Contract
STOCKHOLDERS’
AGREEMENT
STOCKHOLDERS’
AGREEMENT, dated as of __________ ____, 2008 (this “Agreement”), between
the former stockholders of Biomed America, Inc., a Delaware corporation (the
“Seller”),
listed on Appendix A hereto who have become parties to this Agreement through
the execution of a counterpart signature page (the “Stockholders” and
individually a “Stockholder”), and
Allion Healthcare, Inc., a Delaware corporation (the “Company”).
WHEREAS,
the Company, the Company’s wholly owned subsidiary, Biomed Healthcare, Inc., a
Delaware corporation (“Merger Sub”), and the
Seller have entered into that certain Merger Agreement, dated as of March 13,
2008, (the “Merger
Agreement”), pursuant to which the Stockholders shall receive shares of
Company Common Stock and Company Preferred Stock (as defined in the Merger
Agreement) in partial consideration for the shares of Seller’s outstanding
capital stock held by the Stockholders, all upon the terms and subject to the
conditions set forth in the Merger Agreement;
WHEREAS,
upon consummation of the transactions contemplated by the Merger Agreement
(without giving effect to any shares of Company Common Stock that may be issued
as part of the Earn Out Payment, as that term is defined in the Merger
Agreement), the Stockholders will beneficially own in the aggregate 3,380,869
shares of Company Common Stock and 5,969,131 shares of Company Preferred
Stock;
WHEREAS,
the Company and the Stockholders have agreed to execute and deliver this
Agreement, which is a condition precedent to the obligations of the Company,
Merger Sub and Seller under the Merger Agreement; and
WHEREAS,
the Company and the Stockholders now wish to enter into this Agreement to set
forth their understanding with respect to, among other things, representation on
the Company’s Board of Directors (the “Board”) and the
holding, acquisition and transfer of Company Common Stock and Company Preferred
Stock by the Stockholders.
NOW,
THEREFORE, in consideration of the promises and the mutual agreements and
covenants hereinafter set forth, the Company and the Stockholder hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
(a) As
used in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
has the meaning set forth in Rule 12b-2, as in effect on the date hereof, under
the Exchange Act.
“Beneficially
Own” has the meaning set forth in Rule 13d-3, as in effect on the date hereof,
under the Exchange Act.
“Business
Day” means any day that is not a Saturday, Sunday or other day on which banks
are required or authorized by law to be closed in The City of New
York.
“Buyout
Transaction” means a completed tender offer, merger (other than a merger by the
Company to effect a reorganization or recapitalization), sale of all or
substantially all of the Company’s assets or any similar transaction in which
each holder of Company Common Stock (other than, if applicable, the Person
proposing such transaction) disposes of all Company Common Stock beneficially
owned by each such holder or which otherwise results in the acquisition of all
(but not less than all) Company Common Stock beneficially owned by each such
holder.
“Closing”
has the meaning set forth in the Merger Agreement.
“Closing
Date” has the meaning set forth in the Merger Agreement.
“Commission”
means the United States Securities and Exchange Commission and any successor
agency.
“Company
Common Stock” has the same meaning as the term “Parent Common Stock” as set
forth in the Merger Agreement.
“Company
Preferred Stock” has the same meaning as the term “Parent Preferred Stock” set
forth in the Merger Agreement.
“Director”
means a member of the Board.
“Earn Out
Payment” shall have the meaning set forth in the Merger Agreement.
“Earn Out
Period” shall have the meaning set forth in the Merger Agreement.
“Effective
Time” shall have the meaning set forth in the Merger Agreement.
“Exchange
Act” means the United States Securities Exchange Act of 1934, as
amended.
“Governmental
Entity” means any Federal, state, local or foreign government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign.
“Group”
means any group of Persons formed for the purpose of acquiring, holding, voting
or disposing of securities that would be required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder to file a statement on
Schedule 13D with the Commission as a “person” within the meaning of Section
13(d)(3) of the Exchange Act if such group beneficially owned securities
representing more than 5% of any class of securities then
outstanding.
“Independent
Director” means a director who has been determined by the Board to be
independent in accordance with the Company’s organizational documents and
charters for committees of the Board, the rules and regulations of Nasdaq and
the Commission, and any other applicable regulations or policies deemed relevant
by the Board.
“LLC
Stockholder” means Parallex LLC.
“Nasdaq”
shall mean the Nasdaq National Market.
“Person”
means any individual, firm, corporation, partnership, limited partnership,
limited liability company, association, trust, unincorporated organization or
other entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Exchange Act.
“Register,”
“Registered” and “Registration” shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act and the declaration or ordering of effectiveness of such
registration statement or document.
“Registrable
Stock” means the Stockholder Shares (excluding Company Preferred Stock and any
shares of Company Common Stock acquired in violation of Article IV hereof);
provided, that any Registrable Stock shall cease to be Registrable Stock when
(i) a registration statement covering such Registrable Stock has been declared
effective and such Registrable Stock has been disposed of pursuant to such
effective registration statement, (ii) such Registrable Stock is sold in a
transaction in which the rights under the provisions of this Agreement are not
assigned, or (iii) such Registrable Stock is sold pursuant to Rule 144 or
otherwise under Section 4(1) or any similar provisions then in force under the
Securities Act without registration under the Securities Act.
“Securities
Act” means the United States Securities Act of 1933, as amended.
“Stockholder
Shares” means Company Common Stock and Company Preferred Stock now or hereafter
beneficially owned by the Stockholders, including any securities issued or
issuable in respect of such Company Common Stock or Company Preferred Stock as a
result of conversion, exchange, recapitalization, reorganization, replacement,
stock dividend, stock split or other distribution, but excluding a Buyout
Transaction.
(b) The
following terms have the meanings set forth in the Sections set forth
below:
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Term
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Location
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Affiliate
Transfer
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3.2
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Agreement
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Preamble
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Board
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Recitals
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Company
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Preamble
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Designees
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2.1(b)
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Excess
Threshold Shares
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2.3(a)
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Grantees
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2.5(a)
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Merger
Agreement
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Recitals
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Merger
Sub
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Recitals
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Registration
Threshold
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5.1(a)
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Seller
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Preamble
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Standstill
Period
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4.1(a)
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Stockholder
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Preamble
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Stockholder
Director
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2.1
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Stockholders’
Representative
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7.10
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Threshold
Percentage
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2.3(a)
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Transfer
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3.2
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ARTICLE
II
GOVERNANCE
AND VOTING PROVISIONS
Section
2.1 Board
Representation.
(a) At
the Effective Time, the Stockholders shall have the right to designate two (2)
directors to serve on the Board until the next annual meeting of stockholders to
elect directors; provided, that each such director nominee must be approved by
the Company’s Nominating and Corporate Governance Committee and by a majority of
the Company’s Directors as set forth in Section 2.1(b).
(b) In
connection with the Company’s annual meeting of stockholders to be held during
the calendar years ending December 31, 2008, 2009 and 2010, the Stockholders
shall have the right to nominate two (2) members to the Board who will be
submitted by the Company for election at the annual meeting of stockholders of
the Company (each, a “Designee,” and
collectively, the “Designees”). If
at any time the Stockholders collectively own less than 15% of the aggregate
outstanding Company Common Stock (assuming conversion of the Company Preferred
Stock), then the Stockholders shall have no further contractual right to
nominate any Designees. Before being submitted by the Company to its
stockholders for approval at an annual meeting, each Designee shall be subject
to the reasonable prior approval of a majority of both the Directors (other than
any Director nominated or designated by the Stockholders) and the Company’s
Nominating and Corporate Governance Committee (excluding any member thereof
nominated or designated by the Stockholders). Each Designee elected
to the Board pursuant to this Section 2.1(b) shall hereinafter be referred to as
a “Stockholder Director” and collectively all Stockholder Directors shall
hereinafter be referred to as the “Stockholder Directors”.
(c) Each
Stockholder Director and each Designee must meet the requirements of being an
Independent Director. Further, the Company shall be entitled to
conduct reasonable diligence of any proposed Designee or Stockholder Director as
necessary to assist in its evaluation of such Designee or Stockholder Director
and to determine compliance with applicable rules and regulation of the
Commission and Nasdaq.
(d) The
Designees shall be selected by the Stockholders pursuant to a process
established by the Stockholders. Regardless of such process, the
Company shall be permitted to rely solely upon the direction of the
Stockholder’s Representative with respect to the identity of the
Designees.
(e) During
such time as the Stockholders have the right to appoint Designees, there shall
not be more than six (6) members on the Board of Directors; provided, that the
size of the Board of Directors may be increased beyond six (6) members if
approved by a majority vote of the Board of Directors, which majority must
include at least one Stockholder Director.
Section
2.2 Resignations
and Replacements. Subject to
Section 2.1, if a Stockholder Director ceases to serve as a Director for any
reason prior to the next election of Directors, the vacancy created thereby
shall be filled by the Company’s Nominating and Corporate Governance Committee
and a majority of the remaining Directors then in office (excluding the other
Stockholder Director) with an individual designated by the
Stockholders. The Company shall be permitted to rely solely upon the
direction of the Stockholder’s Representative with respect to the identity of
any replacement Stockholder Director.
Section
2.3 Voting
Restrictions.
(a) In
connection with the Company’s annual meeting of stockholders to be held during
the calendar years ending December 31, 2008, 2009 and 2010, the Stockholders
shall vote all of their Stockholder Shares (to the extent such Stockholder
Shares have voting rights) in favor of the nominees for director designated by
the Board, or any committee thereof, not in violation of this Article
II. Further, on votes relating to all other matters, except as set
forth in Section 2.3(b) below, and at all times that the Stockholder Shares that
have voting rights collectively represent more than 35% of the outstanding
Company Common Stock (the “Threshold
Percentage”), but in no event for longer than the expiration of the
Standstill Period (as defined as Article IV), all Stockholder Shares (to the
extent such Stockholder Shares have voting rights) in excess of the Threshold
Percentage (the “Excess Threshold
Shares”) shall either be voted (i) as recommended by a majority of the
Board of Directors, or (ii) in proportion to the votes cast with respect to the
shares of Company Common Stock not owned by the Stockholders. Each
Stockholder shall vote the number of Excess Threshold Shares held by such
Stockholder in the manner set forth in the preceding sentence. The
number of Excess Threshold Shares held by a Stockholder shall equal the multiple
of (i) the total Excess Threshold Shares, and (ii) the quotient determined by
dividing (x) the Stockholder Shares held by such Stockholder, by (y) the total
number of Stockholder Shares.
(b) Notwithstanding
Section 2.3(a), the Stockholders may, in connection with any required vote of
the Company’s stockholders, vote all of their Stockholder Shares at their
discretion with respect to (i) any amendments to the Company’s Certificate of
Incorporation or Bylaws, (ii) any recapitalization, restructuring or similar
transaction or series of transactions involving the Company, (iii) any
dissolution or complete or partial liquidation, or similar arrangement, of the
Company, (iv) any merger, consolidation or other business combination of the
Company, (v) any issuance of any shares of Company Common Stock, or (vi) any
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company to any Person, which, in the case
of clause (ii), (iv) or (v), results in any one Person or Group of Persons
becoming the beneficial owner, directly or indirectly, of more than 50% of the
outstanding Company Common Stock or, in the case of clause (i) either results in
any one Person or Group of Persons becoming the beneficial owner, directly or
indirectly, of more than 50% of the
outstanding
Company Common Stock or, in any way, affects the Stockholders adversely in a
substantive manner different from the other holders of Company Common
Stock.
(c) Each
Stockholder hereby agrees that it shall not vote any Stockholder Shares held by
such Stockholder in connection with any Conversion Approval Proposal (as defined
in the Merger Agreement).
Section
2.4 No Voting
Trust. This Agreement
does not create or constitute, and shall not be construed as creating or
constituting, a voting trust agreement under the Delaware General Corporation
Law or any other applicable corporation law.
Section
2.5 Proxy.
(a) Each
Stockholder hereby irrevocably (to the fullest extent permitted by law) grants
to, and appoints, Company and each of its executive officers and any of them, in
their capacities as officers of the Company (the “Grantees”), as Stockholder’s
proxy and attorney-in-fact (with full power of substitution and
re-substitution), for and in the name, place and stead of Stockholder, to vote
its Stockholder Shares or Excess Threshold Shares, as applicable, to instruct
nominees or record holders to vote the Stockholder Shares or Excess Threshold
Shares, as applicable, and to sign or grant a consent, certificate,
approval or other document with respect to such Stockholder Shares or Excess
Threshold Shares, as applicable, in accordance with Section 2.3(a) hereof and
applicable law, and, in the discretion of the Grantees, with respect to any
proposed adjournments or postponements of any meeting of
Stockholders.
(b) Each
Stockholder represents that any proxies heretofore given in respect of the
Stockholders Shares held by such Stockholder that may still be in effect are not
irrevocable, and such proxies are hereby revoked.
(c) Each
Stockholder hereby affirms that the irrevocable proxy set forth in this Section
2.5 is given to secure the performance of the duties of such Stockholder under
this Agreement. Each Stockholder hereby further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Each Stockholder hereby ratifies and confirms all that
Grantees may lawfully do or cause to be done by virtue hereof. This
irrevocable proxy is executed and intended to be irrevocable in accordance with
the provisions of Section 212 of the Delaware General Corporation
Law. Each Stockholder shall take further action and execute such
other instruments as may be necessary to effectuate the intent of this
irrevocable proxy. For Stockholder Shares as to which any Stockholder
is the beneficial but not the record owner, each Stockholder will cause any
record owner of such Stockholder Shares to grant the Grantees a proxy to the
same effect as that contained in this Section 2.5.
(d) The
Grantees may not exercise this irrevocable proxy on any other matter except as
provided in Section 2.3(a) hereof.
(e) The
Company may terminate this proxy at any time at its sole election by written
notice provided to the applicable Stockholder.
ARTICLE
III
RESTRICTIONS
ON TRANSFER OF STOCKHOLDER SHARES
Section
3.1 Restrictive
Legend.
(a) Each
certificate representing Stockholder Shares held by the Stockholders shall,
except as otherwise provided in this Section 3.1 or in Section 3.3, be stamped
or otherwise imprinted with legends substantially in the following
form:
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(i)
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
ON DISPOSITION AND OTHER RESTRICTIONS OF A STOCKHOLDERS AGREEMENT DATED AS
OF ________, 2008, BETWEEN ______________________ AND
_______________________;”
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(ii)
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE;”
and
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(iii)
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY AN AFFILIATE OF THE
COMPANY AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.”
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(b) Notwithstanding
the foregoing, any Stockholder Shares held by the Stockholders that are not
“restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act shall not be required to bear the legend set forth in (ii)
above. Further, any Stockholder Shares held by a Stockholder who is
not an Affiliate of the Company shall not be required to bear the legend set
forth in (iii) above.
(c) The
Company shall, at the request of a Stockholder, (i) remove the legend described
in Section 3.1(a)(i) from each certificate evidencing Stockholder Shares held by
a Stockholder transferred in compliance with the terms of Section 3.2 and with
respect to which no rights under this Agreement shall transfer and (ii) remove
from each certificate evidencing Stockholder Shares held by a Stockholder the
legend described in Section 3.1(a)(ii) if, in the written opinion of counsel to
the Stockholder reasonably satisfactory to the Company, the securities evidenced
thereby may be publicly sold without registration under the Securities
Act.
Section
3.2 Transfer
Restrictions. No Stockholder shall be permitted to transfer
its Stockholder Shares, whether by sale, assignment, gift, pledge, through
hypothecation, encumbrance, grant of future rights or otherwise (“Transfer”) beginning
from the date of this Agreement and expiring at the end of the Earn Out Period,
except (a) pursuant to an Affiliate Transfer (as defined below) or (b) in
connection with a transfer pursuant to Section 5.2 of this
Agreement. Further, for so long as the Standstill Period is in
effect, the LLC Stockholder shall not Transfer any of its Stockholder Shares
except (i) pursuant to a bona fide public offering
(including
pursuant to the registration rights in Article V providing for a public offering
that is not an underwritten offering), (ii) pursuant to Rule 144 under the
Securities Act but subject in every respect to paragraphs (e), (f) and (g) of
Rule 144, (iii) other than in connection with a sale under (i) or (ii), to a
Person or Group that is permitted to file a Schedule 13G under the Exchange Act
and that, after giving effect to such Transfer, would beneficially own Company
Common Stock representing in the aggregate less than 5% of the outstanding
Company Common Stock, or (iv) pursuant to an “Affiliate Transfer,”
which shall mean a Transfer (a) to the equity owners of the LLC Stockholder, (b)
to a family member of the equity owners of the LLC Stockholder or to a family
member of any other Stockholder, (c) to a trust created for the benefit of (1)
any Stockholder, (2) a family member of any Stockholder, if not an entity, or
(3) a family member of the equity owners of the LLC Stockholder, or (d) to a
corporation, partnership, limited liability company or similar entity controlled
by the LLC Stockholder, provided that with respect to any transfer in accordance
with Section 3.2(iv) such transferee agrees to be bound by the terms of this
Agreement. No rights under this Agreement shall transfer to any
transferee of the Stockholder Shares other than in connection with a transfer
pursuant to Section 3.2(iv).
Section
3.3 Transfer
Procedures. Prior to any
proposed Transfer of any Stockholder Shares held by the Stockholders (other than
pursuant to a Buyout Transaction, pursuant to a registration statement filed in
accordance with Sections 5.1 or 5.2 or pursuant to Rule 144 of the Securities
Act), the Stockholders shall give written notice to the Company of its intention
to effect such Transfer. Each such notice shall describe the manner
of the proposed Transfer and, if requested by the Company, shall be accompanied
by an opinion of counsel satisfactory to the Company to the effect that the
proposed Transfer may be effected without registration under the Securities Act,
whereupon the Stockholders shall be entitled to Transfer such Registrable Stock
in accordance with the terms of its notice, subject in any event to the
restrictions in this Article III. Each certificate for Stockholder
Shares transferred as above provided shall bear the legend set forth in Section
3.1(a)(ii), except that such certificate shall not bear such legend if (i) such
transfer is in accordance with the provisions of Rule 144 of the Securities Act
(or any other rule permitting public sale without registration under the
Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee would be
entitled to transfer such securities in a public sale without registration under
the Securities Act. The restrictions provided for in this Section 3.3
shall not apply to securities that are not required to bear the legend
prescribed by Section 3.1(a)(ii) in accordance with the provisions of Section
3.1.
ARTICLE
IV
STANDSTILL
PROVISIONS
Section
4.1 Standstill
Period.
(a) The
“Standstill Period” shall mean the period beginning on the Closing Date and
continuing until the earlier of (i) the fifth (5th)
anniversary of the Closing Date or (ii) the date on which collectively the
Stockholders beneficially own less than 10% of the outstanding Company Common
Stock (assuming conversion of the Company Preferred Stock).
(b) In
the event the Standstill Period is discontinued pursuant to Section 4.1(a)(ii),
the Standstill Period shall be reinstated for the remainder of the Standstill
Period, if, at anytime prior to the fifth (5th)
anniversary of the Closing Date, the Stockholders collectively beneficially own
10% or more of the outstanding Company Common Stock (assuming conversion of the
Company Preferred Stock).
Section
4.2 Acquisition
of Additional Shares; Other Restrictions. During the
Standstill Period, except with the prior approval of a majority of the
Independent Directors (except any Stockholder Director), neither LLC Stockholder
nor any assignee of LLC Stockholder pursuant to Section 3.2(iv) shall, directly
or indirectly, and shall cause their Affiliates not to, directly or
indirectly:
(a) Acquire
(other than any shares received as part of the Earn Out Payment as contemplated
in the Merger Agreement), announce an intention to acquire, offer to acquire, or
enter into any agreement, arrangement or undertaking of any kind the purpose of
which is to acquire, by purchase, exchange or otherwise, (i) any shares of
Company Common Stock, or (ii) any other security convertible into, or any
option, warrant or right to acquire, Company Common Stock or (iii) all or
substantially all of the assets of the Company or any of its Affiliates;
provided that Sections 4.2(a)(i) and 4.2(a)(ii) shall not be applicable to the
extent that (A) the aggregate percentage of outstanding Company Common Stock
owned by the Stockholders is increased solely as a result of corporate action
taken by the Company and not caused by any action taken by the Stockholders or
(B) the number of shares of outstanding Company Common Stock collectively owned
by the Stockholders does not exceed the number of shares collectively owned by
the Stockholders at the Effective Time plus any shares received as part of the
Earn Out Payment; provided, further, that in no event shall LLC Stockholder or
any assignee of LLC Stockholder be permitted to acquire any shares of Company
stock (other than shares received as part of the Earn Out Payment) if the
acquisition of such shares would result in either of LLC Stockholder (or an
assignee) owning 35% or more of the outstanding Company Common
Stock.
(b) Solicit,
or participate in any solicitation of, proxies with respect to any Company
Common Stock, or become a “participant” in a “solicitation” (as such terms are
defined in Regulation 14A of the Exchange Act) in opposition to any matter that
has been recommended by a majority of the Company’s Independent Directors
(except any Stockholder Director) or in favor of any matter that has not been
approved by a majority of the Independent Directors (except any Stockholder
Director).
(c) Propose
or otherwise solicit stockholders of the Company for the approval of one or more
stockholder proposals, seek or solicit support for (whether publicly or
privately) any written consent of stockholders of the Company, attempt to call a
special meeting of stockholders (except with the approval of a majority of the
Independent Directors excluding any Stockholder Director), nominate or attempt
to nominate any Person for election as a Director (except in accordance with
Article II), or seek the removal or resignation of any Director (except in
accordance with Article II), in each case in opposition to any matter that has
been recommended by a majority of the Independent Directors (except any
Independent Director who
is a
Stockholder Director) (and such recommendation has not been revoked or
withdrawn) or in favor of any matter that has not been approved by a majority of
the Independent Directors.
(d) Deposit
any Company Common Stock in a voting trust or similar agreement or subject any
Company Common Stock to any arrangement or agreement with respect to the voting
of such Company Common Stock.
(e) Take
any action to form, join or in any way participate in any partnership, limited
partnership, syndicate or other Group with respect to Company Common Stock or
otherwise act in concert with any Person for the purpose of circumventing the
provisions or purposes of this Agreement.
(f) Propose
(or publicly announce or otherwise disclose an intention to propose), solicit,
offer, seek to effect, negotiate with or provide any confidential information
relating to the Company or its business to any other Person with respect to any
tender or exchange offer, merger, consolidation, share exchange, business
combination, restructuring, recapitalization or similar transaction involving
the Company; provided, that nothing set forth in this Section 4.2(f) shall
prohibit the Stockholders from soliciting, offering, seeking to effect and
negotiating with any Person with respect to Transfers of Company Common Stock
permitted by this Article IV; provided, further, that in so doing the
Stockholders shall not issue any press release or otherwise make any public
statements (other than statements made in response to any request by any Person
for confirmation by the Stockholders or any of their Affiliates of information
contained in any statement on Schedule 13D under the Exchange Act) with respect
to such action (provided that the Stockholders may, and may permit its
Affiliates to, make any statement required by applicable law, including without
limitation, the amendment of any statement on Schedule 13D under the Exchange
Act); provided, however, that in doing so Stockholders shall not provide any
confidential information relating to the Company or its business to any such
Person.
(g) Take
any other action to seek control (as such term is defined under Rule 12b-2 of
the Exchange Act) of the Company.
(h) Make
or in any way advance any request or proposal to amend, modify or waive any
provision of this Agreement except in a nonpublic and confidential
manner.
(i) Announce
an intention to do, or solicit, assist, prompt, induce or attempt to induce any
Person, directly or indirectly, to do, any of the actions restricted or
prohibited under subparagraphs (a) through (h) above.
Notwithstanding
the restrictions contained in this Section 4.2, neither the actions taken by any
Stockholder Director in his or her capacity as a member of the Board pursuant to
such Person’s responsibilities in such capacity nor the exercise by any
Stockholder of its voting rights in accordance with Section 2.3 with respect to
any Stockholder Shares it beneficially owns shall be deemed to violate this
Section 4.2.
ARTICLE
V
REGISTRATION
RIGHTS
Section
5.1 Demand
Registration.
(a) On
and after the end of the Earn Out Period, the Stockholders’ Representative may
in his sole and absolute discretion request in a written notice that the Company
file a registration statement under the Securities Act (or a similar document
pursuant to any other statute then in effect corresponding to the Securities
Act) covering the registration of any or all Registrable Stock held by the
Stockholders; provided, that there must be included in such registration
Registrable Stock having a minimum value of Ten Million Dollars ($10,000,000)
(based on the then current market price of such Registrable Stock) or such
lesser amount if it constitutes all of the Registrable Stock held by such
Shareholders participating in the registration (the “Registration
Threshold”); provided, that the Registration Threshold shall be increased
to Twenty Million Dollars ($20,000,000) or such lesser amount if it constitutes
all of the Registrable Stock held by such Shareholders participating in the
registration, but in no event less than a minimum value of Five Million Dollars
($5,000,000), if the Company is not eligible to register the sale or other
disposition of Registrable Securities on Form S-3 (or a successor
form). Following receipt of any notice under this Section 5.1,
the Company shall use its reasonable efforts to cause to be registered under the
Securities Act all Registrable Stock that the Stockholders have requested be
registered in a manner of disposition reasonably acceptable to the Company,
including but not limited to, an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule) under the Securities
Act.
(b) If
the Company intends to have the Registrable Stock distributed by means of an
underwritten offering the Stockholders shall enter into an underwriting
agreement in customary form with the underwriter or underwriters. If
any Stockholder who intends to sell Registrable Securities in the offering
disapproves of the terms of the underwriting, such Stockholder may elect to
withdraw all its Registrable Stock from the registration by written notice to
the Company and the managing underwriter. The underwriters shall be
selected by the Company in its sole discretion.
(c) Notwithstanding
any provision of this Agreement to the contrary,
(i) the
Company shall not be required to effect a registration pursuant to this Section
5.1 during the period starting with the date of filing by the Company of, and
ending on a date 120 days following the effective date of, a registration
statement pertaining to a public offering of securities for the account of the
Company or on behalf of the selling stockholders under any other registration
rights agreement which the Stockholders have been entitled to join pursuant to
Section 5.2;
(ii) if
the Board determines in good faith that it is in the best interests of the
Company (A) not to disclose the existence of facts surrounding any proposed
or pending acquisition, disposition, strategic alliance or financing transaction
or other potential material event involving the Company or (B) to suspend
the registration rights set forth herein, the Company may (1) postpone the
filing of any registration pursuant to this Section 5.1 and (2) suspend the
rights of any Stockholder to make sales pursuant to any
registration
statement for such a period of time as the Board may determine; provided, that
such periods of postponement and suspension may not exceed 120 days in the
aggregate during any period of 12 consecutive months; and each Stockholder
agrees in consideration of the obligations of the Company set forth herein to
maintain any communication by the Company with respect to the postponement or
suspension of the any registration pursuant to this Section 5.1 in confidence
such that the Company may rely on the safe harbor provisions of Rule
100(b)(2)(ii) of Regulation FD under the Exchange Act with respect to such
communications; provided, further, that in the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective as provided in Section 5.3(a) by the
number of days by which the Company suspends such registration statement;
and
(iii) the
Company shall not be required to effect a registration pursuant to this Section
5.1 more than one time in any twelve-month period and shall not be obligated to
cause any audit to be undertaken in connection with any such registration that
the Company is not otherwise required to undertake at that time in connection
with its obligations under the Securities Act, the Exchange Act and the rules
and regulations thereunder.
(d) The
Company shall not be obligated to effect and pay for more than three
registrations pursuant to this Section 5.1; provided, that a registration
requested pursuant to this Section 5.1 shall not be deemed to have been effected
for purposes of this Section 5.1(d) unless (i) it has been declared effective by
the Commission, (ii) it has remained effective for the period set forth in
Section 5.3(a), and (iii) the offering of Registrable Stock pursuant to such
registration is not subject to any stop order, injunction or other order or
requirement of the Commission (other than any such stop order, injunction, or
other requirement of the Commission prompted by any act or omission of holders
of Registrable Stock).
Section
5.2 Incidental
Registration.
(a) From
the date hereof and until the end of the Earn Out Period, with respect to all
Stockholders, and (ii) thereafter throughout the remainder of the Standstill
Period for so long as a Stockholder owns more than 1% of outstanding Company
Common Stock (assuming conversion of the Company Preferred Stock), and subject
to Section 5.6, if at any time the Company determines that it shall file a
registration statement under the Securities Act for the registration of Company
Common Stock (other than a registration statement on a Form S-4 or S-8 or filed
in connection with an exchange offer, an offering of securities solely to the
Company’s existing stockholders, or a registration statement registering Company
Common Stock which is issuable solely upon conversion of debt securities) on any
form that would also permit the registration of the Registrable Stock and such
filing is to be on its behalf or on behalf of selling holders of its securities
for the general registration of Company Common Stock to be sold for cash, the
Company shall each such time promptly give the Stockholders’ Representative
written notice of such determination setting forth the date on which the Company
proposes to file such registration statement, which date shall be no earlier
than 15 business days from the date of such notice, and advising the
Stockholders of their right to have Registrable Stock included in such
registration; provided, however, that such right to have Registrable Stock
included in such registration shall not terminate for LLC Stockholder but shall
continue for so long as LLC Stockholder owns more
than 1%
of outstanding Company Common Stock (assuming conversion of the Company
Preferred Stock). Upon the written request of a Stockholder received
by the Company no later than 15 business days after the date of the Company’s
notice to the Stockholders’ Representative, the Company shall use all reasonable
efforts to cause to be registered under the Securities Act all of the
Registrable Stock that each such Stockholder has so requested to be
registered.
(b) If,
in the written opinion of the managing underwriter (or, in the case of a
non-underwritten offering, in the written opinion of the Company), the total
amount of such securities to be so registered, including such Registrable Stock,
will exceed the maximum amount of the Company’s securities which can be marketed
(i) at a price reasonably related to the then current market value of such
securities, or (ii) without otherwise materially and adversely affecting the
entire offering, then the Company shall be entitled to reduce the number of
shares of Registrable Stock to be sold in such offering by the Stockholders and
any other stockholder of the Company hereafter granted incidental registration
rights in proportion (as nearly as practicable) to the amount of Registrable
Stock requested to be included by each Stockholder and each other stockholder at
the time of filing the registration statement. The Company agrees not
to give any other stockholder of the Company registration rights superior to
those granted to the Stockholders without the Stockholders’ Representative’s
prior written approval.
(c) If,
at any time after giving written notice of its intention to register any Company
Common Stock and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such Company Common Stock, the
Company may, at its election, give written notice of such determination to the
Stockholders’ Representative and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such abandoned registration, and (ii) in the
case of a determination to delay such registration of its equity securities,
shall be permitted to delay the registration of such Registrable Securities for
the same period as the delay in registering such other equity
securities.
Section
5.3 Registration
Procedures. Whenever required
under Section 5.1 to use all reasonable efforts to effect the registration of
any Registrable Stock, the Company shall, as expeditiously as
possible:
(a) prepare
and file with the Commission a registration statement with respect to such
Registrable Stock (which shall be filed in no event later than 60 days after
written notice requesting a registration statement under Section 5.1 has been
received by the Company), and use all reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby determined as provided hereafter; provided,
that the Company shall not be required to keep any registration statement
effective more than 90 days (or such shorter period which will terminate when
all of the Registrable Stock covered by such registration statement has been
sold pursuant thereto), in each case subject to Section 5.1(c)(ii) above and
Section 5.3(e) below;
(b) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Stock covered by such registration statement
and as may be necessary to keep such registration statement effective for a
reasonable period not to exceed 90 days, and promptly notify the Stockholders’
Representative of any stop order issued or, to the Company’s knowledge,
threatened to be issued by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if
entered;
(c) furnish
to the Stockholders selling Registrable Stock such numbers of copies of the
registration statement and the prospectus included therein (including each
preliminary prospectus and any amendments or supplements thereto in conformity
with the requirements of the Securities Act) and any exhibits filed
therewith;
(d) use
all reasonable efforts to register or qualify the Registrable Stock covered by
such registration statement under such other securities or blue sky laws of such
jurisdiction within the United States and Puerto Rico as shall be reasonably
appropriate for the distribution of the Registrable Stock covered by the
registration statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business in any jurisdiction wherein it would not but for the requirements of
this paragraph (d) be obligated to do so; and provided, further, that the
Company shall not be required to qualify such Registrable Stock in any
jurisdiction in which the securities regulatory authority requires that any
Stockholder submit any shares of its Registrable Stock to the terms, provisions
and restrictions of any escrow, lockup or similar agreement(s) for consent to
sell Registrable Stock in such jurisdiction unless such Stockholder agrees to do
so;
(e) promptly
notify each Stockholder for whom such Registrable Stock is covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, and at the request of any such Stockholder promptly prepare and
furnish to such Stockholder a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and in the
event the Company shall give such notice, the Company shall extend the period
during which such registration statement shall be maintained effective as
provided in Section 5.3(a) by the number of days during the period from and
including the date of the giving of such notice to the date when the Company
shall make available to the Stockholders such supplemented or amended
prospectus;
(f) enter
into customary agreements (including, if the method of distribution is by means
of an underwriting, an underwriting agreement in customary form) and take such
other
actions
as are reasonably required in order to expedite or facilitate the disposition of
the Registrable Stock to be so included in the registration
statement;
(g) otherwise
use all reasonable efforts to comply with all applicable rules and regulations
of the Commission, and make available to its security holders, as soon as
reasonably practicable, but not later than 15 months after the effective date of
the registration statement, an earnings statement covering the period of at
least 12 months beginning with the first full month after the effective date of
such registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(h) use
all reasonable efforts to list the Registrable Stock covered by such
registration statement with any securities exchange on which the Company Common
Stock is then listed.
For
purposes of Sections 5.3(a) and 5.3(b), the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby or 90 days after the effective
date thereof.
Section
5.4 Furnish
Information. It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Agreement that the Stockholders shall furnish to the
Company such information regarding themselves, the Registrable Stock held by
them, and the intended method of disposition of such securities as the Company
shall reasonably request and as shall be required in connection with the action
to be taken by the Company.
Section
5.5 Expenses
of Registration. All expenses
incurred in connection with each registration pursuant to Sections 5.1 and 5.2
of this Agreement, excluding underwriters’ discounts and commissions, but
including without limitation all registration, filing and qualification fees,
word processing, duplicating, printers’ and accounting fees (including the
expenses of any special audits or “cold comfort” letters required by or incident
to such performance and compliance), stock exchange fees, messenger and delivery
expenses, all fees and expenses of complying with state securities or blue sky
laws, and the fees and disbursements of counsel for the Company, shall be paid
by the Company; provided, however, that if a registration request pursuant to
Section 5.1 is subsequently withdrawn by the Stockholders, the Company shall not
be required to pay any expenses of such registration proceeding, and such
withdrawing Stockholders shall bear such expenses and reimburse the Company for
such expenses incurred by it (alternatively, at the discretion of the
Stockholders’ Representative, such registration proceeding shall count as one of
the three registration statements required to be filed by the Company pursuant
to Section 5.1). The Stockholders shall bear and pay the underwriting
commissions and discounts applicable to securities offered for their account and
the fees and disbursements of their counsel in connection with any
registrations, filings and qualifications made pursuant to this
Agreement.
Section
5.6 Underwriting
Requirements. In connection
with any underwritten offering, the Company shall not be required under section
5.2 to include shares of Registrable Stock in such underwritten offering unless
the holders of such shares of Registrable Stock accept
the terms
of the underwriting of such offering that have been reasonably agreed upon
between the Company and the underwriters.
Section
5.7 Indemnification. In the event any
Registrable Stock is included in a registration statement under this
Agreement:
(a) The
Company shall indemnify, defend and hold harmless each Stockholder, such
Stockholder’s directors and officers, each person who participates in the
offering of such Registrable Stock, including underwriters (as defined in the
Securities Act), and each person, if any, who controls such Stockholder or
participating person within the meaning of the Securities Act, against any
losses, claims, damages, liabilities, expenses or actions, joint or several, to
which they may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities, expenses or actions (or proceedings
in respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such registration statement on the
effective date thereof (including any prospectus filed under Rule 424 under the
Securities Act or any amendments or supplements thereto) or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each such Stockholder, such Stockholder’s
directors and officers, such participating person or controlling person for any
legal or other expenses reasonably incurred by them (but not in excess of
expenses incurred in respect of one counsel for all of them) in connection with
investigating or defending any such loss, claim, damage, liability, expense or
action; provided, however, that the indemnity agreement contained in this
Section 5.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
reasonable consent of the Company; provided, further, that the Company shall not
be liable to any Stockholder, such Stockholder’s directors and officers,
participating person or controlling person in any such case for any such loss,
claim, damage, liability, expense or action to the extent that it arises solely
out of or is solely based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration, by any such Stockholder,
such Stockholder’s directors and officers, participating person or controlling
person. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such Stockholder,
such Stockholder’s directors and officers, participating person or controlling
person, and shall survive the transfer of such securities by such
Stockholder.
(b) Each
Stockholder whose Registrable Securities are included in the registration being
effected shall, severally and not jointly, indemnify, defend and hold harmless
the Company, each of its directors and officers, each person, if any, who
controls the Company within the meaning of the Securities Act, and each agent
and any underwriter for the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities, expenses or actions to which
the Company or any such director, officer, controlling person, agent or
underwriter may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages, liabilities, expenses or actions (or
proceedings in respect thereof) arise solely out of or are solely based upon any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement on the effective date thereof (including
any
prospectus
filed under Rule 424 under the Securities Act or any amendments on supplements
thereto) or solely arise out of or are solely based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of such Stockholder expressly for use in connection with such
registration; and each such Stockholder shall reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent or underwriter (but not in excess of expenses incurred
in respect of one counsel for all of them) in connection with investigating or
defending any such loss, claim, damage, liability, expense or action; provided,
however, that the indemnity agreement contained in this Section 5.7(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
expense or action if such settlement is effected without the reasonable consent
of such Stockholder, and provided, further, that the liability of each
Stockholder hereunder shall be limited to the proportion of any such loss,
claim, damage, liability, expense or action which is equal to the proportion
that the net proceeds from the sale of the shares sold by such Stockholder under
such registration statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by such Stockholder (after the deduction of all underwriters’ discounts
and commissions and all other expenses paid by such Stockholder in connection
with such registration) from the sale of Registrable Stock covered by such
registration statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company, the
Company’s directors and officers, participating person or controlling person,
and shall survive the transfer of such securities by such
Stockholder.
(c) Promptly
after receipt by an indemnified party under this Section 5.7 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 5.7,
notify the indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in and assume the defense
thereof with counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party (unless (i) such indemnified party
reasonably objects to such assumption on the grounds that there may be defenses
available to it which are different from or in addition to those available to
such indemnifying party, (ii) the indemnifying party and such indemnified party
shall have mutually agreed to the retention of such counsel or (iii) in the
reasonable opinion of such indemnified party representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding, in which
case the indemnified party shall be reimbursed by the indemnifying party for the
reasonable expenses incurred in connection with retaining separate legal
counsel); provided, however, that an indemnified party shall have the right to
retain its own counsel, with all fees and expenses thereof to be paid by such
indemnified party, and to be apprised of all progress in any proceeding the
defense of which has been assumed by the indemnifying party. The
failure to notify an indemnifying party promptly of the commencement of any such
action shall not relieve the indemnifying party from any liability in respect of
such action which it may have to such indemnified party on account of the
indemnity contained in this Section 5.7, unless (and only to the extent) the
indemnifying party was
prejudiced
by such failure, and in no event shall such failure relieve the indemnifying
party from any other liability which it may have to such indemnified
party. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any claim or pending or
threatened proceeding in respect of which the indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such claim or
proceeding.
(d) (a) To
the extent any indemnification by an indemnifying party is prohibited or limited
by law, the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities,
expenses or actions referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.7(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(iii) The
liability of each Stockholder in respect of any contribution obligation of such
Stockholder under this Agreement with respect to a particular registration shall
not exceed the net proceeds received by such Stockholder (after deduction of all
underwriters’ discounts and commissions and all other expenses paid by such
Stockholder in connection with such registration) from the sale of the
Registrable Stock covered by such registration statement.
Section
5.8 Lockup. Each Stockholder
shall, in connection with any registration of the Company’s securities, upon the
request of the Company or the underwriters managing any underwritten offering of
the Company’s securities, agree in writing not to effect any sale, disposition
or distribution of any Registrable Stock (other than that included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time from 30 days prior to
the effective date of such registration as the Company or the underwriters may
specify; provided, however, that (i) all executive officers and directors of the
Company shall also have agreed not to effect any sale, disposition or
distribution of any
Registrable
Stock under the circumstances and pursuant to the terms set forth in this
Section 5.8 and (ii) in no event shall the Stockholders be required to not
effect any sale, disposition or distribution for longer than 180 days after the
registration statement becomes effective. The obligations in this
Section 5.8 shall expire on the one (1)-year anniversary of the Closing Date;
provided, that with respect to the LLC Stockholder the obligations in this
Section 5.8 shall continue to be in effect until the expiration of the
Standstill Period, unless any such Stockholder’s ownership of Company Common
Stock (assuming conversion of the Company Preferred Stock) falls below
3%.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
Section
6.1 Representations
and Warranties of the Company. The Company
represents and warrants to the Stockholder as follows:
(a) The
Company has the requisite corporate power and authority to execute, deliver and
perform this Agreement;
(b) This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except that (i) such enforcement may
be subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect relating to or limiting creditors'
rights generally and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceedings therefor
may be brought;
(c) The
execution, delivery and performance of this Agreement by the Company do not
violate or conflict with or constitute a default under the Company's certificate
of incorporation or bylaws; and
(d) No
holders of the Company’s Common Stock or any securities converted into the
Company’s Stock have been granted as of the date of this Agreement registration
rights superior to or pari
passu to those granted to the Stockholders.
Section
6.2 Representations
and Warranties of the Stockholders. Each Stockholder
represents and warrants to the Company as follows:
(a) The
Stockholder has the requisite power and authority (whether corporate or
otherwise) to execute, deliver and perform this Agreement;
(b) This
Agreement has been duly and validly authorized, executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the Stockholder,
enforceable in accordance with its terms, except that (i) such enforcement may
be subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect relating to or limiting creditors'
rights generally and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceedings therefor
may be brought;
(c) As
of the date of this Agreement, the Stockholder does not own any securities of
the Company other than the Company Common Stock or Company Preferred
Stock received pursuant to the Merger Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Interpretation.
(a) The
headings contained in this Agreement and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(b) In
the event of an ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
(c) The
definitions of the terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation.” The word “will” shall be construed
to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include the Person’s successors and
permitted assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, and (iv) all references herein to
Articles and Sections shall be construed to refer to Articles and Sections of
this Agreement.
Section
7.2 Amendments. No amendment,
modification or waiver in respect of this Agreement shall be effective unless it
shall be in writing and signed by both parties hereto.
Section
7.3 Assignment. Except where
otherwise expressly provided herein or pursuant to a Transfer in accordance with
Section 3.2(iv), this Agreement and the rights and obligations hereunder shall
not be assignable or transferable by the parties hereto (except by operation of
law in connection with a merger, or sale of substantially all the assets, of the
parties hereto) without the prior written consent of the other party hereto. Any
attempted assignment in violation of this Section 7.3 shall be
void.
Section
7.4 No
Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their permitted assigns and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such assigns, any legal or equitable
rights hereunder.
Section
7.5 Notices.
(a) All
notices and other communications under this Agreement shall be in the English
language, shall be in writing and shall be delivered (i) by facsimile or
telecopier transmission (provided that a transmission confirmation is received
by the sender and a confirmation copy is sent by a recognized overnight courier
service), in which case such notice or communication shall be deemed to have
been delivered as of the date so transmitted (or, if not transmitted during a
business day for the recipient, the next following business day), or (ii) by a
recognized international overnight courier service, in which case such notice or
communication shall be deemed to have been delivered the next business day of
the recipient following deposit with an international overnight courier service,
in each case to the addresses set forth below (or at such other addresses as may
be provided hereunder):
|
If
to the Company:
|
Allion
Healthcare, Inc.
0000
Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Telecopier
Number: (000) 000-0000
|
|
Copy
to Counsel:
|
Xxxxxx
& Bird LLP
One
Atlantic Center
0000
X. Xxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxx, Esquire
Telecopier
Number: (000) 000-0000
|
|
If
to the Stockholders’ Representative:
|
Xxxxxxx
X. Xxxxx, Xx., Stockholders’ Representative
0000
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Telecopier
Number: (000) 000-0000
|
|
Copy
to Counsel:
|
Xxxxxxx
X. Xxxxx
Xxx
Xxxxxxxxxx LLP
0000
Xxxxxx
00xx
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(b) Any
party hereto may change its address specified for notices herein by designating
a new address by notice in accordance with this Section 7.5.
Section
7.6 Counterparts. This Agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered to the other
party. Copies of executed counterparts transmitted by telecopy, telefax or other
electronic transmission service shall be considered original executed
counterparts for purposes of this Section 7.6.
Section
7.7 Severability. If any provision
of this Agreement (or any portion thereof) or the application of any such
provision (or any portion thereof) to any Person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof (or the remaining portion thereof) or the application
of such provision to any other Persons or circumstances.
Section
7.8 Governing Law;
Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed and
construed in accordance with the internal laws (without reference to choice or
conflict of laws) of the State of Delaware, and each party hereby submits to the
exclusive jurisdiction of the Delaware Court of Chancery of the State of
Delaware. Each party hereby waives all right to a trial by jury in any
action, suit or proceeding brought to enforce or defend any rights or remedies
under this Agreement. Each party irrevocably consents to the service of
any and all process in any such action, suit or proceeding by the delivery of
such process to such party at the address and in the manner provided in Section
7.5.
Section
7.9 Specific
Performance. The parties
hereto agree that irreparable damage would occur in the event any provision of
this Agreement was not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
Section
7.10 Stockholders’
Representative. Each Stockholder hereby constitutes and
appoints Xxxxxxx X. Xxxxx, Xx. as the Stockholders’ representative (the “Stockholders’
Representative”) as his or her true and lawful attorney-in-fact (i) to
give and receive all notices and communications required or permitted under this
Agreement, (ii) to agree to, negotiate, enter into settlements and compromises
with respect to this Agreement, (iii) to negotiate, agree and enter into any
amendments to this Agreement as per Section 7.2 of this Agreement, (iv) to
select and communicate to the Company the designees to serve on the Board as
provided for in Section 2.1 hereof, and (v) to communicate to the Company any
elections of the Stockholders with respect to the registration rights provided
for in Article 5 hereof. The Stockholders’ Representative may take
all actions necessary or appropriate in the judgment of the Stockholders’
Representative for the accomplishment of any of the foregoing, each Stockholder
agreeing to be fully bound by the acts, decisions and agreements of the
Stockholders’ Representative taken and done pursuant to the authority herein
granted. Notices and communications to or from the Stockholders’
Representative shall constitute notice to or from each of the
Stockholders. In the event that Xx. Xxxxx dies or becomes
incapacitated, the Stockholders shall promptly select an alternate person to
serve as the Stockholders’ Representative and shall promptly notify the Company
of such selection. The Company may rely upon any such decision, act,
consent or instruction of the Stockholders’ Representative as being the
decision, act, consent or instruction of each of and all of the
Stockholders. The Company is hereby relieved from any liability to
any Person for any acts done in accordance with such decision, act, consent or
instruction of the Stockholders’ Representative.
Section
7.11 Termination. Upon the
closing of a Buyout Transaction, this Agreement shall terminate and be of no
further force and effect.
Section
7.12 Confidentiality. The
Stockholders agree to maintain, and they shall cause their respective directors,
officers, employees and other representatives to maintain, the confidentiality
of all material non-public information obtained by the Stockholders from the
Company or any of the Company’s officers, directors, employees or
representatives, and not to use such information for any purpose other than (i)
the evaluation and protection of their investment in the Company, (ii) the
exercise of their respective rights under this Agreement, and (iii) the exercise
by the Stockholder Directors of their fiduciary duties as directors of the
Company.
Section
7.13 Change in
Law. In the event any law, rule or regulation comes into force
or effect which conflicts with the terms and conditions of this Agreement, the
parties shall negotiate in good faith to revise this Agreement to achieve the
parties’ intention set forth herein.
[Remainder
of Page Intentionally Left Blank; Signatures on Following Page]
IN
WITNESS WHEREOF, the parties have caused this Stockholders’ Agreement to be duly
executed as of the date first above written.
COMPANY
By:
Name:
Title:
STOCKHOLDER’S
AGREEMENT
COUNTERPART
SIGNATURE PAGE
The
undersigned hereby agrees to all the terms and provisions of the Stockholder’s
Agreement dated __________ ____, 2008, by and among Allion Healthcare, Inc., a
Delaware corporation and the former stockholders of Biomed America, Inc., a
Delaware corporation (the “Stockholder’s
Agreement”), and agrees to be bound by the terms and provisions thereof
as evidenced by the execution of this Counterpart Signature Page which, together
with other Counterpart Signature Pages, is hereby incorporated into the
Stockholder’s Agreement.
IN WITNESS WHEREOF, the
undersigned has signed this Counterpart Signature Page effective the ____ day of
__________, 2008.
BY:
NAME:
