Exhibit 10.26
WARRANT AGREEMENT
December 28, 2000
EXACT Sciences Corporation
(the "Corporation")
00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Re: Issuance of Warrant to Purchase Shares of Common Stock of the
Corporation
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Dear Sirs:
The undersigned subscribing investor (the "Investor") hereby agrees as
follows:
1. ISSUANCE OF WARRANT TO PURCHASE SHARES OF COMMON STOCK OF THE
CORPORATION (THE "WARRANT SHARES"). For good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, and subject to the
terms and conditions set forth in this Warrant Agreement, the Corporation agrees
to issue to the Investor a warrant in the form attached hereto as EXHIBIT A (the
"Warrant" and together with the Warrant Shares, the "Shares") to purchase 48,125
shares of common stock, $.01 par value per share (the "Common Stock") at a price
of $10.9091 per Share.
2. CERTAIN REPRESENTATIONS OF THE INVESTOR. The Investor hereby
represents and warrants to the Corporation as follows, and the Investor
acknowledges that the Investor has full knowledge that the Corporation intends
to rely on such representations and warranties:
(a) THE INVESTOR HAS READ CAREFULLY AND UNDERSTANDS THIS WARRANT
AGREEMENT AND HAS CONSULTED HIS, HER OR ITS OWN ATTORNEY, ACCOUNTANT OR
INVESTMENT ADVISER WITH RESPECT TO THE INVESTMENT CONTEMPLATED HEREBY AND ITS
SUITABILITY FOR THE INVESTOR. THE INVESTOR UNDERSTANDS THAT THE SHARES
CONSTITUTE A SPECULATIVE INVESTMENT AND ENTAIL A HIGH DEGREE OF RISK.
(b) The Corporation has made available to the Investor, during the
course of this transaction and prior to the issuance of the Warrants, the
opportunity to ask questions of and receive answers from representatives of the
Corporation concerning the terms and conditions of the issuance of the Warrant
and the sale of Shares upon exercise of the Warrant, and to obtain any
additional information relative to the financial data and business of the
Corporation, to the extent that the Corporation possesses such information or
can acquire it without unreasonable effort or expense.
(c) The Investor understands that the Investor may have to bear the
economic risk of his, her or its investment for an indefinite period; that
neither the Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933 (the "Act") or under any state securities law and,
therefore, cannot be resold unless it is subsequently registered under the Act
or unless an exemption from such registration is available; that the Investor is
purchasing the Shares for investment for the account of the Investor and not
with any view toward resale or other distribution thereof; that the Investor
agrees not to resell or otherwise dispose of all or any part of the Shares,
except as permitted by law; that the Corporation does not have any intention of
registering the Shares under the Act or of supplying the information which may
be necessary to enable the Investor to sell the Shares; and that Rule 144 under
the Act may not be available as a basis for exemption from registration of any
Shares thereunder. The Investor further understands that the Corporation does
not now and will not, for the foreseeable future, be able to pay any dividends
on the Shares; that the policy of the Corporation will be to retain earnings, if
any, for investment in the Corporation; and that the Corporation may in the
future issue additional securities that will have the effect of diluting the
Investor's percentage ownership of the Corporation.
(d) One or more of the categories set forth below correctly and in all
respects describes the Investor, and the Investor has so indicated by signing
his, her or its name, or by directing its duly authorized representative to sign
in its name and on its behalf, on the blank line or lines following the category
or categories which so describe him or it.
(i) The Investor is a natural person whose net worth, either
individually or jointly with such person's spouse, at the time of his, her or
its purchase, exceeds $1,000,000.
________________________________________________________________________________
(ii) The Investor is a natural person who had individual income in
excess of $200,000, or joint income with that person's spouse in excess of
$300,000, in 1998 and 1999 and reasonably expects to reach the same income level
in 2000.
________________________________________________________________________________
(iii) The Investor is an organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the Shares, with total assets in excess of $5,000,000.
________________________________________________________________________________
(iv) The Investor is a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the Shares, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D.
________________________________________________________________________________
(v) The Investor is an executive officer of the Corporation.
________________________________________________________________________________
(vi) The Investor is a "qualified institutional buyer" within the
meaning of SEC rule 144A, as presently in effect.
________________________________________________________________________________
(e) The Investor has no need for liquidity in connection with
his, her or its purchase of the Shares.
(f) The acquisition of the Warrant and the purchase of the
Warrant Shares upon exercise of the Warrant by the Investor is consistent with
the general investment objectives of the Investor.
(g) The Investor first learned of the offer of Shares by the
Corporation in the State or other local jurisdiction listed in the residence
address of the Investor set forth in EXHIBIT B, and intends that the state
securities laws of that State or other local jurisdiction alone govern this
transaction.
(h) The Investor was not solicited by the Corporation's
registration statement on Form S-1 filed with the SEC on October 27, 2000, or
any amendments thereto, in connection with its acquisition of the Shares.
(i) The Investor is a large institutional "accredited
investor" as defined under Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) promulgated
under the Securities Act and it was not organized for the specific purpose of
acquiring the Shares.
(j) The Investor currently owns Common Stock, Series C
Convertible Preferred Stock and Series D Convertible Preferred Stock of the
Corporation and has a preexisting relationship with the Corporation.
3. CLOSING. The closing of the issuance of the Warrant shall take place
at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, on December 28, 2000 or on such later date
as shall be selected by the Corporation, (the "Closing").
4. CONDITIONS TO CLOSING. The Investor's obligation to complete the
acquisition of the Warrant is subject to the fulfillment, prior to or at the
closing, of each of the following conditions:
4.1 REPRESENTATION AND WARRANTIES. The Corporation shall represent
and warrant to the Investor that at the time of the closing:
(a) ORGANIZATION AND STANDING OF THE CORPORATION, ETC. The
Corporation is duly and validly organized and validly existing as a
corporation under the laws of the State of Delaware, and has all requisite
power and authority under its Certificate of Incorporation and By-Laws to
enter into and carry out the terms of this Warrant Agreement, to conduct
its business and to issue the Warrant and to sell the Warrant Shares upon
exercise of the Warrant.
(b) ISSUANCE OF THE WARRANT AND THE WARRANT SHARES. All action
required to be taken by the Corporation as a condition to the issuance of
the Warrant and sale of the Warrant Shares upon exercise of the Warrant has
been taken and the Warrant Shares upon issuance to the Investor will be
duly and validly issued, fully-paid and non-assessable shares of Common
Stock of the Corporation.
5. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES ETC. All
agreements, representations and warranties made by or on behalf of the
Corporation or the Investor in this Warrant Agreement shall survive the
execution and delivery of this Warrant Agreement, any investigation at any time
made by the Investor or on its behalf, and the sale and purchase of the Warrant
Shares and payment therefor.
6. LOCK-UP AGREEMENT. The Investor agrees that in connection with an
underwritten public offering of Common Stock, upon the request of the Company or
the principal underwriter managing such public offering, neither the Warrant nor
the Warrant Shares may be sold, offered for sale or otherwise disposed of
without the prior written consent of the Corporation or such underwriter, as the
case may be, for a period of not more than 180 days following the effective date
of the registration statement of such public offering. Notwithstanding the
foregoing, the Investor is only obligated under this Section 8 for a period no
greater than the period that all of the members of the Board of Directors of the
Corporation have agreed to be similarly bound.
6.1 RESTRICTIVE LEGEND. All certificates representing the Warrant
and any of the Warrant Shares, shall have affixed thereto a legend in
substantially the following form, in addition to any other legends that may be
required under federal or state securities laws, and may be removed after the
180 day period following the effective date of the registration statement of
such public offering:
"The Warrant and the Warrant Shares issuanble upon exercise
of the Warrant are subject to restrictions set forth in a
certain Warrant Agreement and its attached exhibits (the
"Agreement") between the Company and the registered owner of
these shares, and such Agreement is available for inspection
without charge at the office of the Secretary of the
Company."
7. EXPENSES. Each party hereto will pay its own expenses relating to
this Warrant Agreement and the issuance of the Warrant and the purchase of the
Warrant Shares upon exercise of the Warrant. Without limiting the foregoing,
each of the Investor and the Corporation (i) represents that it has not retained
any broker or agent in connection with the sale of Shares and (ii) will
indemnify and hold harmless the other against any fee, commission, or the like
payable by it in connection with the offer and sale of the Shares.
8. NOTICES. Notices given hereunder shall be deemed to have been duly
given on the date of personal delivery or on the date of postmark, if mailed by
registered or certified mail, to the party being notified at his address
specified EXHIBIT B attached hereto or such other address as he may subsequently
notify the other party in writing.
9. AMENDMENTS. This Warrant Agreement or any term hereof may not be
changed, waived, discharged or terminated except with the written consent of the
Investor and the Corporation.
10. GENERAL. This Warrant Agreement (i) shall be binding upon the
Investor and the legal representatives, successors and assigns of the Investor,
(ii) shall be governed, construed and enforced in accordance with the internal
laws of the Commonwealth of Massachusetts (except insofar as affected by the
State securities, "Blue Sky" laws or other securities laws of the jurisdiction
in which the offerings described herein have been made to the Investor as
aforesaid), and (iii) constitutes the entire agreement of the Corporation and
the Investor with respect to the sale and purchase of the Shares.
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IN WITNESS WHEREOF, the undersigned has executed this Warrant Agreement
as of the day and year first written above.
Mayo Foundation for Medical
Education and Research
/s/ Xxxxx X. Xxxxxxx
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By: Assistant Treasurer
The foregoing Warrant
Agreement is hereby accepted
by the Corporation.
EXACT SCIENCES CORPORATION
By: /s/ Xxx X. Xxxxxxxx
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Xxx X. Xxxxxxxx
President
EXHIBIT A
FORM OF WARRANT
EXHIBIT B
1. Typed or printed name and residence address of Investor:
Mayo Foundation for Medical Education and Research
c/o Xxxxx Xxxxxxx, Treasury Services
000 Xxxxx Xxxxxx, XX
Xxxxxxxxx, XX 00000
2. Preferred address for receiving communications: (Do not complete if same
as above.)
3. Number of Shares issuable upon exercise of the Warrant:
48,125
4. Aggregate exercise price for Warrant Shares (@ $10.9091 per Share):
$190,909.25
5. Social Security or Federal Tax identification Number of the Investor:
