SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT ("Agreement"), made and entered into as of
this 14th day of July, 2000 (the "Effective Date") by and among IXION
BIOTECHNOLOGY, INC., a Delaware corporation (the "Corporation"), and Q-MED AB
(publ), a Swedish company ("Q-MED"), QVESTOR LLC, a Delaware Limited Liability
Company ("QVESTOR"), AMMON B. PECK Ph.D and WEAVER H. GAINES, (referred to
herein individually as the "Shareholder" and collectively as the
"Shareholders"), as follows:
W I T N E S S E T H:
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WHEREAS, the Shareholders are now the owners of a majority of
the Corporation's outstanding shares of stock (the "Shares"); and
WHEREAS, the Shareholders desire to promote their mutual interests and
the interest of the Corporation by imposing certain restrictions and obligations
on themselves, the Corporation, and the Shares pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound, the parties agree as follows:
TERMS
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1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meaning indicated below:
"Dispose Of" shall mean pledge, hypothecate, give, assign, encumber,
sell, grant an option with respect to, or otherwise transfer, other than
pursuant to a plan of merger or consolidation, to anyone, whether or not it is
then a Shareholder; provided, however, that a pledge by all Shareholders of all
Shares to secure future financing for the Corporation shall not be deemed a
disposition of Shares.
2. RESTRICTION ON DISPOSITION
(a) While this Agreement is in force and effect, no
Shareholder shall Dispose Of its interest in any of the Shares now or later
owned by it, except by the terms of this Agreement. Any attempted or purported
transfer of an ownership interest in violation of this Agreement shall be void
and shall constitute an
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abandonment of the Shareholder's Shares. No transfer of ownership interests
pursuant to this Agreement shall be recognized by the Corporation until it is
duly entered upon the books and records of the Corporation and all indicia of
ownership are changed accordingly.
(b) The Share certificates shall bear the following legend or
a legend to the following effect:
These shares have not been registered under the Securities Act of
1933, and may not be sold, transferred, pledged, or hypothecated
except pursuant to registration under such Act or pursuant to an
available exemption from registration under said Act. The transfer of
these shares is further restricted under the terms of a Shareholders'
Agreement dated as of July 14, 2000 between the holder of this
certificate and the Corporation, a copy of which is on file at the
principal office of the Corporation. No transfer will be recognized by
the Corporation until, as the case may be, counsel to the Corporation
is satisfied there is no violation of the Securities Act of 1933, the
other shareholders consent to the transfer, or both.
(c) By virtue of such legend and with notice, any transferee
of the Shares of the Corporation becomes a party to, and is bound by, this
Agreement.
3. DISPOSITIONS OF SHARES
(a) Restriction. No Shareholder shall Dispose Of his or its
Shares, except pursuant to the terms of this Agreement, provided that this
section 3 shall not apply to (i) bona fide gifts or bequests by any Shareholder
to a third person or member of the Shareholder's family or (ii) bona fide gifts
or bequests by a Shareholder to a charitable institution or not-for- profit
entity, where the cumulative total of subsections (i) and (ii) do not exceed ten
percent of the Shareholder's fully diluted holdings of the Shares measured as of
the date of the gift or bequest.
(b) Corporation's Option to Purchase Shares. A Shareholder
(the "Offering Shareholder") who desires to Dispose Of any Shares in response to
a bona fide offer from a third party (the "Third Party Offer") shall first offer
such Shares to the Corporation and the other Shareholders at the same price and
on the same terms contained in the Third Party Offer. The Offering Shareholder
shall give a notice ("Notice") signed by the Offering Shareholder to the
Corporation and on the same day give Notice to the other Shareholders of such
Offering Shareholder's desire to Dispose Of his or its Shares. The Notice shall
specify the number of Shares (the "Offered Shares") the Offering Shareholder
intends to Dispose Of and the purchase price and terms of any offer to purchase
the Shares made by the Third Party Offeror. The Corporation shall have the
irrevocable and exclusive first option, but not the obligation, to purchase all
or, subject to paragraph 3(c) below, a
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part of the Offered Shares, at the price and on substantially the same or
comparable terms to those set forth in the Notice, provided the Corporation
gives notice of its election to purchase to the Offering Shareholder within
thirty (30) days after the Corporation receives the Notice.
(c) Other Shareholders' Option to Purchase Shares. If the
Corporation does not elect to purchase all of the Offered Shares covered by the
Notice as provided in paragraph 3(b), then, subject to paragraph 3(e), each
Shareholder other than the Offering Shareholder shall have the irrevocable and
exclusive second option, but not the obligation, to purchase from the Offering
Shareholder that part of the Offered Shares that the Corporation has not elected
to purchase, pro rata to its holdings of Shares on the date the Corporation
received the Notice (exclusive of the Shares offered for sale or otherwise owned
by the Offering Shareholder). Each Shareholder who elects to purchase all or
a part of its pro rata portion of the Offered Shares shall give notice of such
election to the Offering Shareholder and the other Shareholders, as the case may
be, within forty-five (45) days after the receipt of the Notice by the
Corporation. Each such notice shall state the number of Shares which the
Shareholder giving the notice elects to purchase. The purchase price shall be
the same as set forth in the Third Party Offer.
(i) If any Shareholder fails to exercise its right to
purchase its full pro rata portion of the Offered Shares, each of the other
Shareholders who has given notice of election to purchase its full pro rata
portion of the Offered Shares shall have an additional ten (10) days after the
expiration of such forty-five (45) day period in which to give the Offering
Shareholder and the other Shareholders, further notice (the "Further Notice") of
its election to purchase all or a part of the Remaining Shares (as defined in
(ii) below). Each Further Notice shall state the number of additional Shares
that the Shareholder giving the Further Notice elects to purchase. The Shares
shall be apportioned among those Shareholders who have given a Further Notice
according to the procedure described below or in such different portions as such
Shareholders may agree among themselves. Each of the Participating Shareholders,
as defined in (ii) below, shall be apportioned (1) that number of additional
Shares that it elected to purchase in its Further Notice and which it has not
yet been apportioned pursuant to this paragraph 3(c)(i), or (2) its pro rata
portion of the Unpurchased Shares (as defined in (ii) below), whichever is less.
If the apportionment is followed and there remain at least one Participating
Shareholder and any Unpurchased Shares, the procedure described above shall be
repeated.
(ii) For purposes of paragraph 3(c)(i), the following
definitions shall apply:
(1) The "Remaining Shares" shall be the Offered Shares
that the Corporation and the Shareholders have not elected to purchase.
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(2) A "Participating Shareholder" shall be a
Shareholder who has given a Further Notice and who has not yet been apportioned
pursuant to paragraph 6(c)(i) that number of additional Shares that it elected
to purchase in its Further Notice.
(3) "Unpurchased Shares" shall be the Remaining
Shares that have not yet been apportioned to Participating Shareholders pursuant
to paragraph 3(c)(i).
(4) A "Participating Shareholder's Pro Rata Portion"
of the Unpurchased Shares shall be the number of Unpurchased Shares multiplied
by the fraction formed by dividing the number of Shares that such Participating
Shareholder held on the date the Corporation received the Notice by the number
of Shares that all of the Participating Shareholders held on the date the
Corporation received the Notice.
(d) Effect of an Election to Purchase. The Corporation
and each Shareholder giving notice of election to purchase Shares pursuant to
paragraph 3(b) or 3(c), respectively, shall be obligated severally (but not
jointly) to purchase from the Offering Shareholder, and the Offering
Shareholder, provided the Corporation, the other Shareholders, or a combination
of the Corporation and the other Shareholders elect to purchase all of the
Offered Shares, shall be obligated to sell to the Corporation or the other
Shareholders, or the Corporation and the other Shareholders, as the case may be,
the number of Offered Shares stated therein, at the price and on substantially
similar terms to those contained in the Third Party Offer.
(e) Consequences if Not All Shares are to be Purchased.
If an Offering Shareholder gives Notice and the Corporation, and the other
Shareholders do not elect, pursuant to paragraphs 3(b) and 3(c), respectively,
to purchase all of the Offered Shares, the Offering Shareholder may elect to
sell to the Corporation, if it has elected to purchase part of the Offered
Shares and to the Shareholders, if any, who have elected to purchase part of the
Offered Shares, the aggregate number of such Shares which the Corporation and
such Shareholders have elected to purchase at the price and on substantially
similar terms to those contained in the Third Party Offer. If the Corporation
and the other Shareholders have failed to elect to purchase all of the Offered
Shares pursuant to the provisions above, the Offering Shareholder may sell the
Offered Shares (i) to the third party offeror identified in the Notice at the
price and on the terms contained in the Third Party Offer or (ii) to any other
third party at the identical terms set forth in the Third Party Offer. Such sale
to a third party must be closed within thirty (30) days after nonelection by the
Corporation and the other Shareholders. If such sale is not closed within such
time period, the sale of the Offering Shareholder's Shares will again be
governed by the provisions of this section 3.
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(f) Restrictions on Third Party Purchaser.
Notwithstanding an Offering Shareholder's right to sell Offered Shares to a
third party as set forth above, the Offering Shareholder may not sell Offered
Shares to any competitor or potential competitor of the Corporation.
(g) Continuing Restriction on Remaining Shares. If any
Shares have been offered for sale pursuant to this section 3 and that offer has
not been finally accepted in accordance with the provisions of this section 3,
then such Shares still owned by the Offering Shareholder shall remain subject to
the terms of this Agreement.
(h) Q-MED and QVESTOR Exception. Notwithstanding the
above provisions of this Section 3, Q-MED and QVESTOR may sell, transfer, or
assign their respective Shares of the Corporation to any subsidiary or affiliate
of Q-MED or any business entity in which Q-MED owns an interest in excess of
fifty percent (50%), without first offering such shares to the Corporation or
the other shareholders.
4. DEATH, DISSOLUTION OR DISABILITY OF SHAREHOLDER
(a) Death or Dissolution of Shareholder
(i) Option to Purchase Shares on Death or
Dissolution of Shareholder. Subject to the terms of section 4 (d) hereof, upon
the death of a Shareholder (a "Decedent") or upon the dissolution of a
Shareholder which is an Entity, whether by operation of law, judicially, or
voluntarily (a "Dissolved Shareholder") during the term of this Agreement, the
Corporation and the remaining Shareholders ("Remaining Shareholders") shall have
the irrevocable and exclusive successive options, but not the obligation,
subject to subsection 4(a)(vi) hereof, to purchase, and the personal
representative of the Decedent or the Trustee(s) of the Dissolved Shareholder
shall sell all of the Decedent's or Dissolved Shareholder's Shares owned at the
date of death or dissolution, at the price and in the manner set forth in this
Agreement. The provisions of this section will apply to any Shares held by joint
tenancy only upon the death of both joint tenants.
(ii) Corporation's First Option to Purchase Shares. The
Corporation shall have the irrevocable and exclusive first option to purchase
all, but not less than all, of the Decedent's or Dissolved Shareholder's Shares,
provided the Corporation gives notice of its election to purchase to the
personal representative of the Decedent or the Trustee(s) of the Dissolved
Shareholder within thirty (30) days after the date of appointment of the
personal representative of the Decedent's estate ("Date of Appointment") or the
date of dissolution of the Dissolved Shareholder (the "Date of Dissolution").
The purchase price to be paid by the Corporation shall be
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equal to the Agreed Value of the Shares on the date of death of the Decedent or
the Date of Dissolution.
(iii) Life Insurance. The Corporation may, but is not
obligated to, secure life insurance on the Shareholders from a life insurance
company selected by the Corporation. This insurance need not be in an amount
necessary to pay the entire purchase price for the Shares at death. Each of the
Shareholders agrees to do everything necessary to cause insurance policies to be
issued pursuant to this Agreement, if the Corporation elects to do so. The
Corporation, which shall be the owner of the life insurance policies, agrees to
pay the premiums as they become due, and each policy shall be the sole and
absolute property of the Corporation. Any dividends payable upon the policies
prior to maturity by the death of the insured Shareholder shall be paid to the
Corporation in cash or disposed of as the Corporation may direct. This Agreement
shall extend to and include all additional life insurance policies issued
pursuant to this Agreement.
(iv) Shareholders' Second Option to Purchase Shares. If
the Corporation does not elect to purchase the Shares of the Decedent or
Dissolved Shareholder as provided in subsection 4(a)(ii), then subject to
subsection 4(a)(vi), the Remaining Shareholders shall have the irrevocable and
exclusive second option, but not the obligation, to purchase from the personal
representative of the Decedent or the Trustee(s) of the Dissolved Shareholder,
that part of the Shares, pro rata, to such Remaining Shareholder's holdings of
Shares on the date of death of the Decedent or the Date of Dissolution. Each
Remaining Shareholder who elects to purchase all or part of its pro rata portion
of the Decedent's or Dissolved Shareholder's Shares shall give notice of such
election to the personal representative of the Decedent or the Trustee(s) of the
Dissolved Shareholder and to the Remaining Shareholders within sixty (60) days
after the Date of Appointment or the Date of Dissolution. The purchase price to
be paid shall be equal to the Agreed Value of the Shares on the date of death of
the Decedent or the Date of Dissolution.
(aa) If any Remaining Shareholder fails to
exercise its right to purchase its full pro rata portion of the Shares of the
Decedent or the Dissolved Shareholder, each Remaining Shareholder who has given
notice of election to purchase its full pro rata portion of the Shares of the
Decedent or the Dissolved Shareholder shall have an additional twenty (20) days
after the expiration of such sixty (60) day period in which to give to the
personal representative of the Decedent or the Trustee(s) of the Dissolved
Shareholder and the other Remaining Shareholders further notice (the "Further
Notice") of its election to purchase all or a part of the Shares of the Decedent
or the Dissolved Shareholder. Each Further Notice shall state the number of
additional shares that the Remaining Shareholder giving the Further Notice
elects to purchase. The Shares shall be apportioned among those Remaining
Shareholders who have given a Further Notice according to the procedure
described below or in such different portions as such Shareholders may agree
among themselves. Each of the
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Participating Shareholders shall be apportioned (1) that number of additional
shares of Shares that it elected to purchase in its Further Notice and which has
not yet been apportioned pursuant to this subsection 4(a)(iv)(aa) or (2) its pro
rata portion of the Unpurchased Shares, whichever is less. If the apportionment
is followed and there remain at least one Participating Shareholder and any
Unpurchased Shares, the procedure described above shall be repeated.
(bb) For purposes of subsection 4(a)(iv)(aa),
the following definitions shall apply:
a. The "Remaining Shares" shall be the
Offered Shares that the Shareholders have not elected to purchase.
b. A "Participating Shareholder" shall
be a Shareholder who has given a Further Notice and who has not yet been
apportioned pursuant to subsection 4(a)(iv)(aa) that number of additional shares
that he elected to purchase in his Further Notice.
c. "Unpurchased Shares" shall be the
Remaining Shares that have not yet been apportioned to Participating
Shareholders pursuant to subsection 4(a)(iv)(aa).
d. A "Participating Shareholder's Pro
Rata Portion" of the Unpurchased Shares shall be the number of Unpurchased
Shares multiplied by the fraction formed by dividing the number of shares of
Shares that such Participating Shareholder held on the Date of Appointment or
Date of Dissolution by the number of shares of Shares that all of the
Participating Shareholders held on the Date of Appointment or Date of
Dissolution.
(v) Effect of an Election. The Corporation or
each Shareholder giving notice of election to purchase Shares pursuant to
subsection 4(a)(ii) or 4(a)(iv), respectively, shall be obligated severally (but
not jointly) to purchase from the personal representative of the Decedent or the
Trustee(s) of the Dissolved Shareholder, and the personal representative of the
Decedent or the trustee(s) of the Dissolved Shareholder, provided the
Corporation, or such Remaining Shareholders have elected to purchase all of the
Offered Shares, shall be obligated to sell to the Corporation, or such Remaining
Shareholders, as the case may be, the number of shares of Shares of the Decedent
or Dissolved Shareholder stated therein, at the price determined pursuant to
subsection 4(a)(ii) or 4(a)(iv).
(vi) Consequences if All Shares are Not to be
Purchased. If the Corporation or the Remaining Shareholders do not elect,
pursuant to subsections 4(a)(ii) and 4(a)(iv), to purchase all of the Shares of
the Decedent or the Dissolved Shareholder, the personal representative of the
Decedent or the Trustee(s) of the Dissolved Shareholder may elect to sell to the
Remaining
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Shareholders, if any, who have elected to purchase part of the Shares
of the Decedent or the Dissolved Shareholder, the aggregate number of such
shares which such Shareholders have elected to purchase at the price and on the
terms and conditions determined pursuant to subsection 4(a)(iv). If the
Corporation or the Remaining Shareholders have failed to elect to purchase all
of the Offered Shares pursuant to the provisions above, the personal
representative of the Decedent or the Trustee(s) of the Dissolved Corporation,
prior to any transfer of the Shares to a third party, shall again offer to sell
the Shares at a purchase price equal to the price offered by the bona fide third
party purchaser, first to the Corporation and then to the Remaining Shareholders
in the same manner as set forth in Subsections 3(b) - 3(e) hereof.
(b) Disability of Shareholder
(i) Option to Purchase Shares upon Disability
of Shareholder. Subject to the terms of section 4 (d), below, if a Shareholder
becomes physically or mentally unable to perform his or her regular and
customary duties to the Corporation for a continuous period of [one hundred
(100)] days (the "Date of Disability"), such Shareholder shall be considered
totally and permanently disabled (a "Disabled Shareholder"). The Corporation and
the Remaining Shareholders shall have the irrevocable and exclusive successive
options, but not the obligation, to purchase and the Disabled Shareholder, or
such Shareholder's guardian or other person possessing the legal power to act on
such Shareholder's behalf to satisfy his contractual obligations
("Representative"), shall sell all of the Shares owned by the Disabled
Shareholder at the Date of Disability at the price and in the manner set forth
in this Agreement.
(ii) Corporation's First Option to Purchase Shares.
Within thirty (30) days after the Date of Disability, the Corporation may elect,
at its option, to purchase all of the Shares owned by the Disabled Shareholder
in the same manner as set forth in subsection 4(a)(ii) hereof. The purchase
price of the Shares shall equal its Agreed Value as of the Date of Disability.
(iii) Disability Insurance. In order to assure
sufficient funds are available to pay for a purchase by the Corporation of a
Shareholder's Shares in the event of his or her disability, the Corporation may,
but is not obligated to, secure disability insurance from a company selected by
the Corporation. Each of the Shareholders agrees to do everything necessary to
cause disability insurance policies to be issued pursuant to this Agreement, if
the Corporation elects to do so. The Corporation, which shall be the owner of
the disability insurance policies, agrees to pay the premiums as they become due
and each policy shall be the sole and absolute property of the Corporation. This
Agreement shall extend to and include all additional disability insurance
policies issued pursuant to this Agreement.
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(iv) Shareholders Second Option to Purchase Shares.
If the Corporation does not elect to purchase the Shares owned by the Disabled
Shareholder, the Remaining Shareholders shall have the irrevocable, and
exclusive second option, but not the obligation, to purchase from the Disabled
Shareholder that part of the Disabled Shareholder's Shares, pro rata to its
holdings of Shares on the Date of the Disability in the manner provided in
subsection 4(a)(iv). The purchase price to be paid by the Remaining Shareholders
shall equal the Agreed Value of the Shares as of the Date of Disability.
(v) Consequences if all Shares are Not to be
Purchased. If the Corporation or the Remaining Shareholders do not elect,
pursuant to subsections 4(b)(ii) and 4(b)(iv), respectively, to purchase all of
the Shares of the Disabled Shareholder, the Disabled Shareholder may elect to
sell to the Remaining Shareholders, if any, who have elected to purchase part of
the Shares of the Disabled Shareholder, the aggregate number of shares of such
Shares which such Remaining Shareholders have elected to purchase at the price
determined pursuant to subsection 4(b)(iv). If the Corporation or the Remaining
Shareholders have failed to elect to purchase all of the Shares of the Disabled
Shareholder pursuant to the above provisions, the Disabled Shareholder may sell
its stock to a third party within thirty (30) days thereafter at the Agreed
Value: (i) only on the same terms and conditions as the Shares have been offered
to the Corporation and Remaining Shareholders and (ii) only if the purchaser
agrees in writing to be bound by all of the terms and conditions of this
Agreement. If such sale is not closed within thirty (30) days after nonelection
by the Corporation and Remaining Shareholders, the sale of the Disabled
Shareholder's Shares shall again be governed by provisions of this section 4.
(c) Continuous Restriction on Remaining Shares. If any Shares
have been offered for sale pursuant to this section 4 and that offer has not
been finally accepted in accordance with the provisions of this section 4, then
the Shares still held by the personal representative of the Decedent, the
Trustee(s) of the Dissolved Shareholder or the Disabled Shareholder shall remain
subject to the terms of this Agreement.
(d) Execution of Voting Trust Agreement. In the event of
Shareholder's death, dissolution or disability, the personal representative of
the Decedent or the Trustee(s) of the Dissolved Shareholder, or the
Shareholder's Representative, within ten (10) days after receiving notice of the
election to purchase by the Corporation or the Remaining Shareholders pursuant
to the options set forth in section 4 (a) or (b), may take the following actions
, in which case the terms of section 4 (a) or (b) shall not apply:
(i) Provide notice to the Corporation and
Remaining Shareholders , set forth herein, that such personal representative of
the Decedent, or Trustee of the Dissolved Shareholder, or Shareholder's
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Representative has elected to establish a Voting Trust Agreement, substantially
in the form of Exhibit 1 hereto, under which QVESTOR will be appointed as
Trustee and shall have the right to exercise, in person or by proxy, all of such
Shareholder's voting rights and powers in respect of the Shares registered in
the name of the Trustee, and to take part in or consent to any and all corporate
or shareholder action; and
(ii) Simultaneously with the execution of the Voting
Trust Agreement, or as soon as reasonably practicable thereafter, deposit with
the Trustee, the certificate or certificates for their respective Shares,
together with instruments duly executed for the transfer of their shares to the
Trustee. Pending the delivery of such instruments, each Shareholder hereby
transfers the Shares to the Trustee. The Shares shall be vested in the Trustee
and shall be transferred to the name of the Trustee on the books of the Company,
and the Trustee shall issue and deliver a Certificate to each such personal
representative of the Decedent, Trustee of the Dissolved Shareholder or
Shareholder's Representative representing his beneficial ownership of the
deposited Shares (a "Certificate"); and
(iii) Complete the actions required by subsections
(d)(i) and (ii) within ninety (90) days following the notice by the Corporation
or Remaining Shareholders of their election to purchase the Shareholder's
Shares.
5. VOTING AGREEMENT
Each of the parties hereto agrees to nominate, and cause the
Corporation to nominate, for election to the Corporation's Board of Directors at
any special or annual meeting of stockholders of the Corporation, four nominees
proposed by Shareholders QVESTOR and Q-Med, ("Nominees") and each of the parties
hereto agrees to vote, at any special or annual meeting of the stockholders of
the Corporation, to elect such Nominees to the Corporation's Board of Directors.
6. AGREED VALUE OF SHARES
The Corporation and the Shareholders stipulate that the Agreed Value of
each Share for purposes of this Agreement shall be the value set forth on
Schedule "A" attached hereto from time to time. The Agreed Value shall be
established not less often than once each calendar year by the Shareholders at
the Corporation's Annual Meeting and shall be set forth on a new Schedule "A" to
be attached to this Agreement. If for any reason the Shareholders shall have
failed to stipulate the value for the year in which a Shareholder dies, is
dissolved, becomes disabled, is terminated or announces its intention to sell
its Shares, the last previously stipulated value shall control. In the event the
Shareholders have failed to stipulate the value of the Shares for more than 18
months and the Agreed Value of the Corporation's Shares is disputed by an
Offering Shareholder, the personal representative of the deceased Shareholder,
the trustee(s) of a dissolved Shareholder or a Disabled Shareholder covered
under this Agreement (hereinafter
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referred to collectively as the "Selling Shareholders"), the value of the
Corporation's Shares will be set by appraisal. The Selling Shareholders, at
their expense, shall have the right to choose an MAI appraiser to independently
appraise the business and worth of the Corporation as of the date of the event
which created a requirement or option to purchase the Shares. Such appraisal
shall then be presented to the Board of Directors of the Corporation for their
approval. If a majority of the Board approves the amount of the appraisal
prepared by the Selling Shareholders' MAI, such appraisal shall be deemed the
fair market value of the Corporation ("FMV") from which the Agreed Value of the
Shares will be determined for purposes of said transaction. Should a majority of
the Corporation's Board of Directors fail to approve the appraisal prepared by
the Selling Shareholders' MAI, the Board may, at its expense, choose a second
MAI to independently appraise the business and worth of the Corporation. Once
the Board's MAI has completed its appraisal, the appraisals of the two MAIs
shall be averaged to determine the FMV of the Corporation unless the MAIs
disagree on FMV by an amount exceeding ten percent (10%) of the highest such
appraisal. If the difference in the appraisals does exceed ten percent (10%),
the two MAIs may designate a third MAI to perform an independent appraisal of
the company and assign a FMV to its Shares. The cost of the third MAI's
appraisal shall be borne equally by the Selling Shareholders and the
Corporation, and the FMV determined by such appraiser shall be binding on all
parties. Once the FMV of the Corporation is established in accordance with this
section, the Agreed Value for said transaction will be calculated by dividing
the FMV of the Corporation by the number of shares of Shares outstanding at the
date when the event occurred which created a requirement or option to purchase
the Shares.
7. CLOSING
The Corporation shall set a reasonable time after acceptance by the
Corporation and/or the other Shareholders of an offer from an Offering
Shareholder for closing a purchase under this Agreement.
8. DELIVERY OF SHARES
Upon the payment to the Shareholder of the purchase price as provided
in this Agreement, the Shareholder shall assign and deliver the Shares purchased
under this Agreement to the Corporation (as transfer agent) free and clear of
all liens, charges, and encumbrances of any nature whatsoever, duly endorsed for
transfer.
9. DOCUMENTARY STAMPS
Whenever any Shares are sold pursuant to this Agreement, the party who
triggers the sale of Shares must purchase and affix to the Share certificate any
documentary stamps required by Florida law.
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10. PIGGY-BACK REGISTRATION RIGHTS
If the Corporation elects to register any of its Shares under the
Securities Act of 1933 and/or applicable state securities laws, the Corporation
shall provide the Shareholders notice of such election, and, subject to the
approval of the lead underwriter in any such registration, the Shareholders
shall be entitled to "piggy-back" registration rights for not less than fifty
percent ) of their Shares at no expense, other than applicable broker's
commission.
11. DOCUMENTATION
While employed by the Corporation, each employee and consultant
Shareholder shall prepare and maintain adequate and current documentation of his
work for the Corporation. Upon any termination of such employment, the employee
Shareholder shall leave reasonable and orderly documentation of his work and
cooperate fully with the Corporation in connection with the training of any
person or persons employed to perform the employee Shareholder's duties and the
orderly and smooth transfer of the employee Shareholder's duties to such person
or persons.
12. TERMINATION OR MODIFICATION OF AGREEMENT
(a) This Agreement will terminate upon the occurrence of
any of the following events:
(i) cessation of the Corporation's business;
(ii) receivership, filing for relief under the
Bankruptcy Code, or dissolution of the
Corporation;
(iii) the written agreement of all parties hereto;
(iv) the initial public offering of the Corporation's
shares on a listed stock exchange; or
(v) the sale of all or substantially all of the
stock or assets of the Corporation.
(b) This Agreement may only be modified by the written
agreement of all parties hereto. Unanimous approval of all Shareholders shall be
required for any amendment to be effective.
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13. ABANDONMENT
If a Shareholder attempts or purports to attempt to Dispose Of its
Shares in violation of this Agreement, then the Shareholder shall be deemed to
have abandoned its ownership interest in its Shares, and the Corporation shall
be empowered (but not obligated) to redeem such Shareholder's ownership interest
in its Shares. The redemption price in the event of an abandonment shall be no
greater than the price paid for the Shares by the abandoning Shareholder,
without credit or attribution of interest, or the then-current book value of its
Shares, whichever sum is less, said lower value being a disincentive to a
Shareholder to abandon its interest in its Shares. The redemption price under
this paragraph shall be paid to the abandoning Shareholder over a period of two
(2) years in annual installments beginning one year after the date of
abandonment, with no interest accruing. Each Shareholder which is a party hereto
hereby irrevocably constitutes and appoints the Shareholders who have not
abandoned their interests in their Shares as its attorneys-in-fact to terminate
its ownership interest in the Corporation in the event it shall abandon its
interest as provided herein, and to execute, file of record, and record, as
appropriate, such documents and instruments as may be required to effectuate the
transfer of its ownership interest.
14. INABILITY OF CORPORATION TO PURCHASE SHARES
If the Corporation does not have sufficient surplus to permit it
lawfully to purchase all of the Shares as it deems desirable hereunder to
purchase, the Shareholders shall promptly take such measures to vote their
respective holdings of Shares to reduce the capital of the Corporation, to
revalue the capital of the Corporation so as to increase its surplus, or to take
such other steps as may be appropriate or necessary in order to enable the
Corporation lawfully to perform its obligations hereunder, including, by way of
illustration and not by way of limitation, an up-to-date appraisal of the assets
of the Corporation.
15. NONIMPAIRMENT
In no event shall the purchase of a Shareholder's Shares cause the
Corporation's solvency and continuing operations to be impaired. Accordingly, in
the event insurance proceeds (if obtained for death of a Shareholder) are
insufficient to discharge the Corporation's obligation to purchase a
Shareholder's Shares, then, notwithstanding any other provision of this
Agreement, the payment of the purchase price of the Shares shall be accomplished
so as not to cause the solvency and continued operations to be impaired on such
terms and conditions as the directors of the Corporation in good faith
determine.
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16. STATUS OF TRANSFEREES
Except with respect to donees of a Shareholder as set forth in section
3 hereof, any person or entity acquiring any Share of stock in the Corporation,
by accepting it, shall be deemed to be a party to this Agreement and to agree to
be subject to all the terms and conditions of this Agreement as if he or it
signed this Agreement as a Shareholder. Each such transferee shall sign an
agreement joining to this Agreement.
17. INDEBTEDNESS OF TRANSFEROR TO CORPORATION
If the transferor of any Shares sold hereunder is indebted to the
Corporation at the time the purchase price for the Shares is to be paid by the
Corporation, the purchase price paid for such Shares, including any interest or
any deferred payments of such purchase price, shall first be applied against the
outstanding balance of such indebtedness, and the balance of such purchase price
and interest shall be paid to the transferor of the Shares as hereinabove
provided.
18. PURCHASE BY THE CORPORATION
Whenever the Corporation, pursuant to this Agreement, purchases Shares,
all Shareholders shall do all things and execute and deliver all papers as may
be necessary to consummate such purchase. All Shares so purchased by the
Corporation shall be cancelled.
19. SPECIFIC PERFORMANCE
The parties hereby declare that it is impossible to measure in money
the damages that will accrue to a part or to the Shareholder by reason of a
failure of a party to perform any of the obligations under this Agreement.
Therefore, if the Corporation, any Shareholder, the personal representative of a
Decedent or the trustee(s) of a Dissolved Shareholder shall institute any action
or proceeding to specifically enforce the provisions hereof, then any person
(including the Corporation) against whom such action or proceeding is brought
hereby waives the claim or defense therein that such party has an adequate
remedy at law, and such person shall not urge in any such action or proceeding
the claim or defense that an adequate remedy at law exists so as to defeat the
claim for specific performance of this Agreement.
20. NOTICES
Any and all notices, designations, consents, offers, acceptances, or
any other communication provided for herein shall be given in writing which
shall be addressed to the Shareholders at the current address which the
Shareholders have furnished to the Corporation and which is on file at the
Corporation's office and to
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the Corporation at its principal office, or if none, to the last known address
of the addressee, and shall be deemed given (i) when actually received by hand
delivery or express courier, or (ii) five (5) days after posting by postage
pre-paid certified or registered mail.
21. GOVERNING LAW
This Agreement shall be governed, construed, interpreted, and enforced
in accordance with the laws of the State of Delaware.
22. ARBITRATION/ATTORNEY FEES
The parties will attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement by mediation in accordance
with the Center for Public Resources Model Procedure for Mediation of Business
Disputes.
If the matter has not been resolved pursuant to the aforesaid mediation
procedure within sixty days of the commencement of such procedure (which period
may be extend by mutual agreement), the controversy shall be settled by
arbitration in accordance with the Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes, by three arbitrators, of whom
each party shall appoint one. The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. ss. 1-16, and judgment upon the award rendered
by the Arbitrator(s) may be entered by any court having jurisdiction thereof.
The place of arbitration shall be Orlando, Florida.
The prevailing party in such arbitration shall be entitled to an award
of attorney's fees incurred during the mediation and arbitration.
23. BINDING EFFECT
This Agreement will inure to the benefit of and be binding upon the
Corporation, its successors and assigns, including, but not limited to, any
Corporation or entity that may acquire all or substantially all of the
Corporation's assets and business or into which the Corporation may be
consolidated or merged, and upon the Shareholders, their successors, assigns,
heirs, and legal representatives, as the case may be, and shall bind all who
sign regardless of whether one or more persons who hold Shares fail to sign this
Agreement.
24. MULTIPLE COPIES OR COUNTERPARTS OF AGREEMENT.
The original and one or more copies of this Agreement may be executed
by one or more of the parties. In such event, all of such executed copies
shall have the same force and effect as the executed original, and all of such
counterparts, taken together, shall have the effect of a fully executed
original.
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25. NO ASSIGNMENT
This Agreement and a Shareholder's rights hereunder may not be assigned
by a Shareholder to any firm, entity, or person without the express, written
approval of the Corporation and the other Shareholders.
26. INVALID PROVISION
The invalidity or unenforceability of a particular provision of this
Agreement shall not affect the other provisions hereof, and the agreement shall
be construed in all respects as if the invalid or unenforceable provisions were
omitted.
27. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding of
the parties with respect to the transfer of the Shares and supersedes any and
all prior agreements regarding the Shares, whether written or oral.
28. SURVIVAL
All sections of this Agreement shall survive the termination
of this Agreement for any reason as are necessary to effect the rights of the
parties hereto or of any Trustee appointed hereunder.
IN WITNESS WHEREOF, the Corporation and QVESTOR have executed this
instrument by and through their authorized officers and the individual
Shareholders have hereunto placed their hands on the day and year first above
written.
"CORPORATION":
Witnesses: IXION BIOTECHNOLOGY, INC.
/S/ /S/
-------------------------------- By:---------------------------------
Thomas P. Stagnaro Weaver Gaines
Chairman and Chief Executive Officer
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<PAGE>
"Q-MED":
Witnesses: Q-MED AB (publ)
/S/ /S/
-------------------------------- By:----------------------------------
Terence F. Brennan Per Olof Wallstrom
President and Chief Executive Officer
/S/ /S/
-------------------------------- By:----------------------------------
Terence F. Brennan Bengt Agerup
-------------------------------- Member of the Board of Directors
17
<PAGE>
"QVESTOR":
Witnesses: QVESTOR LLC
/S/ /S/
-------------------------------- By:------------------------------------
Terence F. Brennan Per Olof Wallstrom
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<PAGE>
Witnesses: AMMON B. PECK PH.D
/S/ /S/
------------------------------- ----------------------------------
Theodore Lee Snow Ammon B. Peck, Individually
/S/
-------------------------------
Kimberly A. Ramsey
Witnesses: WEAVER H. GAINES
/S/ /S/
------------------------------- ----------------------------------
Thomas P. Stagnaro Weaver H. Gaines, Individually
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SCHEDULE A
----------
Agreed Value
------------
The Agreed Value for the Shares as of July -----, 2000 is $4.00 per share.
the "CORPORATION":
Witnesses: IXION BIOTECHNOLOGY, INC.
-------------------------------- By:------------------------------
Weaver Gaines
-------------------------------- Chairman and Chief Executive Officer
"Q-MED":
Witnesses: Q-MED AB (publ)
-------------------------------- By:------------------------------
Per Olof Wallstrom
-------------------------------- President and Chief Executive Officer
-------------------------------- By:------------------------------
Bengt Agerup
-------------------------------- Member of the Board of Directors
"QVESTOR":
Witnesses: QVESTOR LLC
-------------------------------- By:------------------------------
Per Olof Wallstrom
--------------------------------
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Witnesses: AMMON B. PECK PH.D
------------------------------- ----------------------------------
Ammon B. Peck, Individually
-------------------------------
Witnesses: WEAVER H. GAINES
------------------------------- ----------------------------------
Weaver H. Gaines, Individually
-------------------------------
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EXHIBIT 1
---------
VOTING TRUST AGREEMENT
This is a Voting Trust Agreement (the "Agreement") dated as of
----------------, among IXION Biotechnology Inc. ("Company"), -----------------
("Shareholder") and QVESTOR, LLC, a Delaware limited liability company, as
Trustee.
Background
The Shareholder currently owns ---------- shares of common stock (the
"Shares") of IXION BIOTECHNOLOGY, INC. (the "Company"). Pursuant to section 4(d)
of a Shareholders' Agreement dated July 14, 2000 among the Shareholder, the
Company, and certain other shareholders named therein ("Shareholders
Agreement"), the parties desire to enter into this Agreement regarding the
deposit of the Shares with the Trustee. Accordingly, in consideration of the
mutual covenants and agreements set forth below, the parties agree as follows:
Terms
1. Filing. A copy of this Agreement and any amendment to this Agreement
shall be filed in the principal office of the Company, and shall be open to the
inspection of any shareholder of the Company. All voting trust certificates (the
"Certificates") issued pursuant to this Agreement shall be issued, received, and
held subject to all the terms of this Agreement. Every person entitled to
receive voting trust certificates under this Agreement, representing shares of
common stock of the Company, and their permitted transferees and assigns, shall
be bound by the provisions of this Agreement.
2. Appointment of the Trustee. The Trustee shall be QVESTOR, LLC.
3. Transfer of Stock to Trustee. As soon as reasonably possible after
the execution of this Agreement, the Shareholder will deposit with the Trustee,
the certificate or certificates for the Shares, together with instruments duly
executed for the transfer of the Shares to the Trustee. Pending the delivery of
such instruments, the Shareholder hereby transfers the Shares to the Trustee.
The Shares shall be vested in the Trustee and shall be transferred to the name
of the Trustee on the books of the Company.
4. Trust Certificates. Following the deposit by the Shareholder of the
certificate or certificates representing their respective Shares with the
Trustee, the Trustee shall issue and deliver a Certificate to the Shareholder
representing his
<PAGE>
beneficial ownership of the Shares (a "Certificate"), in substantially the form
attached to this Agreement as Exhibit A.
5. Rights of Trustee.
(a) The Trustee shall have the right to exercise, in person or
by proxy, all of the Shareholder's voting rights and powers in respect of the
Shares registered in the name of the Trustee, and to take part in or consent to
any and all corporate or shareholder action. The right to vote shall include,
without limitation, the right to vote on the election ofdirectors. The Trustee
may in all matters act either at a meeting or by written consent. The parties
acknowledge that the Trustee, for purposes of this Agreement, shall be permitted
to vote the Shares and to exercise all such powers as are necessary for every
legitimate business purpose for the Company. The Trustee shall have no liability
for any actions taken pursuant to this Agreement, except for those actions taken
in bad faith or in willful violation of this Agreement.
(b) It is expressly understood and agreed that the Shareholder
or any future holders of Certificates (the "Holders") shall not have any right
with respect to any Shares held by the Trustee to vote, to take part in, to
consent to or in any way control or limit any corporate or shareholders' action.
(c) In voting the Shares held pursuant to this Agreement
(either in person or by Proxy), the Trustee shall exercise its reasonable
business judgment and may take such part in the management of the Company's
affairs as it deems appropriate.
(d) It is expressly understood and agreed that at any time,
subject to compliance with: (i) all applicable federal and state securities
laws, (ii) all applicable shareholder agreements and (iii) any underwriter
lock-up agreements that a Holder may sell, assign or otherwise transfer any of
the Certificates and may pledge or otherwise encumber the Certificates;
provided, however, the Shares represented by such Certificates shall continue to
be bound by this Agreement and the new Holder shall sign a copy of this
Agreement.
(e) The Trustee shall have the right, in its sole discretion
and at any time during the term of this Agreement, to permit any Holder to sell,
assign or otherwise transfer all or any portion of the Shares represented by the
Holder's Certificates free of this Agreement, and this Agreement will continue
in full force and effect with respect to all remaining Shares.
(f) It is also expressly understood and agreed that the
Trustee has no rights in the Shares other than the voting rights set forth in
this Agreement. All of the economic benefits of ownership of the Shares remain
vested in the Shareholders. The Trustee may not at any time sell, transfer,
assign, pledge or otherwise encumber any of the Shares without the consent of
the relevant Holders.
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6. Term. This Agreement shall continue in effect for a period extending
until the earlier of (a) July 15, 2010 or (b) the date that the Trustee and
Shareholder agree in writing to terminate this Agreement.
7. Termination Procedure.
(a) Upon the termination of this Agreement, the Trustee shall
mail written notice of such termination to the registered owners of the
Certificates, at the addresses appearing on the transfer books of the Trustee.
After the date of any such notice, the Certificates shall cease to have any
effect, and the Holders of the Certificates shall have no further rights under
this Agreement other than to receive certificates for shares of stock of the
Company or other property distributable under the terms of this Agreement and
upon the surrender of the Certificates.
(b) Promptly following the termination of this Agreement and
the surrender to the Trustee of the Certificates, the Trustee shall take all
actions necessary to have the record ownership of that number of Shares
represented by the Certificates transferred on the books of the Company into the
name of the Holder or the Holder's nominees and shall have the Certificates
representing such Shares delivered to such Holder or the Holder's nominee. The
Trustee shall deliver to each registered Holder, stock certificates for the
number of Shares represented by the Certificate held by such Holder, upon the
surrender of the properly endorsed Certificate.
8. Dividends.
(a) Prior to the termination of this Agreement the Holders
shall be entitled to receive payments of cash dividends, if any, paid by the
Company upon a like number and class of shares of Common Stock as is represented
by each Certificate. If any dividend or distribution in respect of the Shares
deposited with the Trustee is paid, in whole or in part, in stock of the Company
having general voting powers, the Trustee shall receive and hold, subject to the
terms of this Agreement, the certificates for stock which are distributed on
account of such dividend or distribution and the Holder shall be entitled to
receive a Certificate issued under this Agreement for the number of shares and
class of stock received as such dividend or distribution with respect to the
Shares represented by such Certificate. The Trustee shall have no interest in
such dividend Shares, other than the right to exercise voting rights.
(b) If any dividend or distribution in respect of the stock
deposited with the Trustee is paid other than in cash or in capital stock having
general voting powers, then the Trustee shall distribute such dividend or
distribution to the Holders registered as such at the close of business on the
day fixed by the Trustee for taking a record to determine the Holders entitled
to receive such distribution.
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Such distribution shall be made to such Holders ratably, in accordance with the
number of Shares represented by their respective Certificates.
(c) The Trustee shall instruct the Company, in writing, to pay
all cash dividends directly to the Holders or their legal representatives.
(d) The Company is authorized to report or direct the
reporting of such dividends to federal or state taxing authorities, as required
by law, using the respective taxpayer identification number of each Holder. Each
Holder agrees to provide the Company with such additional information as is
requested by the Company for such purpose.
9. Dissolution of the Company. In the event of the dissolution or total
or partial liquidation of the Company, whether voluntary or involuntary, to the
extent that any distributions are received by the Trustee, the Trustee shall
distribute any securities, rights, or property, to which the Holders are
entitled, among the registered Holders or their legal representatives in
proportion to their interests, as shown by the books of the Trustee.
10. Reorganization of Company. In case the Company is merged into or
consolidated with another corporation, or entity, or all or substantially all of
the assets of the Company are transferred to another corporation or entity, then
in connection with such transfer, the term "Company" for all purposes of this
Agreement shall be taken to include such successor corporation or entity, and
the Trustee shall receive and hold as Trustee under this Agreement any stock of
such successor corporation received on account of the ownership, of the stock
held under this Agreement, prior to such merger, consolidation, or transfer.
11. Trustee.
(a) The Trustee (and any successor Trustee) may at any time
resign by mailing to the registered Holders a written resignation, to take
effect thirty days thereafter or upon the prior acceptance of the duties of
Trustee by a successor Trustee.
(b) The rights, powers, and privileges of the Trustee named
under this Agreement shall be possessed by any successor Trustee, with the same
effect as though such successors had originally been parties to this Agreement.
The word "Trustee" as used in this Agreement, means the Trustee or any successor
Trustee acting under this Agreement.
12. Notices. To be effective, a notice or other communication required
or permitted by this Agreement must be in writing. All notices and other
communications shall be delivered by overnight courier service or hand delivery.
Communications shall be addressed to the intended recipient at the address
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<PAGE>
specified below, or to such other address as the intended recipient may have
designated in a writing previously delivered to the sender:
If to the Company: If to the Trustee:
IXION BIOTECHNOLOGY, INC. QVESTOR
13704 Progress Boulevard, Box 13 c/o The Corporation Trust Company
Alachua, Florida 32615 1209 Orange Street
Wilmington, DE
With a copy to:
Terence F. Brennan, Esq.
Holland & Knight LLC
P.O. Box 1526
Orlando, FL 32802
If to the Shareholder:
------------------------------
------------------------------
------------------------------
13. Governing Law and Venue. This Agreement shall be governed by and
construed under the laws of Delaware. Any suit brought to enforce or construe
any provision of this Agreement shall be brought only in the appropriate court
located in Orange County, Florida; provided, however, the Trustee may initiate
an action in any jurisdiction having jurisdiction over the parties to enjoin a
violation of this Agreement.
14. Entire Agreement. This Agreement, including its exhibits,
constitutes the entire agreement of the parties concerning its subject matter
and supersedes any prior or contemporaneous agreements or understandings among
them, concerning its subject matter.
15. Amendment. Upon the written consent of the Trustee and Shareholder
any provisions of this Agreement may be amended.
16. Voting Power. For the purposes of this Agreement, "Voting Power"
related to Shares shall mean the underlying voting power of the Shares.
17. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Voting Trust
Agreement as of the date first written above.
Date:------------------------- ------------------------------
Shareholder
QVESTOR, LLC ("Trustee")
Date:------------------------- By:---------------------------
IXION BIOTECHNOLOGY, INC. ("Company")
13704 Progress Boulevard, Box 13
Alachua, Florida 32615
Date:------------------------- By:----------------------------
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EXHIBIT A (to Exhibit 1)
------------------------
Trust Certificate
-----------------
No. ------ --------------- Shares of Stock
QVESTOR, LLC, the Trustee of the shares deposited under a Voting Trust
Agreement effective ------------------, having received certain shares of IXION
BIOTECHNOLOGY, INC., a Delaware corporation (the "Company"), pursuant to such
Agreement, hereby certifies that ----------------- will be entitled to receive a
certificate for --------------- fully paid --------------- shares of the Company
on the expiration of the Voting Trust Agreement, and in the meantime shall be
entitled to receive payments equal to any dividends that may be collected by the
Trustee upon a like number of such shares held by him under the terms of the
Voting Trust Agreement.
Neither this certificate, nor the shares of capital stock for which it
is issued, have been registered under the Securities Act of 1933, as amended, or
any applicable state securities laws, and no transfer or assignment of this
certificate or the shares for which it is issued may be made in the absence of
an effective registration statement under such laws or the availability of
exemptions from the registration provisions thereof in respect of such transfer
or assignment.
This certificate is subject to restrictions on transfer contained in
the Voting Trust Agreement dated as of -------------------, and the Shareholders
Agreement dated July 14, 2000 among the Company, the Shareholder, and certain
other shareholders named therein, including without limitation, all conditions,
rights of first refusal, options, or other restrictions on transfer of the
shares and is transferable only on the books of the undersigned Trustee by the
registered holder in person or by his duly authorized attorney, and the holder
hereof consents that the undersigned Trustee may treat the registered holder
hereof as the trust owner for all purposes, except the delivery of share
certificates, which delivery shall not be made without the surrender hereof.
IN WITNESS WHEREOF, the undersigned have executed this Voting Trust
Certificate as of this --------- day of -----------------------.
QVESTOR, LLC
By:--------------------------
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