STOCKHOLDERS AGREEMENT
Exhibit 4.2
STOCKHOLDERS AGREEMENT (this “Agreement”) is made and entered into as of March 9, 2010, by and
between Xxxx X. Xxxxxxxxx (the “Stockholder”), and Kinderhook Partners, L.P. (“Kinderhook”).
RECITALS
A. WHEREAS, the Stockholder is, as of the date hereof, the beneficial holder of 15,642,858
shares of common stock of Liberator Medical Holdings, Inc., a Nevada corporation (the “Company”),
par value $.001 per shares (the “Common Stock”), which constitutes 45.97% of the Company’s
outstanding Common Stock;
B. WHEREAS, Kinderhook is purchasing an aggregate of 4,666,667 shares (the “Kinderhook
Shares”) of Common Stock of the Company pursuant to that certain Securities Purchase Agreement
between Kinderhook and the Company, dated the date hereof (the “SPA”);
C. WHEREAS, in connection with the consummation of the transactions contemplated by the SPA,
the Stockholder has agreed to provide for the future voting of his shares of the Company’s Common
Stock as set forth below.
NOW THEREFORE, in consideration of Kinderhook entering into the SPA and the mutual promises
and covenants set forth herein, the parties hereto agree as follows:
1. Kinderhook Director.
1.1 Upon the request of Kinderhook at any time during the term of this Agreement, the
Stockholder agrees to vote or to cause to be voted all of the Shares (as defined below) now
owned or hereafter acquired by such Stockholder or any of its affiliates or which such
Stockholder or any of its affiliates may be empowered to vote from time to time and at all
times in whatever manner as shall be reasonably necessary (including, without limitation,
voting to amend the Company’s Certificate of Incorporation, if necessary, to increase the
number of directors) to ensure that a director selected at Kinderhook’s sole discretion and
request be elected to the Company’s board of directors (the “Kinderhook Director”). Such
Kinderhook Director shall be an additional director to be added as a member of the board of
directors as such board is then currently constituted. It is understood and agreed that the
initial Kinderhook Director may be Xxxxxx Xxxx.
1.2 Removal. The Stockholder shall not vote to remove the Kinderhook Director,
other than for Cause (as defined below). “Cause” shall mean (i) the Kinderhook Director’s
conviction of, or plea of nolo contendere, to a felony or crime involving moral turpitude,
(ii) if it is finally judicially determined by a court of competent jurisdiction that the
Kinderhook Director has violated his fiduciary duties to the Company in any material
respect, or (iii) if the person serving as the Kinderhook Director would cause the Company
to be in violation of any law or regulation material to the Company. In any
such situation, Kinderhook will be entitled to select another person to be elected or
appointed to the Company’s Board of Directors in accordance with the terms of this Agreement
and the SPA.
1.3 Shares. “Shares” shall mean and include any and all shares of Common
Stock, Preferred Stock and any other shares of capital stock of the Company, by whatever
name called, which carry voting rights (including without limitation voting rights which
arise by reason of default) and shall include any such shares now owned or subsequently
acquired by the Stockholder, however acquired, including without limitation stock splits and
stock dividends.
1.4 Vacancy. The Stockholder agrees to vote all of his Shares from time to
time and at all times in whatever manner as shall be reasonably necessary to ensure that in
the event that a Kinderhook Director, for any reason, shall cease to serve as a member of
the Board of Directors during his or her term in office, the resulting vacancy on the Board
of Directors shall be filled in accordance with this Agreement.
1.5 Further Action. The Stockholder agrees to take such further actions as
shall be reasonably necessary to carry out the intent of this Agreement, including, but not
limited to, calling a special meeting of stockholders or initiating or signing and
delivering an action by written consent of the stockholders for the purpose of adding,
electing or removing a director as contemplated hereby. The Stockholder shall vote all of
his Shares entitled to vote at such meeting or in connection with such consent in accordance
with this Agreement.
2. Specific Enforcement. The parties acknowledge and agree that the parties hereto would
be irreparably damaged in the event any of the provisions of this Agreement were not performed by
the parties in accordance with their specific terms or were otherwise breached. Accordingly, it is
agreed that the Stockholder and Kinderhook shall be entitled to an injunction to prevent breaches
of this Agreement and to specifically enforce this Agreement and the terms and provisions hereof in
any action instituted in any court of the United States or any state thereof having subject matter
jurisdiction, in addition to any other remedy to which the parties may be entitled at law or in
equity.
3. Grant of Proxy. Should the provisions of this Agreement be construed to constitute the
granting of proxies, such proxies shall be deemed coupled with an interest and are irrevocable for
the term of this Agreement.
(a)
4. Termination. This Agreement and the rights and obligations of the parties hereunder
shall terminate and be of no further force or effect upon the earliest of (a) the fourth
(4th) anniversary of the date of this Agreement and (b) such time as Kinderhook shall no
longer hold at least seventy-five percent (75%) of the Kinderhook Shares. Notwithstanding the
foregoing,
Kinderhook may terminate its rights under Section 1.1 in its discretion at any time upon
notice to the Company.
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5. Miscellaneous.
5.1 Binding Effect. This Agreement shall inure to the benefit of and shall be
binding upon the respective parties hereto and their respective successors and permitted
assigns. The Shares subject to this Agreement may be transferred or assigned by the
Stockholder; provided, however, that, if such transfer or assignment is effected in a
transaction other than a sale of Shares by means of a broker transaction through an Eligible
Market (as defined in the SPA) or an underwritten public offering, then (i) Kinderhook must
receive written notice prior to the time of said transfer or assignment, stating the name
and address of said transferee or assignee, and (ii) such transferee or assignee must agree
to be bound by the terms and conditions of this Agreement. The right and obligations of the
Stockholder to vote its Shares in accordance with this Agreement shall not be assignable
other than to an affiliate of, or an entity under common investment management with, the
Stockholder.
5.2 Further Assurances. At any time or from time to time after the date hereof,
the parties agree to cooperate with each other, and at the request of any other party, to
execute and deliver any further instruments or documents and to take all such further action
as the other party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby and to otherwise carry out the intent
of the parties hereunder.
5.3 Governing Law. THE CORPORATE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE PARTIES HERETO, WITHOUT REGARD TO ITS
CONFLICTS OF LAW PROVISIONS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY, THE STOCKHOLDER AND
KINDERHOOK HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF
ANY DISPUTE BROUGHT BY THE COMPANY, THE STOCKHOLDER OR KINDERHOOK HEREUNDER, IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH
RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY, THE
STOCKHOLDER OR KINDERHOOK, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA
REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW. THE COMPANY, THE STOCKHOLDER AND KINDERHOOK HEREBY WAIVE ALL
RIGHTS TO A TRIAL BY JURY.
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5.4 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. This Agreement may be signed by facsimile signature.
5.5 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on (a) the date of transmission, if such notice or communication is delivered
via facsimile or email prior to 6:30 p.m. EST (if such transmission is delivered on or after
6:30 p.m. EST, then such transmission or communication shall be deemed to be the business
date immediately following such transmission or communication), or (b) the business day
immediately following the date of deposit with a nationally recognized overnight courier
service. The addresses, facsimile numbers and email addresses for such notices and
communications are those set forth on the signature pages hereof, or such other address or
facsimile number as may be designated in writing hereafter, in the same manner, by any such
Person.
5.6 Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
5.7 Costs of Enforcement. If any party to this Agreement seeks to enforce its
rights under this Agreement by legal proceedings, the non-prevailing party shall pay all
costs and expenses reasonably incurred by the prevailing party, including, without
limitation, all reasonable attorney fees. Notwithstanding the foregoing sentence,
Kinderhook shall retain its right to indemnification, contribution, enforcement and other
remedies pursuant to the terms of the SPA.
5.8 Entire Agreement. This Agreement constitutes and contains the entire
agreement of the parties with regard to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, understandings and agreements between the parties
regarding the subject matter hereof.
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5.9 Amendment. This Agreement may be amended or terminated and the observance
of any term of this Agreement may be waived with respect to the parties to this Agreement
(either generally or in a particular instance and either retroactively or prospectively),
with the prior written consent of each of the Company, the Stockholder and Kinderhook. The
Company shall give prompt written notice of any amendment or
termination hereof or waiver hereunder to any party or beneficiary hereto that did not
consent in writing to such amendment, termination or waiver. Any amendment, termination or
waiver effected in accordance with this Section 8.9 shall be binding on all parties
hereto. No waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
5.10 No Third-Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
| STOCKHOLDER: |
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| /s/ Xxxx X. Xxxxxxxxx | ||||
| Xxxx X. Xxxxxxxxx |
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| Address for Notice: Liberator Medical Holdings, Inc. 0000 XX Xxxx Xxxxxxx Xxxxxx, XX 00000 Telephone: 000-000-0000 Facsimile No.: (000) 000-0000 Xxxx X. Xxxxxxxxx, President With a copy to: Siegel, Lipman, Xxxxx, Xxxxxxx & Xxxxxx, XXX Xxx Xxxxx, Xxxxx 000 0000 Xxxx Xxxxxx Xxxx Xxxx Xxxxx, XX 00000 Tel: 000-000-0000 Fax: 000-000-0000 Email: xxxxxxxx@xxxxxxx.xxx Attn: Xxxxxxxx Xxxxxxx, Esq. |
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| KINDERHOOK PARTNERS, L.P. |
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| By: | /s/ Xxxxxx Xxxx | |||
| Name: | Xxxxxx Xxxx | |||
| Title: | Associate | |||
| Address for Notice: Kinderhook Partners, L.P. 0 Xxxxxxxxx Xxxxx Xxxxx 000 Xxxx Xxx, XX 00000 Attn: Xxxxxx Xxxx Telephone: (000) 000-0000 Facsimile No.: (000) 000-0000 Email: xxxxx@xxxxxxxxxxxxxxxxxx.xxx |
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| With a copy to: Proskauer Rose LLP 0000 Xxxxxxxx Xxx Xxxx, XX 00000 Attn: Xxxxxx Xxxxxxxx, Esq. Tel: 000-000-0000 Facsimile: 000-000-0000 Email: Xxxxxxxxx@xxxxxxxxx.xxx |
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