STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (the "Agreement"), dated as of September 30,
2002, is entered into by and among MATRIA HEALTHCARE, INC., a Delaware
corporation ("Matria"), LIFEMETRIX, INC., a Delaware corporation ("LifeMetrix")
and the stockholders of LifeMetrix listed on Schedule 1 attached hereto (the
"Investors").
Statement of Purpose
The Investors are holders of preferred stock of LifeMetrix. Matria,
LifeMetrix and Quality Oncology, Inc., a Delaware corporation and wholly-owned
subsidiary of LifeMetrix ("QO"), have entered into a Purchase and Sale Agreement
dated as of April 29, 2002 (the "Purchase Agreement") pursuant to which Matria
will acquire substantially all of the assets of LifeMetrix, including all of the
issued and outstanding stock of QO for consideration consisting in part of the
Shares (as defined below). The Shares will be issued by Matria as part of the
Closing Purchase Price and may be issued by Matria as part of the Earn Out
Payment, and such Shares may be distributed, subject to Section 3.8(g) of the
Purchase Agreement, to the Investors. As a condition to consummation of the
Purchase Agreement, LifeMetrix and Matria have agreed that the parties hereto
will enter into this Agreement with respect to the ownership and disposition of
Matria Voting Securities (as defined below).
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE 1
Definitions
1. Definitions. Capitalized terms used but not defined herein will have the
respective meanings ----------- assigned to such terms in the Purchase
Agreement. For all purposes of this Agreement, the following terms shall have
the respective meanings specified below:
"Affiliate" means any Person that controls, is controlled by or is under
common control with another Person; provided that, for purposes of this
definition, "control" shall be deemed to exist only by virtue of possession of
more than 50% of the voting power of a Person's stockholders or other equity
holders possessing general voting rights.
"Beneficial Ownership" shall have the meaning prescribed to such term in
Rule 13b-3 of the Exchange Act.
"Board" means the Board of Directors of Matria.
"Common Stock" means the common stock of Matria, par value $.01 per share,
as described in the Certificate of Incorporation of Matria.
"Estimated Tax Liability" means the estimated tax liability to
LifeMetrix or its stockholders (as evidenced by a Tax Estimate delivered to
Matria by LifeMetrix) resulting from any appreciation in the price of Common
Stock between the Closing Date and the earliest of (i) the thirtieth (30th) day
after the Closing Date, (ii) the date which is five (5) days after any such
earlier date as Matria may permit LifeMetrix to adopt or approve a plan of
liquidation or dissolution, or (iii) the first date on which any Initial
Issuance Shares are distributed to any stockholders or a liquidating trust of
LifeMetrix.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initial Issuance Date" means the date any Shares are issued by Matria as
part of the Closing Purchase Price.
"Initial Issuance Shares" means the Shares issued on the Initial Issuance
Date and any shares of Common Stock received from Matria, by way of stock split,
dividend, recapitalization, capital reorganization or similar transaction, on or
in respect of such Shares.
"Investor Distribution" means any distribution of Shares by an Investor to
its stockholders, limited partners or other equity holders, provided that such
Investor, within five (5) business days thereafter, notifies Matria of such
distribution and certifies to Matria as to the aggregate number of Shares which
such Investor has Transferred to each such stockholder or equity holder, and
that each such stockholder or equity holder which has received from such
Investor a number of Shares in the aggregate greater than or equal to 2% of the
total number of shares of Common Stock outstanding at the time of such
distribution expressly agrees in writing to be bound by and subject to the same
restrictions and obligations as are applicable to the distributing Investor
under this Agreement with respect to such number of Shares.
"LifeMetrix Stockholder" means any Person receiving any Shares as a
distribution on or in respect of its shares of the capital stock of LifeMetrix
in accordance with the terms hereof (including, without limitation, the
Investors).
"Liquidating Transfer" means a distribution of Shares by LifeMetrix to
its stockholders and/or to a liquidating trust, or a distribution by a
liquidating trust to any of the stockholders of LifeMetrix, in each case in
connection with the liquidation and dissolution of LifeMetrix approved and
consummated in accordance with the restrictions of Section 3.8(g) of the
Purchase Agreement, provided that any liquidating trust of LifeMetrix receiving
Shares expressly agrees in writing prior to any such distribution to be bound by
and subject to the same restrictions as are applicable to LifeMetrix under this
Agreement and to perform all of LifeMetrix's obligations and to assume all of
LifeMetrix's liabilities hereunder, and any such liquidating trust shall be
entitled to exercise all rights of LifeMetrix hereunder.
"Market Price" means, per share of Common Stock, as of the applicable date
set forth in this Agreement (i) if such Common Stock is listed on a national
securities exchange or traded on The Nasdaq National Market System ("NMS"), the
average during the ten (10) consecutive trading days immediately preceding such
date of the last price at which the Common Stock shall have been sold on the
national securities exchange (or if traded on more than one such exchange, the
principal exchange on which such shares are traded) or the NMS on each such
trading day, or (ii) if the Common Stock shall not be listed on a national
securities exchange or traded on the NMS but shall be traded in the
over-the-counter market and quotations therefor are reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ"),
the average during the ten (10) consecutive trading days immediately preceding
such date of the last price (if such last price is then reported on a real-time
basis) on each such trading day, or, if the last price is not then so reported,
the mean between the bid and asked prices last reported on each such day, by
NASDAQ, or (iii) if at any time quotations for the Common Stock shall not be
reported by NASDAQ for the over-the-counter market and the Common Stock shall
not be listed on any national securities exchange or traded on the NMS, the fair
market value per share of Common Stock as determined by an independent
investment banking firm jointly selected by Matria and the Review Committee on
the basis of available prices for such Common Stock or in such other manner as
it deems reasonable.
"Matria Voting Securities" means (i) any securities of Matria entitled, or
which may be entitled, to vote (whether or not entitled to vote generally in the
election of directors and including voting rights granted by law or under the
Certificate of Incorporation of Matria) and (ii) any securities of Matria
convertible into or exercisable or exchangeable for the securities described in
clause (i), whether or not subject to the passage of time or other
contingencies.
"Permitted Transfer" means any (i) Transfer of Shares by a LifeMetrix
Stockholder without consideration, by way of gift, devise or inheritance, or
(ii) Transfer of Shares by a LifeMetrix Stockholder to any single Person or
group if, after due inquiry, the transferor reasonably believes that such Person
or group would not own 5% or more of the then outstanding Common Stock, in a
privately negotiated transaction; provided that, in each case, any Person so
acquiring the Shares from any Investor (or any Permitted Transferee thereof)
expressly agrees in writing to be bound by and subject to the same restrictions
and obligations as are applicable to the transferor under this Agreement.
"Permitted Transferee" means any Person receiving Shares pursuant to a
Permitted Transfer or Investor Distribution, which Person shall be subject to
the same restrictions on Transfer as are applicable to a LifeMetrix Stockholder
under this Agreement.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
"Registration Rights Agreement" means that certain Registration Rights
Agreement by and among Matria, LifeMetrix and certain stockholders of
LifeMetrix.
"Restricted Period" means (i) with respect to the Shares issued on the
Initial Issuance Date, a period of one (1) year from the Initial Issuance Date
(such Restricted Period being the "First Restricted Period"), and (ii) with
respect to any Shares issued on the Subsequent Issuance Date, a period of one
(1) year from the Subsequent Issuance Date (such Restricted Period being the
"Second Restricted Period").
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the Initial Issuance Shares and the Subsequent Issuance
Shares. ------
"Subsequent Issuance Date" means the date any Shares are issued by Matria
as part of the Earn Out Payment.
"Subsequent Issuance Shares" means Shares issued on the Subsequent Issuance
Date and any shares of Common Stock received from Matria, by way of stock split,
dividend, recapitalization, capital reorganization or similar transaction, on or
in respect of such Shares.
"Tax Estimate" means a written estimate of the applicable tax liability or
withholding obligation, accompanied by a detailed explanation of the manner in
which such estimate was calculated and the items and assumptions on which such
calculation was based, prepared by KPMG LLP or another independent accounting
firm reasonably satisfactory to Matria.
"Transfer" means (i) to sell, assign, transfer, convey, pledge,
hypothecate, offer, grant an option, contract, right or warrant with respect to
or otherwise dispose of or encumber any interest in, directly or indirectly
through an Affiliate or otherwise (or enter into an agreement, arrangement or
understanding with respect to the foregoing), or (ii) to enter into or agree to
enter into any swap or other arrangement that transfers, in whole or in part,
any of the economic consequences of the ownership of the Shares.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Investors.
Each Investor hereby represents and warrants to Matria as follows:
(a) Such Investor has full legal right, power and authority to enter into
and perform this Agreement. The execution and delivery of this Agreement by such
Investor and the consummation by such Investor of the transactions contemplated
hereby have been duly authorized by all necessary corporate or other action on
behalf of such Investor. This Agreement is a valid and binding obligation of
such Investor enforceable against such Investor in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether asserted at law or in
equity).
(b) Neither the execution and delivery of this Agreement by such Investor
nor the consummation by such Investor of the transactions contemplated hereby
conflicts with or constitutes a violation of or default under (i) the charter or
by-laws or other organizational or governing documents of such Investor, (ii)
any statute, law, regulation, order or decree applicable to such Investor, or
(iii) any contract, commitment, agreement, arrangement or restriction of any
kind to which such Investor is a party or by which such Investor is bound.
2.2 Representations and Warranties of LifeMetrix. LifeMetrix hereby represents
and warrants to Matria as follows:
(a) LifeMetrix has full legal right, power and authority to enter into and
perform this Agreement. The execution and delivery of this Agreement by
LifeMetrix and the consummation by LifeMetrix of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on behalf of
LifeMetrix. This Agreement is a valid and binding obligation of LifeMetrix
enforceable against LifeMetrix in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency, moratorium and other
similar laws affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether asserted at law or in equity).
(b) Neither the execution and delivery of this Agreement by LifeMetrix nor
the consummation by LifeMetrix of the transactions contemplated hereby conflicts
with or constitutes a violation of or default under (i) the charter or by-laws
of LifeMetrix, (ii) any statute, law, regulation, order or decree applicable to
LifeMetrix, or (iii) any contract, commitment, agreement, arrangement or
restriction of any kind to which LifeMetrix is a party or by which LifeMetrix is
bound.
2.3 Representations and Warranties of Matria. Matria hereby represents and
warrants to LifeMetrix and the Investors as follows:
(a) Matria has full legal right, power and authority to enter into and
perform this Agreement. The execution and delivery of this Agreement by Matria
and the consummation by Matria of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on behalf of Matria. This
Agreement is a valid and binding obligation of Matria enforceable against Matria
in accordance with its terms, except that such enforcement may be subject to (i)
bankruptcy, insolvency, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of whether
asserted at law or in equity).
(b) Neither the execution and delivery of this Agreement by Matria nor the
consummation by Matria of the transactions contemplated hereby conflicts with or
constitutes a violation of or default under (i) the charter or by-laws of
Matria, (ii) any statute, law, regulation, order or decree applicable to Matria,
or (iii) any contract, commitment, agreement, arrangement or restriction of any
kind to which Matria is a party or by which Matria is bound.
ARTICLE 3
RESTRICTIONS ON OWNERSHIP AND TRANSFER
3.1 Restrictions on Certain Actions. Neither LifeMetrix nor any Investor,
whether directly or indirectly through any Affiliate or otherwise, shall:
(a) acquire, announce an intention to acquire, offer or propose to acquire,
solicit an offer to sell or agree to acquire by purchase, by gift, by joining a
partnership, limited partnership, syndicate or other "group" (as such term is
used in Section 13(d)(3) of the Exchange Act, such term to have such meaning
throughout this Agreement) or otherwise, directly or indirectly, any (i) assets,
businesses or properties of Matria other than in the ordinary course of business
of Matria and such Investor as conducted at such time, (ii) any Matria Voting
Securities (except, in the case of an Investor, indirectly (A) through the
acquisition of shares of a privately-held entity which owns Matria Voting
Securities, or (B) in a transaction in which shares of an entity owned by such
Investor are sold or exchanged for, or converted into, consideration including
Matria Voting Securities; provided that, in each case, such acquisition or
transaction occurs in the ordinary course of business of such Investor as
conducted at such time), or (iii) any options or other rights to acquire any
Matria Voting Securities (whether or not exercisable only after the passage of
time or the occurrence of an event); provided that the limitations set forth in
the foregoing clauses (ii) and (iii) shall not apply to any Investor which would
not, after giving affect to such proposed acquisition, possess Beneficial
Ownership or the right to acquire Beneficial Ownership of more than 1% of the
outstanding Matria Voting Securities of any class or series;
(b) participate in the formation or encourage the formation of, or join or
in any way participate with, any Person for the purpose of owning or seeking to
acquire Beneficial Ownership of Matria Voting Securities;
(c) solicit or in any way participate, directly or indirectly, in the
"solicitation" of "proxies" or become a "participant" in any "election contest"
(as such terms are defined or used in Regulation 14A under the Exchange Act,
such terms to have such meaning throughout this Agreement) with respect to
Matria;
(d) initiate, propose or otherwise solicit stockholders for the approval of
one or more stockholder proposals with respect to Matria or induce any other
person to initiate any stockholder proposal;
(e) seek to place any representative on the Board, seek the removal of any
member of the Board or seek to have called any meeting of the Board or
stockholders of Matria;
(f) deposit any Shares in a voting trust or subject them to a voting
agreement or other agreement or arrangement with respect to the voting of such
Matria Voting Securities;
(g) otherwise act, alone or in concert with others, to seek to control the
management, Board, policies or affairs of Matria (except for actions of the
Review Committee specifically contemplated by Section 3.7 of the Purchase
Agreement); solicit, propose, seek to effect or negotiate with any other Person
(including, without limitation, Matria) with respect to any merger, acquisition
or other form of business combination or other extraordinary transaction with
Matria or any of its subsidiaries or any restructuring, recapitalization,
similar transaction or other transaction not in the ordinary course of business
with respect to Matria or any of its subsidiaries; solicit, make or propose or
negotiate with any other person with respect to, or announce an intent to make,
any tender offer or exchange offer for any securities of Matria or any of its
subsidiaries; or publicly disclose an intent, purpose, plan or proposal with
respect to Matria, any of its subsidiaries or any securities or assets of Matria
or any of its subsidiaries, that would violate the provisions of this Section
3.1, or assist, participate in, facilitate or solicit any effort or attempt by
any person to do or seek to do any of the foregoing; or
(h) request Matria or any of its Representatives to amend or waive any
provision of this Section 3.1 or Section 3.2 of this Agreement, or otherwise
seek any modification to or waiver of any of the agreements or obligations of
LifeMetrix, the Investors, and their respective Affiliates under Sections 3.1,
3.2, 3.6 and 4.1 of this Agreement.
3.2 Certain Permitted Actions. Notwithstanding the limitations and restrictions
set forth in Section 3.1, LifeMetrix and the Investors shall have the right
to acquire the Shares and shall have the right to acquire any Matria
securities or other assets distributed by Matria to LifeMetrix or the
Investors as a dividend or issued by Matria to LifeMetrix or the Investors
pursuant to a stock split, reclassification, capital reorganization or
similar transaction affecting any Matria securities held by LifeMetrix or
the Investors.
3.3 Repurchase or Resale of Common Stock. In the event that LifeMetrix or any
Investor, whether directly or indirectly through any Affiliate or
otherwise, shall at any time obtain any Matria Voting Securities in
violation of this Agreement, Matria shall have the right and option, in
addition to any other remedy available to it for breach of this Agreement
under law, in equity or otherwise, to (a) repurchase such Matria Voting
Securities held by such violating party; or (b) to cause such violating
party to immediately transfer such Matria Voting Securities to a Person who
is not an Affiliate of such violating party. Such right and option of
Matria under clause (a) may be exercised by Matria by delivering written
notice to LifeMetrix or an Investor, as the case may be, on any business
day within ten (10) business days of Matria's receipt of actual notice of
such violation at such party's address set forth on the signature pages
hereof, and the closing of the repurchase shall occur at the principal
office of Matria within ten (10) business days of the date of such notice.
At such closing, Matria shall tender (i) if the Matria Voting Securities
being reacquired are Common Stock, the Market Price of the Common Stock
being repurchased as of the date of the notice of repurchase in immediately
available funds, or (ii) if the Matria Voting Securities being reacquired
are not Common Stock, the price the violating party paid for such Matria
Voting Securities. At the closing, the violating party shall deliver
certificates for the shares being repurchased duly endorsed for transfer to
Matria together with a certificate to the effect that such violating party
owns the shares to be transferred free and clear of any and all liens,
claims and encumbrances of any kind.
3.4 Prohibition on Transfer.
(a) Notwithstanding any other provision of this Agreement to the contrary
(except for and subject to Section 3.4(b) below), and subject to the piggyback
registration rights granted to LifeMetrix and the Investors pursuant to Section
2.1 of the Registration Rights Agreement, neither LifeMetrix nor any LifeMetrix
Stockholder will Transfer any Shares (i) during the applicable Restricted
Period, other than pursuant to a Permitted Transfer, Investor Distribution or
Liquidating Transfer, or (ii) during the period from the later of (A) January 1,
2004 or (B) the date that is seventeen (17) months after the Closing, until June
30, 2004 or the earlier date on which the Earn Out Payment, if any, is made by
Matria, other than pursuant to a Permitted Transfer, Investor Distribution, or
Liquidating Transfer.
(b) Notwithstanding Section 3.4(a) above, during the First Restricted
Period LifeMetrix shall be permitted to Transfer, in Transfers described in
Section 3.6(b) and in compliance with Rule 145 promulgated under the Securities
Act, up to such number of Initial Issuance Shares equal to the quotient obtained
by dividing (i) the greater of (A) $1,000,000 or (B) the sum of (1) the
Estimated Tax Liability plus (2) the estimated withholding obligation of
LifeMetrix (as evidenced by a Tax Estimate delivered to Matria by LifeMetrix)
with respect to recipients of Incentive Bonuses resulting from the payment of
the Incentive Bonuses with respect to the 2002 calendar year; by (ii) the
Closing Stock Price as of the Closing Date.
3.5 Transfers After Restricted Periods.
(a) After the expiration of the First Restricted Period, LifeMetrix and the
LifeMetrix Stockholders may Transfer Initial Issuance Shares only in accordance
with Section 3.6 and in compliance with all applicable securities laws.
(b) After the expiration of Second Restricted Period, LifeMetrix and the
LifeMetrix Stockholders may Transfer Subsequent Issuance Shares only in
accordance with Section 3.6 and in compliance with all applicable securities
laws, subject in all events to Section 3.5(c).
(c) It is the intent of the parties hereto that, after the expiration of
the Second Restricted Period, LifeMetrix and the LifeMetrix Stockholders shall
not, other than pursuant to a Liquidating Transfer, Investor Distribution or
Permitted Transfer, collectively Transfer during any ninety (90) day period,
determined on a rolling basis (a "Sale Period"), a number of Subsequent Issuance
Shares in excess of ten percent (10%) of the total number of shares of Common
Stock outstanding as of the last day of the immediately preceding calendar year
(the "Transfer Limit"). No LifeMetrix Stockholder shall be liable hereunder for
the actions of any other LifeMetrix Stockholder. For purposes of effecting the
foregoing restriction, the following formula shall apply for purposes of
determining how many Subsequent Issuance Shares LifeMetrix and each LifeMetrix
Stockholder may Transfer after expiration of the Second Restricted Period during
any applicable Sale Period. If the total number of Subsequent Issuance Shares
exceeds the Transfer Limit, the following restrictions shall apply.
(i) Until a Liquidating Transfer of Subsequent
Issuance Shares to LifeMetrix Stockholders pursuant hereto, LifeMetrix
shall not Transfer Subsequent Issuance Shares after expiration of the
Second Restricted Period in excess of the Transfer Limit during any
Sale Period.
(ii) In the event of a Liquidating Transfer of any
Subsequent Issuance Shares to LifeMetrix Stockholders pursuant hereto,
then, after expiration of the Second Restricted Period, (A) LifeMetrix
shall thereafter be permitted to Transfer during any Sale Period a
number of Subsequent Issuance Shares equal to the Transfer Limit
multiplied by the percentage, expressed as a fraction, obtained by
dividing (x) the total number of Subsequent Issuance Shares retained by
LifeMetrix after such Liquidating Transfer by (y) the total number of
Subsequent Issuance Shares issued, and (B) each LifeMetrix Stockholder
receiving Subsequent Issuance Shares in such Liquidating Transfer shall
thereafter be permitted to Transfer a number of Subsequent Issuance
Shares (the "Stockholder Transfer Limit") equal to the Transfer Limit
multiplied by the percentage, expressed as a fraction, obtained by
dividing (x) the total number of Subsequent Issuance Shares received by
such LifeMetrix Stockholder in such Liquidating Transfer by (y) the
total number of Subsequent Issuance Shares issued.
For example, if there were 10,000,000 shares of Common Stock outstanding as
of the last day of the immediately preceding calendar year, the Transfer Limit
would be 1,000,000 shares. If LifeMetrix received 1,200,000 Subsequent Issuance
Shares, LifeMetrix could, after the expiration of the Second Restricted Period,
initially Transfer no more than 1,000,000 Subsequent Issuance Shares during any
Sale Period (except pursuant to a Liquidating Transfer). If LifeMetrix (or a
liquidating trust) made a Liquidating Transfer of 720,000 Subsequent Issuance
Shares to the LifeMetrix Stockholders, then immediately after the expiration of
the Second Restricted Period and following such Liquidating Transfer, LifeMetrix
(or a liquidating trust) could not Transfer during any Sale Period a number of
Subsequent Issuance Shares greater than the product of 1,000,000 multiplied by
480,000/1,200,000, or 400,000 Subsequent Issuance Shares. A LifeMetrix
Stockholder receiving 400,000 Subsequent Issuance Shares in such Liquidating
Transfer could not, after the expiration of the Second Restricted Period,
Transfer during any Sale Period (except pursuant to a Permitted Transfer or
Investor Distribution) a number of Subsequent Issuance Shares greater than the
product of 1,000,000 multiplied by 400,000/1,200,000, or 333,000 Subsequent
Issuance Shares. Another LifeMetrix Stockholder receiving 320,000 Subsequent
Issuance Shares in such Liquidating Transfer could not, after the expiration of
the Second Restricted Period, Transfer during any Sale Period (except pursuant
to a Permitted Transfer or Investor Distribution) a number of Subsequent
Issuance Shares greater than the product of 1,000,000 multiplied by
320,000/1,200,000, or 267,000 Subsequent Issuance Shares.
(iii) In the event of a Permitted Transfer or
Investor Distribution of any Subsequent Issuance Shares, the
Stockholder Transfer Limit of the transferor shall be prorated between
the transferor and each Permitted Transferee as appropriate to reflect
the relative ownership of Subsequent Insurance Shares by the transferor
and each Permitted Transferee following such Permitted Transfer or
Investor Distribution.
(iv) Upon any subsequent Liquidating Transfer, the
formula above shall be reapplied using the cumulative number of Shares
received by each LifeMetrix Stockholder in all such Liquidating
Transfers to determine how many Subsequent Issuance Shares LifeMetrix
and/or the LifeMetrix Stockholders shall thereafter be permitted to
Transfer during any Sale Period after expiration of the Second
Restricted Period. In reapplying such formula, the parties hereto will
attempt to enforce the intent of this Section 3.5 (i.e., to restrict
LifeMetrix and the LifeMetrix Stockholders from collectively
Transferring more than the Transfer Limit within any Sale Period after
expiration of the Second Restricted Period).
(v) Notwithstanding anything to the contrary
contained in this Section 3.5(c), if at any time after the expiration
of the Second Restricted Period, LifeMetrix owns a number of Subsequent
Issuance Shares greater than the Transfer Limit, then, other than
Investor Distributions, only LifeMetrix shall be permitted to Transfer
Shares during such time, and, except pursuant to a Liquidating
Transfer, only to the extent of the Transfer Limit during any Sale
Period.
(vi) The Transfer Limit, and the number of Subsequent
Issuance Shares included in any calculation under this Section 3.5,
shall be adjusted as appropriate from time to time to give effect to
any stock split, stock dividend, reclassification, capital
reorganization or similar transaction on or in respect of the Common
Stock.
(vii) Notwithstanding anything to the contrary
contained in this Section 3.5(c), the limitations on transfer set forth
in this Section 3.5(c) shall not apply to any LifeMetrix Stockholder
which has received, in the aggregate, a number of Shares equal to or
less than 1% of the total number of shares of Common Stock outstanding
at the time of any proposed Transfer by such LifeMetrix Stockholder.
3.6 Authorized Transfers.
(a) Notwithstanding Section 3.5, neither LifeMetrix nor any LifeMetrix
Stockholder will Transfer any Shares at any time except Transfers described
in Section 3.6(b).
(b) From and after the expiration of the applicable Restricted Period,
LifeMetrix and the LifeMetrix Stockholders may Transfer Shares only (i)
pursuant to a transaction approved in writing by the Board, (ii) pursuant
to (A) a "qualifying offer" (as defined below) or (B) a "qualifying tender
offer" (as defined below), (iii) in a Permitted Transfer, Liquidating
Transfer, or an Investor Distribution, (iv) pursuant to a bona fide pledge
of Shares by LifeMetrix or a LifeMetrix Stockholder as security for bona
fide indebtedness to a brokerage firm or financial institution not
affiliated with LifeMetrix, such LifeMetrix Stockholder or any of their
Affiliates for money borrowed, (v) in "brokers' transactions" (as such term
is defined in Rule 144(g) of the Securities Act, which definition shall
apply for all purposes of this Agreement) on the NMS, or if the Shares are
not listed on the NMS, on the principal national securities exchange on
which such Shares are listed or admitted to trading, and if not so listed
or admitted, in the over-the-counter market (vi) in a registered public
offering pursuant to the Registration Rights Agreement, or (vii) to any
Person or group if, after due inquiry, LifeMetrix or a LifeMetrix
Stockholder reasonably believes such Person or group would not own 5% or
more of the then outstanding Common Stock.
For purposes of this Agreement, a "qualifying offer" shall mean (i)any
tender offer or exchange offer commenced by Matria for any Matria Voting
Securities, and (ii) any acquisition transaction involving any Matria Voting
Securities proposed by a Person or entity other than Matria (A) which is
approved by, or not opposed by, the Board, or (B) where such third party offeror
already owns at least 50% of the outstanding Matria Voting Securities. For
purposes of this Agreement, a "qualifying tender offer" shall mean any
acquisition transaction involving any Matria Voting Securities which is a bona
fide tender offer or exchange offer that is commenced by a third party offeror
who does not already own at least 50% of the outstanding Matria Voting
Securities at a price per share greater than the Market Price as of the last
trading day prior to the first public announcement of such offer, if upon
consummation thereof, such third party offeror would have Beneficial Ownership
of 50% or more of the then outstanding Common Stock.
3.7 Legends. LifeMetrix and each Investor hereby acknowledges and agrees that
each certificate representing the Shares issued pursuant to this Agreement,
in addition to any legend referenced in Section 3.3(c) of the Purchase
Agreement, shall include a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN A STANDSTILL AGREEMENT DATED AS OF
SEPTEMBER 30 , 2002 BETWEEN [LIFEMETRIX/INVESTOR] AND THE CORPORATION, A COPY OF
WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE CORPORATION, AND MAY NOT BE SOLD
OR TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS OF SUCH AGREEMENT, AND ANY
ATTEMPTED TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IN
VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND NOT
RECOGNIZED BY THE CORPORATION.
Any such legend shall be removed upon request of any applicable LifeMetrix
Stockholder following the expiration or termination of this Agreement as to such
LifeMetrix Stockholder or at such time as the holder of the applicable Shares is
no longer subject to any restriction or limitations on Transfer referenced in
such legend.
3.8 Cooperation. In the event of any attempted Transfer of Shares, Matria
shall, with reasonable promptness, advise any applicable broker or transfer
agent as to whether or not such Transfer is permitted under the terms of
this Agreement and the Purchase Agreement.
ARTICLE 4
VOTING
4.1 Voting. In connection with all matters subject to the vote of security
holders of Matria, LifeMetrix and each Investor shall, and shall direct its
Affiliates to, vote (or execute a written consent, as the case may be) all
Shares owned by them (a) in accordance with the recommendation of the Board
with respect to such matter, or (b) in the absence of such a
recommendation, in the same proportion as the votes cast by all other
holders of Matria Voting Securities with respect to such matter.
4.2 No Waiver. By voting as directed by Matria, neither LifeMetrix, any
Investor, nor their respective Affiliates shall be deemed to have waived
any rights that it may have under the Certificate of Incorporation of
Matria, the Bylaws or other governing documents of Matria, the Purchase
Agreement or the Delaware General Corporation Law to challenge the
applicable actions taken.
ARTICLE 5
MISCELLANEOUS
5.1 Term. The term of this Agreement shall begin as of the date hereof and
shall continue until the date that is five (5) years from the Subsequent
Issuance Date. Notwithstanding the foregoing, the restrictions set forth
herein shall terminate with respect to any LifeMetrix Stockholder at such
time as such LifeMetrix Stockholder has disposed of Beneficial Ownership of
all Shares acquired by such LifeMetrix Stockholder in accordance with this
Agreement.
5.2 Specific Performance. The parties hereto hereby acknowledge and agree that
irreparable damage would occur if any of the provisions of this Agreement
were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, the parties hereto will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically its provisions in any court of the United States or
any state having jurisdiction, this being in addition to any other remedy
to which they may be entitled under this Agreement, at law, in equity or
otherwise.
5.3 No Waiver. No failure or delay on the part of any party in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
5.4 Entire Agreement; Amendment. This Agreement (including the Schedules
hereto, which are hereby incorporated by reference) constitutes the entire
understanding of the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by (i) until LifeMetrix
Transfers all of its Shares, by an agreement in writing executed by Matria
and Investors holding a majority of the voting power, as of the Closing,
held by all series of the Preferred Stock of LifeMetrix and, until the
Subsequent Issuance Date, by LifeMetrix, and (ii) if LifeMetrix has
Transferred all of its Shares, by an agreement in writing executed by
Matria and the holders of a majority of the Shares remaining subject to the
restrictions set forth in this Agreement.
5.5 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable, the remaining provisions shall
remain in full force and effect. It is declared to be the intention of the
parties hereto that they would have executed the remaining provisions
without including any that may be declared unenforceable.
5.6 Headings; References. Article and Section headings are for convenience only
and will not control or affect the meaning or construction of any provision
of this Agreement. Any references to specific Articles or Sections shall be
references to Articles or Sections of this Agreement unless expressly
stated otherwise.
5.7 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute the same Agreement, and any signature page of any such
counterpart, or any electronic facsimile thereof, may be attached or
appended to any other counterpart to complete a fully executed counterpart
of this Agreement, and any telecopy or other facsimile transmission of any
signature shall be deemed an original.
5.8 Notices. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in
any event be deemed to be given upon receipt or, if earlier, (a) five (5)
days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon
delivery, if delivered by hand, (c) one (1) business day after the business
day of deposit with Federal Express or similar overnight courier, freight
prepaid or (d) one (1) business day after the business day of facsimile
transmission, if delivered by facsimile transmission with copy by first
class mail, postage prepaid, and shall be addressed to the address of such
party as set forth beneath such party's signature hereto, or at such other
address as a party may designate by ten days' advance written notice to the
other parties hereto pursuant to the provisions of this Section 5.8.
5.9 Successors and Assigns; Assignment. This Agreement shall bind the
successors and assigns of the parties hereto, and shall inure to the
benefit of any successor or assign of any of the parties hereto; provided,
however, that this Agreement may not be assigned by any party hereto
without the prior written consent of the other parties hereto, except in
connection with a Permitted Transfer, Investor Distribution or Liquidating
Transfer; provided further, that no such assignment shall relieve the
assignor of any of its obligations or liabilities hereunder.
5.10 Governing Law. The validity and effect of this Agreement and the rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware.
[Signatures begin on following page]
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Standstill Agreement among Matria Healthcare, Inc., LifeMetrix, Inc. and the
undersigned Investors to be executed as of the date first referred to above.
"Matria"
MATRIA HEALTHCARE, INC.
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
Address: 0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Phone #: (000) 000-0000
Facsimile #: (000) 000-0000
"LifeMetrix"
LIFEMETRIX, INC.
By:
--------------------------------------------
Title: ______________________________
Address: 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
XxXxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Phone #: (000) 000-0000
Facsimile #: (000) 000-0000
[Signatures continued on following pages]
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Standstill Agreement among Matria Healthcare, Inc., LifeMetrix, Inc. and the
undersigned Investors to be executed as of the date first referred to above.
"Investors"
---------------------------
By:
--------------------------------------------
Title: ______________________________
Address: ______________________________
------------------------
Attn: ________________________
Phone #: (___)
------------------------
Facsimile #: (___)
------------------------
---------------------------
By:
--------------------------------------------
Title: ______________________________
Address: ________________________
------------------------
Attn: ________________________
Phone #: (___)
------------------------
Facsimile #: (___)
------------------------
---------------------------
By:
--------------------------------------------
Title: ______________________________
Address: ________________________
------------------------
Attn: ________________________
Phone #: (___)
------------------------
Facsimile #: (___)
------------------------
Schedule 1
Investors
[List of Investors executing this Agreement to be added]
