FORM OF
PRINCIPAL STOCKHOLDER AGREEMENT
THIS PRINCIPAL STOCKHOLDER AGREEMENT (this "Agreement"), dated as of
February 14, 1997, between Progenitor, Inc., a Delaware corporation
("Progenitor"), and the undersigned (the "Stockholder").
WHEREAS, the Stockholder is the record and beneficial owner of and has
the power to vote the number of shares of capital stock of Mercator Genetics,
Inc., a Delaware corporation ("MGI"), set forth on Schedule A hereto (the
"Shares");
WHEREAS, the Stockholder desires to induce Progenitor to enter into
the Agreement and Plan of Reorganization, dated as of the date hereof (the
"Reorganization Agreement"), by and among Progenitor, MG Merger Sub Corp., a
Delaware corporation and wholly-owned subsidiary of Progenitor ("Reorganization
Sub"), and MGI, and to proceed with and consummate the transactions contemplated
by the Reorganization Agreement which provides for the merger of MGI with and
into Reorganization Sub (the "Reorganization"); all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Reorganization
Agreement; and
WHEREAS, as a condition to the execution and delivery of the
Reorganization Agreement, Progenitor has requested that the Stockholder enter
into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
1. VOTING; EXCHANGE OF SHARES; WAIVER.
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(a) The Stockholder hereby agrees to vote all shares of MGI Capital
Stock now owned or hereafter acquired by Stockholder in favor of (i) the
Reorganization (including without limitation any Reorganization in which the Per
Share Consideration is to be paid in Optional Public Equity), (ii) approval of
the Reorganization Agreement (including any amendments or modifications of the
terms thereof approved by the Board of Directors of MGI), and (iii) any matters
contemplated by the Reorganization Agreement or incidental to the Reorganization
(including without limitation any Reorganization in which the Per Share
Consideration is to be paid in Optional Public Equity), at any meeting of MGI's
stockholders (or in any written consent in lieu thereof) pursuant to SECTION 7.4
of the Reorganization Agreement. In the event the Reorganization or the
Reorganization Agreement is not approved by the requisite MGI stockholders, the
Stockholder hereby agrees upon the request of Progenitor to exchange
Stockholder's shares of MGI Capital Stock and Venture Capital Bridge Notes
directly for the Per Share Consideration as set forth in ARTICLE III of the
Reorganization Agreement (assuming for the
calculation of the Per Share Consideration that all Venture Capital Bridge Notes
have been converted as set forth in SECTION 3.12 of the Reorganization
Agreement) and subject to substantially the same conditions and restrictions as
set forth in such Reorganization Agreement.
(b) The Stockholder hereby waives (i) all rights of first refusal and
all other rights to acquire any securities to be issued, sold or otherwise
transferred by MGI or any other stockholder in connection with the
Reorganization and the other transactions contemplated by the Reorganization
Agreement and the Related Agreements, including without limitation all such
rights as may be applicable to the Promissory Note to be issued by MGI to
Progenitor and all such rights provided by the Bylaws of MGI, and further waives
all rights of co-sale that may arise by virtue of the execution of this
Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby, including without limitation all such rights
under the Amended Co-Sale Agreement dated April 3, 1996, and (ii) all
registration rights granted prior to the date hereof with respect to any
securities of MGI, including without limitation all such rights arising under
the Series C Preferred Stock Purchase Agreement dated April 3, 1996. The
Stockholder further agrees that all rights of first refusal and other rights to
acquire, and all registration rights with respect to, securities of MGI are
hereby terminated, effective at the Effective Time, except for such rights as
are provided in any Registration Rights Agreement delivered pursuant to
SECTION 7.25 of the Reorganization Agreement.
2. GRANT OF IRREVOCABLE PROXY. The Stockholder hereby irrevocably grants
to Progenitor and appoints Progenitor (with full power of substitution)
Stockholder's proxy to vote the Shares or to grant the consent of the Shares
(the "Irrevocable Proxy") in favor of (i) the Reorganization and each of the
other transactions contemplated by the Reorganization Agreement, and
(ii) approval of the Reorganization Agreement.
The Stockholder represents that any proxies heretofore given in respect of
the Shares are not irrevocable and agrees that any such proxies are hereby
revoked.
3. CONVERSION OF VENTURE CAPITAL BRIDGE NOTES. The Stockholder agrees
that the Venture Capital Bridge Notes will be, and the Venture Capital Bridge
Notes hereby are, converted into that number of shares of MGI Series D Preferred
Stock with a value equal to the face amount of such Venture Capital Bridge Notes
(without any 150% premium, interest or other additional amount) with such shares
of MGI Series D Preferred Stock being valued at $1.34 per share, effective
immediately prior to the Effective Time. The Stockholder hereby agrees to
submit within the time period contemplated by SECTION 3.12 of the Reorganization
Agreement all Venture Capital Bridge Notes now held or hereafter acquired by the
Stockholder to MGI for conversion to shares of MGI Series D Preferred Stock in
accordance with SECTION 3.12 of the Reorganization Agreement.
4. NO SALES OF CAPITAL STOCK. The Stockholder shall not directly or
indirectly sell, offer to sell, contract to sell, grant any option to purchase
or otherwise dispense of any shares of MGI Capital Stock from the date hereof
until the first to occur of the Effective Time or the termination of the
Reorganization Agreement.
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5. NO SOLICITATION OF TRANSACTIONS. From the date hereof until the
earlier of termination of this Agreement or the Reorganization Agreement or the
Effective Time, the Stockholder will not, directly or indirectly, whether
through any director, officer, employee, financial advisor, legal counsel,
accountant, other agent or representative (as used in this SECTION 5,
"affiliates") or otherwise, (a) initiate, solicit or encourage, or take any
other action to facilitate any inquiries or the making of any proposal with
respect to, or (b) engage or participate in negotiations concerning, provide any
nonpublic information or data to, or have any discussions with, any person other
than a party hereto or their affiliates relating to, any (i) acquisition,
(ii) tender offer (including a self-tender offer), (iii) exchange offer,
(iv) merger, (v) consolidation, (vi) acquisition of beneficial ownership of (or
the right to vote securities representing) ten percent (10%) or more of the
total voting power of MGI, (vii) dissolution, (viii) business combination,
(ix) purchase of all or any significant portion of the assets or any division of
(or any equity interest in) MGI, or (x) any similar transaction other than the
Reorganization (such proposals, announcements, or transactions being referred to
as "Acquisition Proposals"). The Stockholder will notify Progenitor orally
(within one business day) and in writing (as promptly as practicable) if any
such Acquisition Proposals (including the identity of the persons making such
proposals and the terms of such proposals) are received by MGI and furnish to
Progenitor a copy of any written proposal relating thereto.
6. IRREVOCABILITY OF PROXY. The Stockholder hereby affirms that the
Irrevocable Proxy is given in connection with the execution of the
Reorganization Agreement and that this Agreement is given to induce Progenitor
to proceed with the transactions contemplated in the Reorganization Agreement.
The Stockholder hereby further affirms that the Irrevocable Proxy is coupled
with an interest and may under no circumstances be revoked. The Stockholder
hereby ratifies and confirms all that the Irrevocable Proxy may lawfully do or
cause to be done by virtue hereof. This Agreement and the Irrevocable Proxy
contained herein is executed and intended to be irrevocable in accordance with
the provisions of Section 705 of the California Corporations Code and Section
212 of the DGCL.
7. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. The Stockholder
represents and warrants that:
(a) The Stockholder has the full right, power and authority to enter
into this Agreement and the applicable Related Agreements and this Agreement and
the applicable Related Agreements have been duly and validly executed and
delivered by the Stockholder and constitute valid and binding obligations on
Stockholder's part enforceable against the Stockholder in accordance with its
terms except to the extent that such enforcement may be (a) limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and (b) subject to general principles of equity; and
(b) The execution, delivery and performance of this Agreement will
not, with or without the giving of notice or the passage of time, (a) violate
any judgment, injunction or order of any court, arbitrator or governmental
agency applicable to the Stockholder, or (b) contravene the provisions of or
result in the breach of any provision of or constitute a
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material default under any material agreement or instrument to which the
Stockholder is a party or by which the Stockholder may be bound.
8. TERMINATION. The obligations of the Stockholder under this Agreement
shall terminate upon the earlier of (i) the termination of the Reorganization
Agreement in accordance with its terms or (ii) the Effective Time.
9. FURTHER ACTIONS. The Stockholder agrees to perform such further acts
and execute such further documents as may reasonably be required to vest in
Progenitor the power to vote the Shares as contemplated by the Irrevocable Proxy
granted hereby.
10. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by delivery, by cable, telegram
or telex, or by registered or certified mail, postage prepared, return receipt
requested, to the respective parties as follows:
(a) If to Progenitor, to:
Progenitor, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to the Stockholder, at the address and facsimile number listed
on the signature page hereof.
or to such other address as Progenitor may have furnished to the Stockholder or
the Stockholder may have furnished to Progenitor, in either case in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. REMEDIES. The Stockholder agrees that damages would be an inadequate
remedy for a breach of the provisions of this Agreement and that this Agreement
may be enforced by injunctive or other equitable relief.
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13. SURVIVAL; BINDING EFFECT. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective heirs, personal
representatives, successors and assigns.
14. 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 agreement.
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IN WITNESS WHEREOF, Progenitor and the Stockholder have caused this
Agreement to be executed as of the date first above written.
PROGENITOR, INC., a Delaware
corporation
By:
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Its:
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STOCKHOLDER
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By:
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Its:
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Address:
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Attention:
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Fax: ( )
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SCHEDULE A
NAME OF STOCKHOLDER NUMBER OF SHARES
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