This Stock
Purchase Agreement is entered into as of June 10, 2009 (this
“ Agreement ”), among Sorrento Therapeutics,
Inc., a California corporation (the “ Company
”), and OPKO Health, Inc. (“ Buyer
”).
A.
The Company is engaged in the business of developing and
commercializing a broad, generally applicable platform for the
generation of fully human monoclonal antibodies based on its
proprietary technology.
B.
The Company has agreed to issue to Buyer an aggregate of 2,315,747
shares of the Company’s common stock, no par value (“
Company Common Stock ”), and Buyer desires to purchase
such shares of Company Common Stock (the “ Purchased
Shares ”) in exchange for $2.3 million in cash (the
“ Purchase Price ”) on the terms and conditions
set forth herein.
C.
In connection with the transactions contemplated by this Agreement,
the Company has also agreed to enter into a License Agreement with
Buyer, in substantially the form attached hereto as
Schedule A (the “ License Agreement
”), and a Shareholders’ Agreement with Buyer and the
other holders of the Company’s outstanding capital stock, in
substantially the form attached hereto as Schedule B
(the “ Shareholders’ Agreement
”)
In consideration
of the preliminary statements and the respective representations
and warranties, covenants and agreements contained in this
Agreement, the parties agree as set forth below.
In addition to
terms defined elsewhere in this Agreement, the following terms when
used in this Agreement shall have the meanings indicated
below:
“
Action ” means any claim, action, suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental
Authority.
“
Affiliate ” of a specified Person means a Person who
directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the
specified Person. As used in the foregoing sentence, the term
“control” (including, with correlative meaning, the
terms “controlling,” “controlled by” and
“under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or
otherwise, or such other relationship as, in fact, constitutes
actual control.
“ Company
Intellectual Property ” means Intellectual Property owned
by the Company.
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“ Company
IP Agreements ” means (a) licenses of Intellectual
Property by the Company to any third party, (b) licenses of
Intellectual Property by any third party to the Company, (c)
agreements between the Company and any third party relating to the
development or use of Intellectual Property, and (d) consents,
settlements, decrees, orders, injunctions, judgments or rulings
governing the use, validity or enforceability of Company
Intellectual Property.
“
Contracts ” means all contracts, agreements,
covenants, commitments and other instruments of any kind, whether
oral or written, to which the Company is a party or to which any
Assets of the Company are bound.
“
Environmental Laws ” means any Law and any enforceable
judicial or administrative interpretation thereof, including any
Governmental Order, relating to pollution or protection of the
environment or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of hazardous
materials.
“
Founders ” shall mean Antonius Schuh, Steve Zaniboni,
and Henry Ji.
“
Governmental Authority ” means any national,
supranational, state, local or similar government, governmental,
regulatory or administrative authority, agency or commission or any
court, tribunal, or judicial or arbitral body.
“
Governmental Order ” means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered
into by or with any Governmental Authority.
“
Guaranty ” means, as to any Person, any contract,
agreement or understanding of such Person pursuant to which such
Person guarantees the indebtedness, Liabilities or obligations of
others, directly or indirectly, in any manner, including agreements
to purchase such indebtedness, Liabilities or obligations, or to
supply funds to or in any manner invest in others, or to otherwise
assure the holder of such indebtedness, Liabilities or obligations
against loss.
“
Intellectual Property ” means (a) all inventions,
technology, and other intellectual property (whether patentable or
unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and
patent disclosures, statutory invention registrations together with
all reissuances, divisions, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof and all rights
therein provided by Law or international treaties and conventions;
(b) all trademarks, service marks, trade dress, logos, trade
names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (c) all
copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (d) all
trade secrets and confidential information (including databases,
ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical
data, designs, drawings, and specifications); (e) all computer
programs and software (including data and source and object codes
and related documentation); (f) all other property rights in
connection with the foregoing; and (g) all copies and tangible
embodiments thereof (in whatever form or medium).
“
Knowledge ” means the actual knowledge of the
Founders.
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“ Law
” means any law, statute, ordinance, rule, regulation, order,
writ, judgment or decree.
“
Liabilities ” means any liability, debt or obligation
(whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated and whether due or to become due), any
and all Actions, damages, deficiencies, fines, penalties, interest,
assessments, judgments, losses, Taxes, costs, expenses, including,
without limitation, fees and disbursements of counsel and
experts.
“
Licensed Intellectual Property ” means Intellectual
Property licensed to the Company pursuant to the Company IP
Agreements.
“
Liens ” means any liens, claims, charges, rights,
pledges, security interests, mortgages, options, title defects or
other encumbrances, restrictions or limitations of any nature
whatsoever, including any restriction on the use, voting, transfer
or other exercise of any attributes of ownership.
“
Material Adverse Effect ” means any change in or
effect on the business of the Company that individually, or
together with all other such changes and effects, is materially
adverse to the business, assets (including intangible assets),
liabilities (contingent or otherwise), condition (financial or
otherwise) or results of operations of the Company.
“
Organizational Documents ” means any and all documents
pursuant to which an entity is organized and/or operates under the
applicable laws of its jurisdiction.
“
Person ” means any natural person, corporation,
limited liability corporation, unincorporated organization,
partnership, association, joint stock company, joint venture, trust
or government, or any agency or political subdivision of any
government, or any other entity.
“ SEC
” means the United States Securities and Exchange
Commission.
“
Securities Act ” means the United States Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“ Tax
” means any national, state, local or other income, gross
receipts, franchise, estimated, alternative minimum, add-on
minimum, sales, use, transfer, registration, all gross receipts,
sales, use, ad valorem , value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
assets, minimum income, environmental, customs, duties, real
property, personal property, capital stock, social security
obligations or contributions, unemployment, disability, payroll,
license, employee or other withholding, or other tax or
governmental charge, of any kind whatsoever, including any
interest, penalties or additions to tax or additional amounts in
respect of the foregoing; the foregoing shall include any
transferee or secondary liability for a Tax and any liability
assumed by agreement or arising as a result of being (or ceasing to
be) a member of any affiliated group of corporations (or being
included, or required to be included, in any tax return relating
thereto).
“
Transaction Documents ” means this Agreement, the
License Agreement, and the Shareholders’
Agreement.
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PURCHASE OF CAPITAL;
CONSIDERATION
2.1 Capital
to be Purchased . Subject to the terms and conditions set
forth herein, at the Closing (as defined below), the Company agrees
to issue to Buyer and Buyer agrees to purchase from the Company the
Purchased Shares, which Purchased Shares shall equal upon closing
34.84% of the Company’s issued and outstanding shares of
Company Common Stock on a fully diluted basis, after giving effect
to all transactions contemplated as of the Closing, and treating
all options, warrants, convertible securities and rights to
purchase securities of the Company, on an as-exercised and
as-converted basis.
2.2
Consideration . In consideration of the sale of the
Purchased Shares by the Company to Buyer at the Closing, Buyer
shall pay or deliver to the Company the Purchase Price, via wire
transfer of immediately available funds (the “ Cash
Consideration ”).
REPRESENTATIONS AND WARRANTIES OF
BUYER
In order to induce
the Company to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer makes the representations
and warranties set forth below to the Company as of the date
hereof.
3.1
Organization . Buyer is a corporation duly organized,
validly existing and in good standing under the Laws of
Delaware.
3.2
Authorization; Enforceability . Buyer has all necessary
corporate power and authority to execute and deliver the
Transaction Documents, to carry out its obligations and to
consummate the transactions contemplated thereby. The execution and
delivery of the Transaction Documents by Buyer and the consummation
by Buyer of the transactions contemplated thereby have been duly
and validly authorized by all requisite corporate
action.
3.3 No
Violation or Conflict . The execution and delivery of the
Transaction Documents by Buyer, the consummation by Buyer of the
transactions contemplated thereby and compliance by Buyer with the
provisions thereof do not and will not (a) violate or conflict
with any provision of Buyer’s Organizational Documents;
(b) violate or conflict with any Law applicable to Buyer; and
(c) with or without the passage of time or the giving of notice,
result in the breach of, or constitute a default under, or give to
others any right of acceleration of performance, termination,
amendment or cancellation of, or result in the creation of any Lien
upon any property or assets of, Buyer pursuant to any instrument,
contract, obligation or agreement to which Buyer is a party or by
which Buyer or its properties may be bound or effected.
3.4
Brokers . Buyer has not employed any financial advisor,
broker or finder and has not incurred and will not incur any
broker’s, finder’s, investment banking or similar fees,
commissions or expenses, in connection with the transactions
contemplated by this Agreement.
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3.5
Purchase Entirely for Own Account . The Purchased Shares
to be acquired by the Buyer will be acquired for investment for the
Buyer’s own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof, and the
Buyer has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing
this Agreement, the Buyer further represents that the Buyer does
not presently have any contract, undertaking, agreement, or
arrangement with any person or entity to sell, transfer or grant
participations to such person or entity or to any third person or
entity, with respect to any of the Purchased Shares.
3.6
Disclosure of Information . The Buyer has had an
opportunity to discuss the Company’s business, management,
financial affairs, and the terms and conditions of the offering of
the Purchased Shares with the Company’s management. The
foregoing, however, does not limit or modify the representations
and warranties of the Company in Article 4 of this Agreement
or the right of the Buyer to rely thereon.
3.7
Restricted Securities . The Buyer understands that the
Purchased Shares have not been, and will not be, 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
and the accuracy of the Buyer’s representations as expressed
herein. The Buyer understands that the Purchased Shares are
“restricted securities” under applicable U.S. federal
and state securities laws and that, pursuant to these laws, the
Buyer must hold the Purchased Shares indefinitely unless they are
registered with the SEC and qualified by state authorities, or an
exemption from such registration and qualification requirements is
available. The Buyer acknowledges that the Company has no
obligation to register or qualify the Purchased Shares.
3.8
Legends . The Buyer understands that the Purchased
Shares and any securities issued in respect of or exchange for the
Purchased Shares, may bear the following legends:
THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN
A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION.
Notwithstanding
the foregoing, the legend referred to in this Section 3.8
shall be removed and the Company shall issue a certificate without
such legend to the holder of the Purchased Shares if such Purchased
Shares are registered under the Securities Act, or if such holder
provides the Company with an opinion of counsel (which may be
counsel for the Company) reasonably acceptable to the Company to
the effect that a public sale or transfer of such Purchased Shares
may be made without registration under the Securities
Act.
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3.9
Accredited Investor . The Buyer is an “accredited
investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
In order to induce
Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, the Company makes the
representations and warranties set forth below to Buyer as of the
date hereof.
4.1
Organization . The Company has been duly organized and
is validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, as the case may
be. The Company is duly qualified or licensed to do business, and
is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary. The
Company has all requisite right, power and authority to
(a) own or lease and operate its properties, (b) conduct
its business as presently conducted and (c) engage in and
consummate the transactions contemplated hereby. The Company is not
in violation of any provision of its Organizational
Documents.
4.2
Authorization; Enforceability . The Company has all
necessary corporate power and authority to execute and deliver the
Transaction Documents, to carry out its obligations thereunder, and
to consummate the transactions contemplated thereby. The execution
and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have
been duly and validly authorized by all requisite corporate action.
This Agreement has been, and upon execution the other Transaction
Documents shall have been, duly and validly executed and delivered
by the Company and constitutes, and upon execution the other
Transaction Documents shall constitute, the legal, valid and
binding obligations of the Company, enforceable in accordance with
their respective terms.
4.3 No
Violation or Conflict . The execution and delivery of the
Transaction Documents by the Company, the consummation by the
Company of the transactions contemplated thereby, and compliance by
the Company with the provisions thereof, do not and will not:
(a) violate or conflict with any provision of the
Company’s Organizational Documents; (b) violate or
conflict with any Law applicable to the Company; and (c) with
or without the passage of time or the giving of notice, result in
the breach of, or constitute a default under, or give to others any
right of acceleration of performance, termination, amendment or
cancellation of, or result in the creation of any Lien upon any
property or assets of the Company, pursuant to any instrument,
Contract, obligation or agreement to which the Company is a party
or by which the Company or any of its properties may be bound or
affected.
4.4
Validity of Purchased Shares . The Purchased Shares,
when issued, sold and delivered to Buyer in accordance with the
terms and for the consideration set forth in this Agreement, will
be validly issued, fully paid, non-assessable and free of
restrictions on transfer other than applicable federal and state
securities laws, restrictions set forth in the Transaction
Documents and liens or encumbrances created by or imposed by Buyer.
The Purchased Shares will be issued in compliance with all
applicable federal and state securities laws.
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4.5
Organizational Documents and Corporate Records . A true
and complete copy of (a) the Organizational Documents of the
Company, as amended, and (b) the minute books of the Company
have been delivered to Buyer. Such minute books contain complete
and accurate records of all meetings and other corporate actions of
the board of directors, committees of the board of directors, and
shareholders of the Company from the date of its incorporation to
the date hereof. All matters requiring the authorization or
approval of the board of directors, a committee of the board of
directors, or the shareholders of the Company have been duly and
validly authorized and approved by them.
4.6
Subsidiaries . The Company does not currently own or
control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, limited liability
company, association or other business entity. The Company is not a
participant in any joint venture, partnership or similar
arrangement.
4.7
Capitalization . Schedule 4.7 describes the
equity capitalization of the Company immediately prior to, and
after, Closing, including without limitation, the number of
authorized shares of capital stock, the number of outstanding
shares, the names of the holders thereof and the amount of shares
held by each such holder. All of the issued and outstanding shares
of capital stock (i) have been duly authorized and validly
issued and are fully paid and non-assessable and (ii) were
issued in compliance with all applicable laws concerning the
issuance of the securities. None of the issued and outstanding
shares of capital stock were issued in violation of any Law,
preemptive rights or rights of first refusal or other agreement or
rights. No written or oral agreement or understanding with respect
to the disposition of the Company’s shares of capital
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