Exhibit 10.2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of May 18, 2006, by and among Mount Xxxx
BioSciences, Inc., a Delaware corporation (the "Company"), Xx. Xxxxxxx X.
Xxxxxxxxx, M.D. ("Xxxxxxxxx" and together with Xxxxxxxxx'x affiliates,
"Paramount"), Enhance Biotech, Inc. ("Enhance"), and each other Person who
executes a joinder hereto in the form of Exhibit A attached hereto (together
with Paramount, Enhance, and their respective Permitted Transferees,
collectively referred to as the "Stockholders" and individually as a
"Stockholder"). Capitalized terms used herein but not otherwise defined have the
meanings set forth in Section 1.
WHEREAS, each Stockholder owns or has the right to acquire certain shares
of the common stock of the Company, par value $0.01 per share (the "Common
Stock");
WHEREAS, the Company and the Stockholders desire to enter into this
Agreement for the purposes, among others, of limiting the manner and terms by
which the Stockholder Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall mean, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); provided,
that beneficial ownership of 10% or more of the voting securities (or the
equivalents) of a Person shall be deemed to be control.
"Approved Sale" means a Sale of the Company to any Person that is not an
Affiliate of the Company or Xxxxxxxxx which has been approved by the Board and
Xxxxxxxxx.
"Board" means the Company's board of directors.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which banks are required or authorized by law to be closed in the State of
New York or City of New York.
"Bylaws" means the Bylaws of the Company and subsequent amendments
thereto.
"Certificate of Incorporation" means the Certificate of Incorporation of
the Company, as amended from time to time.
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"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the Recitals.
"Common Stock Deemed Outstanding" means the number of shares of Common
Stock, determined on a fully diluted basis after giving effect to the conversion
or exchange of all outstanding securities convertible into or exchangeable for
Common Stock (collectively, "Common Stock Equivalents") and the exercise of any
options, warrants or other rights to acquire Common Stock or Common Stock
Equivalents, in each case without regard to any restrictions on exercise,
exchange or conversion.
"Company" has the meaning set forth in the Recitals.
"Enhance Shares" means all Stockholder Shares issued or issuable to, or
otherwise held by Enhance and its Affiliates.
"Equity Interest" means any share, capital stock, partnership, member or
similar interest in the Company, including Common Stock, and any option,
warrant, right or security (including debt securities) convertible, exchangeable
or exercisable therefor.
"Family Group" means, with respect to an individual Stockholder, such
Stockholder's spouse and descendants (whether natural or adopted) and any trust
solely for the benefit of such Stockholder and/or such Stockholder's spouse,
their respective ancestors and/or descendants (whether natural or adopted).
"Other Stockholders" means, with respect to a Stockholder, all
Stockholders other than such Stockholder.
"Permitted Issuance" means an issuance of Equity Interests (i) in
connection with a stock dividend or upon any subdivision, stock split,
recapitalization, reclassification, share combination or similar reorganization;
(ii) upon conversion of any shares of convertible securities; (iii) in
connection with the grant of, or exercise of, options, warrants or rights to
subscribe for shares of Common Stock, to officers, directors and other employees
of the Company and to consultants to the Company pursuant to stock options that
are issued pursuant to a stock option plan approved by the Board or such other
options that are granted to such persons and that are approved by a majority of
the entire Board (in each case, as such number of shares may be adjusted from
time to time in accordance with the terms of such stock option plan or
agreements evidencing grants thereunder); or (iv) pursuant to any public
offering registered under the Securities Act; (v) in connection with loans from
financial institutions, banks or equipment lessors, in connection with bona fide
loan transactions.
"Permitted Transferees" has the meaning given thereto in Section 2(d).
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Pro Rata Share" means, with respect to each Stockholder as of any given
time, the quotient determined by dividing (i) the total number of Stockholder
Shares held by such Stockholder at such time, by (ii) the Common Stock Deemed
Outstanding at such time.
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"Public Sale" means any sale of Stockholder Shares to the public pursuant
to an offering registered under the Securities Act or to the public effected
through a broker, dealer or market maker pursuant to the provisions of Rule 144
under the Securities Act.
"Sale Notice" has the meaning set forth in Section 2(b).
"Sale of the Company" means (i) a transaction or series of transactions
(including by way of merger, consolidation, or sale of equity) the result of
which is that the holders of the Common Stock immediately prior to such
transaction(s) (on a fully diluted as if converted basis) are after giving
effect to such transaction(s) no longer, in the aggregate, the "beneficial
owners" (as such term is defined in Rule 13d-3 and Rule 13d-5 promulgated under
the Securities Exchange Act), directly or indirectly through one or more
intermediaries, of more than 50% of the Common Stock (on a fully diluted as if
converted basis), or (ii) sale, lease, transfer, conveyance or other
disposition, in one or a series of related transactions, of all or substantially
all of the Company's assets determined on a consolidated basis.
"SEC" means the Securities and Exchange Commission and any governmental
body or agency succeeding to the functions thereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Stockholder" has the meaning set forth in the Recitals.
"Stockholder Shares" means (i) any Common Stock held by the Stockholders,
and (ii) any equity securities of the Company issued or issuable directly or
indirectly with respect to the securities referred to in clause (i) above by way
of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Stockholder Shares, such shares will cease to be
Stockholder Shares when they have been sold in a Public Sale, an Approved Sale,
or upon the consummation of a Trading Event. For purposes of this Agreement, a
Person will be deemed to be a holder of Stockholder Shares whenever such Person
has the right to acquire directly or indirectly such Stockholder Shares (upon
conversion or exercise, in connection with a transfer of securities or
otherwise), whether or not such acquisition has actually been effected.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a partnership,
limited liability company, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons shall be allocated a majority of partnership, limited liability
company, association or other business entity gains or losses or shall be or
control the managing director, managing member, manager or a general partner of
such partnership, limited liability company, association or other business
entity.
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"Trading Event" means the first date on which the Stockholder Shares (or
securities received in exchange for Stockholder Shares) trades on a national
securities exchange or on the NASDAQ, including the "Over the Counter Bulletin
Board".
"Transfer" has the meaning set forth in Section 2(a).
2. Restrictions on Transfer of Stockholder Shares.
(a) Transfer of Stockholder Shares. For a period of two (2) years
from the date hereof, no holder of Enhance Shares shall sell, transfer, assign,
pledge or otherwise dispose (a "Transfer") of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in such holder's Enhance Shares, except pursuant to (i) Section
2(b), 2(c) or Section 3, (ii) a Transfer to a Permitted Transferee, or (iii) in
a Public Sale, without the written consent of Xxxxxxxxx (and the Company shall
not register any such Transfer on its books without such consent).
(b) Drag Along Rights. In the event that at any time Paramount
receives a bona fide offer from any proposed purchaser, to purchase fifty
percent (50%) or more of the Stockholder Shares then owned by Paramount,
Paramount shall have the right, exercisable upon twenty (20) days' prior written
notice to the Other Stockholders, to require the Other Stockholders to sell all
of their Stockholder Shares to the proposed purchaser, on the same terms and
conditions as govern the proposed Transfer by Paramount.
(c) Tag Along Rights. Subject to Section 2(d), at least 15 days
prior to any Transfer by Paramount of Paramount Shares constituting more than
25% of the issued and outstanding Stockholder Shares, Paramount shall deliver a
written notice (the "Sale Notice") to the Company, Enhance and the Other
Stockholders, specifying in reasonable detail the identity of the prospective
transferee(s) and the terms and conditions of the Transfer. Enhance and the
Other Stockholders may each elect to participate in the contemplated Transfer by
delivering written notice to Paramount within 10 days after delivery of the Sale
Notice. If Enhance or any Other Stockholders have elected to participate in such
Transfer, each of Paramount, Enhance and such Other Stockholders shall be
entitled to sell in the contemplated Transfer, with respect to each type of
securities being Transferred, for the same consideration and on the same terms
(provided that adequate provision shall be made to account for any exercise or
conversion prices payable by any Stockholder with respect to any rights to
acquire Stockholder Shares), a number of Stockholder Shares equal to the product
of (i) the quotient determined by dividing the number of Stockholder Shares
owned by such Stockholder by the aggregate number of Stockholder Shares owned by
the Stockholders participating in such Transfer, and (ii) the aggregate number
of Stockholder Shares to be sold in the contemplated Transfer.
(d) Permitted Transfers. The restrictions contained in Sections
2(a), 2(b) and 2(c) shall not apply with respect to any Transfer of Stockholder
Shares by any Stockholder (i) in the case of an individual Stockholder, pursuant
to applicable laws of descent and distribution or to any member of such
Stockholder's Family Group, (ii) in the case of an entity, (x) among its
Affiliates, members, shareholders, partners or employees or other Persons
approved by a majority of the voting power of the Board in the Board's sole
discretion, but excluding in all cases under this clause (ii) any Transfer
constituting a distribution that would require registration under the Securities
Act, or (y) to any employee or director of the Company or any Affiliate of the
Company; provided, that the restrictions contained in Sections 2(a) and 2(b)
shall continue to be applicable to such Stockholder Shares after any such
Transfer; and provided further, that the transferees of such Stockholder Shares
shall have agreed in writing to be bound by the provisions of this Agreement
which affect the Stockholder Shares so transferred by executing a Joinder
Agreement in the form substantially attached hereto as Exhibit A. All
transferees permitted under this Section 2(d) are collectively referred to
herein as "Permitted Transferees."
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(e) Termination of Restrictions. The rights and restrictions set
forth in this Section 2 (other than the rights set forth in Section 2(b), which
shall not terminate), shall continue with respect to each Stockholder Share
until the date that is twelve (12) months after the consummation of a Trading
Event.
3. Sale of the Company.
(a) In the event of an Approved Sale, each Stockholder will (i)
consent to and raise no objections against the Approved Sale or the process
pursuant to which the Approved Sale was arranged, (ii) waive any dissenter's
rights and other similar rights, and (iii) if the Approved Sale is structured as
a sale of securities, each Stockholder will agree to sell its Stockholder Shares
(and any other capital stock of the Company) on the terms and conditions of the
Approved Sale. Each Stockholder will take all necessary and desirable actions as
directed by the Board in connection with the consummation of any Approved Sale,
including without limitation executing the applicable purchase agreement and
granting identical indemnification rights (pro rata based upon the consideration
received pursuant to the Approved Sale and not joint and several).
(b) The obligations of each Stockholder under this Section 3 are
subject to the satisfaction of the following conditions: (i) upon consummation
of an Approved Sale, each Stockholder shall receive in exchange for the
Stockholder Shares (and any other capital stock of the Company) held by such
Stockholder the same portion of the aggregate consideration from such sale or
exchange that such Stockholder would have received if such aggregate
consideration had been distributed by the Company in complete liquidation
pursuant to the rights and preferences set forth in the Certificate of
Incorporation, (ii) if the holders of a class or series of capital stock of the
Company are given an option as to the form of consideration to be received, all
holders of shares of such class or series of capital stock shall be given the
same option, and (iii) each holder of then currently exercisable rights to
acquire Stockholder Shares shall be given an opportunity to exercise such rights
prior to the consummation of the Approved Sale and participate in such sale as a
holder of such Stockholder Shares.
(c) All Stockholders will bear their pro rata share (based upon the
consideration received pursuant to the Approved Sale) of the reasonable costs of
an Approved Sale to the extent such costs are incurred for the benefit of all
Stockholders and are not otherwise paid by the Company or the acquiring party.
Costs incurred by any Stockholder on its own behalf will not be considered costs
of the transaction hereunder.
4. Registrations.
(a) Piggyback Registration.
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(i) Whenever securities of the Company are to be registered
under the Securities Act and the registration form to be used may be used for
the registration of Stockholder Shares (a "Piggyback Registration"), the Company
will give prompt written notice to Paramount and Enhance of its intention to
effect such a registration and will, subject to the limitations set forth in
this Section 4, include in such registration all Stockholder Shares, if any,
with respect to which the Company has received a written request from Paramount
or Enhance for inclusion therein within twenty (20) days after the Company's
notice has been given pursuant to the provisions of this Section 4; provided
that such form of registration is then available for sales of shares.
(ii) If a Piggyback Registration is an underwritten public
offering of Common Stock of the Company, and the managing underwriter(s) advise
the Company that in their opinion the number of securities requested to be
included in the registration exceeds the number which can be sold in such
offering without having an adverse effect on the marketability of such
securities, the Company will include in such registration (A) first, the
securities the Company proposes to sell, and (B) second, the Stockholder Shares
requested to be included in such registration by Paramount, and the Stockholder
Shares requested to be included in such registration by Enhance (all such
Stockholder Shares set forth in this subsection (B) and (C) being collectively
referred to as the "Secondary Shares") pro rata as between the Stockholder
Shares owned by Paramount and Enhance based on the number of Stockholder Shares
then owned by such Persons, which in the opinion of such underwriters can be
sold without having an adverse effect on the marketability of such Secondary
Shares.
(iii) All registration expenses of any Piggyback Registration,
including the reasonable legal fees and expenses, up to a maximum of $20,000, of
a single law firm representing all Persons holding Secondary Shares, shall be
borne by the Company.
(iv) In the event that a distribution of securities covered by
a Piggyback Registration is to be underwritten, then any distribution of
Stockholder Shares shall be underwritten by the same underwriters who are
underwriting the distribution of the securities on behalf of the Company or
Paramount, and, if Enhance's Stockholder Shares are to be included in such
distribution, then Enhance shall enter into an underwriting agreement with such
underwriters on terms reasonably requested by such underwriters.
(v) The Company may withdraw any registration statement
relating to a Piggyback Registration referred to in Section 4(a)(i) without
thereby incurring any liability to Paramount or Enhance.
(b) Demand Registration.
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(i) Xxxxxxxxx may request registration under the Securities
Act of all or any portion of his or Paramount's Stockholder Shares (A) on not
more than three (3) occasions ("Long-Form Registrations") unless Form S-3 or any
similar short-form registration is then available for such registration, and (B)
on Form S-3 or any similar short-form registration ("Short-Form Registrations")
if, and only if, such form of registration is then available for such
registration. All registrations requested pursuant to this Section 4(b) are
referred to herein as "Demand Registrations." Each request for a Demand
Registration shall specify the approximate number of Stockholder Shares
requested to be registered. Upon Company's receipt of a request for a Demand
Registration, Company will promptly give written notice of the proposed Demand
Registration to Enhance and the Other Stockholders and, expeditiously as
possible, effect such Demand Registration and all such related qualifications
and compliances as may be requested and as would permit or facilitate the sale
and distribution of all Stockholder Shares as are specified in such request.
After Company has become subject to the reporting requirements of the Securities
Exchange Act, Company shall use its best efforts to make Short-Form
Registrations available for the sale of Stockholder Shares. Xxxxxxxxx shall be
entitled to request an unlimited number of Short-Form Registrations; provided
that such form of registration is then available for sales of shares. Company
shall pay all Registration Expenses in connection with the Long-Form
Registrations and up to two Short-Form Registrations in any twelve-month period,
including with respect to each such Demand Registration, the reasonable legal
fees and expenses, up to a maximum of $20,000, of a single law firm representing
all Persons holding Stockholder Shares included in such Demand Registration.
Company shall not be obligated to effect any Demand Registration within 180 days
after the effective date of a previous Demand Registration or a previous
registration in which the holders of Stockholder Shares were given piggyback
rights pursuant to Section 4(a). Parent may postpone for up to 90 days the
filing or the effectiveness of a registration statement for a Demand
Registration if Company's board of directors determines in its reasonable good
faith judgment that such Demand Registration would reasonably be expected to
have a material adverse effect on any proposal or plan by Company to engage in
any acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer, reorganization or similar transaction;
provided, however, that Company may not exercise its right under this paragraph
more than twice in any 12-month period.
(ii) The Company shall have the right to select the investment
banker(s) and manager(s) to administer the offering in an underwritten Demand
Registration; provided that such investment banker(s) and manager(s) are
reasonably acceptable to Company. In connection with each underwritten Demand
Registration, Company agrees to enter into such customary agreements (including
underwriting agreements) as the managing underwriter selected in the manner
herein provided may request in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of Company's size and investment stature; provided
that such agreement shall not contain any such provision applicable to Company
which is inconsistent with the provisions hereof.
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(c) Rule 144. At any time and from time to time after (A) the
Company registers a class of securities under Section 12 of the Securities
Exchange Act, or (B) the expiration of ninety (90) days following the close of
business on the earlier of such date as the Company commences to file reports
under Section 13 or Section 15(d) of the Securities Exchange Act, then upon
receipt of a written request of Enhance, stating that Enhance proposes to sell
securities in compliance with Rule 144 of the Commission, the Company will (Y)
forthwith furnish to Paramount and Enhance a written statement of compliance
with the filing requirements of the Commission under Section 13 or Section 15 of
the Securities Act and other steps it has taken to enable Paramount or Enhance
to make sale pursuant to Rule 144 as such rule may be amended from time to time
and (Z) use its commercially reasonable efforts to make available to the public,
Paramount and Enhance such information as will enable the holder to make sales
pursuant to Rule 144. The Company shall use its best efforts to (1) cause any
registration statement filed pursuant to Sections 4(a) or (b) herein to become
effective, and (2) cause such registration statement to remain effective until
the earliest to occur of (AA) such date as the Stockholders of such Stockholder
Shares (the "Selling Holders") have completed the distribution described in the
registration statement and (BB) such time that all of such Stockholder Shares
are no longer, by reason of Rule 144(k) under the Act, required to be registered
for the sale thereof by such Stockholders. The Company will also use its best
efforts to, during the period that such registration statement is required to be
maintained hereunder, file such post-effective amendments and supplements
thereto as may be required by the Securities Act and the rules and regulations
thereunder or otherwise to ensure that such registration statement does not
contain any untrue statement of material fact or omit to state a fact required
to be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they are made, not misleading; provided,
however, that if applicable rules under the Securities Act governing the
obligation to file a post-effective amendment permits, in lieu of filing a
post-effective amendment that (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in such registration
statement, the Company may incorporate by reference information required to be
included in (I) and (II) above to the extent such information is contained in
periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in
such registration statement. The Company shall keep such registration effective
until the Stockholder Shares subject to such registration are saleable pursuant
to Rule 144(k); provided, however, that the Company may not suspend such
registration under this Section 4(c) unless required by law.
(d) Notice by Company. The Company agrees to give Paramount and
Enhance prompt written notice of its intention to register any of its securities
under the Securities Act. Paramount and Enhance each agree to provide to the
Company in writing any information reasonably deemed by the Company to be
required to be included with respect to Paramount or Enhance, as the case may
be, in any registration statement prepared in connection with a Piggyback
Registration pursuant to Section 4(a).
(e) Lock-up. Provided that the Company's officers, directors and 5%
shareholders agree to an equivalent lockup, Enhance agrees that without the
written consent of the Company it will not, for a period of 90 days, or such
longer period of time as agreed to by the officers, directors and 5%
shareholders of the Company following the effective date of the first
registration statement for the offering of Stockholder Shares under the
Securities Act directly or indirectly sell, offer to sell, grant any option for
the sale of, or otherwise dispose of any Stockholder Share or securities
convertible into Stockholder Shares, except (i) for the Stockholder Shares sold
pursuant to such registration statement, and (ii) transfers to Permitted
Transferees (each of which shall have furnished to the Company and the managing
underwriter their written consent to be bound by this Agreement, including this
clause (ix) or, if requested by the managing underwriter, enter into a lock-up
agreement containing terms which are materially similar to the terms set forth
in this clause (ix). Enhance additionally agrees that for a period beginning
seven days immediately preceding the effective date of any registration
statement filed by the Company under the Securities Act and relating to a public
offering which is not the initial public offering of shares under the Securities
Act and ending on the earlier of (i) 90 days after the effective date of such
registration statement and (ii) the end of the shortest period applicable to any
Affiliate of the Company who is a selling shareholder pursuant to such
registration statement or who is otherwise subject to a lock-up obligation with
respect to such public offering, Enhance shall refrain from directly or
indirectly selling any Stockholder Shares except pursuant to such registration
statement. Notwithstanding the foregoing, the prohibitions hereunder shall not
apply to Stockholder Shares or other securities convertible into Stockholder
Shares (other than Stockholder Shares that are restricted securities within the
meaning of the Securities Act) purchased by Enhance in the open market following
the consummation of an initial public offering of Shares under the Securities
Act.
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(f) Expenses. All expenses incident to the Company's performance of
or compliance with this Section 4, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
Section 4, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on The Nasdaq Stock Market. To the extent Registration Expenses are
not required to be paid by the Company, each holder of securities included in
any registration hereunder shall pay those Registration Expenses allocable to
the registration of such holder's securities so included, and any Registration
Expenses not so allocable shall be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.
5. Legend. In addition to any legend required by any other document,
each certificate evidencing Stockholder Shares and each certificate issued
in exchange for or upon the transfer of any Stockholder Shares (if such
shares remain Stockholder Shares as defined herein after such transfer)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON ____________, 200__, AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED AS OF MAY __, 2006, BY AND AMONG THE
ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE
COMPANY'S STOCKHOLDERS. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL
BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST."
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The Company shall imprint such legend on certificates evidencing
Stockholder Shares outstanding prior to the date hereof. The legend set forth
above shall be removed from the certificates evidencing any shares which cease
to be Stockholder Shares.
6. Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be null and void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such
Stockholder Shares as the owner of such shares for any purpose.
7. Transfer of Stockholder Shares.
(a) Stockholder Shares are transferable only pursuant to (i) public
offerings registered under the Securities Act, (ii) subject to the provisions of
Section 2 and Section 3 above, Rule 144 or Rule 144A (or any similar rule or
rules then in effect) of the SEC if such rule is available, (iii) an effective
registration statement filed in accordance with the Securities Act, and (iv)
subject to Section 2, Section 3 and Section 7(b), any other legally available
means of Transfer.
(b) In connection with the Transfer of any Stockholder Shares other
than a Transfer described in clause (i), (ii) or (iii) of Section 7(a) above or
a Transfer to a Permitted Transferee, the holder thereof shall deliver written
notice to the Company describing in reasonable detail the Transfer or proposed
Transfer, together with an opinion of counsel reasonably acceptable to the
Company to the effect that such Transfer of Stockholder Shares may be effected
without registration of such Stockholder Shares under the Securities Act. No
Transfer or issuance of any Stockholder Shares shall be permitted unless and
until the prospective transferee agrees to become a party to this Agreement and
be bound by all the terms and conditions hereof by executing and delivering to
the Company, a joinder to this Agreement in the form attached hereto as Exhibit
A.
(c) Upon the request of a holder of Stockholder Shares, the Company
shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the SEC.
8. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall
be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company
and the holders of not less than 51% of the Stockholder Shares,
respectively. Notwithstanding anything to the contrary, (i) no
modification, amendment or waiver of any provision specifically applicable
to Enhance shall be effective against Enhance unless approved in writing
by Enhance, and (ii) no modification, amendment or waiver of any provision
that materially and adversely affects any particular Stockholder compared
to its effect on each Other Stockholder hereunder shall be effective
against such Stockholder unless approved in writing by such Stockholder.
The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and
every provision of this Agreement in accordance with its terms.
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9. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
10. Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
11. Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Stockholder Shares and the respective permitted
successors and assigns of each of them, so long as they hold Stockholder
Shares.
12. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
13. Remedies. The parties hereto shall be entitled to enforce their
rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other
rights existing in their favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company may in its sole
discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond
or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
14. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt
requested and postage prepaid, or sent via a nationally recognized
overnight courier, or sent via facsimile to the recipient accompanied by a
certified or registered mailing. Such notices, demands and other
communications will be sent to the Company and the Stockholders at the
address set forth below or at such address or to the attention of such
other person as the recipient party has specified by prior written notice
to the sending party.
11
To the Company:
x/x Xxxxxxxxx Xxxxxxxxxxx, X.X.X.
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: President
With copy to:
Xxxxxxxx Xxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
To Paramount:
x/x Xxxxxxxxx Xxxxxxxxxxx, X.X.X.
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: President
With copy to:
Xxxxxxxx Xxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
12
To Enhance:
Enhance Biotech, Inc.
000 0xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn: C. Every
with copies to:
Savannah House - 0xx Xxxxx
00 Xxxxxxx XX Xxxxxx
Xxxxxx XX0X 0XX
Fax: (00) 000 000 0000
Attn: X. Xxxxx
15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR
RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE.
16. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
13
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
MOUNT XXXX BIOSCIENCES, INC.
By:
-------------------------------
Name: Xxx Xxxxxx
Title: President
-------------------------------
Xxxxxxx X. Xxxxxxxxx
ENHANCE BIOTECH, INC.
By:
-------------------------------
Name: Xxxxx Every
Title: President
EXHIBIT A
FORM OF JOINDER TO
STOCKHOLDERS AGREEMENT
THIS JOINDER to the Stockholders Agreement, dated as of ___________, 200__
by and among MOUNT XXXX BIOSCIENCES, INC., a Delaware corporation (the
"Company"), and certain stockholders of the Company (the "Agreement"), is made
and entered into as of _________ by and between the Company and
_________________ ("Holder"). Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain Equity Interests ("Holder Stock"),
and the Agreement and the Company requires Holder, as a holder of Holder Stock,
to become a party to the Agreement, and Holder agrees to do so in accordance
with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Joinder hereby agree as follows:
Agreement to be Bound. Holder hereby agrees that upon execution of
this Joinder, it shall become a party to the Agreement and shall be fully bound
by, and subject to, all of the covenants, terms and conditions of the Agreement
as though an original party thereto and shall be deemed a Stockholder for all
purposes thereof. In addition, Holder hereby agrees that all Common Stock held
by Holder shall be deemed Stockholder Shares for all purposes of the Agreement.
1. Successors and Assigns. Except as otherwise provided herein, this
Joinder shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and Holder and any subsequent
holders of Holder Stock and the respective successors and assigns of each
of them, so long as they hold any shares of Holder Stock.
2. Counterparts. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
3. Notices. For purposes of Section 16 of the Agreement, all
notices, demands or other communications to the Holder shall be directed
to:
[Name]
[Address]
[Facsimile Number]
4. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS JOINDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR
RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE.
5. Descriptive Headings. The descriptive headings of this Joinder
are inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as
of the date first above written.
MOUNT XXXX BIOSCIENCES, INC.
By:
-------------------------------
Name:
Title:
[HOLDER]
By:
-------------------------------
