Document:

Exhibit 10.1

 

PERFORMANCE BASED RESTRICTED STOCK AGREEMENT

 

IMMUNOGEN, INC.

 

AGREEMENT made as of the 12th day of August, 2016 (the “Grant Date”), between ImmunoGen, Inc. (the “Company”), a Massachusetts corporation, and                          (the “Participant”).

 

WHEREAS, the Company has adopted the ImmunoGen, Inc. 2006 Employee, Director and Consultant Equity Incentive Plan, as amended (the “Plan”) to promote the interests of the Company by providing an incentive for employees, directors and consultants of the Company or its Affiliates;

 

WHEREAS, pursuant to the provisions of the Plan, the Company desires to offer to the Participant shares of the Company’s common stock, $.01 par value per share (“Common Stock”), in accordance with the provisions of the Plan, all on the terms and conditions hereinafter set forth;

 

WHEREAS, Participant wishes to accept said offer; and

 

WHEREAS, the parties hereto understand and agree that any terms used and not defined herein have the meanings ascribed to such terms in the Plan.

 

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

 

1.                                      Terms of Grant.  The Participant hereby accepts the offer of the Company to issue to the Participant, in accordance with the terms of the Plan and this Agreement, Twenty Thousand (20,000) Shares of the Company’s Common Stock (such shares, subject to adjustment pursuant to Section 25 of the Plan and Subsection 2.1(f) hereof, the “Granted Shares”) at a purchase price per share of $.01 (the “Purchase Price”), receipt of which is hereby acknowledged by the Participant’s prior service to the Company and which amount will be reported as income on the Participant’s W-2 for this calendar year.

 

2.1.                            Forfeiture Provisions.

 

(a)                                 Lapsing Forfeiture Right.  In the event that for any reason (i) the Participant is no longer an employee, director or consultant of the Company or an Affiliate (such event being the “Termination”) prior to achievement of a performance goal listed below; or (ii) the Company does not achieve a performance goal set forth below by the fifth (5th) anniversary of the Grant Date (the “Performance End Date”), the Participant (or the Participant’s Survivor) shall, on the date of Termination or the Performance End Date, as applicable, immediately forfeit to the Company (or its designee) the number of Granted Shares which have not yet lapsed as set forth below (the “Lapsing Forfeiture Right”).  The Lapsing Forfeiture Right shall lapse with respect to one-third of the Granted Shares upon achievement of each of the performance goals prior to the date of Termination or the Performance End Date, as applicable.  The foregoing notwithstanding, if a performance goal is achieved prior to the first anniversary of the Grant Date, then the Lapsing Forfeiture Right as to the one-third of the Granted Shares applicable to such performance goal shall not lapse until the first anniversary of the Grant Date, and if a Termination occurs prior to such one-year anniversary, the Granted Shares shall be forfeited to the Company as if the performance goal had not been achieved as of the Termination date; provided, however, that if such Termination occurs due to the Participant’s death or Disability (as defined in the Plan), or there occurs a

 

 

Change of Control (as defined in the Plan) prior to the first anniversary of the Grant Date, the Granted Shares applicable to such performance goal shall not be forfeited to the Company, and Lapsing Forfeiture Right with respect to such Granted Shares shall lapse as of such Termination date or immediately prior to the Change of Control transaction.

 

The Company’s Lapsing Forfeiture Right shall lapse as to one-third of the Granted Shares upon achievement of each of the following performance goals prior to the Performance End Date (or earlier upon a Termination):

 

·                  Mirvetuximab soravtansine (“IMGN853”) meeting its primary endpoint in a registration trial; i.e., a clinical trial designed to (A) ascertain efficacy and safety of IMGN853 that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling and (B) support the preparation and submission of a biologics license application (“BLA”) for the indication under investigation in the study as and to the extent defined in 21 C.F.R. §312.21(c), or its successor regulation.

 

·                  Acceptance of a BLA for IMGN853 by the U.S. Food and Drug Administration (the “FDA”).

 

·                  Receipt of marketing approval for IMGN853 from the FDA.

 

The determination of achievement of the performance goals shall be based on certification of achievement of a performance goal by the Compensation Committee, which certification date shall be deemed to be the vesting date and the date of termination of the Lapsing Forfeiture Right with respect to any of the Granted Shares for all purposes of this Agreement.

 

Any Granted Shares as to which the Company’s Lapsing Forfeiture Right has not previously lapsed upon achievement of the above performance goals shall be forfeited to the Company on the Performance End Date (or earlier upon a Termination).

 

Notwithstanding the foregoing, the Company’s Lapsing Forfeiture Right shall terminate, and the Participant’s ownership of all Granted Shares then owned by the Participant shall become vested upon a Corporate Transaction where all stock grants are terminated in exchange for a cash payment in accordance with Section 25(b) of the Plan.

 

(b)                              Effect of a For Cause Termination.  Notwithstanding anything to the contrary contained in this Agreement, in the event the Company or an Affiliate terminates the Participant’s employment or service for Cause (as defined in the Plan) or in the event the Administrator determines, within one year after the Participant’s termination, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct that would constitute Cause, all of the Granted Shares then held by the Participant shall be forfeited to the Company immediately as of the time the Participant is notified that he or she has been terminated for Cause or that he or she engaged in conduct which would constitute Cause.

 

(c)                               Escrow.  The certificates representing all Granted Shares acquired by the Participant hereunder which from time to time are subject to the Lapsing Forfeiture Right shall be delivered to the Company and the Company shall hold such Granted Shares in escrow as provided in this Subsection 2.1(c). The Company shall promptly release from escrow and deliver to the Participant the whole number of Granted Shares, if any, as to which the Company’s Lapsing Forfeiture Right has lapsed and without the legend set forth in Section 5. In the event of forfeiture to the Company of Granted Shares subject to the Lapsing Forfeiture Right, the Company shall release from escrow and cancel a certificate

 

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for the number of Granted Shares so forfeited.  Any securities distributed in respect of the Granted Shares held in escrow, including, without limitation, shares issued as a result of stock splits, stock dividends or other recapitalizations, shall also be held in escrow in the same manner as the Granted Shares.

 

(d)                                 Prohibition on Transfer.  The Participant recognizes and agrees that all Granted Shares which are subject to the Lapsing Forfeiture Right may not be sold, transferred, assigned, hypothecated, pledged, encumbered or otherwise disposed of, whether voluntarily or by operation of law, other than to the Company (or its designee).  However, the Participant, with the approval of the Administrator, may transfer the Granted Shares for no consideration to or for the benefit of the Participant’s Immediate Family (including, without limitation, to a trust for the benefit of the Participant’s Immediate Family or to a partnership or limited liability company for one or more members of the Participant’s Immediate Family), subject to such limits as the Administrator may establish, and the transferee shall remain subject to all the terms and conditions applicable to this Agreement prior to such transfer and each such transferee shall so acknowledge in writing as a condition precedent to the effectiveness of such transfer.  The term “Immediate Family” shall mean the Participant’s spouse, former spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers, nieces and nephews and grandchildren (and, for this purpose, shall also include the Participant.)  The Company shall not be required to transfer any Granted Shares on its books which shall have been sold, assigned or otherwise transferred in violation of this Subsection 2.1(d), or to treat as the owner of such Granted Shares, or to accord the right to vote as such owner or to pay dividends to, any person or organization to which any such Granted Shares shall have been so sold, assigned or otherwise transferred, in violation of this Subsection 2.1(d).

 

(e)                                  Failure to Deliver Granted Shares to be Forfeited.  In the event that the Granted Shares to be forfeited to the Company under this Agreement are not in the Company’s possession pursuant to Subsection 2.1(c) above or otherwise and the Participant or the Participant’s Survivor fails to deliver such Granted Shares to the Company (or its designee), the Company may immediately take such action as is appropriate to transfer record title of such Granted Shares from the Participant to the Company (or its designee) and treat the Participant and such Granted Shares in all respects as if delivery of such Granted 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.

 

(f)                                   Adjustments.  The Plan contains provisions covering the treatment of Shares in a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with respect to the Granted Shares 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.

 

2.2                               General Restrictions on Transfer of Granted Shares.

 

(a)                                 The Participant agrees that in the event the Company proposes to offer for sale to the public any of its equity securities and such Participant is requested by the Company and any underwriter engaged by the Company in connection with such offering to sign an agreement restricting the sale or other transfer of Shares, then such Participant will promptly sign such agreement and will not transfer, whether in privately negotiated transactions or to the public in open market transactions or otherwise, any Shares or other securities of the Company held by him or her during such period as is determined by the Company and the underwriters, not to exceed 90 days following the closing of the offering, plus such additional period of time as may be required to comply with Marketplace Rule 2711 of the National Association of Securities Dealers, Inc. or similar rules thereto (such period, the “Lock-Up Period”).  Such agreement shall be in writing and in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to customary and prevailing terms and conditions.  Notwithstanding whether the Participant has signed such an agreement, the Company may impose stop-transfer instructions with

 

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respect to the Shares or other securities of the Company subject to the foregoing restrictions until the end of the Lock-Up Period.

 

(b)                                 The Participant acknowledges and agrees that neither the Company nor, 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, 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.

 

3.                                      Securities Law Compliance.  The Participant specifically acknowledges and agrees that any sales of Granted Shares shall be made in accordance with the requirements of the Securities Act of 1933, as amended.

 

4.                                      Rights as a Stockholder.  The Participant shall have all the rights of a stockholder with respect to the Granted Shares, including voting and dividend rights, subject to the transfer and other restrictions set forth herein and in the Plan.

 

5.                                      Legend.  In addition to any legend required pursuant to the Plan, all certificates representing the Granted 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 Restricted Stock Agreement dated as of                      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.”

 

6.                                      Incorporation of the Plan.  The Participant specifically understands and agrees that the Granted Shares issued under the Plan are being sold to the Participant pursuant to the Plan, a copy of which Plan the Participant acknowledges he or she has read and understands and by which Plan he or she agrees to be bound.  The provisions of the Plan are incorporated herein by reference.

 

7.                                      Tax Liability of the Participant and Payment of Taxes. The Participant acknowledges and agrees that any income or other taxes due from the Participant with respect to the Granted Shares issued pursuant to this Agreement, including, without limitation, the Lapsing Forfeiture Right, shall be the Participant’s responsibility.  Without limiting the foregoing, the Participant agrees that, to the extent that the lapsing of restrictions on disposition of any of the Granted Shares or the declaration of dividends on any such shares before the lapse of such restrictions on disposition results in the Participant’s being deemed to be in receipt of earned income under the provisions of the Code, the Company shall be entitled to immediate payment from the Participant of the amount of any tax required to be withheld by the Company.

 

Upon execution of this Agreement, the Participant may file an election under Section 83 of the Code in substantially the form attached as Exhibit B.  The Participant acknowledges that if he or she files such an election, the Participant will have income for tax purposes equal to the fair market value of the Granted Shares on the Grant Date, less the price paid for the Granted Shares by the Participant.  The Participant acknowledges that if he or she does not file such an election, as the Granted Shares are released from the Lapsing Forfeiture Right in accordance with Section 2.1, the Participant will have income for tax purposes equal to the fair market value of the Granted Shares at such date, less the price paid for the Granted Shares by the Participant. The Participant has been given the opportunity to obtain

 

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the advice of his or her tax advisors with respect to the tax consequences of the purchase of the Granted Shares and the provisions of this Agreement.

 

The Participant shall be required to deposit with the Company an amount of cash equal to the amount determined by the Company to be required with respect to the statutory minimum of the Participant’s estimated total federal, state and local tax and other withholding obligations with respect to the Granted Shares.  In connection with the foregoing, any taxes or other amounts required to be withheld by the Company by applicable law or regulation shall be paid, at the option of the Company as follows:

 

(i)                                     requiring the Participant to deposit with the Company an amount of cash equal to the amount determined by the Company to be required to be withheld with respect to the statutory minimum amount of the Participant’s total tax and other withholding obligations due and payable by the Company or otherwise withholding from the Participant’s paycheck an amount equal to such amounts due and payable by the Company; or

 

(ii)                                  if the Company believes that the sale of shares can be made in compliance with applicable securities laws, authorizing, at a time when the Participant is not in possession of material nonpublic information, the sale by the Participant on the date that the Granted Shares shall be released from the Lapsing Forfeiture Right such number of Granted Shares as the Company instructs a broker to sell to satisfy the Company’s withholding obligation, after deduction of the broker’s commission, and the broker shall remit to the Company the cash necessary in order for the Company to satisfy its withholding obligation.  To the extent the proceeds of such sale exceed the Company’s withholding obligation the Company agrees to pay such excess cash to the Participant as soon as practicable.  In addition, if such sale is not sufficient to pay the Company’s withholding obligation the Participant agrees to pay to the Company as soon as practicable, including through additional payroll withholding, the amount of any withholding obligation that is not satisfied by the sale of shares of Common Stock. The Participant agrees to hold the Company and the broker harmless from all costs, damages or expenses relating to any such sale.  The Participant acknowledges that the Company and the broker are under no obligation to arrange for such sale at any particular price.  In connection with such sale of Granted Shares, the Participant shall execute any such documents requested by the broker in order to effectuate the sale of Granted Shares and payment of the withholding obligation to the Company.  The Participant acknowledges that this paragraph is intended to comply with Section 10b5-1(c)(1)(i)(B) under the Exchange Act.

 

The Company shall not deliver any shares of Common Stock to the Participant until it is satisfied that all required withholdings have been made.

 

8.                                      Equitable Relief.  The Participant specifically acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Agreement or the Plan, including the attempted transfer of the Granted Shares by the Participant in violation of this Agreement, monetary damages may not be adequate to compensate the Company, and, therefore, in the event of such a breach or threatened breach, in addition to any right to damages, the Company shall be entitled to equitable relief in any court having competent jurisdiction.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for any such breach or threatened breach.

 

9.                                      No Obligation to Maintain Relationship.  The Company is not by the Plan or this Agreement 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 Shares is a one-time benefit which does not create any contractual or other right to receive future grants of shares, or benefits in lieu of shares; (iii) that all determinations with respect to any such future grants, including, but not limited to, the

 

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times when shares shall be granted, the number of shares to be granted, the purchase price, and the time or times when each share shall be free from a lapsing repurchase or forfeiture right, 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 Shares is an extraordinary item of compensation which is outside the scope of the Participant’s employment contract, if any; and (vi) that the Shares are 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.

 

10.                               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:

 

ImmunoGen, Inc.

Attn: Finance

830 Winter Street

Waltham, MA 02451

 

If to the Participant:

 

EMPLOYEE NAME AND ADDRESS

 

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 on the earliest of receipt, one business day following delivery by the sender to a recognized courier service, or three business days following mailing by registered or certified mail.

 

11.                               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.

 

12.                               Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of law principles thereof.

 

13.                               Severability.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such provision or provisions shall be modified to the extent necessary to make such provision valid and enforceable, and to the extent that this is impossible, then such provision shall be deemed to be excised from this Agreement, and the validity, legality and enforceability of the rest of this Agreement shall not be affected thereby.

 

14.                               Entire Agreement.  This Agreement, together with the Plan, constitutes 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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15.                               Modifications and Amendments; Waivers and Consents.  The terms and provisions of this Agreement may be modified or amended as provided in the Plan.  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.

 

16.                               Consent of Spouse/Domestic Partner.  If the Participant has a spouse or domestic partner as of the date of this Agreement, the Participant’s spouse or domestic partner shall execute a Consent of Spouse/Domestic Partner in the form of Exhibit A hereto, effective as of the date hereof.  Such consent shall not be deemed to confer or convey to the spouse or domestic partner any rights in the Granted Shares that do not otherwise exist by operation of law or the agreement of the parties.  If the Participant subsequent to the date hereof, marries, remarries or applies to the Company for domestic partner benefits, the Participant shall, not later than 60 days thereafter, obtain his or her new spouse/domestic partner’s acknowledgement of and consent to the existence and binding effect of all restrictions contained in this Agreement by having such spouse/domestic partner execute and deliver a Consent of Spouse/Domestic Partner in the form of Exhibit A.

 

17.                               Counterparts.  This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

18.                               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 Shares 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.

 

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
IMMUNOGEN, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Mark J. Enyedy
    
	
 
    	
Title:
    	
President and Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Participant:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Print Name:
    

 

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EXHIBIT A

 

CONSENT OF SPOUSE/DOMESTIC PARTNER

 

I,                             , spouse or domestic partner of                          , acknowledge that I have read the PERFORMANCE BASED RESTRICTED STOCK AGREEMENT dated as of August 12, 2016 (the “Agreement”) to which this Consent is attached as Exhibit A 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 Granted Shares granted to my spouse/domestic partner pursuant to the Agreement are subject to a Lapsing Forfeiture Right in favor of ImmunoGen, Inc. (the “Company”) and that, accordingly, I may be required to forfeit to the Company any or all of the Granted Shares of which I may become possessed as a result of a gift from my spouse/domestic partner or a court decree and/or any property settlement in any domestic litigation.

 

I hereby agree that my interest, if any, in the Granted 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 Granted Shares shall be similarly bound by the Agreement.

 

I agree to the Lapsing Forfeiture Right described in the Agreement and I hereby consent to the forfeiture of the Granted Shares to the Company by my spouse/domestic partner or my spouse/domestic partner’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 Granted Shares by an outright bequest of the Granted Shares to my spouse or domestic partner, then the Company shall have the same rights against my legal representative to exercise its rights to the Granted Shares with respect to any interest of mine in the Granted Shares as it would have had pursuant to the Agreement if I had acquired the Granted 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                 , 201  .

 

	
 
    	
 
    
	
 
    	
Print name:
    

 

A-1

 

EXHIBIT B

 

Election to Include Gross Income in Year

of Transfer Pursuant to Section 83(b)

of the Internal Revenue Code of 1986, as amended

 

In accordance with Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), the undersigned hereby elects to include in his gross income as compensation for services the excess, if any, of the fair market value of the property (described below) at the time of transfer over the amount paid for such property.

 

The following sets for the information required in accordance with the Code and the regulations promulgated hereunder:

 

1.                                      The name, address and social security number of the undersigned are:

 

Name:

Address:

Social Security No.:

 

2.                                      The description of the property with respect to which the election is being made is as follows:

 

(    ) shares (the “Shares”) of Common Stock, $.01 par value per share, of ImmunoGen, Inc., a Massachusetts corporation (the “Company”).

 

3.                                      This election is made for the calendar year     , with respect to the transfer of the property to the Taxpayer on                   (the “Grant Date”).

 

4.                                      Description of restrictions:  The property is subject to the following restrictions:

 

In the event taxpayer’s service with the Company or an Affiliate is terminated prior to the achievement of a performance goal set forth in the  restricted stock agreement or a performance goal is not achieved by the fifth anniversary of the Grant Date, the taxpayer shall forfeit one-third of the Shares for each of the three performance goals not achieved by the applicable time.

 

5.                                      The fair market value at time of transfer (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the property with respect to which this election is being made is:  $[   ] per Share  x  [    ] Shares  =  $[      ]. was not more than $     per Share.

 

6.                                      The amount paid by taxpayer for said property was $[    ] per Share  x  [    ] Shares  =  $[    ].

 

7.                                      The amount to include in gross income is $[     ].

 

The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the person for whom the services were performed. Additionally, the undersigned will include a copy of the election with his income tax return for the taxable year in which the property is transferred. The undersigned is the person performing the services in connection with which the property was transferred.

 

Signed this      day of       , 201  .

 

	
 
    	
 
    
	
 
    	
Print Name:
    

 

B-1Converted by EDGARwiz

STOCK AND MINERAL LEASE PURCHASE AGREEMENT

This Stock and Mineral Lease Purchase Agreement (this “Agreement”) is entered into as of the 12th day of August, 2016 by and between FieldPoint Petroleum Corp., a Colorado corporation (the “Company”), and HFT Enterprises, LLC, a Nevada Corporation (together with his permitted successors and assigns, the “Buyer”).

WITNESSETH:

WHEREAS, the Company wishes to sell, and the Buyer wishes to purchase, certain shares of common stock of the Company; and

WHEREAS, the Company wishes to sell, and the Buyer wishes to purchase, certain interests in oil and gas mineral leases, as set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

1.

Purchase and Sale of Shares.  Subject to the terms and conditions of this Agreement, on September 30, 2016 or such earlier date as Buyer and the Company may agree (the “Closing Date”), Company shall issue and sell to Buyer, and Buyer shall purchase in two equal tranches, a number of newly-issued shares of common stock of the Company equal to a total of 19.9% of the total number of issued and outstanding shares of common stock of the Company, as measured on the date of this Agreement, for a price of $0.45 per share (the shares to be purchased, the “Shares”).  The first tranche will be purchased at the closing date and the second tranche must be purchased by December 31, 2016.

2.

Purchase and Sale of Oil and Gas Mineral Lease.  On the Closing Date, the Company shall give the  Buyer,  the right to  purchase, an undivided 100% working interest on or before December 31, 2016 (the “Lease Interest”) in the Company’s Elkhorn and JC Kinney leases in the Big Muddy Oil Field in Converse County, Wyoming for a purchase price of $430,000.00. 

3.

Registration Rights.  The holders of the Shares (if purchased) will be entitled to “piggyback” registration rights on all registration statements of the Company.  The shares to be registered on behalf of such holders will be reduced in any such registration only after all other stockholders’ shares are reduced.

4.

Due Diligence.  The Company will cooperate in supporting Buyer’s due diligence activities, including permitting Buyer and its representatives and affiliates access to the Company’s books and records, facilities, key personnel, customers, suppliers and other business relations and independent accountants in connection with his review of the Company’s operations at reasonable times, upon reasonable notice and in such a manner as does not unreasonably interfere with the operations of the Company.  

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5.

Representations and Warranties of the Company. The Company represents and warrants to Buyer that:

5.1

The Company has all requisite power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby. The Company has duly and validly authorized, executed, and delivered this Agreement.  All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the Company to enter into the transactions contemplated hereby has been taken or will be taken prior to the Closing Date. 

5.2

This Agreement constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

5.3

The Shares will be, upon issuance, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.

6.

Representations and Warranties of Buyer. Buyer represents and warrants to the Company that:

6.1

Buyer has all requisite power and authority and has taken all required action on its part necessary to permit it to execute and deliver and to carry out the terms of this Agreement, and to take all other actions required to be taken by it pursuant to the provisions hereof.  Buyer has duly and validly authorized, executed, and delivered this Agreement.  Buyer is duly organized, validly existing and in good standing under the laws of the state of its formation.

6.2

This Agreement is the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

6.3

Buyer hereby confirms that the Shares will be acquired for investment for Buyer’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Buyer has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, Buyer further represents that Buyer does not presently have any contract, undertaking, agreement or arrangement with any person or unrelated entity to sell, transfer or grant participations to such person or unrelated entity or to any third party, with respect to any of such shares.  The buyer reserves the right to transfer shares to a related entity.

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6.4

Buyer has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management and has had an opportunity to review the Company’s facilities.

6.5

Buyer understands that the Shares have not been, and will not initially be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Buyer’s representations as expressed herein. Buyer understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Buyer must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  Buyer understands that certificates for the Shares will be notated with restrictive legends necessitated by federal and state securities laws.

6.6

Buyer is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

7.

Conditions to Buyer’s Obligations at Closing.  The obligations of Buyer to purchase the Shares and the Lease Interest on the Closing Date is subject to the fulfillment, on or before the Closing Date, of each of the following conditions, unless otherwise waived:

7.1

Buyer shall have completed its diligence review of the Company and the Lease Interest and any related matters on or before August 31, 2016 to Buyer’s complete satisfaction.  If Buyer does not notify the Company on or before August 31, 2016 that Buyer is not satisfied with its diligence review, then this item 7.1 shall automatically be deemed waived. 

7.2

The Company shall have confirmed to the Buyer, and the Buyer shall be satisfied, that all proceeds from the sale of the Lease Interest will be used to pay down the Company’s indebtedness owed to Citibank. 

7.3

Citibank shall have agreed with the Company, in a written document satisfactory in form and substance to Buyer, that Citibank will extend until December 31, 2017, with interest payments due only and no principal payments due during such period, the Company’s current indebtedness owed to Citibank.

7.4

Citibank shall have provided a written payoff letter satisfactory to Buyer that indicates that Citibank will release any and all liens with respect to the Company’s Elkhorn and JC Kinney leases in the Big Muddy Oil Field in Converse County, Wyoming, upon receipt of the proceeds from the sale of the Shares and the Lease Interest pursuant to this Agreement. 

7.5

The Company shall have made arrangements satisfactory to Buyer providing that Buyer will have the right to nominate one member of the Board of Directors of the Company to stand for election at or with respect to any meeting held or consent solicited for the election of the full slate of directors.

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7.6

The Company shall have obtained such consents as are necessary to enable the Company to perform its obligations hereunder, including but not limited to board and stockholder consents, to the extent applicable, and shall have provided to Buyer evidence satisfactory to Buyer of same. 

8.

Miscellaneous.

8.1

Confidentiality.  The parties agree that they shall keep all terms of this Agreement confidential, except to the extent otherwise required by law, provided that each party shall be entitled to disclose the terms of this Agreement to their legal and financial advisors, and with respect to the Company, to the New York Stock Exchange.

8.2

Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Buyer shall be entitled to assign all or any portion of its rights and obligations hereunder to any person or entity at any time and from time to time, so long as such person or entity confirms in writing that it makes the representations contained in Section 6 hereof as of the date of such assignment. The Company shall not be entitled to assign any portion or all of its rights and obligations hereunder to any party.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.3

Governing Law.  This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado, without regard to conflict of law or other principles that would result in the application of any law other than the law of the State of Colorado.  

8.4

Counterparts.  This Agreement may be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

8.5

Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.6

Fees and Expenses.  Each party shall bear its own expenses in connection with the transactions contemplated by this Agreement.  

8.7

Delays or Omissions.  No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or 

4

an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

8.8

Entire Agreement.  This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

8.9

Further Assurances. The Company and Buyer each agree to do, execute, acknowledge and deliver all such further acts, instruments and assurances, and to take all such further action before or after the date hereof, as shall be necessary or desirable to carry out this Agreement and to consummate and effect the transactions con­templated hereby.

 [Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

COMPANY:

FIELDPOINT PETROLEUM CORP. 

By:  /s/ Phillip H. Roberson

Name:

Phillip H. Roberson

Title:

President

BUYER:  HFT ENTERPRISES, LLC

By:  /s/ Benjamin Herman

Name:

Benjamin Herman

Title:

President

Signature Page to Stock and Mineral Lease Purchase Agreement

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