Exh. 4.2
EXECUTION VERSION
INVESTOR RIGHTS AGREEMENT
BY AND AMONG
OMRIX BIOPHARMACEUTICALS, INC.
AND
THE COMMON STOCKHOLDERS LISTED ON EXHIBIT A HERETO
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January 13, 2005
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INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") dated as of January 13,
2005 is entered into by and among Omrix Biopharmaceuticals, Inc., a Delaware
corporation (the "Company"), and the holders of the Company's Common Stock
listed on Exhibit A hereto (the "Common Stockholders")
RECITALS:
WHEREAS, pursuant to the Plan of Recapitalization (the "Plan of
Recapitalization") of even date herewith by and among the Company, the Preferred
Stockholders and the Noteholders (each, as defined therein), certain holders of
the Company's securities are exchanging all of the convertible promissory notes,
shares of Preferred Stock and certain other securities of the Company for shares
of Company's Common Stock (the "Recapitalization"); and
WHEREAS, as a condition precedent to the Recapitalization, the Company and
the Common Stockholders desire to enter into this Agreement to provide for
certain arrangements with respect to (i) the registration of shares of capital
stock of the Company under the Securities Act; (ii) the Common Stockholders'
right of first refusal with respect to certain issuances of securities of the
Company, and (iii) certain covenants of the Company in accordance with the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged the parties hereto agree
as follows:
SECTION 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 "Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with another person or
entity, provided that, with respect to the Company and any Common Stockholder
that is a partnership, corporation or limited liability company, an "Affiliate"
shall also include without limitation, any general partner, limited partner,
retired partner, shareholder, member, retired member, officer, director or
affiliate of the Company or such Common Stockholder, as applicable, or any
general partner, limited partner, retired partner, shareholder, member, retired
member, officer, director or affiliate of the foregoing, or investment vehicles
now or hereafter existing for whom any of the foregoing serves as a general
partner or manager, as applicable, or the estates, beneficiaries, trustees or
family members of any such general partner, limited partner, retired partner,
shareholder, member, retired member, officer, director or affiliate of the
foregoing, or any trusts for the benefit of any of the foregoing persons.
1.2 "Available Undersubscription Amount" means the difference between the
total of all Basic Amounts available for purchase by the Major Investors
pursuant to Section 3 and the Basic Amounts subscribed for pursuant to Section
3.
1.3 "Basic Amount" means, with respect to a Major Investor, his, her or its
pro rata portion of the Offered Securities determined by multiplying the number
of Offered Securities by a fraction, the numerator of which is the aggregate
number of shares of Common Stock then held by such Major Investor (giving effect
to the conversion or exercise into Common Stock of convertible or exercisable
securities then held by such Major Investor that are then convertible or
exercisable for shares of Common Stock without the payment of additional
consideration) and the denominator of which is the total number of shares of
Common Stock then outstanding (giving effect to the conversion or exercise into
Common Stock of all outstanding convertible or exercisable securities that are
then convertible or exercisable for shares of Common Stock without the payment
of additional consideration).
1.4 "By-laws" means the Company's Amended and Restated By-laws, as amended
from time to time.
1.5 "Certificate of Incorporation" means the Company's Amended and Restated
Certificate of Incorporation, as amended from time to time.
1.6 "Code" means the Internal Revenue Code of 1986, as amended.
1.7 "Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
1.8 "Common Stock" means the common stock, $0.01 par value per share, of
the Company.
1.9 "Company" has the meaning ascribed to it in the introductory paragraph
hereto.
1.10 "Company Sale" means (a) a merger or consolidation in which (i) the
Company is a constituent party, or (ii) a Subsidiary of the Company is a
constituent party and either (x) the Company issues shares of its capital stock
pursuant to such merger or consolidation, or (y) as a result of such merger or
consolidation of a Subsidiary, the Company's ownership interest in the surviving
entity is reduced, except any such merger or consolidation referred to in (a)(i)
or (a)(ii) above involving the Company or a Subsidiary in which the holders of
capital stock of the Company immediately prior to such merger or consolidation
continue to hold immediately following such merger or consolidation at least a
majority of the voting power of (1) the surviving or resulting entity or (2) if
the surviving or resulting entity is a wholly-owned subsidiary of another entity
immediately following such merger or consolidation, the parent entity of such
surviving or resulting entity provided, that, for purposes of the exceptions
described in the foregoing clauses (1) and (2), the holders or former holders of
the Company's Common Stock shall, as among themselves, own the capital stock of
such surviving or resulting entity in approximately the same relative
proportions as they owned the Company's Common Stock prior to such merger or
consolidation; (b) the disposition by holders of the Company's then outstanding
capital stock of at least a majority of the then outstanding equity voting power
of the Company in a single or a series of related transactions; (c) the sale,
lease or other
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disposition of all or substantially all of the assets of the Company in a single
transaction or series of related transactions (except any such sale to a
wholly-owned subsidiary of the Company unless such sale, lease or other
disposition is followed by a subsequent disposition or transfer of at least a
majority of the then outstanding equity voting power of the Company or such
Subsidiary in a single or a series of related transactions); or (d) the
disposition by exclusive license, sale, assignment or otherwise of all or
substantially all or a significant portion of the intellectual property rights
of the Company, except for non-exclusive licenses under such intellectual
property rights in the ordinary course of business.
1.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
1.12 "Indemnified Party" means a party entitled to indemnification pursuant
to Section 2.6.
1.13 "Indemnifying Party" means a party obligated to provide
indemnification pursuant to Section 2.6.
1.14 "Initiating Holder" means any Common Stockholder initiating a request
for registration pursuant to Section 2.1(a) or any Major Investor initiating a
request for registration pursuant to Section 2.1(b), as the case may be.
1.15 "Initial Public Offering" means the closing of the initial
underwritten public offering of shares of Common Stock pursuant to an effective
Registration Statement under the Securities Act.
1.16 "Major Investor" means any Common Stockholder who owns on the date of
such determination greater than 1% of the then outstanding shares of Common
Stock; provided that for purposes of determining whether a Common Stockholder is
a Major Investor all shares of Common Stock held by any Affiliate of such Common
Stockholder shall be deemed to be held by such Common Stockholder.
1.17 "MPM" means, collectively, MPM Capital Advisors LLC, BB BioVentures
LLP, MPM Asset Management Investors 1998 LLC, MPM BioVentures Parallel Fund,
L.P. and Affiliates thereof, together with their respective successors and
assigns.
1.18 "Notice of Acceptance" means a written notice from a Common
Stockholder to the Company containing the information specified in Section
3.1(b).
1.19 "Offer" means a written notice of any proposed or intended issuance,
sale or exchange of Offered Securities containing the information specified in
Section 3.1(a).
1.20 "Offered Securities" means (i) any shares of Common Stock, (ii) any
other equity securities of the Company, (iii) any option, warrant or other right
to subscribe for, purchase or otherwise acquire any equity securities of the
Company or (iv) any debt securities convertible into or exchangeable for capital
stock of the Company.
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1.21 "Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
1.22 "Plan of Recapitalization" has the meaning ascribed to it in the
recitals hereto.
1.23 "Refused Securities" means those Offered Securities as to which a
Notice of Acceptance has not been given by the Common Stockholders pursuant to
Section 3.1.
1.24 "Registration Expenses" means all expenses incurred by the Company in
complying with the provisions of Section 2, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company and the fees and expenses of one counsel to
represent all Selling Stockholders selected by holders of a majority of the
Registrable Shares held by the Selling Stockholders, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions and
the fees and expenses of any additional counsel to the Selling Stockholders'.
1.25 "Registrable Shares" means (i) the Shares (as defined in Section 1.29)
acquired by the Common Stockholders, (ii) any other shares of Common Stock, and
any shares of Common Stock issued or issuable upon the conversion or exercise of
any other securities acquired by the Common Stockholders after the date hereof
(other than Shares acquired in the public market pursuant to brokers'
transactions after the Company's Initial Public Offering), and (iii) any other
shares of Common Stock issued in respect of such shares or securities (because
of stock splits, stock dividends, reclassifications, recapitalizations, or
similar events); provided however, that shares of Common Stock which are
Registrable Shares shall cease to be Registrable Shares (x) upon any sale of
such shares pursuant to a Registration Statement or Rule 144 under the
Securities Act or (y) upon any sale in any manner to a person or entity that is
not entitled pursuant to Section 5 to the rights provided by this Agreement or
(z) as to any Shares held by any Common Stockholder, when the aggregate number
of shares held by such Common Stockholder is less than 100,000 shares and such
Shares are eligible for resale pursuant to Rule 144(k) under the Securities Act.
Wherever reference is made in this Agreement to a request or consent of holders
of a certain percentage of Registrable Shares, the determination of such
percentage shall include shares of Common Stock issuable upon conversion of such
Registrable Shares even if such conversion has not yet been effected.
1.26 "Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
1.27 "Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
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1.28 "Selling Stockholder" means any Common Stockholder or Major Investor,
as the case may be, and his, her or its successors or assigns owning Registrable
Shares included in a Registration Statement.
1.29 "Shares" means shares of Common Stock owned by the Common
Stockholders.
1.30 "Stockholders Agreement" means the Stockholders' Agreement dated as of
the date hereof by and among the Company and the Common Stockholders named
therein.
1.31 "Subsidiary" or "Subsidiaries" means any corporation, partnership,
limited liability company, trust or other entity of which the Company directly
or indirectly owns at the time (a) a majority of the outstanding shares of every
class of voting equity securities of such corporation, partnership, limited
liability company, trust or other entity or (b) the right to receive more than
50% of the net assets of such entity available for distribution to the holders
of outstanding stock or ownership interests upon a liquidation or dissolution of
such entity.
1.32 "Undersubscription Amount" means, with respect to a Major Investor,
any additional portion of the Offered Securities attributable to the Basic
Amounts of other Major Investors as such Major Investor indicates it will
purchase or acquire should the other Major Investors subscribe for less than
their Basic Amounts.
SECTION 2
REGISTRATION RIGHTS
2.1 Required Registrations
(a) At any time after 180 days following the Initial Public Offering,
a Common Stockholder or Common Stockholders holding in the aggregate at least a
majority of the Registrable Shares then outstanding may request, in writing,
that the Company effect the registration on Form S-1 or, after the Company
becomes eligible to use such form, Form S-2 (or any successor form) of
Registrable Shares owned by such Common Stockholder or Common Stockholders.
Except as provided in Section 2.1(c), the Company shall not register any
additional shares of stock of the Company on a Registration Statement at the
same time as a demand registration pursuant to this Section 2.1(a) without the
prior written consent of the holders of at least a majority of the Registrable
Shares to be included in the demand registration.
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Major Investor or Major Investors holding, in the aggregate, not
less than 1,000,000 Registrable Shares (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to such shares
after the date hereof) may request, in writing, that the Company effect the
registration on Form S-3 (or any successor form relating to secondary
offerings).
(c) Upon receipt of any request for registration pursuant to Section
2.1(a), the Company shall promptly give written notice of such proposed
registration to all other Common Stockholders in accordance with Section 6.1.
Upon receipt of any request for registration pursuant to Section 2(b), the
Company shall promptly give written notice of such proposed
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registration to all other Major Investors in accordance with Section 6.1. Such
Common Stockholders or Major Investors, as applicable, shall have the right, by
giving written notice, to the Company within 30 days after the Company provides
its registration notice, to elect to have included in such registration the
number of Registrable Shares as such Common Stockholders or Major Investors, as
applicable, may request in such notice of election, subject in the case of an
underwritten offering to the terms of Section 2.1(d). Thereupon, the Company
shall, as expeditiously as possible, use its best commercial efforts to effect
the registration on an appropriate Registration Statement of all Registrable
Shares that the Company has been requested to so register; provided however,
that in the case of a registration requested under Section 2.1(b), the Company
will only be obligated to effect such registration on Form S-3 (or any successor
form).
(d) If the Initiating Holders intend to distribute the Registrable
Shares covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to Section 2.1(a)
or (b), as the case may be, and the Company shall include such information in
its written notice referred to in Section 2.l(c). In such event, (i) the right
of any other Common Stockholder to include its Registrable Shares in such
registration pursuant to Section 2.l(a) and the right of any other Major
Investor to include its Registrable Shares in such registration pursuant to
Section 2.l(b), as the case may be, shall be conditioned upon such other Common
Stockholder's or Major Investor's participation in such underwriting on the
terms set forth herein, and (ii) all Common Stockholders or Major Investors, as
applicable, including Registrable Shares in such registration shall enter into
an underwriting agreement upon customary terms with the underwriter or
underwriters managing the offering. The Initiating Holders shall have the right
to select the managing underwriter(s) for any underwritten offering requested
pursuant to Section 2.l(a) or (b), subject to the approval of the Company, which
approval will not be unreasonably withheld, conditioned or delayed. If any
Common Stockholder or Major Investor, as applicable, who has requested inclusion
of its Registrable Shares in such registration as provided above disapproves of
the terms of the underwriting, such person may elect, by written notice to the
Company, to withdraw its Registrable Shares from such registration and
underwriting. In an underwritten offering, if the managing underwriter advises
the Company in writing that market factors require a limitation on the number of
shares to be underwritten, the number of Registrable Shares to be included in
the Registration Statement and underwriting shall be allocated among all Common
Stockholders or Major Investors, as applicable, requesting registration in
proportion, as nearly as practicable, to the respective number of Registrable
Shares held by them on the date of the request for registration made by the
Initiating Holders pursuant to Section 2.1(a) or (b), as the case may be. If
any Common Stockholder or Major Investor, as applicable, would thus be entitled
to include more Registrable Shares than such Common Stockholder or Major
Investor requested to be registered, the excess shall be allocated among other
requesting Common Stockholders or Major Investors, as applicable, pro rata in
the manner described in the preceding sentence.
(e) The Company shall not be required to effect more than two (2)
registrations requested by the Common Stockholders pursuant to paragraph (a)
above. In addition, the Company shall not be required to effect any registration
(other than on Form S-3 or any successor form) within one hundred twenty (120)
days after the effective date of any other Registration Statement of the Company
or within one hundred eighty (180) days after the effective date of the
Registration Statement for the Initial Public Offering of the Company's
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Common Stock. For purposes of this Section 2.1(e), a Registration Statement
shall not be counted (i) until such time as such Registration Statement has been
declared effective by the Commission (unless the Initiating Holders withdraw
their request for such registration (other than as a result of information
concerning a materially adverse change in the business, properties, assets or
condition (financial or otherwise) of the Company which is made known to the
Common Stockholders after the date on which such registration was requested) and
elect not to pay the Registration Expenses therefor pursuant to Section 2.5) or
(ii) if (A) less than sixty percent (60%) of the total number of Registrable
Shares that Common Stockholders have requested to be included in such
Registration Statement are sold (in the case of a Registration Statement for an
underwritten offering) or included in such Registration Statement at the time it
is declared effective (in the case of a Registration Statement for an "at the
market" secondary offering or a shelf registration) or (B) the Company or any
other person registers additional shares of stock of the Company on a
Registration Statement at the same time as a demand registration pursuant to
this Section 2.1, except (x) as required by Section 2.1(c) or (y) a
Registration Statement on Form X-0, Xxxx X-0, or any similar or successor form.
(f) If at the time of any request to register Registrable Shares
pursuant to this Section 2.1 the Company is engaged or has plans to engage in a
registered public offering or is engaged in any other activity which, in the
good faith determination of the Company's Board of Directors, would be adversely
affected by the requested registration, then the Company may at its option
direct that such request be delayed for a period not in excess of ninety (90)
days from the effective date of such request, provided that such right to delay
a request may not be exercised by the Company more than once in any twelve month
period, and the Company shall thereafter promptly file a Registration Statement
and cause such Registration Statement to become effective as soon as possible
after filing.
2.2 Incidental Registration
(a) Whenever the Company proposes to file a Registration Statement for
the public offer and sale of the Company's equity securities (including pursuant
to Section 2.l(a), to the extent required or permitted by Section 2.1(c), but
excluding a Registration Statement for the Company's Initial Public Offering and
a Registration Statement on Form X-0, X-0 or any similar or successor form) at
any time and from time to time, it will, prior to such filing, give written
notice to all Major Investors of its intention to do so, which notice shall set
forth the manner of distribution of the equity securities to be offered and sold
pursuant to such Registration Statement. Upon the written request of a Major
Investor or Major Investors given within thirty (30) days after the Company
provides such notice, the Company shall use its best commercial efforts to cause
all Registrable Shares which the Company has been requested by such Major
Investor or Major Investors to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the Company's
notice to such Major Investor or Major Investors; provided that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 2.2 without obligation to any Major Investor.
(b) If the registration for which the Company gives notice pursuant to
Section 2.2(a) is a registered public offering involving an underwriting, the
Company shall so advise the Major Investors as a part of their written notice
made pursuant to Section 2.2(a). In such event,
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(i) the right of any Major Investor to include his, her or its Registrable
Shares in such registration pursuant to Section 2.2 shall be conditioned upon
such Major Investor's participation in such underwriting on the terms set forth
herein, and (ii) all Major Investors including Registrable Shares in such
registration shall enter into an underwriting agreement upon customary terms
with the underwriter or underwriters selected for the underwriting by the
Company. If any Major Investor who has requested inclusion of his, her or its
Registrable Shares in such registration as provided above disapproves of the
terms of the underwriting, such Major Investor may elect, by written notice to
the Company, to withdraw his, her or its Registrable Shares from such
Registration Statement and underwriting. If the managing underwriter advises the
Company in writing that market factors require a limitation on the number of
shares to be underwritten, all of the shares held by holders other than the
Major Investors, including any officers, directors or employees of the Company,
shall first be excluded from such Registration Statement and underwriting to the
extent deemed advisable by the managing underwriter, and, if further reduction
of the number of shares is required, the number of shares that may be included
in the Registration Statement and underwriting shall be allocated among all
Major Investors requesting registration in proportion, as nearly as practicable,
to the respective number of Registrable Shares held by them on the date the
Company gives the notice specified in Section 2.2(a); provided that, except for
a Registration Statement for the Company's Initial Public Offering, the number
of Registrable Shares permitted to be included therein shall in no event be less
than 25% of the total number of shares of Common Stock included in such
underwriting. If any Common Stockholder would thus be entitled to include more
shares than such holder requested to be registered, the excess shall be
allocated among other requesting Common Stockholders pro rata in the manner
described in the preceding sentence.
2.3 Aggregation. For purposes of this Section 2, the Affiliates of any
Common Stockholder that is a partnership, corporation or limited liability
company, shall be deemed to be a single "Common Stockholder."
2.4 Registration Procedures.
(a) If and whenever the Company is required by the provisions of this
Agreement to use its best commercial efforts to effect the registration of any
Registrable Shares under the Securities Act, the Company shall, as expeditiously
as possible:
(i) prepare and file with the Commission a Registration Statement
with respect to such Registrable Shares and use its best commercial efforts to
cause that Registration Statement to become effective as soon as possible and to
keep the Registration Statement effective for up to twelve (12) months from the
effective date or such lesser period until all such Registrable Shares are sold;
provided however, that such twelve-month period shall be extended for a period
of time equal to the period the Selling Stockholders refrain from selling any
securities of the Company included in such registration at the request of an
underwriter of the Company's Common Stock or as required pursuant to Section
2.4(b) and (c);
(ii) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the Prospectus included in the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act (including the anti-fraud provisions thereof);
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(iii) furnish to each Selling Stockholder such reasonable numbers
of copies of the Prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as the
Selling Stockholder may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Shares owned by such Selling
Stockholder;
(iv) register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of such states as
the Selling Stockholders shall reasonably request, and do any and all other acts
and things that may be necessary or desirable to enable the Selling Stockholders
to consummate the public sale or other disposition in such states of the
Registrable Shares owned by the Selling Stockholder; provided however, that the
Company shall not be required in connection with this subsection (iv) to qualify
as a foreign corporation or execute or file a general consent to service of
process in any jurisdiction, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act;
(v) cause all such Registrable Shares to be listed on each
securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
(vi) provide a transfer agent and registrar for all such
Registrable Shares and a CUSIP number not later than the effective date of such
Registration Statement;
(vii) make available for inspection by the Selling Stockholders,
any managing underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant or other agent retained
by any such underwriter or selected as counsel to all the Selling Stockholders
in connection with their required due diligence examination of the Company, all
financial and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such Selling
Stockholder, underwriter, attorney, accountant or agent in connection with such
Registration Statement;
(viii) notify each Selling Stockholder, promptly after it shall
receive notice thereof, of the time when such Registration Statement has become
effective or a supplement to any Prospectus forming a part of such Registration
Statement has been filed;
(ix) following the effectiveness of such Registration Statement,
notify each Selling Stockholder of any request by the Commission for the
amending or supplementing of such Registration Statement or Prospectus;
(x) notify each Selling Stockholder of Registrable Shares covered
by such Registration Statement upon the occurrence of any event as a result of
which the Prospectus included in a Registration Statement, as then in effect,
contains an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and prepare, file and
furnish to each such Selling Stockholder a reasonable number of copies of a
supplement or
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an amendment to such Prospectus as may be necessary so that such Prospectus does
not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(xi) use its best commercial efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of a Registration
Statement covering Registrable Shares and, if such an order is issued, to obtain
the withdrawal thereof at the earliest possible time and to notify the Selling
Stockholders of the issuance of such order and the resolution thereof; and
(xii) at the request of any Selling Stockholder at any time after
any Registrable Shares held by such Selling Stockholder become eligible for
resale pursuant to Rule 144(k) under the Securities Act, deliver a letter to the
Company's transfer agent irrevocably instructing the transfer agent to remove
any securities law legend from any certificate representing such Registrable
Shares which have become eligible for sale pursuant to Rule 144(k), which
instructions shall be irrevocable unless and until such Selling Stockholder
informs the Company or the Company otherwise reasonably determines that such
Selling Stockholder is an "affiliate" (as defined in Rule 144 under the
Securities Act,
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses and, following receipt of the revised
Prospectuses, the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.
(c) In the event that, in the reasonable judgment of the Company, it
is advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling Stockholders
to such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.4(c) to suspend sales of Registrable Shares for a period in excess of
30 calendar days consecutively or 60 calendar days in the aggregate in any
365-day period.
2.5 Allocation of Expenses. The Company shall pay all Registration Expenses
of all registrations under this Agreement; provided however, that if a
registration under Section 2.1(a) is withdrawn at the request of the Initiating
Holders holding a majority of the shares requested by such Initiating Holders to
be so registered and if such Initiating Holders elect not to have such
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registration counted as a registration requested under Section 2.1(a), the
Selling Stockholders shall pay the Registration Expenses of such registration
pro rata in accordance with the number of their Registrable Shares included in
such registration; provided further however, that if at the time of such
withdrawal, the Initiating Holders have either (i) learned information
concerning the business, properties, assets or condition (financial or
otherwise) of the Company which is made known to the Selling Stockholders after
the date on which such registration was requested and such information is
reasonably likely to have a material adverse effect on the market for the Common
Stock, or (ii) been informed by the underwriters of such registration that more
than 25% of the Registrable Shares requested for registration shall not be
included therein due to market factors, and in either such case the Initiating
Holders have withdrawn the request with reasonable promptness following such
disclosure, then the Selling Stockholders shall not be required to pay the
Registration Expenses and shall retain all of their rights, including their
demand and incidental registration rights pursuant to Sections 2.1 and 2.2.
2.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless each Selling Stockholder, each underwriter of such Registrable
Shares, and each other person, if any, who controls such Selling Stockholder or
underwriter within the meaning of the Securities Act or the Exchange Act against
any losses, claims, damages or liabilities, joint or several, to which such
Selling Stockholder, underwriter or controlling person may become subject under
the Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, (ii) the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the Registration Statement or the offering
contemplated thereby; and the Company will reimburse such Selling Stockholder,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such Selling Stockholder, underwriter or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or final prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
information relating to such Selling Stockholder, underwriter or controlling
person that is furnished to the Company, in writing, by or on behalf of such
Selling Stockholder, underwriter or controlling person specifically for use in
the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each Selling Stockholder,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each
11
underwriter (if any) and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, or (ii) any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case if and to the extent (and only to the extent) that the
statement or omission was made solely in reliance upon and in conformity with
information relating to such Selling Stockholder furnished in writing to the
Company by or on behalf of such Selling Stockholder specifically for use in
connection with the preparation of such Registration Statement, prospectus,
amendment or supplement; provided however, that the obligations of each such
Selling Stockholder hereunder shall be limited to an amount equal to the net
proceeds received by such Selling Stockholder from the sale of Registrable
Shares sold in connection with such registration.
(c) Each Indemnified Party shall give notice to the Indemnifying Party
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld, conditioned or delayed); and, provided
further, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 2.6 except to the extent that the Indemnifying Party is adversely
affected by such failure. The Indemnified Party may participate in such defense
at such party's expense; provided however, that the Indemnifying Party shall pay
such expense if representation of such Indemnified Party by the counsel retained
by the Indemnifying Party would be inappropriate due to actual or potential
differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding; provided further, that in no
event shall the Indemnifying Party be required to pay the expenses of more than
one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party shall also be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld, conditioned or delayed.
(d) An underwriter shall not be entitled to indemnification pursuant
to this Section 2.6 in the event that it fails to deliver to any Selling
Stockholder any preliminary or final or revised Prospectus, as required by the
rules and regulations of the Commission.
12
(e) In order to provide for just and equitable contribution to joint
liability under the Securities Act in circumstances in which the indemnification
provided for in this Section 2.6 is due in accordance with its terms but for any
reason is held to be unavailable to an Indemnified Party in respect to any
losses, claims, damages and liabilities referred to herein, then the
Indemnifying Party shall, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Indemnified Party as a result
of losses, claims, damages or liabilities to which such party may be subject in
such proportions as is appropriate to reflect the relative fault of the Company
on the one hand and the Selling Stockholders on the other in connection with the
statements, omissions or violations which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations.
The relative fault of the Company and the Selling Stockholders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact related to information supplied by the Company
or the Selling Stockholders and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Selling Stockholders agree that it would not be just and
equitable if contribution pursuant to this Section 2.6(e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 2.6(e),(i) in no case shall any one Selling
Stockholder be liable or responsible for any amount in excess of the net
proceeds received by such Selling Stockholder from the offering of Registrable
Shares and (ii) the Company shall be liable and responsible for at least any
amount in excess of such proceeds; provided however that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person or entity who
is not guilty of such fraudulent misrepresentation. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section
2.6(e), notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve such party from any other obligation it or they may
have thereunder or otherwise under this Section 2.6(e). No party shall be liable
for contribution with respect to any action, suit, proceeding or claim settled
without its prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.
(f) The rights and obligations of the Company and the Selling
Stockholders under this Section 2.6 shall survive the termination of this
Agreement.
2.7 Other Matters with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2.1, the Company agrees to (a) enter
into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by the Company, including without limitation customary provisions with
respect to indemnification by the Company of the underwriters of such offering;
(b) use its best efforts to cause its legal counsel to render customary opinions
to the underwriters with respect to the Registration Statement; and (c) use its
best efforts to cause its independent public accounting firm to issue customary
"cold comfort letters" to the underwriters with respect to the Registration
Statement.
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2.8 Information by Holder. Each Selling Stockholder shall furnish to the
Company such information regarding such holder and the distribution proposed by
such holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
2.9 Limitations on Subsequent Registration Rights. Except with respect to
assignees as contemplated by Section 5 hereof, the Company shall not, without
the prior written consent of Common Stockholders holding at least a majority of
the Registrable Shares, enter into any agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or
prospective holder to include securities of the Company in any Registration
Statement.
2.10 Rule 144 Requirements. After the earliest of (i) the closing of the
sale of securities of the Company pursuant to a Registration Statement or (ii)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a
written statement by the Company as to its compliance with the requirements of
said Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy, which may be delivered in electronic form or by
providing a URL address for a location at which such electronic copy may be
obtained, of the most recent annual or quarterly report of the Company, and
(iii) such other reports and documents of the Company as such holder may
reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any such securities without registration.
2.11 Company Sale. The Company shall not, directly or indirectly, enter
into any Company Sale in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, prior to such
Company Sale, agree in writing to assume the obligations of the Company under
this Agreement, and for that purpose references hereunder to "Registrable
Shares" shall be deemed to be references to the securities which the Common
Stockholders would be entitled to receive in exchange for Registrable Shares
under any such Company Sale; provided however, that the provisions of this
Section 2.11 shall not apply in the event of any Company Sale in which the
Company is not the surviving corporation if all Common Stockholders are entitled
to receive in exchange for their Registrable Shares consideration consisting
solely of (i) cash, (ii) securities of the acquiring corporation which may be
immediately sold to the public without registration under the Securities Act, or
(iii) securities of the acquiring corporation which the acquiring corporation
has agreed to register within 90 days of completion of the transaction for
resale to the public pursuant to the Securities Act.
14
2.12 Termination. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the earlier of (i) the seventh
anniversary of the consummation of the Initial Public Offering or, (ii) the date
on which the number of outstanding Registrable Shares is 2,000,000 or less, or
(iii) with respect to specific shares of Common Stock, when such shares cease to
be Registrable Shares.
SECTION 3
PARTICIPATION RIGHTS
3.1 Participation Rights.
(a) The Company shall not issue, sell or exchange, agree to issue,
sell or exchange, or reserve or set aside for issuance, sale or exchange, any
Offered Securities (excluding securities described in Section 3.1(h)), unless in
each such case the Company shall have first complied with this Section 3.1. The
Company shall deliver to each Major Investor an Offer, which shall (i) identify
and describe the Offered Securities, (ii) describe the price and other terms
upon which they are to be issued, sold or exchanged, and the number or amount of
the Offered Securities to be issued, sold or exchanged, (iii) identify the
persons or entities to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (iv) offer to issue and sell to or
exchange with such Major Investor (A) such Major Investor's Basic Amount, and
(B) such Major Investor's Undersubscription Amount. Each Major Investor shall
have the right, for a period of thirty (30) days following delivery of the
Offer, to purchase or acquire, at a price and upon the other terms specified in
the Offer, up to such Major Investor's Basic Amount of the Offered Securities
described above. The Offer by its terms shall remain open and irrevocable for
such 30-day period.
(b) To accept an Offer, in whole or in part, a Major Investor must
deliver a Notice of Acceptance to the Company prior to the end of the 30-day
period of the Offer, setting forth the portion of the Major Investor's Basic
Amount that such Major Investor elects to purchase and, if such Major Investor
shall elect to purchase all of its Basic Amount, the Undersubscription Amount
(if any) that such Major Investor elects to purchase. If the Basic Amounts
subscribed for by all Major Investors are less than the total of all Basic
Amounts available for purchase, then each Major Investor who has set forth
Undersubscription Amounts in its Notice of Acceptance shall be entitled to
purchase, in addition to the Basic Amounts subscribed for, the Undersubscription
Amount it has subscribed for; provided however, that should the
Undersubscription Amounts subscribed for exceed the Available Undersubscription
Amount, each Major Investor who has subscribed for any Undersubscription Amount
shall be entitled to purchase only that portion of the Available
Undersubscription Amount as the Undersubscription Amount subscribed for by such
Major Investor bears to the total Undersubscription Amounts subscribed for by
all Major Investors, subject to rounding by the Board of Directors to the extent
it reasonably deems necessary.
(c) The Company shall have 90 days from the expiration of the 30-day
period set forth in Section 3.l(a) above to issue, sell or exchange all or any
part of the Refused Securities, but only to the offerees or purchasers described
in the Offer and only upon terms and conditions (including, without limitation,
unit prices and interest rates) which are not more
15
favorable, in the aggregate, to the acquiring person or persons or less
favorable, in the aggregate, to the Company than those set forth in the Offer.
(d) In the event the Company shall propose to sell less than all the
Refused Securities (any such sale to be in the manner and on the terms specified
in Section 3.l(c) above), then each Major Investor may, at his, her or its sole
option and in his, her or its sole discretion, reduce the number or amount of
the Offered Securities specified in his, her or its Notice of Acceptance to an
amount that shall be not less than the number or amount of the Offered
Securities that the Major Investor elected to purchase pursuant to Section
3.1(b) above multiplied by a fraction, (i) the numerator of which shall be the
number or amount of Offered Securities the Company actually proposes to issue,
sell or exchange (including Offered Securities to be issued or sold to Major
Investors pursuant to Section 3.1(b) above prior to such reduction) and (ii) the
denominator of which shall be the original amount of the Offered Securities. In
the event that any Major Investor so elects to reduce the number or amount of
Offered Securities specified in his, her or its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount
of the Offered Securities unless and until such securities have again been
offered to the Major Investors in accordance with Section 3.l(a) above.
(e) Upon the closing of the issuance, sale or exchange of all of the
Refused Securities or less than all, in accordance with Section 3.l(d), of the
Refused Securities, the Major Investors shall acquire from the Company, and the
Company shall issue to the Major Investors, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 3.1 (d) above if the Major Investors have so elected, upon the terms and
conditions specified in the Offer.
(f) The purchase by the Major Investors of any Offered Securities is
subject in all cases to the preparation, execution and delivery by the Company
and the Major Investors of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Major Investors
and their respective counsel.
(g) Any Offered Securities not acquired by the Major Investors or
other persons in accordance with Section 3.l(c) above may not be issued, sold or
exchanged until they are again offered to the Major Investors under the
procedures specified in this Agreement.
(h) The rights of the Major Investors under this Section 3 shall not
apply to:
(i) securities issuable upon conversion or exchange of any
convertible securities or exercise of any options or warrants outstanding on the
date of this Agreement as reflected on Schedule 3.3 to the Plan of
Recapitalization;
(ii) shares of Common Stock issued or deemed issued by reason of
a dividend, stock split, split-up or other distribution on shares of Common
Stock;
(iii) up to an aggregate of 3,275,636 shares (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares after the date hereof) of Common Stock (or options or
other rights with respect thereto, including shares of Common Stock issuable
upon exercise thereof), issued to employees or directors of, or consultants to,
the Company or any of its subsidiaries pursuant to a plan, agreement or
16
arrangement approved by a majority of the members of the Board of Directors of
the Corporation;
(iv) up to an aggregate of 3,000,000 shares (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares after the date hereof) of Common Stock issued by the
Company in connection with acquisitions of businesses, intellectual property
rights or other assets (whether by merger or otherwise), corporate partnering
transactions, collaborations, strategic alliances, equipment leasing
arrangements, bank financings or borrowings by the Company, or for investment
banking or other services rendered to the Company.
(v) shares of Common Stock offered pursuant to the Company's
Initial Public Offering.
3.2 Termination. This Section 3 shall terminate upon the earlier of the
closing of a Company Sale or the consummation of the Initial Public Offering.
SECTION 4
COVENANTS OF THE COMPANY
4.1 Affirmative Covenants. So long as any Shares are outstanding, the
Company covenants and agrees that, subject to waiver or amendment in accordance
with Section 6.4 below, it will perform and observe the following covenants and
provisions, and will cause each Subsidiary, if and when such Subsidiary exists,
to perform and observe such of the following covenants and provisions as are
applicable to such Subsidiary:
(a) Payment of Taxes. The Company and each Subsidiary will pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it or upon its income or property before the same shall become
overdue; provided, however, that the Company or any Subsidiary shall not be
required to pay and discharge any such tax, assessment, charge, levy, or claim
so long as the validity thereof is being contested by the Company or any
Subsidiary in good faith and, if required, by appropriate proceedings if the
Company or Subsidiary shall have set aside on its books sufficient reserves, if
any, with respect thereto or where the failure to so pay would not have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Company or its Subsidiaries. All transfer,
excise or other taxes payable by the Company to any jurisdiction (in the United
States and outside of the United States) by reason of the sale or issuance of
the Shares (except for such taxes payable by reason of any subsequent transfer
of the Shares) shall be paid or provided for by the Company. All United States
federal and state, and all other jurisdictions, income tax returns of the
Company or any Subsidiary for any period shall be prepared and signed by an
independent accounting firm of established national reputation selected by the
Company. The preparation of such returns shall be at the Company's expense.
(b) Maintenance of Insurance. Within 90 days from the date hereof, the
Company and each Subsidiary shall maintain, or shall cause to be maintained, (i)
valid policies of workers' compensation insurance as required by law, product
liability insurance and other
17
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in the same general
areas in which the Company or such Subsidiary operates, including, without
limitation, insurance against loss, damage, fire, theft, public liability and
other risks, (ii) term life insurance policies on the lives of such officers of
the Company as determined by the Board of Directors, each such policy with a
face amount acceptable to the Board of Directors in its sole discretion and
naming the Company as beneficiary and (iii) director's and officer's liability
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in the same general
areas in which the Company or such Subsidiary operates. The Company will not
cause or permit any assignment of the proceeds of such life insurance policies
and will not borrow against such policies. The Company will add BB BioVentures
L.P. or its designee(s) as notice party to such policies and will request that
the issuer(s) of such policies provide such designee with at least ten (10)
days' notice before any such policy is terminated (for failure to pay premiums
or otherwise) or assigned, or before any change is made in the designation of a
beneficiary thereof. In the event that the Company or any of its successors or
assigns (i) consolidates with or merges into any other entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each such case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
the Company assume the obligations of the Company with respect to
indemnification of members of the Board of Directors as in effect immediately
prior to such transaction, whether in the Company's bylaws, Company's
certificate of incorporation, or elsewhere, as the case may be, and to continue
such indemnification for a period of at least five (5) years following the
closing of any such merger or sale.
(c) Conduct of Business: Preservation of Corporate Existence and
Intellectual Property Rights. The Company and each Subsidiary shall preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation (other than the corporate existence, rights,
franchises and privileges of any non-operating Subsidiary or other Subsidiary
the termination of dissolution of which would not materially adversely affect
the business, properties, assets or conditions of the Company and its other
Subsidiaries, taken as a whole), and qualify and remain qualified, and cause
each Subsidiary to qualify and remain qualified, as a foreign corporation in
each jurisdiction in which (i) such qualification is necessary or desirable in
view of its business and operations or the ownership or lease of its properties
or (ii) the failure to so qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Company or its Subsidiaries. The Company and each Subsidiary will continue to
engage principally in the businesses they conduct as of the date hereof. The
Company shall, and shall cause each Subsidiary to, secure, preserve and maintain
all Intellectual Property Rights (as defined in the Plan of Recapitalization)
owned or possessed by it, except where the failure to so secure, preserve and
maintain such Intellectual Property Rights would not have a material adverse
effect on the business, properties, assets or condition (financial or otherwise)
of the Company or its Subsidiaries.
(d) Current Obligations. The Company and each Subsidiary shall pay,
when due, or in conformity with customary trade terms but not later than 90 days
from the due date, all
18
lease obligations, all trade debt, and all other indebtedness incident to the
operations of the Company or its Subsidiaries, except such as are being
contested in good faith and by proper proceedings if the Company or Subsidiary
shall have set aside on its books sufficient reserves, if any, with respect
thereto or where the failure to so pay would not have a material adverse effect
on the business, properties, assets or condition (financial or otherwise) of the
Company or its Subsidiaries. The Company and each Subsidiary will pay and
discharge all lawful claims for labor, materials and supplies which, if not paid
when due, might become a lien or charge upon its property or any part thereof.
(e) Maintenance of Properties. The Company and each Subsidiary shall
maintain and preserve all of its tangible properties and assets necessary or
useful for the proper conduct of its business, in good repair, working order and
condition, ordinary wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto; and comply with the provisions of all material leases to which it is a
party or under which it occupies property so as to prevent any material loss or
forfeiture thereof or thereunder, and except where the failure to so preserve,
maintain or repair such property or comply with such leases would not have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Company and any Subsidiary.
(f) Inspection Rights. The Company shall, at any time during normal
business hours and upon reasonable prior notice to the Company, permit any Major
Investor who is not a competitor of the Company (as determined in good faith by
the Company's Board of Directors) or the designated representative or agent of
such Major Investor, to (i) visit and inspect the premises and any of the
properties of the Company and any Subsidiary, including its records and books of
account (and make copies thereof and take extracts therefrom), and (ii) discuss
the affairs, finances and accounts of the Company and any Subsidiary with its
officers, directors, employees and accountants, all at the expense of such Major
Investor; provided, that, the Company shall not be obligated under this Section
4.l(f) with respect to information that the Board of Directors determines in
good faith is confidential and should not be disclosed.
(g) Compliance with Laws. The Company and each Subsidiary shall comply
in all material respects with all applicable laws, rules, regulations,
requirements and orders of the United States or any applicable foreign
jurisdiction, including of the Food and Drug Administration or similar foreign
governmental authority, in the conduct of its business including, without
limitation, all labor, employment, wage and hour, health and safety,
environmental, health insurance, health information security, privacy, data
protection and data transfer laws, and shall adopt and monitor policies and
procedures designed to comply with all such applicable laws, rules, regulations
and orders, except where noncompliance would not have a material adverse effect
on the business, properties, assets or condition (financial or otherwise) of the
Company and any Subsidiary.
(h) Material Changes, Litigation and FDA Notices. The Company will
promptly notify in writing the Board of Directors of any material adverse change
in the business, properties, assets or condition (financial or otherwise) of the
Company or any Subsidiary and of any litigation or governmental proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against the Company or any Subsidiary or against any officer, director,
19
any person in charge of a principal business function or any other individual
designated by the Board of Directors as a key employee of the Company or any
Subsidiary, materially adversely affecting or which, if adversely determined,
would materially adversely affect its present or proposed business, properties,
assets or condition (financial or otherwise) taken as a whole. The Company will
also promptly notify each Major Investor of any facts which, if such facts had
existed as of the date hereof, would have constituted a material breach of any
representation or warranty contained in the Plan of Recapitalization and have
had or would reasonably be excepted to have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Company or its Subsidiaries. The Company will also promptly provide to the Board
of Directors written notice and copies of any material notices or correspondence
from the Food and Drug Administration or any foreign regulatory equivalent. The
Company shall not be obligated to provide any information to a Major Investor
under this Section 4.l(h) if (i) an employee of such Major Investor serving as a
director or observer on the Company's Board of Directors shall have received
such information in connection with his or her service on such Board of
Directors, (ii) the disclosure of such information, based on the advice of
Company counsel, would materially adversely affect the attorney-client privilege
between the Company and its counsel, or (iii) the Board of Directors determines
in good faith that such information is confidential and should not be disclosed.
(i) Non-Disclosure and Proprietary Rights and Assignment Agreement.
The Company will cause each person now or hereafter employed by the Company or
any Subsidiary (whether as an employee or as a consultant) who receives or has
access to confidential information of the Company or who participates in the
creation of Company Intellectual Property (as defined in the Plan of
Recapitalization) to enter into an agreement covering non-disclosure and
assignment of proprietary rights substantially in the form attached hereto as
Exhibit B.
(j) Meetings of Directors and Committees of the Board. The Company
shall hold meetings of the Company's Board of Directors not less than six (6)
times per year unless otherwise determined by a majority of the members of the
Board of Directors of the Company, but in any event not less than on a quarterly
basis.
(k) Keeping of Records and Books of Account. The Company and each
Subsidiary shall keep adequate records and books of account in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions of the Company and
any Subsidiary, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, returns of merchandise, obsolescence, amortization,
taxes, bad debts and other purposes in connection with its business shall be
made.
(l) Compliance with ERISA. The Company and each Subsidiary shall
comply with all minimum funding requirements applicable to any pension, employee
benefit plans or employee contribution plans which are subject to ERISA or to
the Code and shall comply, in all other material respects, with the provisions
of ERISA and the Code, and the rules and regulations thereunder, which are
applicable to any such plan. Neither the Company nor any Subsidiary will permit
any event or condition to exist which could permit any such plan to be
terminated under circumstances which would cause the lien provided for in
Section 4068 of ERISA to attach to the assets of the Company or any Subsidiary.
20
(m) Vesting of Stock. Unless otherwise approved by a majority of the
members of the Board of Directors of the Company or a duly appointed committee
thereof, all stock options, shares of restricted stock, stock appreciation
rights and other stock equivalents issued after the date of this Agreement to
employees, directors, consultants and other service providers pursuant to a
stock purchase or option plan or other employee stock incentive program shall be
subject to a minimum vesting schedule of at least four years, with 25% of the
shares subject thereto vesting one year after the date of the issuance or grant
of such shares, and the balance of such shares vesting no more frequently than
monthly for the three years thereafter, and shall provide for termination of
vesting upon cessation of employment. With respect to any shares of stock
purchased by any such person, the Company shall have a right of first refusal on
any transfer of such shares with certain exceptions as provided in the
Stockholders' Agreement. With respect to any shares of stock that are subject to
vesting, the Company shall have a repurchase option at cost on any unvested
portion of such securities in the event of cessation of employment or provision
of services.
(n) Stockholders' Agreement. If any person receives any Common Stock
(including without limitation receipt of Common Stock upon exercise of options
or settlement of stock appreciation rights), the Company shall cause each such
person to execute and deliver the applicable Instrument of Accession attached to
the Stockholders' Agreement.
(o) Integration. The Company will not offer, sell or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that will be integrated with the sale of the Shares in a manner
that would require the registration of any of the Shares under the Securities
Act.
4.2 Negative Covenants. The Company covenants and agrees that, in addition
to any other vote required by law or the Company's Certificate of Incorporation
or By-laws, without the prior approval of a majority of the Board of Directors
of the Company, the Company shall not after the date of this Agreement, and the
Company shall not permit any Subsidiary (at such time as one exists) to:
(a) make any capital expenditures with respect to a single item, asset
or project in excess of $75,000, except for expenses contained in the Company's
annual budget as approved by the Board of Directors;
(b) create, incur or assume any indebtedness for borrowed money in
excess of $75,000, other than trade credit in the ordinary course of business;
(c) make any loans to any other entity or person or guarantee,
directly or indirectly, any indebtedness or obligations of any other entity or
person, other than loans to employees of the Company not exceeding $3,000 in
principle amount with respect to any such employee;
(d) hire or make offers to hire any key employees of the Company,
including, a Chief Executive Officer, a Chief Financial Officer and any other
key officer;
(e) take any action which creates or commits the Company to enter into
a material acquisition, joint venture, licensing or collaboration agreement, or
exclusive marketing
21
or other distribution agreement with respect to the Company's products or
services, other than the ordinary course of business;
(f) authorize, offer, sell, issue or obligate itself to issue any
debt, equity or convertible securities of the Company; and
(g) take any action that results in a material change in the Company's
line of business, as currently conducted and proposed to be conducted as of the
date of this Agreement.
4.3 Financial Statements and Other Information The Company will deliver the
following documents to each Major Investor:
(a) as soon as practicable, but in any event within one hundred twenty
(120) days after the end of each fiscal year of the Company, audited
consolidated balance sheets of the Company and its Subsidiaries as at the end of
such year, together with consolidated statements of income and retained
earnings, statements of cash flows and summaries of bookings and backlogs of the
Company and its Subsidiaries for such year, prepared in accordance with
generally accepted accounting principles, audited by certified independent
public accountants of established national reputation selected by the Company,
together with the accountant's management letter regarding the adequacy of the
audit, a capitalization table updated as of such fiscal year end and a report
from the Chief Executive Officer or Chief Financial Officer discussing
comparisons to forecasted annual budgets and to corresponding periods from prior
fiscal years, all in reasonable detail;
(b) as soon as practicable, but in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of the Company in
each year, unaudited consolidated balance sheets of the Company and its
Subsidiaries as at the end of such quarter, together with consolidated
statements of income and retained earnings and statements of cash flows and
summaries of bookings and backlogs of the Company and its Subsidiaries for such
period and for the current fiscal year to date, and a report from the Chief
Executive Officer or Chief Financial Officer discussing comparisons to
forecasted quarterly budgets and comparisons to corresponding periods from prior
fiscal years, all in reasonable detail;
(c) as soon as practicable, but in any event within twenty (20) days
after the end of each month, balance sheets of the Company and its Subsidiaries
as at the end of such month, together with separate statements of income and
retained earnings, statements of cash flows and summaries of bookings and
backlogs of the Company and its Subsidiaries for such month and for the current
fiscal year to date, and a report from the Chief Executive Officer or Chief
Financial Officer discussing comparisons to forecasted monthly budgets and
comparisons to corresponding periods from prior years, all in reasonable detail;
and
(d) promptly after the end of each of the fiscal quarters of the
Company in each year, a capitalization table of the Company as of the end of
such quarter, duly certified by the Chief Financial Officer of the Company; and
(e) not later than 15 days prior to the end of each fiscal year, a
comprehensive operating budget approved by the Board of Directors and prepared
on a monthly basis for each upcoming fiscal year, including operating expenses
and revenues, cash flow projections, capital
22
expenditures and statement of cash position for such fiscal quarter
(collectively, the "Operating plan"), and any material revisions to the
Operating Plan, promptly after preparation thereof.
The financial statements delivered pursuant to clauses (b) and (c) shall be
accompanied by a certificate of the Chief Executive Officer or Chief Financial
Officer of the Company stating that such statements have been prepared in
accordance with generally accepted accounting principles consistently applied
(except as otherwise noted therein and subject to physical inventory and other
customary year end audit adjustments) and fairly present the financial condition
of the Company at the date thereof and for the periods covered thereby.
In addition to the information listed above, the Company shall promptly
provide to each Major Investor other information and materials reasonably
requested, including, without limitation, reports of adverse developments,
management letters, communications with stockholders or directors, press
releases and registration statements; provided that the Company shall have the
right to refuse to provide such information if (i) the Company determines that a
conflict of interest exists between the Company and the requesting Major
Investor; (ii) the release of such information would cause a violation of any
duties of confidentiality to a third party; or (iii) the disclosure would result
in the waiver of the Company's attorney client privilege.
4.4 Aggregation. For purposes of calculating percentage thresholds under
this Section 4, the Affiliates of any Common Stockholder that is a partnership,
corporation or limited liability company, shall be deemed to be a single "Common
Stockholder."
4.5 Termination of Covenants. This Section 4 shall terminate upon the
earlier of (a) the closing of a Company Sale, or (b) the consummation of an
Initial Public Offering.
SECTION 5
TRANSFERS OF RIGHTS; AGREEMENT OF THE COMMON STOCKHOLDERS
5.1 Transfers of Shares. The rights and obligations of each Common
Stockholder hereunder may be assigned by such Common Stockholder to any person
or entity to which Registrable Shares are transferred by such Common Stockholder
in compliance with the requirements of the Stockholders Agreement, and for
purposes of this Agreement such transferee shall be deemed a "Common
Stockholder", provided that the assignment of rights shall be contingent upon
the transferee providing written instrument to the Company notifying the Company
of such transfer and agreeing in writing to be bound by all terms and conditions
set forth in this Agreement. This Agreement may not be assigned by the Company.
SECTION 6
MISCELLANEOUS
6.1 Notices. Any notice, demand, request or delivery required or permitted
to be given pursuant to the terms of this Agreement shall be in writing and
shall be deemed given (i) when delivered personally or when sent by facsimile
transmission and confirmed by telephone or electronic transmission report (with
a hard copy to follow by mail), (ii) on the next business day
23
after timely delivery to a generally recognized receipted overnight courier
(such as FedEx) and (iii) on the third business day after deposit in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid),
addressed to the party at such party's address as set forth below or as
subsequently modified by written notice delivered as provided herein, as
follows:
(i) if to the Company, to:
Omrix Biopharmaceuticals S.A.
Attn: President
Chaussee de Waterloo, 200
X-0000 Xxxxx Xx Genese
Telephone: x00 0 0000000
Facsimile: x00 0 0000000
or at such other address or addresses as may have been furnished in writing by
the Company to a Common Stockholder, with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
O'Melveny & Xxxxx LLP
Times Square Tower
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) if to a Common Stockholder, at the address as set forth on
Exhibit A hereto or at such other address as such party may designate by prior
written notice to the other parties hereto;
(iii) if to MPM, at its address set forth on Exhibit A, with a copy
to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx & Dodge LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6.2 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the respective successors, permitted assigns, heirs, executors and
administrators of the parties hereto.
6.3 Entire Agreement. This Agreement, the Plan of Recapitalization and the
Stockholders' Agreement embody the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, written or oral, relating to such subject matter.
24
6.4 Amendments and Waivers. Except as otherwise expressly set forth in this
Agreement, any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the holders of at least sixty-two percent (62%) of the
Registrable Shares; provided that, this Agreement may be amended, or the
observance of any term of this Agreement may be waived, with the written consent
of the holders of less than all Registrable Shares only in a manner which
affects all Registrable Shares in the same fashion, and any amendment or waiver
that adversely affects any holder of Registrable Shares in a manner different
than other holders of Registrable Shares shall require the written consent of
such holder. No waivers of or exceptions to any term, condition or provision of
this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
6.5 Confidentiality. Each Common Stockholder shall keep confidential and
shall not disclose, divulge, use or otherwise take advantage of (except as
contemplated hereunder) any confidential, proprietary or secret information that
it may obtain from the Company or any Subsidiary pursuant to financial
statements, reports and other materials and information transmitted by such
entities to such Common Stockholder pursuant to this Agreement or the Plan of
Recapitalization, or pursuant to any visitation, observation or inspection
rights granted hereunder, unless such information (i) was a matter of public
knowledge prior to the time of its disclosure by the Company to such Common
Stockholder; (ii) became a matter of public knowledge after the time of its
disclosure by the Company to such Common Stockholder through means other than an
unauthorized disclosure resulting from an act or omission by such Common
Stockholder; (iii) was independently developed or discovered by the Common
Stockholder without reference to information provided by the Company; (iv) was
or becomes available to such Common Stockholder on a non-confidential basis from
a third party, provided that such third party is not bound by an obligation of
confidentiality to the Company with respect to such confidential information; or
(v) is required to be disclosed to comply with applicable laws or regulations,
or with a valid order of a court or other governmental body of the United States
or any political subdivisions thereof, provided such Common Stockholder (a)
notifies the Company of such required disclosure and, if practical, permits the
Company to contest such disclosure by appropriate proceedings and/or to obtain a
protective order with respect to the information to be disclosed, and (b) takes
all reasonable actions to obtain confidential treatment for such disclosure and,
if possible, to minimize the extent of such disclosure. Notwithstanding the
foregoing, each Common Stockholder may disclose such information (a) to its
Affiliates, which parties shall remain bound by this confidentiality provision;
(b) to its attorneys, accountants, consultants and other professionals to the
extent necessary to obtain their services in connection with its investment in
the Company and who shall be advised of the confidential nature of such
information; or (c) to any prospective purchaser of any Company securities from
such Common Stockholder as long as such prospective purchaser agrees in writing
to be bound by the provisions of this Section, except that such Common
Stockholder may disclose such confidential information for the purpose of
evaluating its investment in the Company to an Affiliate of such Common
Stockholder only if such Affiliate is advised of the confidentiality provisions
of this Agreement.
25
6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
6.7 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
6.8 Specific Performance. In addition to any and all other remedies that
may be available at law in the event of any breach of this Agreement, each
Common Stockholder shall be entitled to seek specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
6.9 Titles and Subtitles. The titles of sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
6.10 Governing Law. Except to the extent that any provision of this
Agreement is contrary to any mandatory provision of the Delaware General
Corporation Law (in which case such mandatory statutory provision shall apply),
this Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts and the laws of the United States applicable
therein (without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the laws of any other jurisdiction) and
shall be treated in all respects as a Massachusetts contract.
[Remainder of page intentionally left blank.]
26
IN WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as
of the date first written above.
COMPANY:
OMRIX BIOPHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxx
------------------------------------
COMMON STOCKHOLDERS:
XXXXXXX & XXXXXXX
DEVELOPMENT CORPORATION
By: /s/ Zeer Zehavi
------------------------------------
Name: Zeer Zehavi
Title: Vice President
/s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
MINV S.A.
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
TINV S.A.
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx Xxxx
----------------------------------------
Xxxxxxx Xxxx
/s/ Xxxx Xxxxxxxx
----------------------------------------
Xxxx Xxxxxxxx
Signature Page to Investor Rights Agreement
/s/ Israel Nur
----------------------------------------
Israel Nur
/s/ Xxxxxxxx Xxxxxx
----------------------------------------
Xxxxxxxx Xxxxxx
BB BIOVENTURES L.P.
By: BAB BIOVENTURES L.P.,
its General Partner
by: BAB BIOVENTURES N.V., its
General Partner
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
MPM ASSET MANAGEMENT INVESTORS
1998 LLC
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Manager
MPM BIOVENTURES PARALLEL FUND, L.P.
By: MPM BIOVENTURES I L.P., its General
Partner
By: MPM BIOVENTURES LLC, its General
Partner
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Manager
VAN MOER, XXXXXXXX LUXEMBOURG SA
By: /s/ Authorized Officer
------------------------------------
Name: Authorized Officer
Title: Authorized Officer
Signature Page to Investor Rights Agreement
QUEST FOR GROWTH NV
Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
on behalf of ------------------------------------
Quest Management NV Name: Xxxx Xxxxxx
Managing Director Title: on behalf of Quest Management NV
Quest for Growth NV Managing Director Quest for
Growth NV
/s/ Xxx X. Xxxxxxx
Xxx X. Xxxxxxx
Chairman
CAPRICORN VENTURE FUND NV
By: /s/ Xx. Xxx X. Xxxxxxx
------------------------------------
Name: Xx. Xxx X. Xxxxxxx
Title: Managing Director on behalf of
Capricorn Venture Partners n.v.
Managing Director
BARING CAPRICORN VENTURES LTD.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
CAPRICORN VENTURE PARTNERS NV
By: /s/ Xx. Xxx X. Xxxxxxx
------------------------------------
Name: Xx. Xxx X. Xxxxxxx
Title: Managing Director
INVESTMENT FUND I-DIRECT EN CO. C.V.
(Successor to NIB CAPITAL Private Equity
Belgium Investments N.V., formerly
PARNIB BELGIE N.V.), Represented by
Xxxxx Investment B.V. in its turn
represented by Alp Invest Partners n.v.
By: /s/ G.J.J. Xxxxxxxxxx
------------------------------------
Name: G.J.J. Xxxxxxxxxx
Title: Partner
/s/ Kees de Ru
Kees de Ru
Legal Counsel
Signature Page to Investor Rights Agreement
SAVIENT PHARMACEUTICALS, INC.
(formerly known as Bio-Technology
General Corp.)
By: /s/ XXXXXX YACHMETE
------------------------------------
Name: XXXXXX YACHMETE
Title: SVP & GENERAL COUNSEL
BARC N.V.
By: /s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxx
----------------------------------------
Xxxx Xxxx
/s/ Xxx Xxxxxxx
----------------------------------------
Xxx Xxxxxxx
XXXXXX SERVICES LTD.
By: /s/ X. X. XXXXX
------------------------------------
Name: X. X. XXXXX
Title: DIRECTOR
Signature Page to Investor Rights Agreement
EXHIBIT A
SCHEDULE OF COMMON STOCKHOLDERS
TOTAL SHARES OF
COMMON STOCK
HELD IMMED.
FOLLOWING
CLOSING OF
INVESTOR NAME RECAPITALIZATION
------------- ----------------
TINV SA 2,750,000
MINV SA 2,678,571
Xxxxxx Xxxx 3,368,121
MINV SA 20,000
MINV SA 24,286
TINV SA 14,105
Bio Invest BV (Xxxxxx Xxxx) 000,000
Xxx Xxxx, Xxxxxxxx Xxxxxxxxxx XX 1,606,111
Quest For Growth NV 1,284,891
Capricorn Venture Fund NV 620,996
Baring Capricorn Ventures LTD 680,817
BB Bioventures LP 7,630,803
MPM Asset Management Investors 1998 LLC 100,183
MPM Bioventures Parallel Fund LP 980,521
Capricorn Venture Partners NV 31,531
Parnib Belgie NV/NIB Capital Private Equity 2,278,310
Investment Fund I - Direct en Co. C.V. 112,398
Xxxxxx X Xxxxx 42,857
Xxxxxxx Xxxx 57,143
Xxxx Xxxxxxxxx 40,000
Xxxx Xxxxxxxxx 30,000
Xxxxxx X Xxxxx 54,053
Xxxxxxx Xxxx 54,053
Israel Nur 21,026
Xxxxxxxx Xxxxxx 300,000
Israel Nur 43,038
BARC NV (Xxxx Xxxxxx) 324,584
Xxxx Xxxx 81,146
Xxxxxx Services Ltd 243,438
Xxx Xxxxxxx 830,670
Savient Pharmaceuticals Inc. 1,209,836
Xxxxxxx & Xxxxxxx Development Corporation 1,196,956
----------
Total 29,412,130
==========
EXHIBIT B
NON-DISCLOSURE AND PROPRIETARY RIGHTS AND ASSIGNMENT
AGREEMENT
EMPLOYEE CONFIDENTIALITY, INVENTIONS
AND NON-SOLICITATION AGREEMENT
In consideration of my employment or continued employment by Omrix
Biophamaceuticals, Inc., a Delaware corporation, or any of its predecessors,
successors or subsidiaries (collectively, the "Company"), and for other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, I
agree as follows:
CONFIDENTIALITY
I understand that the Company continually obtains and develops valuable
proprietary and confidential information concerning its business, business
relationships and financial affairs (the "Confidential Information") which may
become known to me in connection with my employment.
I acknowledge that all Confidential Information, whether or not in writing
and whether or not labelled or identified as confidential or proprietary, is and
shall remain the exclusive property of the Company or the third party providing
such information to myself or the Company. By way of illustration, but not
limitation, Confidential Information may include Inventions (as hereafter
defined), trade secrets, technical information, know-how, research and
development activities of the Company, product and marketing plans, customer and
supplier information and information disclosed to the Company or to me by third
parties of a proprietary or confidential nature or under an obligation of
confidence. Confidential Information is contained in various media, including
Without limitation, patent applications, computer programs in object and/or
source code, flowcharts and other program documentation, manuals, plans,
drawings, designs, technical specifications, laboratory notebooks, supplier and
customer lists, internal financial data and other documents and records of the
Company.
I agree that I shall not, during the term of my employment and thereafter,
publish, disclose or otherwise make available to any third party, other than
employees of the Company, any Confidential Information except as expressly
authorized in writing by the Company. I agree that I shall use such Confidential
Information only in the performance of my duties for the Company and in
accordance with any Company policies with respect to the protection of
Confidential Information. I agree not to use such Confidential Information for
my own benefit or for the benefit of any other person or business entity.
I agree to exercise all reasonable precautions to protect the integrity and
confidentiality of Confidential Information in my possession and not to remove
any materials containing Confidential Information from the Company's premises
except to the extent necessary to my employment. Upon the termination of my
employment, or at any time upon the Company's request, I shall return
immediately to the Company any and all materials containing any Confidential
Information then in my possession or under my control.
Confidential Information shall not include information which (a) is or
becomes generally known within the Company's industry through no fault of mine;
(b) was known to me at the time it was disclosed as evidenced by my written
records at the time of disclosure; (c) is lawfully and in good faith made
available to me by a third party who did not derive it from the Company and
who imposes no obligation of confidence on me; or (d) is required to be
disclosed by a governmental authority or by order of a court of competent
jurisdiction, provided that such disclosure is subject to all applicable
governmental or judicial protection available for like material and reasonable
advance notice is given to the Company.
ASSIGNMENT OF INVENTIONS
I agree promptly to disclose to the Company any and all ideas, concepts,
discoveries, inventions, developments, original works of authorship, software
programs, software and systems documentation, trade secrets, technical data and
know-how that are conceived, devised, invented, developed or reduced to practice
or tangible medium by me, under my direction or jointly with others during any
period that I am employed or engaged by the Company, whether or not during
normal working hours or on the premises of the Company, which relate, directly
or indirectly, to the business of the Company and arise out of my employment
With the Company (hereinafter "Inventions").
I hereby assign to the Company all of my right, title and interest to the
Inventions and any and all related patent rights, copyrights and applications
and registrations therefor. During and after my employment, I shall cooperate
with the Company, at the Company's expense, in obtaining proprietary protection
for the Inventions and I shall execute all documents which the Company shall
reasonably request in order to perfect the Company's rights in the Inventions. I
hereby appoint the Company my attorney to execute and deliver any such documents
on my behalf in the event I should fail or refuse to do so within a reasonable
period following the Company's request. I understand that, to the extent this
Agreement shall be construed in accordance with the laws of any state which
limits the assignability to the Company of certain employee inventions, this
Agreement shall be interpreted not to apply to any such invention which a court
rules or the Company agrees is subject to such state limitation.
I further represent that the attached Schedule A contains a complete list
of all inventions made, conceived or first reduced to practice by me, under my
direction or jointly With others prior to my employment with the Company ("Prior
Inventions") and which are not assigned to the Company hereunder. If there is no
such Schedule A attached hereto, I represent that there are no such Prior
Inventions.
NON-SOLICITATION
I agree that during my employment with the Company and for a period of one
(1) year after the termination or cessation of such employment for any reason, I
shall not solicit, divert or take away, or attempt to divert or take away, the
business or patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company which were contacted,
solicited or served by me while employed by the Company.
I agree that during my employment and for a period of one (1) year after
the termination or cessation of my employment for any reason, I shall not
directly or indirectly recruit, solicit or hire any employee of the Company, or
induce or attempt to induce any employee of the Company to discontinue his or
her employment relationship with the Company.
2
