EXHIBIT 10.6
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STOCKHOLDERS AGREEMENT
among
EXIGENT DIAGNOSTICS, INC.,
SMITHKLINE XXXXXXX CORPORATION,
SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO.,
XXXXXXX XXXXX SECURITIES INCORPORATED,
EXIGENT PARTNERS, L.P.,
X. XXXXXXX STOUGHTON,
XXXXXX X. XXXXX,
XXXXXXX X. XXXXXX,
XXXXXXX X. XXXXXX,
XXXXXX X. XXXX,
XXXXX X. XXXXXXX,
XXXXXX X. XXXXX,
AND
EACH INVESTOR SIGNATORY HERETO
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Dated as of December 4, 1996
TABLE OF CONTENTS
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Sections Page
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1. Certain Defined Terms.................................. 3
2. Limitations on Transfers............................... 7
3. Consultation with and Consent of Xxxxxxx Xxxxx in
Connection with Future Issuances of Securities........ 8
4. Preemptive Rights...................................... 8
5. Stock Splits, Etc...................................... 11
6. Registration Rights.................................... 11
7. Financial Reports and Information...................... 11
8. Corporation Governance Provisions...................... 12
9. Specific Performance................................... 14
10. Legend................................................. 14
11. Notices................................................ 14
12. Termination............................................ 17
13. Entire Agreement; Effectiveness and Amendments......... 17
14. Expenses............................................... 17
15. Governing Law; Successors and Assigns.................. 17
16. Waivers................................................ 18
17. Severability........................................... 18
18. Captions............................................... 18
19. Counterparts........................................... 18
20. Attorney's Fees........................................ 18
21. Parties Benefitted..................................... 18
22. Successors and Assigns................................. 18
STOCKHOLDERS AGREEMENT
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THIS STOCKHOLDERS AGREEMENT (the "Agreement") is made as of this 4th
day of December, 1996, by and among
. EXIGENT DIAGNOSTICS, INC., a Delaware corporation (the
"Corporation"),
. SMITHKLINE XXXXXXX CORPORATION, a Pennsylvania corporation
("SmithKline"),
. SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO., a Pennsylvania
limited liability company ("SBD"),
. XXXXXXX XXXXX SECURITIES INCORPORATED, a Delaware Corporation
("Xxxxxxx Xxxxx"),
. EXIGENT PARTNERS, L.P., a Delaware limited partnership ("Exigent
Partners"),
. X. XXXXXXX STOUGHTON ("Stoughton"),
. XXXXXX X. XXXXX ("Grove"),
. XXXXXXX X. XXXXXX ("Xxxxxx"),
. XXXXXXX X. XXXXXX ("Knight"),
. XXXXXX X. XXXX ("Xxxx"),
. XXXXX X. XXXXXXX ("Xxxxxxx"),
. XXXXXX X. XXXXX ("Xxxxx"), and
. EACH INVESTOR WHO SHALL HEREAFTER BECOME A SIGNATORY HERETO
(individually, an "Investor" and collectively, the "Investors").
WHEREAS, Stoughton and Grove formed the Corporation on July 10, 1996
and as a result of the incorporation were issued that number of shares of common
capital stock of the Corporation, $.01 par value per share ("Common Stock"), as
is set forth opposite their names on Exhibit A hereto;
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WHEREAS, on July 24, 1996, the Corporation entered into a letter of
intent (the "Letter of Intent") with SmithKline relating to the Corporation's
purchase from SmithKline of substantially all of the assets and assumption of
liabilities relating to the business then being operated by SmithKline in
connection with the research and development of point of care diagnostic
equipment (as more particularly described in the Private Placement Memorandum
(hereinafter defined), the "POC Business");
WHEREAS, Asarch, Knight, Xxxx, Xxxxxxx (collectively, the "Employee
Stockholders", and together with Stoughton and Grove, the "Management
Stockholders") and Xxxxx became Stockholders of the Corporation in October,
1996, subject to certain forfeiture restrictions pertaining to their stock and,
in the case of Xxxxx, rights to additional stock, as more fully set forth in the
letter agreements entered into between each of them and the Corporation attached
hereto as Exhibit B (the "Letter Agreements");
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WHEREAS, on or prior to the date hereof, pursuant to an Asset Purchase
Agreement (the "Purchase Agreement") by and among the Corporation, SmithKline
Xxxxxxx Clinical Laboratories, Inc. and SBD, the Corporation has purchased the
assets and assumed the liabilities of the POC Business from SBD and in
consideration therefor has issued to SBD that number of shares of Common Stock
as is set forth opposite SBD's name on Exhibit A hereto, such number comprising
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five percent (5%) of the total issued and outstanding shares of Common Stock as
of the date hereof;
WHEREAS, pursuant to the Purchase Agreement, the Company may from time
to time issue to SBD and its Affiliates (defined below) additional shares of
Common Stock to prevent the dilution of their equity interests in the Company
(the "Antidilution Shares");
WHEREAS, on or prior to the date hereof, Exigent Partners has extended
or caused a third party to extend to the Corporation a working capital loan in
the original principal amount of One Million Dollars ($1,000,000) and in
consideration therefor has received the shares of Common Stock set forth
opposite its name on Exhibit A hereto;
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WHEREAS, the Corporation has engaged Xxxxxxx Xxxxx to conduct a
private offering (the "Private Offering") to the Investors of shares of Common
Stock equal to up to 50% of the total issued and outstanding shares of Common
Stock (plus certain over-subscription shares) of Common Stock (all as more
particularly described in the private placement memorandum ("Private Placement
Memorandum") prepared by the Corporation in connection with the Private
Offering), the first closing thereunder to occur at such time as a minimum of
Four Million Dollars ($4,000,000) has been raised from the Investors in such
offering, and subsequent closings to occur as additional funds up to an
aggregate (including the initial closing's funds) of Seven Million Five Hundred
Thousand Dollars ($7,500,000) are raised from the Investors (all such amounts
being before commissions and expenses);
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WHEREAS, the Corporation will issue to Xxxxxxx Xxxxx warrants to
purchase a number of shares of Common Stock equal to twenty percent (20%) of
that number of shares of Common Stock sold in the Private Offering;
WHEREAS, if the minimum amount of funds, Four Million Dollars
($4,000,000), is raised in the Private Offering, the Investors will own thirty-
five and 81/100 percent (35.81%) of the total issued and outstanding Common
Stock; if the maximum amount, Seven Million Five Hundred Thousand Dollars
($7,500,000), is raised, the Investors will own fifty percent (50%) of the total
issued and outstanding Common Stock of the Corporation (the shares of Common
Stock representing such percentages being the "Private Offering Stock");
WHEREAS, pursuant to the Letter of Intent, SmithKline made available
to the Corporation a One Million Dollar ($1,000,000) loan, secured by all of the
present and future assets of the Corporation, the outstanding principal amount
of which loan is convertible, at the election of SmithKline or as otherwise
required by the loan documents, into up to two percent (2%) of the Corporation's
issued and outstanding Common Stock upon the earlier of the first closing of the
Private Offering or December 31, 1996 (the "Conversion Shares");
WHEREAS, the Corporation and its stockholders desire to set forth
certain rights and obligations which each will have to the other with respect to
their stock interest in the Corporation, whether now owned or hereafter
acquired; and desire to cause each new stockholder to enter into a counterpart
to and to become bound by the terms and conditions of this Agreement at such
time as they become stockholders in the Corporation.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and undertakings set forth below, the parties hereto,
intending to be legally bound hereby, agree with each other as follows:
1. Certain Defined Terms. Capitalized terms used in this Agreement
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have the meanings set forth in this Section 1, or are defined in the provisions
of this Agreement identified in this Section 1.
(a) "Affiliate" of a Person shall mean any Person which,
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directly or indirectly, controls, is controlled by, is under common control
with, or under a common management agreement with, such Person. For purposes
hereof, (i) the partners of Exigent Partners shall be deemed to be Affiliates of
Exigent Partners (but only to the extent of their pro rata interest therein),
(ii) other members of the consolidated group of corporations of which SmithKline
is a member, as well as SBD and SmithKline Xxxxxxx Clinical Laboratories, Inc.,
shall be considered to be Affiliates of SmithKline and SBD, and (iii) the
officers and directors of the Corporation shall be deemed to be Affiliates of
the Corporation for so long as they hold such position.
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(b) "Agreement" means this Stockholders Agreement, as the same may be
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amended from time to time in accordance herewith.
(c) "Bona Fide Offer" shall mean a bona fide written offer from any
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Person to purchase any Securities owned by a Stockholder.
(d) "Common Equity Percentage" shall mean, as to any Stockholder, the
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percentage that (i) the outstanding shares of Common Stock then owned by such
Stockholder and any shares of Common Stock issuable upon exercise of any
warrants (including as warrants for this purpose the right to receive
Antidilution Shares) or Options, in each case which are fully vested and then
owned by such Stockholder, is of (ii) the aggregate outstanding number of shares
of Common Stock then owned by Stockholders, plus all shares of Common Stock
issuable upon exercise of any warrants (including as warrants for this purpose
the right to receive Antidilution Shares) or Options, in each case which are
fully vested and then owned by such Stockholders.
(e) "Common Shares" shall mean issued and outstanding shares of Common
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Stock.
(f) "Counterpart" shall mean a counterpart to this Agreement in the
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form of Exhibit C hereto, pursuant to the execution of which a Person shall
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become bound by all of the terms and conditions to this Agreement.
(g) "Excluded Securities" shall mean, collectively:
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(i) the Warrant Shares and shares issued in connection with the
exercise of Options;
(ii) Stock to be issued as a stock dividend;
(iii) any Antidilution Shares or Conversion Shares
issued to SmithKline or its Affiliates;
(iv) shares of any class of the Corporation's Stock to be issued
upon any subdivision, combination, stock split or reverse
stock split of all the outstanding shares of such class of
Stock of the Corporation;
(v) any securities to be issued by the Corporation pursuant to
the acquisition by the Corporation of any Person by means
of merger, stock purchase, reorganization, purchase of
substantially all the assets or otherwise in which the
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Corporation or its stockholders of record immediately
prior to the effective date of such transaction, directly
or indirectly, own at least a majority of the voting power
of the acquired or resulting entity after such
transaction; provided, that such recipient(s) of shares of
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Stock execute(s) a Counterpart and agree(s) to be bound by
the terms and conditions hereof; and provided, further,
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that such acquisition has been approved by a majority of
the Independent Directors; and
(vi) any securities to be issued pursuant to a Public Offering;
(vii) the Private Offering Stock; and
(viii) any Securities to be issued to one or more investors for
the purpose of raising additional capital for the benefit
of the Corporation and such issuance is approved by a
majority of the Independent Directors (the "Exempted
Securities").
(h) "Options" shall mean incentive stock or non-qualified options
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granted in accordance with the Purchase Agreement, pursuant to the Stock Option
Plan as described in the Private Placement Memorandum.
(i) "Person" shall mean an individual, a sole proprietorship, a
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corporation, a partnership, limited liability company, limited liability
partnership, a joint venture, an association, a trust, or any other entity or
organization, including a government or a political subdivision, agency or
instrumentality thereof.
(j) "Public Offering" shall mean the sale of shares of Common Stock
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in a registered underwritten public offering.
(k) "Securities" shall mean all shares of capital stock, options,
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warrants, notes, bonds or other equity or debt securities offered or sold by the
Corporation from time to time on or after the date hereof.
(l) "Stock" shall mean any Common Shares or any other shares of any
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other class of capital stock that the Corporation may from time to time have
outstanding.
(m) "Stockholder" shall mean any Person who is a party to this
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Agreement, provided such person holds one or more shares of Stock.
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(n) "Stock Option Plan" shall mean the Stock Option Plan adopted by
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the Corporation on or after the date hereof providing for the issuance of the
shares of Common Stock to certain employees of the Corporation.
(o) "Transfer" shall mean any transfer of Stock, whether by sale,
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assignment, gift, will, devise, bequest, operation of the laws of descent and
distribution, or in trust, pledge, hypothecation, mortgage, encumbrance or other
disposition. The verb to "Transfer" shall mean to sell, assign, give, transfer
(including by gift, will, devise, bequest, or operation of laws of descent and
distribution, or in trust), pledge, hypothecate, mortgage, encumber or dispose
of.
(p) "Warrant Shares" shall mean the warrants and shares of Stock
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issuable on exercise thereof to be issued to Xxxxxxx Xxxxx at each closing of
the Private Offering.
Other capitalized terms used in this Agreement have the definitions set
forth in the following sections:
Capitalized Term Section
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5-Day Period 4(d)
20-Day Period 4(b)
90-Day Period 4(f)
Accepting Stockholders 4(d)
Additional Directors 8(b)
Antidilution Shares Preamble
Board 2(d)
Conversion Shares Preamble
Director 8(b)
Employee Stockholders Preamble
Fair Market Value 2(f)
Final Closing 3(a)
First Closing 8(b)
Holdings Preamble
Independent Directors 8(b)
Investor Registration Agreement 8(b)
Management Directors 8(b)
Management Stockholders Preamble
Notice of Acceptance 4(c)
Notice of Refused Securities 4(c)
Offer 3(b)
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Outside Offer 4(f)
Purchase Agreement Preamble
Preemptive Offer 4(a)
Private Offering Preamble
Private Offering Stock Preamble
Private Placement Memorandum Preamble
Refused Securities 4(c)
SKB Director 8(b)
Xxxxxxx Xxxxx Directors 8(b)
Strategic/Venture Capital Securities 4(a)
Voting Securities 8(b)
2. Limitations on Transfers.
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(a) Each Stockholder hereby agrees that it shall Transfer all or
any of his or its Stock only if such Transferee shall, as a condition to such
Transfer, execute a Counterpart and thereafter the Transferee shall be treated
as a Stockholder having the obligations of the Stockholder from whom Transferred
for all purposes under this Agreement. No Transfer shall be effective and the
Corporation shall not, and shall not be compelled to, recognize any Transfer or
record any Transfer on their books made unless such Transfer is effected in
accordance with the terms of this Agreement, or issue any certificate
representing any Stock to any Person who has received such Stock in a Transfer
unless such Transfer is effected in accordance with the terms of this Agreement.
(b) Any Stockholder shall be permitted to pledge his Stock to a
lender to the pledging Stockholder provided that, in the case of Stockholders
other than Investors, (i) prior to completing the pledge, the lender undertakes
in a writing (in form and substance acceptable to the lender and the
Corporation) delivered to the Corporation that (A) such lender is prohibited
from selling or syndicating all, or any portion of the debt obligation secured
by the pledge, and (B) in the event of any default on the debt secured by such
pledge, all or any portion of the pledged Stock (as determined by the
Corporation) may be purchased by the Corporation for a price equal to the lower
of (1) the Fair Market Value (as determined under procedures comparable to those
set forth in Section 2(c) hereof with decisions as to choice of the valuation
determiner being made by the Corporation and the lender) of the Stock being
purchased, or (2) the unpaid principal, plus accrued interest, plus all other
amounts accrued and owing to the lender in respect of such indebtedness, secured
by the pledge, and (ii) the lender is an institution normally engaged in the
business of making commercial loans.
(c) For purposes of this Agreement, "Fair Market Value" of a
share of Stock shall mean such value as determined by an investment banking firm
mutually acceptable to both the Board of Directors of the Corporation (the
"Board") and the Stockholder. In the event an investment banking firm cannot be
mutually agreed upon, such value shall be a value per
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share of Stock as determined by a nationally recognized firm engaged in the
business of (among other things) valuing privately held businesses, which is not
an Affiliate of the Corporation, any director of the Corporation, or any of the
Stockholders, and which is selected by the Corporation.
3. Consultation with and Consent of Xxxxxxx Xxxxx in Connection with
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Future Issuances of Securities.
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(a) Until the second anniversary of the final closing (the "Final
Closing") of the Private Offering, the Corporation shall not issue any
Securities, or other rights to acquire Securities, or create any class of
Securities, without prior consultation with, and obtaining the consent of (which
consent will not be unreasonably withheld, delayed or conditioned) Xxxxxxx
Xxxxx; provided, however, no such consultation or consent shall be required (i)
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if the Corporation does not sell at least $4,000,000 of Common Stock in the
Private Offering or (ii) in connection with Excluded Securities, except that the
Corporation shall first be required to consult with, but not be required to
obtain the consent of, the Placement Agent with respect to the Exempted
Securities.
4. Preemptive Rights.
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(a) The Corporation shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange,
any Securities unless it shall have first offered (the "Preemptive Offer") to
sell such Securities to the Stockholders on the terms set forth herein;
provided, however, the Preemptive Offer shall not apply to Excluded Securities,
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other than to Exempted Securities (exclusive of those Exempted Securities that
are to be offered in any transaction or series of related transactions to a
limited number, not to exceed four (4), of institutional, venture capital or
strategic investors ("Strategic/Venture Capital Securities") in which case the
Preemptive Offer shall not apply thereto). Each Stockholder shall have a
preemptive right to purchase up to such Stockholder's Common Equity Percentage
of such Securities. Each Stockholder may assign all or any part of its rights
and responsibilities with respect to such Offer (as defined below) to an
Affiliate (or a permitted transferee). Such Affiliate or Affiliates (or a
permitted transferee) which are such assignees shall thereafter be deemed to be
such assigning Stockholder (to the extent of such assignment) for purposes of
applying this Section 4 to such Preemptive Offer. Each such Affiliate shall
agree in writing, as a condition to such assignment, to execute a Counterpart in
the event of a purchase of Securities pursuant to such assignment.
(b) The Corporation shall deliver to each Stockholder written
notice of the Preemptive Offer, specifying the price and terms and conditions of
the offer, including, without limitation, the minimum and maximum limits on the
amount of Securities proposed to be sold by the Corporation pursuant to the
offer (the "Offer"), and the Common Equity Percentage applicable to the
Stockholder receiving such notice. The Preemptive Offer by its terms shall
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remain open and irrevocable for a period of twenty (20) days from the date such
notice is given (the "20-Day Period").
(c) If a Stockholder desires to purchase Securities pursuant to
the Preemptive Offer, such Stockholder shall evidence his or its intention to
accept the Preemptive Offer by delivering a written notice to the Corporation
signed by the Stockholder, setting forth the percentage of the Securities (not
exceeding such Stockholder's Common Equity Percentage of such Securities) that
the Stockholder agrees to purchase pursuant to the terms and conditions set
forth herein (the "Notice of Acceptance"). Provided the minimum number of
Securities set forth in the Preemptive Offer has been sold after conclusion of
all procedures set forth in this Section 4, then, upon closing of the Preemptive
Offer, each Stockholder shall be obligated to buy the percentage set forth in
such Stockholder's Notice of Acceptance times the number of Securities being
sold at such closing. The Corporation shall not be permitted to sell at such
closing (or any subsequent closing with respect to which the procedures set
forth in this Section 4 have not again been followed, except as provided in this
Section 4) more than the maximum number of Securities set forth in the
Preemptive Offer. The Notice of Acceptance must be given, if at all, prior to
the end of the 20-Day Period.
(d) Within five (5) days following the end of the 20-Day Period,
the Corporation shall give written notice (the "Notice of Refused Securities")
to the Stockholders setting forth the percentage, if any, of Securities for
which a Notice of Acceptance could have been but was not received from the
Stockholders (the "Refused Securities"). Each Stockholder giving a Notice of
Acceptance ("Accepting Stockholders") shall be entitled to purchase by an
additional Notice of Acceptance given to the Corporation within five (5) days
after the date the Notice of Refused Securities is given (the "5-Day Period"),
that proportion of any Refused Securities which the Common Equity Percentage of
such Accepting Stockholder (prior to the Offer) bears to the Common Equity
Percentage of all Accepting Stockholders (prior to the Offer). The procedure set
forth in this section shall be repeated until there are no more Accepting
Stockholders or no more Refused Securities, whichever occurs first. To the
extent any Investor does not purchase a portion of the Refused Securities within
the 5-Day Period so entitled to be purchased by such Investor (the "Investor
Refused Securities"), Xxxxxxx Xxxxx shall be entitled to purchase all, but not
less than all of the Investor Refused Securities by giving notice of its
agreement to do so within two business days of the end of the 5-Day Period (the
"7-Day Period").
(e) If, subject to Section (d) above, the Stockholders give
Notices of Acceptance prior to the end of the 20-Day Period or a 7-Day Period,
as applicable, indicating their intention to purchase, in the aggregate, at
least the minimum amount of Securities set forth in the Preemptive Offer, the
Corporation shall schedule a closing of the sale of the Securities to occur on a
date not more than sixty (60) days nor less than twenty (20) days after the
termination of the 20-Day Period or 7-Day Period, as applicable. Upon the
closing of the sale of the Securities, each Accepting Stockholder shall purchase
those Securities for which it tendered Notices of Acceptance upon the terms
specified in the Offer.
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(f) Upon completion of the procedures set forth in Sections 4(b)
through 4(d) above, regardless of whether the Stockholders tender Notices of
Acceptance for at least the minimum amount of Securities set forth in the Offer
allocable to their Common Equity Percentages, any remaining Refused Securities
may be sold for a period of ninety (90) days after the expiration of the 20-Day
Period or 7-Day Period, as applicable (the "90-Day Period"), to any other Person
or Persons (including without limitation, executive officers of the Corporation)
upon terms and conditions which are in all material respects (including without
limitation, price, form of consideration, payment period and interest rates) the
same as those set forth in the Preemptive Offer (the "Outside Offer"). The
closing of the sale of such Refused Securities (which shall only occur if the
minimum amount is sold pursuant to this Section 4 and shall include full payment
to the Corporation in cash or notes in accordance with the terms of such offer)
shall take place not more than thirty (30) days after the expiration of such 90-
Day Period and not less than twenty (20) days after notice of said closing shall
have been given by the Corporation to each Accepting Stockholder. In the event
Accepting Stockholders gave Notices of Acceptance for less than the minimum
number of Securities set forth in the Preemptive Offer, provided the Refused
Securities agreed to be purchased pursuant to the Outside Offer, plus the
Securities for which Accepting Stockholders gave Notices of Acceptance exceeds
such minimum, then at the same time as the closing of the sale of Refused
Securities, each Accepting Stockholder shall purchase those Securities for which
it tendered Notices of Acceptance upon the terms specified in the Preemptive
Offer.
(g) (i) If at least the minimum amount of the Securities set
forth in the Preemptive Offer and the Outside Offer are not agreed to be
purchased within the 90-Day Period, the Corporation may rescind all Notices of
Acceptance tendered by Stockholders by providing written notice of such
rescission to each Accepting Stockholder and the Corporation shall not sell any
Securities pursuant to the Outside Offer.
(ii) Any Securities as to which Notices of Acceptance are rescinded,
and any Refused Securities not purchased in the Outside Offer may not be sold or
otherwise disposed of until they are again offered to the Stockholders under the
procedures specified in subsections (a) through (g) hereof.
(h) The transferability of Securities purchased by any Stockholder or
other Person pursuant to this Section 4 shall be subject to the terms and
conditions set forth in this Agreement and any Person who is not then a
Stockholder and who purchases Securities shall execute a Counterpart as a
condition precedent to such purchase. The obligation of any Stockholder to
purchase such Securities is further conditioned upon the preparation of a
purchase agreement embodying the terms of the Preemptive Offer or Outside Offer
which shall be
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reasonably satisfactory in form and substance to the Corporation and its
counsel, and such Stockholder or other purchaser and such Stockholder's or other
purchaser's counsel.
5. Stock Splits, Etc. If there shall be any change in the Stock
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of a Corporation as a result of any merger, consolidation, reorganization,
recapitalization, stock dividend, split-up, combination or exchange of Shares,
or otherwise, the provisions of this Agreement shall apply with equal force to
additional and/or substitute Securities, if any, received by each Stockholder in
exchange for or by virtue of its ownership of Shares.
6. Registration Rights. The Stockholders shall have the registration
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and other rights set forth in the various Registration Rights Agreements between
the Corporation and the Stockholders.
7. Financial Reports and Information.
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(a) Within ninety (90) days after the end of each fiscal year of
the Corporation, for so long as this Agreement shall be in effect, the
Corporation shall furnish each of the Stockholders with audited consolidated and
consolidating financial statements of the Corporation for such fiscal year
(showing comparison to the prior fiscal year) which shall include a statement of
income and retained earnings for each such fiscal year, a balance sheet as at
the last day thereof, and a statement of cash flows prepared in accordance with
generally accepted accounting principles consistently applied, and accompanied
by the report, without qualification, of the Corporation's independent certified
public accountants (which shall be of recognized national standing), including
such accountant's management letters to the Corporation and a breakdown of all
the Stockholders of each Corporation, listing next to each Stockholder's name,
the Stockholder's Common Equity Percentage.
(b) If for any period the Corporation shall have any subsidiary
or subsidiaries whose accounts are consolidated with those of the Corporation,
then in respect of such period the financial statements delivered pursuant to
the foregoing Section 7(a) shall be the consolidated financial statements of the
Corporation and all such consolidated subsidiaries.
(c) Promptly upon becoming available, copies of all financial
statements, reports, press releases, notices, proxy statements and other
documents sent by any of the Corporation to their lenders or released to the
public and copies of all regular and periodic reports, if any, filed by the
Corporation with the Securities and Exchange Commission or any securities
exchange.
(d) Upon request from any Stockholder including any Selling
Stockholder, the Corporation shall disclose to such Stockholder, in writing, the
name and address of such Stockholder (as it then appears on the records of the
Corporation) and such Stockholder's Common Equity Percentage.
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8. Corporation Governance Provisions.
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(a) The Board shall have a minimum of two (2) and a maximum of
ten (10) seats; provided, however, in no event shall the number of directors
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exceed seven (7) without the prior written consent of Xxxxxxx Xxxxx. Effective
with the First Closing of the Private Offering (the "First Closing"), there
shall be not less than seven (7) directors. No person shall serve as a director
of the Corporation unless such person meets the qualifications set by the
Corporation applicable to all of its directors.
(b) Following the First Closing and continuing for a period of
five (5) years thereafter, except as set forth in Section 5 of the Registration
Rights Agreement among the Corporation and the Investors (the "Investor
Registration Agreement"), the Corporation shall cause from time to time the
following individuals to be nominated to serve as members of the Board, and the
Stockholders shall promptly (i) vote any shares of Stock and any other
securities issued by the Corporation which are entitled to be voted for the
election of directors (collectively, "Voting Securities") which they own or
otherwise have the power to vote (including, without limitation, by execution of
a written consent or in any other manner permitted by law, the Corporation's
certificate of incorporation and by-laws), and (ii) take any other action
necessary or otherwise reasonably requested by the Corporation, in each case to
facilitate the election of the following nominees to serve as members of the
Board:
(i) Stoughton and Grove; provided, that (A) if Stoughton is
not then employed by the Corporation, the Corporation's then Chief Executive
Officer, unless such Chief Executive Officer is Grove, in which case, an
executive officer selected by Grove; and (B) if Grove is not then employed by
the Corporation, an executive officer of the Corporation selected by Stoughton
or, if Stoughton is not then employed by the Corporation, by the then Chief
Executive Officer of the Corporation (the "Management Directors");
(ii) so long as SmithKline or its Affiliates beneficially
own at least five-sevenths (5/7ths) of the shares of Common Stock owned in the
aggregate by it and by its Affiliates on November 7, 1996, an individual
selected by SmithKline, if SmithKline shall so designate an individual to so
serve on the Board, which individual shall be reasonably acceptable to Stoughton
or, if Stoughton is no longer employed by the Corporation, by the Corporation's
then Chief Executive Officer (the "SKB Director"); provided, that the SKB
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Director shall be elected pursuant to this Section 8(b)(ii) notwithstanding any
provisions of the Investor Registration Agreement or any other agreement; and
provided, further, that the SKB Director shall serve on any compensation
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committee of the Board of Directors; and provided, further, if SKB shall not be
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entitled to designate the SKB Director, then an individual designated by Xx.
Xxxxxxxxx (or if Xx. Xxxxxxxxx is not then employed by the Corporation, an
individual designated by the then Chief Executive Officer of the Corporation)
shall be designated as a director nominee (an "Additional Management Director").
-12-
(iii) one individual designated by Xxxxxxx Xxxxx, if Xxxxxxx
Xxxxx shall so designate an individual to so serve on the Board, which
individual shall be reasonably acceptable to the Corporation and the Management
Directors; provided, however, if the Board shall consist of more than seven
individuals, then two individuals designated by Xxxxxxx Xxxxx, if Xxxxxxx Xxxxx
shall so designate two individuals to so serve on the Board, which individuals
shall be reasonably acceptable to Stoughton or, if Stoughton is no longer
employed by the Corporation, by the Corporation's then Chief Executive Officer
(the "Xxxxxxx Xxxxx Directors");
(iv) three individuals (who are neither full-time employees
of the Corporation nor Affiliates of any beneficial owner of 5% or more of the
then outstanding Voting Securities of the Corporation) designated by Stoughton
or, if Stoughton is no longer employed by the Corporation, by the Corporation's
then Chief Executive Officer, which individuals shall be reasonably acceptable
to Xxxxxxx Xxxxx and SmithKline (the "Independent Directors"); and
(v) subject to Xxxxxxx Xxxxx'x agreement to the expansion
of the Board to consist of more than seven (7) individuals, that number of
individuals, any of whom may be affiliates or employees of the Corporation,
designated by Stoughton or, if Stoughton is no longer employed by the
Corporation, by the Corporation's then Chief Executive Officer, up to a maximum
of two individuals, which individuals shall be reasonably acceptable to Xxxxxxx
Xxxxx and SmithKline (the "Additional Directors").
The Management Directors, the Additional Management Director, the SKB Director,
the Xxxxxxx Xxxxx Directors, the Independent Directors and the Additional
Directors are each a "Director" and collectively, the "Directors."
Notwithstanding the foregoing, the five (5) year time limitation set forth in
the first sentence of this subsection (b) shall not apply to the nomination of,
the agreement to vote in favor of, or the rights of, the SKB Director.
(c) Subject to the provisions of Section 5 of the Investor
Registration Agreement: (i) no Director may be removed, except for cause,
without the approval of the Person nominating such director; provided however,
-------- -------
that in no event shall the SKB Director be removed, other than for cause,
without the consent of SmithKline; and (ii) any Director which is nominated
pursuant to this Agreement may be removed by the Person so nominating such
Director, with or without cause, and each Stockholder agrees to vote their
shares of Common Stock (whether at a meeting duly called and held, by execution
of a written consent, or otherwise) in favor of the removal of any such Director
if so requested to do so by the Person who nominated such Director sought to be
removed. Upon the creation of any vacancies on the Board as a result of the
death, disability, resignation or removal of any Director, the person nominating
the director whose death, disability, resignation or removal resulted in the
vacancy in the Board shall be entitled to nominate a replacement Director and
the Stockholders shall promptly vote their Voting Securities (including, without
limitation, by execution of a written consent or in any other manner permitted
by law, the Corporation's certificate of incorporation and by-laws), and (ii)
-13-
take any other action necessary or otherwise reasonably requested by the
Corporation, to cause the election of such nominee.
(d) Unless an individual nominated to serve on the Board
expressly agrees in writing otherwise, such nominee shall not be deemed to be
the deputy of or otherwise required to discharge his or her duties on the Board
under the direction of, or with special attention to the interests of, the
person or designating such nominee to serve on the Board.
9. Specific Performance. Because of the unique character of the
--------------------
shares of Stock, the Corporation will be irreparably damaged if this Agreement
is not specifically enforced. Should any dispute arise concerning the Transfer
of Stock, an injunction may be issued restraining any Transfer pending the
determination of such controversy. In the event of any controversy concerning
the right or obligation to Transfer any such Stock, such right or obligation
shall be enforceable in a court of equity by a decree of specific performance.
Such remedy shall be cumulative and not exclusive, and shall be in addition to
any other remedy which the Corporation or the other Stockholders of the
Corporation may have.
10. Legend. Each certificate evidencing any of the Shares shall bear
------
a legend substantially as follows:
"The shares represented by this Certificate are subject to
restrictions on transfer and may not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of except in accordance
with and subject to all the terms and conditions of a certain
Stockholders Agreement dated as of December 4, 1996, among the
Corporation and its stockholders, a copy of which the Corporation will
furnish to the holder of this certificate upon request and without
charge."
11. Notices. All notices and other communications hereunder shall be
-------
in writing and shall be given to the person either personally or by sending a
copy thereof by first class or express mail, postage prepaid, or by telegram
(with messenger service specified), telex or TWX (with answer back received) or
courier services, charges prepaid, or by telecopier, to such party's address (or
to such party's telex, TWX, telecopier or telephone number). If the notice is
sent by mail, it shall be deemed to have been received by the addressee five (5)
business days after being deposited in the United States mail, and if the notice
is sent by telegraph or courier services, it shall be deemed to have been given
to the addressee one (1) business day after deposited with a telegraph office or
courier service for delivery to that person or, in the case of telex, TWX or
telecopy when dispatched.
-14-
If to the Corporation or Stoughton to:
Exigent Diagnostics, Inc.
000 Xxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxx xx Xxxxxxx, XX 00000-0000
Attention: X. Xxxxxxx Stoughton
Telecopy No.: 610-270-6150
With a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Telecopy No.: 000-000-0000
If to any of the Management Stockholders other than Stoughton to:
Exigent Diagnostics, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telecopy No.: 000-000-0000
With a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Telecopy No.: 000-000-0000
If to SmithKline to:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (Mail Code FP 2225)
X.X. Xxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Chief Operating Officer
Telecopy No.: 000-000-0000
-15-
With a copy to:
SmithKline Corporation
Xxx Xxxxxxxx Xxxxx (Mail Code FP 2225)
X.X. Xxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel, Corporate Law - U.S.
Telecopy No.: 000-000-0000
If to Exigent Partners to:
Exigent Partners, L.P.
c/o Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, General Partner
Telecopy No.: 000-000-0000
With a copy to:
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telecopy No.: 212-213-1199
If to Xxxxxxx Xxxxx Securities Incorporated to:
Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx XxXxxxxx
Telecopy No.: 000-000-0000
With a copy to:
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telecopy No.: 000-000-0000
-16-
If to an Investor, to the address set forth on the Investor Signature
Page hereto.
Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
12. Termination. Except as provided in Section 13 hereof, this
-----------
Agreement shall terminate upon (i) the consummation of a Public Offering or (ii)
the earlier mutual agreement of a group of Stockholders having an aggregate
Common Equity Percentage of at least ninety percent (90%) of the aggregate
Common Equity Percentage of all shareholders in the Corporation, so long as such
group includes Exigent Partners and SmithKline.
13. Entire Agreement; Effectiveness and Amendments. This Agreement
----------------------------------------------
constitutes the entire agreement of the parties with respect to the subject
matter hereof and shall be effective as of December 4, 1996 as to the parties
who are then signatories hereto and, thereafter, as to all other parties at the
time they became signatories hereto. Except as provided in Section 12 hereof,
neither this Agreement nor any provision hereof may be waived, modified, amended
or terminated except by a writing duly executed by holders of Stock having an
aggregate Common Equity Percentage of at least ninety (90%) so long as such
writing is executed by SmithKline, and, if the waiver, modification, amendment
or termination would affect the rights or obligations of a holder of another
class of Stock other than Common Stock, by holders of at least eighty percent
(80%) of the outstanding shares of such class of Stock so affected; provided,
--------
that (i) until the termination of this Agreement pursuant to Section 12 hereof,
and except as otherwise provided by operation of the terms of Section 8 hereof,
the right of any Stockholder to nominate a director in accordance with the
provisions of Section 8 hereof may not be modified, amended or terminated
without the consent of such Stockholder, (ii) any such waiver, amendment or
modification shall affect all Stockholders equally unless the Stockholder
affected differently shall have specifically approved the waiver, amendment or
modification, and (iii) the terms and provisions of this Section 13 shall not be
modified or amended without the prior written consent of each of the
Stockholders. To the extent any term or other provision of any other indenture,
agreement or instrument by which any party hereto is bound conflicts with this
Agreement, this Agreement shall have precedence over such conflicting term or
provision.
14. Expenses. Each of the parties hereto shall bear its or his own
--------
expenses with respect to the agreements set forth herein unless expressly agreed
otherwise in a writing signed by the parties to bear such expenses.
15. Governing Law; Successors and Assigns. This Agreement shall be
-------------------------------------
construed and enforced in accordance with New York law without regard to the
choice of law
-17-
provisions thereof and shall be binding upon the parties hereto and their
respective successors and assigns.
16. Waivers. The failure of any party to insist upon strict
-------
performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.
17. Severability. If any provision of this Agreement is held
------------
illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability will not affect any other provision hereof. This Agreement
shall, in such circumstances, be deemed modified to the extent necessary to
render enforceable the provisions hereof.
18. Captions. Captions are for convenience only and are not deemed
--------
to be part of this Agreement.
19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Attorney's Fees. In the event of litigation of any dispute or
---------------
controversy arising from, in, under or concerning this Agreement or any
amendment hereof, including, without limiting the generality of the foregoing,
any claimed breach hereof or thereof, the prevailing party in such action shall
be entitled to recover from the other party in such action, such sum as the
court shall fix as reasonable attorney's fees incurred by such prevailing party.
21. Parties Benefitted. Nothing in this Agreement, express or
------------------
implied, is intended to confer upon any third party any rights, remedies,
obligations or liabilities.
22. Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.
[SPACE INTENTIONALLY LEFT BLANK]
-18-
IN WITNESS WHEREOF, the parties have executed this Stockholders
Agreement under seal on the date first above written.
EXIGENT DIAGNOSTICS, INC.
By: /s/ X. Xxxxxxx Stoughton
----------------------------------------
X. Xxxxxxx Stoughton
President and Chief Executive Officer
SMITHKLINE XXXXXXX CORPORATION
By: /s/ X. X. Xxxxxxxxx
----------------------------------------
Name: X X Xxxxxxxxx
Title: Attorney in fact
XXXXXXX XXXXX SECURITIES INCORPORATED
By: /s/ Xxxxxxx X. Dioguench
----------------------------------------
Name: Xxxxxxx X. Dioguench
Title: President
EXIGENT PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx
General Partner
/s/ X. Xxxxxxx Stoughton
--------------------------------------------
X. XXXXXXX STOUGHTON
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
XXXXXX X. XXXXX
[EXECUTIONS CONTINUED]
-19-
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxx
--------------------------------------
XXXXXX X. XXXX
/s/ Xxxxx X. Xxxxxxx
--------------------------------------
XXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxx
--------------------------------------
XXXXXX X. XXXXX
[INVESTOR SIGNATURES FOLLOW ON SEPARATE PAGES]
-20-
INVESTOR SIGNATURE PAGE
TO STOCKHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the undersigned Investor has executed this
Agreement as of ____________ ___, 199__.
If the Holder is an INDIVIDUAL:
____________________________________
Print Name
____________________________________
Signature
____________________________________
____________________________________
Print Address
If the Holder is a PARTNERSHIP,
CORPORATION or a TRUST:
____________________________________
Name of Partnership, Corporation
or Trust
By:__________________________________
Signature
Print Name:___________________________
Print Title:____________________________
_____________________________________
_____________________________________
Print Address
Accepted and agreed to this
____ day of ___________, 199__
EXIGENT DIAGNOSTICS, INC.
By:____________________________________
X. Xxxxxxx Stoughton
Chairman & CEO
-21-
