Unassociated Document


    

      Execution
        Copy


      INVESTOR
        RIGHTS AGREEMENT

      


      THIS
        INVESTOR RIGHTS AGREEMENT
        (this
“Agreement”)
        is
        made as of March 19, 2004, by and among Lev Pharmaceuticals, Inc., a Delaware
        corporation (the “Company”),
        Emigrant Capital Corporation, a Delaware corporation, John Hart, Gilbert
        Stein,
        Barry Friedberg, David Seldin and Francis May (each an “Investor” and
        collectively, the “Investors”)
        and
        Judson Cooper and Joshua Schein (each, a “Founder”
        and
        collectively, the “Founders”).


      RECITALS

      


      WHEREAS,
        the
        Company and the Investors are parties to a Stock Purchase Agreement of even
        date
        herewith (the “Purchase
        Agreement”)
        providing for, among other things, the purchase by the Investors of shares
        (the
“Shares”) of Common Stock of the Company; and

      


      WHEREAS,
        in
        order to induce the Investors to purchase shares of the Company’s Common Stock
        and enter into the Purchase Agreement, the Company desires to grant to the
        Investors certain pre-emptive, co-sale, and other rights as set forth
        herein.

      


      NOW,
        THEREFORE,
        in
        consideration of the promises and mutual covenants contained herein, the
        parties
        hereto hereby agree as follows:

      


      AGREEMENT

      


      1. Definitions.
        For
        purposes of this Section 1:

      


      1.1 The
        term
“Act”
        means
        the Securities Act of 1933, as amended.

      


      1.2 The
        term
“Common
        Stock”
        means
        the Company’s common stock, par value per share of $0.00001.

      


      1.3 The
        term
“Equity
        Securities”of
        any
        Person means (i) any capital stock, partnership, membership, joint venture
        or
        other ownership or equity interest, participation or securities in or of
        such
        Person (whether voting or non-voting, whether preferred, common or otherwise,
        and including any stock appreciation, contingent interest or similar right)
        and
        (ii) any option, warrant, security or other right (including debt securities)
        directly or indirectly convertible into or exercisable or exchangeable for,
        or
        otherwise to acquire directly or indirectly, any stock, interest, participation
        or security described in clause (i) above.

      


      1.4 The
        term
“IPO”
        means
        the sale of the Company’s Common Stock pursuant to an underwritten initial
        public offering pursuant to a registration statement declared effective under
        the Act, resulting
        in such common stock being listed on any national securities exchange or
        quoted
        on the NASDAQ Stock Exchange.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      1.5 The
        term
“Person”
        means
        an individual, a partnership, a joint venture, a corporation, a trust, a
        limited
        liability company, an unincorporated organization or a government or any
        department or agency thereof.

      


      2. Covenants.

      


      2.1 Company
        Share Issuances.

      


      2.1.1 Obligation
        to Maintain Proportionate Ownership.

      


      2.1.1.1 The
        Company agrees that in the event the Company wishes to sell Equity Securities
        at
        any time prior to an IPO (an “Equity
        Financing”),
        then
        each Investor shall be entitled to purchase such amount of Equity Securities
        being sold in the Equity Financing so as to maintain its proportionate interest
        in the Company (the “Requisite
        Number”).
        The
        Company shall notify each Investor of the material terms of the proposed
        sale
        (including price and number of shares to be offered) and each Investor shall
        acquire, at the time of consummation of such proposed issuance and sale and
        on
        such terms as are specified in the Company’s notice pursuant hereto, up to the
        Investor’s Requisite Number. Each Investor shall have fifteen (15) days after
        the date of any such notice to elect by written notice to the Company to
        purchase its Requisite Number on such terms and at the time the proposed
        sale is
        consummated. 

      


      2.1.1.2 
        The
        right to maintain proportionate ownership of each Investor set forth in this
        Section 2.1 shall not be applicable to:

      


      2.1.1.2.1 shares
        issued in connection with an offering pursuant to a registration statement
        declared effective under the Act;

      


      2.1.1.2.2 shares
        issued pursuant to a bona fide acquisition of a business by the corporation
        by
        merger, purchase of assets, or other acquisition or reorganization approved
        by
        the Board of Directors; 

      


      2.1.1.2.3 shares
        issued pursuant to options, warrants, notes or other rights to acquire
        securities of the Corporation outstanding on the date hereof or issued at
        a
        later date pursuant to a stock incentive program approved by the Board of
        Directors; and

      


      2.1.1.2.4 shares
        or
        convertible securities issued in connection with the licensing of products
        or
        compounds approved by the Board of Directors

      


      2.2 Co-Sale
        Rights.

      


      2.2.1 Grant
        of Right.
        If
        at any
        time prior to the IPO, any Founder desires to sell, transfer or otherwise
        dispose of for cash all or any part of his shares of Common Stock (the
“Founders
        Shares”),
        then
        such Founder (the "Transferring
        Founder")
        shall
        give the Company and each Investor a written notice (a "Co-Sale
        Notice")
        setting forth in reasonable detail the terms and conditions of such proposed
        transaction. Upon receipt of the Co-Sale Notice,each Investor shall have
        the
        right and option to elect to sell, at the price and on the terms stated in
        the
        Co-Sale Notice, a pro rata portion of the total number of shares of Common
        Stock
        to be sold (the "Subject
        Shares")
        equal
        to the product obtained by multiplying (i) the Subject Shares, by (ii) a
        fraction, the numerator of which is the number of shares of Common Stock
        held by
        such Investor (calculated on a fully-diluted basis, assuming the exercise
        of all
        outstanding options and warrants, and the conversion of all outstanding
        convertible securities), and the denominator of which is the sum of the total
        number of shares of Common Stock at the time owned by the Transferring Founder
        and such Investor (calculated on a fully-diluted basis, assuming the exercise
        of
        all outstanding options and warrants, and the conversion of all outstanding
        convertible securities). Any such election shall be made by written notice
        (a
        "Co-Sale
        Election Notice")
        to the
        Transferring Founder within 15 days after the date of the Co-Sale Notice.
        Thereupon, such Transferring Founder shall not sell any of the Subject Shares
        (i) except at the price and on the terms stated in its Co-Sale Notice and
        (ii)
        if any Investor shall have delivered a Co-Sale Election Notice as aforesaid,
        unless the proposed transferee contemporaneously acquires from such Investor
        the
        shares of Common Stock in respect of which such Co-Sale Election Notice shall
        have been delivered, at said price and on said terms. 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      2.2.1.1.1 Each
        Investor may effect its participation in the sale by delivering to the
        Transferring Founder, for transfer to the purchase offeror, one or more
        certificates, properly endorsed for transfer, that represent the number of
        shares of Common Stock that such Investor elects to sell pursuant to this
        Section 2.2.

      


      2.2.2 Mechanics
        of Transfer.
        The
        stock certificates that each Investor delivers to the Transferring Founder
        pursuant to Section 2.2.1 shall be transferred by such Transferring
        Founder
        to the purchase offeror in consummation of the sale of the Founder’s Shares
        pursuant to the terms and conditions specified in the Section 2.3.1
        notice
        to such Investor, and the Founder shall promptly thereafter remit to such
        Investor that portion of the sale proceeds to which such Investor is entitled
        by
        reason of its participation in such sale. In the event that less than all
        the
        shares represented by such a stock certificate are sold pursuant to
        Section 2.2.1, the Founder shall instruct the Company to issue a new
        certificate to such Investor representing the shares not sold.

      


      2.2.3 No
        Effect on Subsequent Rights.
        The
        exercise or non-exercise of the rights of each Investor to participate in
        one or
        more sales of the Founder’s Shares made by the Founders shall not adversely
        affect such Investor’s right to participate in subsequent sales of the Founder’s
        Shares by the Founders.

      


      2.3 Prohibited
        Transfers; Exceptions.

      


      2.3.1 Agreement
        Not to Transfer.
        Any
        attempt by a Founder to transfer any Founder’s Shares in violation of
        Section 2.2 shall be void and the Company agrees that it will not
        effect
        such a transfer nor will it treat any alleged transferee as the holder of
        such
        shares without the written consent of Emigrant Capital Corporation. Each
        Investor agrees that without the prior written consent of the Founders, such
        Investor may not sell or otherwise transfer any of its shares of Common Stock
        to
        (i) MacAndrews and Forbes Holdings, Inc. or any of its affiliates, directors
        or
        officers, (ii) Donald Drapkin or any affiliates of Donald Drapkin, (iii)
        Gabriel
        Cerrone or any affiliates of Gabriel Cerrone or (iv) any Person that at the
        time
        of such sale or transfer is a direct competitor of the Company in a product
        and
        geographic market in which the Company then conducts its principal
        business.

      


      2.3.2 Exclusions.
        The
        rights of the Investors set forth in Section 2.3 shall not apply to
        a
        transfer of Founder’s Shares to (i) a Family Member, (ii) a trust, the
        beneficiaries of which are the Founder and/or Family Members, (iii) an
        entity, the sole equity owners of which are the Founder and/or Family Members
        or
        (iv) other Founders; provided,
        in each
        case, that
        the
        transferee shall furnish the Company with a written agreement to be bound
        by and
        comply with all provisions of this Agreement applicable to the Founder. Such
        transferee shall be treated as the “Founder” for purposes of this
        Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      3. Miscellaneous.

      


      3.1 Successors
        and Assigns.
        Except
        as otherwise provided herein, the terms and conditions of this Agreement
        shall
        inure to the benefit of and be binding upon the respective successors and
        assigns of the parties (including transferees of any Shares). Nothing in
        this
        Agreement, express or implied, is intended to confer upon any party other
        than
        the parties hereto or their respective successors and assigns any rights,
        remedies, obligations or liabilities under or by reason of this Agreement,
        except as expressly provided in this Agreement.

      


      3.2 Governing
        Law;
        WAIVER OF JURY TRIAL.
        This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of New York (without reference to the conflicts of law
        provisions thereof). The Company hereby irrevocably consents to the jurisdiction
        of the Courts of the State of New York and of any Federal Court located in
        New
        York in connection with any action or proceeding arising out of or relating
        to
        this Agreement. In any such litigation the Company waives personal service
        of
        any summons, complaint or other process and agrees that the service thereof
        may
        be made by certified or registered mail directed to the Chief Executive Officer
        of the Company at its address set forth below. THE
        PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
        BY
        LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
        ACTION
        (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED
        OR
        INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT
        OR
        ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
        OR
        HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE
        PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
        DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
        A
        JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
        OF
        A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
        OF
        THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

      


      3.3 Counterparts.
        This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original but all of which together shall constitute one and the same
        instrument.

      


      3.4 Titles
        and Subtitles.
        The
        titles and subtitles used in this Agreement are used for convenience only
        and
        are not to be considered in construing or interpreting this
        Agreement.

       

      4. Notices.
        All
        notices, deliveries and other communications provided for herein shall be
        in
        writing and shall be (i) delivered in person, (ii) transmitted by telecopy,
        (iii) sent by first-class, registered or certified mail, postage prepaid,
        or
        (iv) sent by reputable overnight courier service, fees prepaid, to the recipient
        at the address or telecopy number set forth below, or such other address
        or
        telecopy number as may hereafter be designated in writing by such recipient.
        Notices shall be deemed given upon personal delivery, seven days following
        deposit in the mail as set forth above, upon acknowledgment by the receiving
        telecopier or one day following deposit with an overnight courier
        service.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      To
        the
        Company, to:
LEV
        Pharmaceuticals, Inc.
524
        Clubhouse Road
Woodmere,
        NY 11598
Attention:
        Josh Schein, C.E.O.
Facsimile: (516)
        374-3373


      To
        the
        Investors, to:
Emigrant
        Capital Corporation
6
        East
        43rd Street
8th
        Floor
New
        York,
        NY 10017
Attention:
        John Hart
Facsimile:
        (212) 850-4637

       

      with
        a
        copy (which shall not constitute notice to Emigrant Capital Corporation),
        to:

       

      Kirkland &
        Ellis LLP
Citigroup
        Center
153
        East
        53rd Street
New
        York,
        NY 10022-4675
Attention:
        Armand A. Della Monica, Esq.
Facsimile:
        (212) 446-4900

       

      To
        any
        Investor other than Emigrant Capital Corporation, to:

       

      Emigrant
        Capital Corporation
6
        East
        43rd Street
8th
        Floor
New
        York,
        NY 10017
Attention:
        John Hart
Facsimile:
        (212) 850-4637

      


      or
        such
        other address or to the attention of such other person as the recipient party
        shall have specified by prior written notice to the sending party. Any notice
        under this Agreement will be deemed to have been given when so delivered
        or sent
        or, if mailed, five days after deposit in the U.S. mail.

      


      


      4.1 Attorneys’
        Fees.
        Except
        as otherwise provided herein, if any action at law or in equity is necessary
        to
        enforce or interpret the terms of this Agreement, the prevailing party shall
        be
        entitled to reasonable attorneys’ fees, costs and necessary disbursements in
        addition to any other relief to which such party may be entitled.

      


      4.2 Amendments
        and Waivers.
        Any
        term of this Agreement may be amended and the observance of any term of this
        Agreement may be waived (either generally or in a particular instance and
        either
        retroactively or prospectively), only with the written consent of the Company,
        Emigrant Capital Corporation and each Founder (but if and only to the extent
        that any such amendment relates to a provision materially adversely affecting
        such Founder in a manner differently than the other parties hereto). Any
        amendment or waiver effected in accordance with this paragraph shall be binding
        upon each Party hereto.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      4.3 Severability.
        If one
        or more provisions of this Agreement are held to be unenforceable under
        applicable law, such provision shall be excluded from this Agreement and
        the
        balance of the Agreement shall be interpreted as if such provision were so
        excluded and shall be enforceable in accordance with its terms.

      


      4.4 Entire
        Agreement.
        This
        Agreement (including the Exhibits hereto, if any) constitutes the full and
        entire understanding and Agreement between the parties. The parties hereto
        further acknowledge and agree that this Agreement supersedes and renders
        void
        every other prior written or oral understanding among or between the parties
        hereto with regard to the subject matter contained herein and
        therein.

      


      4.5 Specific
        Performance.
        The
        parties hereto agree that irreparable damage would occur if any of the
        provisions of this Agreement were not performed in accordance with these
        specific terms or were otherwise breached. It is accordingly agreed that
        the
        parties shall be entitled to seek an injunction or injunctions (without posting
        any bond or other security) to prevent breaches of this Agreement and to
        enforce
        specifically the terms and provisions hereof in any court of the United States
        or any state having jurisdiction, this being in addition to any other remedy
        to
        which they are entitled at law or in equity.

      


      *
        * *

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      


      


      IN
        WITNESS WHEREOF,
        the
        parties have executed this Investor Rights Agreement as of the date first
        above
        written.

      


      
        	 	 	 
	 	LEV
                PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	President
                and Chief Executive Officer


      

      

        
          	 	 	 
	 	FOUNDERS
	 
 	 
 	 
 
	 	 	 
	 	
                  

                
	 	Judson
                  Cooper


        

      

       

      
        
          	 	 	 
	 	 
	 
 	 
 	 
 
	 	  	 
	 	
                  

                
	 	Joshua
                  D. Schein
	 	 
	 	 
	 	 
	 	INVESTOR SIGNATURES ON NEXT
                  PAGE


        



      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      


      INVESTORS:

      


      EMIGRANT
        CAPITAL CORPORATION



      
        	By:	 


      

      Name:
        John Hart

      Title: Managing
        Director

      


       

      
        	 


      

      John
        Hart

       

      


      
        
          	 


        
Gilbert
        Stein

      


      


      
        
          	 


        
Barry
        Friedberg

      


      


      
        
          	 


        
David
        Seldin

      


      
        	 


      

      Francis
        May