Exhibit 10.6
SUBSCRIPTION AND SHAREHOLDERS AGREEMENT
by and among
AVANTIUM B.V.
(to be renamed AVANTIUM INTERNATIONAL B.V.)
(as the Company)
B.V. LICHT EN ▇▇▇▇▇▇ MAATSCHAPPIJ
(as the Chemical Shareholder)
SMITHKLINE ▇▇▇▇▇▇▇ PLC
S.R. ONE, LIMITED
(as the Pharmaceutical Shareholders)
GSE SYSTEMS, INC.
(as the Informatics Shareholder)
DELFT UNIVERSITY OF TECHNOLOGY
UNIVERSITY OF TWENTE
EINDHOVEN UNIVERSITY OF TECHNOLOGY
(as the University Shareholders)
THE GENERICS GROUP LIMITED
ALPINVEST HOLDING NV
(as the Financial Shareholders)
Dated as of February 24, 2000
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▇▇▇▇▇ & ▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
The shares in the share capital of Avantium B.V. (to be renamed
Avantium International B.V.) to be offered and purchased pursuant to
this Agreement are to be offered, sold, transferred or delivered in or
from the Netherlands as part of their initial distribution only to
individuals or legal entities who or which trade or invest in
securities in the conduct of business or a profession - such as banks,
brokers, dealers, institutional investors and multinationals with a
treasury department - in accordance with Article 2 of the Netherlands
Exemption Regulation to the Act on the Supervision on Securities
Transactions 1995 ("Vrijstellingsregeling Wet toezicht effectenverkeer
1995").
("Vrijstellingsregeling Wet toezicht effectenverkeer 1995").
TABLE OF CONTENTS
Article 1. Definitions and Interpretation 7
Article 2. Company's Articles of Association
Shares and Corporate Governance 10
Article 3. Issue and Subscription 9
Article 4. Conditions Precedent 10
Article 5. Completion 10
Article 6. Decision Procedure within One Group of Shareholders 12
Article 7. Stock Option Plan 12
Article 8. Transfer of Shares 12
Article 9. Preference in Liquidation and Sales Proceeds 13
Article 10. Conversion Right 14
Article 11. Weighted Average Anti-Dilution Adjustment 14
Article 12. Registration Right 20
Article 13. Drag-along Right 15
Article 14. Tag-along Right 16
Article 15. Redemption Right 22
Article 16. Limitation on Shareholding 16
Article 17. Dividends 16
Article 18. Reporting 17
Article 19. Representations and Warranties 17
Article 20. Confidentiality 18
Article 21. Company's Auditors 18
Article 22. Shareholders and Customer Treatment 18
Article 23. Notices 19
Article 24. Expenses 30
Article 25. Governing Law and Jurisdiction 31
Article 26. Counterparts 31
Article 27. General Provisions 31
Exhibits
Exhibit 1 Articles
Exhibit 2 Notarial Deed
Exhibit 3 Business Principles
Exhibit 4 Technology Transfer Agreement Shell
Exhibit 5 Technology Transfer Agreement SmithKline
Exhibit 6 Technology Transfer Agreement GSE
Exhibit 7A Letter of Intent
Exhibit 7B Employment Agreement
Exhibit 8 Secondment Agreement
Schedules
Schedule 1 Business Plan
Schedule 2 Shareholdings
Schedule 3 Resolution Incorporator
Schedule 4 Stock Option Plan
Schedule 5 Deed of Adherence
Schedule 6 Terms of Business
Schedule 7 Terms of Sale and Purchase
Schedule 8 Weighted Average Anti-Dilution Adjustment
THIS SUBSCRIPTION AND SHAREHOLDERS AGREEMENT (the Agreement) is
made and entered into on this 24th day of February, 2000, by and
among:
1. AVANTIUM B.V. (the Company), a private company with limited
liability, with its registered address at Carel van ▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇ ▇▇ The Hague, The Netherlands (to be renamed AVANTIUM
INTERNATIONAL B.V.)
2. B.V. LICHT EN ▇▇▇▇▇▇ MAATSCHAPPIJ "Shel"), a private company with
limited liability, with its registered address at Carel van
▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ The Hague, The Netherlands;
3. SMITHKLINE ▇▇▇▇▇▇▇ PLC ("SmithKline"), a public company with its
registered address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
4. S.R. ONE, LIMITED ("SRO"), a private company with limited
liability, with its registered address at Four Tower Bridge, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
America;
5. GSE SYSTEMS, INC. ("GSE"), a Delaware public company, with its
registered address at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America;
6. DELFT UNIVERSITY OF TECHNOLOGY ("Delft"), a university, with its
registered address at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
7. UNIVERSITY OF TWENTE ("Twente"), a university, with its registered
address at ▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇;
8. EINDHOVEN UNIVERSITY OF TECHNOLOGY ("Eindhoven"), a university,
with its registered address at Den Dolech 2, HG 1.03, 5612 AZ
Eindhoven, The Netherlands;
9. THE GENERICS GROUP LIMITED ("Generics"), a private company with
limited liability, with its registered address at ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and
10. ALPINVEST HOLDING NV ("Alpinvest"), a public company with limited
liability, with its registered address at ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇;
each of the parties to this Agreement a "Party" and collectively the Parties;
Party 2 the "Chemical Shareholder";
Parties 3 and 4 collectively the "Pharmaceutical Shareholders";
Party 5 the "Informatics Shareholder";
Parties 2 through 5 collectively the "Industry Shareholders";
Parties 6 through 8 collectively the "University Shareholders";
Parties 9 and 10 collectively the "Financial Shareholders"; and
Parties 2 through 10 collectively the "Shareholders";
WHEREAS:
A. The Company is incorporated by Shell ( the "Incorporator") on
January 28, 2000, in order to develop high-speed experimentation and
simulation technologies, also referred to as HSE & S, for application
in new product and process development in the pharmaceutical,
petrochemical and fine chemical, bio technology and polymers
industries (the "Business").
B. The Company has or will have, as soon as possible after the
Completion Date, incorporated as its operating company Avantium
Technologies B.V., a directly wholly-owned subsidiary
C. The Shareholders have agreed to subscribe for shares in the Company
on the terms and conditions of this Agreement so that the Business can
be established.
D. The Company has delivered to the Shareholders a business plan (the
Business Plan), a copy of which is attached hereto as Schedule 1.
E. Each of the Shareholders has conducted and to its satisfaction
finalized its own independent due diligence investigation as to the
viability of the Business Plan.
F. A due diligence investigation as to the viability of the Business
Plan, including but not limited to the Intellectual Property Rights
(as hereinafter defined) and Tangibles (as hereinafter defined), has
been completed and the results of the due diligence exercise are
satisfactory to the Shareholders in their sole and absolute
discretion.
G. A copy of the Business Plan has been submitted to the Securities
Supervision Board (Stichting Toezicht Effectenverke) of the
Netherlands pursuant to article 2 of the Exemption Regulation to the
Act on the Supervision of the Securities Trade Act 1995
(Vrijstellingsregeling Wet Toezicht Effectenverkeer 1995)
H. The Parties hereto wish to have their mutual relations
and their respective rights and obligations in respect of their
investment and their resulting shareholdings in the Company to be
governed by the provisions of this Agreement and the articles of
association of the Company.
DECLARED TO HAVE AGREED AS FOLLOWS
Article 1. Definitions and Interpretation
1.1In this Agreement and all of its schedules (hereinafter individually referred
to as a ("Schedule") and exhibits (hereinafter individually referred to as an
(Exhibit), the following capitalized words shall have the meaning referred to in
the provisions indicated below:
Agreement...........................................................introduction
Alpinvest...........................................................introduction
Articles.............................................................Article 2.1
Board................................................................Article 2.3
Board of Managing Directors..........................................Article 2.3
Business Plan..........................................................recital D
Business Principles..................................................Article 5.3
Business...............................................................recital A
Cash.................................................................Article 3.1
Chemical Shareholder................................................introduction
Common Shares........................................................Article 2.2
Company.............................................................introduction
Completion...........................................................Article 5.1
Completion Date......................................................Article 5.1
Conditions...........................................................Article 4.1
Deed of Adherence....................................................Article 8.3
Delft...............................................................introduction
Documentation........................................................Article 5.3
Eindhoven...........................................................introduction
Exhibit..............................................................Article 1.1
Financial Shareholders..............................................introduction
Foundation...........................................................Article 7.2
Generics............................................................introduction
GMS..................................................................Article 7.1
GSE.................................................................introduction
Incidental Shares...................................................Article 12.2
Incorporator...........................................................recital A
Industry Shareholders...............................................introduction
Informatics Shareholder.............................................introduction
Intellectual Property Rights.........................................Article 3.1
IPO.................................................................Article 12.1
Negotiator..........................................................Article 13.2
Notarial Deed........................................................Article 3.5
Parties.............................................................introduction
Party...............................................................introduction
Pharmaceutical Shareholders.........................................introduction
Preferred Proceeds...................................................Article 9.1
Preferred Shares.....................................................Article 2.2
Registration Shares.................................................Article 12.1
Schedule.............................................................Article 1.1
Shares...............................................................Article 2.2
Shareholders........................................................introduction
Shell...............................................................introduction
SmithKline..........................................................introduction
SRO.................................................................introduction
Stock Option Plan....................................................Article 7.1
Supervisory Board....................................................Article 2.3
Tangibles............................................................Article 3.1
Technology Transfer Agreements.......................................Article 8.1
Twente..............................................................introduction
University Shareholders.............................................introduction
1.2The recitals, the exhibits and the schedules to this Agreement
form an integral part of this Agreement and any reference to this
Agreement includes such recitals, exhibits and schedules. In this
Agreement, reference to a recital, article, exhibit or schedule
is a reference to a recital, article of, or exhibit or schedule
to this Agreement, unless the context requires otherwise.
1.3In this Agreement, unless the context indicates otherwise,
references to the singular shall include references to the plural
and vice versa and references to any pronoun shall include the
corresponding masculine, female or neuter, and references to
persons shall include bodies and corporate and unincorporated
associations of persons.
1.4In this Agreement a reference to a particular agreement,
enactment, regulation or other document shall be construed as a
reference to such agreement, enactment, regulation or document as
it may from time to time be binding, enforceable or in force, as
such agreement, enactment, regulation or document may be novated,
assigned, re-enacted (with or without modification), restated,
consolidated, amended or supplemented from time to time
hereafter.
1.5In this Agreement a reference to a company or other legal
entity shall be construed so as to include any legal entity or
entities into which such company may during the continuance of
this Agreement be merged by means of a statutory merger or into
which it may be split up or demerged.
1.6In this Agreement headings are inserted for convenience only
and shall not affect the construction of this Agreement.
Article 2. Company' Articles of Association, Shares and
Corporate Governance
2.1Upon Completion, the Incorporator shall have incorporated the
Company as a private limited liability company ("besloten
vennootschap met beperkte aansprakelijkheid" under the laws of
the Netherlands. The Company' articles of association (as may be
amended from time to time, the "Articles") are substantially in
the form as attached hereto, as Exhibit 1.
2.2The Company's share capital shall be divided into two types of
shares (collectively the ("Shares"): (i) common shares (the
"Common Shares"), each such share having a nominal value of EUR 1
(one Euro); and (ii) preferred shares (the "Preferred Shares"),
each such share having a nominal value of EUR 1 (one Euro).
2.3 The Company shall have a board (the "Board"), consisting of
(i) a board of managing directors ("statutair bestuur") of the
Company (the "Board of Managing Directors") and (ii) a
supervisory board (the "Supervisory Board").
2.4 In addition to the Articles, the members of the Supervisory
Board shall each serve for a period of 2 (two) years. Each
director may be reappointed.
2.5 In addition to the Articles, the Board shall appoint the
members to the scientific advisory board. Furthermore, any and
all transactions to be entered into between the Company and any
of its Shareholders require the prior written approval of the
Board
2.6 In addition to the Articles, Shareholders who do not have an
employee directly nominated as a member of the Supervisory Board
have observation rights to the Supervisory Board. 2.7 Each group
of Shareholders is required to nominate one supervisory director
("commissaris") of the Company. All Shareholders shall vote their
shares to ensure that the nominees so nominated by the different
groups of Shareholders shall be appointed accordingly.
Article 3. Issue and Subscription
3.1The Incorporator agrees to procure that the Company issues to
each Shareholder appearing in column 1 of Schedule 2 the number
of Preferred Shares and Common Shares as set forth against that
Shareholders name in respectively columns 3(i) and 4(i) of
Schedule 2 in consideration for the payment by such Shareholder
of the amount in cash ("Cash"), and/or intellectual property
rights ("Intellectual Property Rights") and/or tangibles in kind
("Tangibles") as set forth against its name in respectively
columns 5(i), 5(ii) and 5(iv) of Schedule 2 and at such time as
set forth against its name in respectively columns 5(i), 5(ii)
and 5(iv) of Schedule 2, provided, however, that such issue
occurs within two (2) months after the date of this Agreement. To
that effect, the Incorporator shall at the date hereof execute a
shareholders' resolution, substantially in the form as set forth
in Schedule 3, authorizing the Board of Managing Directors to
issue such shares. Furthermore, Schedule 3 sets forth such number
of shares against such share issue price to be issued to such
potential shareholders which the Board is empowered to issue
shares to, such issue referred to in Schedule 2 as the "Second
Closing".
3.2Each of the Shareholders hereby agree to subscribe to the
same, all subject to the terms and conditions of this Agreement.
3.3Each of the Shareholders subscribing to Preferred Shares pays
for a Preferred Share a par value of EUR 1 (one Euro) and a
surplus ("agio") of EUR 9.2167 (nine Euros and twenty-one point
sixty-seven eurocents).
3.4Each of the Shareholders agrees to procure that prior to the
issue, it shall have made the payment of Cash payable by such
Shareholder to the Company as contribution to the shares to be
issued to such Shareholder on each of the dates as set forth
against its name in respectively columns 5(i) and 5(iv) of
Schedule 2 into account number 54.31.72.201 with ABN AMRO Bank in
the name of "Stichting Derdengelden Notariaat ▇▇▇▇▇ & ▇▇▇▇▇▇▇"
(SWIFT-code ABN-ANL 2A).
3.5The shares will be issued to each of the Shareholders pursuant
to a notarial deed ("Notarial Deed") in the form as attached
hereto as Exhibit
2, which will be executed by one of the civil law notaries of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ / ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ in Amsterdam, The Netherlands.
3.6Each of the Shareholders may for internal purposes hold its
Shares through an affiliate, whereby such Shareholder controls
such affiliate and whereby "control" means the right or power to
direct or cause the direction of the management and/or policies
of such affiliate whether through the ownership of securities
with the right to vote, under or pursuant to any contract or
voting arrangement, or under or pursuant to any statute or
sovereign power, or otherwise, provided however that the
obligations under this Agreement shall remain vested in such
Shareholder.
Article 4. Conditions Precedent
4.1The obligations of each of the Parties under this Agreement
are conditional upon the following conditions precedent
("opschortende voorwaarden") ("Conditions"):
(a) Parties having reached agreement on the Documentation (as
hereinafter defined in Article 5.3);
(b) all consents and approvals of the Shareholders, the Company,
all government authorities and all third parties that are
required under the laws of the Netherlands in connection with the
transactions as contemplated by this Agreement being obtained and
in full force and effect at the Completion Date (as hereinafter
defined);
(c) the European Commission having been notified and approval or
sufficient comfort obtained; and
(d) the payments of Cash pursuant to Article 3.4 having been
made.
4.2Unless specifically waived by the Shareholders, if any of the
Conditions shall not be fulfilled on or before the Completion
Date (as hereinafter defined), this Agreement shall terminate and
cease to have any effect (unless such date is extended by mutual
written agreement between the Parties), except that the
termination of this Agreement does not affect accrued rights and
obligations of the Parties at the date of termination including
those obligations of confidentiality.
Article 5. Completion
5.1Subject to the provisions of Article 4, completion
("Completion") shall take place on February 24, 2000 or at such
later date as Parties have agreed upon (the "Completion Date") at
the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ / ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ or at such other place as
shall be mutually agreed between the Parties.
5.2At Completion, all of the following actions shall be effected:
(a) the Parties shall execute and deliver the Documentation as
hereinafter defined I in Article 5.3;
(b) the Incorporator shall appoint each of (i) Dr. ▇▇▇ ▇▇▇▇▇▇▇
and (ii) ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ as a managing director
("statutair bestuurder") of the Company, and shall accept the
resignation of Mr. Maarten Geuze, Mr. ▇▇▇▇ ▇▇▇▇ Dieters and Mr.
Jan van der Eijk as directors of the Company;
(c) the Company shall provide a duly executed shareholders'
resolution, substantially in the form of Schedule 3, authorizing
the Board of Managing Directors to issue the shares, as further
set forth in Article 3.1;
(d) the Company and each of the Shareholders shall appear before
the civil law notary to execute the Notarial Deed;
(e) the Shareholders shall appoint each of (i) Mr. Maarten Geuze,
as the nominee of the Chemical Shareholder, (ii) ▇▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, as the nominee of the Pharmaceutical Shareholders, (iii)
▇▇. ▇▇▇▇▇ ▇. Southern, as the nominee of the Informatics
Shareholder, (iv) Prof. dr. ir. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as the
nominee of the University Shareholders, (v) ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
as the nominee of the Financial Shareholders, and (vi) a nominee
of the Board of Managing Directors, as a supervisory director
(commissari) of the Company;
(f) the Shareholders shall instruct Stichting Derdengelden
Notariaat ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to transfer the amounts of Cash by
telephone transfer to the Companys bank account number
▇▇.▇▇.▇▇.▇▇▇ with ING Bank in Amsterdam;
(g) the Company shall provide evidence of life insurance cover
having been obtained in favor of the Company and on terms
reasonably satisfactory to the Parties, on the life and possible
permanent disability of Dr ▇▇▇ ▇▇▇▇▇▇▇ in the amount of EUR
500,000 (five hundred thousand Euros);
(h) the Parties shall do all such further acts and execute all
such further documents as shall be appropriate to fully effect
the transactions contemplated in this Agreement.
5.3At Completion, all of the following documents shall be
executed and/or delivered, or in the case of the employment
agreement agreed upon (collectively, the Documentation):
(a) this Agreement;
(b) the Company's business principles, substantially in the form
as attached hereto as Exhibit 3 (Business Principles);
(c) the technology transfer agreements (Technology Transfer
Agreements) between the Company and respectively Shell
International Chemicals B.V., SmithKline and GSE, substantially
in the form as attached hereto as respectively Exhibit 4, Exhibit
5 and Exhibit 6;
(d) the letter of intent between the Company, Shell International
Chemicals B.V. and Dr. I.E. ▇▇▇▇▇▇▇, substantially in the form as
attached hereto as Exhibit 7A;
(e) the employment agreement between the Company and Dr. I.E.
▇▇▇▇▇▇▇, substantially in the form as attached hereto as Exhibit
7B; and
(f) the secondment agreement between the Company and Generics
substantially in the form as attached hereto as Exhibit 8.
Article 6. Decision Procedure within One Group of Shareholders
Where each of the different groups of shareholders is required to
nominate or appoint a nominee or reach a decision, such
nomination or decision needs to be approved by the shareholders
representing at least 51 % (fifty one percent) of the voting
rights within each such group of shareholders, unless such group
of shareholders has adopted an alternative procedure, provided,
however, that the general rule as stated above shall prevail in
the event the alternative procedure does not properly result in a
nomination or decision.
Article 7. Stock Option Plan
7.1As soon as possible after Completion, the Shareholders will
ensure that the Company adopts a stock option plan for the
Companys management, employees and/or advisors (Stock Option
Plan), substantially in the form as attached hereto as Schedule
4, equal to an amount of 20% (twenty percent) of such number of
common shares as is equal to the sum of the numbers of all issued
and outstanding Preferred Shares and Common Shares at September
30, 2000. The Stock Option Plan shall be administered by the
Board. Upon a refinancing round and upon the recommendation of
the Board, the general meeting of shareholders of the Company
(GMS) shall take into consideration increasing the number of
stock options.
7.2The Shareholders will ensure that under the Stock Option Plan,
any shares to be issued in connection with the exercise of any
option granted under the Stock Option Plan shall be held in trust
by a Stichting Administratiekantoor (the Foundatio) which for
that purpose will be incorporated, and that the Foundation, for
each of the shares it holds, will issue a depository receipt
certificaat van aandeel) to the holder of the option so
exercised, through which depository receipt the relevant
individual will hold economic ownership of the relevant share
without being a shareholder of the Company (and without having a
right to vote).
Article 8. Transfer of Shares
8.1The Shareholders acknowledge and agree that a Shareholder may
transfer, sell, assign, exchange or otherwise dispose of all or
any portion of its shares or any interest therein (each a
("Transfer")only upon and subject to the terms and conditions set
forth in the Articles and this Article 8. Any attempted Transfer
that does not comply with the terms and conditions of this
Article 8 and the Articles shall be null and void (nietig). The
Shareholders shall cause the Company to comply with the
requirements of this Article 8 and not to register any Transfer
of shares unless the provisions of this Article 8 have been fully
complied with, provided, however, that the pledge of shares in
connection with a loan document entered into by a Shareholder
shall not be considered a Transfer. Notwithstanding, in the event
that any such pledge results in a forfeiture, such lender shall
be bound by the terms of this Article 8.
8.2The Shareholders agree that in the event a Shareholder wishes
to Transfer some or all of its shares to a transferee who is an
affiliate (as defined in article 2:24(b) Netherlands Civil Code)
of the transferor, the other Shareholders shall waive their
pre-emptive rights set forth in the Articles in respect of such
Transfer, provided, however, that:
(a) the transferor shall procure that the shares so transferred
will be re-transferred to the transferor immediately upon such
transferee (i) ceasing to be an affiliate of the transferor
and/or (ii) being declared bankrupt or suspending all payments;
and(b) the provisions of Article 8.3 are complied with.
The term affiliate with respect to Shell means: N.V. Koninklijke
Nederlandsche Petroleum Maatschappij, a Netherlands company, the
Shell Transport and Trading Company plc, an English company and
any company (Parent Company as defined hereinafter), which is at
the time in question directly or indirectly affiliated with these
two companies or either of them, whereby for the purpose of this
definition:(a) a particular company is directly affiliated with a
company or companies if the latter holds/hold shares carrying 50%
(fifty percent) or more of the votes exercisable at a general
meeting (or its equivalent) of the particular company; and
(b) a particular company is indirectly affiliated with a company
or companies (the Parent Company or Companie") if a series of
companies can be specified, beginning with the Parent Company or
Companies and ending with a particular company, so related that
each company of the series except the Parent Company or Companies
is directly affiliated with one or more companies earlier in the
series.8.3To effect a Transfer, a transferee of the shares shall
execute and deliver to the non-transferring Shareholders and the
Company a deed of adherence, substantially in the form as
attached hereto as Schedule 5 (Deed of Adherenc) by which the
transferee agrees to become a party to and be bound by the terms
and conditions of this Agreement, as if such transferee is
substituted for the transferring Shareholder as to the shares
transferred, and the transferor Shareholder shall discharge all
its obligations with respect to those shares arising prior to the
date of the Transfer. Upon the execution and delivery of such
instrument and such discharge, the transferee shall, subject to
any applicable legal requirements, become a Shareholder in the
place of the transferor as to the shares transferred and shall
have all the rights, powers, duties and obligations as to the
shares transferred by the transferor under this Agreement. The
transferor shall then cease to be a Shareholder as to those
shares and shall have no further rights, powers, duties and
obligations under this Agreement in regard to them; provided,
however, that the transferor shall remain liable under all of its
confidentiality undertakings to the Company and the other Parties
under this Agreement as if the transferor had continued to own
the shares being transferred with respect to all matters arising
prior to the date of the Transfer.
9.1In the event of any liquidation, dissolution or winding-up of
the Company, either voluntary or involuntary, the holders of the
Preferred Shares, if any, shall rank on a parity with each other
and be entitled to receive, prior and in preference to any
distribution of any of the assets of the Company, whether such
assets are capital surplus or earnings, to the holders of Common
Shares, the amount paid for the subscription of the Preferred
Shares plus any declared but unpaid dividends plus 8% (eight
percent) interest compounded annually on such shares up to the
date fixed for distribution (as adjusted for any stock dividends,
combinations, recapitalizations or splits and the like)
(collectively, the Preferred Proceeds).
9.2In the event the assets and funds that pursuant to this
article should be distributed to the holders of the Preferred
Shares shall be insufficient to fully pay the Preferred Proceeds,
then such assets and funds shall be distributed ratably among the
holders of the Preferred Shares in proportion to the full
preferential amount each such holder is otherwise entitled to
receive.
9.3Any surpluses in assets and funds available for distribution
to the Company's shareholders after distribution of the Preferred
Proceeds to the holders of the Preferred Shares, if any, shall be
distributed among the holders of Common Shares pro rata based on
the number of Common Shares held by each holder.
9.4The Parties hereby agree that in case of a merger,
consolidation, reorganization or sale of all or substantially all
of the Company's assets, all proceeds of such merger,
consolidation, reorganization or sale of all or substantially all
of the Company's assets will be distributed as if such proceeds
were generated from a liquidation of the Company in which case
the provisions of this Article 9 apply mutatis mutandis to such
proceeds.
Article 10. Conversion Right10.1Preferred Shares may be
converted, at any time, into Common Shares at a conversion rate
of 1:1.
10.2Before any holder of Preferred Shares shall be entitled to
convert the same into Common Shares, the holder shall give
written notice to the Company that the holder elects to convert
the same. The Company shall, as soon as practicable thereafter,
issue to such holder of Preferred Shares a notice in writing for
the number of Common Shares to which such holder shall be
entitled as aforesaid. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date
of such surrender of the Preferred Shares to be converted.
Article 11. Weighted Average Anti-Dilution Adjustment11.1In the
event of an issue of new shares each of the Shareholders shall
have such pre-emptive rights as contained in the Articles.
11.2The Shareholders agree not to make use of their right to
limit or suspend the pre-emptive rights of any Shareholder in the
event of an issue of new shares.
11.3In the event of any issue of additional Shares (Common or
Preferred) in the capital of the Company after Completion for a
price per Share less than EUR 10.2167 (ten Euros and twenty-one
point sixty-seven eurocents), then the Company shall be obliged
to issue to the holder of the Preferred Shares such number of
Preferred Shares for a contribution equal to the nominal value of
the Preferred Shares per Share as is necessary to achieve a
situation in which the price per Share paid for the aggregate
number of Shares (including the newly issued Shares) by the
holder of the Preferred Shares is equal to the price per Share
additionally issued multiplied by a fraction, the numerator of
which shall be the number of Shares outstanding after the
issuance of additional Shares (excluding the Shares issued
pursuant to this Article 11.3) plus the number of Shares the
Preferred Shares would purchase if the investment of such holder
of the Preferred Shares would have been made for a price per
Share equal to the price per Share of the Shares additionally
issued to the new shareholder and the denominator shall be the
number of Shares outstanding before the issuance of additional
Shares and the number of Shares additionally issued to the new
shareholder (and excluding the Shares issued pursuant to this
Article 11.3). Attached hereto as Schedule 8 is a numerical
example of the weighted average anti-dilution adjustment. Each of
the Parties hereby irrevocably agrees to such issue of Preferred
Shares and to co-operate in all actions and resolutions required
for the issuance as contemplated by this Article 11.3.
11.4 The beneficiaries of this Article 11 are those parties
having joined this Agreement prior to May 1, 2000. Article 12.
Registration Right.
▇▇.▇▇ the request of 51% (fifty-one percent) of the Shares, such
request to be made with the support of the Board and an
internationally recognized underwriter, and for an anticipated
offering price to the public exceeding EUR 100,000,000 (one
hundred million Euros), the Company will apply for all or part of
the Shares (the Registration Shares) to be listed on an
internationally recognized stock exchange or internationally
recognized automated stock quotation system in the European Union
or the United States of America (the IP). Prior to the IPO,
all Preferred Shares shall be converted into Common Shares. At
the IPO, this Agreement shall no longer remain in effect, but the
Stock Option Plan (as attached hereto as Schedule 4) remains
valid.
12.2If, at any time, the Company proposes to register any shares
in the Company for public sale for its own account or for the
account of any shareholder, the Company shall give the
Shareholders notice of such proposed registration statement. Upon
the written request of the Shareholders delivered to the Company
within 30 business days after the receipt of the notice from the
Company, which request shall state the number of shares (the
(Incidental Shares) that the Shareholders wish to sell or
distribute publicly under the registration statement proposed to
be filed by the Company, the Company shall use its best efforts
to register such Incidental Shares, and to cause such
registration to become and remain effective for as long as the
Company keeps such registration effective as to such other
shares. The Shareholders shall be entitled to deliver a request
to register the Incidental Shares to the Company with respect to
every proposed registration of shares by the Company. The
Company's managing underwriter shall have the right to limit, in
whole or in part, the total number of the Incidental Shares to be
registered, so long as such limitation is applied on a pro rata
basis with respect to all other shares proposed or requested to
be registered by other Shareholders.
12.3The Company shall pay all of the expenses in connection with
the registration of the Registration Shares or Incidental Shares,
including the costs of reorganization of the Company if required,
preparing, printing and filing a registration statement in
compliance with any applicable securities laws, qualifying the
offering under such securities laws pursuant to which the
offering is required to be qualified, accounting and auditing
expenses and reasonable fees and expenses of counsel to each
Investor provided, however, that the Company shall not be
required to pay underwriting discounts and commissions applicable
to the Registration Shares and the Incidental Shares.
12.4The Company shall provide each Shareholder with customary
indemnification in connection with any sale by such Shareholder
of shares in a public offering pursuant to this Article 12.
Article 13. Drag-along Right
13.1At the request of the holders of at least 51 % (fifty one
percent) of the voting rights in the Company and until an IPO has
been effected, each of the Shareholders shall be obliged to sell
and transfer all of their shareholding(s) in the Company for such
price per share, and on such other terms as are customary, as may
be agreed between the Shareholders and any reasonable bona fide
third party, who is prepared to buy all of the shares available
for sale.
13.2In the event of such a request, the Shareholders shall
irrevocably appoint a person (the Negotiator) who will be
authorized to negotiate the conditions of sale with the third
party. Subject to the conditions of the preceding subparagraph
13.1, the Negotiator will be deemed authorized by all
Shareholders to negotiate all conditions with the prospective
buyer and conclude the contract with such third party on behalf
of all Shareholders.
Article 14. Tag-along Right
In the event a Shareholder wishes to sell any of its shares in
the Company to a bona fide third party, such Shareholder shall be
obliged to give the other Shareholders at least 30 days prior
written notice of his intention to sell. In such an event the
other Shareholder(s) shall have the right (but not the
obligation) to demand from the selling Shareholder(s) within 15
days of receipt of such notice that the relevant selling
Shareholder also sells the shares held by the other
Shareholder(s) at the same price per share and on such other
terms as are agreed between that selling Shareholder and the
third party. This clause becomes null and void at an IPO or after
5 (five) years after Completion.
Article 15. Redemption Right
15.1 In the event that the Company has not conducted an IPO (or
been purchased) 5 (five) years after Completion, any holder of
Preferred Shares participating in this round of financing shall,
at its option, have its shares redeemed by the Company, for the
greater of (i) the original purchase price (subject to price
adjustment) plus 8% (eight percent) interest compounded annually
plus any accrued and unpaid dividends whether or not declared, or
(ii) the fair market value of the shares on an as if converted
into Common Shares basis plus any accrued and unpaid dividends.
Such amounts may be paid in 4 (four) equal quarterly payments, to
the extent permitted under Netherlands law.
15.2 For a period of 3 (three) years commencing on the fifth
anniversary of the Completion Date, no redemption right may be
exercised to the extent such exercise of redemption right would
result in the Company having less than 35% (thirty-five percent)
of its balance sheet value as at the close of the previous tax
year.
Article 16. Limitation on Shareholding
Notwithstanding anything provided for in this Agreement and/or
the Articles, the Shareholders agree that neither any of the
Shareholders nor any of the group of Shareholders (the Chemical
Shareholder, the Pharmaceutical Shareholders, the Informatics
Shareholder, the University Shareholders or the Financial
Shareholders) shall be allowed to have a direct or indirect
interest in the Company of more than 40% (forty percent) of the
voting rights and that the Industry Shareholders shall not be
allowed to have a direct or indirect interest in the Company of
more than 49% (forty-nine percent).
Article 17. Dividends
The Parties agree that the Company shall not make any
distributions to the Shareholders from profits or reserves until
the net profits after tax exceed the total capital expenditures
and research and development needs at the minimum level, as
contained in the high growth financial plan in the Business Plan,
for a period of 5 (five) years after the date of this Agreement
and if and when such distributions are approved by the
Supervisory Board.
Article 18. Reportin
The Board of Managing Directors shall:
(a) keep books of account and therein make true and complete
entries of all its dealings and transactions of and in relation
to the Business (such books of account and all other records and
documents relating to the business affairs of the Company shall
be open to inspection by each of the Shareholders during normal
business hours and on 2 (two) working days prior notice;
(b) provide each member of the Board within 15 (fifteen) days
from the end of each calendar month with management accounts for
such month in a form acceptable to the Shareholders (such
accounts to include a balance sheet, a profit and loss account of
the prior month and an estimate for the coming month);
(c) provide each Shareholder within 30 (thirty) days from the end
of each quarter with a management report;
(d) provide each Shareholder as soon as the same are available
(and in any event within 3 (three) months after the end of each
financing year) with the audited annual accounts of the Company
for that financial year, each such audited accounts to be
accompanied by an unqualified declaration (verklarin) of the
external auditor as meant in article 2:393(5) of the Netherlands
Civil Code, or in the case of any future subsidiaries established
outside the Netherlands, a comparable unqualified declaration of
an external auditor in the respective jurisdictions where any
such subsidiary is established;
(e) each year prepare an annual business plan and budget no later
than 75 (seventy five) days prior to the beginning of each
financial year;
(f) keep each Shareholder fully informed as to all its financial
and business affairs and in particular shall provide each
Shareholder with full details of any actual or prospective
material change in such affairs as soon as such details are
available; and
(g) provide each Shareholder within 2 (two) weeks of receipt with
copies of all reports and documents drawn up or designated by the
auditor, including in any case the management letter.
Article 19. Representations and Warranties
Each of the Parties hereto represents and warrants to the other
Parties that:
(a) each Party is a company, and in the case of each of the
University Shareholders it is a university under the laws of the
Netherlands, duly organized and validly existing under the laws
of its incorporation, and has all requisite corporate power and
authority to own its property and to conduct its business in the
manner presently conducted;
(b) each Party has full power and authority (corporate or
otherwise) to enter into, execute, deliver and carry out the
terms of this Agreement and to incur the obligations provided for
herein, all of which have been duly authorized by all proper and
necessary corporate action and are not in violation of its
articles of association or governing documents;
(c) except as specifically set forth in this Agreement, no
consent, authorization or approval of, filing with, notice to, or
exemption by, any person or any governmental instrumentality is
required to authorize or is required in connection with the
execution, delivery and performance of this Agreement, or is
required as a condition to the validity or enforceability of this
Agreement;
(d) this Agreement is its legal and binding obligation,
enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors rights generally or by general
principles of equity;
(e) the execution, delivery and carrying out by each Party of the
terms of this Agreement will not constitute a default under,
conflict with, or require any consent under (other than consents
which have been obtained), any mortgage, indenture, contract,
agreement, judgment, decree or order to which it is a party or by
which it or its assets is bound, which defaults, conflicts and
consents, if not obtained, would have a material adverse effect
on the rights or obligations of any of the Parties under this
Agreement, or the ability of it to perform its obligations
hereunder; and
(f) there is no litigation pending or, to the best of its
knowledge, threatened to which any Party is a party and which
affects the rights and obligations of the Parties under this
Agreement.
Article 20. Confidentiality
Each of the Parties agrees to keep secret and confidential and
not to use, disclose or divulge to any third party or to enable
or cause any person to become aware of (except for the purpose of
the Companys business) any confidential information relating to
the Company including but not limited to intellectual property
(whether owned or licensed by the Company), lists of customers,
reports, notes, memoranda and all other documentary records
pertaining to the Company, or its business affairs, finances,
suppliers, customers or contractual or other arrangements but
excluding any information which is in the public domain
(otherwise than through the wrongful disclosure of any party, and
any of their successors and predecessors) or which they are
required to disclose by law or by the rules of any regulatory
body to which the relevant party is subject.
Article 21. Companys Auditors The Shareholders agree to exercise
their voting right in such a manner as is necessary to ensure
that one of the (presently five) leading internationally
recognized audit firms shall be and continue to be appointed as
auditors of the Company. Article 22. Shareholders and Customer
Treatment
Attached hereto as Schedule 6 are the in principle terms of
business, pursuant to which the individual Shareholders may place
R&D orders with the Company. Furthermore, attached hereto as
Schedule 7 are the in principle terms of sale and purchase, on
which individual Shareholders may purchase equipment and software
from the Company.
Article 23. Notices
Any notices given in connection with this Agreement must be in
writing and may be given by fax and registered mail to the
following addresses or, in respect of any of such addresses, to
such other address as the recipient may notify to the other
Parties for such purpose:
the Company: Avantium B.V.
(to be renamed Avantium International B.V.)
Attn: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇
Siriusdreef 17-27,
2132 WT Hoofddorp
The Netherlands
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Shell: B.V. Licht en ▇▇▇▇▇▇ Maatschappij
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: +31 20
SmithKline: SmithKline ▇▇▇▇▇▇▇ Pharmaceuticals
Attn. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
New Frontiers Science Park (North)
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
SRO: S.R. One, Ltd.
Attn. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.D
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Tel: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
GSE: GSE Systems, Inc.
Attn. ▇▇. ▇▇▇▇▇ ▇. Southern
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Tel: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Delft: Delft University of Technology
Attn. ▇. ▇▇▇▇ L.L.M.
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Twente: University of Twente
Attn. ▇▇▇▇. ▇.▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Eindhoven: Technische Universiteit Eindhoven Holding B.V.
Attn: Drs. B.P. Hiddinga
Den Dolech 2
HG 0.02
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
enerics:
The Generics Group Limited
Attn. ▇▇▇▇▇ Coggill
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Alpinvest: Alpinvest Holding NV
Attn. ▇.▇. ▇▇ ▇▇▇▇▇
Gooimeer 3
Postbus 5973
1410 AB Naarden-Vesting
The Netherlands
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Article 24. Expenses
24.1 The Parties agree that each shall bear its own costs and
expenses with respect to the transactions contemplated by this
Agreement, provided, however, that if Completion has been
effected, the Company shall pay within 30 (thirty) days after the
Completion Date the reasonable out-of-pocket costs of: (i) patent
research carried out by Generics; (ii) market research carried
out by PricewaterhouseCoopers; (iii) in kind contribution
research carried out by PricewaterhouseCoopers and Generics; (iv)
incorporation of the Company carried out by the Incorporator; and
(v) start-up expenditures of the Company financed by the
Incorporator as of January 1, 2000, as incurred by the
Incorporator up to and including the Completion Date. The Company
shall also bear the fees and expenses of its advisors, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ / ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and KPMG Corporate Finance N.V.
24.2 The Company shall reimburse the directors of the Supervisory
Board for reasonable travel expenses (not including first-class
travel).
Article 25. Governing Law and Jurisdiction 25.1This Agreement
shall be governed by and construed in accordance with the laws of
the Netherlands.
▇▇.▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, shall
have exclusive jurisdiction over any dispute arising out of or in
connection with this Agreement.
Article 26. Counterparts
This Agreement may be executed in two or more counterparts
(whether original or facsimile counterparts), each of which upon
due execution shall be deemed an original and part of the same
document.
Article 27. General Provisions
27.1This Agreement and its annexes set out the entire agreement
and understanding between the Parties with respect to the subject
matter of this Agreement and supersedes all prior discussions,
agreements, including, but not limited to, the agreements on the
term sheet and understandings of every and any nature between the
Parties.
27.2Amendments to this Agreement must be made in writing in order
to be effective and be signed by all Parties to this Agreement.
27.3In the event of any discrepancies or contradictions between
this Agreement and the Articles, this Agreement shall prevail to
the extent permitted under the laws of the Netherlands.
27.4Should any provision of this Agreement be or become partly or
entirely invalid, this shall not affect the validity of any of
the remaining provisions.
IN WITNESS WHEREOF, this Agreement has been signed and executed
by the Parties hereto in Amsterdam, The Netherlands on February
24, 2000.
___________________________
Avantium B.V.
(to be renamed Avantium International B.V.)
By: [ ]
___________________________ ___________________________
B.V. Licht en ▇▇▇▇▇▇ Maatschappij B.V. Licht en ▇▇▇▇▇▇ Maatschappij
By: [ ] By: [ ]
___________________________
SmithKline ▇▇▇▇▇▇▇ Plc.
By: [ ]
___________________________
S.R. One, Limited
By: ▇▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
___________________________
GSE Systems, Inc.
By: ▇▇. ▇▇▇▇▇ ▇. Southern
___________________________
Delft University of Technology
By: [ ]
__________________________
University of Twente
By: [ ]
___________________________
Eindhoven University of Technology
By: [ ]
___________________________
The Generics Group Limited
By: [ ]
___________________________
Alpinvest Holding NV
By: [ ]
Exhibit 10.7
GSE SYSTEMS, INC.
AVANTIUM B. V.
SOFTWARE LICENSE
AND INTELLECTUAL PROPERTY AGREEMENT
This Software License and Intellectual Property Agreement (Agreement) together
with all Exhibits, sets forth all terms and conditions by and between, Avantium
B.V. (Avantium) a Dutch company, and GSE Systems, Inc., (GSE) a corporation
organized under the laws of Delaware in the U.S., (parties), is for the
licensing of GSE's proprietary software, new developments and versions thereof
(including the object and source codes thereof), which may be developed by GSE
during the term of this Agreement, intellectual property and the underlying
intellectual property rights (GSE Products), listed and described in Exhibit A
hereto, to Avantium for its internal use and for research and development (R&D)
on the GSE Products by Avantium and the creation of new, derivative products
(New Software Products) and the use and exploitation thereof by Avantium .
WHEREAS, GSE desires to own an equity interest in Avantium; and,
WHEREAS, Avantium desires to be granted a license with regard to the GSE
Products for its own use and to use for R&D so that the GSE Products become the
basis for New Software Products; and
WHEREAS, GSE will license the GSE Products in Exhibit A to Avantium in exchange
for which Avantium shall convey an equity interest in Avantium to GSE; and,
WHEREAS, any and all New Software Products derived from or arising out of
Avantiu's R&D on the GSE Products shall be the joint intellectual property of
Avantium and GSE, and GSE will have rights to market, distribute and sell the
New Software Products for which GSE shall pay Avantium royalties at a rate(s) to
be determined; and,
WHEREAS, Avantium desires to have GSE provide certain resources for use in the
development and creation of New Software Products for the benefit of Avantium
and GSE.
NOW THEREFORE, in consideration of the mutual covenants and promises set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows and enter into this Agreement on the
day and year entered below.
1. License and Consideration
1.1 GSE License to Avantium. GSE hereby grants to Avantium and
its subsidiaries and Avantium hereby accepts from GSE the
following: (i) a non-transferable, exclusive, irrevocable and
perpetual license in accordance with, and subject to, all of the
provisions of this Agreement throughout the term of this
Agreement to use the source code of the GSE Products; (ii) a
non-transferable, non-exclusive, irrevocable and perpetual
license in accordance with, and subject to, all of the provisions
of this Agreement throughout the term of this Agreement to use
the object code of the GSE Products; for the research and
development (R&D) of a HSE&S informatics system and the
development of New Software Products;
Promptly after the Effective date GSE shall transfer and disclose
to Avantium: the object code(s), the source codes and all other
relevant information, data and documentation of the GSE Products.
Neither Avantium, nor any shareholder, shall have the right to
sell, license or distribute either the GSE Products or the New
Software Products, unless this Agreement provides otherwise.
In the event any Avantium shareholders desire to license any of
the GSE Products or New Software Products, the terms of such
licensing shall be separately agreed between such shareholder and
GSE or Avantium.
2. Remedies in case of Breach, bankruptcy or Liquidation 2.1 This
agreement, the license and rights granted hereunder, shall be
irrevocable and perpetual following the Effective Date hereof,
subject to the provisions of this Agreement.
2.2 In the event of a material breach of this Agreement by a
party, which breach has not been cured to the satisfaction of the
non-breaching party within a period of sixty (60) days after the
breaching party has been requested by written notice to do so,
the non breaching party can only invoke the following remedies (A
or B):
A. the non-breaching party can seek injunctive relief to force
the breaching party to cease and desist its breach immediately;
or
B. (i) Avantium shall only have the right to use the object codes
of the GSE Products in order to exploit the developed New
Software Products at its own discretion against the payment of
one time (lump sum) fee of US$ 965,000.= to GSE;
(ii) Avantium shall return immediately the source codes of the
GSE Products to GSE and delete or destroy all copies thereof;
(iii) GSE and Avantium will grant each other the irrevocable,
perpetual and royalty free right to exploit the New Software
Products (together with the related object- and sources codes) at
their own discretion; (iv) GSE shall assign and transfer
immediately all its preferred and common shares in Avantium to
Avantium; (v) Avantium shall pay to GSE the difference between
the value of these shares at the moment these shares were
conveyed to GSE and the fair market value of the shares at the
moment of the aforementioned assignment and transfer, which fair
market value will be determined in accordance with the
Subscription and Shareholders Agreement, provided and when
sufficient capital is available; (vi) all payments due and owing
either party shall be made immediately; (vii) for a period of one
year, but no longer than one year, after termination of this
Agreement, unless GSE waives such time, Avantium shall offer to
GSE any improved new, updated, upgraded, revised, reformatted,
modified, similar or renamed version of the New Software
Products, pursuant to Section 10.3.; which remedies (i through
vii) can only be invoked together, and not separately or
individually.
2.3 In the event: - an order is made or resolution is passed for
the winding-up of GSE, or a provisional liquidator is appointed
in respect of GSE, or an administration order is made in respect
of GSE, a receiver (which expression shall include an
administrative receiver) is appointed in respect of GSE or all or
any of its assets, and is not discharged within a period of 30
days or any voluntary arrangement is proposed in respect of GSE;
or, - GSE ceases to exist or to carry on (i) the business for
which it was created or incorporated or (ii) the business which
is essential for the purpose of this Agreement; Avantium can only
invoke the following remedies, which remedies only can be invoked
together, and not separately or individually: (i) all the
provisions of the Agreement shall terminate immediately, with
exception of the granted non-transferable, exclusive, perpetual,
irrevocable and perpetual license to Avantium as set forth in
Section 1.1; (ii) Avantium shall be granted an exclusive,
perpetual, irrevocable, royalty free license and right to use and
to exploit the developed New Software Products at its own
discretion; (iii) all payments due and owing either party shall
be made immediately.
2.4 In the event: - an order is made or resolution is passed for
the winding-up of Avantium, or a provisional liquidator is
appointed in respect of Avantium, or an administration order is
made in respect of Avantium, a receiver (which expression shall
include an administrative receiver) is appointed in respect of
Avantium, all or any of its assets, and is not discharged within
a period of 30 days or any voluntary arrangement is proposed in
respect of Avantium; or, - Avantium ceases to exist or to carry
on (i) the business for which it was created or incorporated or
(ii) the business which is essential for the purpose of this
Agreement; - GSE can only invoke the following remedies, which
remedies only can be invoked together, and not separately or
individually: (i) all the provisions of the Agreement shall
terminate immediately; (ii) GSE shall be granted an exclusive,
perpetual, irrevocable, royalty free license and right to use and
to exploit the developed New Software Products at its own
discretion; (iii) all payments due and owing either party shall
be made immediately.
2.5 The above remedies are the sole remedies of parties and each
party hereby waives all its rights to terminate this Agreement,
including its right to terminate under statutory law, article 6:
265 Burgerlijk Wetboek (Dutch Civil Code) and its right to invoke
the obligation to undo and its right to compensation for damage,
other than explicitly set forth in this Agreement.
3. Ownership of New Software Products and Intellectual Property.
3.1 New Software Products. The following are definitions of the
various forms of New Software Products:
3.1.1 HSE&S Modules (HSE Module), The newly developed modules
specifically developed for the purpose of Avantium that are a
derivative of or extension of GSE Products including the object
and source code and all relevant information, data and
documentation, and compensated for as described in the Section
10.1.
3.1.2 HSE&S New Software Products (HSE Product), The newly
developed products specifically developed by Avantium and GSE for
the purpose of Avantium, including the object and source code and
all relevant information, data and documentation, and compensated
for as described in the Section 10.1.
3.2 Underlying Intellectual Property Rights. Without prejudice to
Sections 3.5 and 3.6, all of the underlying intellectual property
rights (such as copyrights, patent rights and trademark rights)
contained in or with respect to the New Software Products shall
be co-owned by and be proprietary to Avantium and GSE together,
and Avantium and GSE shall be acknowledged as the owners of such
Intellectual Property rights. GSE shall have the right to seek
patent, copyright, trademark protection or related notices or
applications anywhere in the world in respect to its co-ownership
of the New Software Products and underlying intellectual property
rights in the joint names of Avantium and GSE. Both parties shall
cooperate fully and completely and do whatever acts are necessary
to aid Avantium and GSE in obtaining full and complete protection
for said proprietary, intellectual property rights in any country
or jurisdiction in the world that Avantium and GSE mutually
select.
3.3 Avantium and GSE agree that both parties will provide the
necessary assistance in obtaining the necessary intellectual
property rights referred to in Section 3.2. GSE shall be solely
responsible for the filing and the costs of filing, application,
registration and maintenance of the intellectual property rights.
3.4 Product Displays and Notices. Neither party shall be
responsible or liable to the other party for damages, payment or
otherwise, if the New Software Products become embedded in or
co-mingled with an operating system resulting in a loss of the
display identifying information about the other party and its
contribution to the New Software Products. Neither party will
remove any copyright, patent right, trademark right and/or
confidentiality notices from, or assert any claim of ownership
to, the New Software Products.
3.5 The ownership of any information, data and software, further
developments and versions thereof (including the underlying
intellectual property rights) which have been solely developed by
Avantium and which do not contain any confidential information
received from GSE under this Agreement remain and shall be
exclusively vested in Avantium.
3.6 The ownership of the GSE Products, any information, data and
software, further developments and versions thereof (including
the underlying intellectual property rights) which have been
solely developed by GSE and which do not contain any confidential
information received from Avantium under this Agreement remain
and shall be exclusively vested in GSE.
4. Relationship of Parties.
4.1 The parties are signatories to a Subscription and
Shareholders' Agreement dated February 24, 2000, which specifies
the respective rights and obligations in regard thereto. In
respect of this Agreement, GSE and Avantium will each act and
take affirmative steps to market and promote each other's
products in accordance with their standard business practices.
Neither party shall misrepresent or make any negative statements
about the other, its products or services and each party shall
indemnify the other with respect to such misrepresentation or
negative statement. Neither party is responsible to any end user
for the quality or services of the other.
4.2 Except as expressly set forth herein, no right, title or
interest in or license to, any patents, trade secrets,
copyrights, other intellectual property rights or rights to the
GSE Products or New Software Products is granted or conveyed to
the other party pursuant to this Agreement.
5. Names and Trademarks.
Nothing in this Agreement grants to either party the right to use
or display the trademarks, trade names, logos or service marks of
the other party, except as provided herein. Avantium agrees to
submit to GSE for written approval, and GSE agrees to submit to
Avantium for written approval, any marketing materials which may
use or display any trademark, trade name, logo or service ▇▇▇▇ of
Avantium and GSE respectively. Each party at its sole discretion
may accept or reject the other party's use of such marketing
materials. In accordance with this Agreement, each party may make
general reference to the fact the parties hereto have entered
into a cooperative development and business alliance of which GSE
is a member as a shareholder in Avantium.
6. Confidentiality.
6.1 Each party acknowledges that it may receive information
regarding the GSE Products, Avantium products and New Software
Products from the other party that the providing party regards as
confidential and proprietary. To the extent that such
confidential information had been disclosed by the providing
party to the receiving party in writing marked Confidential, or
orally or visually disclosed and summarized in writing and
delivered by the providing party to the receiving party within
thirty (30) days of such disclosure, such information shall be
Confidential for the purpose of this Article.
6.2 Other than as expressly contemplated herein, neither party
shall disclose, provide or otherwise make available to any third
party (including a prospective client) any confidential
information of the other party except to the extent necessary to
exploit its rights granted under this Agreement and provided such
third party has agreed to confidentiality obligations no less
stringent than those assumed by the receiving party hereunder.
Each party agrees that it will protect the confidential
information of the other through the exercise of at least
reasonable care, and in no event less protection and care than is
customarily used in safeguarding its own confidential or
proprietary information of a similar nature.
6.3 In no event shall either party use any confidential
information of the other party except to the extent necessary to
effect the provisions and purposes, as expressly contemplated
under the terms of this Agreement.
6.4 The foregoing shall not prohibit or limit a party's use of
information, including but not limited to ideas, concepts, know
how, techniques and methodologies, which (a) are or become part
of the public domain through no breach of the confidentiality
provisions of this Agreement; (b) are rightfully obtained by the
receiving party from a third party without restriction; (c) are
already and rightfully known to or independently developed by the
receiving party.
7. Limited Warranty.
7.1 GSE represents and warrants that it is the rightful owner of
the GSE Products and that it is allowed to grant the rights
herein to Avantium.
7.2 In accordance with its standard license provisions, GSE will
provide a twelve (12) month warranty on the GSE Products. With
regard to GSE Products and New Software Products, GSE makes no
further warranty, either express or implied, including but not
limited to implied warranties of merchantability or fitness for a
particular purpose, and all other warranties are hereby
disclaimed. Notwithstanding anything contained in this Agreement,
GSE makes no representation, warranty, or guaranty that
Avantium's use of the GSE Products or New Software Products will
be uninterrupted or error free.
7.3 Avantium provides no warranty, either express or implied,
including but not limited to implied warranties of
merchantability or fitness for a particular purpose towards GSE
with regard to any New Software Product, and all other warranties
are hereby disclaimed. Notwithstanding anything contained in this
Agreement, Avantium makes no representation, warranty, or
guaranty that GSEs use of the New Software Products will be
uninterrupted or error free.
8. Limitation of Liability
8.1 Except as otherwise provided in Section 9, GSE's liability,
if any, to Avantium for claimed loss or damage, whether based on
contract, tort, strict liability or any other legal theory, shall
be strictly limited to the payments made by Avantium under this
Agreement.
8.2 Avantium's liability, if any, to GSE for claimed loss or
damage, whether based on contract, tort, strict liability or any
other legal theory, shall be strictly limited to the payments
made by GSE under this Agreement.
8.3 The warranties and commitments expressly set forth in this
agreement are in lieu of all other obligations or liabilities on
the part of each party for damages or other relief, including,
without limitation, special, indirect, incidental, or
consequential damages that in any way arise from or are in
connection with the use and/or performance of the GSE Products or
New Software Products.
9. Intellectual Property Indemnification
9.1 GSE will indemnify Avantium against any loss or liability
awarded by final judgment of a court of competent jurisdiction
based on a suit that the GSE Products infringe or misappropriate
any patent, copyright, trademark, trade secret, or other
proprietary right. Avantium shall promptly notify GSE in writing
of any such suit or threatened suit. Avantium shall provide GSE
all information and reasonable assistance for the defense of the
same. GSE shall have no liability for any such claim of
infringement or misappropriation to the extent that it is based
on the use of services and/ or software not specifically supplied
by GSE, which have been used in combination with a GSE Product or
New Software Products. GSE shall have absolute discretion with
respect to the defense and settlement of any such suit, legal
proceeding, or claim.
9.2 In the event a third party claims that a New Software Product
infringes or misappropriates any patent, copyright, trademark,
trade secret, or other proprietary right, each party will
promptly notify the other party in writing of any such claim.
Each party will provide the other party all information and
reasonable assistance for the defense of the same. Parties will
decide in mutual agreement, how such claim will be dealt with.
Each party will bear 50% of all the (legal) costs and (attorney)
fees as well as the awarded claims. Avantium shall have no
liability for any such costs, fees and claims of infringement to
the extent that it is based on the use of services and/ or
software added, used or supplied by GSE, which have been used in
combination with a New Software Product.
9.3 If a GSE Product becomes, or if in GSE's sole judgment appear
might become subject to a third party infringement claim, GSE in
its sole discretion may: i) procure at no cost to Avantium from
the third party the right to allow Avantium to continue to use
the GSE Product ; ii) modify or replace at GSE's own costs that
portion of the GSE Product which is alleged to be infringing. In
the event the foregoing options are not reasonably practical,
GSE, in its sole judgment, may terminate the license for such GSE
Product and return to Avantium the license valuation for such GSE
Products on the Effective Date of this Agreement, pro rated over
a 5 (five) year period from such date.
9.4 If a New Software Product becomes, or if in both parties
judgment appear might become subject to a third party
infringement claim, both parties shall: i) procure from the third
party the right to allow Avantium and GSE to continue the use,
distribution and sale of that New Software Product; ii) modify or
replace that portion of that New Software Product which is
alleged to be infringing; or iii) in the event that the foregoing
options are not reasonably practical, cease and desist the use,
distribution and sale of that New Software Product.
9.5 The foregoing states the entire liability of each party with
respect to the infringement of any copyrights, patents,
trademarks, trade secrets, or other proprietary rights pertaining
to the GSE Products and any New Software Products.
10. Development costs and Exclusive Distributor of New Software
Products.
10.1 All costs, expenditures (including costs of third parties
involved) with regard to the development of a New Software
Product by Avantium will be borne by both parties equally. Each
party shall appoint a person(s) responsible for determining the
project development, including release date, of any proposed New
Software Product.
10.2 A New Software Product will be deemed to be developed once a
full product acceptance has been made by both GSE and Avantium.
During the first two years after the development of a New
Software Product both parties will decide in mutual agreement
whether the New Software Product will be brought on the market.
It is expressly understood by both parties that each party has a
veto right with regard to the decision to bring a New Software
Product on the market during those first two years. After the
expiration of those two years GSE may decide at its own
discretion whether such New Software Product will be brought on
the market, provided however that GSE accepts the exclusive
distribution license agreement offered by Avantium, as set forth
in Section 10.3. If GSE refuses such exclusive distribution
agreement, Avantium can decide at its own discretion to bring
such New Software Product on the market whether or not by
appointing a third party or parties as its distributor(s), with
GSE being entitled to the same royalty as defined in Section
10.3.
10.3 Avantium hereby grants to GSE the first right of refusal to
be appointed as the sole and exclusive distributor of each such
New Software Product and all upgraded, revised, reformatted,
modified, similar or renamed version and improvement of each such
New Software Product for which distribution license GSE shall pay
to Avantium a royalty of ten per cent (10%) of the revenues
realized by GSE as a result of the distribution of the New
Software Product, which royalty shall increase if the revenues
exceed a certain amount, to be decided by both parties with
regard to each distribution license. Furthermore in such
distribution license agreement standard provisions mutually
agreeable to GSE and Avantium will be inserted.
10.4 Avantium Shareholders will be entitled to acquire licenses
of the HSE Module and HSE Products as developed under this
Agreement at a preferred status for a term; the duration and cost
of which shall be determined at the time by mutual agreement of
the Avantium Board and GSE, but not longer than one year after
completion of each New Software Product.
11. Marketing and Sales.
11.1 Avantium shall advise GSE of potential users of the New
Software Product(s) so that GSE may consider its marketing and
sales activities accordingly.
11.2 Avantium shall furnish information kits for marketing
purposes which shall include GSE overviews, organization and
contact information, New Software Product(s) description and
positioning information and suggested lead qualification
questions. All of the information shall be subject to GSE's
approval and Avantium shall not distribute any information kits
without GSE's prior written approval. All costs, expenditure
(including costs of third parties involved) with regard to the
information kits will be borne by both parties equally.
11.3 The parties agree to inform appropriate personnel in each
company about this Agreement and provide mutually agreed upon
training to personnel needing same to ensure that such personnel
are knowledgeable about the GSE Products and New Software
Products and informed of all improvements, changes, upgrades and
changes to the GSE Products and New Software Products. The
parties shall inform such personnel that they are subject to the
confidentiality provisions set forth in Section 6 hereof.
12. General Provisions.
12.1 The parties agree that in the event of a breach of the
provisions of the Sections on: Names and Trademarks;
Confidentiality and Non-solicitation, money damages alone may not
be an adequate remedy; in such event, the aggrieved party may, in
addition to such other equitable and legal relief which may be
available, seek the entry of injunctive relief by a court of
competent jurisdiction.
12.2 To the extent that GSE Products and New Software Products
are subject to the U.S. Export Administration Regulations,
Avantium will comply with such regulations. To assist Avantium in
such compliance, GSE shall promptly advise Avantium in writing
the Export Control Classification Number (ECCN) of all GSE
Products and New Products.
12.3 For the term of this Agreement and for one (1) year after
its termination, neither party will, without the other's prior
written consent, knowingly employ or independently contract for
Agreement related services of any employee from either party
12.4 This Agreement shall be governed by and construed in
accordance with the laws of The Netherlands without giving effect
to any conflict of laws principles. The competent courts of
Amsterdam, the Netherlands shall have exclusive jurisdiction over
any dispute arising out of or in connection with this Agreement.
.
12.5 This Agreement constitutes the entire agreement between the
parties with respect to the matters set forth herein and shall
supersede all prior endorsements, representations and
understanding pertaining thereto.
12.6 This Agreement may not be modified, except in writing signed
by both parties. If any of the provisions of this Agreement are
held invalid, such provisions shall be deemed severed and the
remaining provisions shall remain in full force and effect.
12.7 This Agreement may not be assigned or transferred, nor may
rights or obligations be delegated, without the prior written
Agreement of the parties. Notwithstanding the foregoing, this
Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement, as well as their respective successors
and assigns.
12.8 Failure of any party to enforce in any one of more
instances, any of the terms or conditions of this Agreement shall
not be construed as a waiver of the future performance of any
such terms or conditions
.
12.9 This Agreement shall come into force on the date on which
the Subscription and Shareholders Agreement comes into full
force, all conditions precedent having been met (the Effective
Date).
12.10 Any notices given in connection with this Agreement must be
in writing and may be given by fax and registered mail to the
following addresses or, in respect of any of such addresses, to
such other address as the recipient may notify to the other Party
for such purpose:
the Company: Avantium B.V.
Attn: Dr. I.E. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
GSE: GSE Systems, Inc.
Attn: ▇▇▇▇▇ ▇. Southern
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Tel: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
....................................Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
IN WITNESS WHEREOF, the parties agree to and accept the terms herein and have
caused this Agreement to be signed by their authorized representatives as of the
Effective Date.
GSE SYSTEMS, INC. AVANTIUM B. V.
▇▇▇▇▇ ▇. Southern Dr. ▇▇▇ ▇▇▇▇▇▇▇
Name (typed or printed) Name (typed or printed)
______________________________ _______________________________
Signature Signature
Senior Vice President CEO
Title Title
February 24, 2000 February 24, 2000
Date Date
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 2132 WT Hoofddorp
USA The Netherlands
Address Address
EXHIBIT A
GSE PRODUCTS
A. BatchCAD Version 7.0 or later
B. BatchWizard Version 1.0 or later
C. VPbatch Version 1.3 or later
D. SimSuite Pro Version 3.0 or later
E. TotalVision Version 1.1 or later