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EXHIBIT 10.5
AURORA BIOSCIENCES CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of _____________ in San Diego, California,
between AURORA BIOSCIENCES CORPORATION, a Delaware corporation (the "Company"),
and __________________________ (the "Purchaser").
WHEREAS, the Purchaser is an employee, director or consultant of the
Company and the Purchaser's continued service to the Company is considered by
the Company to be important for the Company's continued growth; and
WHEREAS, in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Company is willing to sell to the Purchaser
and the Purchaser desires to purchase shares of Common Stock according to the
terms and conditions contained in the Company's 1996 Stock Plan and herein; and
WHEREAS, the issuance of Common Stock hereunder is in connection with
and in furtherance of the Company's compensatory benefit plan for participation
of the Company's employees, directors, officers, consultants and advisors and
is intended to comply with the provisions of Rule 701 promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act").
NOW, THEREFORE, the parties agree as follows:
1. SALE OF STOCK. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase an aggregate of ______
shares of the Company's Common Stock (the "Shares"), at the price of _____ per
share for an aggregate purchase price of _________.
2. PAYMENT OF PURCHASE PRICE. The purchase price for the Shares
shall be paid by delivery to the Company at the time of execution of this
Agreement of cash or check in the amount of the aggregate purchase price, and
the Company shall immediately issue and deliver to Purchaser a share
certificate in accordance with the terms of this Agreement.
3. REPURCHASE OPTION. In the event of any termination of the
Purchaser's employment by or services to the Company for any or no reason
(including death or disability) before all of the Shares are released from the
Company's repurchase option
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(see Section 4), the Company shall, upon the date of such termination (as
reasonably fixed and determined by the Company) have an irrevocable, exclusive
option for a period of 90 days (or such longer period of time either mutually
agreed to by Purchaser and the Company or determined by the Company in good
faith to be necessary to avoid the loss of "qualified small business stock"
treatment under section 1202 of the Internal Revenue Code for any stockholder
other than the Purchaser) from such date to repurchase some or all of the
Unreleased Shares (as defined in Section 4) at such time at the original
purchase price per share (the "Repurchase Price"). Said option shall be
exercised by the Company by written notice to the Purchaser or the Purchaser's
executor (with a copy to the Escrow Holder, as defined in Section 6) and, at
the Company's option, (i) by delivery to the Purchaser or the Purchaser's
executor with such notice of a check in the amount of the purchase price for
the Shares being repurchased, or (ii) by cancellation by the Company of an
amount of any Purchaser's indebtedness to the Company equal to the purchase
price for the Shares being repurchased, or (iii) by a combination of (i) and
(ii) so that the combined payment and cancellation of indebtedness equals such
repurchase price. Upon delivery of such notice and the payment of the purchase
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.
4. RELEASE OF SHARES FROM REPURCHASE OPTION.
(a) The number of Shares to be released from the
Company's repurchase option, and the timing thereof, is set forth in a schedule
attached hereto as Exhibit A, provided that, as to each incremental period
resulting in the release of Shares from such repurchase option, that the
Purchaser's employment or services have not been terminated prior to the date
of any such release.
(b) Any of the Shares which have not yet been released
from the Company's repurchase option are referred to herein as "Unreleased
Shares".
(c) The Shares which (i) have been released from the
Company's repurchase option, (ii) have been paid for in full, and (iii) no
longer secure Shares not yet paid for in full, shall be delivered to the
Purchaser at the Purchaser's request (see Section 6).
5. RESTRICTIONS ON TRANSFER.
(a) Except for the escrow described in Xxxxxxx 0, xxxx of
the Shares or any beneficial interest therein shall be transferred, encumbered
or otherwise disposed of
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in any manner until the release of such Shares from the Company's repurchase
option in accordance with the provisions of this Agreement.
(b) The Shares may not be sold, offered for sale, pledged,
hypothecated or otherwise transferred in the absence of an effective
registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to such Shares or an opinion of counsel
reasonably acceptable to the Company that such registration is not required. The
Company shall not be required to transfer on its books any portion of such
Shares purchased hereunder which shall have been sold or transferred in
violation of any of the provisions set forth in 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 transferee to whom such shares shall have been so transferred.
(c) The Purchaser hereby agrees that if so requested by
the Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the Company under Section 7 of
the Securities Act, the Purchaser shall not sell, transfer or otherwise dispose
of any Shares or other securities of the Company during a period of up to 180
days (as specified by such representative) following the effective date of a
registration statement of the Company filed under the Securities Act; provided,
however, that such restriction shall only apply to the first two registration
statements of the Company to become effective under the Securities Act which
include securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such 180-day period.
(d) The Shares are subject to a Right of First Refusal as
set forth in Article XIV of the Company's Bylaws.
6. ESCROW OF SHARES. The Shares issued under this Agreement
shall be held by an escrow holder designated by the Company (the "Escrow
Holder"), along with a stock assignment executed by the Purchaser in blank in
the form attached hereto as Exhibit B, pursuant to the terms of the Joint
Escrow Instructions attached hereto as Exhibit C.
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. TAX CONSEQUENCES. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such
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advisors and not on any statements or representations of the Company or any of
its agents. The Purchaser understands that the Purchaser (and not the Company)
shall be responsible for the Purchaser's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
The Purchaser understands that Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"), taxes as ordinary income both (i) the difference
between the fair market value of the Shares when the Company granted the
Purchaser the right to purchase the Shares and the fair market value of the
Shares on the date of this Agreement, and (ii) the difference between the
amount paid for the Shares and the fair market value of the Shares as of the
date any restrictions on the Shares lapse. In this context, "restriction"
includes the right of the Company to buy back the Shares pursuant to its
repurchase option. In the event the Company has registered under the Exchange
Act, "restriction" with respect to officers, directors and 10% shareholders
also means the period after the purchase of the Shares during which such
officers, directors and 10% shareholders could be subject to suit under Section
16(b) of the Exchange Act. The Purchaser understands that the Purchaser may
elect to be taxed at the time the Shares are purchased rather than when and as
the Company's repurchase option or 16(b) period expires by filing an election
under Section 83(b) of the Code with the I.R.S. within 30 days from the date of
purchase. A form of election under Section 83(b) is attached as Exhibit D
hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND
NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE
PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.
9. GENERAL PROVISIONS.
(a) 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 Purchaser under this Agreement may only be assigned with the
prior written consent of the Company.
(b) Any notice, demand or request required or permitted
to be given by either the Company or the Purchaser 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) 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 thereafter from
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.
(d) The Purchaser agrees upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
(e) Purchaser acknowledges that it is aware that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act") and that the Shares are deemed to constitute "restricted
securities" under Rule 144 and Rule 701 promulgated under the Act. In this
connection, Purchaser warrants and represents to the Company that Purchaser is
purchasing the Shares for Purchaser's own account and Purchaser has no present
intention of distributing or selling said Shares except as permitted under the
Act and Section 25102(f) of the California Corporations Code. Purchaser
further warrants and represents that Purchaser has either (i) preexisting
personal or business relationships with the Company or any of its officers,
directors or controlling persons, or (ii) the capacity to protect its own
interests in connection with the purchase of the Shares by virtue of the
business or financial expertise of Purchaser or of any professional advisors to
Purchaser who are unaffiliated with and who are not compensated by the Company
or any of its affiliates, directly or indirectly. Purchaser further
acknowledges that the exemption from registration under Rule 144 will not be
available for at least three years from the date of sale of the Shares unless
at least two years from the date of sale (i) a public trading market then
exists for the Common Stock of the Company, (ii) adequate information
concerning the Company is then available to the public, and (iii) other terms
and conditions of Rule 144 are complied with; and that any sale of the Shares
may be made only in limited amounts in accordance with such terms and
conditions.
(f) All certificates representing any shares of Common
Stock of the Company subject to the provisions of this Agreement shall have
endorsed thereon legends in substantially the following form:
(i) The securities represented by this
certificate have not been registered under the Act. They may not be sold or
offered for sale or otherwise distributed unless the securities are registered
under the Act or an exemption therefrom is available.
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(ii) Any other legend required to be placed
thereon by the Company's Bylaws or applicable state, federal or foreign
securities laws.
(g) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN
EMPLOYEE, DIRECTOR OR CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER). 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 AN EMPLOYEE OR CONSULTANT
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 EMPLOYMENT AT
ANY TIME, WITH OR WITHOUT CAUSE.
(h) Purchaser has reviewed this Agreement in its
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this
Agreement.
(i) PURCHASER ACKNOWLEDGES THAT THIS AGREEMENT SETS FORTH
THE ENTIRE UNDERSTANDING BETWEEN THE COMPANY AND PURCHASER REGARDING SHARES OF
THE COMPANY'S SECURITIES, AND THIS AGREEMENT SUPERSEDES ALL PRIOR AGREEMENTS
AND/OR UNDERSTANDINGS REGARDING THE SAME.
IN WITNESS WHEREO, the parties have duly executed this Agreement as of
the day and year first set forth above.
AURORA BIOSCIENCES CORPORATION PURCHASER:
By: __________________________ __________________________
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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 Aurora Biosciences Corporation,
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 of the State of California 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:
_______________________________
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EXHIBIT A
REPURCHASE OPTION -- RELEASE SCHEDULE
The number of Shares subject to the Company's repurchase option shall be
released in accordance with the following schedule:
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EXHIBIT B
AURORA BIOSCIENCES CORPORATION
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, hereby sells, assigns and
transfers unto AURORA BIOSCIENCES CORPORATION, a Delaware Corporation (the
"Company"), pursuant to the Repurchase Option under that certain Restricted
Stock Purchase Agreement dated by and between the undersigned and
the Company (the "Agreement"), shares of Common Stock of Aurora
Biosciences Corporation, a Delaware corporation (the "Company") standing in the
undersigned's name on the books of the Company represented by Certificate No.
and does hereby irrevocably constitute and appoint the Secretary of the
Company attorney to transfer said stock on the books of the Company with full
power of substitution in the premises. This Assignment may be used only in
accordance with and subject to the terms and conditions of the Agreement, in
connection with the repurchase of shares of Common Stock issued to the
undersigned pursuant to the Agreement, and only to the extent that such shares
remain subject to the Company's Repurchase Option under the Agreement.
Dated: ________________________
________________________________
(Signature)
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EXHIBIT C
AURORA BIOSCIENCES CORPORATION
JOINT ESCROW INSTRUCTIONS
President
Aurora Biosciences Corporation
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
Dear Sir:
As Escrow Agent for both Aurora Biosciences Corporation, a Delaware
corporation (the "Company"), and the undersigned purchaser of stock of the
Company ("Purchaser"), 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"), dated to which a copy
of these Joint Escrow Instructions is attached as Exhibit C, in accordance
with the following instructions:
1. In the event the Company or an assignee shall elect to
exercise the Repurchase Option set forth in the Agreement, the Company or its
assignee will give to Purchaser 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. Purchaser 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 any 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
against the simultaneous delivery to you of the purchase price (which may
include suitable acknowledgment of cancellation of indebtedness) of the number
of shares of stock being purchased pursuant to the exercise of the Repurchase
Option.
3. Purchaser 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 specified in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as her
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of
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assignment and/or transfer and all stock certificates necessary or appropriate
to make all securities negotiable and complete any transaction herein
contemplated.
4. This escrow shall terminate upon expiration or exercise in
full of the Repurchase Option, whichever occurs first.
5. If at the time of termination of this escrow you should have
in your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of same to Purchaser and shall be discharged
of all further obligations hereunder; provided, however, that if at the time of
termination of this escrow you are advised by the Company that the property
subject to this escrow is the subject of a pledge or other security agreement,
you shall deliver all such property to the pledgeholder or other person
designated by the Company.
6. Except at otherwise provided in these Joint Escrow
Instructions, 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 or their assignees. 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
Purchaser 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
of any court, 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, authority 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
any statute of limitations with respect to these Joint Escrow Instructions or
any documents deposited with you.
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11. You shall be entitled to employ such legal counsel (including
without limitation the firm of Cooley, Godward, Xxxxxx, Xxxxxxxxx & Xxxxx) 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 President of the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company may appoint any officer or assistant officer of the Company as
successor Escrow Agent and Purchaser hereby confirms the appointment of such
successor or successors as his attorney-in-fact and agent to the full extent of
your appointment.
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, you may (but are not obligated to) retain in your possession
without liability to anyone all or any part of said securities until such
dispute 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 any United States Post Box, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties hereunto
entitled at the following addresses, or at such other addresses as a party may
designate by ten days' written notice to each of the other parties hereto:
COMPANY: AURORA BIOSCIENCES CORPORATION
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
PURCHASER:
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PRESIDENT: AURORA BIOSCIENCES CORPORATION
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
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.
It is understood and agreed that references to "you" or "your" herein refer to
the original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Agreement and these Joint Escrow Instructions in
whole or in part.
Very truly yours,
AURORA BIOSCIENCES CORPORATION
By____________________________________
PURCHASER:
______________________________________
ESCROW AGENT:
______________________________________
