EX-10.9



 





Exhibit 10.9


Execution Version


NANOSPHERE, INC.




RESTRICTED STOCK PURCHASE AGREEMENT




          RESTRICTED STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of March 16, 2006, by and between
Nanosphere, Inc., a Delaware corporation (the “Company”), and Mr. William P. Moffitt, an individual resident in the State of Illinois (“Purchaser”).




RECITALS




     A. Purchaser is President, Chief Executive Officer and a director of the Company.



     B. Purchaser and the Company are parties to that certain Employment Agreement, dated as of
July 19, 2004, as amended on the date hereof (the “Employment Agreement”).



     C. The Company desires to sell to Purchaser, and Purchaser desires to purchase, certain shares
of Common Stock, par value $0.01 per share, of the Company (“Common Stock”), as hereinafter
provided, under the Company’s 2000 Equity Incentive Plan, as amended (the “Plan”).



     D. For the purpose of facilitating the purchase of such shares by Purchaser, Purchaser and the
Company, simultaneously with the execution and delivery of this Agreement, are entering into a Loan
and Security Agreement substantially in the form attached as Exhibit A hereto (the “Loan
and Security Agreement”).



AGREEMENT




     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for such other
good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto agree as follows:



     1. Purchase of Shares. The Company hereby agrees to sell to Purchaser, and Purchaser
agrees to purchase, on the date of this Agreement (the “Effective Date”), Eight Million (8,000,000)
shares of Common Stock (the “Shares”) for eighteen cents ($0.18) per share, for an aggregate
purchase price (the “Purchase Price”) of One Million Four Hundred Forty Thousand Dollars
($1,440,000) (the “Transaction”). Payment for the Shares in the amount of the Purchase Price shall
be made to the Company upon execution of this Agreement, by the execution and delivery by Purchaser
of the Promissory Note substantially in the form attached to the Loan and Security Agreement as
Schedule 1 thereto (the “Promissory Note”). All Shares issued hereunder shall be deemed
issued to Purchaser as fully paid and nonassessable shares, and Purchaser shall have all rights of
a stockholder with respect thereto, including the right to vote, receive dividends (including stock
dividends), participate in stock splits or other recapitalizations, and exchange such



 









 







shares in a merger, consolidation or other reorganization. The Company shall be responsible
for and shall pay any and all applicable stock transfer taxes in connection with the Transaction.
(The Company does not undertake under this Agreement to pay any other tax, including, without
limitation, any tax incurred by Purchaser in connection with the payment of any future dividends
paid by the Company on the Shares.)



     2. Closing. The closing of the Transaction shall occur contemporaneously with the
execution and delivery of this Agreement. On the Effective Date, Purchaser shall deliver to the
Company the Promissory Note duly executed, and the Company shall deliver to Purchaser one or more
certificates representing the Shares, free and clear of all liens and encumbrances of any kind,
except those required by applicable securities laws, this Agreement, the Loan and Security
Agreement and the Promissory Note, registered in such names and in such denominations as Purchaser
shall require.



     3. Securities Law Compliance.



          (a) Purchaser Representations and Warranties. Purchaser hereby represents to,
acknowledges to and promises (as applicable) the Company as follows:





     (i) the Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and are being issued to Purchaser in reliance upon one or
more exemptions from the registration requirements of the Securities Act, including,
without limitation, the exemption from such registration provided by Rule 701 promulgated
under the Securities Act for stock issuances under compensatory benefit plans such as the
Plan;




     (ii) no authority of the United States or any state of the United States has
made any finding or determination as to the fairness of an investment in the Common Stock
and no such authority has recommended or endorsed or will recommend or endorse the
Transaction;




     (iii) the Shares are restricted securities and may not be resold or
transferred unless the Shares are first registered under the Securities Act or unless an
exemption from such registration is available;




     (iv) Purchaser is acquiring the Shares for Purchaser’s own account, for
investment and not with a view to resale or “distribution” (as such term is defined in the
Securities Act), except in compliance with the Securities Act; and




     (v) Purchaser is an “Accredited Investor” as defined in Rule 501 promulgated
under the Securities Act, by reason of the fact that Purchaser meets the conditions set
forth in subparagraphs a(4), a(5) or a(6) thereof.


Purchaser acknowledges that the representations, acknowledgements and promises contained in this
Section 3(a) may be relied upon by Company as a basis for the exemption of the issuance of the
Shares from the registration requirements of the


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 Securities Act and applicable state securities laws and shall survive the consummation of the
Transaction.




          (b) Legends. Each certificate evidencing the Shares shall bear the following
legend, unless, in the opinion of counsel reasonably satisfactory to the Company, such Shares
represented by such certificate are no longer subject to such restrictions imposed under
applicable securities laws, in which case such legend shall be removed from such certificate:





“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES
LAW. ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION
STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY SUCH REGISTRATION IS UNNECESSARY IN
ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT.”



     4. No Effect on Employment Agreement. This Agreement and the Transaction are not
intended to, and do not, modify, supplement or in any way affect the terms of the Employment
Agreement. By entering into this Agreement, or into the Loan and Security Agreement, the Company
does not promise or guarantee Purchaser’s employment by the Company for any period of time.



     5. Company Repurchase of Shares. Upon the occurrence of a Triggering Event (as
defined below), the Purchaser shall promptly sell to the Company, and the Company shall promptly
purchase from the Purchaser, for a price of eighteen cents ($0.18) per Share, such number of Shares
as set forth in the following schedule:




     (i) if the Triggering Event occurs prior to July 19, 2006, four million
(4,000,000) Shares;




     (ii) if the Triggering Event occurs on or after July 19, 2006, but prior to
July 19, 2007, two million (2,000,000) Shares; and




     (iii) if the Triggering Event occurs on or after July 19, 2007, no Shares.


For the purposes of this Section 5, “Triggering Event” means any of the following: (i) Purchaser’s
employment by the Company during the term of the Employment Agreement shall have been terminated by
the Company for “Cause” (as defined in the Employment Agreement); or (ii) Purchaser’s employment by
the Company during the term of the Employment Agreement shall have been terminated by Purchaser
without “Good Reason” (as defined in the Employment Agreement).




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     6. Stockholders’ Agreements. Purchaser shall sign and become a party to, as of the
Effective Date, each of (i) that certain Amended and Restated Stockholders Agreement by and among
the Company and certain stockholders of the Company, dated as of June 17, 2005 and (ii) that
certain Amended and Restated Stockholders Agreement by and among the Company and certain other
stockholders of the Company (a/k/a the “Other Stockholders Agreement”), dated as of June 17, 2005,
in each case, on such terms and conditions as set forth therein and in such capacity as a
stockholder (as contemplated therein) as the Company may approve.



     7. General Provisions.



          (a) Governing Law. This Agreement shall be construed, interpreted and governed by
the laws of the State of Illinois, without regard to the conflicts of law rules thereof.




          (b) Notices. All notices made pursuant to this Agreement shall be in writing and
shall be sent by prepaid certified mail, return receipt requested, or by recognized air courier
service, addressed as follows:



(i) If to the Company to:



Mr. Stephen G. Wasko

Chief Financial Officer

Nanosphere, Inc.

4088 Commercial Avenue

Northbrook, Illinois 60062



copy to:



Paul, Hastings, Janofsky & Walker LLP

1055 Washington Boulevard

Stamford, Connecticut 06901

Attention: Esteban A. Ferrer, Esq.



(ii) If to Executive to:



Mr. William P. Moffitt

942 Pine Tree Lane

Winnetka, Illinois 60093



or to such other addresses as may hereafter be specified by notice in writing by either of the
parties hereto, and shall be deemed given three (3) business days after the date so mailed or
sent.




          (c) Severability. If any provision of this Agreement is determined to be invalid,
illegal or unenforceable, the remaining provisions of this Agreement shall


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           remain in full force and effect, so long as the essential terms and conditions of this
Agreement for each party hereto remain valid, binding, and enforceable.




          (d) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same
instrument.




[Signature Page Follows.]




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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 	 	 
	 
	 	 	/s/ William P. Moffitt
III	 	 
	 	 	 	 	 
	 	 	MR. WILLIAM P. MOFFITT	 	 
	 
	 	 	 	 	 	 
	 	 	NANOSPHERE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark Slezak	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	Mr. Mark Slezak	 	 
	 

	 	Title:
	 	Chairman of the Board of Directors	 	 






[Signature
Page to Restricted Stock Purchase Agreement]





   










 





Execution Version




Promissory Note 




ONE MILLION FOUR HUNDRED FORTY THOUSAND DOLLARS ($1,440,000)




March 16, 2006

Northbrook, Illinois




     1. Loan. For value received, the receipt and sufficiency of which are hereby
acknowledged, Mr. William P. Moffitt, an individual resident in the State of Illinois (“Borrower”),
hereby promises to pay to the order of Nanosphere, Inc., a Delaware corporation (“Lender”), on the
earlier of (i) the seventh anniversary of the date hereof, (ii) immediately prior to the completion
of the Lender’s first underwritten public offering of its securities registered under the
Securities Act of 1933, as amended, and (iii) immediately prior to the consummation of a Change in
Control (as defined in the Employment Agreement)(the “Maturity Date”), One Million Four Hundred
Forty Thousand Dollars ($1,440,000) (the “Loan”), together with interest on the unpaid balance of
such amount from the date of this Promissory Note, as provided herein. This Promissory Note is the
Promissory Note issued under that certain Loan and Security Agreement by and between Borrower and
Lender, of even date herewith (said agreement, as the same may be amended, restated or supplemented
from time to time, being herein called the “Agreement”), to which a reference is made for a
statement of all of the terms and conditions of the Loan evidenced hereby. Capitalized terms not
defined in this Promissory Note shall have the respective meanings assigned to them in the
Agreement. This Promissory Note is secured by the Agreement and the Collateral, and is entitled to
the benefit of the rights and security provided thereby.



2. Term and Prepayment




          (a) Term. On the Maturity Date, Borrower shall pay to Lender in full, in cash, all
outstanding principal and accrued but unpaid interest on the Loan.



          (b) Prepayment. Borrower shall have the right, at any time, upon seven (7) Business
Days’ prior written notice to Lender, to prepay all or a portion of the Loan (and any accrued by
unpaid interest thereon), without penalty.



     3. Interest 



          (a) Rate. Borrower shall pay interest to Lender on the outstanding portion of the Loan
at a rate per annum equal to four and fifty-one one-hundredths percent (4.51%). All computations
of interest shall be made by Lender on the basis of a three-hundred-and-sixty-day
(360) year.



          (b) Payment. Interest shall be payable by Borrower in immediately available United
States Dollars, in arrears for the preceding year on each anniversary of the date hereof (or the
next succeeding Business Day, if such day is not a Business Day).



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     4. Events of Default. An “Event of Default” shall be deemed to have occurred for
the purposes of this Promissory Note, upon the occurrence of any of the following events:




	 	(i)	 	Non-Payment. Borrower shall have failed for thirty (30) days following receipt of
notice of such delinquency from Lender to make to Lender any payment due under this Promissory
Note.
	 
	 	(ii)	 	Involuntary Termination For Cause. Borrower’s employment by Lender during the
term of the Employment Agreement shall have been terminated by Lender for “Cause” (as defined in
the Employment Agreement); or
	 
	 	(iii)	 	Voluntary Termination Without Good Reason. Borrower’s employment
by Lender during the term of the Employment Agreement shall have been terminated by
Borrower without “Good Reason” (as defined in the Employment Agreement).





     5. Remedies. Upon the occurrence of any one or more of the Events of Default
specified in this Promissory Note, all amounts then remaining unpaid on this Promissory Note may
be declared to be immediately due and payable, all as provided in the Agreement and hereunder.



     6. Waivers



          (a) Defenses. To the fullest extent permitted by applicable law, Borrower waives:
(a) presentment, demand and protest, and notice of presentment, dishonor, intent to
accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all of the Loan, the Agreement or this Promissory Note; (b) all
rights to notice and a hearing prior to Lender’s taking possession or control of, or to Lender’s
replevy, attachment or levy upon, the Collateral or any bond or security that might be required by
any court prior to allowing Lender to exercise any of its remedies; and (c) the benefit of all
valuation, appraisal and exemption laws.



          (b) No Jury Trial. Borrower hereby waives the right to trial by jury in any action or
proceeding under the Agreement or under this Promissory Note.



     7. Governing Law. This Promissory Note shall be construed, interpreted and governed by
the laws of the State of Illinois, without regard to the conflicts of law rules thereof.



[Signature page follows.]




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     THE UNDERSIGNED, INTENDING TO BE LEGALLY BOUND, has executed this Promissory Note
as of the date first set forth above.



WITNESS




	 	 	 
	/s/

	 	/s/ WILLIAM P. MOFFITT
	 

	 	 
	Name:

	 	MR. WILLIAM P. MOFFITT






[Signature Page to Promissory Note]




 









 








Schedule 2 




Stock Certificates




	 	 	 
	Certificate Number	 	Number of Shares
	24
	 	8,000,000










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