INVIVO THERAPEUTICS CORPORATION SCIENTIFIC ADVISORY BOARD AGREEMENT
INVIVO
THERAPEUTICS CORPORATION
This Scientific Advisory Board
Agreement (this “Agreement”) between [insert name], having an address at [insert
address] (the “Member”), and InVivo Therapeutics Corporation, (the “Company”), a
Delaware corporation having a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, is made effective as of September 25, 2008 (the
“Effective Date”). In connection with the appointment of the Member
to the Advisory Board (the “SAB”) of the Company and the mutual promises of the
parties hereunder, it is agreed as follows:
1. General. The
Company hereby retains the Member, and the Member hereby agrees, to serve as a
member of the SAB and to consult with the Company in its Field of Interest (such
services and consultation being herein referred to as the
“Services”). The term “Field of Interest” currently means
neurological disease. The Company may modify
the definition of Field of Interest by written notice to the Member based on the
activities in which the Company is then engaged or in which the Company then
proposes to be engaged.
2. Performance
of Services. As of the Effective Date, the Member agrees to
make himself or herself available to render the Services, from time to time at
the request of the Company, at such time or times and location or locations as
may be mutually agreed. The Member agrees to devote his or her best
efforts to the performance of the Services. The Member agrees that,
at the request of the Company, he or she shall devote at least 10 hour per month
to the performance of the Services (including attendance at meetings of the
SAB). In connection therewith, the Company shall have the right to
publicize the Member’s affiliation with the Company.
3. Compensation. For
the full, prompt and faithful performance of the Services, the Company shall
grant the Member an option to purchase up to [insert]
([insert]) shares of the Company’s common stock, $0.001 par value per
share, at a purchase price of $1.00 per share (the “Option”). The Option shall
be subject to and governed by the Non-Qualified Stock Option Agreement attached
hereto as Exhibit
A (the “Option Agreement”). Subject to the terms and
conditions set forth in this Option Agreement, including Member’s continued
services as a member of the SAB, the Option granted hereby shall become
exercisable as follows: 25% of the Shares shall vest on the first
anniversary of the date of the Option Agreement, 25% of the Shares shall vest on
the second anniversary of the date of the Option Agreement, 25% of the Shares
shall vest on the third anniversary of the date of the Option Agreement and the
remaining 25% of the Shares shall vest on the fourth anniversary of the date of
the Option Agreement.
4. Principal
Institution. The Company recognizes that the activities of the
Member are or will be subject to the rules and regulations of [insert] (the
“Principal Institution”), now or in the future, and the Company agrees that
Member shall be under no obligation to perform Services if such performance
would conflict with such rules and regulations. In the event such
rules and regulations shall, in the Company’s opinion, substantially interfere
with the performance of Services by the Member, the Company may terminate this
Agreement upon thirty (30) days notice to the Member.
5. Term. The
Member’s performance of Services shall commence on the Effective Date of this
Agreement and, unless terminated earlier, this Agreement shall continue for a
period of four (4) years thereafter, and shall automatically be extended for an
additional period or periods of one year (such period, including any extension
of such period, the “Term”), unless either the Member or the Company terminates
this Agreement pursuant to Sections 4 or 6 hereof.
6. Termination;
Effect of Termination. This Agreement may be terminated by
either party at any time upon sixty (60) days prior written notice. If either
party breaches any of its material obligations under this Agreement in any
material respect, the non-breaching party may terminate this Agreement (in
addition to any other available remedy), in the event that such breach is not
cured within ten (10) days after receipt by such party of written notice
thereof.
Such
termination shall not relieve the Member or the Company of any obligations
hereunder which by their terms are intended to survive the termination of the
Member’s association with the Company, including, but not limited to, the
obligations of Sections 7, 9, 10, 11, 12, 17 and 18.
Upon
termination of this Agreement for any reason, the Member shall promptly deliver
to the Company any and all property of the Company or its customers, licensees,
licensors, or affiliates which may be in his or her possession or control
including, without limitation, products, cell lines, materials, memoranda,
notes, diskettes, records, reports, laboratory notebooks, or other documents or
photocopies of the same.
7. Non-competition. So
long as this Agreement continues in effect and for a period of two (2) years
following termination of this Agreement, the Member shall not, without the prior
written approval of the Company, alone or as a partner, officer, director,
consultant, employee, stockholder or otherwise, engage in any commercial
employment, consulting or business activity, occupation or other activity that
is or is intended to be competitive with the business of the Company in its
Field of Interest; provided, however, that the
Member’s academic research and teaching activities at the Principal Institution
shall in no event be deemed a violation of this provision and that the holding
by the Member of any investment in any security shall not be deemed to be a
violation of this Section 7 if such investment does not constitute over five
percent (5%) of the outstanding issue of such security.
8. Independent
Contractor. It is understood and agreed, that the Member is an
independent contractor and that neither this Agreement nor the rendering of the
Services shall for any purpose whatsoever or in any way or manner create any
employer-employee relationship between the parties. The Member shall
not be entitled to any fringe benefits generally provided to employees of the
Company and the Company shall not be required to maintain workers’ compensation
coverage for the Member.
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9. Inventions. The
Member shall promptly disclose to the Company, and hereby assigns and agrees to
assign to the Company (or as otherwise directed by the Company), his or her full
right, title and interest to all Inventions (as defined below). The
Member agrees, without charge, to cooperate fully with the Company, its
attorneys and agents, in the preparation and filing of all papers and other
documents as may be required to perfect the Company’s rights in and to any of
such Inventions, including, but not limited to, execution of any and all
applications for domestic and foreign patents, copyrights or other proprietary
rights and the performance of such other acts (including, among others, the
execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Inventions to the Company and to permit
the Company to file, obtain and enforce any patents, copyrights or other
proprietary rights in the Inventions. The Member hereby designates
the Company as his or her agent, and grants to the Company a power of attorney
with full power of substitution, which power of attorney shall be deemed coupled
with an interest, for the purpose of effecting any such assignment hereunder
from the Member to the Company. “Inventions” shall mean, for purposes
of this paragraph, ideas, discoveries, creations, manuscripts and properties,
innovations, improvements, know-how, inventions, trade secrets, apparatus,
developments, techniques, methods, biological processes, cell lines, laboratory
notebooks and formulas (whether or not patentable or copyrightable or
constituting trade secrets) conceived, made or discovered by the Member (whether
alone or with others) within the Company’s Field of Interest as a direct result
of consulting with the Company under this Agreement and/or a direct result of
Confidential Information (as defined in Section 10 hereof) received from the
Company. In no event, however, shall the Member’s obligations
hereunder relate to any right, title or interest that the Member may have in
inventions, discoveries, developments, methods and processes (whether or not
patentable or copyrightable or constituting trade secrets) conceived, made or
discovered by the Member (whether alone or with others) with the use of
facilities or fundings of the Principal Institution and that the Member is
required to assign to his or her Principal Institution pursuant to the rules and
regulations of such Principal Institution. Upon termination of this
Agreement with the Company, the Member shall provide to the Company in writing a
full, signed statement of all Inventions in which the Member participated prior
to termination of this Agreement.
10. Confidentiality.
During the period of this Agreement, the Member will be exposed to certain
information concerning the Company’s research, business, Inventions, products,
proposed new products, designs, clinical testing programs, manufacturing
processes and techniques, customers, and other information and materials that
embody trade secrets or technical or business information that is confidential
and proprietary to the Company and is not generally known to the public
(collectively, “Confidential Information”). The Member hereby agrees
not to disclose, except to Company employees and representatives, or otherwise
make use of, or allow others to use, any Confidential Information without the
Company’s prior written consent, unless such information becomes publicly
available, through no fault of the Member. The Member further agrees
not to make any notes or memoranda relating to the business of the Company other
than for the benefit of the Company and not to use or permit to be used at any
time any such notes or memoranda other than for the benefit of the Company. In
addition, the Member agrees, promptly upon the Company’s request, whether during
or after the Term, to return to the Company or destroy any and all documentary,
machine-readable or other elements or evidence of Confidential Information and
any copies that may be in the Member’s possession or under the Member’s
control.
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11. Injunctive
Relief. The Member agrees that any breach of this Agreement by
him or her could cause irreparable damage to the Company and that in the event
of such breach the Company shall have the right to obtain injunctive relief,
including, without limitation, specific performance or other equitable relief to
prevent the violation of his or her obligations hereunder. It is
expressly understood and agreed that nothing herein contained shall be construed
as prohibiting the Company from pursuing any other remedies available for such
breach or threatened breach, including, without limitation, the recovery of
damages by the Company.
12. Publications. The
Member agrees that he or she will not at any time publish any Confidential
Information that becomes known to him or her as a result of his or her
relationship with the Company which is, or pursuant to the terms hereof becomes,
the property of the Company or any of its clients, customers, consultants,
licensors, licensees, or affiliates except to such extent as may be necessary in
the ordinary course of performing in good faith his or her duties as a member of
the SAB of the Company and with the prior written consent of the
Company.
During
the Term and for a period of two (2) years thereafter, the Member agrees to
submit to the Company for a period not to exceed sixty (60) days (the “Review
Period”) a copy of any proposed manuscript or other materials to be published or
otherwise publicly disclosed by the Member (each a “Proposed Publication”) which
contains information relating to the Field of Interest or any other area in
which the Member has performed Services, in sufficient time to enable the
Company to determine if patentable Inventions or Confidential Information of the
Company would be disclosed.
During
the Review Period, the Company will notify the Member whether the Company
desires to file a patent application on any Invention disclosed in the Proposed
Publication. In the event the Company desires that such a patent
application be filed, the Member will delay publication or disclosure of the
Proposed Publication until the first to occur of the following: (a) the filing
of a patent application covering such Invention, (b) the agreement by the
Company and the Member that no Invention is disclosed in such materials, or (c)
ninety (90) days after the date that the Proposed Publication was received by
the Company from the Member. Further, if the Company reports to the
Member that the Proposed Publication contains Confidential Information of the
Company, the Member will remove such Confidential Information therein prior to
any publication or disclosure thereof.
13. No
Conflicting Agreements. The Member represents and warrants
that, other than those set forth on Schedule A attached
hereto, he or she is not a party to any commitments or obligations inconsistent
with this Agreement and hereby agrees to indemnify and hold the Company harmless
against any claim based upon circumstances alleged to be inconsistent with such
representation and warranty. During the Term, the Member will not
enter into any agreement either written or oral in conflict with this Agreement
and will arrange to provide the Services in such a manner and at times that the
Services will not conflict with his or her responsibilities under any other
agreement, arrangement or understanding or pursuant to any employment
relationship he or she has at any time with any third party.
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14. Notices. All
notices and other communications hereunder shall be delivered or sent by
facsimile transmission, recognized courier service, registered or certified
mail, return receipt requested, addressed to the party at the address set forth
on the signature page hereof, or to such other address as such party may
designate in writing to the other. Such notice or communication shall
be deemed to have been given as of the date sent by the facsimile or delivered
to a recognized courier service, or three days following the date deposited with
the United States Postal Service.
15. Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective legal representatives,
successors and permitted assigns. The Member agrees that the Company
may assign this Agreement, in whole or in part, to any person or entity
controlled by, in control of, or under common control with, the Company, and to
any purchaser of all or substantially all of its assets or such portion of its
assets to which this Agreement relates, or to any successor corporation
resulting from any merger or consolidation of the Company with or into such
corporation. The Member may not assign or transfer this Agreement or any of his
or her rights or obligations hereunder. In no event shall the Member
assign or delegate responsibility for actual performance of the Services to any
other person or entity without the prior written consent of the
Company.
16. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties as to the subject matter hereof. No provision of
this Agreement shall be waived, altered or cancelled except in writing signed by
the party against whom such waiver, alteration or cancellation is
asserted. Any such waiver shall be limited to the particular instance
and the particular time when and for which it is given.
17. Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of
Massachusetts.
18. Acknowledgement
of no other Capital Stock. Member hereby acknowledges and
agrees that except as specified herein, as of the date hereof the Member has not
been issued nor does he have a claim for nor is entitled to any capital stock or
other equity interest in the Company, for any reason whatsoever.
19. Enforceability. The
invalidity or unenforceability of any provision hereof as to an obligation of a
party shall in no way affect the validity or enforceability of any other
provision of this Agreement, provided that if such invalidity or
unenforceability materially adversely affects the benefits the other party
reasonably expected to receive hereunder, that party shall have the right to
terminate this Agreement. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject so as to be unenforceable at law, such
provision or provisions shall be construed by limiting or reducing it or them,
so as to be enforceable to the extent compatible with the applicable law as it
shall then appear.
20. Construction. This
Agreement has been prepared jointly and shall not be strictly construed against
either Party.
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21. Counterparts. This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one
agreement.
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IN
WITNESS WHEREOF, the parties hereto have duly executed Agreement as a sealed
instrument as of the day and year first above written.
INVIVO
THERAPEUTICS CORPORATION
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By:
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▇▇▇▇▇
▇▇▇▇▇▇▇▇, CEO & President
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[insert]
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Schedule
A
Conflicting
Agreements
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Exhibit
A
NON-QUALIFIED
STOCK OPTION AGREEMENT
INVIVO
THERAPEUTICS CORPORATION
AGREEMENT
made as of the 25th day of September 2008, between InVivo Therapeutics
Corporation (the “Company”), a Delaware corporation having a principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and [insert], having
an address at [insert] (the “Participant”).
WHEREAS,
the Company desires to grant to the Participant an Option to purchase shares of
its common stock, $0.001 par value per share (the “Shares”), under and for the
purposes set forth in the Company’s 2007 Employee, Director and Consultant Stock
Plan (the “Plan”);
WHEREAS,
the Company and the Participant understand and agree that any terms used and not
defined herein have the same meanings as in the Plan; and
WHEREAS,
the Company and the Participant each intend that the Option granted herein shall
be a Non-Qualified Option.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as
follows:
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1.
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GRANT OF
OPTION.
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The
Company hereby grants to the Participant the right and option to purchase all or
any part of an aggregate of [insert] ([insert]) Shares, on the terms and
conditions and subject to all the limitations set forth herein, under United
States securities and tax laws, and in the Plan, which is incorporated herein by
reference. The Participant acknowledges receipt of a copy of the
Plan.
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2.
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PURCHASE
PRICE.
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The
purchase price of the Shares covered by the Option shall be $1.00 per Share,
subject to adjustment, as provided in the Plan, in the event of a stock split,
reverse stock split or other events affecting the holders of Shares after the
date hereof (the “Purchase Price”). Payment shall be made in
accordance with Paragraph 8 of the
Plan.
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3.
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EXERCISABILITY OF
OPTION.
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Subject
to the terms and conditions set forth in this Agreement and the Plan, the Option
granted hereby shall become exercisable as follows: 25% of the Shares
shall vest on the first anniversary of the date of this
agreement, 25% of the Shares shall vest on the second anniversary of
the date of this Agreement, 25% of the Shares shall vest on the third
anniversary of the date of this Agreement and the remaining 25% of the Shares
shall vest on the fourth anniversary of the date of this
Agreement.
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The
foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the Plan.
Notwithstanding the
foregoing, in the event of a Change of Control (as defined below), 100% of the
Shares which would have vested in each vesting installment remaining under this
Option will be vested for purposes of Section 23(B) of the Plan unless this
Option has otherwise expired or been terminated pursuant to its terms or the
terms of the Plan.
Change of Control
means the occurrence of any of the following events:
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(i)
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Ownership. Any
“Person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing 50% or more of the total voting
power represented by the Company’s then outstanding voting securities
(excluding for this purpose the Company or its Affiliates or any employee
benefit plan of the Company) pursuant to a transaction or a series of
related transactions which the Board of Directors does not
approve;
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(ii)
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Merger/Sale
of Assets. A merger or consolidation of the Company whether or
not approved by the Board of Directors, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or the parent of such corporation) at least 50% of the
total voting power represented by the voting securities of the Company or
such surviving entity or parent of such corporation outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s
assets.
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4.
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TERM OF
OPTION.
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The
Option shall terminate ten years from the date of this Agreement, but shall be
subject to earlier termination as provided herein or in the Plan.
If the
Participant ceases to be an employee, director or consultant of the Company or
of an Affiliate (for any reason other than the death or Disability of the
Participant or termination of the Participant for “cause” (as defined in the
Plan)), the Option may be exercised, if it has not previously terminated, within
three months after the date the Participant ceases to be an employee, director
or consultant of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to
the extent that the Option has become exercisable and is in effect at the date
of such cessation of employment, directorship or consultancy.
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Notwithstanding
the foregoing, in the event of the Participant’s Disability or death within
three months after the termination of employment, directorship or consultancy,
the Participant or the Participant’s Survivors may exercise the Option within
one year after the date of the Participant’s termination of employment,
directorship or consultancy, but in no event after the date of expiration of the
term of the Option.
In the
event the Participant’s employment, directorship or consultancy is terminated by
the Company or an Affiliate for “cause” (as defined in the Plan), the
Participant’s right to exercise any unexercised portion of this Option shall
cease immediately as of the time the Participant is notified his or her
employment, directorship or consultancy is terminated for “cause”, and this
Option shall thereupon terminate. Notwithstanding anything herein to
the contrary, if subsequent to the Participant’s termination, but prior to the
exercise of the Option, the Board of Directors of the Company determines that,
either prior or subsequent to the Participant’s termination, the Participant
engaged in conduct which would constitute “cause,” then the Participant shall
immediately cease to have any right to exercise the Option and this Option shall
thereupon terminate.
In the
event of the Disability of the Participant, as determined in accordance with the
Plan, the Option shall be exercisable within one year after the Participant’s
termination of service or, if earlier, within the term originally prescribed by
the Option. In such event, the Option shall be
exercisable:
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(a)
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to
the extent that the Option has become exercisable but has not been
exercised as of the date of Disability;
and
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(b)
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in
the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion through the date of Disability of any additional
vesting rights that would have accrued on the next vesting date had the
Participant not become Disabled. The proration shall be based
upon the number of days accrued in the current vesting period prior to the
date of Disability.
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In the
event of the death of the Participant while an employee, director or consultant
of the Company or of an Affiliate, the Option shall be exercisable by the
Participant’s Survivors within one year after the date of death of the
Participant or, if earlier, within the originally prescribed term of the
Option. In such event, the Option shall be exercisable:
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(x)
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to
the extent that the Option has become exercisable but has not been
exercised as of the date of death;
and
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(y)
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in
the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion through the date of death of any additional vesting
rights that would have accrued on the next vesting date had the
Participant not died. The proration shall be based upon the
number of days accrued in the current vesting period prior to the
Participant’s date of death.
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5.
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METHOD OF EXERCISING
OPTION.
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Subject
to the terms and conditions of this Agreement, the Option may be exercised by
written notice to the Company or its designee, in substantially the form of
Exhibit A
attached hereto. Such notice shall state the number of Shares with
respect to which the Option is being exercised and shall be signed by the person
exercising the Option. Payment of the purchase price for such Shares
shall be made in accordance with Paragraph 8 of the Plan. The Company
shall deliver a certificate or certificates representing such Shares as soon as
practicable after the notice shall be received, provided, however, that the
Company may delay issuance of such Shares until completion of any action or
obtaining of any consent, which the Company deems necessary under any applicable
law (including, without limitation, state securities or “blue sky”
laws). The certificate or certificates for the Shares as to which the
Option shall have been so exercised shall be registered in the Company’s share
register in the name of the person so exercising the Option (or, if the Option
shall be exercised by the Participant and if the Participant shall so request in
the notice exercising the Option, shall be registered in the name of the
Participant and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person
exercising the Option. In the event the Option shall be exercised,
pursuant to Section 4 hereof, by any person other than the Participant, such
notice shall be accompanied by appropriate proof of the right of such person to
exercise the Option. All Shares that shall be purchased upon the
exercise of the Option as provided herein shall be fully paid and
nonassessable.
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6.
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PARTIAL
EXERCISE.
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Exercise
of this Option to the extent above stated may be made in part at any time and
from time to time within the above limits, except that no fractional share shall
be issued pursuant to this Option.
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7.
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NON-ASSIGNABILITY.
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The
Option shall not be transferable by the Employee otherwise than by will or by
the laws of descent and distribution. The Option shall be
exercisable, during the Employee’s lifetime, only by the Employee (or, in the
event of legal incapacity or incompetency, by the Employee’s guardian or
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of the Option or of any
rights granted hereunder contrary to the provisions of this Section 7, or the
levy of any attachment or similar process upon the Option shall be null and
void.
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8.
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NO RIGHTS AS
STOCKHOLDER UNTIL EXERCISE.
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The
Participant shall have no rights as a stockholder with respect to Shares subject
to this Agreement until registration of the Shares in the Company’s share
register in the name of the Participant. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such
registration.
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9.
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ADJUSTMENTS.
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The Plan
contains provisions covering the treatment of Options in a number of
contingencies such as stock splits and mergers. Provisions in the
Plan for adjustment with respect to stock subject to Options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference.
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10.
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TAXES.
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The
Participant acknowledges that upon exercise of the Option the Participant will
be deemed to have taxable income measured by the difference between the then
fair market value of the Shares received upon exercise and the price paid for
such Shares pursuant to this Agreement. The Participant acknowledges
that any income or other taxes due from him or her with respect to this Option
or the Shares issuable pursuant to this Option shall be the Participant’s
responsibility.
The
Participant agrees that the Company may withhold from the Participant’s
remuneration, if any, the minimum statutory amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person’s gross income. At the Company’s
discretion, the amount required to be withheld may be withheld in cash from such
remuneration, or in kind from the Shares otherwise deliverable to the
Participant on exercise of the Option. The Participant further agrees
that, if the Company does not withhold an amount from the Participant’s
remuneration sufficient to satisfy the Company’s income tax withholding
obligation, the Participant will reimburse the Company on demand, in cash, for
the amount under-withheld.
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11.
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PURCHASE FOR
INVESTMENT.
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Unless
the offering and sale of the Shares to be issued upon the particular exercise of
the Option shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the “1933 Act”), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the following conditions have been fulfilled:
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(a)
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The
person(s) who exercise the Option shall warrant to the Company, at the
time of such exercise, that such person(s) are acquiring such Shares for
their own respective accounts, for investment, and not with a view to, or
for sale in connection with, the distribution of any such Shares, in which
event the person(s) acquiring such Shares shall be bound by the provisions
of the following legend which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to such
exercise:
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“The
shares represented by this certificate have been taken for investment and they
may not be sold or otherwise transferred by any person, including a pledgee,
unless (1) either (a) a Registration Statement with respect to such shares shall
be effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws;” and
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(b)
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If
the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration
thereunder. Without limiting the generality of the foregoing,
the Company may delay issuance of the Shares until completion of any
action or obtaining of any consent, which the Company deems necessary
under any applicable law (including without limitation state securities or
“blue sky” laws).
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12.
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RESTRICTIONS ON
TRANSFER OF SHARES.
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12.1 The
Shares acquired by the Participant pursuant to the exercise of the Option
granted hereby shall not be transferred by the Participant except as permitted
herein
12.2 In
the event of the Participant’s termination of service for any reason, the
Company shall have the option, but not the obligation, to repurchase all or any
part of the Shares issued pursuant to this Agreement (including, without
limitation, Shares purchased after termination of employment, Disability or
death in accordance with Section 4 hereof). In the event the Company
does not, upon the termination of service of the Participant (as described
above), exercise its option pursuant to this Section 12.2, the restrictions set
forth in the balance of this Agreement shall not thereby lapse, and the
Participant for himself or herself, his or her heirs, legatees, executors,
administrators and other successors in interest, agrees that the Shares shall
remain subject to such restrictions. The following provisions shall
apply to a repurchase under this Section 12.2:
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(i)
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The
per share repurchase price of the Shares to be sold to the Company upon
exercise of its option under this Section 12.2 shall be equal to the Fair
Market Value of each such Share determined in accordance with the Plan as
of the date of termination of service provided, however, in the event of a
termination by the Company for “cause” (as defined in the Plan), the per
share repurchase price of the Shares to be sold to the Company upon
exercise of its option under this Section 12.2 shall be equal to
$.01.
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(ii)
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The
Company’s option to repurchase the Participant’s Shares in the event of
termination of service shall be valid for a period of 18 months commencing
with the date of such termination of
service.
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(iii)
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In
the event the Company shall be entitled to and shall elect to exercise its
option to repurchase the Participant’s Shares under this Section 12.2, the
Company shall notify the Participant, or in case of death, his or her
Survivor, in writing of its intent to repurchase the
Shares. Such written notice may be mailed by the Company up to
and including the last day of the time period provided for in Section
12.2(ii) for exercise of the Company’s option to
repurchase.
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14
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(iv)
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The
written notice to the Participant shall specify the address at, and the
time and date on, which payment of the repurchase price is to be made (the
“Closing”). The date specified shall not be less than ten days
nor more than 60 days from the date of the mailing of the notice, and the
Participant or his or her successor in interest with respect to the Shares
shall have no further rights as the owner thereof from and after the date
specified in the notice. At the Closing, the repurchase price
shall be delivered to the Participant or his or her successor in interest
and the Shares being purchased, duly endorsed for transfer, shall, to the
extent that they are not then in the possession of the Company, be
delivered to the Company by the Participant or his or her successor in
interest.
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12.3 It
shall be a condition precedent to the validity of any sale or other transfer of
any Shares by the Participant that the following restrictions be complied with
(except as hereinafter otherwise provided):
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(i)
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No
Shares owned by the Participant may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the terms
and conditions hereinafter set
forth.
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(ii)
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Before
selling or otherwise transferring all or part of the Shares, the
Participant shall give written notice of such intention to the Company,
which notice shall include the name of the proposed transferee, the
proposed purchase price per share, the terms of payment of such purchase
price and all other matters relating to such sale or transfer and shall be
accompanied by a copy of the binding written agreement of the proposed
transferee to purchase the Shares of the Participant. Such
notice shall constitute a binding offer by the Participant to sell to the
Company such number of the Shares then held by the Participant as are
proposed to be sold in the notice at the monetary price per share
designated in such notice, payable on the terms offered to the Participant
by the proposed transferee (provided, however, that the Company shall not
be required to meet any non-monetary terms of the proposed transfer,
including, without limitation, delivery of other securities in exchange
for the Shares proposed to be sold). The Company shall give
written notice to the Participant as to whether such offer has been
accepted in whole by the Company within sixty days after its receipt of
written notice from the Participant. The Company may only
accept such offer in whole and may not accept such offer in
part. Such acceptance notice shall fix a time, location and
date for the closing on such purchase (“Closing Date”) which shall not be
less than ten nor more than sixty days after the giving of the acceptance
notice. The place for such closing shall be at the Company’s
principal office. At such closing, the Participant shall accept
payment as set forth herein and shall deliver to the Company in exchange
therefor certificates for the number of Shares stated in the notice
accompanied by duly executed instruments of
transfer.
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15
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(iii)
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If
the Company shall fail to accept any such offer, the Participant shall be
free to sell all, but not less than all, of the Shares set forth in his or
her notice to the designated transferee at the price and terms designated
in the Participant’s notice, provided that (i) such sale is consummated
within six months after the giving of notice by the Participant to the
Company as aforesaid, and (ii) the transferee first agrees in writing to
be bound by the provisions of this Section 12 so that such transferee (and
all subsequent transferees) shall thereafter only be permitted to sell or
transfer the Shares in accordance with the terms hereof. After
the expiration of such six months, the provisions of this Section 12.3
shall again apply with respect to any proposed voluntary transfer of the
Participant’s Shares.
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(iv)
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The
provisions of this Section 12.3 may be waived by the
Company. Any such waiver may be unconditional or based upon
such conditions as the Company may
impose.
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12.4 In
the event that the Participant or his or her successor in interest fails to
deliver the Shares to be repurchased by the Company under this Agreement, the
Company may elect (a) to establish a segregated account in the amount of
the repurchase price, such account to be turned over to the Participant or his
or her successor in interest upon delivery of such Shares, and
(b) immediately to take such action as is appropriate to transfer record
title of such Shares from the Participant to the Company and to treat the
Participant and such Shares in all respects as if delivery of such Shares had
been made as required by this Agreement. The Participant hereby
irrevocably grants the Company a power of attorney which shall be coupled with
an interest for the purpose of effectuating the preceding sentence.
12.5 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 Company issued with respect to the shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company’s rights to repurchase pursuant to this
Agreement. 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 restrictions
contained in this Agreement, shall be added to the Shares subject to the
Company’s rights to repurchase pursuant to this Agreement.
12.6 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 a merger, consolidation or
capital reorganization, there shall be substituted for the Shares then subject
to the restrictions contained in this Agreement such amount and kind of
securities as are issued in such subdivision, combination, reclassification,
merger, consolidation or capital reorganization in respect of the Shares subject
immediately prior thereto to the Company’s rights to repurchase pursuant to this
Agreement.
16
12.7 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 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.
12.8 The
provisions of Sections 12.1, 12.2 and 12.3 shall terminate upon the consummation
of a public offering of any of the Company’s securities pursuant to a
registration statement filed with the Securities and Exchange Commission
pursuant to the 1933 Act, in which offering the aggregate gross proceeds to the
Company exceed $10,000,000 and in which the price per share of such securities
equals or exceeds $5.00 (such price subject to equitable adjustment in the event
of any stock split, stock dividend, combination, reorganization,
reclassification or other similar event).
12.9 If,
in connection with a registration statement filed by the Company pursuant to the
1933 Act, the Company or its underwriter so requests, the Participant will agree
not to sell any Shares for a period not to exceed 180 days following the
effectiveness of such registration.
12.10 The
Participant acknowledges and agrees that neither the Company, its shareholders
nor its directors and officers, has any duty or obligation to disclose to the
Participant any material information regarding the business of the Company or
affecting the value of the Shares before, at the time of, or following a
termination of the employment of the Participant by the Company, including,
without limitation, any information concerning plans for the Company to make a
public offering of its securities or to be acquired by or merged with or into
another firm or entity.
12.11 All
certificates representing the Shares to be issued to the Participant pursuant to
this Agreement shall have endorsed thereon a legend substantially as
follows: “The shares represented by this certificate are subject to
restrictions set forth in a Non-Qualified Stock Option Agreement dated April 19,
2007 with this Company, a copy of which Agreement is available for inspection at
the offices of the Company or will be made available upon request.”
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13.
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NO OBLIGATION TO
MAINTAIN RELATIONSHIP.
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The
Company is not by the Plan or this Option obligated to continue the Participant
as an employee, director or consultant of the Company or an
Affiliate. The Participant acknowledges: (i) that the Plan
is discretionary in nature and may be suspended or terminated by the Company at
any time; (ii) that the grant of the Option is a one-time benefit which does not
create any contractual or other right to receive future grants of options, or
benefits in lieu of options; (iii) that all determinations with respect to any
such future grants, including, but not limited to, the times when options shall
be granted, the number of shares subject to each option, the option price, and
the time or times when each option shall be exercisable, will be at the sole
discretion of the Company; (iv) that the Participant’s participation in the Plan
is voluntary; (v) that the value of the Option is an extraordinary item of
compensation which is outside the scope of the Participant’s employment
contract, if any; and (vi) that the Option is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments.
17
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14.
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NOTICES.
|
Any
notices required or permitted by the terms of this Agreement or the Plan shall
be given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
If to the
Company:
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InVivo Therapeutics
Corporation
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▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn:
CEO
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If to the
Participant:
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[insert]
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or to
such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been
given upon the earlier of receipt, one business day following delivery to a
recognized courier service or three business days following mailing by
registered or certified mail.
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15.
|
GOVERNING
LAW.
|
This
Agreement shall be construed and enforced in accordance with the law of the
State of Delaware, without giving effect to the conflict of law principles
thereof. For the purpose of litigating any dispute that arises under
this Agreement, the parties hereby consent to exclusive jurisdiction in the
Commonwealth of Massachusetts and agree that such litigation shall be conducted
in the courts of Middlesex County, Commonwealth of Massachusetts or the federal courts of
the United States for the District of Massachusetts.
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16.
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BENEFIT OF
AGREEMENT.
|
Subject
to the provisions of the Plan and the other provisions hereof, this Agreement
shall be for the benefit of and shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties
hereto.
18
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17.
|
ENTIRE
AGREEMENT.
|
This
Agreement, together with the Plan, embodies the entire agreement and
understanding between the parties hereto 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 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, provided, however, in any event, this Agreement
shall be subject to and governed by the Plan.
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18.
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MODIFICATIONS AND
AMENDMENTS.
|
The terms
and provisions of this Agreement may be modified or amended as provided in the
Plan.
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19.
|
WAIVERS AND
CONSENTS.
|
Except as
provided in the Plan, 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.
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20.
|
DATA
PRIVACY.
|
By
entering into this Agreement, the Participant: (i) authorizes the
Company and each Affiliate, and any agent of the Company or any Affiliate
administering the Plan or providing Plan record keeping services, to disclose to
the Company or any of its Affiliates such information and data as the Company or
any such Affiliate shall request in order to facilitate the grant of options and
the administration of the Plan; (ii) waives any data privacy rights he or she
may have with respect to such information; and (iii) authorizes the Company and
each Affiliate to store and transmit such information in electronic
form.
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21.
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CONSENT OF
SPOUSE.
|
If the
Participant is married as of the date of this Agreement, the Participant’s
spouse shall execute a Consent of Spouse in the form of Exhibit B hereto,
effective as of the date hereof. Such consent shall not be deemed to
confer or convey to the spouse any rights in the Shares that do not otherwise
exist by operation of law or the agreement of the parties. If the
Participant marries or remarries subsequent to the date hereof, the Participant
shall, not later than 60 days thereafter, obtain his or her new spouse’s
acknowledgement of and consent to the existence and binding effect of Section
12.2 of this Agreement by such spouse’s executing and delivering a Consent of
Spouse in the form of Exhibit B.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
19
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant has hereunto set his or her hand,
all as of the day and year first above written.
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InVivo
Therapeutics Corporation
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By:
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Name
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Title
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[insert]
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20
Exhibit
A
NOTICE OF
EXERCISE OF NON-QUALIFIED STOCK OPTION
[Form
for Unregistered Shares]
To: InVivo
Therapeutics Corporation
Ladies
and Gentlemen:
I hereby
exercise my Non-Qualified Stock Option to purchase __________ shares (the
“Shares”) of the common stock, $0.001 par value, of InVivo Therapeutics
Corporation (the “Company”), at the exercise price of $_____ per share, pursuant
to and subject to the terms of that certain Non-Qualified Stock Option Agreement
between the undersigned and the Company dated ________, 200_.
I am
aware that the Shares have not been registered under the Securities Act of 1933,
as amended (the “1933 Act”), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby
represent and warrant that (1) I have been furnished with all information which
I deem necessary to evaluate the merits and risks of the purchase of the Shares;
(2) I have had the opportunity to ask questions concerning the Shares and
the Company and all questions posed have been answered to my satisfaction; (3) I
have been given the opportunity to obtain any additional information I deem
necessary to verify the accuracy of any information obtained concerning the
Shares and the Company; and (4) I have such knowledge and experience in
financial and business matters that I am able to evaluate the merits and risks
of purchasing the Shares and to make an informed investment decision relating
thereto.
I hereby
represent and warrant that I am purchasing the Shares for my own personal
account for investment and not with a view to the sale or distribution of all or
any part of the Shares.
I
understand that because the Shares have not been registered under the 1933 Act,
I must continue to bear the economic risk of the investment for an indefinite
time and the Shares cannot be sold unless the Shares are subsequently registered
under applicable federal and state securities laws or an exemption from such
registration requirements is available.
I agree
that I will in no event sell or distribute or otherwise dispose of all or any
part of the Shares unless (1) there is an effective registration statement under
the 1933 Act and applicable state securities laws covering any such transaction
involving the Shares or (2) the Company receives an opinion of my legal counsel
(concurred in by legal counsel for the Company) stating that such transaction is
exempt from registration or the Company otherwise satisfies itself that such
transaction is exempt from registration.
A-1
I consent
to the placing of a legend on my certificate for the Shares stating that the
Shares have not been registered and setting forth the restriction on transfer
contemplated hereby and to the placing of a stop transfer order on the books of
the Company and with any transfer agents against the Shares until the Shares may
be legally resold or distributed without restriction.
I
understand that at the present time Rule 144 of the Securities and Exchange
Commission (the “SEC”) may not be relied on for the resale or distribution of
the Shares by me. I understand that the Company has no obligation to
me to register the sale of the Shares with the SEC and has not represented to me
that it will register the sale of the Shares.
I
understand the terms and restrictions on the right to dispose of the Shares set
forth in the 2007 Employee, Director and Consultant Stock Plan and the
Non-Qualified Stock Option Agreement, both of which I have carefully
reviewed. I consent to the placing of a legend on my certificate for
the Shares referring to such restriction and the placing of stop transfer orders
until the Shares may be transferred in accordance with the terms of such
restrictions.
I have
considered the Federal, state and local income tax implications of the exercise
of my Option and the purchase and subsequent sale of the Shares.
I am
paying the option exercise price for the Shares as follows:
Please
issue the stock certificate for the Shares (check one):
¨ to me;
or
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¨
to me and ________________, as joint tenants with right of
survivorship
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and mail
the certificate to me at the following address:
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My mailing address for shareholder
communications, if different from the address listed above is:
A-2
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Very
truly yours,
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Participant
(signature)
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Print
Name
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Date
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Social
Security Number
|
A-3
Exhibit
B
CONSENT OF
SPOUSE
I,
____________________________, spouse of _____________________________,
acknowledge that I have read the Non-Qualified Stock Option Agreement dated as
of April 19, 2007 (the “Agreement”) to which this Consent is attached as Exhibit
B and that I know its contents. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the
Agreement. I am aware that by its provisions the Shares granted to my
spouse pursuant to the Agreement are subject to a right of repurchase in favor
of InVivo Therapeutics Corporation (the “Company”) and that, accordingly, the
Company has the right to repurchase up to all of the Shares of which I may
become possessed as a result of a gift from my spouse or a court decree and/or
any property settlement in any domestic litigation.
I hereby
agree that my interest, if any, in the Shares subject to the Agreement shall be
irrevocably bound by the Agreement and further understand and agree that any
community property interest I may have in the Shares shall be similarly bound by
the Agreement.
I agree
to the repurchase right described in Section 12.2 of the Agreement and I hereby
consent to the repurchase of the Shares by the Company and the sale of the
Shares by my spouse or my spouse’s legal representative in accordance with the
provisions of the Agreement. Further, as part of the consideration
for the Agreement, I agree that at my death, if I have not disposed of any
interest of mine in the Shares by an outright bequest of the Shares to my
spouse, then the Company shall have the same rights against my legal
representative to exercise its rights of repurchase with respect to any interest
of mine in the Shares as it would have had pursuant to the Agreement if I had
acquired the Shares pursuant to a court decree in domestic
litigation.
I AM
AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE AGREEMENT
ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL GUIDANCE OR
COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.
Dated as
of the _______ day of ________________, 200__.
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Print
name:
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A-4