tenant,
which cost shall be amortized over a ten year basis commencing on the Term Commencement Date;
(e) Tenant and any guarantor of Tenants obligations hereunder (hereinafter Guarantor)
shall acknowledge that, notwithstanding such assignment or sublease and consent of Landlord
thereto, Tenant and Guarantor shall not be released or discharged from any liability
whatsoever under this Lease and will continue to be liable with the same force and effect as
though no assignment or sublease had been made; and
(f) Tenant shall pay Landlords reasonable costs including but not limited to
attorneys fees and Landlords administrative and overhead costs, incurred in connection
with each such assignment or subletting.
14.4 Landlords Consent. Landlord shall not unreasonably withhold its consent to a
sublease of at least 10,000 rentable square feet or assignment pursuant to the preceding Section
14.1, subject to Landlords options in subclauses (c) and (d) of Section 14.2. If Landlord elects
to pursue its option under Section 14.2 to match the terms of Tenants Sublease Notice, this
Section 14.4 is not relevant. Landlords failure to consent shall be deemed unreasonable if the
conditions set forth in Subsections 14.3(a)-(f) are met, Landlords Mortgagee has consented thereto
and if:
(a) The proposed assignment or subletting is made to a party other than a Competitor;
or
(b) The proposed assignee or subtenant has a good credit rating, which shall be at
least equal to that of Tenant as of the Term Commencement Date, and demonstrable ability to
comply with the terms and conditions of this Lease, a good reputation in the community, and
the proposed use by such subtenant or assignee (even though Permitted Use) could not in
Landlords reasonable opinion be expected to detract from the character of the Building at
the time of the proposed assignment or sublease.
14.5 No Waiver. The consent by Landlord to an assignment or subletting shall not in
any way be construed to relieve Tenant from obtaining the express consent of Landlord to any
further assignment or subletting for the use of all or any
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part of the Premises, nor shall the collection of rent by Landlord from any assignee, sublessee or
other occupant after default by Tenant be deemed a waiver of this covenant or the acceptance of
such assignee, sublessee or occupant as tenant or a release of Tenant from the further performance
by Tenant of the obligations in this Lease on Tenants part to be performed.
15. |
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MISCELLANEOUS COVENANTS |
15.1 Rules and Regulations. Tenant and Tenants servants, employees,
agents, visitors and licensees will faithfully observe such Rules and Regulations as
are attached hereto as Exhibit C and made a part hereof or as Landlord hereafter at
any time or from time to time may make and may communicate in writing to
Tenant and which in the reasonable judgment of Landlord shall be necessary for the
reputation, safety, care or appearance of the Property, or the preservation of good
order therein, or the operation or maintenance of the Property, or the equipment
thereof, or the comfort of tenants or others in the Building, provided, however, that
in the case of any conflict between the provisions of this Lease and any such Rules
and Regulations, the provisions of this Lease shall control, and provided further
that nothing contained in this Lease shall be construed to impose upon Landlord
any duty or obligation to enforce such Rules and Regulations or the terms,
covenants or conditions in any other lease as against any other tenant and Landlord
shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors, invitees or licensees.
15.2 Access to Premises. Tenant shall: (i) permit Landlord to erect, use and maintain pipes, ducts and conduits in and through the Demised Premises,
provided the same do not materially reduce the floor area or materially adversely
affect the appearance thereof; (ii) permit the Landlord and any Mortgagee to have
free and unrestricted access to and to enter upon the Demised Premises at all
reasonable hours (upon 24 hours prior notice except in case of emergency) for the
purposes of inspection or of making repairs, replacements or improvements in or to
the Demised Premises or the Building or equipment (including, without limitation,
sanitary, electrical, heating, air conditioning or other systems) or of complying with
all laws, orders and requirements of governmental or other authority or of
exercising any right reserved to Landlord by this Lease (including the right during
the progress of any such repairs, replacements or improvements or while
performing work and furnishing materials in connection with compliance with any
such laws, orders or requirements to take upon or through, or to keep and store
within, the Demised Premises all necessary materials, tools and equipment); and
(iii) permit Landlord, at reasonable times and upon 24 hours prior notice, to show
the Demised Premises during ordinary business hours to any Mortgagee,
prospective purchaser of any interest of Landlord in the Property, prospective
Mortgagee, or prospective assignee of any Mortgage, and during the period of twelve
months next preceding the Termination Date to any person contemplating the
leasing of the Demised Premises or any part thereof. If Tenant shall not be
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personally present to open and permit any entry into the Demised Premises at any time when for any
reason an entry therein shall be necessary or permissible pursuant to the terms of this Lease or by
law, Landlord or Landlords agents must nevertheless be able to gain such entry by contacting a
responsible representative of Tenant, whose name, address and telephone number shall be furnished
by Tenant. Provided that Landlord shall not be obligated to employ labor at so-called over-time
or other premium pay rates, Landlord shall exercise its rights of access to the Demised Premises
permitted under any of the terms and provisions of this Lease in such manner as to minimize to the
extent practicable interference with Tenants use and occupation of the Demised Premises.
Notwithstanding the foregoing, any entry (other than in case of emergency) by Landlord, any
Mortgagee or any of their agents or representatives shall be subject to Tenants reasonable
security requirements, including but not limited to the requirement that a representative of Tenant
accompany such parties when in certain parts of the Demised Premises.
15.3 Accidents to Sanitary and other Systems. Tenant shall give to
Landlord prompt notice of any fire or accident in the Demised Premises or in the
Building and of any damage to, or defective condition in, any part or appurtenance
of the Buildings sanitary, electrical, heating and air conditioning or other systems located in, or passing through, the Demised Premises.
15.4 Signs, Blinds and Drapes. Tenant shall not place any signs on the exterior of the Building (except as provided in Section 27.11) or on or in any
window, public corridor or door visible from the exterior of the Demised Premises.
No drapes or blinds may be put on or in any exterior window nor may any Building drapes or blinds be removed by Tenant.
15.5 Estoppel Certificate. Tenant shall at any time and from time to time upon not less than ten business (10) days prior notice by Landlord, Prime Landlord
or by a Mortgagee to Tenant, execute, acknowledge and deliver to the party making
such request a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in full
force and effect as modified and stating the modifications), and the dates to which
Rent has been paid in advance, if any, and stating whether or not to the actual
knowledge and belief of the signer of such certificate Landlord is in default in
performance of any covenant, agreement, term, provisions or condition contained in
this Lease and, if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by any prospective purchaser of any interest in the Property,
any Mortgagee or prospective Mortgagee, any lessee or prospective lessee thereof,
any prospective assignee of any Mortgage, or any other party designated by
Landlord. The form of any such estoppel certificate requested by a Mortgagee shall
be reasonably satisfactory to such Mortgagee.
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15.6 Requirements of Law Fines and Penalties. Tenant at its sole expense
shall comply with all laws, rules, orders and regulations of Federal, State, County
and Municipal Authorities and with any direction of any public officer or officers,
pursuant to law, which shall impose any duty upon Landlord or Tenant with respect
to and arising out of Tenants use or occupancy of the Demised Premises. If Tenant
receives notice of any violation of law, ordinance, order or regulation applicable to
the Demised Premises, it shall give prompt notice thereof to Landlord. Without
limiting the generality of the foregoing, Tenant shall be responsible for compliance
with requirements imposed by the Americans with Disabilities Act relative to the
Demised Premises, including without limitation all such requirements applicable to
removing barriers, furnishing auxiliary aids and ensuring that, whenever
alterations are made, the affected portions of the Demised Premises are readily
accessible to and usable by individuals with disabilities. Notwithstanding anything
in the foregoing to the contrary, if the requirement of additional work in the
Demised Premises is caused by governmental action solely as result of work being
done by Landlord in parts of the Building other than the Demised Premises, then
Landlord shall be responsible for the cost of such ADA work. Conversely, if
additional ADA work in the Building is caused by governmental action solely as a
result of work in the Demised Premises by Tenant, then Tenant shall be responsible for the cost of such ADA work.
15.7 Tenants Acts Effect on Insurance. Tenant shall not do or permit to be done any act or thing upon the Demised Premises or elsewhere in the Building
which will invalidate or be in conflict with any insurance policies covering the
Building and the fixtures and property therein and shall not do, or permit to be
done, any act or thing upon the Demised Premises which shall subject Landlord to
any liability or responsibility for injury to any person or persons or to property by
reason of any business or operation being conducted on the Demised Premises or for
any other reason. Subject to the terms of this Lease and except as otherwise
specifically set forth to the contrary herein, Tenant at its own expense shall comply
with all applicable provisions of the California Health and Safety Code and all
regulations promulgated thereunder and with all rules, orders, regulations or
requirements of the underwriter(s) of the fire and other hazard insurance for the
Property and the Demised Premises and shall not do, or permit anything to be done,
in or upon the Demised Premises, or bring or keep anything therein, that is not
permitted by the City of South San Francisco Fire Department, or other authority
having jurisdiction, and then only in such quantity and manner of storage as will not increase the rate for any insurance applicable to the Building. If by reason of failure of
Tenant to comply with the provisions hereof the insurance rate applicable to any policy of
insurance shall at any time thereafter be higher than it otherwise would be, then Tenant shall
reimburse Landlord for that part of any insurance premiums thereafter paid by Landlord, which shall
have been charged because of such failure by Tenant.
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15.8 Miscellaneous. Tenant shall not suffer or permit the Demised Premises or any
fixtures, equipment or utilities therein or serving the same, to be overloaded, damaged or defaced.
In the event of loss of, or damage to, the Demised Premises or the Building by fire or other
casualty, the rights and obligations of the parties hereto shall be as follows:
(a) If the Demised Premises, or any part thereof, shall be damaged by fire or other
casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving
such notice and the insurance proceeds for such casualty, shall proceed in a commercially
reasonable manner, subject to unavoidable delays, to repair, or cause to be repaired, such
damage to the extent hereinafter provided. Landlord shall be responsible to restore only to
the cold shell condition as set forth on Exhibit A-l, and Tenant shall be responsible for
restoration of all leasehold improvements beyond such cold shell. If the Demised Premises
or any part thereof shall be rendered untenantable by reason of such damage, whether to the
Demised Premises or to the Building, Yearly Fixed Rent shall proportionately abate for the
period from the date of such damage to the date when such damage shall have been repaired
by Landlord to the condition set forth on Exhibit A-l.
(b) If, as a result of fire or other casualty, the whole or a substantial
portion of the Building is rendered untenantable and the nature and extent of the damage
is such that in Landlords opinion, taking into account a reasonable time for adjusting
loss and obtaining plans and permits for restoration, the Demised Premises cannot be made
tenantable within 180 days after such event, Landlord, within ninety (90) days from the
date of such fire or casualty, may terminate this Lease by notice to Tenant, specifying a
date not less than thirty (30) nor more than sixty (60) days after the giving of such
notice on which the Term of this Lease shall terminate. If Landlord does not so elect to
terminate this Lease, then Landlord shall (to the extent that proceeds of insurance
required to be carried by Landlord, net of any portion thereof retained by a Mortgagee,
are made available for such purpose) proceed with diligence to repair the damage to the
Demised Premises and all facilities serving the same, if any, which shall have occurred,
and the Yearly Fixed Rent shall meanwhile proportionately abate, all as provided in
Paragraph (a) of this Section. However, if such damage is not repaired and the Demised
Premises restored to substantially the same condition as they were prior to such damage
within one (1) year from the date of such damage, Tenant within thirty (30) days from the
expiration of such one (1) year period or from the expiration of any extension thereof by
reason of unavoidable delays as hereinafter provided, may terminate this Lease by
33
notice to Landlord, specifying a date not more than sixty (60) days after the giving of such notice
on which the Term of this Lease shall terminate. The period within which the required repairs may
be accomplished shall be extended by the number of days, lost as a result of unavoidable delays,
which term shall be defined to include all delays referred to in Article 24.
(c) If the Demised Premises shall be rendered untenantable by fire
or other casualty during the last two (2) years of the Term of this Lease,
Landlord may terminate this Lease effective as of the date of such fire or
other casualty upon notice to Tenant given within ninety (90) days after such
fire or other casualty. Notwithstanding the foregoing to the contrary, in the
event Landlord exercises the foregoing termination right, if Tenant has
available to it the option to extend and validly exercises said option, Tenant
may defeat said termination notice by the valid exercise of said option term
so as to add an additional five years on to the Term of this Lease.
(d) Landlord shall not be required to repair or replace any of
Tenants leasehold improvements, fixtures, business machinery, equipment,
cabinet work, furniture, personal property or other installations (all of which
shall, however, be restored by Tenant within a reasonable time after
Landlord shall have completed any repair or restoration required under the
terms of this Article), and no damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance arising
from any repair or restoration of any portion of the Demised Premises or of
the Building.
(e) The provisions of this Article shall be considered an express
agreement governing any instance of damage or destruction of the Building
or the Demised Premises by fire or other casualty, and any law now or
hereafter in force providing for such a contingency in the absence of express
agreement shall have no application.
(f) In the event of any termination of this Lease pursuant to this
Article, the Term of this Lease shall expire as of the effective termination
date as fully and completely as if such date were the date originally fixed
herein for the end of the Term of this Lease. Tenant shall have access to the
Demised Premises for a period of fifteen (15) days after the date of
termination in order to remove Tenants personal property.
(g) Landlords Architects certificate, given in good faith, shall be
deemed conclusive of the statements therein contained and binding upon
Tenant with respect to the performance and completion of any repair or
restoration work undertaken by Landlord pursuant to this Article or Article
18.
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17. |
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WAIVER OF SUBROGATION |
In any case in which Tenant shall be obligated under any provision of this Lease to pay to
Landlord or Prime Landlord any loss, cost, damage, liability, or expense suffered or incurred by
Landlord or Prime Landlord, Landlord shall allow to Tenant as an offset against the amount thereof
(i) the net proceeds of any insurance collected by Landlord for or on account of such loss, cost,
damage, liability, or expense, provided that the allowance of such offset does not invalidate the
policy or policies under which such proceeds were payable and (ii) if such loss, cost, damage,
liability or expense shall have been caused by a peril against which Landlord has agreed to procure
insurance coverage under the terms of this Lease, the amount of such insurance coverage, if not
actually procured by Landlord.
In any case in which Landlord or Prime Landlord shall be obligated under any provision of this
Lease to pay to Tenant any loss, cost, damage, liability or expense suffered or incurred by Tenant,
Tenant shall allow to Landlord as an offset against the amount thereof (i) the net proceeds of any
insurance collected by Tenant for or on account of such loss, cost, damage, liability, or expense,
provided that the allowance of such offset does not invalidate the policy or policies under which
such proceeds were payable and (ii) if such loss, cost, damage, liability or expense shall have
been caused by a peril against which Tenant has agreed to procure insurance coverage under the
terms of this Lease, the amount of such insurance coverage, if not actually procured by Tenant.
The parties hereto shall each endeavor to procure an appropriate clause in, or endorsement
on, any fire or extended coverage insurance policy covering the Demised Premises and the Building
and personal property, fixtures and equipment located thereon or therein, pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of recovery, and having
obtained such clauses and/or endorsements of waiver of subrogation or consent to a waiver of right
of recovery each party hereby agrees that it will not make any claim against or seek to recover
from the other for any loss or damage to its property or the property of others resulting from
fire or other perils covered by such fire and extended coverage insurance; provided, however, that
the release, discharge, exoneration and covenant not to sue herein contained shall be limited by
the terms and provisions of the waiver of subrogation clauses and/or endorsements or clauses
and/or endorsements consenting to a waiver of right of recovery and shall be co-extensive
therewith. If either party may obtain such clause or endorsement only upon payment of an
additional premium, such party shall promptly so advise the other party and shall be under no
obligation to obtain such clause or endorsement unless such other party pays the premium.
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18. |
|
CONDEMNATION EMINENT DOMAIN |
In the event that the whole or more than 40% of the Building shall be taken or appropriated by
eminent domain or shall be condemned for any public or quasi-public use, or (by virtue of any such
taking, appropriation or condemnation) shall suffer any damage (direct, indirect or consequential)
for which Landlord or Tenant shall be entitled to compensation then (and in any such event) this
Lease and the Term hereof may be terminated at the election of Landlord by a notice in writing of
its election so to terminate which shall be given by Landlord to Tenant within sixty (60) days
following the date on which Landlord shall have received notice of such taking, appropriation or
condemnation. In the event that more than fifty percent (50%) of the floor area of the Demised
Premises or a substantial part of the means of access thereto within the perimeter of the Property
so as to substantially interfere with the use of the Demised Premises shall be so taken,
appropriated or condemned, then (and in any such event) this Lease and the Term hereof may be
terminated at the election of Tenant by a notice in writing of its election so to terminate which
shall be given by Tenant to Landlord within sixty (60) days following the date on which Tenant
shall have received notice of such taking, appropriation or condemnation. Tenant hereby waives the
benefits of California Code of Civil Procedure Section 12165.130.
Upon the giving of any such notice of termination (either by Landlord or Tenant) this Lease
and the Term hereof shall terminate on or retroactively as of the date on which Tenant shall be
required to vacate any part of the Demised Premises or shall be deprived of a substantial part of
the means of access thereto, provided, however, that Landlord may in Landlords notice elect to
terminate this Lease and the Term hereof retroactively as of the date on which such taking,
appropriation or condemnation became legally effective. In the event of any such termination, this
Lease and the Term hereof shall expire as of the effective termination date as fully and completely
as if such date were the date originally fixed herein for the end of the Term of this Lease. If
neither party (having the right so to do) elects to terminate Landlord will, with reasonable
diligence and at Landlords expense, restore the remainder of the Demised Premises, or the
remainder of the means of access thereto, as nearly as practicably may be to the same condition as
obtained prior to such taking, appropriation or condemnation in which event (i) a just proportion
of the Yearly Fixed Rent, according to the nature and extent of the taking, appropriation or
condemnation and the resulting permanent injury to the Demised Premises and the means of access
thereto, shall be permanently abated, and (ii) a just proportion of the remainder of the Yearly
Fixed Rent, according to the nature and extent of the taking, appropriation or condemnation and the
resultant injury sustained by the Demised Premises and the means of access thereto, shall be abated
until what remains of the Demised Premises and the means of access thereto shall have been restored
as fully as may be possible for permanent use and occupation by Tenant hereunder. Except for any
award specifically reimbursing Tenant for moving or relocation expenses and Tenants moveable
personal property
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(but not leasehold improvements), there are expressly reserved to Landlord all rights to
compensation and damages created, accrued or accruing by reason of any such taking, appropriation
or condemnation, in implementation and in confirmation of which Tenant does hereby acknowledge that
Landlord shall be entitled to receive and retain all such compensation and damages, grants to
Landlord all and whatever rights (if any) Tenant may have to such compensation and damages, and
agrees to execute and deliver all and whatever further instruments of assignment as Landlord may
from time to time request. In the event of any taking of the Demised Premises or any part thereof
for temporary use, (i) this Lease shall be and remain unaffected thereby, and (ii) Tenant shall be
entitled to receive for itself any award made for such use, provided, that if any taking is for a
period extending beyond the Term of this Lease, such award shall be apportioned between Landlord
and Tenant as of the Termination Date.
19.1 Events of Default. Occurrence of any of the following events shall constitute
an Event of Default under this Lease: (a) Tenant shall neglect or fail to perform or observe any of
the Tenants covenants herein, including (without limitation) the covenants with regard to the
payment when due of Rent, which default continues, in the case of payment of Rent, for thirty (30)
days after notice of default or, in the case of defaults other then payment of Rent, for twenty
(20) days after such notice of default (provided that if more time, but not more than 30 additional
days) is required to complete such performance, Tenant shall not be in default if Tenant commences
such performance within the thirty (30) day period and thereafter diligently pursues its
completion); or (b) Tenant shall default in payment of Rent more than two (2) times in any
consecutive twelve (12) month period; or (c) Tenant shall be involved in financial difficulties as
evidenced by an admission in writing by Tenant of Tenants inability to pay its debts generally as
they become due, or by the making or offering to make a composition of its debts with its
creditors; or (d) Tenant shall make an assignment or trust mortgage, or other conveyance or
transfer of like nature, of all or a substantial part of its property for the benefit of its
creditors; or (e) the leasehold hereby created shall be taken on execution or by other process of
law and shall not be revested in Tenant within sixty (60) days thereafter; or (f) a receiver,
sequester, trustee or similar officer shall be appointed by a court of competent jurisdiction to
take charge of all or a substantial part of Tenants property and such appointment shall not be
vacated within sixty (60) days; or (g) any proceeding shall be instituted by or against Tenant
pursuant to any of the provisions of any Act of Congress or State law relating to bankruptcy,
reorganization, arrangements, compositions or other relief from creditors, and, in the case of any
such proceeding instituted against it, if Tenant shall fail to have such proceeding dismissed
within thirty (30) days or if Tenant is adjudged bankrupt or insolvent as a result of any such
proceeding; or (h) any event shall occur or any contingency shall arise whereby this Lease, or the
term and estate thereby created, would (by operation of law or otherwise) devolve upon or
37
pass to any person, firm or corporation other than Tenant, except as expressly permitted
under Article 14 hereof.
19.2 Remedies Available upon Default. Upon the occurrence of an Event of Default,
Landlord shall have the following remedies, which shall not be exclusive but shall be cumulative
and shall be in addition to any other remedies now or hereafter allowed by law:
(a) Landlord may terminate Tenants right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly
acknowledges that in the absence of such written notice from Landlord, no
other act of Landlord, including re-entry into the Premises, efforts to relet the
Premises, reletting of the Premises for Tenants account, storage of Tenants
personal property and trade fixtures, acceptance of keys to the Premises from
Tenant or exercise of any other rights and remedies under this Section, shall
constitute an acceptance of Tenants surrender of the Premises or constitute a
termination of this Lease or of Tenants right to possession of the Premises.
Upon such termination in writing of Tenants right to possession of the
Premises, as herein provided, this Lease shall terminate and Landlord shall
be entitled to recover damages from Tenant as provided in California Civil
Code Section 1951.2 and any other applicable existing or future Law
providing for recovery of damages for such breach, including the worth at the
time of award of the amount by which the rent which would be payable by
Tenant hereunder for the remainder of the Term after the date of the award
of damages, including Additional Rent as reasonably estimated by Landlord,
exceeds the amount of such rental loss as Tenant proves could have been
reasonably avoided, discounted at the discount rate published by the Federal
Reserve Bank of San Francisco for member banks at the time of the award
plus one percent (1%).
(b) Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after
Tenants breach and abandonment and recover rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations).
(c) Landlord may immediately, or at any time thereafter, without
notice, cure said Event of Default for the account of Tenant. If Landlord at
any time is compelled to pay or elects to pay any sum of money, or do any act
which will require the payment of any sum of money, by reason of the failure
of Tenant to comply with any provision hereof, or if Landlord is compelled to
or does incur any expense, including without limitation reasonable attorneys
fees, in instituting, prosecuting and/or defending any action or proceeding
arising by reason of any default of Tenant hereunder, Tenant shall on
demand pay to Landlord by way of reimbursement the sum or sums so paid
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by Landlord with all interest, costs and damages together with interest at the Interest Rate
for the period such sums remain outstanding.
(d) Landlord may remove all of Tenants property from the Premises, and such
property may be stored by Landlord in a public warehouse or elsewhere at the sole cost and
for the account of Tenant. If Landlord does not elect to store any or all of Tenants
property left in the Premises, Landlord may consider such property to be abandoned by Tenant,
and Landlord may thereupon dispose of such property in the manner and as prescribed by
California Civil Code Section 1980 et seq. Any proceeds realized by Landlord on the disposal
of any such property shall be applied first to offset all expenses of storage and sale, then
credited against Tenants outstanding obligations to Landlord under this Lease, and any
balance remaining after satisfaction of all obligations of Tenant under this Lease shall be
delivered to Tenant.
(e) The damages recoverable by Landlord pursuant to this Section shall in all
events include reimbursement of any concessions made by Landlord in connection with the
leasing of the Demised Premises to Tenant, including without limitation (a) abated Rent, (b)
allowances or improvements in excess of any Building standard work, (c) sums paid to any
former landlord of Tenant under a so-called take-over, lease assumption or similar
agreement and (d) signing bonuses and other incentive payments. Any allowances, abated rent,
signing bonuses, incentive payments or takeover payments shall be deemed commercially
reasonable if recommended to Landlord by a reputable commercial real estate broker as being
appropriate and necessary for the leasing of said Premises to a creditworthy tenant.
19.3 Grace Period. Notwithstanding anything to the contrary in this Article
contained, Landlord agrees not to take any action to terminate this Lease (a) for default by Tenant
in the payment when due of Rent, if Tenant shall cure such default within five (5) days after
written notice thereof given by Landlord to Tenant, unless there has been two (2) or more defaults
in any 12-month period as set forth in Section 19.1(b), or (b) for default by Tenant in the
performance of any other covenant, if Tenant shall cure such default within a period of thirty (30)
days after written notice thereof given by Landlord to Tenant (except where the nature of the
default is such that remedial action should appropriately take place sooner, as indicated in such
written notice), or with respect to covenants other than to pay a sum of money within such
additional period as may reasonably be required to cure such default if (because of governmental
restrictions or any other cause beyond the reasonable control of Tenant) the default is of such a
nature that it cannot be cured within such thirty (30)-day period, provided, however, (1) that
there shall be no extension of time beyond such thirty (30)-day period for the curing of any such
default unless, not more than ten (10) days after the receipt of the notice of default, Tenant in
writing (i) shall specify the cause on account of which the default cannot
39
be cured during such period and shall advise Landlord of its intention duly to institute all steps
necessary to cure the default and (ii) shall as soon as may be reasonable duly institute and
thereafter diligently prosecute to completion all steps necessary to cure such default and, (2)
that no notice of the opportunity to cure a default need be given, and no grace period whatsoever
shall be allowed to Tenant, if the default is incurable or if the covenant or condition the breach
of which gave rise to the default had, by reason of a breach on a prior occasion, been the subject
of a notice hereunder to cure such default.
20. |
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END OF TERM ABANDONED PROPERTY |
Upon the expiration or other termination of the Term of this Lease, Tenant shall peaceably
quit and surrender to Landlord the Demised Premises and all alterations and additions thereto which
Tenant is not entitled or required to remove under the provisions of this Lease, broom clean in
good order, repair and condition excepting only reasonable use and wear and damage by fire or other
casualty for which, under other provisions of this Lease, Tenant has no responsibility of repair or
restoration. Tenants obligation to observe or perform this covenant shall survive the expiration
or other termination of the Term of this Lease. If the last day of the Term of this Lease or any
renewal thereof falls on a day other than a Business Day, this Lease shall expire on the Business
Day immediately following. Tenant shall pay twice the amount of Rent applicable to each month (or
fraction thereof) during which Tenant remains in possession of any part of the Demised Premises in
violation of the foregoing covenants, without prejudice to eviction and any other remedy available
to Landlord on account thereof.
Any personal property in which Tenant has an interest which shall remain in the Building or on
the Demised Premises after the expiration or termination of the Term of this Lease shall be
conclusively deemed to have been abandoned, and may be disposed of in such manner as Landlord may
see fit; provided, however, notwithstanding the foregoing, that Tenant will, upon request of
Landlord made not later than ten (10) days after the expiration or termination of the Term hereof,
promptly remove from the Building any such personal property or, if any part thereof shall be sold,
that Landlord may receive and retain the proceeds of such sale and apply the same, at its option,
against the expenses of the sale, the cost of moving and storage, any arrears of Rent payable
hereunder by Tenant to Landlord and any damages to which Landlord may be entitled under Article 19
hereof or pursuant to law, with the balance if any, to be paid to Tenant.
21.1 Entry and Possession. Upon entry and taking possession of the Property by a
Mortgagee, for the purpose of foreclosure or otherwise, such Mortgagee shall have all the rights of
Landlord, and shall be liable to perform all
40
the obligations of Landlord arising and accruing during the period of such possession by
such Mortgagee.
21.2 Right to Cure. No act or failure to act on the part of Landlord which would
entitle Tenant under the terms of this Lease, or by law, to be relieved of Tenants obligations
hereunder or to terminate this Lease, shall result in a release or termination of such obligations
or a termination of this Lease unless (i) Tenant shall have first given written notice of
Landlords act or failure to act to first Mortgagees of record, if any, and to any other Mortgagees
of whom Tenant has been given written notice, specifying the act or failure to act on the part of
Landlord which could or would give basis to Tenants rights; and (ii) such Mortgagees, after
receipt of such notice, have failed or refused to correct or cure the condition complained of
within 30 days thereafter for a monetary default and 60 days for a non-monetary default, but
nothing contained in this paragraph shall be deemed to impose any obligation on any such Mortgagees
to correct or cure any such condition.
21.3 Prepaid Rent. No Rent shall be paid more than thirty (30) days prior
to the due dates thereof and, as to a first Mortgagee of record and any other
Mortgagees of whom Tenant has been given written notice, payments made in
violation of this provision shall (except to the extent that such Rent is actually
received by such Mortgagee) be a nullity as against such Mortgagee and Tenant shall be liable for the amount of such payments to such Mortgagee.
21.4 Continuing Offer. The covenants and agreements contained in this Lease with respect to the rights, powers and benefits of a Mortgagee (particularly,
without limitation thereby, the covenants and agreements contained in this Article)
constitute a continuing offer to any person, corporation or other entity, which by
accepting or requiring an assignment of this Lease or by entry or foreclosure
assumes the obligations herein set forth with respect to such Mortgagee; every such
Mortgagee is hereby constituted a party to this Lease as an obligee hereunder to the
same extent as though its name was written hereon as such; and such Mortgagee shall be entitled to enforce such provisions in its own name.
21.5 Subordination. This lease shall be subordinate to all mortgages encumbering the Land and/or Building, but Tenant shall nevertheless have the
benefit of the non-disturbance provisions hereinafter set forth, and Tenant agrees,
at the request of Landlord or any Mortgagee, to execute and deliver promptly any
certificate or other instrument which Landlord or such Mortgagee may reasonably
request subordinating this Lease and all rights of Tenant hereunder to any
Mortgage, and to all advances made under such Mortgage and/or agreeing to attorn
to such Mortgagee in the event that it succeeds to Landlords interest in the
Property. Landlord shall provide that (i) the holder of each such Mortgage shall
execute and deliver to Tenant a non-disturbance agreement to the effect that, in the
event of any foreclosure of such Mortgage, such holder will not name Tenant as a
party defendant to such foreclosure nor disturb its possession under the Lease, or
41
(ii) each such Mortgage shall contain provisions substantially to the same effect as those
contained in such a non-disturbance agreement. The form of the non-disturbance agreement shall be a
commercially reasonable form reflecting then current commercial lending practices for loans of the
size and type as that related to the Building. Tenant agrees that a subordination, non-disturbance
and attornment agreement substantially in form as that attached hereto shall be deemed commercially
reasonable. In addition if the Prime Lease shall be terminated due to foreclosure of the mortgage
made by Prime Landlord in favor of its mortgagee or due to such mortgagees acceptance of a deed in
lieu of foreclosure, Tenant shall attorn to mortgagee as landlord hereunder and this lease shall
continue in full force and effect for its remaining term as a direct lease between Tenant and such
mortgagee without the necessity of any additional act or agreement; provided, however, if requested
by such Mortgagee, Tenant shall execute and deliver a new lease with such mortgagee on the same
terms and conditions as set forth herein except that the term of such new lease shall be equal to
the then remaining term hereunder. Landlord represents and warrants that as of the date of this
Lease, Bank of America is the sole mortgagee of the Land and Building.
21.6 Limitations on Liability. Nothing contained in the foregoing Section 21.6 or
in any such non-disturbance agreement or non-disturbance provision shall however, affect the prior
rights of the holder of any Mortgage with respect to the proceeds of any award in condemnation or
of any fire insurance policies affecting the Building, or impose upon any such holder any liability
(i) for the erection or completion of the Building, or (ii) in the event of damage or destruction
to the Building or the Demised Premises by fire or other casualty, for any repairs, replacements,
rebuilding or restoration except such repairs, replacements, rebuilding or restoration as can
reasonably be accomplished from the net proceeds of insurance actually received by, or made
available to, such holder, or (iii) for any default by Landlord under the Lease occurring prior to
any date upon which such holder shall become Tenants landlord (unless and to the extent said
default continues after such date upon which the holder becomes Tenants landlord, in which event
such mortgagee shall be responsible for correcting such default continuing after such date), or
(iv) for any credits, offsets or claims against the Rent as a result of any acts or omissions of
Landlord committed or omitted prior to such date, or (v) for return of any security deposit or
other funds unless the same shall have been received by such holder, and any such agreement or
provision may so state.
Landlord covenants that if, and so long as, Tenant keeps and performs each and every covenant,
agreement, term, provision and condition herein contained on the part and on behalf of Tenant to be
kept and performed, Tenant shall quietly enjoy the Demised Premises from and against the claims of
all persons claiming by, through or under Landlord subject, nevertheless, to the covenants,
agreements,
42
terms, provisions and conditions of this Lease and to all Mortgages to which this Lease is subject
and subordinate.
Without incurring any liability to Tenant, Landlord may permit access to the Demised Premises
and open the same, whether or not Tenant shall be present, upon any demand of any receiver,
trustee, assignee for the benefit of creditors, sheriff, marshall or court officer entitled to, or
reasonably purporting to be entitled to, such access for the purpose of taking possession of, or
removing Tenants property or for any other lawful purpose (but this provision and any action by
Landlord hereunder shall not be deemed a recognition by Landlord that the person or official making
such demand has any right or interest in or to this Lease, or in or to the Demised Premises), or
upon demand of any representative of the fire, police, building, sanitation or other department of
the city, county, state or federal governments.
23. |
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ENTIRE AGREEMENTWAIVERSURRENDER |
23.1 Entire Agreement. This Lease and the Exhibits made a part hereof contain the
entire and only agreement between the parties and any and all statements and representations,
written and oral, including previous correspondence and agreements between the parties hereto, are
merged herein. Tenant acknowledges that all representations and statements upon which it relied in
executing this Lease are contained herein and that Tenant in no way relied upon any other
statements or representations, written or oral. Any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this Lease in whole or in part
unless such executory agreement is in writing and signed by the party against whom enforcement of
the change, modification, discharge or abandonment is sought. Nothing herein shall prevent the
parties from agreeing to amend this Lease and the Exhibits made a part hereof as long as such
amendment shall be in writing and shall be duly signed by both parties.
23.2 Waiver by Landlord. The failure of Landlord to seek redress for violation, or
to insist upon the strict performance, of any covenant or condition of this Lease, or any of the
Rules and Regulations promulgated hereunder, shall not prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an original violation.
The receipt by Landlord of Rent with knowledge of the breach of any covenant of this Lease shall
not be deemed a waiver of such breach. The failure of Landlord to enforce any of such Rules and
Regulations against Tenant and/or any other tenant or subtenant in the Building shall not be
deemed a waiver of any such Rules and Regulations. No provisions of this Lease shall be deemed to
have been waived by Landlord unless such waiver be in writing signed by Landlord. No payment by
Tenant or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be
deemed to be other than on account of the stipulated rent, nor shall any endorsement or statement
on any check or any letter accompanying any check or
43
payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlords right to recover the balance of such rent or pursue any other
remedy in this Lease provided.
23.3 Surrender. No act or thing done by Landlord during the term hereby demised
shall be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept
such surrender shall be valid, unless in writing signed by Landlord. No employee of Landlord or of
Landlords agents shall have any power to accept the keys of the Demised Premises prior to the
termination of this Lease. The delivery of keys to any employee of Landlord or of Landlords agents
shall not operate as a termination of the Lease or a surrender of the Demised Premises. In the
event that Tenant at any time desires to have Landlord underlet the Demised Premises for Tenants
account, Landlord or Landlords agents are authorized to receive the keys for such purposes without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby relieves Landlord
of any liability for loss of or damage to any of Tenants effects in connection with such
underletting.
24. |
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INABILITY TO PERFORM EXCULPATORY CLAUSE |
Except as otherwise expressly provided in this Lease, this Lease and the obligations of Tenant
to pay Rent hereunder and perform all other covenants, agreements, terms, provisions and conditions
hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused
because Landlord is unable to fulfill any of its obligations under this Lease or is unable to
supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to
make or is delayed in making any repairs, replacements, additions, alterations, improvements or
decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord
is prevented or delayed from doing so by reason of any cause whatsoever beyond Landlords
reasonable control, including but not limited to governmental preemption in connection with a
national emergency or by reason of any rule, order or regulation of any department or subdivision
thereof of any governmental agency or by reason of strikes, labor troubles, shortages of labor or
materials or conditions of supply and demand which have been or are affected by war, hostilities or
other similar or dissimilar emergency. In each such instance of inability of Landlord to perform,
Landlord shall exercise reasonable diligence to eliminate the cause of such inability to perform.
Tenant shall neither assert nor seek to enforce any claim for breach of this Lease against any
of Landlords assets other than Landlords or Prime Landlords interest in the Building of which
the Demised Premises are a part and in the rents, issues and profits thereof, and Tenant agrees to
look solely to such interest for the satisfaction of any liability of Landlord under this Lease, it
being specifically agreed that in no event shall Landlord (which term shall include, without
limitation any of the officers, trustees, directors, partners, beneficiaries, joint venturers,
managers, members, stockholders or other principals or representatives, disclosed or
44
undisclosed, of Landlord or any managing agent) ever be personally liable for any such liability.
This paragraph shall not limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord or to take any other action which shall not involve the personal liability
of Landlord to respond in monetary damages from Landlords assets other than the Landlords
interest in said real estate, as aforesaid. In no event shall Landlord ever be liable for
consequential damages.
Any notices required under this Lease shall be in writing and delivered by hand or mailed by
registered or certified mail or by nationally recognized overnight delivery service (such as
Federal Express) for next business day delivery to Landlord or Tenant at the addresses set forth in
Article 1. Either party may at any time change the Address for such notices, consents, requests,
bills, demands or statements by delivering or mailing, as aforesaid, to the other party a notice
stating the change and setting forth the changed Address, provided such changed Address is within
the United States.
All bills and statements for reimbursement or other payments or charges due from Tenant to
Landlord hereunder shall be due and payable in full fifteen (15) days, unless herein otherwise
provided, after submission thereof by Landlord to Tenant. Tenants failure to make timely payment
of any amounts indicated by such bills and statements within applicable notice and grace periods,
whether for work done by Landlord at Tenants request, reimbursement provided for by this Lease or
for any other sums properly owing by Tenant to Landlord, shall be treated as a default in the
payment of Rent, in which event Landlord shall have all rights and remedies provided in this Lease
for the nonpayment of Rent.
26. |
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SUCCESSORS AND ASSIGNS |
The covenants, agreements, terms, provisions and conditions of this Lease shall bind and
benefit the successors and assigns of the parties hereto with the same effect as if mentioned in
each instance where a party hereto is named or referred to, except that no violation of the
provisions of Article 14 hereof shall operate to vest any rights in any successor or assignee of
Tenant and that the provisions of this Article shall not be construed as modifying the conditions
of limitation contained in Article 19 hereof.
If in connection with or as a consequence of the sale, transfer or other disposition of the
real estate (Land and/or Building, either or both, as the case may be) of which the Demised
Premises are a part Landlord ceases to be the owner of the reversionary interest in the Demised
Premises, Landlord shall be entirely freed and relieved from the performance and observance
thereafter of all covenants and obligations hereunder accruing thereafter on the part of Landlord
to be performed
45
and observed, it being understood and agreed in such event (and it shall be deemed and construed as
a covenant running with the land) that the person succeeding to Landlords ownership of said
reversionary interest shall thereupon and thereafter assume, and perform and observe, any and all
of such covenants and obligations of Landlord.
27. MISCELLANEOUS
27.1 Separability. If any provision of this Lease or portion of such provision
or the application thereof to any person or circumstance is for any reason held
invalid or unenforceable, the remainder of the Lease (or the remainder of such
provision) and the application thereof to other persons or circumstances shall not be
affected thereby.
27.2 Captions. The captions are inserted only as a matter of convenience
and for reference, and in no way define, limit or describe the scope of this Lease nor
the intent of any provisions thereof.
27.3 Broker. Each party represents and warrants that it has not directly or
indirectly dealt, with respect to the leasing of space in the Building, with any broker
or had its attention called to the Demised Premises or other space to let in the
Building, by any broker other than the Broker (if any) listed in Article 1 whose
commission shall be the responsibility of Landlord. Each party agrees to exonerate
and save harmless and indemnify the other against any claims for a commission by
any other broker, person or firm, with whom such party has dealt in connection
with the execution and delivery of this Lease or out of negotiations between
Landlord and Tenant with respect to the leasing of other space in the
Building.
27.4 Governing Law. This Lease is made pursuant to, and shall be
governed by, and construed in accordance with, the laws of the State of California.
27.5 Assignment of Lease and/or Rents. With reference to any assignment
by Landlord or Prime Landlord of its interest in this Lease and/or the Rent payable
hereunder, conditional in nature or otherwise, which assignment is made to or held
by a bank, trust company, insurance company or other institutional lender holding
a Mortgage on the Building, Landlord and Tenant agree:
(a) that the execution thereof by Landlord and acceptance thereof
by such Mortgagee shall never be deemed an assumption by such Mortgagee
of any of the obligations of the Landlord hereunder, unless such Mortgagee
shall, by written notice sent to the Tenant, specifically otherwise elect; and
(b) that, except as aforesaid, such Mortgagee shall be treated as
having assumed the Landlords obligations hereunder only upon foreclosure
of such Mortgagees Mortgage and the taking of possession of the Demised
46
Premises after having given notice of its intention to succeed to the interest of the
Landlord under this Lease.
27.6 Memorandum of Lease. Neither party shall record this Lease;
provided, however, that either party shall at the request of the other, execute and
deliver a recordable memorandum of this Lease setting forth the parties to this
Lease, a description of the Demised Premises and the term of this Lease for
recordation in the Official records of the County of San Mateo.
27.7 Arbitration of Certain Matters. At the election of either party, if any
dispute as to the rentable square footage of the Demised Premises, the allocation of
real estate taxes or operating expenses under Sections 6.5 and 6.6, the abatement of
Yearly Fixed Rent pursuant to Article 16 or the abatement of Yearly Fixed Rent
pursuant to Article 18 remains unresolved 30 days after written complaint by
Tenant has been delivered to Landlord as to an allocation, reduction, apportionment
or abatement made or proposed by Landlord, the matter may be submitted to
binding arbitration pursuant to California Code of Civil Procedure Section 1280 et
seq.
27.8 Sublease. Notwithstanding anything to the contrary herein, Landlord
and Tenant acknowledge that this is a sublease and that Landlord derives its estate
to the Demised Premises through the Prime Lease. Landlord represents and
warrants that, as of the date hereof, Prime Landlord and Landlord are under
common control. At such time as Landlord and Prime Landlord are no longer under
common control, the responsibility for furnishing services, repairs, restoration and
other similar functions of Landlord shall be performed by Prime Landlord, and
Landlord shall be required to use reasonable efforts to enforce the provisions of the
Prime Lease relating thereto, but without obligation to provide such services,
repairs, restoration, and the like. Landlord shall have the right, but not the
obligation, to assign this Lease to Prime Landlord, and after such assignment this
Lease shall no longer be a sublease, but rather a direct lease between Tenant and
Prime Landlord.
27.9 Holdover. If for any reason Tenant retains possession of the Premises
or any part thereof after the termination of the Term or any extension thereof, such
holding over shall constitute a tenancy from month to month, terminable by either
party upon thirty (30) days prior written notice to the other party, and Tenant shall
pay Landlord monthly rental during the month to month tenancy computed as the
rent (including Yearly Fixed Rent and all additional rent) payable hereunder for the
final month of the last year of the Term prior to such holding over plus fifty (50%)
percent of said rent. The month to month tenancy shall otherwise be on the same
terms and conditions as set forth in this Lease, as far as applicable.
27.10 Lease Amendments. Tenant acknowledges that amendments to this
Lease may be required in connection with the financing of the Land or Building and
47
Tenant hereby agrees that it will enter into any reasonable modifications requested
by a mortgagee in connection with such financing, provided the same do not
(a) increase the Yearly Fixed Rent or additional rents payable by Tenant or increase
Tenants financial obligations hereunder; (b) reduce or extend the Term hereof;
(c) change the Permitted Use; or (d) otherwise materially impair Tenants rights
hereunder.
27.11 Signage. Tenant shall be entitled to maintain exterior Building
signage in accordance with the sign criteria attached hereto as Exhibit D. Landlord
shall use commercially reasonable efforts to ensure that, subject to any contrary
requirements of law or the OCRs, Tenant has proportional directional and
monument signage within the project.
Tenant may maintain a sign on the northern elevation of the Building of equal size to the sign
on the western elevation to be maintained by Landlord, which signs shall be the exclusive company
signs on the facades of the Building. If additional signage rights are obtained for the roof or
facade, the signage shall be shared on a pro rata basis based on square footage leased. Nothing
herein shall be deemed to grant Tenant permission to install signs other than in accordance with
the attached sign criteria and all applicable laws, regulations and private restrictions.
Tenant may maintain a sign on the right hand wall of the Building lobby of comparable size and
design to Landlords lobby wall sign.
27.12 Sierra Point CCRs. This Lease shall be subject to the Amended and
Restated Declaration of Covenants, Conditions and Restrictions for Sierra Point
recorded in the Official Records of San Mateo on October 23, 1998, as Document No.
98-172218, as amended by that certain First Amendment to Amended and Restated
Declaration of Covenants, Conditions and Restrictions for Sierra Point recorded in
the Official Records of San Mateo on August 6, 1999, as Document No. 1999-134787
(as amended, the CCRs). Tenant shall comply with the CCRs.
27.13 Financial Statements. Tenant shall furnish Landlord with complete
audited financial statements within ninety (90) days after the close of each fiscal
year of Tenant prepared by a certified public accountant (but not necessarily
certified statements) and shall, upon written request from Landlord, provide copies
of Tenants quarterly unaudited financial statements within fifteen (15) days after
Landlords request.
27.14 Communications Dish. Tenant shall have the right to install,
maintain and operate, at Tenants sole cost and expense (without rental charge
from Landlord), communications dishes or antennae, which receive and/or send
signals (hereinafter called the Communications Dishes on the roof of the Building
and fully contained (both vertically and horizontally) within the screens over the
48
portion of the third floor leased to the Tenant, and to run lines and conduits and cables necessary
for the operations of the Communications Dishes from the roof of the Building into the Premises,
provided that (and in the event Tenant makes such installation, Tenant hereby covenants and agrees
that): (a) such installation is performed in accordance with all laws and requirements of public
authorities and does not cause structural damage to the Building, (b) Tenant indemnifies and holds
Landlord harmless from (i) any liability, cost or expense incurred by Landlord in connection with
the erection, installation, maintenance and operations of the Communications Dishes and any related
equipment installed by Tenant pursuant to the provisions of this Section 27.14 and (ii) any and all
claims, costs, damages and expenses (including reasonable attorneys fees) arising out of
accidents, damage, injury or loss to any and all persons and property resulting from or arising in
connection with the erection, installation, maintenance and operations of the Communications Dishes
(including without limitation claims or damages due to interference with other signals or its own
signal clarity and other claims or damages), (c) Tenant promptly reimburses Landlord for repairs
made necessary by any damage caused to the roof or other portions of the Building by reason of such
installation, including, without limitation, any repairs, restorations, maintenance, renewals or
replacement of the roof necessitated by or in any way caused by or relating to such installations,
(d) Tenant removes such installations and lines and repairs any resulting damage to the Building
and restores the affected portion of the roof and the Building to a condition that is in all
material respects the same as the condition which existed prior to any such installation, ordinary
wear and tear and damage by casualty excepted, all at or prior to the expiration of the Term of
this Lease, (e) Tenant shall not install the Communications Dishes without Landlords prior
approval of the manner of such installation and detailed plans and specifications for such
installation, which approval shall not be unreasonably withheld, delayed or conditioned, (f) said
Communication Dishes may not be used by anyone other than the Tenant and any Corporate Transferees
lawfully occupying the Demised Premises and specifically may not be used by anyone in the business
of broadcasting or providing wireless communications, (g) the electric current necessary to operate
the Communications Dishes shall be obtained by Tenant from the public utility furnishing electric
to the Premises and Landlord shall have no obligation to furnish any electric current in connection
therewith, and (h) the installation of the Communications Dishes or their operation not interfere
with Building operations or the use by other tenants or occupants of antennae or communication
dishes installed by such tenants or occupants prior. Tenant shall have access to the roof as
reasonably required in connection with the operation, installation and maintenance of the
Communications Dishes; provided, however, Tenant shall always be accompanied on the roof by a
representative of Landlord. Tenant agrees that Landlord shall have the right, at Landlords sole
cost and expense, to relocate the Communications Dishes, provided that such relocation does not
affect the functioning of the Communications Dishes. Landlord makes no representation whether or
not the roof of the Building is suitable for or conductive
49
to the operation of a Communications Dish and Tenant hereby agrees that Landlord shall have no
liability to Tenant in the event that the Communications Dishes shall not operate in a manner
satisfactory to Tenant.
28.1 Security Deposit. Subject to Section 28.2 below, Tenant has deposited
with Landlord the Security Deposit described in Article 1 hereof as security for the
faithful performance and observance by Tenant of the terms, provisions, covenants
and conditions of this Lease, and it is agreed that if an Event of Default by Tenant
exists in respect of any of the terms, provisions, covenants and conditions of this
Lease, including, but not limited to, the payment of Rent, Landlord may use, apply
or retain the whole or any part of the security so deposited to the extent required for
the payment of any Rent or any other sum as to which there exists an Event of
Default by Tenant or for any sum which Landlord may expend or may be required
to expend by reason of Tenants Event of Default in respect of any of the terms,
provisions, covenants and conditions of this Lease, including, but not limited to, any
damages or deficiency accrued before or after summary proceedings or other re-
entry by Landlord. Upon the expiration or earlier termination of this Lease, and
providing there exists no default or Event of Default hereunder, any remaining
balance of the Security Deposit (including, without limitation, any and all interest
accrued thereon) and the Letter of Credit (as defined below) shall be returned by
Landlord to Tenant after the date fixed as the end of the Term and not later than
thirty (30) days after delivery of entire possession of the Premises to Landlord as
provided hereunder. In the event of a sale of the Land and Building or leasing of the
Building, of which the Premises form a part, Landlord shall have the right to
transfer the security to the vendee or lessee and Landlord shall thereupon be
released by Tenant from all liability for the return of such security, and Tenant
agrees to look solely to the new Landlord for the return of said security, and it is
agreed that the provisions hereof shall apply to every transfer or assignment made
of the security to a new Landlord. Tenant further covenants that it will not assign
or encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Landlord nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted
encumbrance. In the event Landlord applies or retains any portion or all of the
security deposited pursuant to the terms of this Section 28.1, Tenant shall forthwith
restore the amount so applied or retained so that at all times the amount deposited
shall be the full amount of the security deposit required at the relevant time.
Landlord shall not be responsible for the payment of any interest on the Security
Deposit.
28.2 Letter of Credit. In satisfaction of the Security Deposit obligation
contained in Section 28.1 above, Tenant shall deliver to Landlord, and shall
maintain in effect at all times during the Initial Term following delivery thereof, a
clean, unconditional and irrevocable letter of credit, in substantially the form
50
annexed hereto as Exhibit E (the Letter of Credit) in the amount of the Security Deposit
described in Article 1 hereof issued by Imperial Bank or another banking corporation (Bank)
reasonably satisfactory to Landlord. Such letter of credit shall have an expiration date no earlier
than the first anniversary of the date of issuance thereof and it shall be automatically renewed
from year-to-year unless terminated by the Bank by notice to Landlord given not less than
forty-five (45) days prior to the then expiration date therefor. It is agreed that in the event
there exists an Event of Default in respect of any of the terms, covenants or provisions of this
Lease, including, but not limited to, the payment of Rent, or if any letter of credit is terminated
by the Bank and is not replaced within thirty (30) days prior to its termination or expiration that
(A) Landlord shall have the right to require the Bank to make payment to Landlord of so much of the
entire proceeds of the letter of credit as shall be reasonably necessary to cure the Event of
Default (or the entire proceeds if notice of termination is given as aforesaid and the letter of
credit is not replaced as aforesaid), and (B) Landlord may apply said sum so paid to it by the Bank
to the extent required for the payment of Rent or any other sum as to which an Event of Default by
Tenant exists or for any sum which Landlord may expend or may be required to expend by reason of an
Event of Default by Tenant in respect of any of the terms, covenants and conditions of this Lease,
including, but not limited to, any damages or deficiency in the reletting of the Premises, whether
such damages or deficiency accrue before or after summary proceedings or other re-entry by
Landlord, without thereby waiving any other rights or remedies of Landlord with respect to such
Event of Default. If Landlord applies any part of the proceeds of a letter of credit, Tenant, upon
demand, shall deposit with Landlord promptly the amount so applied or retained (or increase the
amount of the letter of credit) so that the Landlord shall have the full deposit on hand at all
times during the Term. If, subsequent to a letter of credit being drawn upon, a new letter of
credit meeting all the requirements set forth in this Section 28.2 is delivered to Landlord, any
proceeds of the former letter of credit then held by Landlord shall be promptly returned to Tenant.
If Tenant shall fully and faithfully comply with all of the terms, covenants and provisions of this
Lease, any letter of credit, or any remaining portion of any sum collected by Landlord hereunder
from the Bank, together with any other portion or sum held by Landlord as security, shall be
returned to Tenant within thirty (30) days after the last day of the Initial Term of this Lease. In
the event of an assignment by Landlord of its interest under this Lease, Landlord shall have the
right to transfer the security to the assignee, and Tenant agrees to look to the new Landlord
solely for the return of said security and it is agreed that the provisions hereof shall apply to
every transfer or assignment made of the security to a new Landlord.
28.3 Reduction of Security Deposit. Provided Tenant is not then in default and there
has never been an Event of Default under this Lease, the Security Deposit will be reduced to an
amount equal to six (6) months Yearly Fixed Rent upon the later of (a) the commencement of the
twenty-fifth month of the Lease Term or (b) the date on which Tenant has sustained for a period
of six months a tangible
51
net worth in a total amount including cash and cash balances equal to or exceeding
$30,000,000, as set forth in audited financial statements provided by Tenant, which
financial statements shall be computed in accordance with generally accepted
accounting principles. The date upon which Tenant is entitled to such a reduction in
the Letter of Credit is hereinafter deemed the Reduction Date. Provided Tenant has met
the conditions of this Section 28.3, upon the written request of Tenant made on or
after the Reduction Date, Landlord shall exchange the Letter of Credit for a
replacement letter of credit provided by Tenant in the amount equal to six (6) months
Yearly Fixed Rent upon the same terms and conditions as the Letter of Credit.
29. SALE OF BUILDING
29.1 Except as otherwise provided, provided Tenant is not in default hereunder
beyond any applicable notice and cure period, and the named Tenant Genesoft, Inc. is
occupying not less than 50% of the Demised Premises, Landlord shall, prior to
marketing the Building for sale to an unaffiliated third party, provide a pre-sale
notice to Tenant advising Tenant of Landlords intention to market the Building.
Landlord will refrain from marketing the Building for a period of thirty (30) days,
during which time Tenant may submit an offer to purchase to Landlord for Landlords
consideration without any obligation. Nothing herein shall require Landlord to accept
any such offer submitted by Tenant. Notwithstanding the foregoing, said pre-sale
notice shall not apply to (a) an unsolicited offer to purchase submitted to Landlord
without marketing efforts by Landlord, (b) a deed of trust or mortgage and to the
foreclosure of the same or the granting of a deed in lieu of foreclosure, or (c) a
sale of the Building to an affiliate of Landlord or to anyone owning an equity
interest in Landlord, or to the sale or transfer of equity interests in Landlord. The
provisions of this Section 29 are (a) personal to Genesoft, Inc. and its Corporate
Transferrees (but not to any assignee thereof) and shall apply only to the first sale
of the Building to which this Section 29 applies, but not to any subsequent sale.
Tenant agrees that a foreclosure or deed in lieu of foreclosure of a mortgage or deed
of trust shall extinguish this Section 29.
IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be
executed under seal, all as of the day and year first above written.
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MJ RESEARCH COMPANY, INC. |
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GENESOFT, INC. |
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By
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/s/ Illegible
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By
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/s/ David B. Singer |
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Its PRESIDENT
title (duly-authorized)
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Its President & CEO
title (duly-authorized) |
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FIRST AMENDMENT TO LEASE
This Agreement made as of this 5th day of December, 2002, between MJ
Research, Incorporated (Landlord) and Genesoft, Inc. (Tenant).
Whereas, Landlord and Tenant are parties to a certain lease dated as of October 6, 2000 with
respect to premises at 7000 Shoreline Court, South San Francisco, California (the Lease) and
Whereas, Tenant has requested that Landlord partially defer certain payments of Fixed
Rent as more particularly set forth herein, and
Whereas, Landlord is willing to do so upon the terms and conditions set forth herein,
Now, therefore, the parties agree as follows:
1. Yearly Fixed Rent, as defined in the Lease, shall continue to accrue and be owed at the
rates set forth in the Lease.
2. Provided Tenant is not otherwise in default under the Lease, Landlord agrees to defer
temporarily (with respect to the Rent Deferred Space as hereinafter defined) receipt of Fixed Rent
in excess of $3.00 per rentable square foot per month for the months of December, 2002 and January
through June, 2003 (the Deferral Period), but only with respect to 38,229 s.f. of the Premises
(the Rent Deferred Space). Said deferred rent shall be hereinafter referred to as the Deferred
Rent. All Deferred Rent shall continue to accrue and be fully earned by Landlord, who, as a
convenience to Tenant, has agreed to defer receipt of payment of the same, subject to the
conditions of this Agreement. Tenant shall continue to pay when due during the Deferral Period
Fixed Rent at the rate of $3.00/s.f./month and any additional rent or charges due under the Lease
with respect to the Rent Deferred Space. Tenant shall also pay in full all Fixed Rent and other
charges, without deferral of any kind, on the portion of the Premises other than the Rent Deferred
Space.
3. The parties agree that the total amount of Fixed Rent deferred under this Agreement is
$425,488.77. Tenant may defer payment of the entire December payment of Fixed Rent with respect to
the Rent Deferred Space ($172,030.50), and the balance of the Deferred Rent shall be deferred on a
monthly basis of $38,190.77 per month for January and February, 2003, and $44,211.84 per month for
March through June, 2003. All Deferred Rent shall be due and payable in full on July 1, 2003.
Notwithstanding the foregoing, if after the date hereof there shall occur an Event of Default, all
Deferred Rent theretofore accrued but unpaid shall be immediately due and payable, and Fixed Rent
shall no longer be deferred.
4. Article 28 is hereby modified to provide as follows:
1
(a) In case of an Event of Default, Landlord may draw upon the letter of credit to the
extent of any Deferred Rent in addition to any other damages or costs for which Landlord has
the right to so draw; and
(b) Section 28.3 is hereby deleted from the Lease.
5. Section 2.4 of the Lease is modified to delete subsection (b) thereof and also to delete
the words (other than the security desk) from the last paragraph of Section 2.4.
6. Capitalized terms not otherwise defined herein shall have the meaning set forth in the
Lease.
7. Tenant hereby confirms that the Lease is in full force and effect, that it has no claims
against Landlord or right to offset against rent or other charges, and the Landlord is not in
default of its obligations under the Lease.
8. This Agreement shall be null and void unless the Tenant pays all December rent (not
deferred by this Agreement) on or before December 6, 2002.
Executed under seal as of the date first set forth above.
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MJ Research, Incorporated
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By: |
/s/ Illegible
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Duly Authorized |
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Genesoft, Inc.
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By: |
/s/ David B. Singer
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Duly Authorized
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David B. Singer
Chairman and CEO
Genesoft, Inc. |
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2
SECOND AMENDMENT TO LEASE
This Agreement made as of this 25th day of March, 2004 between MJ Research, Incorporated
(Landlord) and Genome Therapeutics Corporation (Tenant).
WHEREAS, Landlord and Genesoft, Inc. executed a certain Agreement of Lease dated as of October
6, 2000, as amended by a First Amendment to Lease dated December 5, 2002 (the Lease), and
WHEREAS, Genome Therapeutics Corporation is the successor by merger to Genesoft, Inc., and
WHEREAS, the parties desire to further amend the Lease.
NOW, THEREFORE, for consideration paid, the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease as follows:
1. Section 16(a) and 16(b) of the Lease are deleted and replaced with the following Section
16(a) and 16(b):
(a) If the Demised Premises, or any part thereof, shall be damaged by fire or other
casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving
such notice and the insurance proceeds for such casualty, shall proceed in a commercially
reasonable manner, subject to unavoidable delays, to repair, or cause to be repaired, such
damage to the extent hereinafter provided. Landlord shall be responsible to restore only to
the cold shell condition as set forth on Exhibit A-1, and Tenant shall be responsible for
restoration of all leasehold improvements beyond such cold shell (the TI).
Notwithstanding the preceding sentence to the contrary, solely with respect to the portion
of the Demised Premises subleased pursuant to that certain Sublease ( the Fluidigm
Sublease) dated as of April 1, 2004 between Tenant and Fluidigm Corporation ( the
Fluidigm Space), provided that if within thirty (30) days of the date of the casualty,
Landlord is furnished with (a) a full set of the approved working construction plans, in
electronic form, used by Tenant in Tenants construction of the TI (the TI Plans),
together with a full release or assignment of rights to use said plans, and (b) the
proceeds of insurance required to be carried by Tenant under Section 13.1(b) with respect
to the TI, which proceeds, together with any other sums contributed by Tenant or any
subtenant thereof, shall be sufficient to pay for the full cost of reconstructing the TI in
the Fluidigm Space, Landlord shall also reconstruct the TI in the Fluidigm Space. Tenant
agrees to maintain separate insurance required under Section 13.1(b) of the Lease for the
TI in the Fluidigm Space, and, if Landlord has agreed to reconstruct said TI, to make the
proceeds thereof available to Landlord. Tenant shall cooperate, at no expense to Tenant, in
making available such TI
Plans as may be in the possession or control of Tenant. Landlord shall be under no obligation to
furnish the TI Plans. If the foresaid conditions are met with respect to reconstructing the TI in
the Fluidigm Space, for purposes of Sections 16(a) and 16(b), the term Demised Premises shall be
deemed to be the cold shell as to the space leased by Tenant exclusive of the Fluidigm Space and
both cold shell and TI with respect to the Fluidigm Space; if said conditions are not met, all
restoration shall be to a cold shell. If the Demised Premises or any part thereof shall be rendered
untenantable by reason of such damage, whether to the Demised Premises or to the Building, Yearly
Fixed Rent shall proportionately abate for the period from the date of such damage to the date when
the Demised Premises shall have been restored by Landlord.
(b) If, as a result of fire or other casualty, the whole or a substantial portion of the
Building is rendered untenantable, within ninety (90) days from the date of such fire or
casualty, Landlord shall notify Tenant and the lessee under the Fluidigm Sublease of its
opinion of the time required to restore the Demised Premises, taking into account a reasonable
time for adjusting loss and obtaining plans and permits for restoration. If in Landlords
opinion the Demised Premises cannot be made tenantable within one (1) year after such event,
Landlord, within ninety (90) days from the date of such fire or casualty, may terminate this
Lease by notice to Tenant, specifying a date not less than thirty (30) nor more than sixty
(60) days after the giving of such notice on which the Term of this Lease shall terminate. In
addition, if in Landlords opinion said estimated time for restoration exceeds one (1) year
and Landlord does not elect to terminate this Lease, Tenant shall, by notice given to Landlord
within fifteen (15) days of Landlords notice as aforesaid, elect (a) to terminate this Lease
or (b) accept Landlords estimated restoration period (the Longer Restoration Period). If
Tenant accepts a Longer Restoration Period, Tenants right to terminate as hereinafter
provided shall be effective only if actual restoration takes more than 60 days beyond such
estimated Longer Restoration Period, such termination to be elected within 30 days after the
expiration of said estimated Longer Restoration Period plus 60 days. If neither Landlord or
Tenant elects to terminate this Lease as provided above, then Landlord shall (to the extent
that proceeds of insurance required to be carried by Landlord, net of any portion thereof
retained by a Mortgagee, plus any sums contributed by Tenant or any subtenant of Tenant, are
made available for such purpose) proceed with diligence to repair the damage to the Demised
Premises and all facilities serving the same, if any, which shall have occurred, and the
Yearly Fixed Rent shall meanwhile proportionately abate, all as provided in Paragraph (a) of
this Section. However, if such damage is not repaired and the Demised Premises restored to
substantially the same condition as they were prior to such damage within one (1) year (or, if
elected, the Longer Restoration Period plus 60 days) from the date of such damage,
2
Tenant, within thirty (30) days from the expiration of the later of such one (1) year period (or,
if elected, the Longer Restoration Period plus 60 days), or from the expiration of any extension
thereof by reason of the delays set forth in the following sentence, may terminate this Lease by
notice to Landlord, specifying a date not more than sixty (60) days after the giving of such notice
on which the Term of this Lease shall terminate. The period within which the required repairs may
be accomplished shall be extended by the number of days, lost as a result of unavoidable delays,
which term shall be defined to mean all delays referred to in Article 24.
3
Except as modified hereby, the Lease is ratified and confirmed in full force and effect.
Executed under the date first set forth above.
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MJ RESEARCH INCORPORATED
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By: |
/s/ [ILLEGIBLE]
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VP, Finance, Duly authorized |
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GENOME THERAPEUTICS
CORPORATION
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By: |
/s/ [ILLEGIBLE] |
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, Duly authorized |
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4
AGREEMENT OF LEASE
AGREEMENT OF LEASE made as of the ____ day of November, 1999, by and
between Mountain Cove Tech Center, L.L.C., a Delaware limited liability company (hereinafter
referred to as Landlord) and MJ Research Company, Inc. (hereinafter referred to as Tenant).
W I T N E S S E T H:
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the entire land and
building (the Building) in South San Francisco a portion, as shown on the plan attached hereto as
Exhibit A and made a part hereof (hereinafter referred to as the Premises or the Demised
Premises).
1. REFERENCE DATA
1.1 Definitions. Each reference in this Lease to any of the terms and titles
contained in this Article shall be deemed and construed to incorporate the data stated following
that term or title in this Article.
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1)
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Additional Rent:
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Sums or other charges payable by Tenant to Landlord under
this Lease, other than Yearly Fixed Rent, all of which
shall be payable as additional rent under this Lease. |
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2)
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Broker: |
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3)
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Business Day:
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All days except Saturdays, Sundays, days defined as
legal holidays for the entire state under the laws of
the State of California, and such other days as Tenant
presently or in the future recognizes as holidays for
Tenants general staff. |
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4)
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Environmental Laws
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As defined in Section 5.3 (a) (1). |
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5)
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Event of Default:
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The occurrence of an event listed in Section 19.1. |
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6)
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Hazardous Materials
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As defined in Section 5.3 (a) (1). |
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7)
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Interest Rate
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2 1/2% per month or the maximum
interest rate Landlord is permitted to charge Tenant
under applicable law, whichever is less. |
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8)
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Land:
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The parcel of land on which the Building is situated. |
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9)
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Landlords Address: |
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10)
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Landlords Architect:
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Any licensed architect from time to time designated by
Landlord. |
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11)
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Lease Year:
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A twelve (12) month period beginning
on the Term Commencement Date and
each succeeding twelve (12) month
period during the Term of this Lease,
except that if the Term Commencement
Date shall be other than the first
day of a calendar month, the first
Lease Year shall include the partial
calendar month in which the Term
Commencement Date occurs as well as
the succeeding twelve (12) full
calendar months. |
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12)
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Mortgage:
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A mortgage, deed of trust, trust
indenture, or other security
instrument of record creating an
interest in or affecting title to the
Land or Building or any part thereof,
and any and all renewals,
modifications, consolidations or
extensions of any such instrument. |
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13)
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Mortgagee:
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The holder of any Mortgage. |
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14)
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Operating Expense Base: |
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15)
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Property:
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The Land and Building. |
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16)
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Rent:
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Yearly Fixed Rent and Additional Rent. |
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17)
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Rentable Area of the
Demised Premises:
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141,677 square feet. |
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18)
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Tax Base: |
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19)
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Tenants Address:
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Until the Term Commencement Date, _______,
and thereafter, the Demised Premises. |
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20)
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Tenants Operating
Expense Share:
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100% |
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21)
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Tenants Tax Share:
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100% |
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22)
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Term Commencement Date:
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As defined in Section 3.2. |
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23)
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Term of this Lease:
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As defined in Section 3.1. |
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24)
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Termination Date:
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As defined in Section 3.1. |
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25)
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Use of Demised Premises: |
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26)
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Yearly Fixed Rent: |
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1.2 Exhibits. The following exhibits are attached hereto and made a part hereof:
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A - Plan of Demised Premises
A-l - Plans and Specifications for Landlords Work
B - Cleaning Specifications
C - Rules and Regulations
2. DESCRIPTION OF DEMISED PREMISES
2.1 Demised Premises. The Demised Premises are that portion of the Building as
described above (as the same may from time to time be constituted after changes therein,
additions thereto and eliminations therefrom pursuant to rights of Landlord hereinafter
reserved).
2.2 Appurtenant Rights. Tenant shall have, as appurtenant to the Demised Premises,
rights to use in common, subject to reasonable rules from time to time made by Landlord of
which Tenant is given notice, those common roadways, walkways, elevators, hallways and
stairways necessary for access to that portion of the Building occupied by the Demised
Premises.
2.3 Reservations. All the perimeter walls of the Demised Premises except the inner
surfaces thereof, any balconies, terraces or roofs adjacent to the Demised Premises, and any
space in or adjacent to the Demised Premises used for serving other portions of the Building
exclusively or in common with the Demised Premises, including without limitation (where
applicable) shafts, stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms, ducts,
electric or other utilities, sinks or other Building facilities, and the use thereof, as well
as the
right of access through the Demised Premises for the purpose of operation, maintenance,
decoration and repair, are expressly reserved to Landlord.
3. TERM OF LEASE
3.1 Term. The Term of this Lease is ten (10) years (or until such Term shall sooner
cease or expire) commencing on the Term Commencement Date and ending on the day
immediately prior to the 10th anniversary thereof, except that if the Term
Commencement Date
shall be other than the first day of a calendar month, the Term of this Lease shall end on the
last
day of the calendar month in which said 10th anniversary of the Term Commencement
Date shall
fall (which date on which the Term of this Lease is scheduled to expire is hereinafter
referred to
as the Termination Date).
3.2 Term Commencement Date. The Term Commencement Date shall be the earlier
of (a) the date on which, pursuant to permission therefor duly given by Landlord, Tenant
undertakes Use of the Demised Premises for the purposes set forth in Article 1, or (b) the
date on
which the Demised Premises are ready for Tenants occupancy in accordance with the provisions
of Section 4.2.
4. PREPARATION OF PREMISES; TENANTS ACCESS
4.1 Plans and Specifications. Landlord shall lay out the Demised Premises for
Tenants occupancy in accordance with the plans and specifications (the Plans) referenced in
Exhibit A-l attached hereto and made a part hereof.
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4.2 When Premises Deemed Ready. The Demised Premises shall be conclusively
deemed ready for Tenants occupancy after Landlord gives notice to Tenant that the
installations
to be done by Landlord in the Demised Premises (as set forth in Section 4.1) have been
substantially completed by Landlord. Such work shall not be deemed incomplete if only minor
or insubstantial details of construction or mechanical adjustments remain to be done, or if a
delay
is caused in whole or in part by Tenant. Landlords Architects certificate of substantial
completion, as hereinabove stated, given in good faith, or of any other facts pertinent to
such
work, shall be deemed conclusive of the statements therein contained and binding upon Tenant.
4.3 Conclusiveness of Landlords Performance. Tenant shall be conclusively deemed
to have agreed that Landlord has performed all of its obligations under this Article 4 unless
not
later than the end of the second calendar month next beginning after the Landlords notice of
substantial completion under Section 4.2 Tenant shall give Landlord written notice specifying
the respects in which Landlord has not performed such obligations.
4.4 Entry by Tenant; Interference With Construction. Tenant may enter the Demised
Premises prior to the Term Commencement Date to undertake such work as is to be performed
by Tenant pursuant and subject to this Lease in order to prepare the Demised Premises for
Tenants occupancy. Such entry shall be deemed to be pursuant to a license from Landlord to
Tenant and shall be at the risk of Tenant. In no event shall Tenant interfere with any
construction being performed by or on behalf of Landlord in or around the Building; without
limiting the generality of the foregoing, Tenant shall comply with all instructions issued by
Landlords contractors relative to the moving of Tenants equipment and other property into
the Demised Premises and shall pay any fees or costs imposed in connection therewith.
5. USE OF PREMISES
5.1 Permitted Use. Tenant shall continuously during the Term of this Lease occupy
and use the Demised Premises for the permitted Use set forth in Article 1 and for no other
purpose. Service and utility areas (whether or not a part of the Demised Premises) shall be
used
only for the particular purpose for which they are designated.
5.2 Prohibited Uses. Tenant shall not use, or suffer or permit the use of, or suffer
or
permit anything to be done in or anything to be brought into or kept in, the Demised Premises
or
any part thereof (i) which would violate any of the covenants, agreements, terms, provisions
and
conditions of this Lease, (ii) for any unlawful purposes or in any unlawful manner, or (iii)
which,
in the reasonable judgment of Landlord shall in any way (a) impair or tend to impair the
appearance or reputation of the Building, (b) impair or interfere with or tend to impair or
interfere with any of the Building services or the proper and economic heating, cleaning, air
conditioning or other servicing of the Building or with the use of any of the other areas of
the
Building, or (c) occasion discomfort, inconvenience or annoyance to any of the other tenants
or
occupants of the Building, whether through the transmission of noise or odors or vibrations or
dust or otherwise. Without limiting the generality of the foregoing, no food shall be prepared
or
served for consumption by the general public on or about the Demised Premises; no intoxicating
liquors or alcoholic beverages shall be sold or otherwise served for consumption by the
general
public on or about the Demised Premises; no lottery tickets (even where the sale of such
tickets
- 4 -
is not illegal) shall be sold and no gambling, betting or wagering shall otherwise be permitted on
or about the Demised Premises; no loitering shall be permitted on or about the Demised Premises;
and no loading or unloading of supplies or other material to or from the Demised Premises shall be
permitted on the Land except at times (excluding Business Days from 7:00 to 9:30 a.m. and from 4:00
to 6:00 p.m.) and in locations to be designated by Landlord. The Demised Premises shall be
maintained in a sanitary condition. Tenant shall suitably store all trash and rubbish in the
Demised Premises or other locations designated by Landlord from time to time. Tenant specifically
agrees that its indemnification obligations pursuant to Section 13.3 shall extend to any claim
arising from the consumption of intoxicating liquors or alcoholic beverages on or about the Demised
Premises.
5.3 Hazardous Materials.
(a) Definitions.
(1) Environmental Law means any governmental statute, code, ordinance,
regulation, rule or order and any amendment thereto governing or regulating materials that are
toxic,
explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or otherwise hazardous.
Environmental Laws include, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., the California Hazardous Substances Act at California
Health and Safety Code Section 108100 et seq., the provisions regarding hazardous waste
control at
California Health and Safety Code Sections 25100 through 25250.25 and the California Medical
Waste Management Act at California Health and Safety Code 117600 et seq.
(2) Hazardous Materials shall mean any substance: (A) that now or in the future
is regulated or governed by, requires investigation or remediation under, or is defined as a
hazardous waste, hazardous substance, pollutant or contaminant under any Environmental Law or
(B) that is toxic, explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or
otherwise
hazardous, including gasoline, diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls
(PCBs), asbestos, radon and urea formaldehyde foam insulation.
(b) Tenants Covenants. No Hazardous Materials shall be stored, placed, handled, used
or released by Tenant or its employees, contractors, sublessees, guests or visitors at or
about the
Demised Premises or Property without Landlords prior written consent, which consent may be
granted, denied, or conditioned upon compliance with Landlords requirements, all in
Landlords
absolute discretion. Notwithstanding the foregoing, normal quantities and use of those
Hazardous
Materials customarily used in the conduct of general office activities, such as copier fluids
and
cleaning supplies may be used and stored at the Demised Premises without Landlords prior
written
consent, provided that Tenants activities at or about the Demised Premises and Property shall
comply at all times with the laws all Environmental Laws. Tenant shall keep Landlord fully and
promptly informed of all storage, placement, handling, use or release by Tenant or its
employees,
contractors, sublessees, guests or visitors of Hazardous Materials, other than Hazardous
Materials
permitted by the preceding sentence. At the expiration or termination of the Lease, Tenant
shall promptly remove all Hazardous Materials from the Demised Premises. Tenant shall be responsible
- 5 -
and liable for the compliance with all of the provisions of this Section by all of Tenants
employees, contractors, sublessees, guests and visitors and all of Tenants obligations under this
Section (including its indemnification obligations under subsection (e) below) shall survive the
expiration or termination of this Lease.
(c) Compliance. Tenant shall at Tenants expense promptly take all actions required by
any governmental agency or entity in connection with or as a result of the storage, placement,
handling, use or release by Tenant or its employees, contractors, sublessees, guests or
visitors of
Hazardous Materials at or about the Demised Premises or Property, including inspection and
testing, performing all cleanup, removal and remediation work required with respect to those
Hazardous Materials, complying with all closure Laws and postclosure monitoring, and filing
all
required reports or plans. [Insert if applicable: All medical waste regulated by any
Environmental
Laws that is brought to the Demised Premises shall be stored in leak-proof, closeable
containers,
which containers shall be stored in a specified dirty storage area of the Demised Premises
that
shall be protected from leaks or any other type of contamination of the Demised Premises.
Tenant
shall never use any of the Landlords trash receptacles for disposing of any medical waste.]
All of
the foregoing work shall be performed in a good, safe and workmanlike manner by consultants
qualified and licensed to undertake such work and in a manner that will not interfere with any
other
tenants quiet enjoyment of the Property or Landlords use, operation, leasing and sale of the
Property. Tenant shall deliver to Landlord prior to delivery to any governmental agency, or
promptly after receipt from any such agency, copies of all permits, manifests, closure or
remedial
action plans, notices, and all other documents relating to the storage, placement, handling,
use or
release by Tenant or its employees, contractors, sublessees, guests or visitors of Hazardous
Materials at or about the Demised Premises or Property. If any lien attaches to the Demised
Premises or the Property in connection with or as a result of the storage, placement,
handling, use or
release by Tenant or its employees, contractors, sublessees, guests or visitors of Hazardous
Materials, and Tenant does not cause the same to be released, by payment, bonding or
otherwise,
within ten (10) days after the attachment thereof, Landlord shall have the right but not the
obligation
to cause the same to be released and any sums expended by Landlord in connection therewith
shall
be payable by Tenant on demand.
(d) Landlords Rights. Landlord shall have the right, but not the obligation, to enter
the
Demised Premises at any reasonable time (i) to confirm Tenants compliance with the provisions
of
this Section, and (ii) to perform Tenants obligations under this Section if Tenant has failed
to do so
after reasonable notice to Tenant. Landlord shall also have the right to engage qualified
Hazardous
Materials consultants to inspect the Demised Premises and review the storage, placement,
handling,
use or release by Tenant or its employees, contractors, sublessees, guests or visitors of
Hazardous
Materials, including review of all permits, reports, plans, and other documents regarding
same.
Tenant shall pay to Landlord on demand the costs of Landlords consultants fees and all costs
incurred by Landlord in performing Tenants obligations under this section. Landlord shall
use
reasonable efforts to minimize any interference with Tenants business caused by Landlords
entry
into the Demised Premises, but Landlord shall not be responsible for any interference caused
thereby.
- 6 -
(e) Tenants Indemnification. Tenant agrees to indemnify, defend and hold harmless
Landlord and its members, managers, directors, officers, agents and employees and their partners,
members, managers, directors, officers, shareholders, employees and agents from all shall mean all
costs and expenses of any kind, damages, including foreseeable and unforeseeable consequential
damages, fines and penalties incurred in connection with any violation of and compliance with the
Environmental Laws and all losses of any kind attributable to the diminution of value, loss of use
or adverse effects on marketability or use of any portion of the Demised Premises or Property and
all other claims, actions, losses, damages, liabilities, costs and expenses of every kind,
including reasonable attorneys, experts and consultants fees and costs, incurred at any time and
arising from or connection with the storage, placement, handling, use or release by Tenant or its
employees, contractors, sublessees, guests or visitors of Hazardous Materials at or about the
Property or Tenants failure to comply in full with all Environmental Laws with respect to the
Demised Premises and the Property.
5.4 Licenses and Permits. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenants business, and if the failure to secure such license or permit
would in any way affect Landlord, Tenant, at Tenants expense, shall duly procure and thereafter
maintain such license or permit and submit the same to inspection by Landlord. Tenant, at Tenants
expense, shall at all times comply with the terms and conditions of each such license or permit.
6. RENT
6.1 Yearly Fixed Rent. Tenant shall pay to Landlord, without any set-off or
deduction, at Landlords office, or to such other person or at such other place as Landlord
may
designate by notice to Tenant, the Yearly Fixed Rent set forth in Article 1. The Yearly Fixed
Rent shall be paid in equal monthly installments in advance on or before the first Business
Day
of each calendar month during the Term of this Lease and shall be apportioned for any fraction
of a month in which the Term Commencement Date or the last day of the Term of this Lease
may fall.
6.2 Taxes. Tenant shall pay to Landlord as Additional Rent Tenants Tax Share of all
real estate taxes imposed against the Property during any calendar year (including without
limitation all so-called linkage and impact fees, betterment assessments, fire and police
service
availability fees and similar charges for customary governmental services and charges in lieu
of
such taxes, assessment district assessments, governmental charges, fees or assessments for
traffic
or transit mitigation, personal property taxes assessed on personal property of Landlord used
in
the operation of the Property, increases in the foregoing due to changes in values, tax rate,
alterations made by Tenant or other factors and the reasonable cost of contesting by
appropriate
proceedings the amount or validity of any of the foregoing) in excess of the Tax Base,
prorated
with respect to any portion of a calendar year in which the Term of this Lease begins or ends.
As
soon as Tenants share of real estate taxes with respect to any calendar year can be
determined,
the same will be certified by Landlord to Tenant (which certification shall be accompanied by
copies of the relevant tax bills) and will become payable to Landlord within ten (10) days
thereafter. If Landlord shall receive any refund of real estate taxes of which Tenant has paid
a
portion pursuant to this Section, then, out of any balance remaining after deducting
Landlords
- 7 -
expenses incurred in obtaining such refund, Landlord shall pay to Tenant the same proportionate
share of said balance, prorated as set forth above. Tenant shall, if as and when demanded by
Landlord and with each monthly installment of Fixed Rent, make tax fund payments to Landlord. Tax
fund payments refer to such payments as Landlord shall determine to be sufficient to provide in
the aggregate a fund adequate to pay, when they become due and payable, all payments required from
Tenant under this Section. In the event that tax fund payments are so demanded, and if the
aggregate of said tax fund payments is not adequate to pay Tenants share of such taxes, Tenant
shall pay to Landlord the amount by which such aggregate is less than the amount of said share,
such payment to be due and payable at the time set forth above. Any surplus tax fund payments shall
be accounted for to Tenant after payment by Landlord of the taxes on account of which they were
made, and may be credited by Landlord against future tax fund payments or refunded to Tenant at
Landlords option.
In addition, Tenant shall timely file business property statements with respect to Tenants
personal property and trade fixtures and pay when due all taxes imposed on such personal property
and trade fixtures.
6.3 Operating Expenses. Tenant shall pay to Landlord as Additional Rent Tenants
Operating Expense Share of all costs and expenses incurred by Landlord during any calendar year in
the operation and maintenance of the Building and the Land in accordance with generally accepted
operational and maintenance procedures in excess of the Operating Expense Base, including, without
limiting the generality of the foregoing, all such costs and expenses in connection with (1)
insurance, license fees, janitorial service, landscaping and snow removal, (2) wages, salaries,
management fees, employee benefits, payroll taxes, on-site office expenses, administrative and
auditing expenses, and equipment and materials for the operation, management and maintenance of the
Property, (3) any capital expenditure (amortized, with interest, on such reasonable basis as
Landlord shall determine) made by Landlord for the purpose of reducing other operating expenses or
complying with any governmental requirement, (4) the furnishing of heat, air conditioning,
electricity and other utilities, and any other service to the extent to which Landlord is not
reimbursed by tenants, and (5) the furnishing of the repairs and services referred to in Article 7
(the foregoing being hereinafter referred to as operating expenses). If, during any portion of a
calendar year for which operating expenses are being computed pursuant to this Section, less than
the entire rentable area of the Building is occupied or Landlord is not supplying all occupants
with the same services being supplied hereunder, such costs and expenses shall be reasonably
extrapolated in order to take into account the costs and expenses which would have been incurred
had the entire rentable area of the Building been occupied and had such services been supplied to
all occupants. As soon as Tenants share of operating expenses with respect to any calendar year
can be determined, the same will be certified by Landlord to Tenant and will become payable to
Landlord within ten (10) days following such certification, subject to proration with respect to
any portion of a calendar year in which the Term of this Lease begins or ends. Tenant shall, if as
and when demanded by Landlord and with each monthly installment of Yearly Fixed Rent, make
operating fund payments to Landlord. Operating fund payments refer to such payments as Landlord
shall determine to be sufficient to provide in the aggregate a fund adequate to pay, when they
become due and payable, all payments required from Tenant under this Section. In the event that
operating fund payments are so demanded, and if the aggregate of said operating fund payments
- 8 -
is not adequate to pay Tenants share of operating expenses, Tenant shall pay to Landlord the
amount by which such aggregate is less than the amount of said share, such payment to be due and
payable at the time set forth above. Any surplus operating fund payments shall be accounted for to
Tenant after such surplus has been determined, and may be credited by Landlord against future
operating fund payments or refunded to Tenant at Landlords option.
6.4
Obligations Survive Termination. All obligations and liabilities of Tenant
relating to any period prior to the termination of the Term of this Lease, including
without
limitation the obligation to pay any Additional Rent due pursuant to the provisions of
this
Article, shall survive such termination.
6.5 Payment to Mortgagee. Landlord reserves the right to provide in any Mortgage
given by it of the Property that some or all rents, issues, and profits and all other amounts
of
every kind payable to the Landlord under this Lease shall be paid directly to the Mortgagee
for
Landlords account and Tenant covenants and agrees that it will, after receipt by it of notice
from
Landlord or Mortgage designating such Mortgagee to whom payments are to be made by Tenant,
pay such amounts thereafter becoming due directly to such Mortgagee until excused therefrom
by notice from such Mortgagee.
7. UTILITIES AND LANDLORDS SERVICES
7.1 Electricity. Tenant shall purchase directly from the public utility serving
the Building all electrical energy that Tenant requires for operation of the lighting fixtures,
appliances and equipment servicing the Demised Premises. The costs of initially installing any
required meter and related installation equipment shall be paid by Landlord. Landlord shall not be
liable in any way to Tenant for any failure or defect in the supply or character of electrical
energy furnished to the Demised Premises by reason of any requirement, act or omission of the
public utility serving the Building. Tenants use of electrical energy in the Demised Premises
shall not at any time exceed the capacity of any of the electrical conductors and equipment in or
otherwise serving the Demised Premises. In order to insure that such capacity is not exceeded and
to avert possible adverse effect upon the Building electrical services Tenant shall give notice to
Landlord and obtain Landlords prior written consent whenever Tenant shall connect to the Building
electrical distribution system any fixtures, appliances or equipment other than lamps, typewriters,
personal computers and similar small machines. Any additional feeders or risers to supply Tenants
electrical requirements in addition to those originally installed and all other equipment proper
and necessary in connection with such feeders or risers, shall be installed by Landlord upon
Tenants request, at the sole cost and expense of Tenant, provided that such additional feeders and
risers are permissible under applicable laws and insurance regulations and the installation of such
feeders or risers will not cause permanent damage or injury to the Building or cause or create a
dangerous condition or unreasonably interfere with other tenants of the Building. Tenant agrees
that it will not make any alteration or addition to the electrical equipment in the Demised
Premises without the prior written consent of Landlord in each instance first obtained, which
consent will not be unreasonably withheld. Landlord, at Tenants expense, shall purchase, install
and replace all light fixtures, bulbs, tubes, lamps, lenses, globes, ballasts and switches used in
the Demised Premises.
- 9 -
7.2 Water Charges. Landlord shall furnish hot and cold water for ordinary cleaning,
toilet, lavatory and drinking purposes. If Tenant requires, uses or consumes water for any
purpose other than for such purposes, Landlord may (i) assess a reasonable charge for the
additional water so used or consumed by Tenant or (ii) install a water meter and thereby
measure
Tenants water consumption for all purposes. In the latter event, Landlord shall pay the cost
of
the meter and the cost of installing any equipment required in connection therewith, and
Tenant
shall keep said meter and installation equipment in good working order and repair, and shall
pay
for water consumed, as shown on said meter, together with the sewer charge based on said meter
charges, as and when bills are rendered. On default in making such payment Landlord may pay
such charges and collect the same from Tenant.
7.3 Heat and Air Conditioning. Landlord shall furnish to and distribute in the
Demised Premises heat and air conditioning as normal seasonal changes may require on
Business Days from 8:00 a.m. to 6:00 p.m. when reasonably required for the comfortable
occupancy of the Demised Premises by Tenant. Tenant agrees to lower and close the blinds or
drapes when necessary because of the suns position whenever the air conditioning system is in
operation, and to cooperate fully with Landlord with regard to, and to abide by all the
regulations
and requirements which Landlord may prescribe for the proper functioning and protection of,
the
heating and air conditioning system. Without limiting the generality of the foregoing, all
windows in the Demised Premises must remain closed at all times notwithstanding the fact that
such windows may be operable. The air conditioning system servicing the Building is designed
to provide cooling based upon an occupancy of not more than one person per one hundred (100)
square feet of floor area, and upon a combined lighting and standard electrical load not to
exceed
3.0 watts per square foot. In the event Tenant exceeds such condition or introduces into the
Demised Premises equipment which overloads such system, or in any other way causes such
system not to adequately perform its proper functions, supplementary systems may at Landlords
option be provided by Landlord at Tenants expense.
7.4 Additional Heat and Air Conditioning Services.
Landlord shall, upon reasonable
advance written notice from Tenant of its requirements in that regard, received before 3:00
p.m.
on the preceding Business Day, furnish additional heat or air conditioning services to the
Demised Premises on days and at times other than as provided in this Article. Tenant will pay
to
Landlord a reasonable charge for any such additional heat or air conditioning service required
by Tenant.
7.5 Elevator Service. Landlord shall provide passenger elevator service to the
Demised Premises on Business Days from 8:00 a.m. to 6:00 p.m. and on a reduced basis at all
other times. Freight elevator service shall be available in common with other tenants on
Business Days from 9:30 a.m. to 4:00 p.m. and at other times at reasonable charge.
7.6 Cleaning. Landlord shall furnish cleaning services to the Building substantially
in
accordance with the specifications attached hereto as Exhibit B and made a part hereof.
7.7 Repairs and Other Services.
Except as otherwise provided in Articles 16 and 18,
and subject to Tenants obligations in Article 12 and elsewhere in this Lease, Landlord shall
(a)
keep and maintain the roof, exterior walls, structural floor slabs and columns of the Building in
- 10 -
as good condition and repair as they are in on the Term Commencement Date, reasonable use and wear
excepted, (b) keep and maintain in workable condition the Buildings sanitary, electrical, heating,
air conditioning and other systems, (c) keep all walkways on the Property clean and remove all snow
and ice therefrom, (d) provide grounds maintenance to all landscaped areas and (e) arrange for the
extermination of rodents and vermin in the Building.
7.8 Interruption or Curtailment of Services.
Landlord reserves the right to
interrupt, curtail, stop or suspend the furnishing of services and the operation of any Building
system, when necessary by reason of accident or emergency, or of repairs, alterations, replacements
or improvements in the reasonable judgment of Landlord desirable or necessary to be made, or of
difficulty or inability in securing supplies or labor, or of strikes, or of any other cause beyond
the reasonable control of Landlord, whether such other cause be similar or dissimilar to those
hereinabove specifically mentioned, until said cause has been removed. Landlord shall have no
responsibility or liability for any such interruption, curtailment, stoppage, or suspension of
services or systems, except that Landlord shall exercise reasonable diligence to eliminate the
cause of same.
8. CHANGES OR ALTERATIONS BY LANDLORD
Landlord reserves the right, exercisable by itself or its nominee, at any time and from time
to time without the same constituting an actual or constructive eviction and without incurring any
liability to Tenant therefor or otherwise affecting Tenants obligations under this Lease, to make
such changes, alterations, additions, improvements, repairs or replacements in or to the Building
and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages,
elevators, and stairways thereof, as it may deem necessary or desirable, and to change the
arrangement and/or location of entrances or passageways, doors and doorways, and corridors,
elevators, stairs, toilets, or other public parts of the Building, provided, however, that there be
no unreasonable obstruction of the right of access to, or unreasonable interference with the use
and enjoyment of, the Demised Premises by Tenant, except that Landlord shall not be obligated to
employ labor at so-called over-time or other premium pay rates. Nothing contained in this Article
shall be deemed to relieve Tenant of any duty, obligation or liability of Tenant with respect to
making or causing to be made any repair, replacement or improvement or complying with any law,
order or requirement of any governmental or other authority. Landlord reserves the right to from
time to time change the address of the Building. Neither this Lease nor any use by Tenant shall
give Tenant any right or easement or the use of any door or any passage or any concourse connecting
with any other building or to any public convenience, and the use of such doors, passages and
concourses and of such conveniences may be regulated or discontinued at any time and from time to
time by Landlord without notice to Tenant and without affecting the obligations of Tenant hereunder
or incurring any liability to Tenant therefor.
9. FIXTURES, EQUIPMENT AND IMPROVEMENTS REMOVAL BY TENANT
All fixtures, equipment, improvements and appurtenances attached to or built into the Demised
Premises prior to or during the Term, whether by Landlord at its expense or at the expense of
Tenant (either or both) or by Tenant shall be and remain part of the Demised Premises and shall not
be removed by Tenant at the end of the Term unless otherwise expressly
- 11 -
provided in this Lease. Where not built into the Demised Premises, and if furnished and installed
by and at the sole expense of Tenant, all removable electric fixtures, air conditioning, carpets,
drinking or tap water facilities, furniture, or trade fixtures or business equipment shall not be
deemed to be included in such fixtures, equipment, improvements and appurtenances and may be, and
upon the request of Landlord will be, removed by Tenant upon the condition that such removal shall
not materially damage the Demised Premises or the Building and that the cost of repairing any
damage to the Demised Premises or the Building arising from such removal shall be paid by Tenant,
provided, however, that any of such items toward which Landlord shall have granted any allowance or
credit to Tenant shall be deemed not to have been furnished and installed in the Demised Premises
by or at the sole expense of Tenant.
10. ALTERATIONS AND IMPROVEMENTS BY TENANT
Tenant shall make no alterations, decorations, installations, removals, additions or
improvements in or to the Demised Premises without Landlords prior written consent and then only
by contractors or mechanics approved by Landlord. No such installations or other work shall be
undertaken or begun by Tenant until Landlord has approved written plans and specifications
therefor; and no amendments or additions to such plans and specifications shall be made without
prior written consent of Landlord. Any such alterations, decorations, installations, removals,
additions and improvements shall be done at the sole expense of Tenant and at such times and in
such manner as Landlord may from time to time designate. If Tenant shall make any alterations,
decorations, installations, removals, additions or improvements, then Landlord may elect to require
Tenant at the expiration of this Lease to restore the Demised Premises to substantially the same
condition as existed at the Term Commencement Date.
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11. |
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TENANTS CONTRACTORS MECHANICS AND OTHER LIENS STANDARD
OF TENANTS PERFORMANCE COMPLIANCE WITH LAWS |
Whenever Tenant shall make any alterations, decorations, installations, removals,
additions or improvements or do any other work in or to the Demised Premises, Tenant will
strictly observe the following covenants and agreements:
(a) In no event shall any material or equipment be incorporated in or added to the
Demised Premises in connection with any such alteration, decoration, installation, addition or
improvement which is subject to any lien, charge, mortgage or other encumbrance of any kind
whatsoever or is subject to any security interest or any form of title retention agreement.
Any
mechanics lien filed against the Demised Premises or the Building for work claimed to have
been done for, or materials claimed to have been furnished to Tenant shall be discharged by
Tenant within ten (10) days thereafter, at the expense of Tenant, by filing the bond required
by
law or otherwise. If Tenant fails so to discharge any lien, Landlord may do so at Tenants
expense and Tenant shall reimburse Landlord for any expense or cost incurred by Landlord in so
doing within fifteen (15) days after rendition of a bill therefor.
(b) All installations or work done by Tenant under this or any other Article of this
Lease shall be at its own expense (unless expressly otherwise provided) and shall at all times
comply with (i) laws, rules, orders and regulations of governmental authorities having
- 12 -
jurisdiction thereof and (ii) plans and specifications prepared by and at the expense of Tenant
theretofore submitted to Landlord for its prior written approval.
(c) Tenant shall procure all necessary permits before undertaking any work in the
Demised Premises; do all such work in a good and workmanlike manner, employing materials of
good quality and complying with all governmental requirements, and defend, save harmless,
exonerate and indemnify Landlord from all injury, loss or damage to any person or property
occasioned by or growing out of such work.
(d) No work shall be commenced prior to the time Landlord has posted a Notice
of nonresponsibility at the Demised Premises and recorded said notice in the county in which
the Property is located pursuant to California Civil Code Section 3094.
12. REPAIRS BY TENANT
Tenant, at its expense, shall keep or cause to be kept all and singular the Demised Premises
in such repair, order and condition as the same are in on the Term Commencement Date or may be put
in during the Term hereof, reasonable use and wear thereof and damage by fire or by unavoidable
casualty excepted. Without limiting the generality of the foregoing, Tenant shall keep all windows
and other glass whole, and shall replace the same whenever broken with glass of the same quality.
Tenant hereby waives the benefits of California Civil Code Section 1932(1).
13. INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION
13.1 Tenants Insurance
(a) Liability Insurance.
Tenant shall maintain in full force throughout the Term
commercial general liability and property damage insurance providing coverage on an occurrence
form basis with limits of not less than Two Million Dollars ($2,000,000.00) each occurrence
for
bodily injury and property damage combined, Two Million Dollars ($2,000,000.00) annual general
aggregate, and Two Million Dollars ($2,000,000.00) products and completed operations annual
aggregate. Tenants liability insurance policy or policies shall: (i) include premises and
operations
liability coverage, automobile, products and completed operations liability coverage, broad
form
property damage coverage including completed operations, blanket contractual liability
coverage
with, to the maximum extent possible, coverage for the indemnification obligations of Tenant
under
this Lease, and personal and advertising injury coverage; (ii) provide that the insurance
company
has the duty to defend all insureds under the policy; (iii) provide that defense costs are
paid in
addition to and do not deplete any of the policy limits; (iv) cover liabilities arising out of
or incurred
in connection with Tenants use or occupancy of the Premises or the Property; and (v) extend
coverage to cover liability for the actions of Tenants employees, contractors, sublessees,
guests and
visitors.
(b) Personal Property Insurance.
Tenant shall at all times maintain in effect with
respect
to tenant improvements and Tenants trade fixtures and personal property located at or within
the
Demised Premises, commercial property insurance providing coverage, at a minimum, for broad
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form perils, to the extent of 100% of the full replacement cost of covered property. Tenant may
carry such insurance under a blanket policy, provided that such policy provides equivalent
coverage to a separate policy. During the Term, the proceeds from any such policies of insurance
shall be used for the repair or replacement of such tenant improvements, trade fixtures and
personal property so insured. Landlord shall be provided coverage under such insurance to the
extent of its insurable interest and, if requested by Landlord, both Landlord and Tenant shall
sign all documents reasonably necessary or proper in connection with the settlement of any claim
or loss under such insurance. Landlord shall have no obligation to carry insurance on any such
tenant improvements or on Tenants trade fixtures or personal property.
(c) Workmens Compensation Insurance.
Tenant shall maintain workers compensation
insurance as required by law and employers liability insurance in an amount not less than
Five
Hundred Thousand Dollars ($500,000).
(d) Business Interruption/Extra Expense Insurance.
Tenant shall maintain loss of
income, business interruption and extra expense insurance in such amounts as will reimburse
Tenant
for direct or indirect loss of earnings and incurred costs attributable to the perils commonly
covered
by Tenants property insurance described above but in no event less than One Million Dollars
($1,000,000). Such insurance shall be carried with the same insurer that issues the insurance
for the
personal property.
(e) Other Coverage.
Tenant, at its cost, shall maintain such other insurance as
Landlord
may reasonably require from time to time, but in no event may Landlord require any other
insurance
which is (i) not then being required of comparable tenants leasing comparable amounts of space
in
comparable buildings in the vicinity of the Building or (ii) not then available at
commercially
reasonable rates.
(f) Insurance Criteria.
Each policy of insurance required under this Section shall:
(i) be
in a form, and written by an insurer, reasonably acceptable to Landlord, (ii) be maintained at
Tenants sole cost and expense, and (iii) require at least thirty (30) days written notice to
Landlord
prior to any cancellation, nonrenewal or modification of insurance coverage. Insurance
companies
issuing such policies shall have rating classifications of A or better and financial size
category
ratings of XIII or better according to the latest edition of the A.M. Best Key Rating Guide.
All
insurance companies issuing such policies shall be licensed to do business in the State of
California.
Any deductible amount under such insurance shall not exceed $5,000. Tenant shall provide to
Landlord, upon request, evidence that the insurance required to be carried by Tenant pursuant
to this
Section, including any endorsement affecting the additional insured status, is in full force
and effect
and that premiums therefore have been paid.
(g) Increase in Amount of Insurance.
Tenant shall increase the amounts of insurance as
required by any Mortgagee, and, not more frequently than once every three (3) years, as
recommended by Landlords insurance broker, if, in the opinion of either of them, the amount
of
insurance then required under this Lease is not adequate. Any limits set forth in this Lease
on the
amount or type of coverage required by Tenants insurance shall not limit the liability of
Tenant
under this Lease.
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(h) Insurance Provisions.
Each policy of liability insurance required by this Section
shall: (i) contain a cross liability endorsement or separation of insureds clause; (ii) provide
that it is primary to and not contributing with, any policy of insurance carried by Landlord
covering the same loss; (iii) provide that any failure to comply with the reporting provisions
shall not affect coverage provided to Landlord, its members, property managers and mortgagees; and
(iv) name Landlord, its members, property managers and such other parties in interest as Landlord
may from time to time reasonably designate to Tenant in writing, as additional insureds. Such
additional insureds shall be provided the same extent of coverage as provided to Tenant under such
policies. All endorsements affecting such additional insured status shall be acceptable to Landlord
and shall be at least as broad as additional insured endorsement form number CG 20 11 11 85
promulgated by the Insurance Services Office.
(i) Evidence of Coverage.
Prior to occupancy of the Premises by Tenant, and not less
than thirty (30) days prior to the expiration of any policy thereafter, Tenant shall furnish to
Landlord a certificate of insurance reflecting that the insurance required by this Section is in
force accompanied by an endorsement showing the required additional insureds satisfactory to
Landlord in substance and form. Notwithstanding the requirements of this paragraph, Tenant shall,
at Landlords request, provide to Landlord a certified copy of each insurance policy required to
be in force at any time pursuant to the requirements of this Lease or its Exhibits. Tenants
failure to furnish Landlord with such certificates of insurance shall be deemed a material default
under this Lease.
13.2 General.
Tenant will save Landlord harmless, and will exonerate and indemnify
Landlord, from and against any and all claims, liabilities, penalties, damages or expenses
(including without limitation reasonable attorneys fees) asserted against or incurred by Landlord:
(a) on account of or based upon any injury to person, or loss of or damage to
property sustained or occurring on the Demised Premises on account of or based upon the act,
omission, fault, negligence or misconduct of any person whomsoever (other than Landlord or its
agents, contractors or employees);
(b) on account of or based upon any injury to person or loss of or damage to
property, sustained or occurring elsewhere (other than on the Demised Premises) in or about
the
Building (and, in particular, without limiting the generality of the foregoing on or about the
elevators, stairways, public corridors, sidewalks, roof, or other appurtenances and facilities
used
in connection with the Building or Demised Premises) arising out of the use or occupancy of
the
Building or Demised Premises by Tenant, or any person claiming by, through or under Tenant;
(c) on account of or based upon (including moneys due on account of) any
work or thing whatsoever done (other than by Landlord or its contractors, or agents or
employees
of either) in the Demised Premises during the Term of this Lease and during the period of
time,
if any, prior to the Term Commencement Date that Tenant may have been given access to the
Demised Premises; and
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(d) on account of or resulting from the failure of Tenant to perform and discharge any of its covenants and obligations under this Lease;
and, in case any action or proceeding be brought against Landlord by reason of any of the
foregoing, Tenant upon notice from Landlord shall at Tenants expense resist or defend such action
or proceeding and employ counsel therefor reasonably satisfactory to Landlord, it being agreed that
such counsel as may act for insurance underwriters of Tenant engaged in such defense shall be
deemed satisfactory.
13.3 Property of Tenant.
In addition to and not in limitation of the foregoing, and
subject only to provisions of applicable law, Tenant covenants and agrees that all
merchandise,
furniture, fixtures and property of every kind, nature and description which may be in or upon
the Demised Premises or elsewhere on the Property during the Term of this Lease, shall be at
the
sole risk and hazard of Tenant, and that if the whole or any part thereof shall be damaged,
destroyed, stolen or removed from any cause or reason whatsoever other than the negligence or
misconduct of Landlord, no part of said damage or loss shall be charged to, or borne by
Landlord.
13.4 Bursting of Pipes, etc.
Landlord shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster or tiles, steam, gas,
electricity,
electrical disturbance, water, rain or snow or leaks from any part of the Building or from the
pipes, appliances or plumbing works or from the roof, street or sub-surface or from any other
place or caused by any other cause of whatever nature, unless caused by or due to the
negligence
of Landlord, its agents, servants or employees; nor shall Landlord or its agents be liable for
any
such damage caused by other tenants or persons in the Building or caused by operations in
construction of any private, public or quasi-public work; nor shall Landlord be liable for any
latent defect in the Demised Premises or elsewhere in the Building.
14. ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.
Tenant covenants and agrees that neither this Lease nor the term and estate hereby granted nor
any interest herein or therein, will be assigned, mortgaged, pledged, encumbered or otherwise
transferred (whether voluntarily or by operation of law), and that neither the Demised Premises,
nor any part thereof, will be encumbered in any manner by reason of any act or omission on the part
of Tenant, without the prior written consent of Landlord in every case.
In connection with any request by Tenant for such consent, Tenant shall submit to Landlord, in
writing, a statement containing the name of the proposed assignee, such information as to its
financial responsibility and standing as Landlord may require, and all of the terms and provisions
upon which the proposed transaction is to take place. Tenant shall reimburse Landlord promptly, as
Additional Rent, for reasonable legal and other expense incurred by Landlord in connection with any
request by Tenant for any consent required under the provisions of this Article.
The listing of any name other than that of Tenant, whether on the doors of the Demised
Premises or on the Building directory, or otherwise, shall not operate to vest any right or
interest
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in this Lease or in the Demised Premises or be deemed to be the written consent of Landlord
mentioned in this Article, it being expressly understood that any such listing is a privilege
extended by Landlord revocable at will by written notice to Tenant.
If this Lease be assigned, Landlord may at any time and from time to time, collect rent and
other charges from the assignee, and apply the net amount collected to the Rent and other charges
herein reserved, but no such collection shall be deemed a waiver of this covenant, or the
acceptance of the assignee as a tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. The consent by Landlord to an
assignment shall not in any way be construed to relieve Tenant from obtaining the express consent
in writing of Landlord to any further assignment. Tenant shall remain fully and primarily liable
for all its obligations hereunder notwithstanding any assignment.
Notwithstanding anything herein to the contrary, Tenant may assign this lease to an Affiliate,
meaning, for purposes hereof, a corporation or other entity controlling, controlled by or under
common control with Tenant. In addition, Tenant may, without Landlords consent, sublease any or
all of the Demised Premises, and any so-called subleasing profits or subrents in excess of the
rent reserved herein shall belong to Tenant. Landlord shall, upon request of Tenant, not
unreasonably withhold its consent to a nondisturbance agreement for the benefit of any such
subtenants.
15. MISCELLANEOUS COVENANTS
15.1 Rules and Regulations.
Tenant and Tenants servants, employees, agents, visitors
and licensees will faithfully observe such Rules and Regulations as are attached hereto as
Exhibit
C and made a part hereof or as Landlord hereafter at any time or from time to time may make
and may communicate in writing to Tenant and which in the reasonable judgment of Landlord
shall be necessary for the reputation, safety, care or appearance of the Property, or the
preservation of good order therein, or the operation or maintenance of the Property, or the
equipment thereof, or the comfort of tenants or others in the Building, provided, however,
that in
the case of any conflict between the provisions of this Lease and any such Rules and
Regulations, the provisions of this Lease shall control, and provided further that nothing
contained in this Lease shall be construed to impose upon Landlord any duty or obligation to
enforce such Rules and Regulations or the terms, covenants or conditions in any other lease as
against any other tenant and Landlord shall not be liable to Tenant for violation of the same
by
any other tenant, its servants, employees, agents, visitors, invitees or licensees.
Notwithstanding
Paragraph 22 of Exhibit C, Landlord shall be required to arrange for extermination of vermin
within the Building pursuant to Section 7.7.
15.2 Access to Premises.
Tenant shall: (i) permit Landlord to erect, use and maintain
pipes, ducts and conduits in and through the Demised Premises, provided the same do not
materially reduce the floor area or materially adversely affect the appearance thereof; (ii)
permit
the Landlord and any Mortgagee to have free and unrestricted access to and to enter upon the
Demised Premises at all reasonable hours for the purposes of inspection or of making repairs,
replacements or improvements in or to the Demised Premises or the Building or equipment
(including, without limitation, sanitary, electrical, heating, air conditioning or other
systems) or
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of complying with all laws, orders and requirements of governmental or other authority or of
exercising any right reserved to Landlord by this Lease (including the right during the progress of
any such repairs, replacements or improvements or while performing work and furnishing materials in
connection with compliance with any such laws, orders or requirements to take upon or through, or
to keep and store within, the Demised Premises all necessary materials, tools and equipment); and
(iii) permit Landlord, at reasonable times, to show the Demised Premises during ordinary business
hours to any Mortgagee, prospective purchaser of any interest of Landlord in the Property,
prospective Mortgagee, or prospective assignee of any Mortgage, and during the period of twelve
months next preceding the Termination Date to any person contemplating the leasing of the Demised
Premises or any part thereof. If during the last three (3) months of the Term, Tenant shall have
removed all of Tenants property therefrom, Landlord may immediately enter and alter, renovate and
redecorate the Demised Premises, without elimination or abatement of rent, or incurring liability
to Tenant for any compensation, and such acts shall have no effect upon this Lease. If Tenant shall
not be personally present to open and permit any entry into the Demised Premises at any time when
for any reason an entry therein shall be necessary or permissible, Landlord or Landlords agents
must nevertheless be able to gain such entry by contacting a responsible representative of Tenant,
whose name, address and telephone number shall be furnished by Tenant. Provided that Landlord shall
not be obligated to employ labor at so-called over-time or other premium pay rates, Landlord
shall exercise its rights of access to the Demised Premises permitted under any of the terms and
provisions of this Lease in such manner as to minimize to the extent practicable interference with
Tenants use and occupation of the Demised Premises. If an excavation shall be made upon land
adjacent to the Demised Premises or shall be authorized to be made, Tenant shall afford, to the
person causing or authorized to cause such excavation (subject to the same provisions applicable
hereunder in the case of work to be performed by Landlord), license to enter upon the Demised
Premises for the purpose of doing such work as said person shall deem necessary to preserve the
Building from injury or damage and to support the same by proper foundations without any claim for
damage or indemnity against Landlord, or diminution or abatement of Rent.
15.3 Accidents to Sanitary and other Systems.
Tenant shall give to Landlord prompt
notice of any fire or accident in the Demised Premises or in the Building and of any damage
to,
or defective condition in, any part or appurtenance of the Buildings sanitary, electrical,
heating
and air conditioning or other systems located in, or passing through, the Demised Premises.
15.4 Signs, Blinds and Drapes.
Tenant shall not place any signs on the exterior of the
Building or on or in any window, public corridor or door visible from the exterior of the
Demised Premises. No drapes or blinds may be put on or in any window nor may any Building
drapes or blinds be removed by Tenant.
15.5 Estoppel
Certificate. Tenant shall at any time and from time to time upon not
less
than ten (10) days prior notice by Landlord or by a Mortgagee to Tenant, execute, acknowledge
and deliver to the party making such request a statement in writing certifying that this Lease
is
unmodified and in full force and effect (or if there have been modifications, that the same is
in
full force and effect as modified and stating the modifications), and the dates to which Rent
has
been paid in advance, if any, and stating whether or not to the best knowledge of the signer
of
such certificate Landlord is in default in performance of any covenant, agreement, term,
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provisions or condition contained in this Lease and, if so, specifying each such default of which
the signer may have knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by any prospective purchaser of any interest in the Property, any Mortgagee or
prospective Mortgagee, any lessee or prospective lessee thereof, any prospective assignee of any
Mortgage, or any other party designated by Landlord. The form of any such estoppel certificate
requested by a Mortgagee shall be satisfactory to such Mortgagee.
15.6 Requirements of Law Fines and Penalties.
Tenant at its sole expense shall
comply with all laws, rules, orders and regulations of Federal, State, County and Municipal
Authorities and with any direction of any public officer or officers, pursuant to law, which
shall
impose any duty upon Landlord or Tenant with respect to and arising out of Tenants use or
occupancy of the Demised Premises. If Tenant receives notice of any violation of law,
ordinance, order or regulation applicable to the Demised Premises, it shall give prompt notice
thereof to Landlord. Without limiting the generality of the foregoing, Tenant shall be
responsible for compliance with requirements imposed by the Americans with Disabilities Act
relative to the Demised Premises, including without limitation all such requirements
applicable
to removing barriers, furnishing auxiliary aids and ensuring that, whenever alterations are
made,
the affected portions of the Demised Premises are readily accessible to and usable by
individuals
with disabilities.
15.7 Tenants Acts Effect on Insurance.
Tenant shall not do or permit to be done any
act or thing upon the Demised Premises or elsewhere in the Building which will invalidate or
be
in conflict with any insurance policies covering the Building and the fixtures and property
therein and shall not do, or permit to be done, any act or thing upon the Demised Premises
which
shall subject Landlord to any liability or responsibility for injury to any person or persons
or to
property by reason of any business or operation being conducted on the Demised Premises or for
any other reason. Tenant at its own expense shall comply with all applicable provisions of the
California Health and Safety Code and all regulations promulgated thereunder and with all
rules,
orders, regulations or requirements of the underwriter(s) of the fire and other hazard
insurance
for the Property and the Demised Premises and shall not (i) do, or permit anything to be done,
in
or upon the Demised Premises, or bring or keep anything therein, except as now or hereafter
permitted by the City of South San Francisco Fire Department, or other authority having
jurisdiction, and then only in such quantity and manner of storage as will not increase the
rate for
any insurance applicable to the Building, or (ii) use the Demised Premises in a manner which
shall increase such insurance rates on the Building or on property located therein, over that
applicable when Tenant first took occupancy of the Demised Premises hereunder. If by reason
of failure of Tenant to comply with the provisions hereof the insurance rate applicable to any
policy of insurance shall at any time thereafter be higher than it otherwise would be, then
Tenant
shall reimburse Landlord for that part of any insurance premiums thereafter paid by Landlord,
which shall have been charged because of such failure by Tenant.
15.8 Miscellaneous.
Tenant shall not suffer or permit the Demised Premises or any
fixtures, equipment or utilities therein or serving the same, to be overloaded, damaged or
defaced.
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16. DAMAGE BY FIRE, ETC.
In the event of loss of, or damage to, the Demised Premises or the Building by fire or other
casualty, the rights and obligations of the parties hereto shall be as follows:
(a) If the Demised Premises, or any part thereof, shall be damaged by fire or
other casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon
receiving such notice, shall proceed promptly and with due diligence, subject to unavoidable
delays, to repair, or cause to be repaired, such damage. If the Demised Premises or any part
thereof shall be rendered untenantable by reason of such damage, whether to the Demised
Premises or to the Building, Yearly Fixed Rent shall proportionately abate for the period from
the date of such damage to the date when such damage shall have been repaired.
(b) If, as a result of fire or other casualty, the whole or a substantial portion of
the Building is rendered untenantable, Landlord, within ninety (90) days from the date of such
fire or casualty, may terminate this Lease by notice to Tenant, specifying a date not less
than
thirty (30) nor more than sixty (60) days after the giving of such notice on which the Term of
this
Lease shall terminate. If Landlord does not so elect to terminate this Lease, then Landlord
shall
(to the extent that insurance proceeds, net of any portion thereof retained by a Mortgagee,
are
made available for such purpose) proceed with diligence to repair the damage to the Demised
Premises and all facilities serving the same, if any, which shall have occurred, and the
Yearly
Fixed Rent shall meanwhile proportionately abate, all as provided in Paragraph (a) of this
Section. However, if such damage is not repaired and the Demised Premises restored to
substantially the same condition as they were prior to such damage within nine (9) months from
the date of such damage, Tenant within thirty (30) days from the expiration of such nine (9)
month period or from the expiration of any extension thereof by reason of unavoidable delays
as
hereinafter provided, may terminate this Lease by notice to Landlord, specifying a date not
more
than sixty (60) days after the giving of such notice on which the Term of this Lease shall
terminate. The period within which the required repairs may be accomplished shall be extended
by the number of days, not to exceed one hundred eighty (180) days, lost as a result of
unavoidable delays, which term shall be defined to include all delays referred to in Article 24.
(c) If the Demised Premises shall be rendered untenantable by fire or other
casualty during the last two (2) years of the Term of this Lease, Landlord may terminate this
Lease effective as of the date of such fire or other casualty upon notice to Tenant given
within
ninety (90) days after such fire or other casualty.
(d) Landlord shall not be required to repair or replace any of Tenants
business machinery, equipment, cabinet work, furniture, personal property or other
installations
(all of which shall, however, be restored by Tenant within thirty (30) days after Landlord
shall
have completed any repair or restoration required under the terms of this Article), and no
damages, compensation or claim shall be payable by Landlord for inconvenience, loss of
business or annoyance arising from any repair or restoration of any portion of the Demised
Premises or of the Building.
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(e) The provisions of this Article shall be considered an express agreement
governing any instance of damage or destruction of the Building or the Demised Premises by
fire
or other casualty, and any law now or hereafter in force providing for such a contingency in
the
absence of express agreement shall have no application.
(f) In the event of any termination of this Lease pursuant to this Article, the
Term of this Lease shall expire as of the effective termination date as fully and completely
as if
such date were the date originally fixed herein for the end of the Term of this Lease. Tenant
shall have access to the Demised Premises for a period of fifteen (15) days after the date of
termination in order to remove Tenants personal property.
(g) Landlords Architects certificate, given in good faith, shall be deemed
conclusive of the statements therein contained and binding upon Tenant with respect to the
performance and completion of any repair or restoration work undertaken by Landlord pursuant
to this Article or Article 18.
17. WAIVER OF SUBROGATION
In any case in which Tenant shall be obligated under any provision of this Lease to pay to
Landlord any loss, cost, damage, liability, or expense suffered or incurred by Landlord, Landlord
shall allow to Tenant as an offset against the amount thereof the net proceeds of any insurance
collected by Landlord for or on account of such loss, cost, damage, liability or expense, provided
that the allowance of such offset does not invalidate or prejudice the policy or policies under
which such proceeds were payable.
In any case in which Landlord shall be obligated under any provision of this Lease to pay to
Tenant any loss, cost, damage, liability or expense suffered or incurred by Tenant, Tenant shall
allow to Landlord as an offset against the amount thereof (i) the net proceeds of any insurance
collected by Tenant for or on account of such loss, cost, damage, liability, or expense, provided
that the allowance of such offset does not invalidate the policy or policies under which such
proceeds were payable and (ii) if such loss, cost, damage, liability or expense shall have been
caused by a peril against which Tenant has agreed to procure insurance coverage under the terms of
this Lease, the amount of such insurance coverage, if not actually procured by Tenant.
The parties hereto shall each endeavor to procure an appropriate clause in, or endorsement on,
any fire or extended coverage insurance policy covering the Demised Premises and the Building and
personal property, fixtures and equipment located thereon or therein, pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of recovery, and having
obtained such clauses and/or endorsements of waiver of subrogation or consent to a waiver of right
of recovery each party hereby agrees that it will not make any claim against or seek to recover
from the other for any loss or damage to its property or the property of others resulting from fire
or other perils covered by such fire and extended coverage insurance; provided, however, that the
release, discharge, exoneration and covenant not to sue herein contained shall be limited by the
terms and provisions of the waiver of subrogation clauses and/or endorsements or clauses and/or
endorsements consenting to a waiver of right of recovery and shall be co-extensive therewith. If
either party may obtain such clause or endorsement only
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upon payment of an additional premium, such party shall promptly so advise the other party and
shall be under no obligation to obtain such clause or endorsement unless such other party pays the
premium.
18. CONDEMNATION EMINENT DOMAIN
In the event that the whole or any part of the Building shall be taken or appropriated by
eminent domain or shall be condemned for any public or quasi-public use, or (by virtue of any such
taking, appropriation or condemnation) shall suffer any damage (direct, indirect or consequential)
for which Landlord or Tenant shall be entitled to compensation then (and in any such event) this
Lease and the Term hereof may be terminated at the election of Landlord by a notice in writing of
its election so to terminate which shall be given by Landlord to Tenant within sixty (60) days
following the date on which Landlord shall have received notice of such taking, appropriation or
condemnation. In the event that more than fifty percent (50%) of the floor area of the Demised
Premises or a substantial part of the means of access thereto within the perimeter of the Property
so as to substantially interfere with the use of the Demised Premises shall be so taken,
appropriated or condemned, then (and in any such event) this Lease and the Term hereof may be
terminated at the election of Tenant by a notice in writing of its election so to terminate which
shall be given by Tenant to Landlord within sixty (60) days following the date on which Tenant
shall have received notice of such taking, appropriation or condemnation. Tenant hereby waives the
benefits of California Code of Civil Procedure Section 12165.130.
Upon the giving of any such notice of termination (either by Landlord or Tenant) this Lease
and the Term hereof shall terminate on or retroactively as of the date on which Tenant shall be
required to vacate any part of the Demised Premises or shall be deprived of a substantial part of
the means of access thereto, provided, however, that Landlord may in Landlords notice elect to
terminate this Lease and the Term hereof retroactively as of the date on which such taking,
appropriation or condemnation became legally effective. In the event of any such termination, this
Lease and the Term hereof shall expire as of the effective termination date as fully and completely
as if such date were the date originally fixed herein for the end of the Term of this Lease. If
neither party (having the right so to do) elects to terminate Landlord will, with reasonable
diligence and at Landlords expense, restore the remainder of the Demised Premises, or the
remainder of the means of access thereto, as nearly as practicably may be to the same condition as
obtained prior to such taking, appropriation or condemnation in which event (i) a just proportion
of the Yearly Fixed Rent, according to the nature and extent of the taking, appropriation or
condemnation and the resulting permanent injury to the Demised Premises and the means of access
thereto, shall be permanently abated, and (ii) a just proportion of the remainder of the Yearly
Fixed Rent, according to the nature and extent of the taking, appropriation or condemnation and the
resultant injury sustained by the Demised Premises and the means of access thereto, shall be abated
until what remains of the Demised Premises and the means of access thereto shall have been restored
as fully as may be for permanent use and occupation by Tenant hereunder. Except for any award
specifically reimbursing Tenant for moving or relocation expenses, there are expressly reserved to
Landlord all rights to compensation and damages created, accrued or accruing by reason of any such
taking, appropriation or condemnation, in implementation and in confirmation of which Tenant does
hereby acknowledge that Landlord shall be entitled to receive and retain all such compensation
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and damages, grants to Landlord all and whatever rights (if any) Tenant may have to such
compensation and damages, and agrees to execute and deliver all and whatever further instruments of
assignment as Landlord may from time to time request. In the event of any taking of the Demised
Premises or any part thereof for temporary use, (i) this Lease shall be and remain unaffected
thereby, and (ii) Tenant shall be entitled to receive for itself any award made for such use,
provided, that if any taking is for a period extending beyond the Term of this Lease, such award
shall be apportioned between Landlord and Tenant as of the Termination Date.
19. DEFAULT
19.1 Events of Default. Occurrence of any of the following events shall constitute an
Event of Default under this Lease: (a) Tenant shall neglect or fail to perform or observe any of
the Tenants covenants herein, including (without limitation) the covenants with regard to the
payment when due of Rent; or (b) Tenant shall be involved in financial difficulties as evidenced by
an admission in writing by Tenant of Tenants inability to pay its debts generally as they become
due, or by the making or offering to make a composition of its debts with its creditors; or (c)
Tenant shall make an assignment or trust mortgage, or other conveyance or transfer of like nature,
of all or a substantial part of its property for the benefit of its creditors; or (d) the leasehold
hereby created shall be taken on execution or by other process of law and shall not be revested in
Tenant within sixty (60) days thereafter; or (e) a receiver, sequester, trustee or similar officer
shall be appointed by a court of competent jurisdiction to take charge of all or a substantial part
of Tenants property and such appointment shall not be vacated within sixty (60)
days; or (f) any proceeding shall be instituted by or against Tenant pursuant to any of the
provisions of any Act of Congress or State law relating to bankruptcy, reorganization,
arrangements, compositions or other relief from creditors, and, in the case of any such proceeding
instituted against it, if Tenant shall fail to have such proceeding dismissed within thirty (30)
days or if Tenant is adjudged bankrupt or insolvent as a result of any such proceeding; or (g) any
event shall occur or any contingency shall arise whereby this Lease, or the term and estate thereby
created, would (by operation of law or otherwise) devolve upon or pass to any person, firm or
corporation other than Tenant, except as expressly permitted under Article 14 hereof; or (h) Tenant
shall vacate all or substantially all of the Demised Premises.
19.2 Remedies Available upon Default. Upon the occurrence of an Event of Default,
Landlord shall have the following remedies, which shall not be exclusive but shall be cumulative
and shall be in addition to any other remedies now or hereafter allowed by law:
(c) Landlord may terminate Tenants right to possession of the Premises at any time by written
notice to Tenant. Tenant expressly acknowledges that in the absence of such written notice from
Landlord, no other act of Landlord, including re-entry into the Premises, efforts to relet the
Premises, reletting of the Premises for Tenants account, storage of Tenants personal property and
trade fixtures, acceptance of keys to the Premises from Tenant or exercise of any other rights and
remedies under this Section, shall constitute an acceptance of Tenants surrender of the Premises
or constitute a termination of this Lease or of Tenants right to possession of the Premises. Upon
such termination in writing of Tenants right to possession of the Premises, as herein provided,
this Lease shall terminate and Landlord shall be entitled to recover damages from Tenant as
provided in California Civil Code Section 1951.2 and any other applicable existing or future Law
providing for
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recovery of damages for such breach, including the worth at the time of award of the amount by
which the rent which would be payable by Tenant hereunder for the remainder of the Term after the
date of the award of damages, including Additional Rent as reasonably estimated by Landlord,
exceeds the amount of such rental loss as Tenant proves could have been reasonably avoided,
discounted at the discount rate published by the Federal Reserve Bank of San Francisco for member
banks at the time of the award plus one percent (1%).
(d) Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord
may continue this Lease in effect after Tenants breach and abandonment and recover rent as it
becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations).
(e) Landlord may immediately, or at any time thereafter, without notice, cure said Event of
Default for the account of Tenant. If Landlord at any time is compelled to pay or elects to pay any
sum of money, or do any act which will require the payment of any sum of money, by reason of the
failure of Tenant to comply with any provision hereof, or if Landlord is compelled to or does incur
any expense, including without limitation reasonable attorneys fees, in instituting, prosecuting
and/or defending any action or proceeding arising by reason of any default of Tenant hereunder,
Tenant shall on demand pay to Landlord by way of reimbursement the sum or sums so paid by Landlord
with all interest, costs and damages together with interest at the Interest Rate for the period
such sums remain outstanding.
(f) Landlord may remove all of Tenants property from the Premises, and such property may be
stored by Landlord in a public warehouse or elsewhere at the sole cost and for the account of
Tenant. If Landlord does not elect to store any or all of Tenants property left in the Premises,
Landlord may consider such property to be abandoned by Tenant, and Landlord may thereupon dispose
of such property in the manner and as prescribed by California Civil Code Section 1980 et seq.
Any proceeds realized by Landlord on the disposal of any such property shall be applied first to
offset all expenses of storage and sale, then credited against Tenants outstanding obligations to
Landlord under this Lease, and any balance remaining after satisfaction of all obligations of
Tenant under this Lease shall be delivered to Tenant.
(e) The damages recoverable by Landlord pursuant to this Section shall in all events include
reimbursement of any concessions made by Landlord in connection with the leasing of the Demised
Premises to Tenant, including without limitation (a) abated Rent, (b) allowances or improvements in
excess of any Building standard work, (c) sums paid to any former landlord of Tenant under a
so-called take-over, lease assumption or similar agreement and (d) signing bonuses and other
incentive payments.
19.3 Grace Period. Notwithstanding anything to the contrary in this Article
contained, Landlord agrees not to take any action to terminate this Lease (a) for default by Tenant
in the payment when due of Rent, if Tenant shall cure such default within five (5) days after
written notice thereof given by Landlord to Tenant, or (b) for default by Tenant in the performance
of any other covenant, if Tenant shall cure such default within a period of thirty (30) days after
written notice thereof given by Landlord to Tenant (except where the nature of the default is such
that remedial action should appropriately take place sooner, as indicated in such written notice),
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or with respect to covenants other than to pay a sum of money within such additional period as may
reasonably be required to cure such default if (because of governmental restrictions or any other
cause beyond the reasonable control of Tenant) the default is of such a nature that it cannot be
cured within such thirty (30)-day period, provided, however, (1) that there shall be no extension
of time beyond such thirty (30)-day period for the curing of any such default unless, not more than
ten (10) days after the receipt of the notice of default, Tenant in writing (i) shall specify the
cause on account of which the default cannot be cured during such period and shall advise Landlord
of its intention duly to institute all steps necessary to cure the default and (ii) shall as soon
as may be reasonable duly institute and thereafter diligently prosecute to completion all steps
necessary to cure such default and, (2) that no notice of the opportunity to cure a default need be
given, and no grace period whatsoever shall be allowed to Tenant, if the default is incurable or if
the covenant or condition the breach of which gave rise to the default had, by reason of a breach
on a prior occasion, been the subject of a notice hereunder to cure such default.
20. END OF TERM ABANDONED PROPERTY
Upon the expiration or other termination of the Term of this Lease, Tenant shall peaceably
quit and surrender to Landlord the Demised Premises and all alterations and additions thereto which
Tenant is not entitled or required to remove under the provisions of this Lease, broom clean in
good order, repair and condition excepting only reasonable use and wear and damage by fire or other
casualty for which, under other provisions of this Lease, Tenant has no responsibility of repair or
restoration. Tenants obligation to observe or perform this covenant shall survive the expiration
or other termination of the Term of this Lease. If the last day of the Term of this Lease or any
renewal thereof falls on a day other than a Business Day, this Lease shall expire on the Business
Day immediately preceding. Tenant shall pay twice the amount of Rent applicable to each month (or
fraction thereof) during which Tenant remains in possession of any part of the Demised Premises in
violation of the foregoing covenants, without prejudice to eviction and any other remedy available
to Landlord on account thereof.
Any personal property in which Tenant has an interest which shall remain in the Building or on
the Demised Premises after the expiration or termination of the Term of this Lease shall be
conclusively deemed to have been abandoned, and may be disposed of in such manner as Landlord may
see fit; provided, however, notwithstanding the foregoing, that Tenant will, upon request of
Landlord made not later than ten (10) days after the expiration or termination of the Term hereof,
promptly remove from the Building any such personal property or, if any part thereof shall be sold,
that Landlord may receive and retain the proceeds of such sale and apply the same, at its option,
against the expenses of the sale, the cost of moving and storage, any arrears of Rent payable
hereunder by Tenant to Landlord and any damages to which Landlord may be entitled under Article 19
hereof or pursuant to law, with the balance if any, to be paid to Tenant.
21. RIGHTS OF MORTGAGEES
21.1 (Intentionally omitted)
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21.2 Entry and Possession. Upon entry and taking possession of the Property by a
Mortgagee, for the purpose of foreclosure or otherwise, such Mortgagee shall have all the rights of
Landlord, and shall be liable to perform all the obligations of Landlord arising and accruing
during the period of such possession by such Mortgagee.
21.3 Right to Cure. No act or failure to act on the part of Landlord which would
entitle Tenant under the terms of this Lease, or by law, to be relieved of Tenants obligations
hereunder or to terminate this Lease, shall result in a release or termination of such obligations
or a termination of this Lease unless (i) Tenant shall have first given written notice of
Landlords act or failure to act to first Mortgagees of record, if any, and to any other Mortgagees
of whom Tenant has been given written notice, specifying the act or failure to act on the part of
Landlord which could or would give basis to Tenants rights; and (ii) such Mortgagees, after
receipt of such notice, have failed or refused to correct or cure the condition complained of
within a reasonable time thereafter, but nothing contained in this paragraph shall be deemed to
impose any obligation on any such Mortgagees to correct or cure any such condition. Reasonable
time as used above means and includes a reasonable time to obtain possession of the Land and
Building if any such Mortgagee elects to do so and a reasonable time to correct or cure the
condition if such condition is determined to exist.
21.4 Prepaid Rent. No Rent shall be paid more than thirty (30) days prior to the due
dates thereof and, as to a first Mortgagee of record and any other Mortgagees of whom Tenant has
been given written notice, payments made in violation of this provision shall (except to the extent
that such Rent is actually received by such Mortgagee) be a nullity as against such Mortgagee and
Tenant shall be liable for the amount of such payments to such Mortgagee.
21.5 Continuing Offer. The covenants and agreements contained in this Lease with
respect to the rights, powers and benefits of a Mortgagee (particularly, without limitation
thereby, the covenants and agreements contained in this Article) constitute a continuing offer to
any person, corporation or other entity, which by accepting or requiring an assignment of this
Lease or by entry or foreclosure assumes the obligations herein set forth with respect to such
Mortgagee; every such Mortgagee is hereby constituted a party to this
Lease as an obligee hereunder
to the same extent as though its name was written hereon as such; and such Mortgagee shall be
entitled to enforce such provisions in its own name.
21.6 Subordination. Notwithstanding the foregoing provisions of this Article, Tenant
agrees, at the request of Landlord or any Mortgagee, to execute and deliver promptly any
certificate or other instrument which Landlord or such Mortgagee may request subordinating this
Lease and all rights of Tenant hereunder to any Mortgage, and to all advances made under such
Mortgage and/or agreeing to attorn to such Mortgagee in the event that it succeeds to Landlords
interest in the Property.
21.7 Limitations on Liability. Nothing contained in the foregoing Section 21.6 or in any such
non-disturbance agreement or non-disturbance provision shall however, affect the prior rights of
the holder of any Mortgage with respect to the proceeds of any award in condemnation or of any fire
insurance policies affecting the Building, or impose upon any such holder any liability (i) for the
erection or completion of the Building, or (ii) in the event of damage or
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destruction to the Building or the Demised Premises by fire or other casualty, for any repairs,
replacements, rebuilding or restoration except such repairs, replacements, rebuilding or
restoration as can reasonably be accomplished from the net proceeds of insurance actually received
by, or made available to, such holder, or (iii) for any default by Landlord under the Lease
occurring prior to any date upon which such holder shall become Tenants landlord, or (iv) for any
credits, offsets or claims against the Rent as a result of any acts or omissions of Landlord
committed or omitted prior to such date, or (v) for return of any security deposit or other funds
unless the same shall have been received by such holder, and any such agreement or provision may so
state.
22. QUIET ENJOYMENT
Landlord covenants that if, and so long as, Tenant keeps and performs each and every covenant,
agreement, term, provision and condition herein contained on the part and on behalf of Tenant to be
kept and performed, Tenant shall quietly enjoy the Demised Premises from and against the claims of
all persons claiming by, through or under Landlord subject, nevertheless, to the covenants,
agreements, terms, provisions and conditions of this Lease and to all Mortgages to which this Lease
is subject and subordinate.
Without incurring any liability to Tenant, Landlord may permit access to the Demised Premises
and open the same, whether or not Tenant shall be present, upon any demand of any receiver,
trustee, assignee for the benefit of creditors, sheriff, marshall or court officer entitled to, or
reasonably purporting to be entitled to, such access for the purpose of taking possession of, or
removing Tenants property or for any other lawful purpose (but this provision and any action by
Landlord hereunder shall not be deemed a recognition by Landlord that the person or official making
such demand has any right or interest in or to this Lease, or in or to the Demised Premises), or
upon demand of any representative of the fire, police, building, sanitation or other department of
the city, county, state or federal governments.
23. ENTIRE AGREEMENT WAIVER SURRENDER
23.1 Entire Agreement. This Lease and the Exhibits made a part hereof contain the
entire and only agreement between the parties and any and all statements and representations,
written and oral, including previous correspondence and agreements between the parties hereto, are
merged herein. Tenant acknowledges that all representations and statements upon which it relied in
executing this Lease are contained herein and that Tenant in no way relied upon any other
statements or representations, written or oral. Any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this Lease in whole or in part
unless such executory agreement is in writing and signed by the party against whom enforcement of
the change, modification, discharge or abandonment is sought. Nothing herein shall prevent the
parties from agreeing to amend this Lease and the Exhibits made a part hereof as long as such
amendment shall be in writing and shall be duly signed by both parties.
23.2 Waiver by Landlord. The failure of Landlord to seek redress for violation, or to
insist upon the strict performance, of any covenant or condition of this Lease, or any of the Rules
and Regulations promulgated hereunder, shall not prevent a subsequent act, which would have
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originally constituted a violation, from having all the force and effect of an original violation.
The receipt by Landlord of Rent with knowledge of the breach of any covenant of this Lease shall
not be deemed a waiver of such breach. The failure of Landlord to enforce any of such Rules and
Regulations against Tenant and/or any other tenant or subtenant in the Building shall not be deemed
a waiver of any such Rules and Regulations. No provisions of this Lease shall be deemed to have
been waived by Landlord unless such waiver be in writing signed by Landlord. No payment by Tenant
or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed
to be other than on account of the stipulated rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlords right to recover the
balance of such rent or pursue any other remedy in this Lease provided.
23.3 Surrender. No act or thing done by Landlord during the term hereby demised
shall be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept
such surrender shall be valid, unless in writing signed by Landlord. No employee of Landlord or of
Landlords agents shall have any power to accept the keys of the Demised Premises prior to the
termination of this Lease. The delivery of keys to any employee of Landlord or of Landlords agents
shall not operate as a termination of the Lease or a surrender of the Demised Premises. In the
event that Tenant at any time desires to have Landlord underlet the Demised Premises for Tenants
account, Landlord or Landlords agents are authorized to receive the keys for such purposes without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby relieves Landlord
of any liability for loss of or damage to any of Tenants effects in connection with such
underletting.
24. INABILITY TO PERFORM EXCULPATORY CLAUSE
Except as otherwise expressly provided in this Lease, this Lease and the obligations of Tenant
to pay Rent hereunder and perform all other covenants, agreements, terms, provisions and conditions
hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused
because Landlord is unable to fulfill any of its obligations under this Lease or is unable to
supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to
make or is delayed in making any repairs, replacements, additions, alterations, improvements or
decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord
is prevented or delayed from doing so by reason of any cause whatsoever beyond Landlords
reasonable control, including but not limited to governmental preemption in connection with a
national emergency or by reason of any rule, order or regulation of any department or subdivision
thereof of any governmental agency or by reason of strikes, labor troubles, shortages of labor or
materials or conditions of supply and demand which have been or are affected by war, hostilities or
other similar or dissimilar emergency. In each such instance of inability of Landlord to perform,
Landlord shall exercise reasonable diligence to eliminate the cause of such inability to perform.
Tenant shall neither assert nor seek to enforce any claim for breach of this Lease against any
of Landlords assets other than Landlords interest in the Building of which the Demised Premises
are a part and in the rents, issues and profits thereof, and Tenant agrees to look solely to
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such interest for the satisfaction of any liability of Landlord under this Lease, it being
specifically agreed that in no event shall Landlord (which term shall include, without limitation
any of the officers, trustees, directors, partners, beneficiaries, joint venturers, members,
stockholders or other principals or representatives, disclosed or undisclosed, of Landlord or any
managing agent) ever be personally liable for any such liability. This paragraph shall not limit
any right that Tenant might otherwise have to obtain injunctive relief against Landlord or to take
any other action which shall not involve the personal liability of Landlord to respond in monetary
damages from Landlords assets other than the Landlords interest in said real estate, as
aforesaid. In no event shall Landlord ever be liable for consequential damages.
25. BILLS AND NOTICES
Any notice, consent, request, bill, demand or statement hereunder by either party to the other
party shall be in writing and, if received at Landlords or Tenants Address, shall be deemed to
have been duly given when either delivered or served personally or mailed in a postpaid envelope,
deposited in the United States mails addressed to the respective party at its Address as stated in
Article 1 or if any Address for notices shall have been duly changed as hereinafter provided, if
mailed as aforesaid to the party at such changed Address. Either party may at any time change the
Address for such notices, consents, requests, bills, demands or statements by delivering or
mailing, as aforesaid, to the other party a notice stating the change and setting forth the changed
Address, provided such changed Address is within the United States.
All bills and statements for reimbursement or other payments or charges due from Tenant to
Landlord hereunder shall be due and payable in full thirty (30) days, unless herein otherwise
provided, after submission thereof by Landlord to Tenant. Tenants failure to make timely payment
of any amounts indicated by such bills and statements, whether for work done by Landlord at
Tenants request, reimbursement provided for by this Lease or for any other sums properly owing by
Tenant to Landlord, shall be treated as a default in the payment of Rent, in which event Landlord
shall have all rights and remedies provided in this Lease for the nonpayment of Rent.
26. SUCCESSORS AND ASSIGNS
The covenants, agreements, terms, provisions and conditions of this Lease shall bind and
benefit the successors and assigns of the parties hereto with the same effect as if mentioned in
each instance where a party hereto is named or referred to, except that no violation of the
provisions of Article 14 hereof shall operate to vest any rights in any successor or assignee of
Tenant and that the provisions of this Article shall not be construed as modifying the conditions
of limitation contained in Article 19 hereof.
If in connection with or as a consequence of the sale, transfer or other disposition of the
real estate (Land and/or Building, either or both, as the case may be) of which the Demised
Premises are a part Landlord ceases to be the owner of the reversionary interest in the Demised
Premises, Landlord shall be entirely freed and relieved from the performance and observance
thereafter of all covenants and obligations hereunder accruing thereafter on the part of Landlord
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to be performed and observed, it being understood and agreed in such event (and it shall be deemed
and construed as a covenant running with the land) that the person succeeding to Landlords
ownership of said reversionary interest shall thereupon and thereafter assume, and perform and
observe, any and all of such covenants and obligations of Landlord.
27. MISCELLANEOUS
27.1 Separability. If any provision of this Lease or portion of such provision or the
application thereof to any person or circumstance is for any reason held invalid or unenforceable,
the remainder of the Lease (or the remainder of such provision) and the application thereof to
other persons or circumstances shall not be affected thereby.
27.2 Captions. The captions are inserted only as a matter of convenience and for
reference, and in no way define, limit or describe the scope of this Lease nor the intent of any
provisions thereof.
27.3 Broker. Each party represents and warrants that it has not directly or indirectly
dealt, with respect to the leasing of space in the Building, with any broker or had its attention
called to the Demised Premises or other space to let in the Building, by any broker other than the
Broker (if any) listed in Article 1 whose commission shall be the responsibility of Landlord. Each
party agrees to exonerate and save harmless and indemnify the other against any claims for a
commission by any other broker, person or firm, with whom such party has dealt in connection with
the execution and delivery of this Lease or out of negotiations between Landlord and Tenant with
respect to the leasing of other space in the Building.
27.4 Governing Law. This Lease is made pursuant to, and shall be governed by, and
construed in accordance with, the laws of the State of California.
27.5 Assignment of Lease and/or Rents. With reference to any assignment by Landlord of
its interest in this Lease and/or the Rent payable hereunder, conditional in nature or otherwise,
which assignment is made to or held by a bank, trust company, insurance company or other
institutional lender holding a Mortgage on the Building, Landlord and Tenant agree:
(a) that the execution thereof by Landlord and acceptance thereof by such Mortgagee shall
never be deemed an assumption by such Mortgagee of any of the obligations of the Landlord
hereunder, unless such Mortgagee shall, by written notice sent to the Tenant, specifically
otherwise elect; and
(b) that, except as aforesaid, such Mortgagee shall be treated as having assumed the
Landlords obligations hereunder only upon foreclosure of such Mortgagees Mortgage and the taking
of possession of the Demised Premises after having given notice of its intention to succeed to the
interest of the Landlord under this Lease.
27.6 Memorandum of Lease. Neither party shall record this Lease; provided, however,
that either party shall at the request of the other, execute and deliver a recordable memorandum of
this Lease setting forth the parties to this Lease, a description of the Demised Premises and the
term of this Lease for recordation in the Official records of the County of San Mateo.
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27.7 (omitted)
27.8 (omitted)
27.9 Arbitration of Certain Matters. At the election of either party, if any dispute
as to the allocation of real estate taxes or operating expenses under Section 6.2, the abatement of
Yearly Fixed Rent pursuant to Article 16 or the abatement of Yearly Fixed Rent pursuant to Article
18 remains unresolved 30 days after written complaint by Tenant has been delivered to Landlord as
to an allocation, reduction, apportionment or abatement made or proposed by Landlord, the matter
may be submitted to binding arbitration pursuant to California Code of Civil Procedure Section 1280
et seq.
IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be executed under
seal, all as of the day and year first above written.
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MOUNTAIN COVE TECH CENTER, L.L.C. |
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MJ RESEARCH COMPANY, INC. |
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John Finney
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John Finney
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Its President |
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/s/ Mike Finney |
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Mike Finney |
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Its Managers |
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