Cadence Pharmaceuticals, Inc. Amended and Restated Restricted Common Stock Purchase Agreement
EXHIBIT 10.6
Cadence Pharmaceuticals, Inc.
Amended and Restated Restricted
Common Stock Purchase Agreement
Common Stock Purchase Agreement
Table of Contents
| Page | ||||||
| I. | Purchase of Shares
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1 | ||||
1.1 Purchase
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1 | |||||
1.2 Payment
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1 | |||||
| II. | Securities Law Compliance
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1 | ||||
2.1 Restricted Securities
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1 | |||||
2.2 Disposition of Shares
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2 | |||||
2.3 Restrictive Legends
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3 | |||||
| III. | Transfer Restrictions
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3 | ||||
3.1 Restriction on Transfer
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3 | |||||
3.2 Transferee Obligations
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3 | |||||
3.3 Definition of Owner
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4 | |||||
3.4 Market Stand-Off Provisions
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4 | |||||
| IV. | Right of First Refusal
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4 | ||||
4.1 Grant
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4 | |||||
4.2 Notice of Intended Disposition
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4 | |||||
4.3 Exercise of Right
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4 | |||||
4.4 Non-Exercise of Right
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5 | |||||
4.5 Partial Exercise of Right
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5 | |||||
4.6 Recapitalization
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5 | |||||
4.7 Lapse
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5 | |||||
| V. | Marital Dissolution or Legal Separation
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6 | ||||
5.1 Grant
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6 | |||||
5.2 Notice of Decree or Agreement
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6 | |||||
5.3 Exercise of the Special Purchase Right
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6 | |||||
5.4 Lapse
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7 | |||||
| VI. | Repurchase Option
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7 | ||||
6.1 Repurchase Option
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7 | |||||
6.2 Release of Shares From Repurchase Option
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7 | |||||
6.3 Escrow of Shares
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9 | |||||
6.4 Tax Consequences
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9 | |||||
| VII. | General Provisions
|
10 | ||||
7.1 Assignment
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10 | |||||
7.2 Definitions
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10 | |||||
7.3 Notices
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10 | |||||
7.4 No Waiver
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10 | |||||
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| Page | ||||||
| VIII. | Miscellaneous Provisions
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10 | ||||
8.1 Purchaser Undertaking
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10 | |||||
8.2 Agreement is Entire Contract
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10 | |||||
8.3 Governing Law
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11 | |||||
8.4 Counterparts
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11 | |||||
8.5 Successors and Assigns
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11 | |||||
8.6 Amendment and Waiver
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11 | |||||
8.7 Arbitration
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11 | |||||
8.8 Acknowledgement
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11 | |||||
Exhibit A — Joint Escrow Instructions
Exhibit B — Assignment Separate From Certificate
Exhibit B — Assignment Separate From Certificate
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Amended and Restated Restricted Common Stock Purchase Agreement
This Amended and Restated Restricted Common Stock Purchase Agreement (the
“Agreement”) is made as of this ___ day of November, 2004, by and between Cadence Pharmaceuticals,
Inc., a Delaware corporation (formerly known as Strata Pharmaceuticals, Inc.) (the “Company”), and
[PURCHASER] (“Purchaser”).
Recitals
A. On July 6, 2004, the Purchaser and the Company entered into a Restricted Common Stock
Purchase Agreement (the “Prior Agreement”) pursuant to which the Purchaser purchased certain shares
of the Company’s Common Stock.
B. The Company and the Purchaser desire to amend and restate the Prior Agreement to grant the
Company a Repurchase Option with respect to the Purchaser’s Shares (as such terms are defined
below).
C. Pursuant to the terms of the Prior Agreement, the Prior Agreement may be amended with the
consent of a majority of the Company’s Board of Directors, which consent has been obtained by the
Company, and the Purchaser.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
agreements herein contained, the parties, intending to be legally bound, hereby agree as follows:
I. Purchase of Shares
1.1 Purchase. Pursuant to the terms of the Prior Agreement, the Purchaser
purchased, and the Company sold to Purchaser, [NUMBER OF SHARES OF COMMON STOCK] shares of the
Company’s Common Stock (the “Shares”) at a purchase price of $0.001 per share (the “Purchase
Price”), or $[PURCHASE PRICE] in the aggregate.
1.2 Payment. As of the date of the Prior Agreement, the Purchaser delivered
to the Corporate Secretary of the Company the aggregate Purchase Price payable for the Shares in
cash, cancellation of indebtedness or transfer of property. Concurrently with the execution of
this Agreement, the Purchaser shall deliver to the Corporate Secretary of the Company (i) duly
executed Joint Escrow Instructions (in the form attached hereto as Exhibit A), and (ii) a
duly executed blank Assignment Separate from Certificate (in the form attached hereto as
Exhibit B).
II. Securities Law Compliance
2.1 Restricted Securities.
(a) Purchaser hereby confirms that Purchaser has been informed that the Shares are restricted
securities under the Securities Act of 1933, as amended (“1933 Act”), and may not
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be resold or
transferred unless the Shares are first registered under the federal securities laws or unless an
exemption from such registration is available. Accordingly, Purchaser hereby acknowledges that
Purchaser is prepared to hold the Shares for an indefinite period and that Purchaser is aware that
Rule 144 of the Securities and Exchange Commission (“SEC”) issued under the 1933 Act is not
presently available to exempt the sale of the Shares from the registration requirements of the 1933
Act.
(b) Upon the expiration of the ninety (90)-day period immediately following the date on which
the Company first becomes subject to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the Shares may be sold (without registration) pursuant to
the applicable requirements of Rule 144. If Purchaser is at the time of such sale an affiliate of
the Company for purposes of Rule 144 or was such an affiliate during the preceding three (3)
months, then the sale must comply with all the requirements of Rule 144 (including the volume
limitation on the number of shares sold, the broker/market-maker sale requirement and the requisite
notice to the SEC). If Purchaser is not at the time of the sale an affiliate of the Company nor
was such an affiliate during the preceding three (3) months, then none of the requirements of Rule
144 (other than the broker/market-maker sale requirement for Shares held for fewer than two (2)
years following payment in cash of the Purchase Price therefor) will be applicable to the sale.
The requirements of Rule 144 are subject to change at any time.
2.2 Disposition of Shares. Subject to the terms of this Agreement,
Purchaser hereby agrees that Purchaser shall make no disposition of the Shares (other than a
permitted transfer under paragraph 3.1) unless and until there is compliance with all of the
following requirements:
(a) Purchaser shall have notified the Company of the proposed disposition and provided a
written summary of the terms and conditions of the proposed disposition;
(b) Purchaser shall have complied with all requirements of this Agreement applicable to the
disposition of the Shares;
(c) Purchaser shall have provided the Company with written assurances, in form and substance
satisfactory to the Company, that (i) the proposed disposition does not require registration of the
Shares under the 1933 Act or (ii) all appropriate action necessary for compliance with the
registration requirements of the 1933 Act or of any exemption from registration available under the
1933 Act (including Rule 144) has been taken; and
(d) Purchaser shall have provided the Company with written assurances, in form and substance
satisfactory to the Company, that the proposed disposition will not result in the contravention of
any transfer restrictions applicable to the Shares.
The Company shall not be required (i) to transfer on its books any Shares which have
been sold or transferred in violation of the provisions of this Article II nor (ii) to
treat as the owner of the Shares, or otherwise to accord voting or dividend rights to, any
transferee to whom the Shares have been transferred in contravention of this Agreement.
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2.3 Restrictive Legends. In order to reflect the restrictions on
disposition of the Shares, the stock certificates for the Shares will be endorsed with restrictive
legends, including one or more of the following legends:
(a) “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (“ACT”), NOR HAVE THEY BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF
ANY STATE. NO TRANSFER OF SUCH SECURITIES WILL BE PERMITTED UNLESS A REGISTRATION STATEMENT UNDER
THE ACT IS IN EFFECT AS TO SUCH TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR IN THE OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REGISTRATION UNDER THE
ACT IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH APPLICABLE STATE
SECURITIES LAWS.”
(b) “THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.”
III. Transfer Restrictions
3.1 Restriction on Transfer. Except for the escrow described below in
Article VI, none of the Shares or any beneficial interest therein shall be transferred, assigned,
encumbered or otherwise made the subject of disposition until the release of such Shares from the
Repurchase Option in accordance with the provisions of this Agreement. In addition, the Shares
shall not be transferred, assigned, encumbered or otherwise made the subject of disposition in
contravention of the Company’s First Refusal Right under Article IV or Special Purchase Right under
Article V or as otherwise limited herein. The restrictions on transfer set forth under Article IV
and Article V, however, shall not be applicable to (i) a gratuitous transfer of the Shares
made to the [EXECUTIVE OFFICER ONLY: Purchaser’s] siblings, spouse, lineal descendent or
antecedent, including adopted children and stepchildren, [DIRECTOR ONLY: of the Director (as
defined below)] or to a trust for the exclusive benefit of the [EXECUTIVE OFFICER ONLY: Purchaser]
[DIRECTOR ONLY: Director] or the [EXECUTIVE OFFICER ONLY: Purchaser’s] [DIRECTOR ONLY: Director’s]
siblings, spouse or issue, provided and only if the Purchaser obtains the Company’s prior written
consent to such transfer and such transferee agrees to be bound by the terms of this Agreement,
(ii) a transfer of title to the Shares effected pursuant to the Purchaser’s will or the laws of
intestate succession or (iii) a transfer to the Company in pledge as security for any
purchase-money indebtedness incurred by the Purchaser in connection with the acquisition of the
Shares [DIRECTOR ONLY: or (iv) to any affiliate of the Purchaser].
3.2 Transferee Obligations. Each person (other than the Company) to whom
the Shares are transferred by means of one of the permitted transfers specified in paragraph 3.1
must, as a condition precedent to the validity of such transfer, acknowledge in writing to the
Company that such person is bound by the provisions of this Agreement and that the transferred
shares are subject to (i) the Company’s First Refusal Right and Special Purchase Right granted
hereunder and (ii) the market stand-off provisions of paragraph 3.4, to the same extent such Shares
would be so subject if retained by the Purchaser.
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3.3 Definition of Owner. For purposes of this Agreement, the term “Owner”
shall include the Purchaser and all subsequent holders of the Shares who derive their chain of
ownership through a permitted transfer from the Purchaser in accordance with paragraph 3.1.
3.4 Market Stand-Off Provisions.
(a) In connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the 1933 Act, Owner shall
not sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to, any Shares without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for such period of time from and after the
effective date of such registration statement as may be requested by the Company or such
underwriters; provided, however, that in no event shall such period exceed one hundred-eighty (180)
days.
(b) Owner shall be subject to the market stand-off provisions of this paragraph 3.4 provided
and only if the executive officers and directors of the Company are also subject to similar
arrangements.
(c) In the event of any stock dividend, stock split, recapitalization or other change
affecting the Company’s outstanding Common Stock effected without receipt of consideration, then
any new, substituted or additional securities distributed with respect to the Shares shall be
immediately subject to the provisions of this paragraph 3.4, to the same extent the Shares are at
such time covered by such provisions.
(d) In order to enforce the limitations of this paragraph 3.4, the Company may impose
stop-transfer instructions with respect to the Shares until the end of the applicable stand-off
period.
IV. Right of First Refusal
4.1 Grant. The Company is hereby granted the right of first refusal (the
“First Refusal Right”), exercisable in connection with any proposed transfer of the Shares. For
purposes of this
Article IV, the term “transfer” shall include any sale, assignment, pledge, encumbrance or
other disposition for value of the Shares intended to be made by the Owner, but shall exclude any
of the permitted transfers under paragraph 3.1.
4.2 Notice of Intended Disposition. In the event the Owner desires to
accept a bona fide third-party offer for any or all of the Shares (the shares subject to such offer
to be hereinafter called the “Target Shares”), Owner shall promptly (i) deliver to the Corporate
Secretary of the Company written notice (the “Disposition Notice”) of the terms and conditions of
the offer, including the purchase price and the identity of the third-party offeror and (ii)
provide satisfactory proof that the disposition of the Target Shares to such third-party offeror
would not be in contravention of the provisions set forth in Articles II and III of this Agreement.
4.3 Exercise of Right. The Company (or its assignees) shall, for a period
of twenty-five (25) days following receipt of the Disposition Notice, have the right to repurchase
any or all
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of the Target Shares specified in the Disposition Notice upon substantially the same
terms and conditions specified therein. Such right shall be exercisable by delivery of written
notice (the “Exercise Notice”) to Owner prior to the expiration of the twenty-five (25) day
exercise period. If such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, then the Company (or its assignees) shall effect the repurchase of the Target
Shares, including payment of the purchase price, not more than five (5) business days after
delivery of the Exercise Notice; and at such time Owner shall deliver to the Company the
certificates representing the Target Shares to be repurchased, each certificate to be properly
endorsed for transfer.
4.4 Non-Exercise of Right. In the event the Exercise Notice is not given to
Owner within twenty-five (25) days following the date of the Company’s receipt of the Disposition
Notice, Owner shall have a period of thirty (30) days thereafter in which to sell or otherwise
dispose of the Target Shares to the third-party offeror identified in the Disposition Notice upon
terms and conditions (including the purchase price) no more favorable to such third-party offeror
than those specified in the Disposition Notice; provided, however, that any such sale or
disposition must not be effected in contravention of the provisions of Article II of this
Agreement. The acquired shares shall remain subject to (i) the securities law restrictions under
Article II, (ii) the market stand-off provisions of paragraph 3.4, (iii) the Company’s First
Refusal Rights hereunder and (iv) Article V.
4.5 Partial Exercise of Right. In the event the Company (or its assignees)
makes a timely exercise of the First Refusal Right with respect to a portion, but not all, of the
Target Shares specified in the Disposition Notice, Owner shall have the option, exercisable by
written notice to the Company delivered within thirty (30) days after the date of the Disposition
Notice, to effect the sale of the Target Shares pursuant to one of the following alternatives:
(a) sale or other disposition of all the Target Shares to the third-party offeror identified
in the Disposition Notice, but in full compliance with the requirements of paragraph 4.4, as if the
Company did not exercise the First Refusal Right hereunder; or
(b) sale to the Company (or its assignees) of the portion of the Target Shares which the
Company (or its assignees) has elected to purchase, such sale to be effected in substantial
conformity with the provisions of paragraph 4.3.
Failure of Owner to deliver timely notification to the Company under this paragraph 4.5 shall
be deemed to be an election by Owner to sell the Target Shares pursuant to alternative (a) above.
4.6 Recapitalization. In the event of any stock dividend, stock split,
recapitalization or other transaction affecting the Company’s outstanding Common Stock as a class
effected without receipt of consideration, then any new, substituted or additional securities or
other property which is by reason of such transaction distributed with respect to the Shares shall
be immediately subject to the Company’s First Refusal Right hereunder, but only to the extent the
Shares are at the time covered by such right.
4.7 Lapse. The First Refusal Right under this Article IV shall remain in
effect under all circumstances but shall lapse and cease to have effect upon the earliest
to occur of (i) the first
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date on which shares of the Company’s Common Stock are held of record by
more than five hundred (500) persons, (ii) a determination is made by the Company’s Board of
Directors that a public market exists for the outstanding shares of the Company’s Common Stock,
(iii) an underwritten public offering pursuant to an effective registration statement under the
1933 Act or (iv) a Change of Control (as defined below). However, the market stand-off provisions
of paragraph 4.4 shall continue to remain in full force and effect following the lapse of the First
Refusal Right hereunder.
V. Marital Dissolution or Legal Separation
5.1 Grant. Notwithstanding anything in this Agreement to the contrary, in
connection with the dissolution of Owner’s marriage or the legal separation of Owner and Owner’s
spouse, the Company shall have the right (the “Special Purchase Right”) [DIRECTOR ONLY: if
applicable,] to purchase from Owner’s spouse, in accordance with the provisions of this Article V,
all or any portion of the Shares which would otherwise be awarded to such spouse in settlement of
any community property or other marital property rights such spouse may have in such shares.
5.2 Notice of Decree or Agreement. Owner shall promptly provide the Company with written notice (the “Dissolution Notice”) of (i)
the entry of any judicial decree or order resolving the property rights of Owner and Owner’s spouse
in connection with their marital dissolution or legal separation or (ii) the execution of any
contract or agreement relating to the distribution or division of such property rights. The
Dissolution Notice shall be accompanied by a copy of the actual decree or order of dissolution or
contract or agreement between Owner and Owner’s spouse which provides for the award to the spouse
of one or more Shares in settlement of any community property or other marital property rights such
spouse may have in such shares.
5.3 Exercise of the Special Purchase Right. The Special Purchase Right
shall be exercisable by delivery of written notice (the “Purchase Notice”) to Owner and Owner’s
spouse within forty-five (45) days after the Company’s receipt of the Dissolution Notice. The
Purchase Notice shall indicate the number of Shares to be purchased by the Company, the date such
purchase is to be effected (such date to be not less than five (5) business days, nor more than
fifteen (15) business days, after the date of the Purchase Notice) and the fair market value to be
paid for such Shares. Owner (or Owner’s spouse, to the extent such spouse has physical possession
of the Shares) shall, prior to the close of business on the date specified for the purchase,
deliver to the Company the certificates representing the shares to be purchased. The Company
shall, concurrently with the receipt of the stock certificates, pay to Owner’s spouse (in cash or
cash equivalents) an amount equal to the fair market value specified for such shares in the
Purchase Notice.
If Owner’s spouse does not agree with the fair market value specified for the Shares in the
Purchase Notice, then the spouse shall promptly notify the Company in writing of such disagreement
and the fair market value of such Shares shall thereupon be determined by an appraiser of
recognized standing selected by the Company and the spouse. If they cannot agree on an appraiser
within fifteen (15) days after the date of the Purchase Notice, each shall select an appraiser of
recognized standing, and the two (2) appraisers shall designate a third appraiser of recognized
standing whose appraisal shall be determinative of such value. The cost of the
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appraisal shall be
shared equally by the Company and Owner’s spouse. The closing shall then be held on the fifteenth
(15th) business day following the completion of such appraisal; provided, however, that if the
appraised value is more than twenty-five percent (25%) greater than the fair market value specified
for the Shares in the Purchase Notice, the Company shall have the right, exercisable prior to the
expiration of such fifteen (15) business-day period, to rescind the exercise of the Special
Purchase Right and thereby revoke its election to purchase the Shares awarded to the spouse.
5.4 Lapse. The Special Purchase Right shall lapse upon the earlier
to occur of (i) the lapse of the First Refusal Right or (ii) the expiration of the exercise period
specified in this Article V, to the extent the Special Purchase Right is not timely exercised in
accordance with such paragraph.
VI. Repurchase Option
6.1 Repurchase Option. In the event of any voluntary or involuntary termination of the [EXECUTIVE OFFICER ONLY:
Purchaser’s employment by, or services to,] [DIRECTOR ONLY: service of [RELATED DIRECTOR] (the
“Director”) as a director of] the Company for any or no reason (including death or disability)
before all of the Shares are released from the Company’s Repurchase Option (as defined below), the
Company shall, upon the date of such termination (as reasonably fixed and determined by the
Company), have an irrevocable, exclusive option, but not the obligation, for a period of 90 days
from such date to repurchase all or any portion of the Unreleased Shares (as defined below in
paragraph 6.2) at such time (the “Repurchase Option”) at the original purchase price per share (the
“Repurchase Price”). The Repurchase Option shall be exercisable by the Company by written notice to
the Purchaser or the Purchaser’s executor and shall be exercisable by delivery to the Purchaser or
the Purchaser’s executor of cash, check or wire transfer in an amount equal to the Repurchase Price
times the number of Shares to be repurchased (the “Aggregate Repurchase Price”). Upon delivery of
such notice and the payment of the Aggregate Repurchase Price, 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.
6.2 Release of Shares From Repurchase Option.
(a) The Shares shall be released from the Company’s Repurchase Option pursuant to the
following schedule:
25% of the Shares are immediately released from, and shall
not be subject to, the Repurchase Option. As of July 6,
2004 (the “Vesting Commencement Date”), the remaining 75% of
the Shares shall be subject to the Repurchase Option.
1/48th of such Shares shall be released from the Repurchase
Option on each monthly anniversary of the Vesting
Commencement Date thereafter, such that all Shares shall be
released from the Repurchase Option on the
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four (4) year
anniversary of the Vesting Commencement Date.
Any of the Shares which, from time to time, have not yet been released from the Repurchase
Option are referred to herein as “Unreleased Shares.” The number of Shares released each month
and/or year, as applicable, from the Repurchase Option shall be rounded down to the next whole
number of Option Shares, except in the last month of the four (4) year period when all Unreleased
Shares shall be released from the Repurchase Option.
(b) Upon an Acceleration Event (as defined below), the Repurchase Option shall lapse for 100%
of the Unreleased Shares (if any). An “Acceleration Event” shall mean any of the following:
(1) The termination by the Company of the [EXECUTIVE OFFICER ONLY: Purchaser’s employment
with] [DIRECTOR ONLY: Director’s service as a director of] the Company for any reason other than
Cause (as defined below). [EXECUTIVE OFFICER
ONLY: Unless otherwise defined in an employment or services agreement between the Purchaser
and the Company (which definition will control),] “Cause” shall mean dishonesty, fraud, misconduct,
unauthorized use or disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case as determined by
the Board of Directors of the Company, and its determination shall be conclusive and binding; or
(2) [EXECUTIVE OFFICER ONLY: The termination by the Purchaser of the Purchaser’s employment
with the Company for Good Reason (as defined below). Unless otherwise defined in an employment or
services agreement between the Purchaser and the Company (which definition will control), “Good
Reason” shall mean the occurrence of any of the following events or conditions and the failure of
the Company or any successor corporation, as applicable, to cure such event or condition within
thirty (30) days after receipt of written notice from the Purchaser:
(i) a change in the Purchaser’s position or responsibilities (including reporting
responsibilities) that represents a substantial reduction in the position or responsibilities as in
effect immediately prior thereto; the assignment to the Purchaser of any duties or responsibilities
that are materially inconsistent with such position or responsibilities; or any removal of the
Purchaser from or failure to reappoint or reelect the Purchaser to any of such positions, except in
connection with the termination of the Purchaser’s employment for Cause, as a result of his or her
disability or death, or by the Purchaser other than for Good Reason;
(ii) a material reduction in the Purchaser’s annual base salary, except in connection with a
general reduction in the compensation of all personnel of the Company and its parent and
subsidiaries, if any;
(iii) the Company requiring the Purchaser (without the Purchaser’s consent) to be based at any
place outside a 50-mile radius of his or her principal place of employment with the Company, except
for reasonably required travel on the Company’s business;
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(iv) a material reduction in the Purchaser’s aggregate benefits (in terms of benefit levels
and/or reward opportunities) provided for under each material employee benefit plan, program and
practice of the Company, except in connection with a general reduction in the benefits of all
personnel of the Company and its parent and subsidiaries, if any; or
(v) any material breach by the Company of its obligations to the Purchaser under any
applicable employment or services agreement between the Purchaser and the Company.]
(c) In the event of a Change of Control, the Repurchase Option shall lapse for (i) [EXECUTIVE
OFFICER ONLY: 50%] [DIRECTOR ONLY: 100%] of the Unreleased Shares (if any) at the time of the
Change of Control [EXECUTIVE OFFICER ONLY: and (ii) the remaining Unreleased Shares (if any) on the
twelve month anniversary of the Change of Control. In the event an Acceleration Event occurs
between the Change of Control and the twelve month
anniversary of the Change of Control the provisions of paragraph 6.2(b) above shall apply.] A
“Change of Control” shall mean (1) a merger or consolidation of the Company with or into any other
corporation or other entity or person or (2) a sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the Company’s
outstanding securities or all or substantially all the Company’s assets; provided that the
following events shall not constitute a “Change of Control”: (A) a merger or consolidation of the
Company in which the holders of the voting securities of the Company immediately prior to the
merger or consolidation hold at least a majority of the voting securities in the successor
corporation immediately after the merger or consolidation; (B) a sale, lease, exchange or other
transaction in one transaction or a series of related transactions of all or substantially all of
the Company’s assets to a wholly owned subsidiary corporation; (C) a mere reincorporation of the
Company; or (D) a transaction undertaken for the sole purpose of creating a holding company that
will be owned in substantially the same proportion by the persons who held the Company’s securities
immediately before such transaction.
(d) Subject to paragraph 6.3, the Shares which have been released from the Repurchase Option
shall be delivered to the Purchaser at the Purchaser’s request.
6.3 Escrow of Shares. Pursuant to the terms of the Joint Escrow
Instructions attached hereto as Exhibit A, the Shares issued under this Agreement shall be
held by the Escrow Agent (as defined in such Joint Escrow Instructions) along with a stock
assignment executed by the Purchaser in blank in the form attached hereto as Exhibit B.
Notwithstanding the vesting set forth in paragraph 6.2 above, neither the Company nor the Escrow
Agent shall be required to release or issue certificates evidencing the Shares to the Purchaser
more frequently than twice in any calendar year.
6.4 Tax Consequences. The Purchaser has reviewed with the Purchaser’s own
tax advisors the federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. The Purchaser is relying solely on such 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 the transactions contemplated by this Agreement.
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VII. General Provisions
7.1 Assignment. The Company may assign its First Refusal Right under
Article IV and/or its Special Purchase Rights under Article V and/or its Repurchase Option under
Article VI to any person or entity selected by the Company’s Board of Directors, including (without
limitation) one or more stockholders of the Company.
7.2 Definitions. For purposes of this Agreement, the following provisions shall be applicable in determining
the parent and subsidiary corporations of the Company:
(1) any corporation (other than the Company) in an unbroken chain of corporations ending with
the Company shall be considered to be a parent corporation of the Company, provided each such
corporation in the unbroken chain (other than the Company) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain, and
(2) each corporation (other than the Company) in an unbroken chain of corporations beginning
with the Company shall be considered to be a subsidiary of the Company, provided each such
corporation (other than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
7.3 Notices. Any notice required in connection with (i) the First Refusal
Right, Special Purchase Right or the Repurchase Option or (ii) the disposition of any Shares
covered thereby shall be given in writing and shall be deemed effective upon personal delivery or
upon deposit in the United States mail, registered or certified, postage prepaid and addressed to
the party entitled to such notice at the address indicated below such party’s signature line on
this Agreement or at such other address as such party may designate by ten (10) days’ advance
written notice under this paragraph 7.3 to all other parties to this Agreement.
7.4 No Waiver. The failure of the Company (or its assignees) in any
instance to exercise the First Refusal Right, Special Purchase Right or the Repurchase Option shall
not constitute a waiver of any other repurchase right and/or right of first refusal that may
subsequently arise under the provisions of this Agreement or any other agreement between the
Company and the Purchaser or the Purchaser’s spouse. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of
like or different nature.
VIII. Miscellaneous Provisions
8.1 Purchaser Undertaking. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Company may in its judgment deem
necessary or advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either the Purchaser or the Shares pursuant to the express provisions of
this Agreement.
8.2 Agreement is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
10
8.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied to contracts entered
into and performed in such State without resort to that State’s conflict-of-laws rules.
8.4 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
8.5 Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns and the Purchaser
and the Purchaser’s legal representatives, heirs, legatees, distributees, assigns and transferees
by operation of law, whether or not any such person shall have become a party to this Agreement and
have agreed in writing to join herein and be bound by the terms and conditions hereof.
8.6 Amendment and Waiver. This Agreement shall not be amended nor any
Section hereof waived by the Company in the absence of approval of such amendment or waiver by a
majority of the Company’s Board of Directors.
8.7 Arbitration. Any controversy between the parties hereto involving any
claim arising out of or relating to this Agreement shall be finally settled by arbitration in San
Diego, California, in accordance with the then current Employment ADR Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
8.8 Acknowledgement. PURCHASER ACKNOWLEDGES AND AGREES THAT THE LAPSING OF
THE REPURCHASE OPTION PURSUANT TO ARTICLE VI HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN “AT
WILL” EMPLOYEE AND/OR DIRECTOR, AS APPLICABLE, OF THE COMPANY (AND 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 REPURCHASE OPTION SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE
AND/OR DIRECTOR FOR SUCH PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE
COMPANY’S RIGHT TO TERMINATE PURCHASER’S EMPLOYMENT AND/OR SERVICE WITH THE COMPANY AT ANY TIME,
WITH OR WITHOUT CAUSE.
[Remainder of Page Intentionally Left Blank]
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In Witness Whereof, the parties have executed this Agreement on the day and year
first indicated above.
| THE COMPANY: Cadence Pharmaceuticals, Inc. |
|||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| Address: | ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
||||
| PURCHASER: |
||||||||
| By: | ||||||||
| Name: | ||||||||
| Address: | ||||||||
Schedule to Exhibit 10.6: The form of Amended and Restated Restricted Common Stock Purchase
Agreement above was executed by the following persons or entities with respect to the number of
shares and purchase prices listed:
| NUMBER OF SHARES | PURCHASE | RELATED | ||||||||||
| PURCHASER | OF COMMON STOCK | PRICE | DIRECTOR | |||||||||
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
1,000,000 | $ | 1,000.00 | N/A | ||||||||
▇▇▇▇▇ ▇. Socks |
850,000 | $ | 850.00 | N/A | ||||||||
▇▇▇▇▇▇ Investments, LLC |
1,750,000 | $ | 1,750.00 | Cam ▇. ▇▇▇▇▇▇ | ||||||||