FERMAVIR PHARMACEUTICALS, INC. REPURCHASE OPTION AGREEMENT
Exhibit
10.2
THIS
AGREEMENT is made as of March 16, 2006
between FermaVir Pharmaceuticals, Inc., a Florida corporation (the “Company”),
and Xxxxx XxXxxxxx (the “Shareholder”).
WHEREAS
the Shareholder was a founder of FermaVir Research, Inc. a Delaware corporation,
which the Company acquired in August 2005 (“FermaVir Research”);
and
WHEREAS
the Shareholder acquired 1,029,000 shares of the Company’s common stock, $.0001
par value (the “Shares”) in exchange for shares he had purchased from FermaVir
Research; and
WHEREAS,
assuming the Shareholder’s active participation in the research and development
conducted by Fermavir Research is critical to the Company’s ability to raise
capital and fund the development of the “Licensed Subject Matter,” as defined in
that Patent and Technology License Agreement dated February 2, 2005 between
University College Cardiff Consultants Limited and FermaVir Research (formerly
named Contravir Research, Inc.).
THEREFORE,
the parties agree as follows:
1. Consideration.
In
consideration of the option granted to the Company, the Company will enter
into
a technology acquisition agreement with the Shareholder and certain other
option
holders, in the form annexed hereto as Exhibit A (the “Technology Acquisition
Agreement”).
2. Repurchase
Option.
(a) The
Shareholder hereby grants to the Company an irrevocable, exclusive option
for a
period of one hundred twenty (120) days (the “Option Period”) from the “Trigger
Event” (defined below) to repurchase up to 926,100 of the Shares which have not
been released pursuant to Section 3 herein (the “Unreleased Shares”) for the
aggregate price of $114,000,000 (the “Repurchase Price”). For the purposes of
this Agreement, the “Trigger Event” shall mean the earlier of the Company’s
abandonment of the development of the Licensed Subject Matter or December
31,
2006, unless on or before such date, Phase I Clinical Trials (defined as
first
dosing in humans) have commenced for a product utilizing the Licensed Subject
Matter (as reasonably determined by the Company, provided such determination
will not be necessary if, following receipt of all requisite regulation
approvals, human patients have been administered a product incorporating
the
Licensed Subject Matter). Said option shall be exercised by the Company by
delivering written notice to the Shareholder or the Shareholder’s executor (with
a copy to the Escrow Holder (as defined in Section 6)) AND, at the Company’s
option, (i) by delivering to the Shareholder or the Shareholder’s executor a
check in the amount of the aggregate Repurchase Price, or (ii) by the Company
canceling an amount of the Shareholder’s indebtedness to the Company, if any,
equal to the aggregate Repurchase Price, or (iii) by a combination of (i)
and
(ii) so that the combined payment and cancellation of indebtedness equals
such
aggregate Repurchase Price. Upon delivery of such notice and the payment
of the
aggregate Repurchase Price in any of the ways described above, the Company
shall
become the legal and beneficial owner of the Shares being repurchased and
all
rights and interests therein or relating thereto, and the Company shall have
the
right to retain and transfer to its own name the number of Shares being
repurchased by the Company.
(b) Whenever
the Company shall have the right to repurchase Shares hereunder, the Company
may
designate and assign one or more employees, officers, directors of the Company
or other persons or organizations to exercise all or a part of the Company’s
purchase rights under this Agreement and purchase all or a part of such Shares.
3. Release
of Shares From Repurchase Option.
(a) The
Shares shall be released from the Company’s repurchase option upon the
commencement of Phase I clinical trials of a product incorporating the Licensed
Subject Matter.
(b) In
the
event a Trigger Event has occurred and the Company has not abandoned the
development of the Licensed Subject Matter, the Shares shall be released
from
the Company’s repurchase option upon the commencement of Phase I clinical trials
of a product incorporating the Licensed Subject Matter.
(c) In
the
event of a “Change of Control” of the Company prior to a Trigger Event, all of
the Shares shall be released from the Company’s repurchase option. For this
purpose, a “Change of Control” is defined as:
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(i)
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Any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (other than a group
consisting
of the Company’s shareholders as of the date of the Closing and their
Parents and Subsidiaries) becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities
of the
Company representing 75% or more of the total voting power represented
by
the Company’s then outstanding voting securities;
or
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(ii)
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The
consummation of a merger, consolidation, reorganization, sale of
stock or
similar transaction in which the shareholders of the Company before
such
transaction (and their Parents and Subsidiaries) own less than
50% of the
voting stock or voting power of the surviving entity immediately
after
such transaction; or
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(iii)
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The
consummation of the sale or disposition of all or substantially
all of the
Company’s assets.
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(d) The
Shares which have been released from the Company’s repurchase option shall be
delivered to the Shareholder at the Shareholder’s request (see Section
5).
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4.
Restriction
on Transfer.
Except
for the escrow described in Section 5 or transfer of the Shares to the Company
or its assignees contemplated by this Agreement, none of the Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise
disposed of in any way until the release of such Shares from the Company’s
repurchase option in accordance with the provisions of this Agreement, other
than by will or the laws of descent and distribution.
5.
Escrow
of Shares.
(a) To
ensure
the availability for delivery of the Shareholder’s Unreleased Shares upon
repurchase by the Company pursuant to the Company’s repurchase option under
Section 2 above, the Shareholder shall, upon execution of this Agreement,
deliver and deposit with an escrow holder designated by the Company (the
“Escrow
Holder”) the share certificates representing the Unreleased Shares, together
with the stock assignment duly endorsed in blank, attached hereto as Exhibit
B-1. The Unreleased Shares and stock assignment shall be held by the Escrow
Holder, pursuant to the Joint Escrow Instructions of the Company and Shareholder
attached as Exhibit B-2 hereto, until such time as the Company’s repurchase
option expires. As a further condition to the Company’s obligations under this
Agreement, the spouse of Shareholder, if any, shall execute and deliver to
the
Company the Consent of Spouse attached hereto as Exhibit B-3.
(b) The
Escrow Holder shall not be liable for any act it may do or omit to do with
respect to holding the Unreleased Shares in escrow and while acting in good
faith and in the exercise of its judgment.
(c) If
the
Company or any assignee exercises its repurchase option hereunder, the Escrow
Holder, upon receipt of written notice of such option exercise from the proposed
transferee, shall take all steps necessary to accomplish such
transfer.
(d) When
the
repurchase option has been exercised or expires unexercised or a portion
of the
Shares has been released from such repurchase option, upon Shareholder’s request
the Escrow Holder shall promptly cause a new certificate to be issued for
such
released Shares and shall deliver such certificate to the Company or the
Shareholder, as the case may be.
(e) Subject
to the terms hereof, the Shareholder shall have all the rights of a shareholder
with respect to such Shares while they are held in escrow, including without
limitation, the right to vote the Shares and receive any cash dividends declared
thereon. If, from time to time during the term of the Company’s repurchase
option, there is (i) any stock dividend, stock split or other change in the
Shares, or (ii) any merger or sale of all or substantially all of the assets
or
other acquisition of the Company, any and all new, substituted or additional
securities to which the Shareholder is entitled by reason of the Shareholder’s
ownership of the Shares shall be immediately subject to this escrow, deposited
with the Escrow Holder and included thereafter as “Shares” for purposes of this
Agreement and the Company’s repurchase option.
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6.
Legends.
(a) Shareholder
understands and agrees that the Company shall cause the legends set forth
below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by applicable state or federal
securities laws:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
THE
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH, THE
SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER,
INCLUDING A REPURCHASE OPTION HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH
IN THE RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE
OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND REPURCHASE
OPTION ARE BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer
Notices.
Shareholder agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect
in its
own records.
(c) Refusal
to Transfer.
The
Company shall not be required (i) to transfer on its books any Shares that
have
been sold or otherwise transferred in violation of any of the provisions
of this
Agreement or (ii) to treat as owner of such Shares or to accord the right
to
vote or pay dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.
7.
Adjustment
for Stock Split.
All
references to the number of Shares and the purchase price of the Shares in
this
Agreement shall be appropriately adjusted to reflect any stock split, stock
dividend or other change in the Shares which may be made by the Company after
the date of this Agreement.
8.
General
Provisions.
(a) This
Agreement shall be governed by the laws of the State of New York. This
Agreement, including the Exhibits hereto, represent the entire agreement
between
the parties with respect to the Company’s option to purchase the
Shares.
(b) Any
notice, demand or request required or permitted to be given by either the
Company or the Shareholder pursuant to the terms of this Agreement shall
be in
writing and shall be deemed given when delivered personally or deposited
in the
U.S. mail, First Class with postage prepaid, and addressed to the parties
at the
addresses of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
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(c) The
rights and benefits of the Company under this Agreement shall be transferable
to
any one or more persons or entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns. The rights and obligations of the Shareholder under this Agreement
may only be assigned with the prior written consent of the Company.
(d) Either
party’s failure to enforce any provision or provisions of this Agreement shall
not in any way be construed as a waiver of any such provision or provisions,
nor
prevent that party from thereafter enforcing each and every other provision
of
this Agreement. The rights granted both parties herein are cumulative and
shall
not constitute a waiver of either party’s right to assert all other legal
remedies available to it under the circumstances.
(e) The
Shareholder agrees upon request to execute any further documents or instruments
necessary or desirable to carry out the purposes or intent of this
Agreement.
(f) SHAREHOLDER
ACKNOWLEDGES AND AGREES THAT THE RELEASE OF SHARES FROM THE REPURCHASE OPTION
OF
THE COMPANY PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY COMMENCEMENT OF
PHASE
I CLINICAL TRIALS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT
ALL, AND SHALL NOT INTERFERE WITH PURCHASER’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE PURCHASER’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.
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By
Shareholder’s signature below, Shareholder represents that he is familiar with
the terms and provisions of this Agreement and hereby accepts this Agreement
subject to all of the terms and provisions thereof Shareholder has reviewed
this
Agreement in their entirety, has had an opportunity to obtain the advice
of
counsel prior to executing this Agreement and fully understands all provisions
of this Agreement. Shareholder agrees to accept as binding, conclusive and
final
all decisions or interpretations of the Administrator upon any questions
arising
under this Agreement. Shareholder further agrees to notify the Company upon
any
change in the residence indicated in the Notice of Grant.
| SHAREHOLDER | FERMAVIR PHARMACEUTICALS, INC. | |||
| /s/ Xxxxx XxXxxxxx | /s/ Xxxxxxxx X. Xxxxxx | |||
| Signature | Signature | |||
| Xxxxx XxXxxxxx | Xxxxxxxx X. Xxxxxx | |||
| Printed Name | Printed Name | |||
| President and CEO | ||||
| Title | ||||
6
EXHIBIT
A
TECHNOLOGY
ACQUISITION AGREEMENT
EXHIBIT
B-1
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR
VALUE
RECEIVED I, Xxxxx
XxXxxxxx,
hereby
sell, assign and transfer unto _______________ (
)
shares of the Common Stock of FermaVir Pharmaceuticals, Inc. standing in
my name
of the books of said corporation represented by Certificate No.
___________ herewith
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.
This
Stock Assignment may be used only in accordance with the Restricted Stock
Option
Agreement between said corporation and the undersigned dated _________________,
2006.
Dated:________________,
20__
Signature: __________________
INSTRUCTIONS:
Please
do not fill in any blanks other than the signature line. The purpose of this
assignment is to enable the Company to exercise its “repurchase option,” as set
forth in the Agreement, without requiring additional signatures on the part
of
the Shareholder.
EXHIBIT
A-3
JOINT
ESCROW INSTRUCTIONS
____________________,
2006
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Attn:
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Secretary
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Dear____________:
As
Escrow
Agent for both FermaVir Pharmaceuticals, Inc., a Florida corporation (the
“Company”), and the undersigned purchaser of stock of the Company (the
“Shareholder”), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement (“Agreement”) between the Company and the undersigned, in accordance
with the following instructions:
1.
In
the
event the Company and/or any assignee of the Company (referred to collectively
for convenience herein as the “Company”) exercises the Company’s repurchase
option set forth in the Agreement, the Company shall give to Shareholder
and you
a written notice specifying the number of shares of stock to be purchased,
the
purchase price, and the time for a closing hereunder at the principal office
of
the Company. Shareholder and the Company hereby irrevocably authorize and
direct
you to close the transaction contemplated by such notice in accordance with
the
terms of said notice.
2.
At
the
closing, you are directed (a) to date the stock assignments necessary for
the
transfer in question, (b) to fill in the number of shares being transferred,
and
(c) to deliver same, together with the certificate evidencing the shares
of
stock to be transferred, to the Company or its assignee, against the
simultaneous delivery to you of the purchase price (by cash, a check, or
some
combination thereof) for the number of shares of stock being purchased pursuant
to the exercise of the Company’s repurchase option.
3.
Shareholder
irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions
and
substitutions to said shares as defined in the Agreement Shareholder does
hereby
irrevocably constitute and appoint you as Shareholder’s attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities
all
documents necessary or appropriate to make such securities negotiable and
to
complete any transaction herein contemplated, including but not limited to
the
filing with any applicable state blue sky authority of any required applications
for consent to, or notice of transfer of; the securities. Subject to the
provisions of this paragraph 3, Shareholder shall exercise all rights and
privileges of the Company while the stock is held by you.
4.
Upon
written request of the Shareholder, but no more than once per calendar year,
unless the Company’s repurchase option has been exercised, you will deliver to
Shareholder a certificate or certificates representing so many shares of
stock
as are not then subject to the Company’s repurchase option. Within one hundred
twenty (120) days after cessation of Shareholder’s continuous employment by or
services to the Company, or any parent or subsidiary of the Company, you
will
deliver to Shareholder a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased
by
the Company or its assignees pursuant to exercise of the Company’s repurchase
option.
5.
If
at the
time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Shareholder, you shall
deliver all of the same to Shareholder and shall be discharged of all further
obligations hereunder.
6.
Your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
7.
You
shall
be obligated only for the performance of such duties as are specifically
set
forth herein and may rely and shall be protected in relying or refraining
from
acting on any instrument reasonably believed by you to be genuine and to
have
been signed or presented by the proper party or parties. You shall not be
personally liable for any act you may do or omit to do hereunder as Escrow
Agent
or as attorney-in-fact for Shareholder while acting in good faith, and any
act
done or omitted by you pursuant to the advice of your own attorneys shall
be
conclusive evidence of such good faith.
8.
You
are
hereby expressly authorized to disregard any and all warnings given by any
of
the parties hereto or by any other person or corporation, excepting only
orders
or process of courts of law and are hereby expressly authorized to comply
with
and obey orders, judgments or decrees of any court. In case you obey or comply
with any such order, judgment or decree, you shall not be liable to any of
the
parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to
have
been entered without jurisdiction.
9.
You
shall
not be liable in any respect on account of the identity, authorities or rights
of the parties executing or delivering or purporting to execute or deliver
the
Agreement or any documents or papers deposited or called for
hereunder.
10.
You
shall
not be liable for the outlawing of any rights under the Statute of Limitations
with respect to these Joint Escrow Instructions or any documents deposited
with
you.
11.
You
shall
be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder,
may rely upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor.
12.
Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to
be an officer or agent of the Company or if you shall resign by written notice
to each party. In the event of any such termination, the Company shall appoint
a
successor Escrow Agent.
13.
If
you
reasonably require other or further instruments in connection with these
Joint
Escrow Instructions or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
14.
It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities held by you hereunder,
you are authorized and directed to retain in your possession without liability
to anyone all or any part of said securities until such disputes shall have
been
settled either by mutual written agreement of the parties concerned or by
a
final order, decree or judgment of a court of competent jurisdiction after
the
time for appeal has expired and no appeal has been perfected, but you shall
be
under no duty whatsoever to institute or defend any such
proceedings.
15.
Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by
ten
(10) days’ advance written notice to each of the other parties
hereto.
| COMPANY: | FERMAVIR PHARMACEUTICALS, INC. | |
| PURCHASER: | XXXXX XXXXXXXX | |
| ESCROW AGENT: | ___________________________ |
16.
By
signing these Joint Escrow Instructions, you become a party hereto only for
the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.
17.
This
instrument shall be binding upon and inure to the benefit of the parties
hereto,
and their respective successors and permitted assigns.
18.
These
Joint Escrow Instructions shall be governed by, and construed and enforced
in
accordance with, the laws of the State of New York.
Very
truly yours,
| By: |
____________________________
|
|
Title:
|
____________________________
|
SHAREHOLDER:
_________________________________________
(Signature)
Xxxxx
XxXxxxxx
(Typed
or
Printed Name)
ESCROW
AGENT:
_________________________________________
Corporate
Secretary or Assistant Corporate Secretary
EXHIBIT
B-3
CONSENT
OF SPOUSE
I, spouse
of__________________________ have read and approve the foregoing Agreement.
In
consideration of granting of the right to my spouse to purchase shares of
FermaVir Pharmaceuticals, Inc., as set forth in the Agreement, I hereby appoint
my spouse as my attorney-in-fact in respect to the exercise of any rights
under
the Agreement and agree to be bound by the provisions of the Agreement insofar
as I may have any rights in said Agreement or any shares issued pursuant
thereto
under the community property laws or similar laws relating to marital property
in effect in the state of our residence as of the date of the signing of
the
foregoing Agreement.
| Dated:________________,2006 | Signed: ___________________________ |
