Exhibit 10.5
EXACT LABORATORIES, INC.
Restricted Stock Purchase Agreement
AGREEMENT, dated as of this 11th day of February, 1998 by and between
Xxxxxxx X. Xxxxxxx (the "Purchaser") and Exact Laboratories, Inc. (the
"Company"), a Delaware corporation.
1. SALE. The Company hereby sells and issues to the Purchaser 35,000
shares (the "Shares") of Common Stock, $.01 par value, of the Company, for a
purchase price of $0.40 per share (the "Purchase Price"), to be paid in cash or
by check payable to the order of the Company. This sale is made pursuant and
subject to the following terms and conditions.
2. RECEIPT OF PURCHASE PRICE AND SHARES. The Company hereby
acknowledges receipt of $14,000.00, the aggregate purchase price for the Shares,
in accordance with Section 1. The Purchaser hereby acknowledges receipt of a
stock certificate representing the Shares.
3. COMPANY PURCHASE OPTION.
3.1 OPTION TO THE COMPANY TO PURCHASE THE SHARES. The
Purchaser hereby grants to the Company an irrevocable right and option (the
"Purchase Option") to purchase all or any portion of the Shares on the terms and
conditions set forth in this Agreement.
At any time within (90) ninety days after the Purchaser ceases to be an
employee of the Company or a subsidiary of the Company, subject to the
provisions of Section 3.2 in the event of a Termination Without Cause (as
defined in Section 3.2.2) or a Business Event (as defined in Section
3.2.1(iii)), the Company shall have the right to exercise the Purchase Option
and to purchase from the Purchaser (or her estate, it being understood that
Shares released from the Purchase Option under this Agreement shall pass upon
the Purchaser's death to the Purchaser's estate), for an amount per Share equal
to the Purchase Price (the "Option Price"), up to the number of Shares specified
in the following table:
IF CESSATION OF EMPLOYMENT OCCURS % OF SHARES SUBJECT TO PURCHASE OPTION
Before January 6, 1999 100%
On January 6, 1999 80%
On the 6th day of each calendar month
beginning February 6, 1999 an
additional 583.33 Shares shall be
released from the Purchase Option.
On or after January 6, 2003. None
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3.2.1 EARLY TERMINATION OF PURCHASE OPTION.
Notwithstanding the foregoing, in the event the
Purchaser continues to be employed by the Company on the earlier to occur of the
following events prior to January 6, 2003, the Purchase Option shall immediately
expire and the Company shall have no further right and option to repurchase all
or any portion of the Shares:
(i) the Termination Without Cause (as defined below) of the Purchaser;
(ii) the Purchaser suffers a substantial diminution in job
responsibility following a Business Event;
(iii) the Company moves the Purchaser's place of employment more than
60 miles from the Company's office location (immediately prior to the Business
Event) following a Business Event. For purposes of this Agreement, each of the
following shall be referred to as a "Business Event": the closing of (A) the
sale by the Company of all or substantially all of its assets, (B) the sale or
exchange in a single transaction, or a series of related transactions, of shares
of capital stock of the Company representing at least a majority of the issued
and outstanding shares of capital stock of the Company (measured on the basis of
voting power), or (C) the merger or consolidation of the Company with or into
another entity in a transaction where the shares of the Company's capital stock
outstanding immediately prior to the closing of such merger or consolidation
represent or are converted into or exchanged for shares that represent less than
a majority of the shares of capital stock of the resulting or surviving entity
outstanding immediately after the closing of such merger or consolidation.
3.2.2 For purposes of this Agreement, "Termination Without
Cause" shall mean any termination of the Purchaser's employment by the Company
without cause or for cause other than (A) the Employee's gross negligence in the
performance of her duties as an employee and officer of the Company (as
determined by a majority of the directors of the Company) or (B) criminal
misconduct by the Purchaser in connection with the performance of her duties as
an employee and officer of the Company.
3.3 EXERCISE OF OPTION. The Purchase Option shall be exercised
by written notice delivered or mailed by the Company to the Purchaser (or her
estate), accompanied by payment by check for the Option Price for the Shares
being repurchased.
3.4 DELIVERY OF REPURCHASED SHARES. The Purchaser agrees that
she (or her executors or administrators or other legal representative, as the
case may be) shall promptly deliver to the Company, at the Company's principal
office, certificates for any Shares which are repurchased by the Company
pursuant to this Section 3, and that such certificates shall be duly endorsed in
blank for transfer to the Company; provided, however, that if the Purchaser
fails to deliver such certificates to the Company on or before the fifth day
following delivery to the Purchaser by the Company of the notice and payment
required by subsection 3.3, the Shares repurchased shall be deemed to be
transferred to the Company on such date, and all rights of the Purchaser with
respect to such Shares shall thereupon cease.
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3.5 SHARES NOT REPURCHASED. In the event the Company declines
in writing to repurchase any or all of the Shares or does not exercise its
option for repurchase as provided herein, the Shares shall remain the property
of the Purchaser.
4. ADDITIONAL SHARES. If, from time to time during the term of the
Purchase Option, there is any stock dividend or liquidating dividend of cash
and/or property, stock split, subdivision, or other change in the character or
amount of any of the outstanding Common Stock of the Company, then in such event
any and all new, substituted or additional securities or other property to which
the Purchaser is entitled by reason of her ownership of the Shares shall be
immediately subject to the Purchase Option and be included in the term "Shares"
for all purposes of the Purchase Option with the same force and effect as the
Shares presently subject thereto. After each such event, the Option Price per
share upon exercise of the Purchase Option shall be appropriately adjusted and
the number of shares which are released periodically from the Purchase Option
shall be appropriately adjusted.
5. INVESTMENT REPRESENTATIONS. The Purchaser represents, warrants and
covenants that:
(i) The Purchaser is repurchasing the Shares for her
own account for investment only, and not with a view to, or
for sale in connection with, any distribution of the Shares in
violation of the Securities Act of 1933 (the "Securities
Act"), or any rule or regulation under the Securities Act.
(ii) The Purchaser is aware of the Company's business
affairs and financial condition, and has had such opportunity
as she has deemed adequate to obtain from representatives of
the Company such information as is necessary to permit the
Purchaser to evaluate the merits and risks of her investment
in the Company.
(iii) The Purchaser can afford a complete loss of the
value of the Shares and is able to bear the economic risk of
holding the Shares for an indefinite period.
(iv) The Purchaser has sufficient experience in
business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and
to make an informed investment decision with respect to such
purchase.
(v) The Purchaser understands that: (A) the Shares
will not be registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 and/or
Rule 701 under the Securities Act; (B) the Shares cannot be
sold, transferred or otherwise disposed of unless they are
subsequently registered under
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the Securities Act or an exemption from registration is then
available; (C) in any event, the exemption from registration
under Rule 144 or otherwise will not be available for at least
two years and even then may not be available unless a public
market then exists for the Common Stock, adequate information
concerning the Company is available to the public, and other
terms and conditions of Rule 144 are complied with, and (D)
there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock
of the Company and the Company has no obligation or current
intention to register the Shares under the Securities Act.
6. LEGENDS.
6.1 RESTRICTED STOCK AGREEMENT LEGEND. All certificates
representing shares which are subject to the Purchase Option shall have affixed
thereto a legend substantially in the following form:
"The securities represented by this certificate are subject to
certain restrictions on transfer and to certain rights of the
Company to purchase such securities as set forth in a
Restricted Stock Purchase Agreement between the corporation
and the registered holder (or his/her predecessor in
interest), a copy of which is available for inspection without
charge at the principal office of the corporation."
7. RESTRICTIONS ON TRANSFER. Except as otherwise provided in this
Section 7, the Purchaser shall not sell, assign, transfer, pledge, hypothecate
or otherwise dispose of, by operation of law or otherwise (collectively
"transfer") any of the Shares, or any interest therein, unless and until such
Shares are no longer subject to the Company's Purchase Option. Notwithstanding
the foregoing the Purchaser may transfer Shares by gift, provided that such
Shares shall remain subject to this Agreement (including without limitation the
Purchase Option and the restrictions on transfer set forth herein), and such
permitted transferee shall, as a condition to such transfer, deliver to the
company a written instrument confirming that such transferee shall be bounded by
all of the terms and conditions of this Agreement.
8. EFFECT OF PROHIBITED TRANSFER. The Company shall not be required (a)
to transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (b) to treat as owner of such Shares or to pay dividends to any transferee to
whom any such Shares shall have been so transferred.
9. RIGHT OF STOCKHOLDER. Subject to the provision of Sections 7 and 8
above, the Purchaser shall, during the term of this Agreement, exercise all
rights and privileges of a stockholder of the Company with respect to the
Shares.
10. LOCK-UP AGREEMENT. The Purchaser agrees that in connection with any
underwritten public offering of Common Stock, commencing upon notice from the
Company or the principal underwriter managing such public offering, the Shares
may not be sold, offered for sale or otherwise disposed of without the prior
written consent of the Company or such
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underwriter, as the case may be, for at least 270 days after the effectiveness
of the Registration Statement filed in connection with such offering or such
longer period of time as the Board of Directors may determine if all of the
Company's directors and officers agree to be similarly bound. The obligation
contained in this paragraph 10 shall survive the termination of this Agreement
and shall remain in full force and effect for such time as the Board of
Directors, in their discretion, may determine.
11. REFUSAL RIGHTS.
11.1 EXERCISE OF RIGHT. If the Purchaser desires to sell all
or any part of the shares acquired under this Agreement (including any
securities received in respect thereof pursuant to recapitalizations and the
like), and an offeror (the "Offeror") has made an offer therefor, which offer
the Purchaser desires to accept, the Purchaser shall: (i) obtain in writing an
irrevocable and unconditional bona fide offer (the "Bona Fide Offer") for the
purchase thereof from the Offeror; and (ii) give written notice (the "Option
Notice") to the Company setting forth his/her desire to sell such shares, which
Option Notice shall be accompanied by a photocopy of the original executed Bona
Fide Offer and shall set forth at least the name and address of the Offeror and
the price and terms of the Bona Fide Offer. Upon receipt of the Option Notice,
the Company shall have an option to purchase any or all of such shares specified
in the Option Notice, such option to be exercisable by giving, within 30 days
after receipt of the Option Notice, a written counter-notice to the Purchaser.
If the Company elects to purchase any or all of such shares, it shall be
obligated to purchase, and the Purchaser shall be obligated to sell to the
Company, such shares at the price and terms indicated in the Bona Fide Offer
within 60 days from the date of receipt by the Company of the Option Notice.
11.2 SALE OF OPTION SHARES TO OFFEROR. The Purchaser may sell,
pursuant to the terms of the Bona Fide Offer, any or all of such shares not
purchased or agreed to be purchased by the Company for 60 days after the
expiration of the 30-day period during which the Company may give the aforesaid
counter-notice; PROVIDED, HOWEVER, that the Purchaser shall not sell such shares
to the Offeror if the Offeror is a competitor of the Company and the Company
gives written notice to the Purchaser, within 30 days of its receipt of the
Option Notice, stating that the Purchaser shall not sell his shares to the
Offeror; and provided, further, that prior to the sale of such shares to the
Offeror, the Offeror shall execute an agreement with the Company pursuant to
which the Offeror agrees not to become a competitor of the Company and further
agrees to be subject to the restriction set forth in this Section 11. If any or
all of such shares are not sold pursuant to a Bona Fide Offer within the time
permitted above, the unsold shares shall remain subject to the terms of this
Section 11.
11.3 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE: If there
shall be any change in the Common Stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, split-up,
combination or exchange of shares, or the like, the restrictions contained in
this Section 11 shall apply with equal force to additional and/or substitute
securities, if any, received by the Purchaser in exchange for, or by virtue of
his or her ownership of, Shares.
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11.4 FAILURE TO DELIVER OPTION SHARES: In the event the
Purchaser fails or refuses to deliver on a timely basis duly endorsed
certificates representing Option Shares to be sold to the Company pursuant to
this Section 11, the Company shall have the right to deposit the purchase price
for the Option Shares in a special account with any bank or trust company in the
Commonwealth of Massachusetts, giving notice of such deposit to the Purchaser,
whereupon such Option Shares shall be deemed to have been purchased by the
Company. All such monies shall be held by the bank or trust company for the
benefit of the Purchaser. All monies deposited with the bank or trust company
but remaining unclaimed for two (2) years after the date of deposit shall be
repaid by the bank or trust company to the Company on demand, and the Purchaser
shall thereafter look only to the Company for payment. The Company may place a
legend on any stock certificate delivered to the Purchaser reflecting the
restrictions on transfer provided in this Section 11.
11.5 EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL: The
refusal rights of the Company set forth above shall remain in effect until such
time, if ever, as a distribution to the public is made of shares of the
Company's Common Stock for an aggregate public offering price of at least $5
million or more pursuant to a registration statement filed under the Securities
Act of 1933, as amended, or a successor statute, at which time the refusal
rights set forth herein will automatically expire.
12. FURTHER INSTRUMENTS AND ACTIONS. The parties 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.
13. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit with the United States Post Office, by registered or certified mail,
addressed to each other party hereto at his/her address hereinafter shown below
her signature or at such other address as such party may designate by ten (10)
days advance written notice to all other parties hereto.
14. EMPLOYMENT STATUS. Nothing contained in this Agreement shall be
construed as giving the Purchaser any right to continue employment with the
Company.
15. WITHHOLDING TAXES. The Purchaser acknowledges and agrees that any
tax consequences of the purchase, exercise and sale of Shares will be borne by
Purchaser and not by the Company and that the Company has the right to deduct
from payments of any kind otherwise due to the Purchaser any federal, state or
local taxes of any kind required by law to be withheld with respect to the
Shares.
16. MISCELLANEOUS
16.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
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16.2 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware as such laws are applied to
contracts entered into and performed in such state.
16.3 SUCCESSOR AND ASSIGNS. Except as otherwise expressly
provided in this Agreement, the provisions hereto shall inure to the benefit of,
and be binding upon, the successors and assigns of the parties hereto.
16.4 AMENDMENTS. The terms and provisions of this Agreement
may not be modified or amended except in a writing executed by the parties
hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EXACT LABORATORIES, INC. PURCHASER
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
President
Address: 00 Xxxxx Xxxx Address: 00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000 Xxxxxx, XX 00000
