Document:

April 23, 2002

EXHIBIT 4.4

April 23, 2002

 

 

To the Stockholders of Apothogen, Inc.

 

Listed on the Signature Page hereto

 

Re:          IntraBiotics Pharmaceuticals, Inc. —

Registration Rights

 

Gentlemen:

 

In connection with the

Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) among

IntraBiotics Pharmaceuticals, Inc., a Delaware corporation (“IntraBiotics”),

APN Acquisition Corp., Apothogen, Inc., a Delaware corporation, and the

stockholders of Apothogen (the “Stockholders”) entered into on even date herewith,

as an additional inducement for the Stockholders to enter into the Merger

Agreement, IntraBiotics hereby agrees to grant to the Stockholders certain

registration rights relating to the shares of Common Stock to be issued by

IntraBiotics to the Stockholders pursuant to the Merger Agreement (the

“Shares”).  Capitalized terms used

herein but not defined shall have the meanings ascribed to them in the Merger

Agreement.

 

If within six (6) months

from the Closing Date, IntraBiotics proposes to file under the Securities Act

of 1933, as amended (the “Act”) a resale registration statement on Form S-1 or

Form S-3 (a “Resale Registration Statement”) with respect to its common stock,

then IntraBiotics shall, at such time, promptly give to each Stockholder

written notice of such proposed registration. 

Upon the written request of any Stockholder given within ten (10)

business days after mailing of such notice by IntraBiotics, IntraBiotics shall

take commercially reasonable steps to cause to be registered under the Act the

Shares that such Stockholder has requested to be registered, subject to the

limitations set forth in Attachment I

hereto.

 

If no Resale Registration

Statement is filed by IntraBiotics and IntraBiotics receives at any time after

the earlier of (i) six (6) months following the Closing Date and (ii) one (1)

month following the effective date of a registration statement for a public

offering of securities of IntraBiotics (other than a registration relating

solely to the sale of securities to participants in an IntraBiotics stock plan,

any corporate reorganization or transaction under Rule 145 of the Act,

including any registration statements related to the issuance or resale of

securities issued in such a transaction, or a registration in which the only

common stock being registered is common stock issuable upon conversion of debt

securities which are also being registered), a written request from the holders

of a majority of the Shares that IntraBiotics file a registration statement

under the Act, the gross proceeds resulting from the sale of the Shares or any

other shares of IntraBiotics common stock included in such registration

statement, of which would exceed $1,000,000, then IntraBiotics shall give

written notice of such request to all Stockholders and shall take commercially

reasonable steps to effect the registration under the Act of the Shares which

the holders request to be registered, subject to the limitations set forth in Attachment I hereto.

 

Please indicate your

agreement with the terms of this letter agreement by executing it in the space

provided below.

 

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

  Very truly yours,

  	

   

  	 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

   

  	

   

  	

  INTRABIOTICS PHARMACEUTICALS, INC.

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

  /s/ Henry J. Fuchs

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  Title:

  	

   

  
									

 

	

  AGREED AND ACCEPTED:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  J.P. MORGAN PARTNERS (BHCA), L.P.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  JPMP Master Fund Manager,

  L.P.,

  	

   

  	

   

  
	

   

  	

  its general partner

  	

   

  	

   

  
	

  By:

  	

  JPMP Capital Corp.,

  	

   

  	

   

  
	

   

  	

  its general partner

  	

   

  	

   

  
	

  By:

  	

  /s/ Mitchell Blutt

  	

   

  	

   

  
	

  Name:

  	

  Mitchell Blutt

  	

   

  	

   

  
	

  Title:

  	

  Partner

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Fred B. Davenport, Jr.

  	

   

  	

   

  
	

  Name:

  	

  Fred B. Davenport, Jr.

  	

   

  	

   

  
	

  Title:

  	

  President

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  /s/ Ernest Mario

  	

   

  	

   

  
	

  ERNEST MARIO

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  /s/ Frederic Eshelman

  	

   

  	

   

  
	

  FREDERIC ESHELMAN

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  /s/ James Butler

  	

   

  	

   

  
	

  JAMES BUTLER

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
							

 

	

  MARIO 2002 CHILDREN’S TRUST

  	

   

  	

  MARIO 2002 GRANDCHILDREN’S TRUST

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Ernest Mario

  	

   

  	

  By:

  	

  /s/ Ernest Mario

  	

   

  	

   

  
	

  Ernest Mario, Trustee

  	

   

  	

  Ernest Mario, Trustee

  	

   

  	

   

  
							

 

 

2

 

Attachment

I — Registration Rights

1.                                      REGISTRATION RIGHTS.  The Company covenants and agrees as follows:

1.1          Definitions. 

For purposes of this Attachment I:

(i)            The term “Act” means the Securities Act of 1933, as

amended.

(ii)           The term “Holder” means any holder of Registrable

Securities.

(iii)         The term “1934 Act” shall mean the Securities Exchange

Act of 1934, as amended.

(iv)          The term “register,” “registered,” and “registration”

refer to a registration effected by preparing and filing a registration

statement or similar document in compliance with the Act, and the declaration

or ordering of effectiveness of such registration statement or document.

(v)            The term “Registrable Securities” means the Shares.

(vi)          The term “SEC” shall mean the Securities and Exchange

Commission.

1.2          Request for Registration.

(a)           If

the Company shall receive at any time after the earlier of (i) six (6) months

following the Closing Date, or (ii) one (1) month after the effective date of a

registration statement for a public offering of securities of the Company

(other than a registration statement relating either to the sale of securities

to employees of the Company pursuant to a stock option, stock purchase or

similar plan or a SEC Rule 145 transaction), a written request from the Holders

of a majority of the Registrable Securities then outstanding that the Company

file a registration statement under the Act, the gross proceeds resulting from

the sale of the Shares or any other shares of the Company’s Common Stock

included in such registration statement, of which would exceed $1,000,000, then

the Company shall:

(i)            within ten (10) days of the receipt thereof, give

written notice of such request to all Holders; and

(ii)           effect as soon as practicable, and in any event within

sixty (60) days of the receipt of such request, the registration under the Act

of all Registrable Securities which the Holders request to be registered,

subject to the limitations of subsection 1.2(b), within twenty (20) days of the

mailing of such notice by the Company.

(b)           If the Holders initiating the registration request

hereunder (“Initiating Holders”) intend to distribute the Registrable

Securities covered by their request by means of an underwriting, they shall so

advise the Company as a part of their request made pursuant to subsection

1.2(a) and the Company shall include such information in the written notice

referred to in subsection 1.2(a).  The

underwriter will be selected by the Company and shall be reasonably acceptable

to a majority in interest of the Initiating Holders.  In such event, the right of any Holder to include such Holder’s

Registrable Securities in such registration shall be conditioned upon such

Holder’s participation in such underwriting and the inclusion of such Holder’s

Registrable Securities in the underwriting (unless otherwise mutually agreed by

a majority in interest of the Initiating Holders and such Holder) to the 

 

3

 

extent provided

herein.  All Holders proposing to

distribute their securities through such underwriting shall (together with the

Company as provided in subsection 1.4(e)) enter into an underwriting agreement

in customary form with the underwriter or underwriters selected for such

underwriting.  Notwithstanding any other

provision of this Section 1.2, if the underwriter advises the Initiating

Holders in writing that marketing factors require a limitation of the number of

shares to be underwritten, then the Initiating Holders shall so advise all

Holders of Registrable Securities which would otherwise be underwritten

pursuant hereto, and the number of shares of Registrable Securities that may be

included in the underwriting shall be allocated among all Holders thereof,

including the Initiating Holders, in proportion (as nearly as practicable) to

the amount of Registrable Securities of the Company owned by each Holder;

provided, however, that the number of shares of Registrable Securities to be

included in such underwriting shall not be reduced unless all other securities

are first entirely excluded from the underwriting.

(c)           Notwithstanding the foregoing, if the Company shall

furnish to Holders requesting a registration pursuant to this Section 1.2, a

certificate signed by the Chief Executive Officer of the Company stating that

in the good faith judgment of the Board of Directors of the Company, it would

be seriously detrimental to the Company and its stockholders for such

registration statement to be filed and it is therefore essential to defer the

filing of such registration statement, the Company shall have the right to

defer taking action with respect to such filing for a period of not more than

one hundred twenty (120) days after receipt of the request of the Initiating

Holders; provided, however, that the Company may not utilize this right more

than once in any twelve-month period.

(d)           In addition, the Company shall not be obligated to

effect, or take any action to effect, any registration pursuant to this Section

1.2:

(i)            after the Company has effected two registrations

pursuant to this Section 1.2 and such registrations have been declared or

ordered effective; or

(ii)           during the period starting with the date of filing of,

and ending on a date one hundred eighty (180) days after the effective date of,

a registration subject to Section 1.3 hereof; provided that the Company is

actively employing in good faith all reasonable efforts to cause such

registration statement to become effective.

1.3          Company Registration. 

If (but without any obligation to do so) the Company proposes to file a

resale registration statement with the SEC for the purpose of effecting a

registration for stockholders other than the Holders of its stock or other

securities under the Act (other than a registration relating solely to the sale

of securities to participants in a Company stock plan, a registration on any

form which does not include substantially the same information as would be

required to be included in a registration statement covering the sale of the

Registrable Securities or a registration in which the only Common Stock being

registered is Common Stock issuable upon conversion of debt securities which

are also being registered), the Company shall, at such time, promptly give each

Holder written notice of such proposed registration.  Upon the written request of each Holder given within ten (10)

days after mailing of such notice by the Company, the Company shall, cause to

be registered under the Act all of the Registrable Securities that each such

Holder has requested to be registered.

1.4          Obligations of the Company. 

Whenever required under this Section 1 to effect the registration of any

Registrable Securities, the Company shall, as expeditiously as reasonably

possible:

(a)           Prepare and file with the SEC a registration statement

with respect to such Registrable Securities and use its best efforts to cause

such registration statement to become effective, and, upon the request of the

Holders of a majority of the Registrable Securities registered 

 

4

 

thereunder, keep

such registration statement effective for a period of up to one hundred twenty

(120) days or until the distribution contemplated in the registration statement

has been completed; provided, however, that (i) such 120-day period shall be

extended for a period of time equal to the period the Holder refrains from

selling any securities included in such registration at the request of an

underwriter of Common Stock (or other securities) of the Company; and (ii) in

the case of any registration of Registrable Securities on Form S-3 which are

intended to be offered on a continuous or delayed basis, such 120-day period

shall be extended, if necessary, to keep the registration statement effective

until all such Registrable Securities are sold, provided that Rule 415, or any

successor rule under the Act, permits an offering on a continuous or delayed

basis, and provided further that applicable rules under the Act governing the

obligation to file a post-effective amendment permit, in lieu of filing a

post-effective amendment which (I) includes any prospectus required by Section

10(a)(3) of the Act or (II) reflects facts or events representing a material of

fundamental change in the information set forth in the registration statement,

the incorporation by reference of information required to be included in (I)

and (II) above to be contained in periodic reports filed pursuant to Section 13

or 15(d) of the 1934 Act in the registration statement.

(b)           Prepare and file with the SEC such amendments and

supplements to such registration statement and the prospectus used in

connection with such registration statement as may be necessary to comply with

the provisions of the Act with respect to the disposition of all securities

covered by such registration statement.

(c)           Furnish to the Holders such numbers of copies of a

prospectus, including a preliminary prospectus, in conformity with the

requirements of the Act, and such other documents as they may reasonably

request in order to facilitate the disposition of Registrable Securities owned

by them.

(d)           Use its best efforts to register and qualify the

securities covered by such registration statement under such other securities

or Blue Sky laws of such jurisdictions as shall be reasonably requested by the

Holders; provided that the Company shall not be required in connection

therewith or as a condition thereto to qualify to do business or to file a

general consent to service of process in any such states or jurisdictions,

unless the Company is already subject to service in such jurisdiction and

except as may be required by the Act.

(e)           In the event of any underwritten public offering,

enter into and perform its obligations under an underwriting agreement, in

usual and customary form, with the managing underwriter of such offering.  Each Holder participating in such

underwriting shall also enter into and perform its obligations under such an

agreement.

(f)            Notify each Holder of Registrable Securities covered

by such registration statement at any time when a prospectus relating thereto

is required to be delivered under the Act of the happening of any event as a

result of which the prospectus included in such registration statement, as then

in effect, includes an untrue statement of a material fact or omits to state a

material fact required to be stated therein or necessary to make the statements

therein not misleading in the light of the circumstances then existing.

(g)           Cause all such Registrable Securities registered

pursuant hereto to be listed on each securities exchange on which similar

securities issued by the Company are then listed.

(h)           Provide a transfer agent and

registrar for all Registrable Securities registered pursuant hereto and a CUSIP

number for all such Registrable Securities, in each case not later than the

effective date of such registration.

5

 

(i)            Furnish, at the request of any Holder requesting

registration of Registrable Securities pursuant to this Section 1, on the date

that such Registrable Securities are delivered to the underwriters for sale in

connection with a registration pursuant to this Section 1, if such securities

are being sold through underwriters, or, if such securities are not being sold

through underwriters, on the date that the registration statement with respect

to such securities becomes effective, (i) an opinion, dated such date, of the

counsel representing the Company for the purposes of such registration, in form

and substance as is customarily given to underwriters in an underwritten public

offering, addressed to the underwriters, if any, and to the Holders requesting

registration of Registrable Securities and (ii) a letter dated such date, from

the independent certified public accountants of the Company, in form and

substance as is customarily given by independent certified public accountants

to underwriters in an underwritten public offering, addressed to the

underwriters, if any, and to the Holders requesting registration of Registrable

Securities.

1.5          Furnish Information. 

It shall be a condition precedent to the obligations of the Company to

take any action pursuant to this Section 1 with respect to the Registrable

Securities of any selling Holder that such Holder shall furnish to the Company

such information regarding itself, the Registrable Securities held by it, and

the intended method of disposition of such securities as shall be required to

effect the registration of such Holder’s Registrable Securities.

1.6          Expenses of Demand Registration. 

All expenses other than underwriting discounts and commissions incurred

in connection with registrations, filings or qualifications pursuant to Section

1.2, including (without limitation) all registration, filing and qualification

fees, printers’ and accounting fees, fees and disbursements of counsel for the

Company and the reasonable fees and disbursements of one counsel for the

selling Holders shall be borne by the Company; provided, however that the

Company shall not be required to pay for any expenses of any registration

proceeding begun pursuant to Section 1.2 if the registration request is

subsequently withdrawn at the request of the Holders of a majority of the

Registrable Securities to be registered (in which case all participating

Holders shall bear such expenses), unless the Holders of a majority of the

Registrable Securities agree to forfeit their right to one demand registration

pursuant to Section 1.2; provided further, however, that if at the time of such

withdrawal, the Holders have learned of a material adverse change in the

condition, business, or prospects of the Company from that known to the Holders

at the time of their request and have withdrawn the request with reasonable

promptness following disclosure by the Company of such material adverse change,

then the Holders shall not be required to pay any of such expenses and shall

retain their rights pursuant to Section 1.2.

1.7          Expenses of Company Registration. 

The Company shall bear and pay all expenses incurred in connection with

any registration, filing or qualification of Registrable Securities with

respect to the registrations pursuant to Section 1.3 for each Holder (which

right may be assigned as provided in Section 1.11), including (without

limitation) all registration, filing and qualification fees, printers and

accounting fees relating or apportionable thereto and the fees and

disbursements of one counsel for the selling Holders selected by them, but

excluding underwriting discounts and commissions relating to Registrable

Securities.

1.8          Underwriting Requirements. 

In connection with any offering involving an underwriting of shares of

the Company’s capital stock, the Company shall not be required to include any

of the Holders’ securities in such underwriting unless they accept the terms of

the underwriting as agreed upon between the Company and the underwriters

selected by it (or by other persons entitled to select the underwriters), and

then only in such quantity as the underwriters determine in their sole

discretion will not jeopardize the success of the offering by the Company.  If the total amount of securities, including

Registrable Securities, requested by stockholders to be included in such

offering exceeds the amount of securities sold other than by the Company that

the underwriters determine in their sole discretion is 

 

6

 

compatible with the

success of the offering, then the Company shall be required to include in the

offering only that number of such securities, including Registrable Securities,

which the underwriters determine in their sole discretion will not jeopardize

the success of the offering (the securities so included to be apportioned pro

rata among the selling stockholders according to the total amount of securities

entitled to be included therein owned by each selling stockholder or in such

other proportions as shall mutually be agreed to by such selling stockholders)

but in no event shall (i) the amount of securities of the selling Holders

included in the offering be reduced below twenty percent (20%) of the total

amount of securities included in such offering, or (ii) notwithstanding (i)

above, any shares being sold by a stockholder exercising a demand registration

right similar to that granted in Section 1.2 be excluded from such

offering.  For purposes of the preceding

parenthetical concerning apportionment, for any selling stockholder which is a

Holder of Registrable Securities and which is a partnership or corporation, the

partners, retired partners and stockholders of such Holder, or the estates and

family members of any such partners and retired partners and any trusts for the

benefit of any of the foregoing persons shall be deemed to be a single “selling

stockholder,” and any pro-rata reduction with respect to such “selling

stockholder,” shall be based upon the aggregate amount of shares carrying

registration rights owned by all entities and individuals included in such

“selling stockholder,” as defined in this sentence.

1.9          Delay of Registration. 

No Holder shall have any right to obtain or seek an injunction

restraining or otherwise delaying any such registration as the result of any

controversy that might arise with respect to the interpretation or

implementation of this Section 1.

1.10        Indemnification. 

In the event any Registrable Securities are included in a registration

statement under this Section 1:

(a)           To the extent permitted by law, the Company will

indemnify and hold harmless each Holder, any underwriter (as defined in the

Act) for such Holder and each person, if any, who controls such Holder or

underwriter within the meaning of the Act or the 1934 Act, against any losses,

claims, damages or liabilities (joint or several) to which they may become

subject under the Act, the 1934 Act or other federal or state law, insofar as

such losses, claims, damages or liabilities (or actions in respect thereof)

arise out of or are based upon any of the following statements, omissions or

violations (each, a “Violation”): (i) any untrue statement or alleged untrue

statement of a material fact contained in such registration statement,

including any preliminary prospectus or final prospectus contained therein or

any amendments or supplements thereto, (ii) the omission or alleged omission to

state therein a material fact required to be stated therein, or necessary to

make the statements therein not misleading, or (iii) any violation or alleged

violation by the Company of the Act, the 1934 Act, any state securities law or

any rule or regulation promulgated under the Act, or the 1934 Act or any state

securities law; and the Company will pay to each such Holder, underwriter or

controlling person, as incurred, any legal or other expenses reasonably

incurred by them in connection with investigating or defending any such loss,

claim, damage, liability or action; provided, however, that the indemnity

agreement contained in this subsection 1.10(a) shall not apply to amounts paid

in settlement of any such loss, claim, damage, liability or action if such

settlement is effected without the consent of the Company (which consent shall

not be unreasonably withheld), nor shall the Company be liable in any such case

for any such loss, claim, damage, liability or action to the extent that it

arises out of or is based upon a Violation which occurs in reliance upon and in

conformity with written information furnished expressly for use in connection

with such registration by any such Holder, underwriter or controlling person.

(b)           To the extent permitted by law, each selling Holder

will indemnify and hold harmless the Company, each of its directors, each of

its officers who has signed the registration statement, each person, if any,

who controls the Company within the meaning of the Act, any underwriter, any

other Holder selling securities in such registration statement and any

controlling person of any such underwriter or other Holder, against any losses,

claims, damages or liabilities (joint or several) to 

 

7

 

which any of the

foregoing persons may become subject, under the Act, or the 1934 Act or other

federal or state law, insofar as such losses, claims, damages or liabilities

(or actions in respect thereto) arise out of or are based upon any Violation,

in each case to the extent (and only to the extent) that such Violation occurs

in reliance upon and in conformity with written information furnished by such

Holder expressly for use in connection with such registration; and each such

Holder will pay, as incurred, any legal or other expenses reasonably incurred

by any person intended to be indemnified pursuant to this subsection 1.10(b),

in connection with investigating or defending any such loss, claim, damage,

liability or action; provided, however, that the indemnity agreement contained

in this subsection 1.10(b), shall not apply to amounts paid in settlement of

any such loss, claim, damage, liability or action if such settlement is

effected without the consent of the Holder, which consent shall not be

unreasonably withheld; provided, that, in no event shall any indemnity under

this subsection 1.10(b) exceed the gross proceeds from the offering received by

such Holder.

(c)           Promptly after receipt by an indemnified party under

this Section 1.10 of notice of the commencement of any action (including any

governmental action), such indemnified party will, if a claim in respect

thereof is to be made against any indemnifying party under this Section 1.10,

deliver to the indemnifying party a written notice of the commencement thereof

and the indemnifying party shall have the right to participate in, and, to the

extent the indemnifying party so desires, jointly with any other indemnifying

party similarly noticed, to assume the defense thereof with counsel mutually

satisfactory to the parties; provided, however, that an indemnified party

(together with all other indemnified parties which may be represented without

conflict by one counsel) shall have the right to retain one separate counsel,

with the fees and expenses to be paid by the indemnifying party, if

representation of such indemnified party by the counsel retained by the

indemnifying party would be inappropriate due to actual or potential differing

interests between such indemnified party and any other party represented by

such counsel in such proceeding.  The

failure to deliver written notice to the indemnifying party within a reasonable

time of the commencement of any such action, if prejudicial to its ability to

defend such action, shall relieve such indemnifying party of any liability to

the indemnified party under this Section 1.10, but the omission so to deliver

written notice to the indemnifying party will not relieve it of any liability

that it may have to any indemnified party otherwise than under this Section

1.10.

(d)           If the indemnification provided for in this Section

1.10 is held by a court of competent jurisdiction to be unavailable to an

indemnified party with respect to any loss, liability, claim, damage or expense

referred to therein, then the indemnifying party, in lieu of indemnifying such

indemnified party hereunder, shall contribute to the amount paid or payable by

such indemnified party as a result of such loss, liability, claim, damage or

expense in such proportion as is appropriate to reflect the relative fault of

the indemnifying party on the one hand and of the indemnified party on the

other in connection with the statements or omissions that resulted in such

loss, liability, claim, damage or expense as well as any other relevant

equitable considerations.  The relative

fault of the indemnifying party and of the indemnified party shall be

determined by reference to, among other things, whether the untrue or alleged

untrue statement of a material fact or the omission to state a material fact

relates to information supplied by the indemnifying party or by the indemnified

party and the parties’ relative intent, knowledge, access to information, and

opportunity to correct or prevent such statement or omission.

(e)           Notwithstanding the foregoing, to the extent that the

provisions on indemnification and contribution contained in the underwriting

agreement entered into in connection with the underwritten public offering are

in conflict with the foregoing provisions, the provisions in the underwriting

agreement shall control.

 

8

 

(f)            The obligations of the Company and Holders under this

Section 1.10 shall survive the completion of any offering of Registrable

Securities in a registration statement under this Section 1, and otherwise.

1.11        Assignment of Registration Rights. 

The rights to cause the Company to register Registrable Securities

pursuant to this Section 1 may be assigned (but only with all related

obligations) by a Holder to a transferee or assignee of such securities who,

after such assignment or transfer, holds at least 100,000 shares of Registrable

Securities (subject to appropriate adjustment for stock splits, stock

dividends, combinations and other recapitalizations), provided:  (a) the Company is, within a reasonable time

after such transfer, furnished with written notice of the name and address of

such transferee or assignee and the securities with respect to which such

registration rights are being assigned; (b) such transferee or assignee agrees

in writing to be bound by and subject to the terms and conditions of this

Agreement; and (c) such assignment shall be effective only if immediately

following such transfer the further disposition of such securities by the

transferee or assignee is restricted under the Act.  For the purposes of determining the number of shares of

Registrable Securities held by a transferee or assignee, the holdings of

transferees and assignees of a partnership who are partners or retired partners

of such partnership (including spouses and ancestors, lineal descendants and

siblings of such partners or spouses who acquire Registrable Securities by

gift, will or intestate succession) shall be aggregated together and with the

partnership; provided that all assignees and transferees who would not qualify

individually for assignment of registration rights shall have a single

attorney-in-fact for the purpose of exercising any rights, receiving notices or

taking any action under Section 1.

1.12        Termination of Registration Rights.

(a)           No Holder shall be entitled to exercise any right

provided for in this Section 1 after five (5) years following the consummation

of the sale of securities pursuant to a registration statement filed by the

Company under the Act in connection with the initial firm commitment

underwritten offering of its securities to the general public.

(b)           In addition, the right of any Holder to request

registration or inclusion in any registration pursuant to this Section shall be

suspended during any period of time when all shares of Registrable Securities

held or entitled to be held upon conversion by such Holder may immediately be

sold under Rule 144 under the Act during any 90-day period, or on such date

after the closing of the first Company-initiated registered public offering of

Common Stock of the Company as all shares of Registrable Securities held or

entitled to be held upon conversion by such Holder may immediately be sold

under Rule 144 during any 90-day period; provided, however, that the provisions

of this Section 1.16(b) shall not apply to any Holder who owns more than one

percent (1%) of the Company’s outstanding stock until such time as such Holder

owns less than one percent (1%) of the outstanding stock of the Company.

 

9Exhibit 10.1

YEAR 2002 STOCK GRANT

1. Purpose. This Year 2002 Stock Grant (the 'Grant ") of Medical Technology and
Innovations, Inc. (the 'Company') for selected employees, officers, directors
and key consultants and advisors to the Company is intended to advance the best
interests of the Company by providing personnel who have substantial
responsibility for the management and growth of the Company and its subsidiaries
with additional incentive by increasing their proprietary interest in the
success of the Company, thereby encouraging them to remain in the employ of the
Company or any of its subsidiaries.

2. Administration. The shall be administered by the Board of Directors of the
Company (the 'Board') which shall keep the minutes of its proceedings with
regard to the and all records, documents, and data pertaining to its
administration of the . A majority of the members of the Board shall constitute
a quorum for the transaction of business, and the vote of a majority of those
members present at any meeting shall decide any question brought before that
meeting. In addition, the Board may take any action otherwise proper under the
Grant by the affirmative vote, taken without a meeting, of a majority of its
members. Any decision or determination reduced to writing and signed by a
majority of the members shall be as effective as if it had been made by a
majority vote at a meeting properly called and held. All questions of
interpretation and application of the Grant shall be subject to the
determination of the Board. The actions of the Board in exercising all of the
rights, powers and authorities set out in this Grant, when performed in good
faith and in its sole judgment, shall be final, conclusive, and binding on the
parties.

3. Shares Available. The stock subject the Stock Grants shall be shares of the
Company's Common Stock, without par value (the 'Common Stock'). The total number
of shares of Common Stock available under the Grant shall not exceed in the
aggregate 500,000. Such shares may be treasury shares or authorized but unissued
shares.

4. Eligibility. The individuals who shall be eligible to participate in the
shall be any officer, director, employee, consultant, advisor or other person
providing key services to the Company who are not engaged in any prohibited
activity(hereinafter such persons may sometimes be referred to as the 'Eligible
Individuals.') Prohibited Activity shall include the following:

        i.   services rendered to the Company not in connection with a capital
             raising or market making transaction;
        ii.  services in connection with the offer or sale of securities in a
             capital-raising transaction that directly or indirectly promotes
             or maintains a market for the Company's securities;
        iii. services by current or future auditors of the Company;
        iv.  services performed by compensate promoters of the Company;
        v.   services involving any promotion or marketing of the Company or
             shareholder or investor relations services; and
        vi.  services in connection with a shell merger.

5. Authority to Grant Stock Grants. The Board in its discretion and subject to
the provisions of the Grant, may grant the following from time to time to
eligible individuals of the Company: (a) Stock Grants. The Board may Grant and
issue shares of Common Stock under the Grant to an eligible individual ('Stock
Grant'). Stock Grants may be made in lieu of cash compensation or as additional
compensation. Stock Grants may also be made pursuant to performance based goals
established by the Board.

Subject only to any applicable limitations set forth in this agreement, the
number of shares of Common Stock covered by any Stock Grant, shall be determined
by the Board.

6. Stock Grants.
(a) Grants in Lieu of Compensation. The Board may grant Common Stock to an
Eligible Individual under the Grant, without any payment by the individual, in
lieu of certain cash compensation or as additional compensation. The Stock Grant
is subject to appropriate tax withholding. After compliance with the tax
withholding requirements, a stock certificate shall be issued to the individual
recipient of the Stock Grant. The certificate shall bear such legend, if any, as
the Board determines is reasonably required by applicable law. Prior to receipt
of a Stock Grant, the individual must comply with appropriate requests of the
Board to assure compliance with all relevant laws.

(b) Performance Based Grants. The Board may Grant shares of Common Stock,
without any payment for such shares, to designated individuals if specified
performance goals established by the Board are satisfied. The designation of an
employee eligible for a specific performance based Stock Grant shall be made by
the Board in writing prior to the beginning of the 12-month period for which the
performance is measured. The Board shall establish the number of shares to be
issued to a designated employee if the performance goal is met. The Board must
certify in writing that a performance goal has been met prior to issuance of any
certificate for a performance based Stock Grant to any employee. If the Board
certifies the entitlement of an employee to the performance based Stock Grant,
the certificate shall be issued to the employee as soon as administratively
practicable, and subject to other applicable provisions of the Grant, including
but not limited to, all legal requirements and tax withholding. Performance
goals determined by the Board may be based on specified increases in net
profits, stock price, Company or segment sales, market share, earnings per
share, and/or return on equity.

7. The Company may, but shall not be obligated to, register any securities
covered by a Stock Grant pursuant to the 1933 Act (as now in effect or as
hereafter amended) and, in the event any shares are registered, the Company may
remove any legend on certificates representing these shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
Stock Grant to comply with any law or regulation of any governmental authority.

8. Employment Obligation. The granting of any Stock Grant shall not impose upon
the Company any obligation to employ or continue to employ any grantee; and the
right of the Company to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that a Stock
Grant has been granted to him.

9. Changes in the Company's Capital Structure. The existence of outstanding
Stock Grants shall not affect in any way the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
If the Company effects a subdivision or consolidation of shares or other capital
readjustment, the payment of a dividend in capital stock or other equity
securities of the Company on, its Common Stock, or other increase or reduction
of the number of shares of the Common Stock outstanding, without receiving
consideration therefor in money, services, or property, or the reclassification
of its Common Stock, in whole or in part, into other equity securities of the
Company, then (a) the number, class and per share price of shares of Common
Stock subject to Stock Grants hereunder shall be appropriately adjusted (or in
the case of the issuance of other equity securities as a dividend on, or in a
reclassification of, the Common Stock, the Stock Grants shall extend to such
other securities) in a manner so as to entitle a grantee to receive, for the
same aggregate cash consideration, and for an Grant of pending performance based
Stock Grants, the same total number and class or classes of shares or in the
case of a dividend of, or reclassification into, other equity securities, those
other securities) he would have held after adjustment if the Stock Grant was
earned, immediately prior to the event requiring the adjustment, or, if
applicable, the record date for determining shareholders to be affected by the
adjustment; and (b) the number and class of shares then reserved for issuance
under the (or in the case of a dividend of, or reclassification into, other
equity securities, those other securities)shall be adjusted by substituting for
the total number and class of shares of stock then reserved, the number and
class or classes of shares of stock (or in the case of a dividend of, or
reclassification into, other equity securities, those other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as a result of the event requiring the adjustment. Comparable
rights shall accrue to each employee in the event of successive subdivisions,
consolidations, capital adjustments, dividends or reclassifications of the
character described above. Appropriate adjustments shall also be made to pending
Stock Grants. Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of
Common Stock then subject to outstanding Stock Grants.

10. Amendment or Termination. The Board may at any time alter, suspend or
terminate the Grant.

11. Forfeitures. Notwithstanding any other provisions of this , if the Board
finds by a majority vote after full consideration of the facts that the
employee, before or after termination of his employment with the Company or its
subsidiaries for any reason (a) committed or engaged in fraud, embezzlement,
theft, commission of a felony, or proven dishonesty in the course of his
employment by the Company or its subsidiaries, which conduct damaged the Company
or its subsidiaries, or disclosed trade secrets of the Company or its
subsidiaries, or (b) participated, engaged in or had a financial or other
interest, whether as an employee, officer, director, consultant, contractor,
shareholder, owner, or otherwise, in any commercial endeavor in the United
States which is competitive with the business of the Company or its subsidiaries
without the written consent of the Company or its subsidiaries, the employee
shall forfeit all outstanding Stock Grants which are not fully vested, including
all rights related to such matters, and including any performance based Stock
Grants to which he may be entitled, and other elections pursuant to which the
Company has not yet delivered a stock certificate. Clause (b) shall not be
deemed to have been violated solely by reason of the employee's ownership of
stock or securities of any publicly owned corporation, if that ownership does
not result in effective control of the corporation. The decision of the Board as
to the cause of the employee's discharge, the damage done to the Company or its
subsidiaries, and the extent of the employee's competitive activity shall be
final. No decision of the Board, however, shall affect the finality of the
discharge of the employee by the Company or its subsidiaries in any manner. To
provide the Company with an opportunity to enforce this Section, no certificate
for Stock may be issued under this without the certification by the Board that
no action forbidden by this provision has been raised for their determination.

12. Tax Withholding. The Company shall be entitled to deduct from other
compensation payable to each employee any sums required by federal, state, or
local tax law to be withheld with respect to the grant, vesting, as appropriate,
of a Stock Grant. In the alternative, the Company may require the employee (or
other person receiving the Stock Grant) to pay the sum directly to the employer
corporation.

13. Written Agreement. Each Stock Grant granted hereunder shall be embodied in a
written agreement, which shall be subject to the terms and conditions prescribed
herein, and shall be signed by the grantee and by an appropriate officer of the
Company on behalf of the Company. Each agreement shall contain other provisions
which the Board in its discretion shall deem advisable.

14. Governing Law and Interpretation. This Grant shall be governed by the laws
of the state of Florida. Headings contained in this are for convenience only and
shall in no manner be construed as part of this plan.

15. Effective Date. This Grant shall become effective as of May 10, 2002 (the
'Effective Date') and shall terminate on the 1st anniversary of the Effective
Date.

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