STOCKHOLDERS' AGREEMENT
AGREEMENT made as of this 8th day of July, 1996, by and among PerArdua
Corporation, a Missouri corporation (the "Corporation"), and the following
owners of the Common Stock, par value $.001 per share, of the Corporation (the
"Shares"): Xxxxxxx X. X'Xxxxxxx, Xx. ("X'Xxxxxxx"), Xxxxxx X. Xxxxx, Xx., as
Trustee of the Xxxxxx X. Xxxxxxxx Irrevocable Trust #1 ("Xxxxxxxx"), Xxxxxx X.
XxXxxxxxxx ("XxXxxxxxxx"), Xxxxxx X. Xxxxx, Xx. ("Sears"), Xxxxxxx X. XxXxxxx
("XxXxxxx"), Xxxxxx Xxxxx ("Xxxxx"), Xxxx Xxxxxxx Xxxx ("Xxxx"), the University
of Southern California ("USC"), and the Limited Partners of PerArdua Investors,
L.P. on the attached Exhibit A. All of the above named stockholders shall be
collectively referred to hereinafter as the "Stockholders" and may individually
and interchangeably be referred to as a "Stockholder." O'Donnell, Williams,
Sears and XxXxxxxxxx shall be referred to collectively as the "X'Xxxxxxx Group,"
XxXxxxx, Xxxxx and Xxxx shall be referred to collectively as the "MWG Group,"
and the remaining Stockholders shall be referred to collectively as the "LP
Group."
WHEREAS, the Corporation and the Stockholders have devised a plan for
the financing of the Corporation and believe it is in their mutual best
interests to provide for stability of management and stock ownership in
furtherance of said financing plan;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Subscriptions.
The Corporation hereby accepts each of the subscriptions (the
"Subscriptions") for purchase of Shares and Common Stock warrants ("Warrants")
of each of USC, the MWG Group and the LP Group, a form of which Subscription is
attached hereto as Exhibit B. The amounts of Shares and Warrants to be purchased
by each of USC, the MWG Group and the LP Group are set forth on Exhibit C
attached hereto. The form of the Warrants is set forth as Exhibit D attached
hereto. The Corporation shall issue certificates for the Shares and the Warrants
as soon as practicable after the date hereof and upon payment of the purchase
price thereof.
2. Certificate of Amendment.
The Corporation shall file a certificate of amendment to its
certificate of incorporation to provide for cumulative voting. Prior to the
initial public offering of the Company's securities on the terms described in
Section 5 hereof, the parties hereto shall thereupon use their best efforts to
cause a new certificate of amendment to the Corporation's certificate of
incorporation to be filed to eliminate the cumulative voting provisions thereof.
1.
3. Private Placement.
The Corporation and the X'Xxxxxxx Group shall use their reasonable best
efforts to effect a private placement of 800,000 Shares of the Corporation at a
price of $1.25 per share for total proceeds of $1,000,000 within ninety (90)
days of the date of this Agreement (the "Private Placement"). Such proceeds
shall be used to exercise that certain Option to purchase assets from PerArdua
Investors, L.P. pursuant to the Option and Asset Purchase Agreement dated of
even date herewith, and to support pre-clinical studies for the continued
development of the drug Thiofoscarnet estimated to be approximately $150,000,
and to provide working capital for the Corporation.
4. Call Rights.
In the event the Private Placement is not effected as defined in
Section 3 above, PerArdua Investors, L.P., a California limited partnership (the
"Partnership") shall have the right to purchase from each member of the
X'Xxxxxxx Group all of their Shares at a price of $.001 per Share (the
"X'Xxxxxxx Call Right"). The X'Xxxxxxx Call Right shall be exercised, if at all,
by written notice thereof given to each of the X'Xxxxxxx Group within 30 days
after the end of the 90-day period described in Section 3. Upon such exercise,
each of the X'Xxxxxxx Group shall promptly tender the certificates for their
Shares for transfer. Also upon such exercise, all of the Warrants held by the
X'Xxxxxxx Group shall be automatically cancelled.
5. No Issuance of Shares.
The parties agree that, while this Agreement is in effect, the
Corporation shall not issue any Shares or other securities of the Corporation
except (a) pursuant to the Private Placement, (b) pursuant to the Subscriptions,
(c) Shares issuable upon exercise of Warrants held by the X'Xxxxxxx Group to
purchase 500,000 Shares at a price not less than $10.00 per Share and
exercisable only after such time as the Corporation has an FDA approved drug for
sale ("FDA Approval"), and (d) options to purchase 500,000 Shares at an exercise
price of $7.50 exercisable following FDA Approval, which options may be issued,
if at all, to members of management of the Corporation in the discretion of its
Board of Directors. Notwithstanding the restriction upon issuance of Securities
contained herein, it is understood and agreed that the Corporation and the
X'Xxxxxxx Group shall use their reasonable best efforts to obtain, on or before
December 31, 1996, a so-called "firm commitment" for an initial public offering
from a securities underwriter for the purchase and sale, subsequent to the
Private Placement, of 1,000,000 Shares at $5.00 per Share in a "unit"
transaction whereby a warrant to purchase a Share at $7.50 per Share would be
sold with each Share sold (the "IPO"). The Corporation and the X'Xxxxxxx Group
shall use their reasonable best efforts to close the IPO on or before March 31,
1997.
2.
6. Restrictions on Transfer.
(a) No Stockholder shall sell or otherwise transfer any of the Shares
without the prior consent of the Board of Directors of the Corporation.
(b) The restriction set forth in this Section 6 is in addition to any
restrictions which may be set forth in the Subscription Agreements with respect
to the Subscriptions.
7. "Lock-up" Agreement.
Each of the Stockholders agrees that, in connection with the IPO and if
required by the underwriter of the IPO, each Stockholder shall agree, and shall
execute and deliver a written instrument to that effect, that he, she or it
shall not sell any Shares following the date of the IPO and for a period not to
exceed one year (the "Lock Up Period") thereafter without the prior written
consent of said underwriter; provided however, that the Lock Up Period
automatically shall be reduced to such shorter lock up period applicable to any
other Corporation shareholder in connection with any public offering.
8. Cooperation with Private Placement and Registration
Process.
Each of the Stockholders agrees that he, she or it will cooperate with
the Corporation with respect to the Private Placement and the IPO by promptly
providing such information and by executing and delivering such instruments and
documents as may be reasonably requested by the Corporation for such purposes.
9. Voting Agreement.
USC, the MWG and the LP Group agree that for the term of this Agreement
they shall vote their shares for the election of the X'Xxxxxxx Group Directors,
to the extent that such vote is necessary when added to the votes cast for all
shares held by the X'Xxxxxxx Group Members to elect such directors. The
"X'Xxxxxxx Group Directors" means the minimum number of directors constituting a
majority of the Board of Directors who shall have been appointed by X'Xxxxxxx.
10. Stockholder Rights.
Prior to the closing of the IPO, a representative elected by a majority
in interest of USC, the LP Group and the MWG Group, voting together (with each
share of common stock entitled to one vote), (the "Representative") shall have
the right to receive due notice of all meetings of the Board of Directors, and
shall have the rights to attend and participate in the discussions at all such
meetings. The Representative shall have the right to receive all written
material and information made available to the Board of Directors, including
without limitation, audited financial information for the Corporation. In
addition, prior to December 31, 1996, the Company will deliver to the
3.
Representative, as soon as practical after the end of each month and in any
event within thirty (30) days thereafter, a consolidated balance sheet of the
Company and its subsidiaries, if any, as at the end of such month and
consolidated statements of income and cash flows of the Company and its
Subsidiaries, for each month and for the current fiscal year of the Company to
date, all subject to normal year-end audit adjustments, prepared in accordance
with generally accepted accounting principles consistently applied and certified
by the principal financial or accounting officer of the Company, together with a
comparison of such statements to the corresponding periods of the prior fiscal
year and to the Company's operating plan then in effect and approved by its
Board of Directors. Following December 31, 1996, all of the foregoing statements
shall be prepared and delivered to the Representative on a quarterly basis.
11. Legend Requirements.
(a) Certificates representing all shares of the common stock of the
Corporation shall be endorsed with a legend which provides substantially as
follows:
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF THAT CERTAIN STOCKHOLDERS' AGREEMENT DATED JULY 8,
1996 (AS SUCH AGREEMENT MAY BE AMENDED) BY AND AMONG THE
CORPORATION AND ITS SHAREHOLDERS. A COPY OF SUCH
AGREEMENT IS ON FILE IN THE PRINCIPAL OFFICE OF THE
CORPORATION, A COPY OF WHICH WILL BE SENT WITHOUT CHARGE
TO EACH STOCKHOLDER WHO SO REQUESTS. SUCH REQUEST MUST
BE MADE TO THE SECRETARY OF THE CORPORATION AT ITS
PRINCIPAL OFFICE.
(b) The legend described in paragraph (a) of this Section 11 shall be
removed upon the termination of this Agreement.
12. Termination.
This Agreement, and all obligations set forth herein (except as
specially otherwise provided) shall automatically terminate upon the first to
occur of the following:
(a) the valid exercise by the Partnership of the X'Xxxxxxx Call Right
(the obligations to close the purchase and sale of Shares subject to such call
rights shall survive termination);
(b) the closing of the IPO;
(c) June 30,1997; or
(d) written agreement of all the Stockholders to terminate this
Agreement.
4.
It is understood and agreed that each of the agreements, other than
this Agreement, which are referenced in this Agreement has independent
significance and shall not be terminated by reason of the termination of this
Agreement.
13. Miscellaneous.
(a) Notices. All notices and communications provided in, or
given in connection with, this Agreement shall be deemed given if in writing
delivered personally, or sent by overnight courier service, by certified or
registered mail, postage prepaid, or by facsimile transmission and shall be
deemed received, in the case of personal delivery, when delivered, in the case
of overnight courier service, on the next business day after delivery to such
service, in the case of mailing, on the third postal delivery day after mailing,
and, in the case of facsimile transmission, upon transmittal. Notices to any
party shall be sent to it at the address set forth opposite the Stockholder's
name on Exhibit A attached hereto, or in the case of the Corporation c/o
X'Xxxxxxx, or any other address of which the other parties are notified in
writing.
(b) Binding Effect; Assignment. All the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, representatives, successors and assigns. No
assignment hereof shall relieve any party of its obligations hereunder.
(c) Amendments. Any term, agreement or condition of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing signed by all the parties hereto or, in the case of a waiver, by the
party waiving an obligation or condition applicable to the other parties.
(d) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
(e) Arbitration. Except with respect to a claim for equitable
relief, any controversy or claim arising out of, or relating to, this Agreement,
or the making, performing, or interpreting hereof, shall be settled by
arbitration according to the following rules: (i) arbitration will be held in
San Francisco, California in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect; (ii) the arbitration will
be conducted by a single arbitrator who is a licensed attorney with at least 15
years of experience in dealing with statutory close corporations formed in
jurisdictions including Delaware and California; in the absence of mutual
agreement on a single arbitrator, each relevant party
5.
to the arbitration will submit three names of proposed arbitrators to the
Presiding Judge of the San Francisco Superior Court who will be petitioned to
select one person to serve as the arbitrator; (iii) the arbitration will be
conducted in an expedited manner, designed to preserve the confidentiality of
the dispute; (iv) the decision of the arbitrator will be final and binding in
the absence of manifest fraud; and (v) the arbitrator will be directed to make
findings as to which parties have substantially prevailed in the proceeding and
which parties have failed substantially to prevail in the proceeding, with the
parties who have failed substantially to prevail being joint and severally
liable for the fees and expenses of the arbitrator and the reasonable attorneys'
fees and costs of the prevailing parties.
(f) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Missouri.
(g) Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their heirs, representatives,
successors and assigns, and all of which taken together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
X'XXXXXXX GROUP: /S/
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Xxxxxxx X. X'Xxxxxxx, Xx.
/s/
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Xxxxxx X. Xxxxx, Xx.,
as Trustee for the Xxxxxx X.
Xxxxxxxx Irrevocable Trust #1
/s/
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Xxxxxx X. XxXxxxxxxx
MWG GROUP: /S/
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Xxxxxx X. Xxxxx, Xx.
/s/
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Xxxxxxx X. XxXxxxx
6.
/s/
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Xxxxxx Xxxxx
/s/
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Xxxx Xxxxxxx Xxxx
USC: THE UNIVERSITY OF
SOUTHERN CALIFORNIA
/s/
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Its:
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LIMITED PARTNERS: /s/
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Print Name:
-------------------
THE CORPORATION: PERARDUA CORPORATION
/s/
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Its:
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7.
