STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this “ Agreement ”) is entered into as of December 14, 2005 by and among BioCryst Pharmaceuticals, Inc., a Delaware corporation (together with its successors and permitted assigns, the “Issuer ”) and the investors named on the signature pages hereto (together with their successors and permitted assigns, the “ Investors ”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in Section 6.1.
WHEREAS , subject to the terms and conditions of this Agreement, the Investors desire to subscribe for and purchase, and the Issuer desires to issue and sell to the Investors, certain shares of the Issuer’s common stock, par value $0.01 per share (the “ Common Stock ”). The Issuer is offering shares of Common Stock, as provided below, to the Investors at a purchase price of Thirteen Dollars and Forty-Six Cents ($13.46) per share and on the other terms and conditions contained in this Agreement (the “ Offering ”).
WHEREAS , the Issuer has filed with the SEC the Registration Statements relating to the offer and sale from time to time of the Issuer’s securities.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer and each of the Investors hereby agree as follows:
1.1 Subscription and Issuance of Common Stock . Subject to the terms and conditions of this Agreement, the Issuer will issue and sell to the Investors and each Investor severally and not jointly, subscribes for and will purchase from the Issuer the number of shares of Common Stock set forth on the signature pages of the Investors hereof (the “ Shares ”) for the aggregate purchase price set forth on the signature pages of the Investors hereof, which shall be equal to the product of the number of Shares subscribed for by the Investor times the per share purchase price specified in the above Recitals to this Agreement (the “ Purchase Price ”).
1.2 Board Member . Kleiner Perkins Caufield & Byers Holdings, LLC (“ Kleiner Perkins ”) will have the right to appoint a member of the Issuer’s Board as of the Closing Date (“ Investor Director ”), who shall initially be Beth Seidenberg. In connection therewith, the Issuer and Kleiner Perkins shall enter into a Nomination and Observer Agreement in the form of Exhibit A hereto (the “ Nomination Agreement ”). The Investor Director may resign from the Board of Directors at any time without notice and may not be removed from the Board of Directors by the Issuer without “ Cause. ” For purposes of this Section 1.3, the following shall constitute “ Cause ”: (i) any action by the Investor Director constituting fraud or embezzlement in the course of his tenure on the Board of Directors, (ii) any conviction of Investor Director of a
felony which would materially and adversely interfere with the Investor Director’s ability to perform his or her duties as a member of the Board of Directors; (iii) continued gross neglect or willful refusal by the Investor Director to perform his or her duties hereunder for a period of ten (10) days following notice to the Investor Director of such inaction; or (iv) a material breach by the Investor Director of any other material obligations under this Agreement or the Issuer’s By-laws if such breach is not curable or, if curable, is not cured within thirty (30) days after written notice thereof by the Issuer to the Investor Director.
1.3 Board Observation Rights .
(a) Subject to the execution of a non-disclosure agreement, customary in form and substance, as requested in good faith by the Issuer, the Issuer shall allow one representative of TPG Biotechnology Partners, L.P. (“ TPG ”), for so long as TPG and its Affiliates beneficially own in the aggregate at least 375,000 shares of Common Stock, subject to proportional adjustments to reflect stock-splits, combinations, subdivisions, or the like, to attend all meetings of the Board in a nonvoting capacity, and in connection with such observer’s attendance, the Issuer shall give such representative copies of all notices, minutes, consents and other materials, financial or otherwise, which the Issuer provides to the Board prior to any such meeting. TPG shall provide the Issuer with written notice identifying the individual who shall exercise board observation rights on behalf of TPG from time to time, which individual shall be reasonably acceptable to the Issuer. Effective upon execution and delivery of this Agreement, TPG hereby appoints Fred Cohen as its initial board observer. TPG shall be responsible for all travel and other expenses incurred by its representative in attending Board meetings.
(b) Notwithstanding the provisions of subsection (a), the Board reserves the right, in the good faith exercise of its reasonable business judgment, to exclude any board observer from (i) attending any portion(s) of any Board meeting or (ii) receiving materials delivered to the rest of the Board in connection with such portion(s) of such Board meeting; provided, however, that notwithstanding the foregoing, the Board may, in the exercise of its reasonable business judgment, permit such observer to attend such portions of a Board meeting and receive such materials on the condition that such observer does not trade in the Issuer’s common stock based on such information or share the contents of the meeting or the materials with any person or entity. The decision of the Board with respect to any such exclusion shall be final and binding.
2.1 Closing . The closing of the transactions contemplated herein (the “ Closing ”) shall take place on a date designated by the Issuer, which date shall be on or before December 19, 2005 (the “ Closing Date ”). The Closing shall take place at the offices of Fenwick & West LLP, 801 California Street, Mountain View, California 94041, or at such other time and place as the Issuer and the Investors mutually agree. At the Closing, unless the Investors and the Issuer otherwise agree (i) the Investors shall pay the Purchase Price to the Issuer, by wire transfer of immediately available funds to the account designated on Exhibit C hereto; (ii) the Issuer shall
issue to the Investors the Shares, and deliver to the Investors certificates for the Shares duly registered in the name of the Investor; and (iii) all other agreements and other documents referred to in this Agreement which are required for the Closing shall be executed and delivered (if that is not done prior to the Closing).
2.2 Termination . This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written consent of the Issuer and the Investors;
(b) by the Investors, upon a breach of any material representation and warranty, covenant or agreement on the part of the Issuer set forth in this Agreement, or if any material representation and warranty of the Issuer shall have become untrue in any material respect, in either case such that the conditions in Section 5.1 would be incapable of being satisfied by the date of the Closing; or
(c) by the Issuer upon a breach of any material representation and warranty, covenant or agreement on the part of the Investors set forth in this Agreement, or if any material representation and warranty of the Investors shall have become untrue in any material respect, in either case such that the conditions in Section 5.2 would be incapable of being satisfied by the date of the Closing.
2.3 Effect of Termination . In the event of termination of this Agreement pursuant to Section 2.2, this Agreement shall forthwith become void, there shall be no liability on the part of the Issuer or the Investor to each other and all rights and obligations of any party hereto shall cease; provided , however , that nothing herein shall relieve any party from liability for the willful breach of any of its representations and warranties, covenants or agreements set forth in this Agreement.
As a material inducement to the Investors entering into this Agreement and subscribing for the Shares, the Issuer hereby represents and warrants to the Investors as follows (it being understood that, except in the case of any representation or warranty that by its terms is made only as of a specified date, each representation and warranty set forth in this Article 3 shall be deemed to be made by the Issuer both as of the date of this Agreement and, if the Closing occurs, as of the date of the Closing):
3.1 Corporate Status . The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except for such jurisdictions wherein the failure to be so qualified and in good standing would not individually or in the aggregate have a material adverse effect on the
business, results of operations or financial condition of the Issuer (a “ Material Adverse Effect ”). The Issuer has no Subsidiaries.
3.2 Corporate Power and Authority . The Issuer has the corporate power and authority to execute and deliver this Agreement and the Nomination Agreement and to perform its obligations hereunder and thereunder, and consummate the transactions contemplated hereby and thereby. The Issuer has taken all necessary corporate and stockholder action to authorize the execution, delivery and performance of this Agreement and the Nomination Agreement and the consummation of the transactions contemplated hereby and thereby.
3.3 Enforceability . This Agreement and the Nomination Agreement have been duly executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity.
3.4 No Violation . The execution and delivery by the Issuer of this Agreement and the Nomination Agreement, the consummation of the transactions contemplated hereby and thereby, and the compliance by the Issuer with the terms and provisions hereof and thereof, will not result in a default under (or give any other party the right, with the giving of notice or the passage of time (or both), to declare a default or accelerate any obligation under) or violate the Certificate of Incorporation or Bylaws of the Issuer or any material Contract to which the Issuer is a party (except to the extent such a default would not, in the case of a Contract, have a Material Adverse Effect on the Issuer), or any material Requirement of Law applicable to the Issuer, or result in the creation or imposition of any material Lien upon any of the properties or assets of the Issuer (except where such Lien would not have a Material Adverse Effect on the Issuer).
3.5 Consents/Approvals . Except for filings with the SEC and Nasdaq that are permitted to be made after the date hereof, no consents, filings, authorizations or other actions of any Governmental Authority are required to be obtained or made by the Issuer for the Issuer’s execution, delivery and performance of this Agreement which have not already been obtained or made. No consent, approval, waiver or other action by any Person under any Contract to which the Issuer is a party or by which the Issuer or any of its properties or assets are bound is required or necessary for the execution, delivery or performance by the Issuer of this Agreement and the consummation of the transactions contemplated hereby, except where the failure to obtain such consents would not have a Material Adverse Effect on the Issuer.
3.6 Valid Issuance . Upon payment of the Purchase Price by the Investors and delivery to the Investors of the certificates for the Shares, such Shares will be validly issued, fully paid and non-assessable.
3.7 SEC Reports and Nasdaq Compliance . The Issuer has timely made all filings required to be made by it under the Exchange Act within the three (3) years prior to the date of this Agreement (the “ SEC Reports ”). The SEC Reports, when filed, complied in all material respects with all applicable requirements of the Exchange Act. None of the SEC Reports, at the time of filing, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances in which they were made. The Common Stock is currently listed on the Nasdaq National Market. The Issuer is currently in compliance with all currently effective inclusion requirements of the Nasdaq National Market. There are no proceedings pending or to the Issuer’s knowledge threatened against the Issuer relating to the continued listing of the Common Stock on the Nasdaq National Market and the Issuer has not received any notice of the delisting of the Common Stock from the Nasdaq National Market. The Shares are qualified for listing on the Nasdaq National Market.
3.8 Registration Statements; Effectiveness . The sale and issuance by the Issuer of the Shares have been validly registered pursuant to the Registration Statements and such Shares of Common Stock will be issued without a restrictive legend. The Registration Statements have been declared effective by the SEC and at the time they became effective, and as of the date hereof, the Registration Statements complied and comply with Rule 415 under the Securities Act. To the Issuer’s knowledge, no stop order suspending the effectiveness of the Registration Statements has been issued and no proceeding for that purpose has been initiated or threatened by the SEC. On the effective dates of the Registration Statements, the Registration Statements and the Prospectuses fully conformed, and at the date of the Closing, the Registration Statements and the Prospectuses will fully conform, in all material respects with the applicable provisions of the Securities Act and the applicable rules and regulations of the SEC thereunder; on the effective dates of the Registration Statements, the Registration Statements, including the exhibits attached thereto, or the documents incorporated by reference therein, did not, and at the date of the Closing, the Registration Statements, including the exhibits attached thereto, the documents incorporated by reference therein, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the effective dates of the Registration Statements, the Prospectuses, including the exhibits attached thereto, or the documents incorporated by reference therein, did not, and on the date the Prospectus Supplement is filed with the Commission pursuant to Rule 424(b) under the Securities Act and the date of the Closing, the Prospectuses, including the exhibits attached thereto, or the documents incorporated by reference therein, will not, contain an untrue statement of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and when filed with the Commission, the exhibits attached thereto and the documents incorporated by reference in the Registration Statements and the Prospectuses, taken as a whole, fully conformed or will fully conform in all material respects with the applicable provisions of the Exchange Act, and the applicable rules and regulations of the SEC thereunder.
3.9 Commissions . The Issuer has not incurred any other obligation for any finder’s or broker’s or agent’s fees or commissions in connection with the transactions contemplated hereby.
3.10 Capitalization . The authorized capital stock of the Issuer consists of Forty-Five Million (45,000,000) shares of Common Stock and Five Million (5,000,000) shares of preferred stock, par value $0.01 per share (the “ Preferred Stock ”). All issued and outstanding shares of capital stock of the Issuer have been, and as of the Closing Date will be, duly authorized and validly issued and are fully paid and non-assessable. As of December 13, 2005, the Issuer has issued and outstanding 26,519,398 shares of Common Stock and no shares of Preferred Stock. Except for: (i) the approximately 3,300,000 shares of Common Stock issuable upon exercise of options outstanding as of December 13, 2005, and (ii) approximately 573,000 shares of Common Stock reserved for issuance under the Issuer’s equity incentive, stock option or stock purchase plans described in the SEC Reports, there are not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Issuer of any shares of its capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of the Issuer’s capital stock (including conversion or preemptive rights and rights of first refusal and similar rights) or agreements, orally or in writing, for the purchase or acquisition from the Issuer of any shares of capital stock and the Issuer is not a party to or subject to any agreement or understanding, and there is no agreement or understanding between any person and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Issuer. Except for as set forth in agreements under which the Issuer has the option to repurchase shares of Common Stock at cost, upon the occurrence of certain events, such as the termination of employment or services, the Issuer has no obligation, contingent or otherwise, to redeem or repurchase any equity security or any security that is a combination of debt and equity.
3.11 Financial Statements . The consolidated financial statements and financial schedules of the Issuer included in the SEC Reports, or incorporated by reference in the Prospectuses, have been prepared in conformity with generally accepted accounting principles (except, with respect to the unaudited consolidated financial statements, for the footnotes and subject to customary audit adjustments) applied on a consistent basis, are consistent in all material respects with the books and records of the Issuer, and accurately present in all material respects the consolidated financial position, results of operations and cash flow of the Issuer as of and for the periods covered thereby.
3.12 Absence of Changes . The Issuer has not sustained since September 30, 2005 any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as disclosed in or incorporated by reference in the Prospectuses; and, since September 30, 2005, there has not been any material change in the capital stock or long-term debt of the Issuer, the Issuer has not incurred any material liabilities or obligations, direct or contingent, nor entered into any material transactions not in the ordinary course of business and there has not been any Material Adverse Change otherwise than as disclosed in or incorporated by reference in the Prospectuses.
3.13 Litigation . Except as set forth in or incorporated by reference in the Prospectuses, there is no action, suit, proceeding or investigation pending or, to the Issuer’s knowledge, currently threatened against the Issuer that questions the validity of this Agreement
or the Nomination Agreement or the right of the Issuer to enter into it, or to consummate the transactions contemplated hereby, or that might result, either individually or in the aggregate, in a Material Adverse Effect on the Issuer or any material change in the current equity ownership of the Issuer. The foregoing includes, without limitation, actions pending or, to the Issuer’s knowledge, threatened involving the prior employment of any of the Issuer’s employees or their use in connection with the Issuer’s business of any information or techniques allegedly proprietary to any of their former employers. The Issuer is not a party to or subject to 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 the Issuer currently pending or which the Issuer currently intends to initiate.
3.14 Rights of Registration and Voting Rights . Except as contemplated in this Agreement or as set forth in or incorporated by reference in the Prospectuses, the Issuer has not granted or agreed to grant any registration rights, including piggyback rights, to any person o