EXHIBIT 10.3
NOTE AND WARRANT HOLDER AGREEMENT
This AGREEMENT dated as of April 11, 1997 is entered into by and among
ORTHOVITA, INC., a Pennsylvania corporation (the "Company"), and each of the
other parties to the Purchase Agreement, dated May 9, 1995 (the "Purchase
Agreement"), who are signatories to this Agreement (collectively, the "Note and
Warrant Holders," and individually, a "Note and Warrant Holder").
BACKGROUND
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The Note and Warrant Holders are parties to the Purchase Agreement with the
Company pursuant to which, among other things, they purchased from the Company
15% Subordinated Secured Notes ("Notes") and warrants (the "Warrants") to
purchase shares of Class B Convertible Preferred Stock, par value $.01 per share
(the "Class B Stock"), and were granted certain registration and anti-dilution
rights. In addition, pursuant to the Purchase Agreement, RAF Ventures IV, L.P.
("RAF") was granted the right to elect two members to the Company's Board of
Directors (the "RAF Directors").
In order to finance the continuing operating activities of the Company, the
Company proposes to enter into a Class C Convertible Preferred Stock Purchase
Agreement (the "Class C Agreement") providing for the sale and issuance of its
Class C Convertible Preferred Stock, $.01 par value (the "Class C Stock").
The Note and Warrant Holders, recognizing that the execution and delivery
of this Agreement is a condition precedent to the consummation of the
transactions contemplated by the Class C Agreement, desire to approve the
issuance of the Class C Stock, amend the Purchase Agreement, apply all amounts
due to the Note and Warrant Holders under the Notes for the purchase of Class B
Stock, become a party to the Registration Rights Agreement and Stockholders'
Agreement attached hereto as Exhibit A and Exhibit B, respectively, receive
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warrants substantially in the form attached hereto as Exhibit D (the "New
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Warrants") and Exhibit E (the "Xxxxxxxx Warrants"), respectively, and amend and
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restate the terms of the Class B Stock in the form attached hereto as Exhibit F.
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It is a condition precedent to the purchase by the prospective investors of the
Class C Stock that Xxxx Xxxxxxxx ("Xxxxxxxx") sell all of the shares of Common
Stock obtainable upon the exercise of the Xxxxxxxx Warrants and the Company sell
the shares of Common Stock obtainable upon the exercise of the New Warrants.
NOW THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:
1. The Purchase Agreement is hereby amended by deleting Article VI and
Sections 7.1, 7.2 and 8.2(d) of the Purchase Agreement in their entirety. All
other provisions of the Purchase Agreement shall continue in full force and
effect and shall be enforceable in accordance with their terms.
2. Each of the Note and Warrant Holders hereby applies the full amount
due to such Note and Warrant Holder under his or its respective Note (such
amount is as set forth opposite such Holder's name on Exhibit C hereto), and for
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such purpose hereby surrenders such Note to the Company in full payment of the
exercise price under his or its respective Warrant for the purchase of that
number of shares of Class B Stock as is set forth opposite his or its name on
Exhibit C hereto.
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3. The Note and Warrant Holders hereby approve the issuance of Class C
Stock pursuant to such terms as may be approved by the Company's Board of
Directors.
4. The Company hereby issues to each of the Note and Warrant Holders the
New Warrants, exercisable for the purchase of that number of shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), as it set forth
opposite the name of each such Holder on Exhibit C attached hereto. Xxxxxxxx
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hereby issues to the Note and Warrant Holders the Xxxxxxxx Warrants, exercisable
for the purchase of that number of shares of Common Stock as it set forth
opposite the name of each such Holder on Exhibit C attached hereto. Each share
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of Common Stock, when sold upon the payment of the purchase price pursuant to
the terms of the New Warrants and Xxxxxxxx Warrants will be duly authorized,
validly issued, fully-paid and non-assessable. Xxxxxxxx hereby represents and
warrants that he has good and valid title, free and clear of any and all liens
and encumbrances of any kind, to the Common Stock sold by him to the Note and
Warrant Holders pursuant to the Xxxxxxxx Warrant. Xxxxxxxx shall place the
stock certificates representing such shares of Common Stock in escrow with the
Company which shares shall be released to only the Note and Warrant Holders upon
their proper exercise of the Xxxxxxxx Warrants.
5. This Agreement may be executed in two or more counterparts, each of
which shall be considered an original, but all of which together shall
constitute the same instrument.
6. The amended and restated terms of the Series B Stock in the form
attached as Exhibit F hereto is hereby approved.
IN WITNESS WHEREOF, each party has executed this Agreement as of the date
first above written.
ORTHOVITA, INC.
By: \s\ Xxxxx X. Xxxxxx
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\s\ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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\s\ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
RAF VENTURES IV, L.P.
By: RAF Ventures, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Vice President
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
THE HRG CORPORATION
By: Signature illegible
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/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/Solomon Xxx Xxxxxx
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Solomon Xxx Xxxxxx
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