THIS STOCK
PURCHASE AGREEMENT (this “ Agreement ”),
dated as of September 18, 2009, is made by and between
QuikByte Software, Inc., a Colorado corporation (the “
Company ”), and each of the Investors listed on
Exhibit A hereto (each, an “
Investor ” and collectively, the “
Investors ”).
WHEREAS,
the Company is a party to that certain Merger Agreement, dated as
of July 14, 2009, as amended (the “ Merger
Agreement ”), by and among the Company, Sorrento
Therapeutics, Inc., a Delaware corporation (“
Sorrento ”), Sorrento Merger Corp., Inc., a
Delaware corporation and wholly-owned subsidiary of the Company
(“ Merger Sub ”), Stephen Zaniboni, as
Stockholders’ Agent thereunder, and Glenn Halpryn, as Parent
Representative thereunder, pursuant to which the Company will
acquire Sorrento via a merger whereby Merger Sub will be merged
with and into Sorrento (the “ Merger ”)
with Sorrento continuing as the surviving entity in the Merger and
as a wholly-owned subsidiary of the Company; and
WHEREAS,
the closing of the Merger (the “ Merger Closing
”) is subject to, among other conditions, the Company’s
receipt of an aggregate investment of $2.0 million in exchange
for shares of common stock, $0.0001 par value, of the Company (the
“ Common Stock ”); and
WHEREAS,
the Investors desire to acquire from the Company, and the Company
desires to issue and sell to the Investors, in the manner and on
the terms and conditions hereinafter set forth, 44,634,374 shares
of Common Stock (collectively, the “ Shares
”); and
WHEREAS,
in connection with the Investors’ purchase of the Shares, the
Company and the Investors desire to establish certain rights and
obligations between themselves.
NOW,
THEREFORE, in consideration of these premises, the mutual
covenants and agreements herein contained and for other good and
valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Company and each of the Investors hereby
agree as follows:
The following
terms when used in this Agreement have the following respective
meanings:
“ 1933
Act ” means the Securities Act of 1933, as
amended.
“ 1934
Act ” means the Securities Exchange Act of 1934, as
amended.
“
Affiliate ” means with respect to any Person,
any (i) officer, director, partner or holder of more than 10%
of the outstanding shares or equity interests of such Person,
(ii) any relative of such Person, or (iii) any other
Person which directly or indirectly controls, is controlled by, or
is under common control with such Person. A Person will be deemed
to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the “ Controlled
” Person, whether through ownership of voting securities, by
contract, or otherwise.
“
Agreement ” has the meaning set forth in the
recitals hereto.
“
Articles of Incorporation ” means the Articles
of Incorporation of the Company, as amended and restated and as on
file with the Secretary of State of the State of Colorado on the
date of this Agreement.
“
Business Day ” means a day other than Saturday,
Sunday or statutory holiday in the State of Florida and in the
event that any action to be taken hereunder falls on a day which is
not a Business Day, then such action shall be taken on the next
succeeding Business Day.
“
Bylaws ” means the Amended and Restated Bylaws
of the Company, as filed with the SEC on the date of this
Agreement.
“
Closing Date ” has the meaning set forth in
Section 3.1 hereof.
“
Closing ” has the meaning set forth in
Section 3.1 hereof.
“
Common Stock ” has the meaning set forth in the
recitals hereto.
“
Company ” has the meaning set forth in the
recitals hereto.
“
Computershare ” has the meaning set forth in
Section 3.2(a) hereof.
“
GAAP ” means generally accepted accounting
principles in the United States.
“
Governmental Authority ” means the United
States, any state or municipality, the government of any foreign
country, any subdivision of any of the foregoing, or any authority,
department, commission, board, bureau, agency, court, or
instrumentality of any of the foregoing.
“
Instruction Letter ” has the meaning set forth
in Section 3.2(a) hereof.
“
Investor(s) ” has the meaning set forth in the
recitals hereto.
“
Investor Lock-Up Agreement ” means the lock-up
letter agreement substantially in the form of Exhibit B
hereto.
“
Knowledge ” means the actual knowledge of the
officers of the Company after due and diligence inquiry of the
employees or agents of the Company reasonably believed to have
knowledge of such matters.
“
Lien ” means any mortgage, lien, pledge,
security interest, easement, conditional sale or other title
retention agreement, or other encumbrance of any kind.
“
Material Adverse Effect ” means a change or
effect in the condition (financial or otherwise), properties,
assets, liabilities, rights, operations or business of the Company
which change or effect, individually or in the aggregate, could
reasonably be expected to be materially adverse to such condition,
properties, assets, liabilities, rights, operations or
business.
“
Merger ” has the meaning set forth in the
recitals hereto.
“
Merger Agreement ” has the meaning set forth in
the recitals hereto.
“
Merger Closing ” has the meaning set forth in
the recitals hereto.
“
Merger Sub ” has the meaning set forth in the
recitals hereto.
“
Person ” means an individual, corporation, limited
liability company, partnership, joint venture, trust,
unincorporated organization, or Governmental Authority.
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“
Purchase Price ” means
$2.0 million.
“
SEC ” means the United States Securities and
Exchange Commission.
“ SEC
Filings ” has the meaning set forth in Section 4.2
(f) hereof.
“
Shareholders ” mean the record holders of
shares of capital stock of the Company.
“
Shares ” has the meaning set forth in the
recitals hereto.
“
Sorrento ” has the meaning set forth in the
recitals hereto.
SECTION II PURCHASE AND
SALE OF COMMON STOCK.
2.1 Issuance
and Purchase of Common Stock . At the Closing, based upon the
representations, warranties, covenants and agreements of the
parties set forth in this Agreement, the Company shall issue and
sell to each Investor, and each Investor shall purchase from the
Company, that number of Shares set forth opposite such
Investor’s name on Exhibit A attached hereto. At
the Closing, the Company shall deliver to each Investor a copy of
the Instruction Letter against payment of that portion of the
Purchase Price set forth opposite such Investor’s name on
Exhibit A .
2.2 Payment for
Common Stock . At the Closing, for all of the Shares, the
Investors shall pay to the Company, in the aggregate, the Purchase
Price. Each Investor shall pay that portion of the Purchase Price
set forth opposite such Investor’s name on
Exhibit A . The Investors shall pay the Purchase Price
by wire transfers of immediately available funds to an account
designated in writing by the Company.
3.1 Closing
. The closing of the issuance and sale of the Shares pursuant to
Section 2.1 hereof and certain of the other transactions
contemplated hereby (the “ Closing ”)
shall take place contemporaneously with the execution of this
Agreement (the “ Closing Date ”) at the
offices of Greenberg Traurig P.A., in Miami, Florida, or such other
place as agreed by the parties hereto. The Closing shall take place
immediately prior to the Merger Closing.
3.2 Deliveries
by the Company . At the Closing, the Company shall deliver or
cause to be delivered to the Investors the following items (in
addition to any other items required to be delivered to the
Investors pursuant to any other provision of this
Agreement):
(a) a
copy of an instruction letter to Computershare Trust Company, N.A.
(“ Computershare ”), the transfer agent
for the Common Stock, duly executed by an officer of the Company
directing Computershare to promptly issue certificates representing
the Shares being issued and sold by the Company to the Investors
pursuant to Section 2.1 hereof, duly recorded on the books
of the Company in the names of each of the Investors as set forth
on Exhibit A (bearing a legend that such securities
have not been registered under the 1933 Act or any state securities
laws) and shall deliver such letter to Computershare (the “
Instruction Letter ”); and
(b) a
certificate of the Secretary of State of the State of Colorado as
to the good standing of the Company dated within five Business Days
prior to the Closing Date.
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3.3 Deliveries
by the Investors . At the Closing, each of the Investors shall
deliver or cause to be delivered to the Company (in addition to any
other items required to be delivered to the Company pursuant to any
other provision of this Agreement):
(a) payment
by wire transfer of immediately available funds necessary to
satisfy each Investor’s obligations to the Company under
Section 2.2 hereof and to result in payment to the Company
of the Purchase Price; and
(b) a
fully-executed Investor Lock-Up Agreement.
SECTION IV REPRESENTATIONS
AND WARRANTIES.
4.1
Representations and Warranties of the Company . In order to
induce each of the Investors to purchase the Common Stock that it
is purchasing hereunder, the Company represents and warrants to
each of the Investors as of the Closing (unless another time is
expressly provided for herein) as follows:
(a)
Organization and Standing . The Company is duly incorporated
and validly existing under the laws of the State of Colorado, and
has all requisite corporate power and authority to own or lease its
properties and assets and to conduct its business as it is
presently being conducted. As of immediately prior to the Closing,
the Company did not own any equity interest, directly or
indirectly, in any other Person or business enterprise other than
Merger Sub. The Company is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify
could reasonably be expected to have a Material Adverse Effect upon
its assets, properties, financial condition, results of operations
or business. As of immediately prior to the Closing, the Company
had no subsidiaries other than Merger Sub.
(b)
Capitalization . As of the Closing Date, the authorized
capital stock of the Company is 600,000,000 shares, consisting of
(i) 500,000,000 shares of Common Stock, of which 11,073,946
shares are issued and outstanding as of immediately prior to the
Closing, and (ii) 100,000,000 shares of preferred stock, par value
$0.0001 per share, of which no shares are issued and outstanding as
of immediately prior to the Closing. The Company has no other class
or series of equity securities authorized, issued, reserved for
issuance or outstanding. Except for the Merger and agreements to be
assumed by the Company in connection with the Merger, there are
(x) no outstanding options, offers, warrants, conversion
rights, contracts or other rights to subscribe for or to purchase
from the Company, or agreements obligating the Company to issue,
transfer, or sell (whether formal or informal, written or oral,
firm or contingent), shares of capital stock or other securities of
the Company (whether debt, equity, or a combination thereof) or
obligating the Company to grant, extend, or enter into any such
agreement and (y) no agreements or other understandings
(whether formal or informal, written or oral, firm or contingent)
which require or may require the Company to repurchase any of its
Common Stock. There are no preemptive or similar rights with
respect to the Company’s capital stock. There are no
anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing
rights to security holders). Other than as contemplated by the
Merger Agreement, the Company is not a party to, and, to the
Knowledge of the Company, no Shareholder is a party to, any voting
agreements, voting trusts, proxies or any other agreements,
instruments or understandings with respect to the voting of any
shares of the capital stock of the Company, or any agreement with
respect to the transferability, purchase or redemption of any
shares of the capital stock of the Company. The issue and sale of
the Shares to the Investors does not obligate the Company to issue
any shares of capital stock or other securities to any Person
(other than the Investors) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. The outstanding
Common Stock is all duly and validly authorized and issued, fully
paid and nonassessable.
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Immediately
following the Merger Closing, the Shares will represent
approximately 19.83% of the issued and outstanding shares of the
capital stock of the Company on a fully-diluted basis.
(c)
Capacity of the Company; Authorization; Execution of
Agreements . The Company has all requisite corporate power,
authority and capacity to enter into this Agreement and to perform
the transactions and obligations to be performed by it hereunder.
The execution and delivery of this Agreement by the Company, and
the performance by the Company of the transactions and obligations
contemplated hereby, including, without limitation, the issuance
and delivery of the Shares to the Investors hereunder, have been
duly authorized by all requisite action on the part of the Company.
This Agreement has been duly executed and delivered by a duly
authorized officer of the Company and constitutes a valid and
legally binding agreement of the Company, enforceable in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws of the United States (both state and federal), affecting the
enforcement of creditors’ rights or remedies in general from
time to time in effect and the exercise by courts of equity powers
or their application of principles of public policy.
(d)
Status of Shares . The Shares being issued and purchased
hereunder, all of which are to be issued by the Company to the
Investors and paid for by the Investors pursuant to the terms of
this Agreement, are and will be, when issued, (i) duly
authorized, validly issued, fully paid and nonassessable,
(ii) issued in compliance with all applicable United States
federal and state securities laws, (iii) subject to
restrictions under this Agreement, and applicable United States
federal and state securities laws, have the rights and preferences
set forth in the Articles of Incorporation, and (iv) free and
clear of all Liens (except for any Liens imposed on such Shares,
directly or indirectly, by the Investors).
(e)
Conflicts; Defaults . The execution and delivery of this
Agreement by the Company and the performance by the Company of the
transactions and obligations contemplated hereby and thereby to be
performed by it do not (i) violate, conflict with, or
constitute a default under any of the terms or provisions of, the
Articles of Incorporation, the Bylaws, or any provisions of, or
result in the acceleration of any obligation under, any contract,
note, debt instrument, security agreement or other instrument to
which the Company is a party or by which the Company, or any of its
assets, is bound; (ii) result in the creation or imposition of
any Liens (except for any Liens imposed, directly or indirectly, by
the Investors) or claims upon the Company’s assets or upon
any of the shares of capital stock of the Company;
(iii) constitute a violation of any law, statute, judgment,
decree, order, rule, or regulation of a Governmental Authority
applicable to the Company; or (iv) constitute an event which,
after notice or lapse of time or both, would result in any of the
foregoing. The Company is not presently in violation of its
Articles of Incorporation or Bylaws.
(f)
SEC Filings . The SEC Filings, when filed, complied in all
material respects with the requirements of Section 13 or 15(d)
of the 1934 Act, as applicable, did not, as of the dates when
filed, contain an untrue statement of material fact or omit to
state a
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