EXHIBIT 2
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STOCKHOLDERS AGREEMENT
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This Stockholders Agreement (the "Agreement") is made as of the 4th
day of December, 1998, by and among (1) Xxxx National Corporation ("Xxxx");
(2) Xxxxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxx X. Xxxx ("Xxxx"), Xxxxxx
Corporation, a Massachusetts corporation ("Cadmus"), Xxxxxx Management
Incorporated, a Delaware corporation ("MMI") and Winchester National, Inc.,
a Delaware corporation ("WNI"); and (3) Xxxxx X. Xxxxxxxx, as an individual
and as Trustee of the InPath, LLC Voting Trust ("Gombrich"); Xxxxxxxx X.
Xxxxxx, as Trustee of each of The EAG Trust, The CMC Trust, The MDG Trust
and The MSD Trust; Xxxxxxx X. Xxxxxx; AccuMed International, Inc., a
Delaware corporation; Northlea Partners Ltd., a Colorado limited
partnership; Xxxx X. Xxxxxxx, as Trustee of Xxxx X. Xxxxxxx'x Trust; Xxxxxx
Xxxxxx, as Trustee of the Xxxxxx Xxxxxx Trust; and Monroe Investments,
Inc., an Illinois corporation (collectively, the "InPath Members," and,
collectively with Milley, Shaw, Cadmus and MMI, the "Shareholders").
WITNESSETH:
WHEREAS, pursuant to the Stock and Membership Interest Exchange
Agreement dated as of December 4, 1998 among Xxxx National Corporation,
InPath, LLC, and the InPath Members (the "Exchange Agreement"), the InPath
Members, concurrently with the execution of this Agreement, are acquiring
securities of Xxxx; and
WHEREAS, pursuant to the Claims Settlement Agreement (the "Claims
Settlement Agreement") dated as of December 4, 1998, among Xxxx, Milley,
Shaw, Cadmus and MMI, Milley, Shaw, Cadmus and MMI concurrently with the
execution of this Agreement are acquiring securities of Xxxx;
WHEREAS, the parties desire to enter into this Agreement to govern
certain of their rights, duties and obligations after the consummation of
the transactions contemplated by the Exchange Agreement and the Claims
Settlement Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties, intending to be legally bound, agree as follows:
Article I CORPORATE GOVERNANCE.
Section 1.01. ELECTION OF DIRECTORS. Commencing as soon as
practicable after the date hereof and during the remainder of the term of
this Agreement, each Shareholder shall vote his or its shares of common
stock, no par value, of Xxxx (collectively with any additional shares
acquired by the Shareholders, the "Stock") in favor of, and take all other
actions necessary to, elect as directors of Xxxx, two directors designated
by Gombrich, two directors designated by Xxxxxx, and an additional
director to be selected by Gombrich and Xxxxxx. The directors to be
elected at the first meeting of shareholders to be held after the date
hereof, shall be Xxxxx X. Xxxxxxxx, Xxxx Xxxxxx, Xxxxx X. X'Xxxxxxx,
Xxxxxxxxx X. Xxxxxx and an additional director to be selected by Gombrich
and Xxxxxx.
Section 1.02. APPOINTMENT OF OFFICERS. After the date hereof, each
Shareholder shall take all actions necessary to cause Xxxx'x Board of
Directors (the "Board") to appoint the following officers:
Xxxxx X. Xxxxxxxx - Chairman, Chief Executive Officer and Secretary
Xxxxxxx Xxxxxx - President and Chief Financial Officer
Xxxxxxx Xxxxxxxx - Vice President and Chief Technology Officer
Xxxxx X. Xxxxxxxxx - Vice President and Treasurer
Section 1.03. SHAREHOLDER APPROVAL. When presented for shareholder
approval at a meeting of shareholders or through a solicitation for
consents, the Shareholders shall vote their Stock and take all other
reasonable actions necessary to: (a) approve the merger of Xxxx with and
into a Delaware corporation to be formed as a wholly-owned subsidiary of
Xxxx (to be named Ampersand Medical Corporation ("Ampersand"), if
available), with Ampersand as the surviving corporation; (b) authorize
additional shares of Stock in an amount at least sufficient to permit the
issuance of Stock issuable upon the exercise of the warrants issued to
InPath Members issued pursuant to the Exchange Agreement (the "Warrants");
(c) authorize shares of so called "blank check" preferred stock; (d) ratify
the Exchange Agreement and the transactions contemplated thereby; (e)
approve, ratify or take any other action necessary to effectuate the
transactions contemplated in the Exchange Agreement; and (f) approve and
ratify the Claims Settlement Agreement and the transactions contemplated
thereby.
Section 1.04. REMOVAL. Any director designated by a Shareholder or
group of Shareholders as set forth in Section 1.01 may be removed by such
Shareholder or group of Shareholders. Each Shareholder agrees that if, at
any time, it is then entitled to vote for the removal of directors of Xxxx,
it will not vote any of its Stock in favor of the removal of any director
who shall have been designated or nominated pursuant to Section 1.01 unless
such removal shall be for Cause (as defined below) or the individual,
corporation, limited liability company, partnership, association, trust or
other entity ("Person") entitled to designate or nominate such director
shall have consented to such removal in writing. Removal for "Cause" shall
mean removal of a director because of such director's (a) willful and
continued failure to substantially perform his or her duties as a member of
the Board, (b) willful misconduct which is significantly injurious to Xxxx,
monetarily or otherwise, or (c) conviction for, or guilty plea to, a felony
or other crime involving moral turpitude. Subject to Section 1.06, nothing
contained in this Section 1.04 shall affect the right of any Shareholder to
designate members of the Board pursuant to Section 1.01.
Section 1.05. VACANCIES. If, as a result of death, disability,
retirement, resignation, removal (with or without Cause) or otherwise,
there shall exist or occur any vacancy on the Board:
(a) the Person or Persons entitled under Section 1.01 to designate
or nominate such director whose death, disability, retirement, resignation
or removal resulted in such vacancy, may, subject to the provisions of
Sections 1.01 and 1.06, designate another individual (the "Nominee") to
fill such capacity and serve as a director of Xxxx; and
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of Xxxx agrees that it will vote its Stock, or
execute a written consent, as the case may be, in order to ensure that the
Nominee be elected to the Board.
Section 1.06. TERMINATION OF RIGHTS AND OBLIGATIONS. The right to
designate one or more members of the Board pursuant to this Article I shall
terminate as to any Shareholder, at such time as he or it beneficially owns
less than 50% of the number of shares of Stock beneficially owned by such
Shareholder as of the date hereof, such amount to be subject to adjustment,
as appropriate, to take into account any stock split, stock dividend,
reverse stock split or similar event. The obligations imposed on
Shareholders in this Agreement shall not terminate as to any Shareholder
when such Shareholder's right to designate a director is terminated.
Section 1.07. ACTION BY THE BOARD. A quorum of the Board shall
consist of three directors, of which at least one director must be a
director designated by Gombrich and one director must be a director
designated by Xxxxxx. In addition to any requirement of Xxxx'x Articles of
Incorporation or Bylaws, all actions of the Board shall require the
affirmative vote of at least a majority of the directors at a duly convened
meeting of the Board at which a quorum (as aforesaid) is present or the
unanimous written consent of the Board; provided that, in the event there
is a vacancy on the Board and an individual has been nominated to fill such
vacancy, the first order of business shall be to fill such vacancy.
Written notice of any meeting of the board of directors will be sent to
each director not less than 15 days prior to such meeting, specifying the
date, time and location of such meeting.
Section 1.08. ARTICLES OF INCORPORATION AND BYLAWS. Each
Shareholder shall vote its Stock, and shall take all other actions
necessary, to ensure, in a manner recommended or requested by the Board,
that Xxxx'x Articles of Incorporation and Bylaws facilitate and do not at
any time conflict with any provision of this Agreement.
Article II DRAG-ALONG RIGHTS.
Section 2.01. RIGHT TO COMPEL PARTICIPATION IN CERTAIN TRANSFERS.
(a) If a Shareholder or group of Shareholders beneficially owning
more than 50% of the outstanding Stock (the "Majority Shareholders") should
transfer Stock that constitutes more than 50% of the outstanding Stock (a
"Drag-along Sale"), such Majority Shareholders may, at its option, require
all but not less than all of the other Shareholders to participate in such
transfer at the same Drag-along Sale Price (as defined below), and
otherwise on substantially the same terms and conditions, as the Majority
Shareholders. Not later than 15 days prior to the proposed date of the
Drag-along Sale, the Majority Shareholders shall provide written notice of
the Drag-along Sale to the other Shareholders ("Drag-along Notice"), which
shall have attached a copy of the agreement pursuant to which such
Drag-along Stock (as defined below) is proposed to be transferred (the
"Drag-along Agreement"). The Drag-along Notice shall identify the
transferee, the number of shares of Stock subject to the Drag-along Sale,
the consideration per share of Stock for which a transfer is proposed to be
made (the "Drag-along Sale Price") and all other material terms and
conditions of the Drag-along Sale. Each other Shareholder shall be
required to participate in the Drag-along Sale on the terms and conditions
set forth in the Drag-along Notice and to tender shares of Stock (the
"Drag-along Stock") owned by such other Shareholder at the time the
Drag-along Notice is delivered. Within 10 days following receipt of the
Drag-along Notice (the "Drag-along Notice Period"), each other Shareholder
shall deliver in escrow to a representative of the Majority Shareholders
designated in the Drag-along Notice certificates representing all
Drag-along Stock held by such other Shareholder, duly endorsed, together
with all other documents required to be executed in connection with such
Drag-along Sale or, if such delivery is not permitted by applicable law, an
unconditional agreement to deliver such Stock pursuant to this Section
2.01(a) at the closing of such Drag-along Sale against delivery to such
other Shareholder of the consideration therefor. In the event that any
other Shareholder should fail to deliver such certificates to the Majority
Shareholders, Xxxx shall cause the books and records of Xxxx to show that
the holders of such Stock are bound by the provisions of this Section
2.01(a) and that such Stock shall be transferred to the buyer immediately
upon surrender for transfer by such other Shareholder.
(b) If, within 120 days after the Majority Shareholders give the
Drag-along Notice, the transfer of all Stock subject to the Drag-along Sale
is not completed, the Majority Shareholders shall return to each other
Shareholder all certificates representing Stock that such other Shareholder
delivered for transfer pursuant hereto, together with any documents in the
possession of the Majority Shareholders executed by such other Shareholder
in connection with such proposed transfer, and all restrictions on transfer
contained in this Agreement or otherwise applicable at such time with
respect to Stock owned by the other Shareholders shall again be in effect.
(c) Promptly after the consummation of the transfer of Stock of the
Majority Shareholders and the other Shareholders pursuant to this Section
2.01, the Majority Shareholders shall give notice thereof to the other
Shareholders, shall remit to each of the other Shareholders who have
surrendered their certificates the total consideration for the Stock of
such other Shareholders transferred pursuant thereto and shall furnish such
other evidence of the completion and time of completion of such transfer
and the terms thereof as may be reasonably requested by such other
Shareholders. The consideration per Share to be paid to the Majority
Shareholders and the other Shareholders shall be the relevant Drag-along
Sale Price.
Article III REGISTRATION RIGHTS.
Section 3.01. DEMAND REGISTRATION.
(a) The Majority Shareholders may make a written request and, after
Xxxx is eligible to use form S-3 for sales by selling Shareholders of
Stock, or any successor form, the other Shareholders may make a written
request (any such requesting Shareholder, a "Registering Shareholder") that
Xxxx effect the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of all or a portion of such Registering
Shareholder's Registrable Stock (as defined below), which request shall
specify the intended method of disposition thereof. Xxxx will promptly
give written notice of such requested registration (a "Demand
Registration") at least 30 days prior to the anticipated filing date of the
registration statement relating to such Demand Registration to the other
Shareholders and thereupon will use its best efforts to effect, as
expeditiously as possible, the registration under the Securities Act of:
(i) the Registrable Stock which Xxxx has been so requested to
register by the Registering Shareholders, then held by the Registering
Shareholders; and
(ii) subject to Section 3.02, all other Registrable Stock
which any other Shareholder entitled to request Xxxx to effect an
Incidental Registration (as such term is defined in Section 3.02) pursuant
to Section 3.02 (all such Shareholders, together with the Registering
Shareholders, the "Holders") has requested Xxxx to register by written
request received by Xxxx within 15 days after the receipt by such Holders
of such written notice given by Xxxx, all to the extent necessary to permit
the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Stock so to be registered; PROVIDED that,
subject to Section 3.01(c) hereof, Xxxx shall not be obligated (A) to
effect more than two Demand Registrations pursuant to this Section 3.01,
other than any such Demand Registrations effected on Form S-3, with respect
to which there shall be no limitation; (B) to effect a Demand Registration
unless the fair market value of the aggregate proceeds expected to be
received from the sale of the Registrable Stock requested to be included in
such Demand Registration, in the reasonable opinion of the Requesting
Shareholders, equals at least $5,000,000 or (C) to effect more than one
Demand Registration within any twelve month period.
Promptly after the expiration of the 15-day period referred to in
Section 3.01(a)(ii), Xxxx will notify all the Holders to be included in the
Demand Registration of the other Holders and the number of shares of
Registrable Stock requested to be included therein. The Registering
Shareholders requesting a registration under this Section 3.01(a) may, at
any time prior to the effective date of the registration statement relating
to such registration, revoke such request, without liability to any of the
other Holders, by providing a written notice to Xxxx revoking such request,
in which case such request, so revoked, shall be considered a Demand
Registration unless such revocation arose out of the fault of Xxxx in which
case such request shall not be considered a Demand Registration.
Notwithstanding anything contained in this Agreement to the contrary,
nothing herein shall be construed as requiring Xxxx to register any of its
securities other than Stock. "Registrable Stock" means any shares of Stock
until (i) a registration statement covering such shares of Stock has been
declared effective by the Securities and Exchange Commission (the "SEC")
and such shares have been disposed of pursuant to such effective
registration statement, (ii) such shares are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any successor
provisions) under the Securities Act are met or such shares may be sold by
the holder thereof pursuant to Rule 144(k) or (iii) such shares are
otherwise transferred and may be resold without subsequent registration
under the Securities Act.
(b) Xxxx shall pay all registration expenses in connection with any
Demand Registration, including but not limited to (i) all registration and
filing fees, (ii) fees and expenses of compliance with federal or state
securities laws (including reasonable fees and disbursements of counsel),
(iii) printing expenses, (iv) internal expenses of Xxxx, (v) reasonable
fees and disbursements of counsel for Xxxx and customary fees and expenses
for independent certified public accountants retained by Xxxx (including
expenses or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letters requested
pursuant to Section 3.04(h)), (vi) the reasonable fees and expenses of any
special experts retained by Xxxx in connection with such registration,
(vii) reasonable fees and expenses of one counsel for the Shareholders
participating in the offering, selected by the Majority Shareholders,
(viii) fees and expenses in connection with any review of underwriting
arrangements by the National Association of Securities Dealers (the "NASD")
including fees and expenses of any "qualified independent underwriter" and
(ix) fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but shall not include any underwriting fees,
discounts or commissions attributable to the sale of Registrable Stock, or
any out-of-pocket expenses (except as set forth in clause (vii) above) of
the Shareholders or any fees and expenses of underwriter's counsel. Xxxx
shall not be obligated to pay or bear the expense of any stock transfer
taxes imposed in respect to the transfer of any Registrable Stock to any
purchaser thereof by any holder of Registrable Stock in connection with any
registration of Registrable Stock pursuant to this Article III.
(c) A registration requested pursuant to this Section 3.01 shall
not be deemed to have been effected unless the registration statement
relating thereto (i) has become effective under the Securities Act and (ii)
has remained effective for a period of at least 90 days (or such shorter
period in which all Registrable Stock of the Holders included in such
registration has actually been sold thereunder); PROVIDED that if after any
registration statement requested pursuant to this Section 3.01 becomes
effective (A) such registration statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or other
governmental agency or court and (B) less than 75% of the Registrable Stock
included in such registration statement has been sold thereunder, such
registration statement shall be at the sole expense of Xxxx and shall not
be considered a Demand Registration, unless any such interference referred
to in clause (A) of this proviso arose out of the fault of the Registering
Shareholders, in which case such registration statement shall be considered
a Demand Registration.
(d) If a Demand Registration involves a public offering of
Registrable Stock underwritten pursuant to a firm commitment and pursuant
to an effective registration statement under the Securities Act (an
"Underwritten Public Offering") and the managing underwriter shall advise
Xxxx and the Registering Shareholders that, in its view, (i) the number of
shares of Stock requested to be included in such registration, or (ii) the
inclusion of some or all of the Stock owned by the Holders exceeds the
largest number of shares of Stock which can be sold without having an
adverse effect on such offering, including the price at which such Stock
can be sold (the "Maximum Offering Size"), Xxxx will include in such
registration, in the priority listed below, up to the Maximum Offering
Size:
(A) first, all Registrable Stock requested to be registered
by any Registering Shareholders pursuant to 3.01(a) hereof (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such Registering Shareholders on the basis of the relative
number of shares of Registrable Stock so requested to be included in such
registration);
(B) second, all Registrable Stock requested to be included in
such registration by any other Holder pursuant to Section 3.02 (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such other Holders on the basis of the relative number of shares
of Registrable Stock so requested to be included in such registration); and
(C) third, any other Stock proposed to be registered by Xxxx.
Section 3.02. INCIDENTAL REGISTRATION.
(a) If Xxxx proposes to register any of its Stock under the
Securities Act other than a registration (i) on Form S-8 or S-4 or any
successor or similar forms, (ii) relating to Stock issuable upon exercise
of employee stock options or in connection with any employee benefit or
similar plan of Xxxx, or (iii) in connection with a direct or indirect
merger, acquisition or other similar transaction) whether or not for sale
for its own account, it will each such time, subject to the provisions of
Section 3.02(b), give prompt written notice at least 30 days prior to the
anticipated filing date of the registration statement relating to such
registration to each Shareholder, which notice shall set forth such
Shareholders' rights under this Section 3.02 and shall offer all
Shareholders the opportunity to include in such registration statement such
number of shares of Registrable Stock as each such Shareholder may request
(an "Incidental Registration"). Upon the written request of any such
Shareholder made within 15 days after the receipt of notice from Xxxx
(which request shall specify the number of shares of Registrable Stock
intended to be disposed of by such Shareholder), Xxxx will use its best
efforts to effect the registration under the Securities Act of all
Registrable Stock which Xxxx has been so requested to register by such
Shareholders, to the extent requisite to permit the disposition of the
Registrable Stock so to be registered; provided that (i) if such
registration involves an Underwritten Public Offering, all such
Shareholders requesting to be included in Xxxx'x registration must sell
their Registrable Stock to the underwriters selected as provided in Section
3.04(f) on the same terms and conditions as apply to Xxxx and the
Registering Shareholders and (ii) if, at any time after giving written
notice of its intention to register any Stock pursuant to this Section
3.02(a) and prior to the effective date of the registration statement filed
in connection with such registration, Xxxx shall determine for any reason
not to register such Stock, Xxxx shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to
register any Registrable Stock in connection with such registration. No
registration effected under this Section 3.02 shall relieve Xxxx of its
obligations to effect a Demand Registration to the extent required by
Section 3.01 hereof. Xxxx will pay all Registration Expenses in connection
with each registration of Registrable Stock requested pursuant to this
Section 3.02.
(b) If a registration pursuant to this Section 3.02 involves an
Underwritten Public Offering (other than in the case of an Underwritten
Public Offering requested by any Shareholder in a Demand Registration, in
which case the provisions with respect to priority of inclusion in such
offering set forth in Section 3.01 (d) shall apply) and the managing
underwriter advises Xxxx that, in its view, the number of shares of Stock
which Xxxx and the Registering Shareholders intend to include in such
registration exceeds the Maximum Offering Size, Xxxx will include in such
registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the other stock proposed to be
registered by Xxxx as would not cause the offering to exceed the Maximum
Offering Size; and
(ii) second, all Registrable Stock requested to be included in
such registration by any Shareholder pursuant to Section 3.02 (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such Shareholders on the basis of the relative number of shares
of Registrable Stock so requested to be included in such registration).
Section 3.03. HOLDBACK AGREEMENTS. If any registration of
Registrable Stock shall be in connection with an Underwritten Public
Offering, each Shareholder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144, of any Registrable
Stock, and not to effect any such public sale or distribution of any other
equity security of Xxxx or of any stock convertible into or exchangeable or
exercisable for any equity securities of Xxxx (in each case, other than as
part of such Underwritten Public Offering) during the 14 days prior to the
effective date of such registration statement (except as part of such
registration) or during the period after such effective date that such
managing underwriter and Xxxx shall agree (but not to exceed 180 days).
Any waiver of any restrictions on sales or distributions referred to in
this Section 3.03 shall be effective as to each Shareholder regardless of
whether the waiver was in fact requested by, or granted to, only certain
Shareholders.
Section 3.04. REGISTRATION PROCEDURES. Whenever Shareholders
request that any Registrable Stock be registered pursuant to Section 3.01
or 3.02 hereof, Xxxx will, subject to the provisions of such Sections, use
its best efforts to effect the registration and the sale of such
Registrable Stock in accordance with the intended method of disposition
thereof as quickly as practicable, and in connection with any such request:
(a) Xxxx will as expeditiously as possible prepare and file with
the SEC a registration statement on any form for which Xxxx then qualifies
or which counsel for Xxxx shall xxxx appropriate and which form shall be
available for the sale of the Registrable Stock to be registered thereunder
in accordance with the intended method of distribution thereof, and use its
best efforts to cause such filed registration statement to become and
remain effective for a period of not less than 90 days (or such shorter
period in which all of the Registrable Stock of the Holders included in
such registration statement shall have actually been sold thereunder).
(b) Xxxx will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
each Shareholder and each underwriter, if any, of the Registrable Stock
covered by such registration statement copies of such registration
statement as proposed to be filed, and thereafter Xxxx will furnish to such
Shareholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such Shareholder
or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Stock owned by such Shareholder.
(c) After the filing of the registration statement, Xxxx will
promptly notify each Shareholder holding Registrable Stock covered by such
registration statement of any stop order issued or threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(d) Xxxx will use its best efforts to (i) register or qualify the
Registrable Stock covered by such registration statement under such other
securities or blue sky laws of such jurisdictions in the United States as
any Shareholder holding such Registrable Stock reasonably (in light of such
Shareholder's intended plan of distribution) requests and (ii) cause such
Registrable Stock to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of Xxxx and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Stock owned by such
Shareholder; PROVIDED that Xxxx will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph (d), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(e) Xxxx will immediately notify each Shareholder holding such
Registrable Stock covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of
a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Stock, such prospectus will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly prepare and make available
to each such Shareholder and file with the SEC any such supplement or
amendment.
(f) Xxxx will select, in its sole discretion, the underwriter or
underwriters in connection with any Underwritten Public Offering; PROVIDED
that Majority Shareholders will have the right, in its sole discretion, to
select the underwriter or underwriters in connection with any underwritten
Demand Registration initiated by the Majority Shareholders pursuant to
Section 3.01. Xxxx will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the disposition
of such Registrable Stock, including the engagement of a "qualified
independent underwriter" in connection with the qualification of the
underwriting arrangements with the NASD.
(g) Xxxx will make available for inspection by any Shareholder and
any underwriter participating in any disposition pursuant to a registration
statement being filed by Xxxx pursuant to this Section 3.04 and any
attorney, accountant or other professional retained by any such Shareholder
or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of Xxxx
(collectively, the "Records") as shall be reasonably requested by any such
Person, and cause Xxxx'x officers, directors and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement.
(h) Xxxx will furnish to each such Shareholder and to each such
underwriter, if any, a signed counterpart, addressed to such underwriter,
of (i) an opinion or opinions of counsel to Xxxx and (ii) a comfort letter
or comfort letters from Xxxx'x independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as a majority of such
Shareholders or the managing underwriter therefor reasonably requests.
(i) Xxxx will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
Xxxx may require each such Shareholder to promptly furnish in writing
to Xxxx such information regarding the distribution of the Registrable
Stock as Xxxx may from time to time reasonably request and such other
information as may be legally required in connection with such
registration.
Each such Shareholder agrees that, upon receipt of any notice from
Xxxx of the happening of any event of the kind described in Section
3.04(e), such Shareholder will forthwith discontinue disposition of
Registrable Stock pursuant to the registration statement covering such
Registrable Stock until such Shareholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.04(e), and, if
so directed by Xxxx, such Shareholder will deliver to Xxxx all copies,
other than any permanent file copies then in such Shareholder's possession,
of the most recent prospectus covering such Registrable Stock at the time
of receipt of such notice. In the event that Xxxx shall give such notice,
Xxxx shall extend the period during which such registration statement shall
be maintained effective (including the period referred to in Section
3.04(a)) by the number of days during the period from and including the
date of the giving of notice pursuant to Section 3.04(e) to the date when
Xxxx shall make available to such Shareholder a prospectus supplemented or
amended to conform with the requirements of Section 3.04(e).
Section 3.05. INDEMNIFICATION BY XXXX. Xxxx agrees to indemnify and
hold harmless each Shareholder holding Registrable Stock covered by a
registration statement, its officers, directors and agents, and each
Person, if any, who controls such Shareholder within the meaning of Section
15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
or prospectus relating to the Registrable Stock (as amended or supplemented
if Xxxx shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission so made in strict
conformity with information furnished in writing to Xxxx by such
Shareholder or on such Shareholder's behalf expressly for use therein;
PROVIDED that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus, or in any
prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the
prospectus as amended or supplemented was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to
the written confirmation of the sale of the Registrable Stock concerned to
such Person if it is determined that Xxxx has provided such prospectus (or
such amended or supplemented prospectus, as the case may be) and it was the
responsibility of such Shareholder to provide such Person with a current
copy of the prospectus (or such amended or supplemented prospectus, as the
case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect
giving rise to such loss, claim, damage, liability or expense. Xxxx also
agrees to indemnify any underwriters of the Registrable Stock, their
officers and directors and each Person who controls such underwriters on
substantially the same basis as that of the indemnification of the
Shareholders provided in this Section 3.05.
Section 3.06. INDEMNIFICATION BY PARTICIPATING SHAREHOLDERS.
(a) Subject to Section 3.06(b), each Shareholder holding
Registrable Stock included in any registration statement agrees, severally
but not jointly, to indemnify and hold harmless Xxxx, its officers,
directors and agents and each Person, if any, who controls Xxxx within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from Xxxx to
such Shareholder, but only (i) with respect to information furnished in
writing by such Shareholder or on such Shareholder's behalf expressly for
use in any registration statement or prospectus relating to the Registrable
Stock, or any amendment or supplement thereto, or any preliminary
prospectus or (ii) to the extent that any loss, claim, damage, liability or
expense described in Section 3.05 results from the fact that a current copy
of the prospectus as amended or supplemented was not sent or given to the
Person asserting any such loss, claim, damage, liability or expense at or
prior to the written confirmation of the sale of the Registrable Stock
concerned to such Person if it is determined that it was the responsibility
of such Shareholder to provide such Person with a current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to
such loss, claim, damage, liability or expense. Subject to Section
3.06(b), each such Shareholder also agrees to indemnify and hold harmless
underwriters of the Registrable Stock, their officers and directors and
each Person who controls such underwriters on substantially the same basis
as that of the indemnification of Xxxx provided in this Section 3.06. As a
condition to including Registrable Stock in any registration statement
filed in accordance with Article III hereof, Xxxx may require that it shall
have received an undertaking reasonably satisfactory to it from any
underwriter to indemnify and hold it harmless to the extent customarily
provided by underwriters with respect to similar securities.
(b) Notwithstanding the foregoing, no Shareholder shall be liable
under Section 3.06(a) for any damage thereunder in excess of the net
proceeds realized by such Shareholder in the sale of the Registrable Stock
of such Shareholder.
Section 3.07. CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant
to this Article III, such Person (an "Indemnified Party") shall promptly
notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
fees and expenses; PROVIDED that the failure of any Indemnified Party so to
notify the Indemnifying Party shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent that the Indemnifying Party
is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for
the Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any and all losses, claims, damages,
liabilities and expenses (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any 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 proceeding without any admission of liability on the part of
any Indemnified Party or any requirement for any action or forbearance on
its part.
Section 3.08. CONTRIBUTION. If the indemnification provided for in
this Article III is held by a court of competent jurisdiction to be
unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein, then each such 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 (i) as between Xxxx and the
Shareholders holding Registrable Stock covered by a registration statement
on the one hand and the underwriters on the other, in such proportion as is
appropriate to reflect both the relative benefits received by Xxxx and such
Shareholders on the one hand and the underwriters on the other, from the
offering of the Registrable Stock, and the relative fault of Xxxx and such
Shareholders on the one hand and of such underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between Xxxx on the one hand and each such
Shareholder on the other, in such proportion as is appropriate to reflect
the relative fault of Xxxx and of each such Shareholder in connection with
such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by Xxxx and such
Shareholders on the one hand and such underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by Xxxx and such Shareholders bear to the total
underwriting discounts and commissions received by such underwriters, in
each case as set forth in the table on the cover page of the prospectus.
The relative fault of Xxxx and such Shareholders on the one hand and of
such underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by Xxxx and such Shareholders or by such
underwriters. The relative fault of Xxxx on the one hand and of each such
Shareholder on the other (or of Xxxx and the Shareholders holding
Registrable Stock covered by a registration statement, on the one hand, and
the underwriters, on the other) shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Xxxx and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 3.08 were determined by
pro rata allocation (even if the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as
a result of the losses, claims, damages or liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 3.08, no underwriter shall be required to contribute any amount in
excess of the amount by which the underwriting discount applicable to the
Registrable Stock purchased by such underwriter in such offering exceeds
the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no Shareholder shall be required to
contribute any amount in excess of the amount by which the net proceeds
realized on the sale of the Registrable Stock of such Shareholder exceeds
the amount of any damages which such Shareholder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. Each Shareholder's obligation to
contribute pursuant to this Section 3.08 is several in the proportion that
the proceeds of the offering received by such Shareholder bears to the
total proceeds of the offering received by all such Shareholders and not
joint.
Section 3.09. PARTICIPATION IN PUBLIC OFFERING. No Person may
participate in any Underwritten Public Offering hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, and (b) completes and executes all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements and the provisions of this
Agreement in respect of registration rights.
Section 3.10. OTHER REGISTRATION RIGHTS. The registration rights
provided in this Article III supersede any prior registration rights
granted to any Shareholder, which are hereby canceled.
Article IV MISCELLANEOUS.
Section 4.01 NO INCONSISTENT AGREEMENTS. Except for the
Registration Rights Agreement dated ___________ , 1989, by and among Bell,
Milley, Xxxx, Xxxxx X. Xxxxx, Xxxx X. Xxxxxx, Xxx X. Xxxxx, Xxxxx X. Xxxxx,
Xxxxx X. Xxxxxxx, The Airlie Group, Winchester National Inc. and Liberty
Associates Limited Partnership, neither Xxxx nor any Shareholder is
presently a party to or will hereafter enter into any agreement with
respect to any Stock which is inconsistent with the rights granted to any
Shareholder by this Agreement or any other agreements relating to the Stock
to which the Shareholders are parties or which otherwise conflicts with the
provisions hereof or thereof.
Section 4.02. ENTIRE AGREEMENT. This Agreement, the Exchange
Agreement, the Claims Settlement Agreement and the other documents
contemplated thereby constitute the entire agreement between the parties
with respect to the subject matter of this Agreement, the Exchange
Agreement, the Claims Settlement Agreement and the other documents
contemplated thereby and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to
the subject matter of this Agreement, the Exchange Agreement, the Claims
Settlement Agreement and the other documents contemplated thereby.
Section 4.03. BINDING EFFECT; BENEFIT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer on
any Person other than the parties hereto, and their respective heirs,
successors, legal representatives and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 4.04. ASSIGNABILITY. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall
be assignable by Xxxx or any Shareholder. No purchaser or transferee of
Stock will be bound by or entitled to the benefits hereof unless this
Agreement is amended in accordance with Section 4.05. Any Shareholder who
ceases to beneficially own any Stock shall cease to be bound by the terms
hereof (other than Sections 3.06, 3.07, and 3.08).
Section 4.05. AMENDMENT; WAIVER; TERMINATION.
(a) No provision of this Agreement may be waived except by an
instrument in writing executed by the party against whom the waiver is to
be effective. No provision of this Agreement may be amended or otherwise
modified except by an instrument in writing executed by Xxxx with the
approval of the Board and Shareholders holding at least 85% of the Stock.
(b) This Agreement shall remain in effect for a period of ten years
from the date hereof.
Section 4.06. NOTICES. All notices and other communications given
or made pursuant hereto or pursuant to any other agreement among the
parties, unless otherwise specified, shall be in writing and shall be
deemed to have been duly given or made if sent by fax (with confirmation in
writing), delivered personally or sent by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the fax
number or address set forth below or at such other addresses as shall be
furnished by the parties by like notice, and such notice or communication
shall be deemed to have been given or made upon receipt:
(i) If to the InPath Members:
InPath, LLC
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx & Coff
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
(ii) If to Bell, Milley, Shaw, Cadmus, MMI or WNI:
Xxxx National Corporation
0000 Xxx Xxxxx Xxxxxx
Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
Section 4.07. HEADINGS. The headings contained in this Agreement
are for convenience only and shall not affect the meaning or interpretation
of this Agreement.
Section 4.08. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
Section 4.09. APPLICABLE LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Illinois,
without regard to the conflicts of law rules of such state.
Section 4.10. SPECIFIC ENFORCEMENT. Each party hereto acknowledges
that the remedies at law of the other parties for a breach or threatened
breach of this Agreement would be inadequate and, in recognition of this
fact, any party to this Agreement, without posting any bond, and in
addition to all other remedies which may be available, shall be entitled to
obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
Section 4.11. CONSENT TO JURISDICTION. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in the United States District Court for
the Northern District of Illinois or any other Illinois State court sitting
in Xxxx County, and each of the parties hereby consents to the
non-exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may
now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient
form. Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of
any such court.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
XXXX NATIONAL CORPORATION
By: _____________________________
Its: _______________________
Attest:__________________________
_________________________________
Xxxxxxxxx X. Xxxxxx
_________________________________
Xxxxxx X. Xxxx
CADMUS CORPORATION
By: _____________________________
Its: _______________________
Attest:__________________________
XXXXXX MANAGEMENT INCORPORATED
By: _____________________________
Its: _______________________
Attest:__________________________
WINCHESTER NATIONAL, INC.
By: _____________________________
Its: _______________________
Attest:__________________________
_________________________________
Xxxxx X. Xxxxxxxx, individually and as
Trustee of the Inpath, LLC Voting Trust
_________________________________
Xxxxxxxx X. Xxxxxx, Trustee of each of
The EAG Trust, The CMC Trust, The MDG Trust and The MSD Trust
_________________________________
Xxxxxxx X. Xxxxxx
ACCUMED INTERNATIONAL, INC.
By: _____________________________
Its: _______________________
Attest:__________________________
NORTHLEA PARTNERS LTD.
By: _____________________________
Its: _______________________
Attest:__________________________
_________________________________
Xxxx X. Xxxxxxx, Trustee of Xxxx X.
Xxxxxxx'x Trust
________________________________
Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Xxxxxx Trust
MONROE INVESTMENTS, INC.
By: _____________________________
Its: _______________________
Attest:__________________________
