This PROXY, STANDSTILL AND RELEASE AGREEMENT dated as of December 2,
2002 (the "Agreement"), among (i) Lipid Sciences, Inc., a Delaware corporation
("Lipid Sciences" or the "Company"), (ii) Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx,
M.D., Ph.D, Xxxxxxx X. Xxxx, S. Xxxxx Xxxxx, Xxxxx X. Xxxxxxxx and H. Xxxxx
Xxxxxx Xx., M.D. (individually, a "Director Party", and collectively, the
"Director Parties") and (iii) Xxxx X. Xxxx, Ph.D., and KAI International, LLC,
(individually, a "Designated Stockholder", and collectively, the "Designated
Stockholders").
WITNESSETH:
WHEREAS, as of the date hereof, each Designated Stockholder owns
beneficially and of record (i) such number of shares of common stock, par value
$.001 per share ("Common Stock"), of the Company ("Owned Common Stock") set
forth on Schedule I hereto next to such Designated Stockholder's name and (ii)
options or warrants to purchase such number of shares of Common Stock (together
with the Owned Common Stock, being referred to herein as the "Owned Shares") set
forth on Schedule I hereto next to such Designated Stockholder's name, which
Owned Shares constitute the only securities of the Company owned beneficially or
of record by such Designated Stockholder;
WHEREAS, the Board of Directors of Lipid Sciences (the "Board of
Directors") has undertaken, or will undertake, or caused to occur, or will cause
to occur, certain changes to its composition and that of the management,
including (a) appointment of Xxxxxxx X. Xxxxxxx as Chairman of the Board of
Directors, (b) election of H. Xxxxx Xxxxxx Xx., M.D., as a director of the Board
of Directors, (c) formation of a three-person Executive Committee (the
"Executive Committee") consisting of Xxxxxxx X. Xxxxxxx, S. Xxxxx Xxxxx and
Xxxxx X. Xxxxxxxx to serve an advisory role to the Board of Directors and to
management of the Company, (d) resignation of Xxxxxxx X. Xxxxxxx, Ph.D., from
the position of President and Chief Executive Officer of Lipid Sciences and from
the Board of Directors, (e) retainment of an executive search firm to identify
candidates for the position of President and Chief Executive Officer and (f)
identification of qualified candidates to serve as independent directors of the
Board of Directors and the election of one or more of such candidates to the
Board of Directors (the changes described above being referred to herein,
collectively, as the "Corporate Governance Changes"); and
WHEREAS, the Company, the Designated Stockholders and the Director
Parties desire to enter into this Agreement to resolve certain issues that have
arisen with respect to certain corporate governance matters in relation to the
Company in order to provide certainty to the Company, its employees, customers
and stockholders regarding the manner in which the business and corporate
governance of Lipid Sciences will be conducted for the benefit of the Company
and its stockholders.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration given to each party hereto, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1
ARTICLE ONE
NO PROXY CONTEST; AGREEMENT TO VOTE; IRREVOCABLE PROXY
SECTION 1.01 NO PROXY CONTEST. In consideration for the Corporate
Governance Changes, each Designated Stockholder agrees that neither he, nor any
of his Affiliates (as defined in Section 1.02 hereof), agents or representatives
or any party acting at his instance or on his behalf, shall either alone, or in
concert with each other or any other person or entity, solicit, induce,
encourage or seek to obtain, or cause, solicit, encourage or induce any other
person or entity to solicit or seek to obtain, a proxy or other authority to
vote with respect to any voting securities of the Company, including but not
limited to the Common Stock, until the day immediately after which the 2004
Annual Meeting of the Company's stockholders is finally adjourned (such final
adjournment meaning that all business at the meeting has been finally concluded
and no further business is to be transacted) (the "Standstill Period").
Notwithstanding the foregoing, nothing in this Agreement shall prohibit the
Designated Stockholders from engaging in communications which encourage other
stockholders of the Company to grant their proxy to vote the Company's
securities to those persons appointed by the Board of Directors to solicit or
vote proxies in connection with any meeting of the Company's stockholders.
SECTION 1.02 VOTING OF SHARES AND PROXY. In consideration for the
Corporate Governance Changes, (a) until the end of the Standstill Period in
accordance with the terms hereof, each Designated Stockholder hereby agrees that
at every meeting of the stockholders of the Company called, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of the Company, each Designated Stockholder will vote all of such
Designated Stockholder's Shares (as defined below) in accordance with the
recommendation of the Board of Directors except as otherwise may be required
under the Delaware General Corporation Law, federal securities laws, the listing
requirements of the exchange on which the Common Stock is then listed or, the
rules of automated quotation system on which the Common Stock is then quoted and
except with respect to a vote of the stockholders of the Company to remove Xxxx
X. Xxxx, Ph.D. as a director of the Company; and (b) concurrently with the
execution of this Agreement, each Designated Stockholder hereby agrees to
deliver to the Company a proxy in the form attached hereto as Exhibit A (the
"Proxy"). Each Designated Stockholder further agrees to execute and deliver upon
request and without the payment of additional consideration, such additional
documentation as the Director Parties may deem necessary and appropriate to
effectuate the foregoing proxy appointment, including but not limited to the
execution of separate proxy documentation. Notwithstanding the foregoing
commitment to execute such additional documentation, the parties hereto agree
that a copy of the Proxy with respect to a Designated Stockholder may be
presented to the Inspector of Elections appointed in connection with any meeting
of the Company's Stockholders conducted during the Standstill Period as an
effective proxy with respect to all Shares covered by such proxy. For purposes
of this Agreement, as it relates to each Designated Stockholder, the term
"Affiliate" shall mean (i) any person or entity who controls, who is controlled
by, or is under common control with such Designated Stockholder; or (ii) any
person who has a contract, agreement, arrangement or understanding with such
Designated Stockholder, with respect to the voting, acquisition or disposition
of the Company's securities. The term "Shares" shall mean (i) the Owned Shares
and (ii) all additional securities of the Company (including all shares of the
Company's capital stock and all additional options, warrants and other rights to
acquire shares of
2
the Company's capital stock) of which a Designated Stockholder acquires
beneficial ownership during the Standstill Period, other than such Owned Shares
and such securities that are sold pursuant to Section 4.01 hereof.
SECTION 1.03 MAJORITY VOTE OF DIRECTOR PARTIES TO CONTROL. In the
event that a vote or recommendation, as the case may be, of the Director Parties
is not unanimous as to any matter brought before any meeting of the stockholders
of the Company during the Standstill Period, then for purposes of the proxy
granted by each Designated Stockholder to the Director Parties or the voting
agreement of each Designated Stockholder pursuant to Section 1.02 hereof, a vote
or recommendation, as the case may be, of a majority of the Director Parties
shall control the voting of the Shares subject to the proxy or the voting
agreement. In the event that such vote or recommendation, as the case may be, of
the Director Parties is split evenly as to any such matter, such Shares subject
to the proxy or the voting agreement shall be split evenly for purposes of
voting on such matter.
SECTION 1.04 TERMINATION AND REPLACEMENT OF DIRECTOR PARTIES. Each of
the Director Parties hereby acknowledges and agrees that in the event that, at
any time during the Standstill Period, such Director Party should resign or
otherwise cease to be a member of the Board of Directors, then the proxy granted
to such Director Party pursuant to Section 1.02 hereof shall terminate effective
as of the date of such resignation or other termination of director status;
provided that such proxy shall remain in full force and effect and shall
continue to be exercised by the remaining Director Parties in accordance with
Section 1.02 and Section 1.03 of this Agreement. In addition, each of the
parties to this Agreement hereby covenants and agrees that in the event that
additional individuals are elected to the Board of Directors during the
Standstill Period to replace any Director Party, then each party hereto will
thereafter use its or his best efforts to cause such newly elected director(s)
to become a party to this Agreement.
SECTION 1.05 CONDITIONAL TERMINATION. Notwithstanding anything to the
contrary herein, this Agreement and the Proxy shall terminate and be of no
further force or effect if on or before the date of the 2003 Annual Meeting of
the Company's stockholders Xxxxxxx X. Xxxxxxx ("Xxxxxxx") ceases to be a member
of the Company's Board of Directors other than as a result of Xxxxxxx'x death or
Disability (as determined in accordance with the Company's Performance Equity
Plan dated August 5, 2002).
ARTICLE TWO
RELEASE OF CLAIMS
SECTION 2.01 GENERAL RELEASE. In consideration for the Corporate
Governance Changes, each Designated Stockholder, and each of such Designated
Stockholder's respective former or present principals, agents, assigns,
beneficiaries or successors in interest, hereby releases and forever discharges
each of the Company and the Director Parties, and each of its former or present
respective officers, directors, partners, limited partners, trustees,
principals, employees, stockholders, successors in interest, predecessors,
assigns, beneficiaries, heirs, executors, administrators, representatives,
servants, agents, insurers and attorneys (individually, a "Released Party," and
collectively, the "Released Parties"), from any and all existing or future
claims, rights, demands, causes of action, debts, damages, obligations and
3
liabilities of any character and description, whether known or unknown,
liquidated or unliquidated, discovered, undiscovered, discoverable or
undiscoverable, fixed or contingent, suspected or unsuspected (collectively,
"Claims"), arising out of or in any way relating to, on or prior to the date
hereof: (a) actions taken or not taken by the Company; (b) management of the
Company; (c) the business of the Company; (d) any business, management or
corporate decisions made, any action taken and any failure to act by any current
or former (i) member of the Board of Directors, (ii) officer, employee or
stockholder of the Company or (iii) any other Released Party; or (e) ownership
of securities of the Company by such Designated Stockholder.
SECTION 2.02 RELEASE OF UNKNOWN CLAIMS. With respect to the release
set forth in Section 2.01 above, each Designated Stockholder understands and
agrees that the nature, extent, and result of the claims released thereby may
not now all be known or anticipated and declares that such Designated
Stockholder nevertheless desires to release in full all possible claims as set
forth above and hereby expressly waives the benefits of Section 1542 of the
Civil Code of the State of California, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
SECTION 2.03 RELEASE BY DIRECTOR PARTIES. The Company and each of the
Director Parties hereby release and forever discharge each Designated
Stockholder and each of its former or present respective officers, directors,
partners, limited partners, trustees, principals, employees, stockholders,
successors in interest, predecessors, assigns, beneficiaries, heirs, executors,
administrators, representatives, servants, agents, insurers and attorneys from
any and all existing or future Claims relating solely to the resignation of
Xxxxxxx X. Xxxxxxx, Ph.D. from the position of President and Chief Executive
Officer of the Company and from the Board of Directors, the resignation of
Xxxxxxxxxxx Xxxxxxx as Chairman of the Board of Directors and from the Board of
Directors and the election of Xxxxxxx to the Board of Directors and as Chairman
of the Board of Directors; provided, however, that the foregoing release and
discharge shall not apply to any Claims asserted derivatively by one or more
stockholders of the Company at any time against the directors of the Company.
SECTION 2.04 RELEASE BY DIRECTOR PARTIES OF UNKNOWN CLAIMS. With
respect to the release set forth in Section 2.03 above, the Company and each
Director Party understand and agree that the nature, extent, and result of the
claims released thereby may not now all be known or anticipated and declares
that the Company and each such Director Party nevertheless desire to release in
full all possible claims as set forth above and hereby expressly waives the
benefits of Section 1542 of the Civil Code of the State of California, which
reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN
4
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
OF DESIGNATED STOCKHOLDERS
Each Designated Stockholder hereby represents and warrants and
covenants to the Company and each Director Party as follows:
SECTION 3.01 ORGANIZATION; AUTHORIZATION. (a) Such Designated
Stockholder, if it is a limited liability company, (i) is a limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (ii) has all requisite power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby and (iii) the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of such Designated Stockholder.
(b) Such Designated Stockholder, if it is an individual, has all legal
capacity to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
(c) This Agreement has been duly executed and delivered by or on
behalf of such Designated Stockholder and, assuming its due authorization,
execution and delivery by the Company and due execution and delivery by each
Director Party, constitutes the legal, valid and binding obligation of such
Designated Stockholder, enforceable against such Designated Stockholder in
accordance with its terms, except as may be limited by the effect of bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), conservatorship, arrangement, moratorium or other laws affecting or
relating to the rights of creditors generally and except as enforcement thereof
is subject to general principals of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
SECTION 3.02 NO CONFLICT. The execution and delivery of this Agreement
by such Designated Stockholder does not, and the performance of this Agreement
by such Designated Stockholder will not, (i) if such Designated Stockholder is
other than an individual, conflict with or violate the Certificate of
Incorporation or By-laws or equivalent organizational documents of such
Designated Stockholder, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to such Designated Stockholder or by which
it or any of its, his or her properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to another party any rights
of termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or assets of such
Designated Stockholder, including, without limitation, such Designated
Stockholder's Owned Shares, pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which such Designated Stockholder is a party or by which such
Designated Stockholder or any of its, his or her properties is bound or
affected, except for any such breaches, defaults or other occurrences that would
not prevent or delay the performance by such Designated Stockholder of its
obligations under this Agreement.
5
SECTION 3.03 TITLE TO OWNED SHARES. Such Designated Stockholder is the
registered or beneficial owner of its Owned Shares free and clear of any claims,
liens, encumbrances, security interests, proxy or voting restriction other than
pursuant to this Agreement. Such Owned Shares are all the securities of the
Company owned of record or beneficially by such Designated Stockholder on the
date of this Agreement.
ARTICLE FOUR
CERTAIN COVENANTS OF DESIGNATED STOCKHOLDER
Each Designated Stockholder hereby covenants and agrees with the
Company and each Director Party, and the Company covenants and agrees with each
Designated Stockholder, as follows:
SECTION 4.01 RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE.
Except with the prior written consent of each Director Party, such Designated
Stockholder hereby agrees, during the Standstill Period, not to (i) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of, or limitation
on the voting rights of, any of the Shares, (ii) grant any proxies or powers of
attorney, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares, (iii) take any action that would cause any
representation or warranty of such Designated Stockholder contained herein to
become untrue or incorrect or have the effect of preventing or disabling such
Designated Stockholder from performing its obligations under this Agreement or
(iv) commit or agree to take any of the actions prohibited by this sentence.
Notwithstanding the foregoing sentence, following the expiration of the lock-up
period specified in that certain Lock-Up Agreement, dated [November 29, 2001,]
executed by such Designated Stockholder in connection with the merger of Lipid
Sciences, Inc., a privately-held Delaware corporation, with and into NZ
Corporation, an Arizona corporation, such Designated Stockholder may sell Shares
pursuant to Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), provided that (i) each such sale satisfies all of the
requirements of Rule 144 of the Securities Act, including the requirements under
Rule 144(f) of the Securities Act that such Shares be sold in "brokers'
transaction" within the meaning of Section 4(4) of the Securities Act or in
transactions directly with a "market maker," as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended, (ii) such
Designated Stockholder provides the Company with written notice at least two
business days prior to any such sale, which notice shall provide the date of
such proposed sale and the number of Shares that are proposed to be sold and
(iii) such Designated Stockholder provides to the Company's transfer agent any
documents or opinions that may be requested by such transfer agent in connection
with such sale. Any transfer of Shares not permitted hereby shall be null and
void. Such Designated Stockholder agrees that any such prohibited transfer may
and should be enjoined. If any involuntary transfer of any of the Shares shall
occur (including, but not limited to, a sale by such Designated Stockholder's
trustee in any bankruptcy, or a sale to a purchaser at any creditor's or court
sale), the transferee (which term, as used herein, shall include any and all
transferees and subsequent transferees of the initial transferee) shall take and
hold such Shares subject to all of the restrictions, liabilities and rights
under this Agreement, which shall continue in full force and effect.
6
SECTION 4.02 ADDITIONAL SHARES. Such Designated Stockholder hereby
agrees, during the Standstill Period, to promptly notify the Company of all
additional Shares of the Company acquired by such Designated Stockholder, if
any, after the date hereof. Any such securities shall be subject to the terms of
this Agreement, including, without limitation, Sections 4.04 and 4.05 below.
SECTION 4.03 FURTHER ASSURANCES. From time to time, at the request of
the Company, such Designated Stockholder shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective the transactions contemplated by this
Agreement, without the payment of any additional consideration.
SECTION 4.04 STOP TRANSFER ORDER. Such Designated Stockholder hereby
authorizes the Company or the Company's counsel to notify the Company's transfer
agent that, during the Standstill Period, there is a stop transfer order with
respect to all of the Shares of such Designated Stockholder. At the request of
the Company, such Designated Stockholder shall cause to be provided to the
Company's transfer agent any evidence of such stop transfer order that may be
required by such transfer agent. Upon receipt of notification of a proposed sale
of any of the Shares in accordance with Section 4.01 hereof, the Company shall
notify the Company's transfer agent (i) to remove the stop transfer order with
respect to such number of Shares of such Designated Stockholder involved in such
proposed sale and (ii), if any such Shares are not sold in accordance with
Section 4.01 hereof on the date specified in such notification to the Company,
to place the stop transfer order with respect to such Shares that are not sold.
SECTION 4.05 LEGEND. Such Designated Stockholder hereby agrees that,
concurrently with the execution of this Agreement, such Designated Stockholder
shall deliver certificates evidencing the Owned Shares of such Designated
Stockholder to the Company's transfer agent in order to have such transfer agent
put the following legend (the "Legend") on such certificates:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT
CERTAIN (i) PROXY, STANDSTILL AND RELEASE AGREEMENT DATED AS OF
DECEMBER 2, 2002 AMONG LIPID SCIENCES, INC. AND THE DIRECTOR PARTIES
AND THE DESIGNATED STOCKHOLDERS NAMED IN SUCH AGREEMENT, AND (ii) THE
PROXY PURSUANT TO SUCH AGREEMENT (AS SUCH AGREEMENT AND PROXY MAY BE
AMENDED PURSUANT TO ITS TERMS).
Such Designated Stockholder hereby agrees, during the Standstill Period, to
promptly deliver certificates evidencing any additional Shares of the Company
acquired by such Designated Stockholder after the date hereof to the Company's
transfer agent in order to have such transfer agent put the Legend on such
certificates.
Upon receipt of notification of a proposed sale of any of the Shares in
accordance with Section 4.01 hereof, the Company shall instruct the Company's
transfer agent (i) to remove the Legend
7
from each certificate evidencing the Shares that are proposed to be sold and
(ii), if any such Shares are not sold in accordance with Section 4.01 hereof on
the date specified in such notification to the Company, to place the Legend on
each certificate evidencing such Shares that are not sold.
ARTICLE FIVE
MISCELLANEOUS
SECTION 5.01 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 hand delivery, by facsimile
transmission or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to Lipid Sciences, Inc.: Lipid Sciences, Inc.
0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx,
Chief Financial Officer and
Xxxxxx Xxxxxxxx, Secretary
If to the Designated Stockholders: Xxxx X. Xxxx, Ph.D
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx
0000 Xxxxxxxxx
Facsimile: 61 7 3206 3600
KAI International, LLC
c/o Xxxx X. Xxxx, Ph.D
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx
0000 Xxxxxxxxx
Facsimile: 61 7 3274 4453
If to the Director Parties: Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxx X. Xxxxxx, M.D., Ph.D
Director, Endovascular Therapy
Black Hall--9th Floor
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
8
Xxxxxxx X. Xxxx
President, SunChase Holdings, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile : (000) 000-0000
S. Xxxxx Xxxxx
Chief Executive Officer, Lexite Labs
Incorporated
0000 Xxxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx X. Xxxxxxxx
Partner, Xxxxx Xxxx LLP
Xxx Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
H. Xxxxx Xxxxxx Xx., M.D.
Chief of the Molecular Disease
Branch,
National Heart, Lung and Blood
Institute
00000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: (000)000-0000
In the case of any communications
to the Company or any Director
Party, with a copy to: Shearman & Sterling
0000 Xxxxx Xxxx
Xxxxx Xxxx, XX 00000-00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
SECTION 5.02 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement constitutes
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof. This
Agreement shall be binding upon and inure to the benefits of the parties hereto
and their respective successors and legal representatives.
SECTION 5.03 AMENDMENTS. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties to this agreement.
9
SECTION 5.04 GOVERNING LAW. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any
California state court, Delaware state court or any federal court sitting in the
State of California or Delaware in any action arising out of or relating to this
Agreement, and hereby irrevocably agrees that all claims in respect of such
action may be heard and determined in such California state, Delaware state or
federal court. Each party hereto hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The parties hereto further agree, to
the extent permitted by law, that final and unappealable judgment against any of
them in any action or proceeding contemplated above shall be conclusive and may
be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified copy of which shall be conclusive evidence of
the fact and amount of such judgment.
(c) To the extent that any party hereto has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
party hereto hereby irrevocably waives such immunity in respect of its
obligations with respect to this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by
applicable laws, any right it may have to a trial by jury in respect of any
action, suit or proceeding arising out of or relating to this Agreement. Each
party hereto certifies that it has been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications set forth above in
this Section.
(e) Each of the Designated Stockholders has appointed Xxxxx Djordevic,
000 Xxxxx Xx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any such action arising out of or based on this Agreement. Such appointment
shall be irrevocable. Each of the Designated Stockholders represents and
warrants that the Authorized Agent has agreed to act as such agent for service
of process and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the relevant Designated
Stockholder shall be deemed, in every respect, effective service of process upon
such Designated Stockholder.
SECTION 5.05 COUNTERPARTS. This Agreement may be executed by facsimile
and in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same Agreement.
SECTION 5.06 DESCRIPTIVE HEADINGS. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
10
SECTION 5.07 SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
SECTION 5.08 AVAILABILITY OF EQUITABLE RELIEF. In the event that any
provision of this Agreement is breached by any Designated Stockholder, each of
the Director Parties and the Company shall be entitled to obtain (a) an
injunction restraining such breach or threatened breach; (b) specific
performance of any provision of this Agreement including but not limited to the
provisions of Section 1.02 hereof, or (c) an order in the nature of a
declaratory judgment declaring that the proxy granted hereby is valid and
irrevocable, in addition to any other right or remedy available to the Director
Parties and the Company. Each Designated Stockholder agrees that a bond or other
security shall not be a condition to the issuance of such injunction and/or for
the ordering of such specific performance.
SECTION 5.09 PUBLIC COMMUNICATIONS. During the Standstill Period, each
Designated Stockholder agrees to publicly communicate his support for the
Company and the decisions and actions undertaken by the Company at the direction
of its management or its Board of Directors and to refrain from any actions or
communications that would reasonably be regarded as expressing a lack of support
therefor.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly and delivered as of the date hereof.
LIPID SCIENCES, INC.
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
By: Xxxxx X. Xxxxxxxx, Chief Financial Officer
DIRECTOR PARTIES:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxx
----------------------------------------------
XXXX X. XXXXXX, M.D., Ph.D
/s/ Xxxxxxx X. Xxxx
----------------------------------------------
XXXXXXX X. XXXX
/s/ S. Xxxxx Xxxxx
----------------------------------------------
S. XXXXX XXXXX
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
XXXXX X. XXXXXXXX
/s/ H. Xxxxx Xxxxxx
----------------------------------------------
H. XXXXX XXXXXX XX., M.D.
12
DESIGNATED STOCKHOLDERS:
/s/ Xxxx X. Xxxx
----------------------------------------------
XXXX X. XXXX, Ph.D
KAI INTERNATIONAL, LLC
/s/ Xxxx X. Xxxx
----------------------------------------------
By: Xxxx X. Xxxx, Ph.D
/s/ Xxxxx X. Xxxxx
----------------------------------------------
By: Xxxxx X. Xxxxx
13
SCHEDULE I
Number of Shares of
Common Stock Issuable
Number of Shares of Upon Exercise of
Common Stock Owned Outstanding Options
Designated Stockholder Beneficially and of Record or Warrants
---------------------- -------------------------- ---------------------
Xxxx X. Xxxx, Ph.D 0 80,000
KAI International, LLC 4,755,013 0
14
EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder of Lipid Sciences, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints the Director Parties (as defined in the Agreement (as defined
below)), and each of them, as the sole and exclusive attorneys and proxies of
the undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of the Company that now
are or hereafter may be beneficially owned by the undersigned, and any and all
other shares or securities of the Company issued or issuable in respect thereof
on or after the date hereof, other than such shares sold in accordance with
Section 4.01 of the Agreement (collectively, the "Shares"), in accordance with
the terms of this Proxy. The Shares beneficially owned by the undersigned
Stockholder of the Company as of the date of this Proxy are listed on the final
page of this Proxy. Upon the undersigned's execution of this Proxy, any and all
prior proxies given by the undersigned with respect to any Shares are hereby
revoked and the undersigned agrees not to grant any subsequent proxies with
respect to the Shares until after the Expiration Date (as defined below).
This Proxy is irrevocable (to the fullest extent permitted by
law), is coupled with an interest and is granted pursuant to that certain Proxy,
Standstill and Release Agreement of even date herewith by and among certain
members of the Board of Directors of the Company, the Company, the undersigned
stockholder and certain other stockholder of the Company (the "Agreement"), and
is granted in consideration of the Director Parties and the Company entering
into that certain Agreement. As used herein, the term "Expiration Date" shall
mean the day immediately after which the 2004 Annual Meeting of the Company is
finally adjourned (such final adjournment meaning that all business at the
meeting has been finally concluded and no further business is to be transacted).
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting, consent and similar rights of the undersigned with respect
to the Shares (including, without limitation, the power to execute and deliver
written consents) at every annual, special or adjourned meeting of stockholders
of the Company and any other matter to be presented at such meeting, except as
otherwise may be required under the Delaware General Corporation Law, federal
securities laws, the listing requirements of the exchange on which the common
stock of the Company is then listed or the rules of automated quotation system
on which the common stock of the Company is then quoted and except with respect
to a vote of the stockholders of the Company to remove Xxxx X. Xxxx, Ph.D. as a
director of the Company.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
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This Proxy is irrevocable (to the fullest extent permitted by law).
This Proxy shall terminate, and be of no further force and effect, automatically
upon the Expiration Date.
Dated: December __, 2002
Signature of Stockholder:
-----------------------
Print Name of Stockholder:
----------------------
Shares of Company Common Stock beneficially owned:
shares of Company Common Stock
-----
shares of Company Common Stock issuable
----- upon exercise of outstanding options or
warrants
[Signature Page to Irrevocable Proxy]
16
