EXHIBIT 9.1
FIRST AMENDED AND RESTATED
SHAREHOLDER AGREEMENT
This First Amended and Restated Shareholder Agreement (this "AGREEMENT")
is entered into as of the 25th day of May, 2005 (the "EFFECTIVE DATE"), by and
among Protalex, Inc., a Delaware corporation (the "COMPANY"), certain of the
holders of the Common Stock of the Company or options to acquire the Common
Stock identified on EXHIBIT A hereto (the "EXISTING SHAREHOLDERS"), a
majority-in-interest of the Investors listed on SCHEDULE I (as such
"MAJORITY-IN-INTEREST" is defined and contemplated in Section 13 of the
"ORIGINAL SHAREHOLDER AGREEMENT" (as defined below) (collectively, all Investors
listed on Schedule I, the "ORIGINAL INVESTORS") and the purchasers listed on
Schedule II and such additional purchasers who may become parties to the 2005
Purchase Agreement (as defined below) on, or before, June 30, 2005 (the "2005
INVESTORS") with reference to the following facts:
A. On September 18, 2003, the Company issued and the Original Investors
purchased shares of the Company's Common Stock and Warrants to purchase shares
of the Company's Common Stock pursuant to that certain Securities Purchase
Agreement (the "ORIGINAL PURCHASE AGREEMENT") whereby, as a condition to such
sale and purchase , the parties thereto wished to assure that (i) a
representative of the Original Investors was elected as a member of the Board of
Directors of the Company and (ii) the transfer of shares of the Company's Common
Stock by the Existing Shareholders was limited.
B. On the Effective Date, the Company has agreed to issue, and the 2005
Investors have agreed to purchase, shares of the Company's Common Stock and
Warrants to purchase shares of the Company's Common Stock pursuant to that
certain Warrant and Common Stock Purchase Agreement dated as of the Effective
Date (the "2005 PURCHASE AGREEMENT"), whereby the parties thereto desire the
2005 Investors to become parties to that certain Shareholder Agreement dated as
of September 18, 2003 (the "ORIGINAL SHAREHOLDER AGREEMENT") as amended and
restated herein.
NOW, THEREFORE, in consideration of their respective promises contained in
this Agreement, the undersigned agree as follows:
1. Definitions. For the purposes of this Agreement, capitalized terms that
are used but not defined herein shall have the respective meanings ascribed
thereto in the Purchase Agreement.
a. "AFFILIATE" means, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
b. "EXPIRATION DATE" shall mean that date on which vSpring SBIC,
L.P. ("VSPRING"), together with its Affiliates, no longer owns shares of Common
Stock and Warrant Shares, on an as exercised basis, (as appropriately adjusted
for stock splits, combinations,
recapitalizations and similar transactions) that represent less than 25% of the
shares of Common Stock and Warrant Shares, on an as exercised basis, purchased
by vSpring together with its Affiliates pursuant to the Original Purchase
Agreement and 2005 Purchase Agreement, collectively (as appropriately adjusted
for stock splits, combinations, recapitalizations and similar transactions).
c. "INVESTORS" shall mean collectively the Original Investors and
the 2005 Investors.
d. "LIQUIDITY DATE" shall have the same meaning as that term is
defined in that certain Registration Rights Agreement dated of even date
herewith among the Company and the Investors (defined therein).
e. "PERSON" shall mean any individual, any corporation, limited
liability company, general or limited partnership, business trust,
unincorporated association or other business organization or entity, or any
governmental authority.
f. "SHARES" shall mean: (i) all securities of the Company (including
all shares of the Company's Common Stock and all options, warrants and other
rights to acquire shares of the Company's Common Stock) owned by such Existing
Shareholder or such Original Investor and 2005 Investor as of the date of this
Agreement, and (ii) all additional securities of the Company (including all
additional shares of the Company Common Stock and all additional options,
warrants and other rights to acquire shares of the Company Common Stock) of
which such Existing Shareholder or such Original Investor or 2005 Investor
acquires beneficial ownership during the period commencing with the execution
and delivery of this Agreement until September 18, 2005.
g. "RESTRICTION TERMINATION DATE" shall mean the date that is the
earlier to occur of (i) September 18, 2005 or (ii) the Liquidity Date.
h. A Person shall be deemed to have effected a "TRANSFER" of a
security if such Person directly or indirectly (i) offers for sale, sells,
assigns, pledges, encumbers, grants an option with respect to, transfers or
otherwise disposes of such security or any interest therein, or (ii) enters into
an agreement, commitment or other arrangement providing for the sale of,
assignment of, pledge of, encumbrance of, granting of an option with respect to,
transfer of or disposition of such security or any interest therein.
2. Restriction on Transfer; Stop Transfer. Except as expressly
contemplated by this Agreement, at all times during the period commencing with
the execution and delivery of this Agreement and continuing until the
Restriction Termination Date, each of the Existing Shareholders (the "RESTRICTED
SHAREHOLDERS") shall not, without the prior written consent of vSpring, directly
or indirectly, (i) cause or permit the Transfer of any of the Shares to be
effected, or discuss, negotiate or make any offer regarding any Transfer of any
of the Shares, or (ii) request that the Company register the Transfer of any
certificate or uncertificated interest representing any of the Shares; provided
however, that from September 18, 2004 and continuing until the Restriction
Termination Date, each
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such Restricted Shareholder may Transfer in the aggregate up to 10% of the
Shares beneficially owned by such Restricted Shareholder (determined on a
fully-diluted basis) as of the Closing Date without the prior written consent of
vSpring. Each Restricted Shareholder hereby agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent in respect of the
Shares.
3. Proxies and Non-Interference; Stop Transfer. Except as expressly
contemplated by this Agreement, at all times during the period commencing with
the execution and delivery of this Agreement and continuing until the Expiration
Date, each of the Existing Shareholders and each of the Investors shall not,
without the prior written consent of vSpring, directly or indirectly, (i) grant
any proxies or powers of attorney with respect to any of the Shares, deposit any
of the Shares into a voting trust or enter into a voting agreement or other
similar commitment or arrangement with respect to any of the Shares in
contravention of the obligations of such Existing Shareholder or such Investor,
respectively, under this Agreement, or (ii) take any action that would make any
representation or warranty of such Existing Shareholder or such Investor,
respectively, contained herein untrue or incorrect, or have the effect of
preventing or disabling such Existing Shareholder or such Investor,
respectively, from performing any of such Existing Shareholder's or such
Investor's obligations under this Agreement. Each Existing Shareholder and each
Investor hereby agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate "stop transfer"
instructions to its transfer agent in respect of the Shares.
4. Voting Agreement. Until the Expiration Date, at each annual meeting of
the shareholders of the Company, or at any meeting of the shareholders of the
Company at which members of the Board of Directors are to be elected, however
called, and at every adjournment or postponement thereof, and at any other time
at which shareholders of the Company will have the right to or will vote for or
render consent in writing regarding the election of directors of the Company,
then and in each event, each Existing Shareholder and each Investor hereby
covenants and agrees to appear at such meeting, in person or by proxy, or
otherwise cause all of the Shares to be counted as present thereat for purposes
of establishing a quorum thereat, and, unless waived in writing by vSpring, each
Existing Shareholder and each Investor shall vote, or cause to be voted (and on
every action or approval by written consent of shareholders with respect to the
following, act, or cause to be acted, by written consent) with respect to all of
the Shares that such Existing Shareholder or such Investor is entitled to vote
or as to which such Existing Shareholder or such Investor has the right to
direct the voting, as of the relevant record date, in favor of the following
actions:
a. to fix and maintain the number of directors at seven (7);
b. with respect to one (1) member of the Board of Directors, to
cause and maintain the election of (1) candidate designated by vSpring, who
shall initially be Dr. ▇▇▇▇▇▇ ▇▇▇▇▇ (the "INVESTOR DESIGNEE").
5. Irrevocable Proxy. With the execution of this Agreement, each Existing
Shareholder and each Investor hereby executes and delivers to vSpring the
irrevocable proxy in writing which is
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incorporated by reference into this Agreement and attached hereto as EXHIBIT B,
which shall be irrevocable to the fullest extent permitted by applicable law,
with respect to the Shares.
6. Representations and Warranties. Each Existing Shareholder and each
Investor hereby represents and warrants to vSpring and the Company as follows:
a. Ownership of Shares. Such Existing Shareholder or such Investor,
as applicable, is the beneficial owner (as such term is defined under Rule
13(d)(3) promulgated under the Securities Exchange Act of 1934, as amended,
except that such terms shall include Shares that may be acquired more than sixty
(60) days from the date hereof) of all of the Shares; provided that with respect
to the Shares held by such Investor issued by the Company pursuant to the 2005
Purchase Agreement , this representation and warranty assumes the valid issuance
of the shares by the Company pursuant the 2005 Purchase Agreement. Such Existing
Shareholder or such Investor, as applicable, has sole voting power and the sole
power of disposition with respect to all of the Shares, with no limitations,
qualifications or restrictions on such rights, subject to applicable federal
securities laws and the terms of this Agreement. Such Existing Shareholder or
such Investor, as applicable, is the sole record holder (as reflected in the
records maintained by the Company's transfer agent for the Company's Common
Stock) of all of the Shares.
b. Power; Binding Agreement. Such Existing Shareholder or such
Investor, as applicable, has the legal capacity, power and authority to enter
into and perform all of such Existing Shareholder's or such Investor's
obligations under this Agreement. The execution, delivery and performance of
this Agreement by such Existing Shareholder or such Investor will not violate
any agreement or court order to which such Existing Shareholder or such
Investor, as applicable, is a party or is subject, including, without
limitation, any voting agreement or voting trust. This Agreement has been duly
and validly executed and delivered by such Existing Shareholder or such Investor
and constitutes a valid and binding agreement of such Existing Shareholder or
such Investor, enforceable against such Existing Shareholder or such Investor in
accordance with its terms.
c. No Consents. To his, her or its knowledge, the execution and
delivery of this Agreement by such Existing Shareholder or such Investor does
not, and the performance by such Existing Shareholder or such Investor of his,
her or its obligations hereunder will not, require such Existing Shareholder or
such Investor to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any Governmental Authority.
7. No Ownership Interest. Nothing contained in this Agreement shall be
deemed to vest in vSpring any direct or indirect ownership or incidence of
ownership of or with respect to any Shares. Except as provided in this
Agreement, all rights, ownership and economic benefits relating to the Shares
shall remain vested in and belong to such Existing Shareholder or such Investor,
respectively.
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8. Shareholder Notification of Acquisition of Additional Shares. At all
times during the period commencing with the execution and delivery of this
Agreement and continuing until the Expiration Date, each such Existing
Shareholder or such Investor shall promptly notify vSpring and the Company of
the number of any additional shares of the Company's Common Stock and the number
and type of any other voting securities of the Company acquired by such Existing
Shareholder or such Investor, if any, after the date hereof.
9. Stop Transfer Instructions. At all times commencing with the execution
and delivery of this Agreement and continuing until the later of the Expiration
Date or the Restriction Termination Date, the Company shall not register the
Transfer (by book-entry or otherwise) of any certificate or uncertificated
interest representing any of the Shares unless such Transfer is made pursuant to
and in compliance with the terms and conditions of this Agreement. The Company
shall instruct its transfer agent for the Company's Common Stock (the "TRANSFER
AGENT") not to Transfer, at any time commencing with the execution and delivery
of this Agreement and continuing until later of the Expiration Date or the
Restriction Termination Date, any certificate or uncertificated interest
representing any of the Shares unless and until the Transfer Agent has received
the Company's instruction to effect any such Transfer.
10. Specific Performance. The parties agree that the damages to the
parties from a violation of Section 4 of this Agreement will be difficult to
ascertain, that the parties will not have an adequate remedy at law for such a
breach and that specific performance or other equitable relief from a breach or
anticipatory breach of Section 1 is therefore appropriate. If any party hereto
or such party's assigns institutes any action or proceeding to specifically
enforce the provisions hereof, any Person against whom such action or proceeding
is brought hereby waives the claim of defense therein that such party or such
personal representative has an adequate remedy at law, and such Person shall not
offer in any such action or proceeding the claim or defense that such remedy at
law exists.
11. Further Assurances. At the request of any party to another party or
parties to this Agreement, such other party or parties shall execute and deliver
such instruments or documents to evidence or further effectuate the respective
rights and obligations of the parties and to evidence and effectuate any
termination of this Agreement.
12. Transferees. This Agreement shall bind and inure to the benefit of any
transferees of the Existing Shareholders and the Investors, and the Company
shall not consent to a transfer of a share of Common Stock owned by an Existing
Shareholder or an Investor unless the transferee thereof agrees to be bound by
this Agreement. Nothing in this Agreement shall be deemed to restrict the
ability of an Investor to transfer Shares in registered open market
transactions.
13. Amendment. This Agreement may be amended only upon the agreement of
(i) the Company, (ii) a majority-in-interest of the Investors voting on an
as-converted basis (which majority-in-interest shall include the agreement of
vSpring), and (iii) all of the Existing Shareholders executing this Agreement.
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14. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be deemed to be an original, fully executed
agreement.
15. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts and
state courts located in the State of Delaware in any suit or proceeding based on
or arising under this Agreement and irrevocably agree that all claims in respect
of such suit or proceeding may be determined in such courts. The parties hereto
irrevocably waive the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The parties hereto further agree that service of
process upon the parties hereto mailed by the first class mail shall be deemed
in every respect effective service of process upon such party in any suit or
proceeding arising hereunder. Nothing herein shall affect either party's right
to serve process in any other manner permitted by law. The parties hereto agree
that a final non appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit or such judgment
or in any other lawful manner.
16. Attorneys' Fees. In any legal proceeding arising out of this
Agreement, including with respect to any instrument, document or agreement made
under or in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and actual attorneys' fees. As used in this
Agreement, "actual attorneys' fees" shall mean the full and actual cost of any
legal services actually performed in connection with the matters involved,
calculated on the basis of the usual hourly fees charged by the attorneys
performing such services.
17. Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part. Further, if
a court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable as written, such court may interpret,
construe, rewrite or revise such provision, to the fullest extent allowed by
law, so as to make it valid and enforceable consistent with the intent of the
parties hereto.
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IN WITNESS WHEREOF, the undersigned have caused this agreement to be
signed on the date first written above.
COMPANY:
PROTALEX, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇,
President and Chief Executive Officer
EXISTING SHAREHOLDERS:
---------------------
[Individual shareholder signatures not
listed for purposes of this exhibit]
_______________________________________
[Signature]
_______________________________________
[Print Name]
_______________________________________
[Title (if shareholder not individual)]
ORIGINAL INVESTORS:
_______________________________________
[Signature]
_______________________________________
[Print Name]
_______________________________________
[Title (if shareholder not individual)]
2005 INVESTORS:
_______________________________________
[Signature]
_______________________________________
[Print Name]
_______________________________________
[Title (if shareholder not individual)]
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