Exhibit 10.4
VOTING
AGREEMENT
THIS VOTING
AGREEMENT (the “ Agreement ”) is made and
entered into as of this 8 th day of May 2008, by and
among Ronald H. Lane, Ph.D. (“ Lane ”), RH Lane
Limited Partnership, a Arizona limited partnership (“ Lane
LP ” and together with Lane, the “ Lane
Holders ”) Harcharan Singh (“ Singh
”), 2133820 Ontario, Inc., an Ontario company (“
Ontario ” and together with Singh, the “
Singh Holders ”), Maneesh Pharmaceuticals Ltd., an
Indian corporation (“ Maneesh ”), Svizera
Holdings BV, a Netherlands entity (“ Svizera ”),
Vinay Sapte (“ Sapte ” and together with Maneesh
and Svizera, the “ Maneesh Holders ”), Axiom
Capital Management LLC (“ Axiom ”), and Indigo
Securities LLC (“Indigo”, and, together with Axiom, the
“ IB Holders ”) (the “ Lane Holders
”, Singh Holders ”, “ Maneesh
Holders ”, and the IB Holders to be collectively referred
to as the “ Stockholders ”).
RECITALS
A.
The Stockholders
are record owners and/or beneficial owners (as such term is defined
in Rule 13d-3 of the Securities and Exchange Act of 1934, as
amended (the “ Exchange Act ”)) of Synovics
Pharmaceuticals Inc.’s (together with its affiliates, the
“ Company ”) common stock, par value $0.001 per
share (the “ Common Stock ”);
B.
Svizera and Ontario
are the holders of a Convertible Promissory Note (the “
Bridge Note ”) of Kirk Pharmaceuticals, LLC in the
principal amount of $1,000,000 due June 30, 2008 convertible into
shares of the Company’s future series of Series C Convertible
Redeemable Stock, par value $0.001 per share (the “ Series
C Preferred Stock ”) pursuant to the terms
thereof;
C.
Maneesh has
guaranteed in full (by means of a letter of credit) (the “
Maneesh Guarantee ”) the Company’s obligations
under that certain Credit Agreement, dated as of May 22, 2006,
between the Company and Bank of India, New York Branch, together
with the documents related thereto and executed and delivered in
connection therewith (the “ BOI Loan ”) in
complete replacement of the guarantees and undertakings of Nostrum
Pharmaceuticals, Inc. (“ Nostrum ”) and Nirmal
Mulye given in connection with the BOI Loan (the “ Nostrum
Guarantee ”);
D.
Maneesh intends to
invest at least $6,000,000 (the “ Series C Investment
”) to acquire, among other things, shares of Series C
Preferred Stock at the initial closing of the Series C Financing
(the “ Series C Financing ”) (including
principal of the Bridge Note that “rolls over” into the
Series C Financing);
E.
Simultaneous with
the effectiveness of the Maneesh Guarantee and release of the
Nostrum Guarantee, Vinay Sapte, a Maneesh Representative (as
defined herein), was appointed to the Board of Directors of the
Company (the “ Board ”) and William McCormick
and Richard Feldheim resigned from the Board;
F.
Upon the release
from escrow to the Company of Svizera’s Series C Investment
in the Series C Financing and subject to the Company’s
Articles of Incorporation and Bylaws and any applicable law and
regulations (including, without limitation, Section 14(f) of
the
Exchange Act and the
rules and regulations promulgated thereunder), the Board resolved
to increase its size to five and appoint two (2) additional Maneesh
Representatives and one (1) Singh Representative (as defined
herein) (such new Board, the “ Post-Financing Board
”);
G.
In connection with
the constitution of the Post-Financing Board, the parties desire
to, among other things, provide for establishment of the size of
the Post-Financing Board and the election of certain designees of
the Stockholders to the Post-Financing Board in accordance with the
terms of this Agreement.
NOW,
THEREFORE , the parties agree
as follows:
1.
Voting Provisions Regarding Board of Directors .
1.1.
Size of the Board . Each Stockholder agrees to vote, or
cause to be voted, all Shares (as defined below) owned by such
Stockholder, or over which such Stockholder has voting control,
from time to time and at all times, in whatever manner as shall be
necessary to ensure that the size of the Post-Financing Board shall
be five (5) directors, unless the Post-Financing Board resolves to
expand its size to seven (7) directors, in which case the size of
the Post-Financing Board shall be seven (7) directors. For purposes
of this Agreement, the term “ Shares ” shall
mean and include any securities of the Company the holders of which
are entitled to vote for members of the Post-Financing Board,
including without limitation, all shares of Common Stock and the
Series C Preferred Stock, by whatever name called, now owned or
subsequently acquired by a Stockholder, however acquired, whether
through stock splits, stock dividends, reclassifications,
recapitalizations, similar events or otherwise.
1.2.
Board Composition . Each Stockholder agrees to vote, or
cause to be voted, all Shares owned by such Stockholder, or over
which such Stockholder has voting control, from time to time and at
all times, in whatever manner as shall be necessary to ensure that
at each annual or special meeting of stockholders at which an
election of directors is held or pursuant to any written consent of
the stockholders, the following persons shall be elected to the
Post-Financing Board:
(a)
one (1) director of the Company designated by the Lane Holders (the
“ Lane Representative ”). The Lane
Representative shall initially be Lane;
(b)
one (1) director of the Company designated by the Singh Holders
(the “ Singh Representative ”). The Singh
Representative shall initially be Singh;
(c)
three (3) directors of the Company designated by the Maneesh
Holders (the “ Maneesh Representatives ”);
provided that if the size of the Post-Financing Board is
increased to seven (7), then the Maneesh Holders may designate one
(1) additional director of the Company. The Maneesh Representatives
shall initially be Vinay Sapte, Jyotiindra Gange and Maneesh Sapte.
The Stockholders hereby agree that no Maneesh Representative, Lane
Representative, or Singh Representative shall ever be Nirmal Mulye
or an Affiliate (as defined below) thereof;
(d)
If the size of the Post-Financing Board is increased to seven (7),
then the IB Holders shall be entitled to designate one (1) director
of the Company who shall
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preferably be a
Certified Public Accountant or a candidate who qualifies as an
“audit committee financial expert” as defined by the
Sarbanes Oxley Act of 2002 and any rules and regulations
thereunder.
(e)
In the event that any of the Lane Holders, the Singh Holders, or
the Maneesh Holders shall cease to beneficially own (determined in
accordance with Section 13 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder) at least 4%
of the outstanding Common Stock determined as of the date hereof
after giving effect to the initial Closing of the offering by the
Company of Series C Preferred Stock, then the right of such holders
falling below such 4% beneficial ownership to designate the Lane
Representative, the Singh Representative, or the Maneesh
Representative, as applicable, shall terminate and such right shall
be vested in the entire Post-Financing Board. After such initial
Closing, the Company shall notify the Stockholders of the number of
shares of Common Stock equal to 4% as so determined
above.
1.3.
Failure to Designate a Board Member . In the absence of any
designation from the persons or groups with the right to designate
a director as specified above, the director previously designated
by them and then serving shall be reelected if still eligible to
serve as provided herein.
1.4.
Removal of Board Members . Each Stockholder also agrees to
vote, or cause to be voted, all Shares owned by such Stockholder,
or over which such Stockholder has voting control, from time to
time and at all times, in whatever manner as shall be necessary to
ensure that:
(a)
no director elected pursuant to Sections 1.2 or Section
1.3 of this Agreement may be removed from office unless (i)
such removal is directed or approved by the affirmative vote of the
Person(s) (as defined below), or of the holders of the class of
stock, entitled under Section 1.2 to designate that director
or (ii) the Person(s) originally entitled to designate or approve
such director or occupy such Post-Financing Board seat pursuant to
Section 1.2 is no longer so entitled to designate or
approve such director or occupy such Post-Financing Board seat;
and
(b)
any vacancies created by the resignation, removal or death of a
director elected pursuant to Sections 1.2 or Section
1.3 shall be filled pursuant to the provisions of this
Section 1 .
All Stockholders
agree to execute any written consents required to perform the
obligations of this Agreement, and the Company agrees at the
request of any party entitled to designate directors to call a
special meeting of stockholders for the purpose of electing
directors.
1.5.
No Liability for Election of Recommended Directors . No
party, nor any Affiliate of any such party, shall have any
liability as a result of designating a Person for election as a
director for any act or omission by such designated Person in his
or her capacity as a director of the Company, nor shall any party
have any liability as a result of voting for any such designee in
accordance with the provisions of this Agreement.
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For purposes of
this Agreement, an individual, firm, corporation, partnership,
association, limited liability company, trust or any other entity
(collectively, a “ Person ”) shall be deemed an
“ Affiliate ” of another Person who, directly or
indirectly, controls, is controlled by or is under common control
with such Person.
1.6
Mulye and Affiliates . Each of the Stockholders agrees that
it shall not vote its respective shares, contrary to the resolution
of a majority of disinterested directors of the Company, to engage
in any fashion Nirmal Mulye, Anil Anand, Nostrum Pharmaceuticals,
Inc. or any of their respective affiliates or associates (the
“ Mulye Parties ”), other than to resolve
outstanding disputes between the Company and any affiliates thereof
and any Mulye Parties.
2.
Remedies .
2.1.
Irrevocable Proxy . Each party to this Agreement hereby
constitutes and appoints a designee of each of the Lane Holders,
the Singh Holder and the Maneesh Holders, and each of them, with
full power of substitution, as the proxies of the party with
respect to the matters set forth herein, including without
limitation, election of persons as members of the Post-Financing
Board in accordance with Section 1 hereto, and hereby
authorizes each of them to represent and to vote, if and only if
the party (i) fails to vote or (ii) attempts to vote (whether by
proxy, in person or by written consent), in a manner which is
inconsistent with the terms of this Agreement, all of such
party’s Shares in favor of the election of persons as members
of the Post-Financing Board determined pursuant to and in
accordance with the terms and provisions of this Agreement. The
proxy granted pursuant to the immediately preceding sentence is
given in consideration of the agreements and covenants of the
Company and the parties in connection with the transactions
contemplated by this Agreement and, as such, is coupled with an
interest and shall be irrevocable unless and until this Agreement
terminates or expires pursuant to Section 4 hereof. Each
party hereto hereby revokes any and all previous proxies with
respect to the Shares and shall not hereafter, unless and until
this Agreement terminates or expires pursuant to Section 4
hereof, purport to grant any other proxy or power of attorney with
respect to any of the Shares, deposit any of the Shares into a
voting trust or enter into any agreement (other than this
Agreement), arrangement or understanding with any person, directly
or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of any of the Shares, in each case, with
respect to any of the matters set forth herein.
2.2.
Specific Enforcement . Each party acknowledges and agrees
that each party hereto will be irreparably damaged in the event any
of the provisions of this Agreement are not performed by the
parties in accordance with their specific terms or are otherwise
breached. Accordingly, it is agreed that each of the Company and
the Stockholders shall be entitled to an injunction to prevent
breaches of this Agreement, and to specific enforcement of this
Agreement and its terms and provisions in any action instituted in
any court of the United States or any state having subject matter
jurisdiction.
2.3.
Remedi
