|
1.
|
Definitions.
Capitalized terms used but not otherwise defined herein have the
respective meanings given to such terms in the LLC
Agreement.
|
|
2.
|
Restrictions on
Transfer of Acquired Shares.
|
|
|
(a)
|
Without
the prior written consent of Quigley, prior to June 1, 2012, PSI
Parent shall not, directly or indirectly, Transfer the Acquired Shares, in
whole or in part; provided, however, that,
subject to Section 2(b),
PSI Parent may Transfer any or all of the Acquired Shares in connection
with, and contemporaneously upon the consummation of, a Company
Sale.
|
|
|
(b)
|
PSI
Parent shall not Transfer any of the Acquired Shares in contravention of
applicable law.
|
|
|
(c)
|
“Company Sale”
means any arm’s-length transaction in which (i) Quigley sells all or
substantially all of its assets to a Third Party, (ii) a Third Party
purchases outstanding Common Stock such that, upon the consummation
thereof, such Third Party will own more than 50% of the shares of capital
stock of Quigley entitled to vote generally in the election of Quigley’s
directors, or (iii) a Third Party merges with Quigley such that,
immediately upon consummation of such merger, the equityholders of such
Third Party will own, in the aggregate, more than 50% of the shares of
capital stock of Quigley entitled to vote generally in the election of
Quigley’s directors.
|
|
|
(d)
|
“Third Party”
means any Person that is not an Affiliate of Quigley immediately prior to
the consummation of a transaction of the type described in Section 2(c).
|
|
|
(e)
|
Any
purported Transfer in contravention of this Section 2
will be null and void ab
initio.
|
|
3.
|
PSI Parent
Representations and
Acknowledgments.
|
|
|
(a)
|
In
order to induce Quigley to issue the Acquired Shares to PSI Parent, PSI
Parent represents and warrants to Quigley
that:
|
|
|
(i)
|
PSI
Parent has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment in
the Acquired Shares;
|
|
|
(ii)
|
no
broker has acted on behalf of PSI Parent in connection with this Agreement
or the License Agreement, and there are no brokerage commissions, finders’
fees or commissions payable in connection herewith or therewith based on
any agreement, arrangement or understanding with PSI Parent or any action
taken by PSI Parent;
|
|
|
(iii)
|
PSI
Parent is acquiring the Acquired Shares for investment purposes only, for
its own account and not with a view to, or for resale in connection with,
any distribution thereof within the meaning of the Securities Act of 1933,
as amended (the “Securities
Act”);
|
|
|
(iv)
|
the
offer of the Acquired Shares to PSI Parent was not made by any public or
general means or pursuant to any public or general
solicitation;
|
|
|
(v)
|
PSI
Parent is an “accredited investor” within the meaning of Rule 501 of
Regulation D under the Securities
Act;
|
|
|
(vi)
|
PSI
Parent is not purchasing the Acquired Shares for the account or on behalf
of any U.S. Person (which, for the purposes of this Agreement, shall have
the definition ascribed thereto in Regulation S promulgated under the
Securities Act (“Regulation
S”));
|
|
|
(vii)
|
PSI
Parent is not a U.S. Person, was not formed under the laws of any United
States jurisdiction and was not formed for the purpose of investing in
securities not registered under the Securities
Act;
|
|
|
(viii)
|
PSI
Parent has not made any pre-arrangement to transfer any of the Acquired
Shares to a U.S. Person or to return any of the Acquired Shares to the
United States securities markets (which includes short sales and hedging
transactions in the United States within the periods restricted under
Regulation S (the “Restricted
Periods”) to be covered by delivery of any of the Acquired Shares)
and is not acquiring the Acquired Shares as part of any plan or scheme to
evade the registration requirements of the Securities
Act;
|
|
|
(ix)
|
PSI
Parent acknowledges and understands that (A) all offers and sales of any
of the Acquired Shares by PSI Parent in the United States or to U.S.
Persons or otherwise, whether prior to the expiration or after the
expiration of the Restricted Periods, shall be made only pursuant to a
registration of such Acquired Shares under the Securities Act or an
exemption from registration requirements of the Securities Act and (B)
Quigley will, in order to approve removal of the restrictive legend from
certificates evidencing the Acquired Shares, require from PSI Parent
(i) certain written representations to indicate that the sale of the
Acquired Shares was made in a transaction that complies with the
provisions of Regulation S, pursuant to a registration of the Acquired
Shares under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act and (ii) require a
legal opinion that removal of the legend is
appropriate;
|
|
|
(x)
|
PSI
Parent has not engaged in any “directed selling efforts” (as defined in
Regulation S) in the United States regarding any of the Acquired Shares,
nor has it engaged in any act intended to or that reasonably might have
the effect of preconditioning the U.S. market for the resale of any of the
Acquired Shares;
|
|
|
(xi)
|
PSI
Parent is not a “distributor” as defined in Regulation S and is not an
officer, director or “affiliate” (as that term is defined in Rule 405
under the Securities Act) of Quigley or an “underwriter” or “dealer” (as
such terms are defined in the federal securities laws of the United
States); and
|
|
|
(xii)
|
PSI
Parent does not have a short position in, or other hedged position with
respect to, the Acquired Shares or any other shares of the Common Stock
and will not have a short position in, or other hedged position with
respect to, such securities at any time prior to the expiration of the
Restricted Periods.
|
|
|
(b)
|
PSI
Parent acknowledges:
|
|
|
(i)
|
that
the Acquired Shares have not been registered under (and that Quigley has
no present intention to register the Acquired Shares under) the Securities
Act or applicable state securities law and that the offering and sale of
the Acquired Shares have been made in reliance on the exemption from the
registration requirements provided by Section 4(2) of the Securities
Act and the regulations promulgated thereby and analogous provisions of
certain state securities laws or in accordance with Regulation S
under the Securities Act;
|
|
|
(ii)
|
that
the Acquired Shares may not be sold or otherwise transferred unless, among
other things, the Acquired Shares have been registered under the
Securities Act and applicable state securities laws or are sold or
transferred in a transaction exempt therefrom;
and
|
|
|
(iii)
|
that
it may have to bear the economic risk associated with its ownership of the
Acquired Shares for an indefinite period of time or to suffer a complete
loss of its investment;
|
|
|
(iv)
|
that:
(A) it has received and reviewed this Agreement; (B) it, its
attorney and its accountant have had access to, and an opportunity to
review, all documents and other materials requested of Quigley; and
(C) it and they have been given an opportunity to ask any and all
questions of, and receive answers from, Quigley concerning the terms and
conditions of the offering and issuance of Acquired Shares and to obtain
all information that it or they believe necessary or appropriate to invest
in Quigley and to purchase the Acquired Shares, to verify the accuracy of
documents and materials requested of Quigley and to evaluate the
suitability of an investment in the Acquired Shares;
and
|
|
|
(v)
|
that,
in evaluating the suitability of an investment in the Acquired Shares, it
has not relied upon any representations, warranties or other information
(whether oral or written), other than such information as has been made
publicly available in Quigley’s periodic reports, as filed with the United
States Securities and Exchange Commission (such information, “Public
Information”).
|
|
|
(c)
|
PSI
Parent hereby waives, to the maximum extent permitted by law, any claim,
or potential claim, it has or may have against Quigley and its officers,
directors, shareholders, partners, successors and assigns, relating to any
such person’s possession of information that is not Public
Information.
|
|
4.
|
Legends on Share
Certificates. PSI Parent hereby consents to the placement of the
following legends on the stock certificate or certificates representing
the Acquired Shares:
|
|
5.
|
Restrictions on
Acquisition of Additional
Shares.
|
|
|
(a)
|
Without
the prior written consent of Quigley, PSI Parent shall not, and shall not
cause any of its Subsidiaries to, directly or indirectly: (i) acquire
any (A) Additional Shares, (B) Common Stock Equivalents, and/or
(C) beneficial or other interest (whether with respect to voting
rights, economic rights, or otherwise) in any Additional Shares or in any
Common Stock Equivalents; and/or (ii) enter into any Contract with
respect to any of the actions described in the immediately foregoing
clause (i).
|
|
|
(b)
|
“Additional
Shares” means any shares of Common Stock other than the Acquired
Shares.
|
|
|
(c)
|
“Common Stock
Equivalents” means (i) any warrant, option, subscription or
purchase right with respect to one or more shares of Common Stock,
(ii) any Security convertible into, exchangeable for or otherwise
entitling the holder thereof to acquire one or more shares of Common
Stock, or (iii) any warrant, option, subscription or purchase right
with respect to any Security described in the immediately foregoing
clause (ii).
|
|
6.
|
Piggyback
Rights.
|
|
|
(a)
|
If,
at any time after June 1, 2012, Quigley proposes to register any
Common Stock (such Common Stock, “Offered
Securities”) under the Securities Act in connection with an
underwritten public offering by Quigley of such Offered Securities solely
for cash and on any form that would permit the registration of the
Acquired Shares (other than a registration (i) relating solely to the
sale of securities to participants in a stock grant, option or purchase
plan or other employee stock incentive program or agreement, (ii) on
any form that does not include substantially the same information as would
be required to be included in a registration statement covering the sale
of Acquired Shares, (iii) in which such Offered Securities constitute
all or part of the consideration in connection with a Company Sale (or
analogous transaction with respect to any Subsidiary of Quigley) or
(iv) in which such Offered Securities are being registered in
connection with a private investment in Quigley’s securities or a
transaction commonly referred to as a “PIPE” transaction), then, on or
before the date that is 20 days prior to the filing of a registration
statement in connection with such registration (any such registration, a
“Registration”),
Quigley shall give written notice (such notice, a “Registration
Notice”) of such proposed Registration to PSI Parent, specifying in
such Registration Notice the number of Offered Securities that Quigley
intends to register.
|
|
|
(b)
|
PSI
Parent may elect to participate (subject to the terms of this Section 6)
in such Registration, with respect to the Acquired Shares, by giving
written notice to Quigley (such notice, a “Registration
Participation Notice”) on or before the date that is 15 days after
Quigley gives a Registration Notice, specifying in such Registration
Participation Notice the number of Acquired Shares that it elects to
include in such Registration (such Acquired Shares, as specified in such
Registration Participation Notice and as may thereafter be reduced in
number pursuant to Section 6(d),
the “Registration Requested
Acquired Shares”).
|
|
|
(c)
|
If
PSI Parent elects to participate in a given Registration in accordance
with this Section 6,
then (i) PSI Parent shall enter into an underwriting agreement in
usual and customary form with the underwriter or underwriters selected by
Quigley for such underwriting (including, if applicable, provisions
relating to a lock-up period after such Registration is effected with
respect to the sale of Registration Requested Acquired Shares) and
(ii) PSI Parent shall complete and execute all questionnaires, powers
of attorney, indemnities and other documents, each in customary form,
reasonably required under the terms of such underwriting agreement; provided, however, that
(x) PSI Parent will not be required to make any representations or
warranties in connection with any such underwriting agreement other than
customary representations and warranties with respect to itself and the
Registration Requested Acquired Shares, and (y) any obligation of PSI
Parent to indemnify any Person pursuant to any such underwriting agreement
will be limited to the net amount received by PSI Parent from the sale of
its Registration Requested Acquired Shares pursuant to such
Registration.
|
|
|
(d)
|
Notwithstanding
anything in this Section 6
to the contrary, if the managing underwriter for such Registration (such
underwriter, the “Managing
Underwriter”) advises Quigley that marketing factors require a
limitation of the number of securities to be underwritten in such
Registration, then Quigley shall give written notice thereof to PSI Parent
and the number of Registration Requested Acquired Shares that PSI Parent
will be entitled to include in such Registration and the number of other
securities (such other securities, collectively with the Registration
Requested Acquired Shares, “Participating
Securities”) offered for the account of other Persons (such other
Persons, collectively with PSI Parent, “Participating
Stockholders”) will be collectively reduced on a pro rata basis
based upon the number of securities that each Participating Stockholder
has elected to include in such Registration, such that the aggregate
number of Participating Securities included in such Registration can be
sold (in the opinion of the Managing Underwriter) in light of such
marketing factors.
|
|
|
(e)
|
Notwithstanding
anything in this Section 6
to the contrary, Quigley may elect to abandon any given Registration,
whether or not PSI Parent has elected to participate in such Registration,
by providing written notice to PSI Parent that it would be detrimental to
Quigley or its stockholders to proceed with such
Registration.
|
|
|
(f)
|
The
rights afforded to PSI Parent pursuant to this Section 6 will
extend to any Person that acquires Acquired Shares in accordance with this
Agreement and applicable law.
|
|
|
(g)
|
Notwithstanding
anything in this Section 6 to
the contrary, the rights afforded pursuant to this Section 6 will
not apply with respect to Acquired Shares that have been registered and
sold pursuant to the Securities Act, that have been sold pursuant to Rule
144 under the Securities Act (or any similar rules promulgated pursuant to
the Securities Act), or that are eligible for sale pursuant to Rule 144(k)
under the Securities Act.
|
|
7.
|
Miscellaneous.
|
|
|
(a)
|
Amendments. Any
provision of this Agreement may be amended if, and only if, such amendment
is in writing and is signed by each
Party.
|
|
|
(b)
|
Incorporation of
Provisions in LLC Agreement. The following provisions of the LLC
Agreement are hereby incorporated by reference as if set forth herein in
full, mutatis
mutandis: Sections 1.2 (Construction);
20.1 (Notices); 20.5 (Waivers); 20.6 (Successors and
Assigns); 20.7 (Governing Law); 20.8 (Dispute Resolution and
Arbitration); 20.9 (Counterparts); 20.11 (No Third-Party
Beneficiaries); 20.13 (Captions); 20.14 (Severability);
20.15 (Interpretation); 20.16 (Consent to Jurisdiction and
Venue); 20.17 (Specific Performance); 20.18 (Further
Assurances); 20.19 (Signed Writings); and 20.21 (Access to
Counsel).
|
|
THE
QUIGLEY CORPORATION
|
|
|
By:
|
/s/ Ted Karkus
|
|
Name:
Ted Karkus
|
|
|
Title:
Chief Executive Officer
|
|
|
PHOSPHAGENICS
LTD.
|
|
|
By:
|
/s/ Fred Banti
|
|
Name:
Fred Banti
|
|
|
Title:
Senior Vice President and Chief Business
Officer
|
|