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Exhibit 10.3
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SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "AGREEMENT") is made as of the
23
day of September, 2005 (the "EFFECTIVE DATE") by and among BIOPAD
LTD., an
Israeli company (the "COMPANY"), the holders of Ordinary Shares par
value NIS 1
each of the Company ("ORDINARY SHARES") listed on SCHEDULE A,
hereto (each of
which is herein referred to as an "ORIGINAL SHAREHOLDER" and
collectively, the
"ORIGINAL SHAREHOLDERS"), the investors listed on SCHEDULE B hereto
(the "NEW
SHAREHOLDER"). The Original Shareholders and New Shareholders shall
be referred
to collectively as the "SHAREHOLDERS". The Ordinary Shares shall be
referred to
as the "SHARES".
WITNESSETH:
WHEREAS, pursuant to that certain Share Purchase Agreement, dated
as of
the date hereof, by and between the Company and the New Shareholder
(the "SHARE
PURCHASE AGREEMENT"); and
WHEREAS, the Company and the Shareholders desire to set forth
certain
matters regarding the ownership of the Shares; and
NOW, THEREFORE, in consideration of the mutual promises and
covenants
set forth herein, the parties hereby agree as follows:
1. RESTRICTIONS ON TRANSFER.
1.1.
For purposes of this Agreement, the term "Transfer" shall
include any sale, assignment, encumbrance, pledge, lien,
hypothecation, conveyance in trust, gift, transfer by bequest,
devise or descent, and transmissions to receivers, levying
creditors, trustees or receivers in bankruptcy proceedings or
general assignees for the benefit of creditors, whether
voluntary or by operation of law, directly or indirectly, of a
Shareholder's Shares directly or beneficially owned by such
Shareholder.
1.2.
No Shareholder may Transfer any Shares without complying with
the terms of this Agreement. Any attempted transfer in
violation of this Agreement shall be void and of no force and
effect and
shall not be honored by the Company.
1.3.
Except as otherwise provided herein, it is hereby agreed that
none of the Original Shareholders or the New Shareholder shall
transfer any of its Shares in the Company, within 3 (three)
years from the Effective Date.
2. RIGHT OF FIRST REFUSAL AND FIRST OFFER.
2.1.
If at any time prior to the Closing of an initial underwritten
Public Offering of the Company's shares to the public ("IPO"),
any Shareholder intends to Transfer any Shares (except for the
Transfer according to Section 2.9 hereto) (a "DISPOSITION"),
including Shares acquired after the date hereof, then such
sale shall be subject to the Right of First Refusal of the
Company and the other Shareholders, as provided hereinafter.
2.2 If a
Shareholder (hereinafter: the "Offeror") wishes to sell
or transfer all or part of his shares in the Company
(hereinafter: the "Offered SHARES") he shall deliver a written
notice to the Company and to the other Shareholders in which
he will specify
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the number of the Offered Shares, the price for the Offered
Shares, the terms of payment and the name of the purchaser who
wishes, in good faith, to purchase all the Offered Shares
under the same conditions (hereinafter: the "Offer"). The
Company and all of the other Shareholders shall respond in
writing to the Offeror (hereinafter: the "RESPONSE NOTICE")
within 30 (thirty) days from the date of receipt of the Offer
if it/he wishes to purchase its pro-rata share of the Offered
Shares at the price and the conditions specified in the Offer.
In the Response Notice the Company and each Shareholder will
also specify the number of the Offered Shares that it or he is
willing to purchase if the Company or any Shareholder refuses
to purchase their
pro-rata share of the Offered Shares, or any
share thereof.
If the Company and/or any Shareholder, shall not respond
within 30 (thirty) days as abovementioned, it will be deemed
as a refusal to purchase his pro-rata share of the Offered
Shares.
2.3 The
Company has the right before the other Shareholders to
purchase all or part of the Offered Shares.
2.4
If the Company
refuses to purchase all of the Offered Shares,
the other Shareholders will have the right to purchase part of
the pro-rata share of the Offered Shares not purchased by the
Company, pro-rata to the number of shares each of them holds
at that time. If a Shareholder refuses to purchase his
pro-rata share of the Offered Shares, its right will be
transferred to the other Shareholders.
2.5
If the
Company and/or the other Shareholders or part of them
notify, within 30 (thirty) days as aforesaid, that they wish
to purchase all of the Offered Shares, it will be deemed an
agreement for the sale and purchase of the Offered Shares at
the price and at the conditions specified in the Offer and the
Offeror shall transfer the Offered Shares to the Company
and/or to the Shareholders that agreed to purchase them,
pro-rata to their shareholding, within 15 (fifteen) days from
the date of receipt of the Response Notice against payment of
the price, or arrangement for the payment of the price, at the
conditions specified in the Offer.
2.6 If the
Company and the other Shareholders, shall notify that
they do not wish to purchase all the Offered Shares or they do
not respond to the Offer, the Offeror may sell and transfer
all the Offered Shares to the purchase specified in the Offer
at the price and under the same conditions specified in the
Offer within the earlier of (i) 15 (fifteen) days after the
last date for the Notice for Response; or (ii) from the date
which the Company and the other Shareholders notified that
they are not interested to purchase the Offered Shares.
If the Offeror does not sell and transfer the Offered Shares
to the purchaser within the aforesaid 15 (fifteen) days period
and he wishes to sell or transfer the Offered Shares, or part
thereof, he shall once again offer them to the Company and the
other Shareholders and the aforesaid procedure will apply
again.
2.7 The
provisions of this Section will apply also to sale of
shares by a receiver, liquidator, trustee in bankruptcy,
executor, court, execution office, etc., as well as sale of
shares by way of a Tender Offer.
2.8 The
provisions of this Section shall not apply to transfer of
Shares by a Shareholder to a corporation, fully owned and
controlled by such Shareholder, or to a spouse, parent,
sibling, lineal descendent or ante descendent, provided that
such transferee
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agrees in writing to assume performance of and be bound by the
terms and
conditions of this Agreement.
2.9 Transfer
of shares to the purchaser, as specified in the
Offer, is subject to the approval by the Board of Directors,
which shall not refuse to approve the transfer, except for
reasonable causes.
2.10
Transfer of Shares to the Company or to a Shareholder as a
result of exercising their right of first refusal as aforesaid
and transfer of shares as specified in paragraph 2.9 above is
not subject to the approval by the Board of Directors.
2.11
For the purpose of the Right of First Refusal of the New
Shareholder, it shall be deemed as if all the Shares, as
defined in the Share Purchase Agreement, have been issued and
allotted to the New Shareholder.
3. PREEMPTIVE RIGHTS.
3.1.
Prior to the consummation of an IPO, if the Company proposes
to issue
or sell any New Securities (as defined below), the
Company shall grant, prior to such issuance, to the New
Shareholder and the Original Shareholders (the "PREEMPTIVE
SHAREHOLDERS"), the right to purchase its pro-rata share in
the Company of the New Securities, thereafter maintaining its
proportionate equity ownership in the Company. A Shareholder's
pro-rata share, for purposes of this Section, is the ratio of
the number of shares held by such Shareholder immediately
prior to the issuance of the New Securities (on an as
converted basis) in relation to the total number of Ordinary
Shares issued and outstanding immediately prior to the
issuance of New Securities (on an as converted basis). Each
Preemptive Shareholder shall have a right of over-allotment
such that if any Preemptive Shareholder declines or fails to
exercise its right hereunder to purchase its pro-rata share of
the New Securities, each other Preemptive Shareholder
exercising its preemptive right hereunder may purchase such
declining Preemptive Shareholder's portion, on a pro-rata
basis to those Preemptive Shareholders exercising their right
of over-allotment.
3.2.
In the event the Company proposes to issue New Securities, it
shall give each Preemptive Shareholder written notice of its
intention, describing the type of New Securities, their price
and the general terms upon which the Company proposes to issue
the same. Each Preemptive Shareholder shall have twenty-one
(21) days after such notice is mailed or delivered to elect to
purchase its pro rata share of such New Securities and any
additional shares as may be available for over-allotment, upon
the terms and conditions specified in the notice, by giving
written notice to the Company and stating therein the maximum
amount of New
Securities elected to be purchased. In the event
that a written notice of any Preemptive Shareholder is not
received by the Company within the period mentioned above,
then such Preemptive Shareholder shall be deemed to have
waived its preemptive right under this Section 3.2.
In the event the Preemptive Shareholders fail to fully
exercise the preemptive right within the said twenty-one (21)
day period, the Company shall have one hundred twenty (120)
days thereafter to sell, or enter into an agreement to sell,
to any third party, the remainder of the New Securities with
respect to which the Preemptive Shareholders' preemptive right
was not exercised, at a price and upon terms no more favorable
to the purchasers thereof than specified in the Company's
notice to the Preemptive Shareholders. In the event the
Company has not sold, or entered into an
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agreement to sell, the New Securities within the one hundred
twenty (120) day period, the Company shall not issue or sell
any New Securities without first complying with the provisions
of this Section.
3.3.
For the purpose of this Section "NEW SECURITIES" shall mean
any equity interest in the Company, whether now authorized or
not, and rights, options or warrants to purchase such equity
interests, and securities of any type whatsoever that are
convertible into equity interests; provided, however, that the
term "New Securities" does not include: (i) securities issued
upon the conversion of any preferred shares, as shall be
hereafter authorized; (ii) securities issued from the Pool (as
such term is defined in the Share Purchase Agreement between
the Company and the New Shareholder that is being executed
simultaneously herewith); (iii) securities issued in
connection with stock splits, bonus shares or other similar
recapitalization events on the basis of a Shareholder's
pro-rata share of all outstanding shares of the Company, on an
as
converted basis.
3.4.
For the purpose of the Pre-emptive Right of the New
Shareholder, it shall be deemed as if all the Shares, as
defined in the Share Purchase Agreement, have been issued and
allotted to the New Shareholder.
4. BRING ALONG.
4.1.
Subject to the provisions of the Israeli Companies Law, 1999,
in the event that prior to an IPO, Original Shareholders and
New Shareholder holding more than 66.7% (%) of the Company's
issued and outstanding share capital (on an as converted
basis) accept an offer to sell all their Shares to a third
party (the "PURCHASE Offer"), and such Purchase Offer is
conditional upon the sale of all of the Company's Shares, then
the remaining shareholders of the Company shall be obligated
to sell their Shares (including any securities convertible or
exchangeable into shares) pursuant to the terms specified in
the Purchase Offer.
4.2.
At the closing of the sale under the Purchase Offer, the
Company may require each Shareholder to: (1) represent and
warrant to the purchasers, in writing, that such Shareholder's
shares, are free and clear of any liens, claims, encumbrances
or third party rights of any kind and to give other reasonable
representations and warranties as customary in this type of
transaction, (2) sign a share transfer deed in the name of
such purchaser, and (3) deliver to the Company the share
certificate or certificates representing such Shareholder's
shares.
4.3.
Should any Shareholder fail to comply with any of its
obligations specified in this Section 4, the Company shall
register su
