JOINT VENTURE/STOCKHOLDERS' AGREEMENT
JOINT VENTURE/STOCKHOLDERS' AGREEMENT, made and entered into on the
dates of the respective signatures set out below among Xxxxxx Medical Products
Private Limited, a company registered under the Companies Xxx, 0000, laws of
India and limited by shares acting through _________________its Managing
Director and constituted attorney Sri___________ and having its registered
office at Plot No. 7 in Cochin Export Processing Zone, Kakkanad, Cochin, India
(hereinafter called the "Company") and the stockholders of the Company listed on
attached Schedule A, acting through those representatives set out on Schedule A
(the "Stockholders").
Background
The Stockholders are desirous of organizing and acquiring an interest
in the Company under the laws of India to engage in the manufacture of modern
syringes and hypodermic needles in India and to set out in this Agreement their
respective rights, powers, duties and obligations with respect to the creation
and operation of the Company and their ownership of the shares of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
Section 1
Definitions
1.1 Defined Terms. Capitalized terms used in this Agreement and not
defined elsewhere are defined in the attached Glossary.
Section 2
Organization of Company
2.1 Organization Of Company. The Company has been organized in
accordance with Organization Documents substantially in the form
attached hereto as Exhibit A and in accordance with all applicable laws and
regulations, including the 1992-1993 U.S./India Treaty, and the rules and
regulations of the Reserve Bank of India ("RBI") and all laws regulating or
pertaining to the issuance of shares of stock in the Company.
2.2 Capital of Company. The initial authorized share capital of the
Company is Rs. 3,00,00,000/- (Rupees Three Crores only) and each of the
Stockholders shall contribute the following amounts to the Company for the
following number of shares:
(a) Xxxxxx has contributed or will contribute to the Company
cash or property in the amount of U.S. Eight Hundred Thousand Dollars ($800,000)
and preincorporation services in exchange for that number of shares of the
Company stock, which at Closing shall constitute 70% of the issued and
outstanding stock of the Company;
(b) S.A. Diagnostics shall contribute to the Company the
equipment listed on attached Schedule B (the "Equipment") having a value in the
amount of U.S. Three Hundred Thousand Dollars ($300,000) in exchange for that
number of shares of the Company stock, which at Closing shall constitute 15 % of
the issued and outstanding stock of the Company;
(c) Superior Medical Supplies shall contribute to the Company
the amount of U.S. One Hundred Thousand Dollars ($100,000) in exchange for that
number of shares of the Company stock, which at Closing shall constitute 5 % of
the issued and outstanding stock of the Company; and
(d) PENPOL shall contribute to the Company its promissory note
in the amount of U.S. Two Hundred Thousand Dollars ($200,000) in exchange for
that number of shares of the Company stock, which at Closing shall constitute 10
% of the issued and outstanding stock of the Company.
2.3 Closing. The contributions to the Company described in Section 2.2,
above shall occur at a closing to be held at a time and place mutually agreed
upon by the Parties, on or before February 28, 1997
unless such date of closing is extended by the mutual consent of the Parties. At
or prior to the Closing:
(a) each Stockholder shall make its contribution to the
Company as provided in Section 2.2, above;
(b) the Company shall issue a certificate or certificates
representing the Shares to be issued to each Stockholder under Section 2.2,
above; and
(c) the parties shall execute such other documents and
instruments necessary or desirable for the consummation of the Contemplated
Transactions and to conform to any legal requirement.
(d) the rights and obligations of the parties at Closing and
under this Agreement are subject to any rules and regulations of Indian
government authorities, including, but not limited to the RBI, the Foreign
Investment Board and SEBI.
2.4 Company Operations. Subject always to the business judgment of the
Company's Board of Directors and management, the Company and the Stockholders
anticipate that the Company will use reasonable efforts to accomplish the
following:
(a) in order to take advantage of the business expertise and
experience of the Stockholders, the Company wit(, from time to time, consult
with the Stockholders, either individually or collectively, regarding strategic
planning and direction related to the business of the Company;
(b) within two (2) years of the date of this Agreement,
research and make a recommendations to the Stockholders with respect to possible
advantages and disadvantages of incorporation of the Company's business under
the laws of a political jurisdiction other than India; and
(c) when and if determined appropriate in the business
judgment of the Company's Board of Directors and when permitted under the laws
governing the operation of the Company, consider the declaration
and payment of dividends in such amounts and at such times that will not impair
the Company's operations. The Company and the Stockholders do not anticipate
that the Company will be in a position to declare and pay any dividends for a
period of at least two (2) years from the date of this Agreement, and thereafter
only at such times and in such amounts as are commercially reasonable and
prudent in the business judgment of the Company's Board of Directors considering
the business needs of the Company.
Section 3
Other Commitments and Agreements
3.1 Transfer of Acquired Indian Assets by Xxxxxx. Xxxxxx has purchased
certain assets of Affiliated Medical Equipments, Ltd. from Kerala State
Industrial Development Corporation Ltd., acting for itself and on behalf of
Kerala Financial Corporation, State Bank of Travancore and State Bank of Mysore
under that Agreement dated January 7, 1997, a copy of which is attached as
Exhibit B. (the "KSIDC Purchase Agreement"). At or prior to the Closing, Xxxxxx
will transfer to the Company all of the assets so acquired under the KSIDC
Purchase Agreement as a part of its contribution to the Company under Section
2.2(a), above. Notwithstanding the foregoing, Xxxxxx shall provide the Bank
Guarantee referenced in the KSIDC Purchase Agreement.
3.2 Bank Guarantees. Each Stockholder does hereby guarantee to Sunwest
Bank of Albuquerque, N.A., Albuquerque, New Mexico ("Sunwest") that the Company
and Xxxxxx' wholly-owned New Mexico subsidiary shall promptly and fully pay any
and all indebtedness, of any kind or nature whatsoever, which now exists or may
hereafter arise or accrue in any manner from Company or Xxxxxx' wholly-owned New
Mexico subsidiary to Sunwest related to that certain loan specifically described
on attached Exhibit C, including renewals, extensions and modifications thereof
and interest or other charges accruing thereon. All such indebtedness,
liabilities and obligations of Company and Xxxxxx' wholly-owned New Mexico
subsidiary to Sunwest are hereinafter called the "Guaranteed Obligations." If
Company or Xxxxxx' wholly-owned New Mexico subsidiary fails at any time to
promptly pay or perform any of the Guaranteed
Obligations when due, by acceleration or otherwise, each Stockholder promises,
to the extent of such Stockholder's Proportionate Share, to pay or perform the
same when due immediately upon demand, together with: (i) such Stockholder's
Proportionate Share of attorneys' fees, court costs and other out-of-pocket
expenses incurred by reason of Company's default and; (ii) the amount of all
actual 'attorneys' fees, court costs and other out-of-pocket expenses incurred
in establishing and enforcing payment against such Stockholder. As used in this
Section 3.2, the term "Proportionate Share" means an amount equal to the
percentage of the Guaranteed Obligations that is equal to such Stockholder's
percentage ownership of Stock of the Company. As of the date hereof, each
Stockholder's Proportionate Share of the Guaranteed Obligations is set forth on
attached Exhibit D. At Closing, and thereafter, each Stockholder agrees to
execute and deliver any and all agreements, documents and instruments which may
be required by Sunwest to evidence the guarantee provided for hereunder. The
guarantees of the Stockholders hereunder shall apply only with respect to the
specific indebtedness described on Exhibit C, and shall not apply to any other
indebtedness of the Company or of Xxxxxx or its subsidiaries.
The parties acknowledge, understand and agree that the loan referenced
in this Section 3.2 secures a standby letter of credit for the benefit of the
Company and such loan, if required to be drawn upon, is an obligation of and
will be repaid by the Company out of assets of the Company and that the
guarantees herein are guarantees that the Company will repay such loan.
3.3 Post-Closing Agreements. Subsequent to the Closing, the Company
shall enter into one or more agreements to provide products manufactured by the
Company to Xxxxxx, X.X. Diagnostics, Superior Medical Supplies and PENPOL. Such
agreements shall provide that such products will be sold fully loaded
manufacturing costs for the products plus twenty-five percent (25%). The
agreements shall also provide that in the event that the Company's capacity is
unable to meet the needs of each of Xxxxxx, X.X. Diagnostics, Superior Medical
Supplies and PENPOL with respect to products, then the products shall be
allocated among Xxxxxx, X.X. Diagnostics, Superior Medical Supplies and PENPOL
prorata based upon the number of Shares held by each in relation to the total
number of
Shares held by Xxxxxx, X.X. Diagnostics, Superior Medical Supplies and PENPOL.
Section 4
Financial Information
4.1 Financial information. For so long as a Stockholder owns any of the
Shares, the Company agrees to furnish the Stockholder with the following:
(a) Quarterly Statements. Within sixty (60) days after the end
of the first, second, and third quarterly periods of each fiscal year, a balance
sheet of the Company as at the end of each such period and statements of
operations and of changes in financial position of the Company for each such
quarterly period, prepared in accordance with the Company's books and records.
This balance sheet and these statements need not be audited, but shall be
certified as correct by the principal financial officer of the Company, subject
to year-end audit adjustments.
(b) Annual Statements. Within ninety (90) days after the last
day of each fiscal year of the Company, or if later as soon as the audited
accounts are ready, to deliver to each Stockholder a copy of its audited report
containing a balance sheet of the Company as at the end of such fiscal period
and copies of statements of operations and of changes in financial position of
the Company for such fiscal period.
(c) Accountant's Reports. Promptly when received by the
Company, a copy of any report submitted to the Company by its accountants or
Statutory Auditor in connection with each annual audit of the books of the
Company made by such accountants.
(d) Other Information. On ten (10) days' written notice, the
Company shall permit a Stockholder, at such Stockholder's expense, to discuss
the Company's affairs, finances, and accounts with its present and comparable
officers of the Company at such reasonable times and as often as such
Stockholder may reasonably request.
Section 5
Representations & Warranties of Stockholders
5.1 General Representations and Warranties. Each Stockholder represents
and warrants to the Company and to each of the other Stockholders as follows:
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms. The Stockholder has the absolute and unrestricted right, power,
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. The Stockholder does not and will not be
required to obtain any consent from any Person in connection with the execution
and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
(b) Each of the Stockholders makes the following
representations with respect to its acquisition of the Shares:
(i) the Stockholder was not formed for the specific
purpose of acquiring the Shares;
(ii) the Stockholder is able to bear the economic
risk of loss of its investment in the Shares;
(iii) the Stockholder is not aware of any
advertising, article, notice or other communication published in any newspaper,
magazine, or similar media or broadcast over television or radio or of any
public solicitation by the Company or any other Person acting on behalf of the
Company with respect to the offering or sale of the Shares;
(iv) the Stockholder is fully familiar with the
proposed business of the Company;
(v) the Stockholder recognizes the risks of investing
in the Company and/or purchasing the Shares;
(vi) each Stockholder has had an opportunity to
examine any and all Company documents, corporate financial records, and any
other business records which may be appropriate in connection with a decision to
purchase the Shares, and an opportunity to discuss the business of the Company
with its officers and directors;
(vii) each Stockholder believes that the Stockholder
and its representatives are adequately informed about the business and financial
condition of the Company and are able to evaluate the risks and merits of making
an investment in the Company;
(viii) each Stockholder agrees that all projections
of revenue growth and potential profits of the Company, if any, that may have
been discussed with any representative of the Stockholder, are highly
speculative and estimates only, that may not be relied upon as indicative of
actual results that may be achieved;
(ix) in entering into this Agreement and in
purchasing the Shares, each Stockholder is and will be acting for its own
account and not for or on behalf of the account of any other person, and is
purchasing the Shares for investment and not for distribution; and
(x) the Stockholder has not paid and will not pay any
commission, fee or other remuneration to any person, directly or indirectly, in
connection with its purchase of the Shares.
(c) There is no pending proceeding that has been commenced
against the Stockholder and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To such Stockholder's knowledge, no such proceeding
has been threatened.
(d) There is no suit, action, arbitration, or legal,
administrative, or other proceeding, governmental investigation, or contract
renegotiation pending nor, to the knowledge of the Stockholder any basis
therefor or any threat thereof against or affecting the Stockholder or any of
its businesses, assets, or its financial condition, or
which questions the validity of this Agreement or the Contemplated Transactions.
(e) To the knowledge of the Stockholder, the Stockholder is
not in violation, breach, or default in any material respect of any term or
provision of any statute, rule, governmental regulation, lease, license, note,
contract, commitment, indenture, mortgage, deed of trust, or other agreement,
instrument, or arrangement applicable to or binding on the Stockholder and the
execution, delivery, and performance of this Agreement and the Contemplated
Transactions, will not, with notice or lapse of time or both: (i) result in any
violation of, or be in conflict with or constitute a breach of or default under,
any such term or provision; or, (ii) result in or constitute an event that would
permit any party to terminate any agreement or to accelerate the maturity,
require payment of, or allow removal of any guaranty of, any indebtedness or any
other obligation of the Stockholder.
(f) To the knowledge of the Stockholder, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any governmental authority by the Stockholder or the
Company is required in connection with the execution and delivery of this
Agreement or the Contemplated Transactions.
(g) Each Stockholder represents to the Company that it has not
dealt with any broker, finder, investment banker, or financial advisor in
connection with this Agreement or the Contemplated Transactions or in connection
with any investment in or loan to the Company and agrees to indemnify and hold
harmless the Company, against any loss, liability, damage, cost, claim, or
expense (including attorneys' fees) incurred by reason of any brokerage,
commission, investment banking, investment advisers, or finder's fee payable or
alleged to be payable due to this Agreement or the Contemplated Transactions
arising out of the acts of the Stockholder.
(h) This Agreement, and all statements, certificates and other
written material furnished to the Company by or on behalf of the Stockholder as
required by or referred to in this Agreement, when read together, do not contain
any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made in them,
in light of the circumstances under which they are made, are not misleading.
5.2 Representations and Warranties Regarding Equipment. With respect to
the Equipment, S.A. Diagnostics represents and warrants as follows:
(a) At Closing, the Company shall obtain good and marketable
title to all of the Equipment, free and clear of all title defects, liens,
restrictions, claims, charges, security interests, or other encumbrances of any
nature whatsoever, including any mortgages, leases, chattel mortgages,
conditional sales contracts, collateral security arrangements, or other title or
interest retention arrangements and free and clear of all taxes and duties or
similar charges; and
(b) the Equipment is in good operating order, condition, and
repair, ordinary wear and tear excepted, and is suitable for use in the
Company's business.
Section 6
Conditions To Obligations of a Party
Each party's obligations at the Closing are subject to the fulfillment
to that party's satisfaction, except to the extent waived or modified in
accordance herewith, at or before the Closing, of each of the following
conditions:
6. 1 Warranties and Statements Correct. Except as affected by the
Contemplated Transactions, the representations and warranties made by each of
the other parties to this Agreement and all written material in all
certifications and documents referred to in this Agreement or delivered to such
party under this Agreement shall be true and correct when made, and shall be
deemed to be repeated at and as of the time of the Closing, and shall be true
and correct at and as of that time.
6.2 Performance. Each other party and the Company shall have performed
and complied with all agreements and conditions in this Agreement required to be
performed or complied with by it before or at the Closing.
6.3 Consents and Waivers. Each party shall have obtained all approvals,
consents and waivers necessary or appropriate for consummation of the
Contemplated Transactions.
6.4 Legal Investment. At the time of the Closing, the party's purchase
of the Shares under this Agreement shall be legally permitted by all laws and
regulations to which the party and the Company are subject.
6.5 Proceedings and Documents. All corporate and other proceedings in
connection with the Contemplated Transactions shall be reasonably satisfactory
in substance and form to such party and such party shall have received all such
counterpart originals or certified or other copies of such documents as such
party may reasonably request.
6.6 Waiver of Conditions to a Party's Obligations. A party may waive or
modify in writing any or all of the above conditions to its obligations to
purchase the Shares in whole or in part without prior notice; provided, however,
that no such waiver of a condition shall constitute a waiver by such party of
any of such party's other rights or remedies, at law or in equity.
Section 7
Limitations on Transfers of Shares
7.1 Limitation on Shares Transfer. Except as otherwise expressly
provided herein, if a Stockholder desires to transfer any or all of the Stock
then owned by such Stockholder (a "Shares Transfer"), then at least sixty days
prior to any such Shares Transfer other than a Permitted Transfer (as
hereinafter defined), such transferring Stockholder (the "Transferring
Stockholder") will give notice (the "Notice") to the Company and the
non-transferring Stockholders of the Company of its intention to effect the
Shares Transfer. The Notice will set forth (i) the number and
class of shares to be sold by the transferring Stockholder (the "Sale Shares"),
(ii) the date or proposed date of the Shares Transfer and the name and address
of the proposed transferee, (iii) the principal terms of the Shares Transfer,
including the cash or other property or consideration to be received upon such
Shares Transfer, (iv) the percentage which the number of Sale Shares constitutes
with respect to the aggregate number of shares of Stock then held by
Transferring Stockholder, and (v) the written consent of the proposed transferee
to be bound by all the terms of this Agreement if the proposed Shares Transfer
is consummated.
7.2 Corporation's Option. Subject to applicable laws of the
jurisdiction under which the Company is organized, the Company shall have the
option, but not the obligation, to purchase the Sale Shares on the same terms as
specified in the Notice. Within 20 days after the giving of the Notice (the
Notice Date"), the Company shall give written notice to transferring Stockholder
and the remaining Stockholders stating whether or not it elects to exercise its
option, the number of Sale Shares, if any, it elects to purchase, and a date and
time for consummation of the purchase not less than 60 or more than 90 days
after the Notice Date. Failure by the Company to give such notice within such
time period shall be deemed an election by it not to exercise its option. The
Transferring Stockholder shall not be entitled to vote, either as a shareholder
or director, in connection with the decision of the Company whether to exercise
its option to purchase the Transferring Stockholder's Sale Shares, provided that
if the Transferring Stockholder's vote is required for valid corporate action,
the Transferring Stockholder shall vote in accordance with the decision of the
majority of the other directors or shareholders.
7.3 Stockholders' 0ption. If the Company fails or is unable under
applicable law to exercise the option with respect to all of the Sale Shares,
the Stockholders other than the Transferring Stockholder shall thereupon have
the option, but not the obligation, to purchase the remaining Sale Shares on the
same terms as specified in the Notice. After the expiration of the 20-day period
in Section 7.2 hereof, but within 30 days after the Notice Date, any electing
Stockholder shall give written notice to the Transferring Stockholder and the
Company stating whether or not such Stockholder elects to exercise its option,
the number of Sale Shares, if any, such Stockholder elects to purchase, and
(unless a closing
date has already been set) a date and time for consummation of the purchase not
more than 90 days after the Notice Date. Failure by such Stockholder to give
such notice within such time period shall be deemed an election by such
Stockholder not to exercise such Stockholder's option. If more than one
Stockholder exercises this option, the number of remaining Sale Shares purchased
shall be pro rated based on their equity ownership on a fully diluted basis.
7.4 Definitions. For purposes of this Section 7, the term "Permitted
Transfer" shall mean a Shares Transfer to a corporate Affiliate in the case of a
transferring Stockholder that is a corporation, to any of its general or limited
partners or any Affiliate thereof in the case of a transferring Stockholder that
is a partnership, to any spouse, parents, brothers, sisters, children (natural
or adopted), stepchildren or grandchildren or a trust for any of their benefit
in the case of a transferring Stockholder that is an individual (each a
"Permitted Transferee"); provided, that, prior to such Shares Transfer, such
Permitted Transferee shall agree in writing to be bound by the terms and
conditions of this Agreement. For purposes of this Section, "Stock" shall mean
(a) the presently issued and outstanding shares of capital stock of the Company,
(b) any presently issued and outstanding options or stock subscription warrants
exercisable for shares of capital stock of the Company (which options and
warrants shall be deemed to be outstanding shares of stock), (c) any additional
shares of capital stock hereafter issued and outstanding, (d) any options or
stock subscription warrants exercisable for shares of capital stock of the
Company hereafter issued and outstanding (which options and warrants shall be
deemed to be outstanding shares of stock) and (e) any shares of capital stock of
the Company into which such shares, options or stock subscription warrants may
be converted or for which they may be exchanged or exercised.
7.5 Other Limitations. Notwithstanding anything to the contrary
contained herein, the Transferring Stockholder shall not be obligated to sell
any of the Sale Shares offered to the Company or the other Stockholders pursuant
to this Section 7 to the Company or such Stockholders, as the case may be,
unless notice is received as to the purchase of all of the Sale Shares by the
Company and/or such Stockholders within the time period specified. In the event
that such
notice is not received, or if such notice is received but the purchase of all of
the Sale Shares is not consummated within 90 days after the Notice Date, the
Transferring Stockholder may, not later than 120 days after the Notice Date,
sell all, but not less than all, of the Sale Shares to the proposed transferee
specified in the Notice on terms and conditions which in all material respects
are no more favorable to such proposed transferee than those set forth in the
Notice. Following such transfer any transferee thereof shall be bound by all of
the terms of the Agreement whether or not he, she or it shall become a signatory
hereto. If at the end of such 120 day period the Transferring Stockholder has
not completed the sale of the Sale Shares as provided in the Notice, no Sale
Shares may be sold or otherwise disposed of until they are again offered under
the procedures specified in this Section 7.
7.6 Transfers Void. Any attempted transfer in violation of the terms of
this Section 7 shall be ineffective to vest in any transferee any interest held
by the Transferring Stockholder in the Stock. Without limiting the foregoing,
any purported Shares Transfer in violation of this Section 7 shall be
ineffective as against the Company, and the Company shall have a continuing
right and option (but not an obligation) to purchase the shares purported to be
transferred by the Transferring Stockholder for a price and on terms the same as
those at which the purported Shares Transfer was sought to be effected.
Section 8
Preemptive Rights
8.1 Preemptive Rights. The Company shall not issue, sell or exchange to
or with any Person, agree to issue, sell or exchange to or with any Person, or
reserve or set aside for issuance, sale or exchange to or with any Person, any:
(a) shares of Common Stock; (b) any other equity security of the Company; (c)
any debt security of the Company which by its terms is convertible into or
exchangeable for any equity security of the Company; (d) any security of the
Company that is a combination of debt and equity; or (a) any option, warrant or
other right to subscribe for, purchase or otherwise acquire any equity security
or any such debt security of the Company (the "Offered Securities"), unless in
each case the
Company shall have first offered to sell to each Stockholder up to its
Proportionate Share of the Offered Securities, at a price and on such other
terms as offered to such other Person or Persons and which price and terms she((
have been specified by the Company in a writing delivered to the Stockholders
(the "Offer"), which offer by its terms shall remain open and irrevocable for a
period of 20 days from the date it is delivered by the Company to the
Stockholders (the "Notice Period"). For the purposes of this Section, a
Stockholder's Proportionate Share shall be that percentage of the Offered
Securities which is equal to the percentage which the number of shares of Common
Stock of the Company owned by the Stockholder at the time of its receipt of the
Offer bears to the total outstanding Common Stock of the Company at the time of
the Stockholder's receipt of the Offer.
8.2 Notice. Notice of a Stockholder's intention to accept, in whole or
in part, an Offer shall be evidenced by a writing signed by the Stockholder and
delivered to the Company prior to the end of the Notice Period, setting forth
such portion of the Offered Securities as the Stockholder elects to purchase
(the "Notice of Acceptance").
8.3 Sale of Securities by the Company. The Company shall have 90 days
from the expiration of the Notice Period to sell all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the
Stockholders (the "Refused Securities") to any other Person or Persons, but only
upon terms and conditions in all material respects, including, without
limitation, unit price and interest rates which, in the aggregate, are no more
favorable to such other Person or Persons or less favorable to the Company than
those set forth in the Offer. Upon and subject to the closing of the sale to
such other Person or Persons of all the Refused Securities, which shall include
payment of the purchase price to the Company in accordance with the terms of the
Offer, each Stockholder shall purchase from the Company, and the Company shall
sell to such Stockholder, the Offered Securities in respect of which a Notice of
Acceptance was delivered to the Company by that Stockholder, at the terms
specified in the Offer. The purchase by a Stockholder of any Offered Securities
is subject in all cases to the preparation, execution and delivery by the
Company and the Stockholder of a customary purchase agreement relating to such
Offered Securities reasonably satisfactory in form and substance to the Company
and the Stockholder.
8.4 Unpurchased Securities. In each case, any Offered Securities not
purchased by the Stockholders or any other Person or Persons in accordance with
this Section 8 may not be sold or otherwise disposed of until they are again
offered to the Stockholders under the procedures specified in this Section 8.
8.5 Excluded Securities. The rights of the Stockholders under this
Section 8 shall not apply to the following securities (the "Excluded
Securities"):
(a) Common Stock or options to purchase or rights to subscribe
for Common Stock, or securities by their terms convertible into or exchangeable
for Common Stock, or options to purchase or rights to subscribe for such
convertible or exchangeable securities issued to officers, employees or
directors of, consultants to, executive recruiters for, or lessors of personal
property to, the Company, pursuant to any agreement, plan or arrangement
approved by the Board of Directors of the Company;
(b) Common Stock issued as a stock dividend or upon any stock
split or other subdivision or combination of shares of Common Stock; and
(c) any securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination.
Section 9
Legend on Stock Certificates
9.1 Legends. Each certificate of the signatories hereto representing the
Shares shall bear the following legend:
THE RIGHTS OF THE HOLDER OF THESE SECURITIES IN RESPECT OF THE
TRANSFER OF THESE SECURITIES ARE SUBJECT TO THE TERMS AND
CONDITIONS OF
THAT CERTAIN JOINT VENTURE/STOCKHOLDERS' AGREEMENT DATED AS OF
[the date of this Agreement], AS THE SAME MAY BE AMENDED FROM
TIME TO TIME, AMONG XXXXXX MEDICAL PRODUCTS PRIVATE LIMITED AND
CERTAIN HOLDERS OF OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION.
NO TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL
SUCH CONDITIONS ARE FULFILLED. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF XXXXXX MEDICAL
PRODUCTS PRIVATE LIMITED.
Section 10
Termination
10.1 Termination. This Agreement shall remain in full force and effect
from the date hereof until (a) ownership of all of the Shares of the Company by
one of the parties hereto; or (b) the liquidation of the Company.
Notwithstanding the foregoing, and notwithstanding termination of this Agreement
the rights and powers of each party and the duties and obligations of each party
under Sections 3.2, 11, 12 13 and 14 shall survive termination and the parties
shall continue to be bound by such provisions indefinitely.
Section 11
Indemnification
11.1 Indemnification. The Company shall indemnify and hold Xxxxxx
harmless from and against, for and in respect of any and all liability,
judgments, damages, losses, penalties, costs and expenses (including court costs
and reasonable attorneys' and experts' fees) suffered, sustained, incurred or
required to be paid by Xxxxxx arising out of or in connection with or as a
result of the Bank Guarantee referenced in Section 3.1 of this Agreement.
Section 12
Confidentiality
12.1 Reciprocal Confidentiality Obligations. During the term of this
Agreement, Confidential Information of one party may be disclosed to one or more
of the other parties. A party to whom any Confidential Information is disclosed
shall not disclose such Confidential Information to any other Person or entity
or use such Confidential Information except for Company purposes or purposes
specifically contemplated by this Agreement. The disclosure of Confidential
information by one party to another shall not constitute a license, sale or
offer to license or sell Confidential Information. Confidential Information
shall be maintained in confidence for a period of five (5) years after the date
of termination of this Agreement. Nothing contained in this Agreement will in
any way restrict or impair a party's right to use, disclose, or otherwise deal
with any Confidential Information which: (a) as shown by written records, was
known to it prior to its receipt from the other party; (b) is or becomes part of
the general public knowledge otherwise than as a consequence of a breach of
duties or obligations of the party; (c) becomes known or available to the party
from sources other than the other party without restrictions as to use or
disclosure and otherwise than as a consequence of a breach of duties or
obligations of the party under this Agreement; or (d) as shown by written
records, is independently developed by employees, agents, contractors or
consultants of the party. Notwithstanding the foregoing, a party shall have no
obligation respecting, or be liable for, use or disclosure of Confidential
Information where such disclosure is compelled by judicial or other governmental
action initiated against the party; only if, however, the party promptly
notifies the other party of such action and cooperates with the other party in
obtaining any available protective order or its equivalent.
Section 13
Dispute Resolution
13.1 Dispute Resolution/Pre-Arbitration. Each party agrees that, unless
otherwise required in order to comply with deadlines under the law, it will not
institute arbitration under Section 13.2 of this
Agreement with respect to any dispute, controversy, or claim arising out of,
relating to, or in connection with, this Agreement or an alleged breach of this
Agreement, until:
(a) It has given each of the other parties written notice
of its grievance;
(b) The other parties have failed to provide a prompt and
effective remedy within a reasonable period of time;
(c) The parties have submitted the matter to each of the chief
executive officers of the corporate stockholders and each of the individual
stockholders for resolution, and they are unable, after a reasonable period of
time, to produce a mutually satisfactory resolution of the matter.
13.2 Arbitration. In the event that the pre-arbitration dispute
resolution procedures set forth in Section 13.1 do not result in the resolution
of any dispute, controversy, or claim arising out of, relating to, or in
connection with, this Agreement or an alleged breach of this Agreement
(including the validity, scope, and enforceability of this arbitration
agreement) and except as provided under Section 13.3 of this Agreement, such
dispute, controversy, or claim shall be solely and finally settled by
arbitration in accordance with the Commercial Rules of the American Arbitration
Association. The place of arbitration shall be in Albuquerque, New Mexico,
U.S.A. and the law applicable to the arbitration procedure shall be the Federal
Arbitration Act (9 USC ss. 2). Judgment on the arbitration award may be entered
and enforced in any court having jurisdiction over the parties or their assets.
Each party shall, except as otherwise provided herein, be responsible
for its own expenses, including legal fees, incurred in the course of any
arbitration proceedings. The costs and fees of the arbitration shall be divided
evenly between the parties.
13.3 Injunctive Relief. Sections 13.1 and 13.2 shall not be construed to
limit or preclude a party from bringing any action in any court of competent
jurisdiction for injunctive or other provisional relief
as necessary or appropriate, but only for such injunctive or provisional relief.
Section 14
Miscellaneous
14.1 Governing Law. The laws of the State of New Mexico will govern this
transaction and the interpretation and construction of this Agreement without
reference to choice of law principles.
14.2 Representations and Warranties. All agreements, representations,
and warranties in this Agreement shall survive the execution and delivery of
this Agreement.
14.3 Assignment, Successors and Assigns. No party may assign any of its
rights, powers, duties or obligations under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld. Subject to the preceding sentence, the provisions of this Agreement
shall inure to the benefit of, and be binding on, the successors and assigns of
the parties to this Agreement.
14.4 Third Party Beneficiaries. Subject to the provisions of the
preceding Section, nothing in this Agreement, express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
Persons other than the parties to it, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third Person any right
of subrogation or action over or against any party to this Agreement.
14.5 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects of
this Agreement, and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties.
14.6 Separability and Severability. Unless otherwise expressly provided
in this Agreement, any invalidity, illegality, or limitation on the
enforceability of all or part of this Agreement, whether at!sing by reason of
the law of a party's domicile or otherwise, shall in no way affect or impair the
validity, legality, or enforceability of this Agreement. If any provision of
this Agreement shall be invalid, illegal, or unenforceable, the validity,
legality, or enforceability of the remaining provisions shall not in any way be
affected or impaired by such invalidity, illegality, or unenforceability.
14.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. It is contemplated that there will be one
original of this Agreement which shall be retained by the Company and that each
of the other parties shall received copies of the original.
14.8 Headings. The various headings of this Agreement are for
convenience of reference only, shall not affect the meaning or interpretation of
this Agreement, and shall not be considered in construing this Agreement.
14.9 Amendments and Waivers. Except as specifically provided in this
Agreement, neither this Agreement nor any term of this Agreement may be amended,
waived, discharged, or terminated by any act or failure to act, but only by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge, or termination is sought.
14.10 Cumulative Rights/No Waiver. The rights and remedies of the
parties to this Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right, power, or privilege
under this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.
14.11 Further Assurances. The parties agree to furnish upon request to
each other such further information, to execute and deliver to each other such
other documents, and to do such other acts and things, all as the other party
may reasonably request for the purpose of carrying out the intent of this
Agreement.
14.12 Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been given when personally delivered to the party to whom the notice or
communication is to be given, when sent by facsimile transmission to the
telephone number set forth in attached Schedule A or such other number as may
hereinafter be designated in writing by the recipient to the sender listing all
parties, or when duly sent by first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth in attached Schedule A or such other address as may hereinafter be
designated in writing by the addressee to the addressor listing all parties. All
such notices shall be deemed to have been received: (a) in the case of personal
delivery, on the date of such delivery; (b) in the case of facsimile
transmission, on the date of transmission; and (c) in the case of mailing, on
the fourteenth day after the posting thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf.
Xxxxxx Medical Products Private
Limited, a company registered under
the Companies Xxx, 0000, laws of
India
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Title:
Date: 2/21/97
Xxxxxx Medical Corporation,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Title: President & CEO
--------------------------------
Date: 2/21/97
--------------------------------
S.A. Diagnostics,
a South African corporation
By: /s/ Xxx Xxxxxxxx
--------------------------------
Title
--------------------------------
Date: 2/21/97
--------------------------------
Superior Medical Supplies
a Texas corporation
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Xxxxxxx Xxxxxxx, President
Date: 2/21/97
--------------------------------
PENPOL,
a company registered under the
Companies Xxx, 0000, laws of India
By:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
GLOSSARY
"Affiliate" When used with respect to a specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified.
"Closing" The consummation of the acquisition of the Shares by the Stockholders
and the delivery of this Agreement as provided in Section 2 of this Agreement.
"Company" Xxxxxx Medical Products Private Limited, an Indian company registered
under the Companies Act, 1956 of India.
"Confidential Information" Trade secrets, know-how, inventions, concepts,
designs, U.S. and foreign patents and/or patent applications, copyrighted
materials, software, schematics, code, source listings, flow charts,
specifications, copies of source or object code or other documentation of any
type, and other data, knowledge, and information, relating to a party's
technology, methods and procedures of operation, business or marketing plans,
financial information, customer lists and data, as well as the nature and
results of research and development activities, and all other materials or
information related to the business or activities of a party or its existing or
new products and component developments, processes and techniques.
"Contemplated Transactions" All of the transactions contemplated by this
Agreement, including:
(a) the acquisition of the Shares by each Stockholder pursuant to the terms
and conditions of this Agreement;
(b) the execution, delivery, and performance of all instruments, agreements
and documents to be executed and delivered under this Agreement; and
(c) the performance by the Company and each of the Stockholders of their
respective covenants and obligations under this Agreement.
"Excluded Securities" As defined in Section 8.5 hereof.
"Xxxxxx" Xxxxxx Medical Corporation, a Delaware corporation.
"Notice Date" As defined in Section 7.2 hereof.
"Notice of Acceptance" As defined in Section 8.2 hereof.
"Notice Period" As defined in Section 8.1 hereof.
"Offer" As defined in Section 8.1 hereof.
"Notice" As defined in Section 7.1 hereof.
"Offered Securities" As defined in Section 8.1 hereof.
"Offered Shares" As defined in Section 7.4 hereof.
"Organization Documents" The Memorandum and Articles of Association of Xxxxxx
Medical Products Private Ltd, a copy of which is attached as Exhibit A.
"PENPOL" Peninsula Polymer Limited (PENPOL), a company registered under the
Companies Xxx, 0000, laws of India.
"Permitted Transfer" As defined in Section 7.4 hereof.
"Person" Any individual, corporation (including any nonprofit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other entity or
governmental body.
"Refused Securities" As defined in Section 8.3 hereof.
"S.A. Diagnostics" S.A. Diagnostics, a company organized under the laws of South
Africa.
"Sale Shares" As defined in Section 7.1 hereof.
"Shares" The shares of the Company's Stock to be acquired by each Stockholder
under this Agreement.
"Shares Transfer" As defined in Section 7.1 hereof.
"Stock" As defined in Section 7.4 hereof.
"Stockholders" The holders of the of the Stock of the Company listed on Schedule
A attached hereto and any transferee of shares owned by any such person or any
successor or assign of any such person.
"Superior Medical Supplies" Superior Medical Supplies, Inc., a Texas
corporation.
"Transferring Stockholder" As defined in Section 7.1 hereof.
Exhibit A
Organization Documents
Exhibit D
Proportionate Share of Guaranteed Obligations
Stockholder Proportionate Share Principal Amount Guaranteed
----------- ------------------- ---------------------------
Xxxxxx Medical 70% $252,000
Corporation
S.A. Diagnostics 15% $ 54,000
PENPOL 10% $ 36,000
Superior Medical 5% $ 18,000
Supplies
Each Stockholder's Proportionate Share will vary from time to time as a
consequence of the accrual of that Stockholder's Proportionate Share of interest
and other costs that may be payable under the loan documents and the
Stockholders' guaranty under Section 3.2 of this Agreement.
Schedule A
Stockholders
NAME PERCENTAGE OWNERSHIP
---- --------------------
Xxxxxx Medical Corporation 70%
a Delaware corporation (U.S.A.)
0000 Xxxxxxx Xxxxxxx Xxxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx, 00000
By: Xxxxxx X. Xxxxxxxxx, its President & CEO
Facsimile No.: (000) 000-0000
S.A. Diagnostics 15%
a South African corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx Xxxx
Xxxxxxxx 0000
Xxxxx Xxxxxx
By: Xxx Xxxxxxxx, its
Facsimile No.: 011-27-12-99-88957
Peninsula Polymers Limited (PENPOL) 10%
an Indian Company
X.X. Xxx 0000
0X/0000 Xxxxxxxxxxxxxx
Xxxxxxxxxx, Xxxxx 695 010
By: C. Balagopol, its Managing Director and constituted attorney Sri
______________.
Facsimile No.: 011-91-471-324599
Superior Medical Supplies, Inc. 5%
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
By: Xxxxxxx Xxxxxxx, its President
Facsimile No.: (000) 000-0000
