Exhibit 10.6
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this
“ Agreement ”) is dated as of June 25,
2009, by and between Arrowhead Research Corporation, a Delaware
corporation (the “ Corporation ”), and TEL
Venture Capital, Inc. (the “ Holder ”). The
Corporation and each Holder are referred to as a “
Party ” and collectively as the “ Parties
”.
W
I T N
E S S E T H
:
WHEREAS, the Corporation and the
Holder are shareholders of Unidym, Inc., a Delaware corporation
(“ Unidym ”);
WHEREAS, the Holder desires to
exchange shares of Series C Preferred Stock, $0.0001 par value per
share and Series C-1 Preferred Stock, $0.0001 par value per share,
of Unidym (each, a “ Unidym Share ” and,
collectively, the “ Unidym Shares ”) in the
amounts set forth on Exhibit A , attached hereto for common
stock of the Corporation, $0.001 par value per share (each, an
“ Arrowhead Share ” and, collectively the
“ Arrowhead Shares ”);
WHEREAS, the Corporation desires to
exchange (the “ Exchange ”) one newly issued and
unregistered Arrowhead Share for each Unidym Share and the
agreement of the Holder to certain restrictions on the transfer and
sale of any Arrowhead Shares it receives pursuant to this Agreement
(the Arrowhead Shares received in the Exchange, referred to in this
Agreement as the “ Exchanged Shares ”);
and
WHEREAS, in partial consideration
for the Exchange and to the extent Holder retains any Unidym Shares
after the Exchange (“Retained Unidym Shares”), the
Corporation desires that the Holder waive certain rights associated
with respect to the Unidym Shares and the Retained Unidym
Shares;
WHEREAS, the Holder is willing to
waive certain rights with respect to the Unidym Shares and confirm
that it prepared to waive certain rights with respect to Retained
Unidym Shares subject to certain terms and conditions;
and
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1. Exchange .
(a) Exchange Ratio . The
Corporation and the Holder hereby agree to exchange at the Closing
the Unidym Shares in the amounts set forth on Exhibit A ,
attached hereto, for Arrowhead Shares in the following ratio: one
Unidym Share for one Arrowhead Share (1:1).
(b) Exchange . To effect this
exchange, the Holder will deliver to the Corporation the stock
certificate or certificates representing the Unidym Shares together
with duly executed stock powers related thereto and the Corporation
will deliver to the Holder a stock certificate or certificates
representing the Exchanged Shares.
2. The Closing .
(a) Closing Date . The
closing of the transactions contemplated by this Agreement (the
“ Closing ”) shall take place at the offices of
Arrowhead Research Corporation at 10:00 a.m., Los Angeles time, on
such date as agreed to by the parties on or after the date the
conditions to closing set forth in this Agreement are satisfied
(“ Closing Date ”), or at such other place, date
or time as the parties may mutually agree in writing.
(b) Conditions to Closing of
Holder . The obligation of the Holder to consummate the
transactions on the Closing Date as contemplated by this Agreement
shall be subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(i) the Corporation shall have
performed and complied in all material respects with all
obligations and agreements required to be performed and complied
with by the Corporation hereunder on or prior to the Closing
Date;
(ii) the representations and
warranties of the Corporation contained in this Agreement shall be
true and correct in all material respects as of the Closing Date as
if made as of such date;
(iii) the Corporation shall have
delivered to the Holder one or more stock certificates evidencing
such Holder’s ownership of the Exchanged Shares to be
delivered on the Closing Date duly executed by the
Corporation;
(iv) the Corporation shall have
delivered to the Transfer Agent the instructions and
pre-authorizations described in Section 5(b) of this Agreement
relating to the acceptance of the opinion of counsel satisfactory
to the Corporation authorizing the removal of the legends from the
Exchanged Shares after the expiration of the Prohibited Period (as
defined herein); and
(v) the Corporation shall have
received all third party consents and all authorizations, consents
and approvals of any Governmental Authority necessary to consummate
the transactions contemplated hereby .
(c) Conditions to Closing of
Corporation . The obligation of the Corporation to consummate
the transactions on the Closing Date shall be subject to the
satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(i) The Holder shall have each
performed and complied in all material respects with all
obligations and agreements required to be performed and complied
with by each Holder hereunder on or prior to the Closing
Date;
(ii) Holder shall have delivered to
Corporation evidence and supporting documents satisfactory to
Corporation that the Holder has complied with or obtained all
necessary consents under the terms and conditions of the Amended
and Restated Right of first Refusal and Co-Sale Agreement, (the
“ ROFR and Co-Sale Agreement ”) to exchange all
the Unidym Shares free and clear of any Claims as required under
this Agreement and with the requested assistance of the Corporation
in obtaining such consents as set forth in Section 11(b) of
this Agreement;
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(iii) the representations and
warranties of the Holder contained in this Agreement shall be true
and correct in all material respects as of the Closing Date as if
made as of such date;
(iv) Holder shall have delivered to
the Corporation a certificate or the certificates representing all
the Unidym Shares owned by Holder to be exchanged on such date and
related executed stock powers; and
(v) Holder shall have received all
third party consents and all authorizations, consents and approvals
of any Governmental Authority necessary to consummate the
transactions contemplated hereby.
3. Representations and Warranties
of the Corporation . The Corporation represents and warrants to
Holder as follows:
(a) Corporate Status . The
Corporation is a corporation incorporated, validly existing and in
good standing under the laws of the State of Delaware with full
right, power and authority to execute, deliver and perform this
Agreement.
(b)
Authorization/Enforceability . This Agreement has been duly
authorized, executed and delivered by the Corporation and
constitutes the valid and legally binding obligation of the
Corporation, enforceable in accordance with its terms and
conditions. The Corporation need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of
any Governmental Authority in order to consummate the transactions
contemplated by this Agreement.
(c) Non-Contravention .
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which the Corporation
is subject, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under the certificate of incorporation or
bylaws of the Corporation, or any agreement, contract, lease,
license, instrument, or other arrangement to which the Corporation
is a party or by which it is bound or to which any of its assets is
subject.
(d) Consents/Approvals . No
consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority or other Person
or entity is required for the issuance and sale of the Exchanged
Shares by the Corporation to Holder or the consummation by the
Corporation of the transactions contemplated by this
Agreement.
(e) Exchanged Shares
Authorization . The Exchanged Shares have been duly authorized
and, when issued and delivered, will be duly and validly issued and
fully paid and nonassessable. Upon consummation of the transactions
contemplated hereby, good and valid title to the Exchanged Shares,
free and clear of all Claims, will be transferred by the
Corporation to Holder.
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(f) The Corporation has such
knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risk of an investment in
and holding the Unidym Shares. The Corporation acknowledges that it
has had access to all information concerning Unidym and it
businesses, assets, liabilities, financial statements, and
obligations which have been requested and has been provided the
opportunity to ask questions of and receive answers from Unidym to
fully and effectively evaluate the Exchange and the transactions
contemplated herein. The Corporation acknowledges that Holder has
not made, and the Corporation is not relying upon, any
representations or warranties by Holder with respect to the
business, operating or financial condition of Unidym.
(g) The Corporation understands that
the Unidym Shares (and any Common Stock issued on conversion
thereof) may not be sold, transferred or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration
statement covering the Unidym Shares (or the Common Stock issued on
conversion thereof) or an available exemption from registration
under the Securities Act, the Unidym Shares (and any Common Stock
issued on conversion thereof) must be held indefinitely. In
particular, the Corporation is aware that the Unidym Shares (and
any Common Stock issued on conversion thereof) may not be sold
pursuant to Rule 144 promulgated under the Securities Act unless
all of the conditions of that Rule are met. Among the conditions
for use of Rule 144 is the availability of current information to
the public about Unidym. Such information is not now available and
the Corporation acknowledges that Unidym has no present plans to
make such information available.
4. Representations and Warranties
of Holder . The Holder represents and warrants to the
Corporation as follows:
(a) Legal Capacity . The
Holder has full legal right, power and authority to execute and
deliver this Agreement and to perform his, her or its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of Holder, enforceable in accordance with its terms and
conditions. Holder need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
third party or Governmental Authority in order to consummate the
transactions contemplated by this Agreement. Holder has been duly
organized, and is validly existing and in good standing, under the
laws of its jurisdiction of formation, and it has properly taken
all corporate, limited liability, partnership or other action
required to be taken by such Holder with respect to the execution
and delivery of this Agreement and consummate the transactions
contemplated by this Agreement.
(b) Title to Unidym Shares .
Holder is the lawful record and beneficial owner of the Unidym
Shares that will be transferred pursuant to Section 1 of this
Agreement with good and marketable title thereto, and the Holder
has the right to sell, assign, convey, transfer and deliver the
Unidym Shares and any and all rights and benefits incident to the
ownership thereof (including, without limitation, any registration
or other rights pertaining to the Unidym Shares and the shares of
common stock underlying such securities), all of which rights and
benefits are transferable by the Holder to the Corporation pursuant
to this Agreement, free and clear of all
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Claims, except as set forth on the attached
Schedule 4(b) . The exchange of the securities as
contemplated herein will (i) pass good and marketable title to
all the Unidym Shares transferred pursuant to Section 1 of
this Agreement to the Corporation, free and clear of all Claims,
and (ii) convey, free and clear of all Claims, any and all
rights and benefits incident to the ownership of such securities
(including, without limitation, any registration or other rights
pertaining to the securities and the shares of common stock
underlying such securities).
(c) Non-Contravention .
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which Holder is
subject, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, organizational document,
bylaws, partnership agreement, trust agreement, agreement any trust
is bound by, contract, lease, license, instrument, or other
arrangement to which Holder, as applicable, is a party or by which
it is bound or to which any of its assets is subject.
(d) Consents/Approvals . No
consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority or other entity
or Person is required for the Exchange or the consummation by
Holder of the transactions contemplated by this
Agreement.
(e) Investment
Representations .
(i) Holder qualifies as an
“accredited investor” (as defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the
“ Securities Act ”)) and is acquiring the
Exchanged Shares hereunder for its own account and with no
intention of distributing or selling the Exchanged Shares except
pursuant to a registration or an available exemption under
applicable law. Holder understands that the Exchanged Shares have
not been (and are not being) registered under the Securities Act by
reason of their contemplated issuance in transaction(s) exempt from
the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) thereof (including the
rules and regulations promulgated thereunder), and that the
reliance of the Corporation
