EXHIBIT 10.6
INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT ("Agreement") is made as of the 6th
day of September, 1996 by and among BIONIX, INC., a Delaware corporation (the
"Company"), the parties designated as "Investors" on the signature pages hereof,
each of which is herein referred to as an "Investor," and the parties designated
as "Founding Stockholders" on the signature pages hereof, each of whom is herein
referred to as a "Founding Stockholder".
RECITALS
WHEREAS, the Founding Stockholders presently own all but 105,000 of
the outstanding shares of capital stock of the Company;
WHEREAS, the Company and the Investors have negotiated and shall
execute a Stock Purchase Agreement of even date herewith (the "Series A
Agreement");
WHEREAS, execution of this Agreement is a condition to the
consummation of the Series A Agreement; and
WHEREAS, in order to induce the Company to enter into the Series A
Agreement and to induce the Investors to invest funds in the Company pursuant to
the Series A Agreement, the Investors, the Founding Stockholders and the Company
intend that this Agreement shall govern the rights of the Investors to cause the
Company to register shares of Common Stock issuable to the Investors and shall
govern certain other matters forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. REGISTRATION RIGHTS. This Section 1 sets forth the Company's
-------------------
agreement with respect to the registration of shares of Common Stock that the
Investors may acquire upon conversion of any shares of Series A Preferred Stock
(as defined in the Series A Agreement) or upon exercise of any Warrants (as
defined in the Series A Agreement) purchased by the Investors pursuant to the
Series A Agreement. The Company shall have no obligation hereunder to register
any shares of Series A Preferred Stock or Warrants. Subject to the foregoing,
the Company covenants and agrees with respect to the registration of the Common
Stock as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
-----------
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Common Stock" shall mean the Company's common stock,
par value $.001 per share.
(c) The term "Form S-3" means such form under the Act as is in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities (including any Founding Stockholders to the
extent that such Founding Stockholders acquire Series A Preferred Stock or
Warrants pursuant to the Series A Agreement) or any assignee thereof in
accordance with Section 1.13 hereof.
(e) The term "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended.
(f) The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(g) The term "Registrable Securities" means the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock, par value
$.001 per share, issued by the Company pursuant to the Series A Agreement, the
Common Stock issued or issuable upon exercise of the Warrants issued pursuant to
the Series A Agreement, the Common Stock acquired pursuant to Section 2.2
hereof, and any other shares of Common Stock issued in respect of such shares
(because of stock splits, stock dividends, reclassifications, recapitalizations,
or similar events.)
(h) The number of shares of "Registrable Securities then
outstanding" shall mean, as of a particular date, the number of shares of Common
Stock outstanding on such date which are Registrable Securities, the number of
shares of Common Stock issuable on such date pursuant to the conversion of
shares of Series A Preferred Stock outstanding on such date and the number of
shares of Common Stock issuable on such date pursuant to the exercise of
Warrants which are outstanding on such date.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 REQUEST FOR REGISTRATION.
------------------------
(a) If the Company shall receive, at any time after the earlier of
(i) the date four years from the date hereof or (ii) six (6) months after the
effective date of the first registration statement for a public offering of
securities of the Company (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or to an SEC Rule 145 transaction), a
written request from the Holders of a majority of the Registrable Securities
then outstanding that the Company file a registration statement under the Act
covering the registration of at least thirty-three and
-2-
one-third percent (33-1/3%) of the Registrable Securities then outstanding (or a
percentage less than 33-1/3% if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would exceed $5,000,000), then the
Company shall:
(i) within ten (10) days of the receipt thereof, give
written notice of such request to all Holders; and
(ii) effect as soon as practicable the registration under
the Act of all Registrable Securities which the Holders request to be
registered, subject to the limitations of subsection 1.2(b), within twenty (20)
days of the mailing of such notice by the Company in accordance with Section
3.5.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to subsection 1.2(a) and the Company
shall include such information in the written notice referred to in subsection
1.2(a)(i). The managing underwriter or underwriters will, at the Company's
option, either (i) be selected by the Company and be reasonably acceptable to a
majority in interest of the Initiating Holders or (ii) be selected by a majority
in interest of the Initiating Holders and be reasonably acceptable to the
Company. In either such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed
upon by a majority in interest of the Initiating Holders and such Holder) to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
subsection 1.4(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 1.2, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Initiating Holders shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities of the Company owned by each Holder;
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other securities
(other than securities offered directly by the Company) are first entirely
excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting registration pursuant to this Section 1.2, a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than ninety (90) days after
receipt of the request of the
-3-
Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two registrations pursuant to
this Section 1.2 and such registrations have been declared or ordered effective;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof, provided that the Company is
actively employing all reasonable efforts to cause such registration statement
to become effective; or
(iii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made pursuant to Section 1.12 below.
1.3 COMPANY REGISTRATION. If (but without any obligation to
--------------------
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holders)
any of its stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration relating
to the sale of securities to participants in a Company stock option, stock
purchase or similar plan or an SEC Rule 145 transaction, a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities that are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of any
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Act all of the Registrable
Securities that such Holder has requested to be registered.
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
--------------------------
Section 1 to effect the registration of any Registrable Securities, the Company
shall:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, subject to Section 1.17, upon
the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for a period
of up to one hundred twenty (120) days or until the distribution contemplated in
the Registration Statement has been completed; provided, however, that (i) such
120-day period shall be extended for a period of time equal to the period that
the Holder refrains from selling any securities included in such registration at
the request of an underwriter of Common Stock (or
-4-
other securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 that are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended, if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment that (I) includes any prospectus required by Section 10(a)(3) of the
Act or (II) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference into the registration statement of information
(required to be included in (I) and (II) above) contained in periodic reports
filed pursuant to Section 13 or 15(d) of the 1934 Act.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process or to submit to the jurisdiction of any taxing authority in
any such states or jurisdictions, except as may be required by the Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered hereunder to be
listed on any securities exchange on which similar securities issued by the
Company are then listed.
-5-
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
1.5 FURNISH INFORMATION.
-------------------
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of subsection 1.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a) or subsection
1.12(b)(2), whichever is applicable.
1.6 EXPENSES OF DEMAND REGISTRATION. All expenses other than
-------------------------------
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders hereunder and if Company counsel does not make
itself available for this purpose, then the Company will pay the reasonable fees
and disbursements of one counsel for the selling Holders) shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
Holders participating therein shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2; provided further, however, that if
at the time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company from that known
to the Holders at the time of their request and have withdrawn the request with
reasonable
-6-
promptness following disclosure by the Company of such material adverse change,
then the Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to Section 1.2.
1.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear
--------------------------------
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including (without limitation) all registration, filing and
qualification fees, printers' fees and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company in its
capacity as counsel to the selling Holders hereunder and if Company counsel does
not make itself available for this purpose, then the Company will pay the
reasonable fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering
-------------------------
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless such Holders accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected in
the manner described herein, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities (other than securities to be sold by
the Company) that the managing underwriters determine in their sole discretion
is compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, that the managing underwriters determine in
their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling stockholder or in such other proportions as shall mutually
be agreed to by such selling stockholders),but in no event shall the amount of
securities of the selling Holders included in the offering be reduced below
thirty percent (30%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities in which case the shares registered on behalf of the Holders may be
reduced to zero if the managing underwriters make the determination described
above and such reduction is effected on a pro rata basis among all stockholders
of the Company requesting or entitled to registration. For purposes of the
preceding parenthetical concerning apportionment for any selling stockholder
that is a partnership or corporation, the partners, retired partners and
stockholders of such holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons, shall be deemed to be a single "selling stockholder", and any
pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder", as defined in
this sentence.
-7-
1.9 DELAY OF REGISTRATION. No Holder shall have any right to
---------------------
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 INDEMNIFICATION. In the event that any Registrable
---------------
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein 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 Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder (severally,
not jointly) will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim damage, liability, or
-8-
action; provided, however, that the indemnity agreement contained in this
subsection 1.10(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder; provided, that, in no event shall any indemnity under
this subsection 1.10(b) exceed the net proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this Section
1.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.10, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel designated by the
indemnifying party; provided, however, that an indemnified party (together with
all other indemnified parties) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in any underwriting agreement
entered into in connection with any related underwritten public offering are in
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall control.
-9-
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1.
1.11 REPORTS UNDER THE 1934 ACT. With a view to making available
--------------------------
to the Holders the benefits of Rule 144 promulgated under the Act and any other
rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times commencing ninety (90) days
after the effective date of the first registration statement filed by the
Company with the SEC for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the one year anniversary of the
date on which the first registration statement filed by the Company with the SEC
for the offering of its securities to the general public is declared effective;
(c) after the effective date of the first registration statement filed
by the Company with the SEC for the offering of its securities to the general
public, file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
commencing ninety (90) days after the effective date of the first registration
statement filed by the Company with the SEC), the Act and the 1934 Act ( any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualified), (ii) a copy, if applicable, of the most
recent annual or quarterly report of the Company and such other reports and
documents filed by the Company with the SEC, and (iii) after the effective date
of the first registration statement filed by the Company with the SEC for the
offering of its securities to the general public, such other information as may
be reasonably requested in availing a Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration.
1.12 FORM S-3 REGISTRATION. In case the Company shall receive
---------------------
from any Holder or Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to an underwritten offering of all or a part of the Registrable
Securities owned by such Holder or Holders, the Company will:
-10-
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.12: (1)
if Form S-3 is not available for such offering by the Holders; (2) if the
Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$1,000,000; (3) if the Company shall furnish to Holders a certificate signed by
the President of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration statement for a period of not more than sixty (60)
days after receipt of the request of the Holder or Holders under this Section
1.12; provided, however, that the Company shall not utilize this right more than
once in any twelve month period; or (4) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a general
consent to service of process or to submit to the taxing authority of such
jurisdiction, in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement on Form S-3 covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to Section 1.12, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the Company (including fees and
disbursements of counsel for the Company in its capacity as counsel to the
selling Holders hereunder and if Company counsel does not make itself available
for this purpose, then the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders), but excluding any
underwriters' discounts or commissions associated with Registrable Securities,
shall be borne by the Company. Registrations effected pursuant to this Section
1.12 shall not be counted as demands for registration or registrations effected
pursuant to Sections 1.2 or 1.3, respectively.
1.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to (i) a partner or
shareholder of such Holder or (ii) a transferee or assignee of such securities
who acquires at least twenty percent (20%) of the Registrable Securities (as
adjusted for stock splits, combinations and the like) owned by such Holder,
provided that: (a) the Company is, within a reasonable time after such
transfer, furnished
-11-
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; (b) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement, including without
limitation the provisions of Section 1.15 below; and (c) such assignment shall
be effective only if immediately following such transfer the further disposition
of such securities by the transferee or assignee is not a public offering
requiring registration under the Act.
1.14 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
---------------------------------------------
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company that would allow such holder or prospective holder
(a) to include such securities in any registration filed under Section 1.2
hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders that is included or (b) to make a demand
registration that could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in subsection
1.2(a) or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 1.2.
1.15 "MARKET STAND-OFF AGREEMENT". Each Investor hereby agrees
---------------------------
that, during the period of duration specified by the Company and a managing
underwriter of Common Stock or other securities of the Company, following the
effective date of a registration statement of the Company filed under the Act,
such Investor shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by such Investor at any time during
such period except Common Stock included in such registration statement;
provided, however, that:
(a) all executive officers and directors of the Company and all
Founding Stockholders enter into similar agreements; and
(b) such market stand-off time period shall not exceed 180 days.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor until the end of such period.
Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated
in the future, or a registration relating solely to an SEC Rule 145 transaction
on Form S-4 or a similar form that may be promulgated in the future.
1.16 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be
----------------------------------
entitled to exercise any right provided for in this Section 1 after five (5)
years following the
-12-
consummation of a sale of securities pursuant to a registration statement filed
by the Company under the Act in connection with the initial firm commitment
underwritten offering of its securities to the general public.
1.17 SUSPENSION OF REGISTRATION OBLIGATIONS. Notwithstanding any
--------------------------------------
provisions herein to the contrary, the Company shall have the right to suspend
the effectiveness of any registration statement or withdraw any registration
statement if such action is determined by the Company, upon advice of counsel,
to be reasonably necessary to protect the Company against liability under
federal or securities laws. In such event, the Company shall use reasonable
efforts to terminate such suspension or refile such registration statement as
promptly as possible and to maintain the effectiveness of such registration
statement for such extended period of time as the Board of Directors shall
determine, in its discretion, to be reasonable under the circumstances.
2. COVENANTS.
---------
2.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver
--------------------------------
to each Investor:
(a) as soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year of the Company, a consolidated income
statement, statement of cash flows and statement of changes in stockholders'
equity for such fiscal year and a consolidated balance sheet of the Company as
of the end of such year, such year-end financial statements to be in reasonable
detail, prepared in accordance with generally accepted accounting principles
("GAAP"), and audited and certified by independent public accountants of
nationally recognized standing selected by the Company;
(b) as soon as practicable, but in any event within forty-five (45)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited consolidated income statement and statement of cash
flows for such fiscal quarter and an unaudited balance sheet as of the end of
such fiscal quarter;
(c) if such Investor holds an aggregate of at least 100,000 shares of
Series A Preferred Stock: within thirty (30) days of the end of each month, an
unaudited consolidated income statement and statement of cash flows and balance
sheet for and as of the end of such month, in reasonable detail, comparing
actual performance to budget;
(d) if such Investor holds an aggregate of at least 100,000 shares of
Series A Preferred Stock: as soon as practicable, but in any event at least
thirty (30) days prior to the end of each fiscal year, a budget and business
plan for the next fiscal year, prepared on a monthly basis, including
consolidated balance sheets and statement of cash flows for such months and, as
soon as prepared, any other budgets or revised budgets prepared by the Company;
and
-13-
(e) with respect to the financial statements called for in subsections
(b) and (c) of this Section 2.1, an instrument executed by the Chief Financial
Officer or President of the Company and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present, in all material respects, the consolidated
financial condition of the Company and its consolidated results of operations
for the period specified, subject to year-end audit adjustment.
2.2 RIGHT OF FIRST OFFER. Subject to the terms and conditions
--------------------
specified in this Section 2.2, the Company hereby grants to each Holder a right
of first offer with respect to future sales by the Company of its Shares (as
hereinafter defined). A Holder shall be entitled to apportion the right of
first offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Holder in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail ("Notice") to
the Holders stating (i) its bona fide intention to offer such Shares, (ii) the
number of such Shares to be offered, and (iii) the price and terms, if any, upon
which it proposes to offer such Shares.
(b) Within fifteen (15) calendar days after receipt of the Notice, the
Holder may elect to purchase or obtain, at the price and on the terms specified
in the Notice, up to that portion of such Shares which equals the proportion
that the number of shares of Registrable Securities issued and held by such
Holder bears to the total number of shares of Registrable Securities issued and
held by all Holders. The Company shall promptly, in writing, inform each Holder
that purchases all of the shares available to it ("Fully-Exercising Holder") of
any other Holder's failure to do likewise. During the ten-day period commencing
after receipt of such information, each Fully-Exercising Holder shall be
entitled to obtain that portion of the Shares for which Holders were entitled to
subscribe but that were not subscribed for by the Holders that is equal to the
proportion that the number of shares of the Registrable Securities then held by
such Fully-Exercising Holder bears to the total number of shares of the
Registrable Securities issued and held by all Fully-Exercising Holders who wish
to purchase some of the unsubscribed shares.
(c) If all Shares that Holders are entitled to obtain pursuant to
subsection 2.2(b) are not elected to be obtained as provided in subsection
2.2(b) hereof, the Company may, during the 180-day period following the
expiration of the period provided in subsection 2.2(b) hereof, offer the
remaining unsubscribed portion of such Shares to any person or persons at a
price not less than, and upon terms no more favorable to the offeree than, the
price and terms specified in the Notice. If the Company does not enter into an
agreement for the sale of the Shares within such period, or if such agreement is
not consummated within 90 days of the
-14-
execution thereof, the right provided hereunder shall be deemed to be revived
and such Shares shall not be offered unless first reoffered to the Holders in
accordance herewith.
(d) The right of first offer in this Section 2.2 shall not be
applicable (i) to the issuance or sale of not to exceed 947,632 shares of Common
Stock (or options therefor) to directors, officers, employees, distributors and
consultants for the primary purpose of soliciting or retaining their employment
or business, or (ii) to the issuance of Series A Preferred Stock and Warrants
pursuant to the Series A Agreement, or (iii) to, or after consummation of, a
bona fide, firmly underwritten public offering of shares of Common Stock,
registered under the Act pursuant to a registration statement, or (iv) to the
issuance of securities pursuant to the conversion or exercise of convertible
securities, or (v) to the issuance of securities in connection with a business
or product acquisition of or by the Company, whether by merger, reincorporation,
consolidation, purchase or sale of assets, sale or exchange of stock or
otherwise, or (vi) to the issuance of stock, warrants or other securities or
rights in connection with the grant of marketing rights or otherwise to persons
or entities with which the Company or any of its subsidiaries has business
relationships; provided, however, that the exclusions set forth in clauses (v)
and (vi) above shall only apply if the issuances are approved by (a) a majority
in interest of the Holders and (b) a majority of the members of the Company's
Board of Directors other than the "Founding Stockholder Nominees" (as defined
herein).
(e) The right of first refusal set forth in this Section 2.2 may not
be assigned or transferred, except that (i) such right is assignable by each
Holder to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Act, controlling, controlled by or
under common control with, any such Holder, and (ii) such right is assignable
between and among any of the Holders.
2.3 BOARD OF DIRECTORS. As of the closing under the Series A
------------------
Agreement, the Board of Directors of the Company shall consist of six members:
Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, Xxxxxx
Xxxxxxx and Xxxxxxx X. Xxxx. It is understood that after such closing, a seventh
director shall be added by the Board. Each of the Investors and Founding
Stockholders shall vote all of their shares of capital stock of the Company in
favor of two "Founding Stockholders Nominees" each time that directors of the
Company are elected. In the event that any such "Founding Stockholder Nominee"
should cease to serve as a member of the Board of Directors of the Company and
should his or her replacement be selected by the shareholders of the Company,
each of the Investors and Founding Stockholders shall vote all of their shares
of capital stock of the Company in favor of a replacement director designated by
holders of a majority in interest of the Common Stock held by the Founding
Stockholders. For purposes of this Agreement, the term "Founding Stockholder
Nominees" shall mean two officers or key employees of the Company designated by
the holders of a majority in interest of the Common Stock held by all Founding
Stockholders. An individual nominated by the Founding Stockholders to fill a
vacancy of any of the Founding Stockholder Nominees shall also be an officer or
key employee of the Company. Initially, the Founding Stockholder Nominees shall
be Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxxxx.
-15-
2.4 OTHER REGISTRATION RIGHTS. The Company shall not grant
-------------------------
registration rights to any shareholder without the approval of a majority in
interest of the Holders.
2.5 LIMITATIONS AND TERMINATION OF COVENANTS. The covenants set
----------------------------------------
forth in Sections 2.1, 2.3 and 2.4 hereof shall terminate as to all Investors
and be of no further force or effect when the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with a
firm commitment underwritten offering of its securities to the general public is
consummated or when the Company first becomes subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall
first occur. The covenants set forth in Section 2.2 hereof shall terminate as to
all Investors and be of no further force and effect when the shares of Series A
Preferred Stock issued pursuant to the Series A Agreement are no longer
outstanding.
3. MISCELLANEOUS.
-------------
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
----------------------
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities, subject to
limitations on assignability provided for herein). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
3.2 GOVERNING LAW. This Agreement shall be governed by and
-------------
construed under the laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware.
3.3 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 TITLES AND SUBTITLES. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 NOTICES. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or on the
fifth (5th) calendar day after deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
3.6 EXPENSES. If any action at law or in equity is necessary to
--------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable
-16-
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
3.7 AMENDMENTS AND WAIVERS. 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), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this subsection 3.7 shall be binding upon
each Holder of any Registrable Securities then outstanding or securities
exercisable for or convertible into Registrable Securities (including Holders of
any securities deemed Registrable Securities pursuant to Section 1.1(d) hereof),
each future holder of all such Registrable Securities, and the Company.
3.8 SEVERABILITY. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
3.9 AGGREGATION OF STOCK. All shares of Registrable Securities held
--------------------
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
3.10 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties hereto with regard to the
subject matter hereof.
3.11 RULE OF CONSTRUCTION. This Agreement shall not be construed
--------------------
against the party that drafted this Agreement merely by virtue of the fact that
such party drafted this Agreement.
3.12 LEGEND. The parties hereto shall take all steps necessary to
------
assure that the stock certificates representing all shares of the Company's
capital stock owned by Investors and Founding Stockholders bear a legend
referencing the agreement set forth in Section 2.3 hereof, such legend to be in
such form as the Company shall reasonably determine.
3.13 ATTORNEYS' FEES. In the event of any dispute involving the
---------------
terms hereof, the prevailing parties shall be entitled to collect legal fees and
expenses from the other parties to the dispute.
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Investors'
Rights Agreement as of the date first above written.
BIONIX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx, President
Address: 000X Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
INVESTORS*:
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
Address: 0 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx
BTAR ASSOCIATES, L.P.
By: STRATEGIC CONCEPTS, INC.,
general partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Title: President
Address: 00 Xxxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
*Xxxxx X. Xxxxxxx, BTAR Associates, LP and TDW Associates, LP are deemed to be
"Investors" hereunder with respect to securities that they will acquire pursuant
to the Series A Agreement.
-18-
TDW ASSOCIATES, LP
By: TDW III, INC., general partner
By: /s/ Xxxxxxx X. Xxxx
----------------------
Xxxxxxx X. Xxxx
Title: President
Address: 000 Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
X. XXXX PRICE THRESHOLD
FUND III, L.P.,
By: X. Xxxx Price Threshold Fund
Associates, Inc., General Partner of
X. Xxxx Price Threshold Fund III, L.P.
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxx
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
H & Q BIONIX INVESTORS, L.P.
By: /s/ H & Q BIONIX INVESTORS, L.P.
-------------------------------------
Address: XXXXXXXXX & XXXXX
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
-19-
LANDMARK FINANCIAL ASSOCIATES II, L.P.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx, General Partner
Address: X.X. Xxx 000
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxx
Address: 0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
STAGE RIGHT LTD. DEFINED JMS F/B/O XXXXXXX XXXXXX PROFIT
BENEFITS PENSION PLAN SHARING XXXXX PLAN
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
-------------------------- --------------------------------------
Address: By: /s/ Xxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxxx Xxxxx --------------------------------------
0000 Xxxxxx Xxxxxx Address: Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 0000 Xxxxxx Xxxxxx
Attention: Retirement Plans Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Department Attention: Retirement Plans
Account No. 00000000 Department
Account No. 00000000
XXXX X. AND XXXXXX X. XXXXXXXXX
FAMILY TRUST
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Address: 0000 X. 00xx Xxxxxx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
-20-
DELAWARE CHARTER GUARANTEE
& TRUST CUSTODIAN FBO XXXXX X.
XXXXXXXXX
By: /s/ Xxxxx X. XxxXxxxxx
-------------------------------------
Xxxxx X. XxxXxxxxx
Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DESERT ORTHOPEDICS AND
REHABILITATION LTD.
PROFIT SHARING PLAN
By: /s/ Xxxx Xxxxxxxxx
------------------------------------
Address: 0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
Address: c/o UBS Securities
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
/s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
Address: c/o UBS Securities
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
-21-
/s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx
Address: c/o UBS Securities
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
-21A-
/s/ Xxxxxxx X'Xxxxxxx
-------------------------------
Xxxxxxx X'Xxxxxxx
22
FOUNDING STOCKHOLDERS*
BIONIX, B.V.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx, President
Address: 000X Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxx
Address: 00X Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
/s/ Xxxxx X. XxxXxxxxx
-----------------------------------
Xxxxx X. XxxXxxxxx
Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-23-
XXXXXXX INVESTMENT GROUP, L.P.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx
Title: General Partner
Address: 0 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx
BTAR ASSOCIATES, L.P.
By: STRATEGIC CONCEPTS, INC.,
general partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
Title: President
Address: 00 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
TDW ASSOCIATES, LP
By: TDW III, Inc., general partner
By: /s/ Xxxxxxx X. Xxxx
-------------------------
Xxxxxxx X. Xxxx
Title: President
Address: 000 Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
*Xxxxx X. Xxxxxxx, LP, BTAR Associates, LP and TDW Associates, LP are deemed to
be "Founding Stockholders" hereunder with respect to all shares of Bionix, Inc.
owned by them other than shares purchased pursuant to the Series A Agreement.
-24-
