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EXHIBIT 10.7
SPECTRX, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 30th day of June, 1994 at Norcross,
Georgia, between SpectRx, Inc., a Delaware corporation (the "Company"), and
▇▇▇▇ ▇▇▇▇▇▇▇ (the "Purchaser").
WHEREAS the Purchaser is an employee or consultant of the Company and
the Purchaser's continued participation is considered by the Company to be
important for the Company's continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Company is willing to sell to the Purchaser
and the Purchaser desires to purchase shares of Common Stock according to the
terms and conditions contained in the 1993 Incentive Stock Plan (the "Plan")
and herein.
THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase an aggregate of 184,395
shares of the Company's Common Stock (the "Shares"), at the price of $0.15 per
share for an aggregate purchase price of $27,659.25.
2. Payment of Purchase Price.
(a) The purchase price for the Shares may be paid by delivery
to the Company at the time of execution of this Agreement of a check or a duly
executed full recourse promissory note (the "Note") in the form attached hereto
as Exhibit A.
(b) With respect to the Note, the parties agree to the
following:
(1) The Note shall become payable in full upon
termination or cessation of the Purchaser's employment with or services to the
Company for any reason.
(2) The Purchaser shall deliver to an escrow
holder designated by the Company (the "Escrow Holder") all certificates
representing the Shares and an executed blank stock assignment for use in
transferring all or a portion of said Shares to the Company
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if, as and when required under this Section 2(b) or under any other provision
of this Agreement including Section 3.
(3) As security for the payment of the Note and
any renewal, extension or modification thereof, the Purchaser hereby grants to
the Company a security interest in and pledges with and delivers to the Company
the certificate or certificates representing the Shares.
(4) In the event of any foreclosure of the
security interest, the Company may sell the Shares at a private sale or may
itself repurchase any or all of the Shares. The parties acknowledge that,
prior to the establishment of a public market for the Shares of the Company,
the securities laws applicable to the sale of the Shares make a public sale of
the Shares commercially unreasonable. The parties agree that the repurchasing
of said Shares by the Company, or by any person to whom the Company may have
assigned its rights hereunder, is commercially reasonable if made at a price
determined by the Board of Directors in its discretion, fairly exercised,
representing what would be the fair market value of the Shares diminished by
any limitation on transferability, whether due to the size of the block of
Shares or the restrictions of applicable securities laws.
(5) In the event of default in payment when due
of any indebtedness under the Note, the Company may elect then, or at any time
thereafter, to exercise all rights available to a secured party under the
Delaware Commercial Code, including the right to sell the Shares at a private
or public sale or repurchase the Shares as provided above. The proceeds of any
sale shall be applied in the following order:
(i) To pay all reasonable expenses of
the Company in enforcing this
Agreement, including without
limitation reasonable attorneys'
fees and legal expenses incurred
by the Company.
(ii) In satisfaction of the remaining
indebtedness under the Note.
(iii) To the Purchaser, any remaining
proceeds.
(6) Upon full payment by the Purchaser of all
amounts due on Purchaser's Note, the Escrow Holder shall deliver to the
Purchaser the certificate or certificates representing the Shares in the Escrow
Holder's possession belonging to the Purchaser, the blank stock assignment, and
the executed original of the Note marked "cancelled" by the Company, and the
Escrow Holder
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shall be discharged of all further obligations hereunder; provided, however,
that the Escrow Holder shall nevertheless retain said certificate or
certificates and stock assignment as escrow agent if so required pursuant to
other restrictions imposed pursuant to this Agreement.
3. Repurchase Option.
(a) In the event of any voluntary or involuntary termination
of the Purchaser's employment by or services to the Company for any or no
reason (including death or disability) before all of the Shares are released
from the Company's repurchase option (see Section 4), the Company shall, upon
the date of such termination (as reasonably fixed and determined by the
Company) have an irrevocable, exclusive option for a period of ninety (90) days
from such date to repurchase all (but not less than all) of the Unreleased
Shares (as defined in Section 4) at such time at the original purchase price
per share (the "Repurchase Price"). Said option shall be exercised by the
Company by written notice to the Purchaser or the Purchaser's executor (with a
copy to the Escrow Holder) and, at the Company's option, (i) by delivery to the
Purchaser or the Purchaser's executor with such notice of a check in the amount
of the purchase price for the Shares being repurchased, or (ii) by cancellation
by the Company of an amount of the Purchaser's indebtedness to the Company
equal to the purchase price for the Shares being repurchased, or (iii) by a
combination of (i) and (ii) so that the combined payment and cancellation of
indebtedness equals such repurchase price. Upon delivery of such notice and the
payment of the purchase price in any of the ways described above, the Company
shall become the legal and beneficial owner of the Shares being repurchased and
all rights and interests therein or relating thereto, and the Company shall
have the right to retain and transfer to its own name the number of Shares
being repurchased by the Company.
(b) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's purchase rights under
this Agreement and purchase all or a part of such Shares; provided that if the
fair market value of the Shares to be repurchased on the date of such
designation or assignment (the "Repurchase FMV") exceeds the Repurchase Price
of the Shares to be repurchased, then each such designee or assignee shall pay
the Company cash equal to the difference between the Repurchase FMV and the
Repurchase Price of the Shares which such designee or assignee shall have the
right to repurchase.
4. Release of Shares From Repurchase Option.
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(a) Twenty-five percent (25%) of the Shares shall be released
from the Company's repurchase option on January 1, 1994 and one forty-eigth
(1/48th) of the Shares shall be released from the Company's repurchase option
on the first day of each calendar month thereafter, provided in each case that
the Purchaser's employment or services have not been terminated prior to the
date of any such release. In no event shall the Shares be released from the
Company's repurchase option at a rate less than 20% per year over five years
from the date of this Agreement.
(b) Any of the Shares which have not yet been released from
the Company's repurchase option are referred to herein as "Unreleased Shares."
(c) The Shares which have been released from the Company's
repurchase option shall be delivered to the Purchaser at the Purchaser's
request (i) if the portion of the Note with respect to such Shares has been
paid (see Section 6) or (ii) so long as the Note continues to be secured by
twice the number of shares purchased pursuant to this Agreement.
5. Restriction on Transfer. Except for the pledge and escrow
described in Sections 2 and 6 or transfer of the Shares to the Company or its
assignees contemplated by this Agreement, none of the Shares or any beneficial
interest therein shall be transferred, encumbered or otherwise disposed of in
any way until the release of such Shares from the Company's repurchase option
in accordance with the provisions of this Agreement, other than by will or the
laws of descent and distribution.
6. Escrow of Shares.
(a) The Shares issued under this Agreement shall be held by
the Escrow Holder, along with a stock assignment executed by the Purchaser in
blank, until the expiration of the Company's option to repurchase such Shares
as set forth above. An additional 217,000 shares of the Company's Common Stock
which are presently outstanding in the name of the Purchaser shall also be held
in escrow as additional security for the Note.
(b) The Escrow Holder is hereby directed to permit transfer
of the Shares only in accordance with this Agreement or instructions signed by
both parties. In the event further instructions are desired by the Escrow
Holder, the Escrow Holder shall be entitled to rely upon directions executed by
a majority of the authorized number of the Company's Board of Directors. The
Escrow Holder shall have no liability for any act or omission hereunder while
acting in good faith in the exercise of the Escrow Holder's own judgment.
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(c) If the Company or any assignee exercises its repurchase
option hereunder, the Escrow Holder, upon receipt of written notice of such
option exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
(d) When the repurchase option has been exercised or expires
unexercised or a portion of the Shares has been released from such repurchase
option and provided (i) the Note has been paid in full with respect to such
Shares or (ii) so long as the Note continues to be secured by twice the number
of shares purchased pursuant to this Agreement, upon Purchaser's request the
Escrow Holder shall promptly cause a new certificate to be issued for such
released Shares and shall deliver such certificate to the Purchaser.
(e) Subject to the terms hereof, the Purchaser shall have all
the rights of a shareholder with respect to such Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time during the term of
the Company's repurchase option, there is (i) any stock dividend, stock split
or other change in the Shares, or (ii) any merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and
all new, substituted or additional securities to which the Purchaser is
entitled by reason of the Purchaser's ownership of the Shares shall be
immediately subject to this escrow, deposited with the Escrow Holder and
included thereafter as "Shares" for purposes of this Agreement and the
Company's repurchase option.
7. Investment Representations; Restrictions on Transfer.
(a) In connection with the purchase of the Shares, the
Purchaser represents to the Company the following:
(i) The Purchaser is aware of the Company's business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Shares. The Purchaser is purchasing these Shares for investment for the
Purchaser's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
(ii) The Purchaser acknowledges and understands that
the Shares constitute "restricted securities" under the Securities Act and must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. The
Purchaser further acknowledges and
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understands that the Company is under no obligation to register the Shares. The
Purchaser understands that the certificate evidencing the Shares will be
imprinted with a legend which prohibits the transfer of the Shares unless they
are registered or such registration is not required in the opinion of counsel
satisfactory to the Company.
(iii) The Purchaser is familiar with the provisions
of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof, in a non-public offering
subject to the satisfaction of certain conditions. Rule 701 provides that if
the issuer qualifies under Rule 701 at the time of issuance of the securities
to the Purchaser, such issuance will be exempt from registration under the
Securities Act. In the event the Company later becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter the securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including among other things: (1) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, and the amount of securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), if
applicable. Notwithstanding this paragraph 7(a)(iii), the Purchaser
acknowledges and agrees to the restrictions set forth in paragraph 7(b).
In the event that the Company does not qualify under Rule 701
at the time of issuance of the securities to the Purchaser, then the securities
may be resold in certain limited circumstances subject to the provisions of
Rule 144, which requires among other things: (1) the availability of certain
public information about the Company: (2) the resale occurring not less than
two years after the party has purchased, and made full payment for, within the
meaning of Rule 144, the securities to be sold; and (3) in the case of an
affiliate, or of a non-affiliate who has held the securities less than three
years, the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified
limitations stated therein, if applicable.
(b) The Purchaser agrees, in connection with the Company's
initial underwritten public offering of the Company's
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securities, (1) not to sell, make short sale of, loan, grant any options for
the purchase of, or otherwise dispose of any shares of Common Stock of the
Company held by the Purchaser (other than those shares included in the
registration) without the prior written consent of the Company or the
underwriters managing such initial underwritten public offering of the
Company's securities for one hundred eighty (180) days from the effective date
of such registration, and (2) further agrees to execute any agreement
reflecting (1) above as may be requested by the underwriters at the time of the
public offering.
8. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legends (in addition to any
legends required under applicable state securities laws):
(a) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF
THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
DELAWARE COMMISSIONER OF CORPORATIONS EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES.
(b) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
(c) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
9. Adjustment for Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company after the date of this
Agreement.
10. Tax Consequences. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. The
Purchaser understands that the Purchaser (and not the Company) shall be
responsible for the Purchaser's own tax liability that may arise as a result of
this
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investment or the transactions contemplated by this Agreement. The
Purchaser understands that Section 83 of the Internal Revenue Code of 1986 (the
"Code"), taxes as ordinary income both (i) the difference between the fair
market value of the Shares when the Company granted the Purchaser the right to
purchase the Shares and the fair market value of the Shares on the date of this
Agreement and (ii) the difference between the amount paid for the Shares and
the fair market value of the Shares as of the date any restrictions on the
Shares lapse. In this context, "restriction" includes the right of the Company
to buy back the Shares pursuant to its repurchase option. In the event the
Company has registered under the Exchange Act, "restriction" with respect to
officers, directors and 10% shareholders also means the period after the
purchase of the Shares during which such officers, directors and 10%
shareholders could be subject to suit under Section 16(b) of the Exchange Act.
The Purchaser understands that the Purchaser may elect to be taxed at the time
the Shares are purchased rather than when and as the Company's repurchase
option or 16(b) period expires by filing an election under Section 83(b) of the
Code with the I.R.S. within 30 days from the date of purchase.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PURCHASER'S BEHALF.
11. General Provisions.
(a) This Agreement shall be governed by the laws of the State
of Delaware. This Agreement represents the entire agreement between the parties
with respect to the purchase of Common Stock by the Purchaser and may only be
modified or amended in writing signed by both parties.
(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end
of this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party not sending the notice.
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(c) The rights and benefits of the Company under this
Agreement shall be transferable to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by the Company's successors and assigns. The rights and obligations
of the Purchaser under this Agreement may only be assigned with the prior
written consent of the Company.
(d) Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN
EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH PURCHASER'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING
RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
(g) Purchaser acknowledges receipt of a copy of the Plan, a
copy of which is annexed hereto, represents that Purchaser is familiar with the
terms and provisions thereof, and hereby accepts this Agreement subject to all
of the terms and provisions thereof. Purchase has reviewed the Plan and this
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement and fully understands all provisions
of the Agreement. Purchase hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board or of the Committee upon
any questions arising under the Plan. Purchaser further agrees to notify the
Company upon any change in the residence address indicated below.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first set forth above.
SPECTRX, INC. PURCHASER:
a Delaware corporation
By:
-------------------------- -----------------------------------
Title:
----------------------- -----------------------------------
(Address)
----------------------------- -----------------------------------
(Address)
-----------------------------
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CONSENT OF SPOUSE
I, ____________________, spouse of ▇▇▇▇ ▇▇▇▇▇▇▇, have read and approve
the foregoing Agreement. In consideration of granting of the right to my
spouse to purchase shares of SpectRx, Inc., as set forth in the Agreement, I
hereby appoint my spouse as my attorney-in-fact in respect to the exercise of
any rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
Delaware or similar laws relating to marital property in effect in the state of
our residence as of the date of the signing of the foregoing Agreement.
Dated: _______________, 1994
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, ▇▇▇▇ ▇▇▇▇▇▇▇, hereby sell, assign and transfer unto
______________________________________
___________________________________________ (__________) shares of the Common
Stock of SpectRx, Inc. (the "Company") standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
attorney, to transfer the said stock on the books of the within named
corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Stock
Purchase Agreement between the Company and the undersigned dated
______________, 19__.
Dated: _______________, 19__
Signature:______________________________
▇▇▇▇ ▇▇▇▇▇▇▇
INSTRUCTION: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.
THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS
"REPURCHASE OPTION" SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL
SIGNATURES ON THE PART OF THE PURCHASER.
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ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the above-referenced
Federal Tax Code, to include in taxpayer's gross income for the current taxable
year, the amount of any compensation taxable to taxpayer in connection with
receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME: : TAXPAYER: SPOUSE:
ADDRESS: :
IDENTIFICATION NO.: : TAXPAYER: SPOUSE:
TAXABLE YEAR: 1994
2. The property with respect to which the election is made is described
as follows: 184,395 shares (the "Shares") of the Common Stock of
SpectRx, Inc. (the "Company").
3. The date on which the property was transferred is: June 30, 1994.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, on
certain events. This right lapses with regard to a portion of the
Shares over time.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is: $27,659.25
6. The amount (if any) paid for such property is: $27,659.25
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: _________________________ Taxpayer: ________________________
The undersigned spouse of taxpayer joins in this election.
Dated: __________________________ Taxpayer: ________________________
Spouse of Taxpayer
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EXHIBIT A
PROMISSORY NOTE
$27,659.25 June 30, 1994
For value received, the undersigned promises to pay to
SpectRx, Inc., a Delaware corporation (the "Company"), or order, at its
principal office the principal sum of $27,659.25 with interest thereon at the
rate of six percent (6%) per annum on the unpaid balance of the principal sum.
Said principal and interest shall be due on June 30, 1999.
Upon any termination of the employment between the undersigned and the
Company, this Note shall be immediately due and payable.
Principal payable in lawful money of the United States of America.
THE PRIVILEGE IS RESERVED TO PREPAY ANY PORTION OF THE NOTE AT ANY TIME.
Should suit be commenced to collect this Note or any portion thereof,
such sum as the Court may deem reasonable shall be added hereto as attorneys'
fees. The maker waives presentment for payment, protest, notice of protest,
and notice of non-payment of this Note.
This Note is secured by a pledge of certain shares of Common Stock of
the Company, pursuant to the provisions of the Stock Purchase Agreement between
the Company and the undersigned executed contemporaneously with this Note.
The holder of this Note shall have full recourse against the maker,
and shall not be required to proceed against the Shares or other collateral
securing this Note in the event of default.
The undersigned understands that the two-year holding period under
Rule 144 of the Securities Act of 1933 generally will not begin to run until
this Note has been paid in full.
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