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EXHIBIT 10.24
MYCO PHARMACEUTICALS INC.
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
February 19, 1992
Xx. Xxxxx X. Xxxxxxxxx
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Re: Stock Purchase and Repurchase Agreement
Dear Xx. Xxxxx X. Xxxxxxxxx:
We are pleased that you have decided to become a founder of Myco
Pharmaceuticals Inc., a Delaware corporation (the "Company") and desire to
purchase shares of the Company's Common Stock, $.001 par value ("Shares"). The
terms on which the Company is willing to issue Shares to you, and our agreements
regarding such Shares are as follows:
1. Purchase of Shares. For the aggregate sum of Eight Hundred and Sixty
Dollars ($860.00) ($0.001 per Share), which the Company acknowledges receiving,
the Company hereby sells and issues to you, and you hereby purchase from the
Company Eight Hundred and Sixty Thousand (860,000) Shares. Upon execution of
this Agreement the Company will deliver to you a certificate registered in your
name representing the Shares.
2. Your Representations and Warranties. To induce the Company to issue
the Shares to you, you hereby represent, warrant and agree as follows:
2.1 Experience, Financial Capability and Suitability. You are
sufficiently experienced in financial and business matters to be capable of
evaluating the risk of this investment and to make an informed decision relating
thereto. You have the financial capability for making the investment, can afford
a complete loss of the investment, and the investment is a suitable one for you.
2.2 Access To Information. Prior to the execution of this
Agreement you have had the opportunity to ask questions of and receive answers
from representatives of the Company concerning the finances, operations,
business and prospects of the Company.
2.3 Investment Intent. You are acquiring the Shares for your
own account for the purpose of investment and not with a view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or
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selling the Shares. The Shares are not being registered under the Securities Act
of 1933, as amended (the "Securities Act") and are not being registered under
any state "blue sky" laws, and the Shares may not be transferred except in
compliance with such laws.
3. The Company's Right To Repurchase Your Shares.
Lapsing Repurchase Right. In the event your employment with
the Company is terminated prior to four years from the date hereof, (a) either
voluntarily by you (except because of a material breach of the Company's
obligations under the employment agreement between you and the Company of even
date) or (b) by the Company for "cause" as defined in the employment agreement
of even date between you and the Company, for a period of ninety (90) days
following such termination, the Company shall have the option to purchase from
you and you shall be obligated to sell to the Company, at a price of $.001 per
Share, all or any part of the number of Shares set forth below:
Period Number of Shares
------ ----------------
Prior to February 19, 1993 860,000
February 19, 1993 - February 18, 1994 645,000
February 19, 1994 - February 18, 1995 430,000
February 19, 1995 - February 18, 1996 215,000
After February 18, 1996 0
In the event your employment with the Company is terminated prior to four
years from the date hereof by you because of a material breach of the Company's
obligations under the employment agreement between you and the Company of even
date, the Repurchase Option (as defined below in this Section 3) shall lapse as
of the date of such termination, and the Company's rights under this Section 3
shall thereupon terminate.
In the event of your death or in the event of the termination of your
employment either by the Company without cause or by reason of your disability
prior to the dates set forth below, the Company shall have the option to
purchase from you, and you shall be obligated to sell to the Company, at a price
of $.001 per Share, all or any part of the number of Shares set forth below:
Period Number of Shares
------ ----------------
Prior to February 19, 1993 430,000
February 19, 1993 - February 18, 1994 322,500
February 19, 1994 - February 18, 1995 215,000
February 19, 1995 - February 18, 1996 107,500
After February 18, 1996 0
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(The rights of the Company pursuant to this Section 3 being referred to as
the "Repurchase Option").
4. Restrictions on Transfer.
4.1 General Restriction. You hereby agree not to sell, transfer,
assign, hypothecate or otherwise dispose of any of the Shares subject to the
Repurchase Option, whether voluntarily or by operation of law (other than to the
Company), prior to the termination of the Repurchase Option, except that you may
transfer all or any part of the Shares not then subject to the Repurchase Option
to your spouse, children or other member of your immediate family, or to a trust
for the benefit of such persons, if the transferee first delivers his or her
written agreement to be bound by the terms of this Agreement. After such date,
subject to compliance with Section 4.2, you may only sell, transfer, assign,
hypothecate or otherwise dispose of any of the Shares which are not then subject
to the Repurchase Option, voluntarily or by operation of law (other than to the
Company), and then only following compliance with the terms of a Voting and
Co-Sale Agreement which the Company may enter into with certain potential
stockholders to which agreement you agree to become a party if and when the
Company enters into such an agreement. The Company shall not be required to
transfer any Shares on its books which shall have been sold, assigned or
otherwise transferred in violation of this Agreement, or to treat as the owner
of such Shares, or to accord the right to vote as such owner or to pay dividends
to, any person or organization to which any such Shares shall have been so sold,
assigned or otherwise transferred in violation of this Agreement.
4.2. Securities Law Restrictions. You agree with the Company that the
Shares shall not be pledged, hypothecated, sold or transferred, unless prior to
the proposed pledge, hypothecation, sale or transfer of all or part of such
Shares (a) a Registration Statement on the appropriate form under the Securities
Act and applicable state securities laws with respect to the Shares proposed to
be transferred shall then be effective; or (b) the Company shall have received
an opinion of counsel in form and substance satisfactory to it that such
registration is not required because such transaction complies with rules
promulgated by the Securities and Exchange Commission under the Securities Act
and with applicable state securities laws.
You understand that the Shares are "restricted securities" as that term
is defined in Rule 144 under the Securities Act and that the Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available; and that in the case of sales
in which Rule 144 is not available, compliance with Regulation A under the
Securities Act or some other exemption
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under the Securities Act will be required. You further understand that there is
not now available and there may not be available at the time you wish to sell
your Shares the adequate current public information with respect to the Company
which would permit offers or sales of the Shares under Rule 144. The Company is
under no obligation to register the Shares under the Securities Act or any state
securities law, nor to make Rule 144 available.
4.3 Legending of Shares: All certificates representing the Shares to be
issued to you pursuant to this Agreement shall have endorsed thereon legends
substantially as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act") or any state securities law and may not be sold,
pledged, hypothecated or transferred in the absence of an
effective Registration Statement covering these securities
under the Act and any applicable state securities laws or an
opinion of counsel in form and substance satisfactory to the
Company that registration is not required under the Act or
under applicable state securities laws."
"The shares represented by this certificate are subject
to a Stock Purchase and Repurchase Agreement dated
, 1992 with this Company, a copy of which Stock Purchase
and Repurchase Agreement is available for inspection at the
offices of the Company or may be made available upon request."
5. Procedures For Exercising Rights To Purchase. In the event the
Company shall be entitled to and shall elect to exercise the Repurchase Option,
it shall give you (or your heirs or Representative) a written notice specifying
the number of Shares which the Company elects to purchase and specifying a date
for closing hereunder, which date shall be not more than thirty (30) calendar
days after the giving of such notice. The closing shall take place at the
Company's principal offices or such other location in the greater Boston,
Massachusetts area as the Company may reasonably designate in such notice. At
the closing, you shall deliver the Shares being purchased against the
simultaneous delivery of the purchase price by the Company.
In the event that you fail to deliver the Shares as required by this
Agreement, the Company may elect (a) to establish a segregated account to
receive the payments, such account to be turned over to you upon delivery of the
certificates representing such Shares, and (b) immediately to take such action
as is appropriate to transfer record title of such Shares from you to the
Company and to treat you and such Shares in all respects as
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if delivery of the certificates representing such Shares had been made as
required by this Agreement. You hereby irrevocably grant the Company a power of
attorney for the purpose of effectuating the foregoing.
6. Adjustment Provisions. If the Company shall pay a stock dividend or
declare a stock split on or with respect to any of its Common Stock, or
otherwise distribute securities of the Company to the holders of its Common
Stock, the number of shares of stock or other securities of the Company issued
with respect to the Shares then subject to the Repurchase Option shall be added
to the Shares then subject to the Repurchase Option without any change in the
aggregate purchase price. If the Company shall distribute to its stockholders
shares of stock of another corporation, the shares of stock of such other
corporation distributed with respect to the Shares then subject to the
Repurchase Option shall be added to the Shares covered by the Repurchase Option
without any change in the aggregate purchase price.
If the outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
Common Stock of the Company, or if the Company shall be a party to any capital
reorganization, there shall be substituted for the Shares then covered by the
Repurchase Option such amount and kind of securities as are issued in such
subdivision, combination, reclassification, or capital reorganization in respect
of the Shares subject to the Repurchase Option immediately prior thereto,
without any change in the aggregate purchase price.
7. Tax Matters. You acknowledge and agree that the Company has the
right to deduct from payments of any kind otherwise due to you any federal,
state or local taxes of any kind required by law to be withheld with respect to
the purchase of the Shares. If you elect, in accordance with Section 83(b) of
the Internal Revenue Code of 1986, as amended (the "Code"), to recognize
ordinary income in the year of acquisition of the Shares, the Company will
require from you at the time of such election an additional payment for
withholding tax purposes based on the difference, if any, between the purchase
price for such Shares and the fair market value of such Shares as of the day
immediately preceding the date of the purchase of such Shares.
Upon execution of this Agreement you will file an election under
Section 83 of the Internal Revenue Code of 1986, as amended, in substantially
the form attached. You acknowledge that if you do not file such an election, as
the Shares are released from the Repurchase Option in accordance with Section 3,
you will have income for tax purposes equal to the fair market
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value of the Shares at such date, less the price you paid for the Shares.
8. Termination. If the Company shall be completely liquidated or shall
be a party to a merger or consolidation in which the Company is not the
surviving corporation or in which the Company is the surviving corporation but
becomes a wholly-owned subsidiary of another corporation, then the Repurchase
Option shall cease and terminate as at the date of such liquidation, merger or
consolidation, and you shall hold the Shares free of this Agreement. In
addition, the Repurchase Option shall terminate one hundred and eighty (180)
days following the consummation of the public offering of any of the Company's
securities pursuant to a registration statement filed with the Securities and
Exchange Commission pursuant to the Securities Act, in which offering the
aggregate gross proceeds to the Company exceed $9,000,000 and in which the price
per share of such securities exceeds $4.50 (such price subject to equitable
adjustment in the event of any stock split, stock dividend, combination,
reorganization, reclassification or similar event).
9. Registration Rights.
9.01. "Piggy Back" Registration. If at any time the Company shall
determine to register under the Securities Act, any of its Common Stock, other
than on Form S-8 or S-4 or its then equivalent, it shall send to you written
notice of such determination and, if within ten (10) days after receipt of such
notice, you shall so request in writing, the Company shall use its best efforts
to include in such registration statement all or any part of your Shares except
that if, in connection with any offering involving an underwriting of Common
Stock to be issued by the Company, the managing underwriter shall impose a
limitation on the number of shares of such Common Stock which may be included in
any such registration statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution, and such limitation is
imposed pro rata among the holders of such Common Stock having an incidental
("piggy back") right to include such Common Stock in the registration statement
according to the amount of such Common Stock which each holder had requested to
be included pursuant to such right, then the Company shall be obligated to
include in such registration statement only such limited portion of your Shares
with respect to which you have requested inclusion hereunder and provided
further that, if in connection with any such offering, the holders of Series A
Preferred Stock are unable to register all of their registrable shares, you
shall not be entitled to register any of your Shares in such offering. In the
case of each registration under this Section 9.01, the Company shall bear all
reasonable costs and expenses of each such
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registration of your Shares; provided, however, that the Company shall have no
obligation to pay any portion of the underwriters' commissions or discounts
attributable to the offer or sale your Shares pursuant to this Section 9.01.
9.02. Indemnification of Holder. In the event that the Company
registers any of your Shares under the Securities Act pursuant to section 9.01,
the Company will indemnify and hold you harmless from and against any and all
losses, claims, damages, expenses or liabilities, to which you become subject
under the Securities Act or under any other statute or at common law or
otherwise, and, except as hereinafter provided, will reimburse you for any legal
or other expenses reasonably incurred by you in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the prospectus (or the registration statement or
prospectus as from time to time amended or supplemented by the Company) or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or any violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection with such
registration, unless such untrue statement or omission was made in such
registration statement, preliminary or amended, preliminary prospectus or
prospectus in reliance upon and in conformity with information furnished in
writing to the Company in connection therewith by you in your capacity as a
selling shareholder and not otherwise expressly for use therein in such
capacity. Promptly after receipt by you of notice of the commencement of any
action in respect of which indemnity may be sought against the Company, you will
notify the Company in writing of the commencement thereof, and, subject to the
provisions hereinafter stated, the Company shall assume the defense of such
action (including the employment of counsel, who shall be counsel reasonably
satisfactory to you), and the payment of expenses insofar as such action shall
relate to any alleged liability in respect of which indemnity may be sought
against the Company. You shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall not be at the expense of the Company unless the employment
of such counsel has been specifically authorized by the Company. The Company
shall not be liable to indemnify you for any settlement of any such action
effected without the Company's consent which shall not be unreasonably withheld
or delayed.
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9.03. Indemnification of Company. In the event that the Company
registers any of your Shares under the Securities Act, you will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each underwriter of the shares so registered
(including any broker or dealer through whom such of the shares may be sold) and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling person for
any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any actions whether or not resulting
in any liability, insofar as such losses, claims, damages, expenses, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement, in any
preliminary or amended preliminary prospectus or in the prospectus (or in the
registration statement or prospectus as from time to time amended or
supplemented) or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, but only insofar as any
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company in connection therewith by you
in your capacity as a selling stockholder and not otherwise, expressly for use
therein provided in such capacity, provided however, that your maximum liability
hereunder shall be equal to the amount received by you from the sale of your
Shares pursuant to the registration statement. Promptly after receipt of notice
of the commencement of any action in respect of which indemnity may be sought
against you, the Company will notify you in writing of the commencement thereof,
and you shall, subject to the provisions hereinafter stated, assume the defense
of such action (including the employment of counsel, who shall be counsel
reasonably satisfactory to the Company) and the payment of expenses insofar as
such action shall relate to the alleged liability in respect of which indemnity
may be sought against you. The Company and each such director, officer,
underwriter or controlling person shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but the
fees and expenses of such counsel shall not be at your expense unless employment
of such counsel has been specifically authorized by you. You shall not be liable
to indemnify any person for any settlement of any such action effected without
your consent.
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In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which you or the Company may
be entitled to indemnification under this Section 9, but it is judicially
determined (by the entry of a final judgement or decree by a court of competent
jurisdiction from there is no further right of appeal) that such indemnification
may not be enforced notwithstanding the provisions of this Section 9, in such
case, then you and the Company will contribute to the aggregate losses, claims,
damages or liabilities to which you and it may be subject (after contribution
from others) in such proportion as is appropriate to reflect the relative fault
of you and the Company in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations, provided, however, that in no case shall you
be required to contribute any amount in excess of the amount received by you
from your sale of Shares pursuant to such registration statement, and further
provided that no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. Other Agreements.
10.1 Further Assurances. You agree to execute such further instruments
and to take such further action as may reasonably be necessary to carry out the
intent of this Agreement.
10.2 No Obligation as to Employment. The Company is not by reason of
this Agreement obligated to employ or to continue to employ you in any capacity.
10.3 Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth above or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered mail, return receipt requested, postage prepaid. All notices,
requests, consents and other communications hereunder shall be deemed to have
been given either (i) if by hand, at the time of the delivery thereof to the
receiving party at the address of such party set forth above, (ii) if made by
telex, telecopy or facsimile transmission, at the time that receipt thereof has
been acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such notice is
delivered to the courier service, or (iv) if sent by registered mail, on the 5th
business day following the day such mailing is made.
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10.4 Entire Agreement. This Agreement embodies the entire agreement and
understanding between you and the Company with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
10.5 Modifications and Amendments. The terms and provisions of this
Agreement may be modified or amended only by written agreement executed by all
parties hereto.
10.6 Waivers and Consents. The terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
10.7 Assignment. The rights and obligations under this Agreement may
not be assigned by either party hereto without the prior written consent of the
other party, provided, however, that the Company may assign its rights to
purchase any or all of the Shares pursuant to the Repurchase Option to any
person designated by the Board of Directors of the Company.
10.8 Benefit. All statements, representations, warranties, covenants
and agreements in this Agreement shall be binding on the parties hereto and
shall inure to the benefit of the respective successors and permitted assigns of
each party hereto. Nothing in this Agreement shall be construed to create any
rights or obligations except among the parties hereto, and no person or entity
shall be regarded as a third-party beneficiary of this Agreement.
10.9 Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed by the
law of The Commonwealth of Massachusetts, without giving effect to the conflict
of law principles thereof.
10.10 Severability. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unreasonable or unenforceable in any
respect, then such provision shall be deemed limited to the extent that such
court deems it
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reasonable and enforceable, and as so limited shall remain in full force and
effect. In the event that such court shall deem any such provision, or portion
thereof, wholly unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
10.11 Headings and Captions. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
10.12 No Waiver of Rights, Powers and Remedies. No failure or delay by
a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing between the parties hereto, shall operate as a waiver
of any such right, power or remedy of the party. No single or partial exercise
of any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
10.13 Survival of Representations and Warranties. All representations
and warranties made by the parties hereto in this Agreement or in any other
agreement, certificate or instrument provided for or contemplated hereby, shall
survive the execution and delivery hereof and any investigations made by or on
behalf of the parties.
10.14 No Broker or Finder. Each of the parties hereto represents and
warrants to the other that no broker, finder or other financial consultant has
acted on its behalf in connection with this Agreement or the transactions
contemplated hereby in such a way as to create any liability on the other. Each
of the parties hereto agrees to indemnify and save the other harmless from any
claim or demand for commission or other compensation by any broker, finder,
financial consultant or similar agent claiming to have been employed by or on
behalf of such party and to bear the cost of legal expenses incurred in
defending against any such claim.
10.15 Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing accurately sets forth your understanding and
agreement, please sign the enclosed copy of this agreement and return it to us.
Very truly yours
MYCO PHARMACEUTICALS INC.
By:_________________________
Xxxx Xxxxxxxx,
Chairman
Accepted and agreed this
____ day of __________, 1992
_________________________
Xx. Xxxxx X. Xxxxxxxxx
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Election to Include Gross Income in Year
of Transfer Pursuant to Section 83(b)
of the Internal Revenue Code
The undersigned hereby elects pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below and supplies the
following information in accordance with the regulations promulgated thereunder:
1. The name, address and social security number of the undersigned are:
Name: ___________________________________________
Address: ___________________________________________
Social Security No.: ___________________________________________
2. Description of property with respect to which the election is being
made:
___________________________________ (_________) shares (the "Shares")
of Common Stock, $.001 par value per share, of Myco Pharmaceuticals
Inc. a Delaware corporation, (the "Company").
3. Date of transfer of shares: February 19, 1992
4. Taxable year of transfer: 1992
5. Nature of restrictions to which property is subject:
If the service of taxpayer as an employee or consultant of the Company
terminates for any reason during the periods set forth below, the Company may
repurchase all or any portion of the Shares set forth below at the acquisition
price paid by the taxpayer:
Period Number of Shares
------ ----------------
Prior to February 19, 1993 860,000
February 19, 1993 - February 18, 1994 645,000
February 19, 1994 - February 18, 1995 430,000
February 19, 1995 - February 18, 1996 215,000
After February 18, 1996 0
6. The fair market value at time of transfer (determined without regard to
any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is
being made is $.001 per Share.
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7. The amount paid by taxpayer for said property is $.001 per share.
8. A copy of this statement has been furnished to the Company.
Dated:__________________________________ ___________________________________
Signature of Taxpayer
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