AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT
Amendment to Restricted Stock Purchase Agreement dated as of January 17,
1996, among VIROPHARMA, INC., a Delaware corporation (the "Corporation"), and
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. (the "Purchaser"), dated as of January 17, 1996 (this
"Amendment").
W I T N E S S E T H:
WHEREAS, on January 17, 1996, the Corporation and the Purchaser entered
into a Restricted Stock Purchase Agreement (the "Purchase Agreement"), whereby,
among other things, the Corporation issued and sold to the Purchaser, and the
Purchaser purchased from the Corporation, 100,000 shares of the Common Stock,
par value $0.001 per share, of the Corporation, subject to the terms and
conditions thereof, including vesting in accordance therewith, rights of
repurchase in the event of the termination of Purchaser, and a right of first
refusal of the Corporation, in the event of a "transfer" (as defined in the
Purchase Agreement) by the Purchaser; and
WHEREAS, the Purchaser and the Corporation intended to enter into the
Purchase Agreement on the same terms, with the exception of the purchase price
and the vesting schedule, as the Employee Stock Purchase Agreements, dated as of
December 29, 1995, and amended as of June 15, 1995, (the "Employee Purchase
Agreements"), among the Corporation and various employees; and
WHEREAS, the Employee Purchase Agreements were amended on June 15, 1995 in
connection with the issuance and sale to certain institutional investors of
shares of Series B Convertible Preferred Stock, par value $0.001 per share, of
the Corporation (the "Series B Shares"), pursuant to the terms and subject to
the conditions of that certain Series B Convertible Preferred Stock Purchase
Agreement, dated as of June 15, 1995, among the Corporation and each of the
"Purchasers" whose names are set forth on Schedule A thereto; and
WHEREAS, the Employee Purchase Agreements were amended, among other things,
to terminate the Corporation's right to repurchase a purchaser's shares after
such shares vest in accordance with the terms of the Employee Purchase Agreement
and to provide for the automatic vesting of such shares upon the occurrence of
certain events; and
WHEREAS, the Purchase Agreement as initially entered into does not reflect
these amendments to the Employee Purchase Agreements;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Amendment of Repurchase Right. Section V of the Purchase Agreement is
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hereby deleted in its entirety, and substituted therefor shall be the following
Section V:
5.1 Grant. The Corporation is hereby granted the right (the "Repurchase
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Right"), exercisable at any time during the sixty (60) day period following the
date the Purchaser ceases for any reason to be a Service Provider (as defined
below) to the Corporation (or its assignees) to repurchase at the Purchase Price
all or (at the discretion of the Corporation and with the consent of the
Purchaser) any portion of the Purchased Shares in which the Purchaser has not
acquired a vested interest in accordance with the vesting provisions of Section
5.3 (such shares to be hereinafter called the "Unvested Shares"). The
Corporation shall not have any Repurchase Right with respect to any portion of
the Purchased Shares in which the Purchaser has acquired a vested interest in
accordance with the vesting provisions of Section 5.3 (the "Vested Shares"). For
purposes of this Agreement, the Purchaser shall be deemed to be a "Service
Provider" to the Corporation for so long as the Purchaser renders periodic
services to the Corporation or one or more of its parent or subsidiary
corporations, whether as an employee, non-employee member of the board of
directors, or an independent, non-employee consultant.
5.2 Exercise of the Repurchase Right. The Repurchase Right shall be
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exercisable by written notice delivered to the Owner of the Purchased Shares at
any time during the sixty (60) day period specified in Section 5.1. The notice
shall indicate the number of Unvested Shares to be repurchased and the date on
which the repurchase is to be effected, such date to be not more than thirty
(30) days after the date of notice. To the extent one or more certificates
representing Purchased Shares may have been previously delivered out of escrow
to the Owner, then the Owner shall, prior to the close of business on the date
specified for the repurchase, deliver to the Secretary of the Corporation the
certificates representing the Purchased Shares to be repurchased, each
certificate to be properly endorsed for transfer. The Corporation (or its
assignees) shall, concurrently with the receipt of such stock certificates
(either from escrow in accordance with Section 7.3 or from Owner as herein
provided), pay to Owner in cash or cash equivalents (including the cancellation
of any purchase-money indebtedness) an amount equal to the Purchase Price
previously paid for the Unvested Shares which are to be purchased.
5.3 Termination of the Repurchase Right.
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(a) The Repurchase Right shall terminate with respect to any
Purchased Shares for which it is not timely exercised under Section 5.2. In
addition, the Repurchase Right provided in Section 5.1 shall terminate, and
cease to be exercisable, with respect to any and all Purchased Shares in which
the Purchaser vests in accordance with the schedule below. Accordingly, provided
the Purchaser continues to be a Service Provider to the Corporation, the
Purchaser shall acquire a vested interest in, and the Repurchase Right provided
in Section 5.1 shall lapse with respect to, the Purchased Shares in accordance
with the following provisions:
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(i) as of the date hereof (the "Vesting Measurement Date"), the
Purchaser shall acquire a vested interest in, and there shall be no Repurchase
Right with respect to, twenty-five percent of the Purchased Shares, and
(ii) upon the expiration of the initial twelve (12) month period
measured from the Vesting Measurement Date, the Purchaser shall acquire a vested
interest in, and the Repurchase Right provided in Section 5.1 shall lapse with
respect to, the remaining Purchased Shares in a series of successive annual
installments each equal to twenty-five percent (25%) of the number of Purchased
Shares issued by the Corporation to the Purchaser as of the date hereof.
(b) All Purchased Shares as to which the Repurchase Right provided in
Section 5.1 lapses shall, however, continue to be subject to (i) the First
Refusal Right of the Corporation and its assignees under Article VI hereof and
(ii) the market stand-off provisions of Section 3.3 above.
5.4 Additional Shares or Substituted Securities. In the event of any
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stock dividend, stock split, recapitalization or other change affecting the
Corporation's outstanding Common Stock as a class effected without receipt of
consideration, any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which is by reason
of any such transaction distributed with respect to the Purchased Shares shall
be immediately subject to the Repurchase Right, but only to the extent the
Purchased Shares are at the time Unvested Shares. Appropriate adjustments to
reflect the distribution of such securities or property shall be made to the
number of Purchased Shares hereunder and to the price per share to be paid upon
the exercise of the Repurchase Right in order to reflect the effect of any such
transaction upon the Corporation's capital structure; provided, however, that
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the aggregate Purchase Price shall remain the same.
5.5 Corporate Transaction.
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(a) In the event of any of the following transactions:
(i) a merger or acquisition in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which at least fifty percent (50%) or more of the
Corporation's outstanding voting stock is transferred to holders different from
those who held the stock immediately prior to such merger, and in each case, the
valuation of the Company exceeds $50,000,000
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(in each case, provided such valuation is exceeded, a "Corporate
Transaction") then the Repurchase Right shall lapse in its entirety and the
Purchaser shall acquire a vested interest in all such Purchased Shares upon
the consummation of such Corporate Transaction. Otherwise, the Purchased
Shares shall remain subject to the Repurchase Right pursuant to an
assignment by the Corporation to the successor corporation (or its parent
company) in connection with such Corporate Transaction, in which case the
Purchased Shares shall vest in accordance with Section 5.3 hereof.
(b) To the extent the Repurchase Right remains in effect
following a corporate transaction which is not deemed a "Corporate
Transaction" as defined in Section 5.5(a) hereof, the Repurchase Right
shall apply to the new capital stock or other property received in exchange
for the Purchased Shares in consummation of the Corporate Transaction, but
only to the extent the Purchased Shares are at the time covered by such
right. Appropriate adjustments shall be made to the price per share payable
upon exercise of the Repurchase Right to reflect the effect of the
Corporate Transaction upon the Corporation's capital structure; provided,
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however, that the aggregate Purchase Price shall remain the same.
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5.6 Legend. In addition to the legends required by Section 2.4
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above, all certificates representing Purchased Shares subject to the
Corporation's Repurchase Right shall be endorsed with the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE
CORPORATION AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS CERTAIN
REPURCHASE RIGHTS TO THE COMPANY UPON TERMINATION OF THE REGISTERED
HOLDER'S SERVICES WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL
UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE."
2. Amendment of Right of First Refusal. Section VI of the Purchase
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Agreement is hereby deleted in its entirety and substituted therefor shall be
the following:
6.1 Grant. The Corporation is hereby granted the right of first
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refusal (the "First Refusal Right"), exercisable in connection with any
proposed sale or other transfer of all or any part of the Purchased Shares
which have become Vested Shares in accordance with
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Section 5.3 hereof. For purposes of this Article VI, the term "transfer" shall
include any assignment, pledge, encumbrance or other disposition for value of
the Purchased Shares intended to be made by the Owner, but shall not include any
of the permitted transfers under Section 4.1 above.
6.2 Notice of Intended Disposition. In the event the Owner desires to
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accept a bona fide third-party offer for any or all of the Purchased Shares (the
shares subject to such offer to be hereinafter called, solely for the purposes
of this Article VI, the "Target Shares"), Owner shall promptly (i) deliver to
the Secretary of the Corporation written notice (the "Disposition Notice") of
the offer and the basic terms and conditions thereof, including the proposed
purchase price thereof, and (ii) provide satisfactory proof that the disposition
of the Target Shares to the third party offeror would not be in contravention of
the provision set forth in Articles II and III of this Agreement.
6.3 Exercise Right. The Corporation (or its assignees) shall, for a
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period of thirty (30) days following receipt of the Disposition Notice, have the
right to repurchase any or all of the Target Shares specified in the Disposition
Notice upon substantially the same terms and conditions specified therein. Such
right shall be exercisable by written notice (the "Exercise Notice") delivered
to Owner prior to the expiration of the thirty (30) day exercise period. If
such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, then the Corporation (or its assignees) shall effect the
repurchase of the Target Shares, including payment of the purchase price, not
more than ten (10) business days after delivery of the Exercise Notice; and at
such time Owner shall deliver to the Corporation the certificates representing
the Target Shares to be repurchased, each certificate to be properly endorsed
for transfer. To the extent any of the Target Shares are at the time held in
escrow under Article VII hereof, the certificates for such shares shall
automatically be released from escrow and surrendered to the Corporation for
cancellation. The Target Shares so purchased shall thereupon be cancelled and
cease to be issued and outstanding shares of the Corporation's Common Stock.
Should the purchase price specified in the Disposition Notice be payable in
property other than cash or evidences of indebtedness, the Corporation (or its
assignees) shall have the right to pay the purchase price in the form of cash
equal in amount to the value of such property. If the Owner and the Corporation
(or its assignees) cannot agree on such cash value within ten (10) days after
the Corporation's receipt of the Disposition Notice, the valuation shall be made
by an appraiser of recognized standing selected by the Owner and the Corporation
(or its assignees), or, if they cannot agree on an appraiser within twenty (20)
days after the Corporation's receipt of the Disposition Notice, each shall
select an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. The cost of such appraisal shall be shared equally
by the Owner and the Corporation. The Closing shall then be held on the latter
of (i) the fifth (5th) business day following delivery of the Exercise Notice or
(ii) the fifteenth (15th) day after such cash valuation shall have been made.
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6.4 Non-Exercise of Right. In the event the Exercise Notice is not given
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to the Owner within thirty (30) days following the date of the Corporation's
receipt of the Disposition Notice, the Owner shall have a period of thirty (30)
days thereafter, in which to sell or otherwise dispose of the Target Shares upon
terms and conditions (including the purchase price) no more favorable to third-
party purchaser than those specified in the Disposition Notice; provided,
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however, that any such sale or disposition shall not be effected in
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contravention of the provisions of Article II of this Agreement. To the extent
any of the Target Shares are at the time held in escrow pursuant to Article VII
below, the certificates for such shares shall automatically be released from
escrow and surrendered to the Owner. The third party purchaser shall acquire the
Target Shares free and clear of all the terms and provisions of this Agreement
(including the Corporation's Repurchase Right under Article V and the
Corporation's (or its assignees') First Refusal Right hereunder). In the event
the Owner does not sell or otherwise dispose of all or any portion of the Target
Shares within the specified thirty (30) day period, the Corporation's (or its
assignees') First Refusal Right shall continue to be applicable to any
subsequent disposition of the Target Shares by the Owner until such right lapses
in accordance with Section 6.7 below.
6.5 Partial Exercise of Right. In the event the Corporation (or its
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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,
the Owner shall have the option, exercisable by written notice to the
Corporation delivered within twenty (20) 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 a third-
party purchaser in compliance with the requirements of Section 6.4, as if the
Corporation did not exercise the First Refusal Right hereunder; or
(b) Sale to the Corporation (or its assignees) of the portion of the
Target Shares which the Corporation (or its assignees) has or have elected to
purchase, such sale to be effected in substantial conformity with the provisions
of Section 6.3.
Failure of Owner to deliver timely notification to the Corporation under
this Section 6.5 shall be deemed to be an election by Owner to sell the Target
Shares pursuant to alternative (b) above.
6.6 Recapitalization.
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(a) In the event of any stock dividend, stock split, recapitalization
or other transaction affecting the Corporation'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 Purchased Shares shall
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be immediately subject to the Corporation's First Refusal Right hereunder,
but only to the extent the Purchased Shares are at a time covered by such
right.
(b) In the event of a Corporate Transaction (as defined in
Section 5.5 above), the Corporation's First Refusal Right shall remain in
full force and effect and shall apply to the new capital stock or other
property received in exchange for the Purchased Shares in consummation of
the Corporate Transaction, but only to the extent the Purchased Shares are
at the time covered by such right.
6.7 Termination. The First Refusal Right under this Article VI shall
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terminate and cease to have effect upon the earlier to occur of (i) the
first date on which the shares of the Corporation's Common Stock are held
of record by more than five hundred (500) persons, or (ii) the closing of a
firm commitment underwritten public offering pursuant to an effective
registration under the 1933 Act covering the offer and sale of Common Stock
in the aggregate amount of at least $10,000,000, (or such lesser amount as
may be approved by the Corporation's Board of Directors, which shall
include a majority of the directors designated by holders of the Series B
Shares pursuant to Section IV.C.3(b) of the Company's Certificate of
Incorporation). However, the market stand-off provisions of Section 3.3
above shall continue to remain in full force and effect following the
termination of the First Refusal Right hereunder.
6.8 Legend. All certificates representing Purchased Shares subject
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to the Right of First Refusal shall be endorsed with the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE
CORPORATION AND THE REGISTERED HOLDERS OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE
CORPORATION CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER
OF THE SHARES. THE SECRETARY OF THE CORPORATION WILL UPON WRITTEN
REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE."
3. Amendment to Section 7.3(d). Section 7.3 of the Purchase Agreement is
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hereby deleted in its entirety and substituted therefor shall be the following:
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(d) As the interest of the Owner in the Purchased Shares (or any
other assets or securities issued with respect thereto) vests in accordance
with the provisions of Article V hereof, the certificates for such vested
shares (as well as all other vested assets and securities) shall be
released from escrow and delivered to the Owner in accordance with the
following schedule:
(i) the initial release of vested shares from escrow shall
be effected within thirty (30) days following the Vesting Measurement Date,
(ii) subsequent releases of vested shares (or other vested
assets and securities) from escrow shall be effected at annual intervals
thereafter, with the first such subsequent annual release to occur twelve (12)
months after the Vesting Measurement Date, and
(iii) upon any earlier termination of the Corporation's
Repurchase Right in accordance with the applicable provisions of Article V
hereof, the Purchased Shares (or other assets or securities) at the time held in
escrow hereunder shall promptly be released to the Owner as fully vested shares
or other property.
4. Amendment to Section 8.1. Section 8.1 of the Purchase Agreement is
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hereby deleted in its entirety and substituted therefor shall be the following:
8.1 Assignment. The Corporation may assign its Repurchase Rights
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under Article V and/or its First Refusal Right under Article VI to one or
more persons or entities selected by the Corporation's Board of Directors,
including (without limitation) one or more stockholders of the Corporation;
provided, however, that any assignment of such Repurchase Rights and/or
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Rights of First Refusal shall not apply to any subsequent Repurchase Right
or Right of First Refusal in favor of the Corporation.
5. Effectiveness. This Amendment shall become effective as of the date
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first written above, upon such time as the Company shall have received from the
Purchaser at least three (3) duly executed and delivered copies of this
Amendment.
6. Limited Amendment. Except as modified hereby, the Purchase Agreement
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shall remain unmodified and shall continue to be in full force and effect in
accordance with its terms.
7. Governing Law. This Amendment shall be governed by, and construed in
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accordance with, the laws of the State of Delaware, as such laws are applied to
contracts entered into and performed in such state.
8. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which shall be deemed an original, but both of which, when
taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
VIROPHARMA, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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