LINKWELL TECH GROUP, INC. STOCKHOLDERS AGREEMENT May 30, 2008
Exhibit
10.1
LINKWELL
TECH GROUP, INC.
____________________
STOCKHOLDERS
AGREEMENT
____________________
May
30, 2008
TABLE
OF CONTENTS
Page
DEFINITIONS
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1
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||
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1.1
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Certain
Definitions
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1
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1.2
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Certain
Matters of Construction
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4
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2.
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VOTING
AGREEMENT
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5
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|
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2.1
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Election
of Directors
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5
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2.2
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Removal
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6
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2.3
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Successors
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6
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2.4
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Ecolab
Observer
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6
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2.5
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Expenses
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6
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|
2.6
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Meetings
of the Board
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|
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2.7
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The
Company
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|
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2.8
|
Period
|
|
3.
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COVENANTS
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6
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3.1
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Dividend
Policy
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6
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3.2
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Inspection
|
6
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|
3.3
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Negative
Covenants and Agreements
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7
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4.
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PUT
AND CALL RIGHTS
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9
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|
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4.1
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Put
Option
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9
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4.2
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Call
Option
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11
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5.
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PREEMPTIVE
RIGHTS
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12
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|
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5.1
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Right
of First Offer
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12
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5.2
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Second
Proposal
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12
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5.3
|
Notice
|
12
|
|
5.4
|
Sale
to Third Parties
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13
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5.5
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Proportionate
Percentage
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13
|
|
6.
|
CERTAIN
TRANSFER RIGHTS AND RESTRICTIONS; RIGHTS OF FIRST OFFER
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14
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|
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6.1
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Transfers
of Shares to Affiliate
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14
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6.2
|
Rights
of First Offer on Transfers by Other Stockholders
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14
|
|
6.3
|
Right
of Co-Sale
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14
|
|
6.4
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Remedies
|
15
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-i-
TABLE
OF CONTENTS
(continued)
Page
7.
|
“TAKE
ALONG” RIGHTS
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16
|
|
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7.1
|
Procedure
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16
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7.2
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Further
Assurances
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16
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7.3
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Closing
|
16
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8.
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RIGHT
OF FIRST OFFER ON A BUSINESS SALE
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17
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|
9.
|
REMEDIES
|
18
|
|
10.
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NON
COMPETE
|
18
|
|
11.
|
LEGENDS
|
19
|
|
12.
|
TERMINATION
|
19
|
|
13.
|
MISCELLANEOUS
|
20
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|
|
13.1
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Authority;
Effect
|
20
|
|
13.2
|
Notices
|
20
|
|
13.3
|
Amendment
|
20
|
|
13.4
|
Waivers
and Remedies
|
21
|
|
13.5
|
Entire
Agreement
|
21
|
|
13.6
|
Assignment
and Successors
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22
|
|
13.7
|
Severability
|
22
|
|
13.8
|
Interpretation
|
22
|
|
13.9
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Governing
Law
|
22
|
|
13.10
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Specific
Performance
|
22
|
|
13.11
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Jurisdiction
and Service of Process
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23
|
|
13.12
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Waiver
of Jury Trial
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23
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13.13
|
Counterparts
|
23
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-ii-
STOCKHOLDERS
AGREEMENT
This
Stockholders Agreement (the “Agreement”)
is
made as of May 30th, 2008 by and among (i) Linkwell Tech Group, Inc., a Florida
corporation (the “Company”),
(ii)
Linkwell Corporation, a Florida corporation (“Linkwell”);
and
(iii) Ecolab Inc., a Delaware corporation (“Ecolab”).
WHEREAS,
Linkwell is the owner of 8,000,000 issued and outstanding shares of Common
Stock, par value $.001 per share (“Common
Stock”),
of
the Company;
WHEREAS,
pursuant to a Stock Purchase Agreement dated as of February 15th, 2008 (the
“Stock
Purchase Agreement”)
by and
among the Company, Linkwell and Ecolab, Ecolab is acquiring as of Closing
888,889 shares of Common Stock;
WHEREAS,
immediately after Closing Linkwell and Ecolab are collectively the holders
of
all of the outstanding capital stock of the Company;
WHEREAS,
the parties believe that it is in the best interests of the Company and the
Stockholders to: (i) provide that certain shares of Common Stock shall be
transferable only upon compliance with the terms hereof; (ii) provide the
Company with certain rights with respect to the purchase of shares of Common
Stock under certain circumstances; (iii) provide for certain rights with respect
to the registration under the Securities Act of the Common Stock held by or
issuable to the Stockholders; (iv) provide for certain rights and
obligations of the Stockholders with respect to the election of directors of
the
Company; and (v) set forth their agreements on certain other
matters;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements
set forth below, the parties hereto, each intending to be legally bound, hereby
agree as follows:
1.
|
DEFINITIONS.
For purposes of this Agreement:
|
1.1 Certain
Definitions.
The
following terms shall have the following meanings:
1.1.1 “Affiliate”
means,
with respect to a specified Person, a Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by or is under
common Control with, the specified Person. In addition to the foregoing, if
the
specified Person is an individual, the term “Affiliate” also includes (a) the
individual’s spouse, (b) the members of the immediate family (including parents,
siblings and children) of the individual or of the individual’s spouse and (c)
any corporation, limited liability company, general or limited partnership,
trust, association or other business or investment entity that directly or
indirectly, through one or more intermediaries Controls, is Controlled by or
is
under common Control with any of the foregoing individuals.
1.1.2 “Board”
shall
mean the Board of Directors of the Company.
1.1.3 “Change
of Control Transaction”
means
any transaction or series of related transactions pursuant to which a third
Person may gain Control of a Person, whether by merger, consolidation, issuance
of voting securities, sale of all or substantially all of the assets of a
Person, or otherwise.
1.1.4 “Closing”
has
the
meaning given to such term in the Stock Purchase Agreement.
1.1.5 “Control”
means
and includes the direct or indirect ownership of all or substantially all of
the
assets of a Person by any third Person, the direct or indirect ownership or
control, by contract or otherwise, of more than 50% of the voting securities
of
a Person, or the right to appoint or elect, whether directly or indirectly,
a
majority of the board of directors of a Person;
1.1.6 “Current
Ratio”
means
the product of (i) the total aggregate current assets of the Group, divided
by
(ii) the total aggregate current liabilities of the Group, in each case as
derived from the then current books and records of the Group
Members.
1.1.7 “Debt
to Total Asset Ratio”
means
the ratio, expressed as a percentage, of the total aggregate indebtedness
(including principal, interest, fees, expenses and other amounts) of the Group
to the total aggregate assets of the Group, in each case as derived from the
then current books and records of the Group Members
1.1.8 “Ecolab
Competitor”
means
any
Person that is engaged in or competitive with the business of Ecolab or any
of
Ecolab’s Subsidiaries at the relevant time.
1.1.9 “Fully
Diluted Shares”
shall
mean outstanding shares of Common Stock, assuming the conversion or exercise
of
all outstanding securities then convertible into or exercisable for Common
Stock.
1.1.10 “Group”
mean
the Company and each of its Subsidiaries from time to time, collectively, and
“Group
Member”
shall
mean any one of them.
1.1.11 “Independent
Third Party”
means
any Person who, immediately prior to the contemplated transaction, does not
own
in excess of 5% of the Fully Diluted Shares, and who is not an Affiliate of
any
such 5% owner.
1.1.12 “Initial
Public Offering”
shall
mean the first public offering of shares of Common Stock registered under the
Securities Act.
1.1.13 “Person”
means
an
individual or an entity, including a corporation,
limited liability company, general or limited partnership, trust, association
or
other business or investment entity,
or any
Governmental Authority.
1.1.14 “Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the rules and regulations
of
the Securities and Exchange Commission promulgated thereunder, all as from
time
to time in effect.
2
1.1.15 “Shares”
shall
mean all shares of Common Stock and any other capital stock of the Company
now
or hereafter in existence, and any securities of the Company exercisable for
or
convertible into Common Stock or any other capital stock of the Company now
or
hereafter in existence.
1.1.16 “Stockholders”
means
the holders of Shares from time to time, and “Stockholder”
shall
mean any one of them.
1.1.17 "Subsidiary"
means,
with respect to a specified Person, any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar governing body,
or
otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred)
are
held by the specified Person or one or more of its Subsidiaries. When used
in
this Agreement without reference to a particular Person, "Subsidiary" means
a
Subsidiary of the Company.
1.1.18 “Total
Debt to Capital Ratio”
means
the ratio, expressed as a percentage, of (i) the total aggregate indebtedness
(including principal, interest, fees, expenses and other amounts) of the Group
to (ii) the sum of (x) total
aggregate indebtedness (including principal, interest, fees, expenses and other
amounts) and (y) total aggregate equity, in each case of the Group, and in
each
case as derived from the then current books and records of the Group Members.
1.1.19 “Voting
Shares”
shall
mean Common Stock and any other shares of capital stock or other securities
now
or hereafter issued, carrying the right to vote for directors of the
Company.
1.2 Additional
Defined Terms.
For
purposes of this Agreement, the following terms have the meanings specified
in
the indicated Section of this Agreement:
Defined
Term
|
Section
|
Agreement
|
Preamble
|
Business
Plan and Budget
|
3.3
|
Business
Sale
|
8
|
Business
Sale Notice
|
8
|
Business
Seller
|
8
|
Call
Closing
|
4.2
|
Call
Notice
|
4.2
|
Call
Purchase Price
|
4.2
|
Call
Right
|
4.2
|
Call
Shares
|
4.2
|
Cash
Consideration
|
4.1(b)
|
Common
Stock
|
Preamble
|
Competing
Activity
|
9(a)
|
Co-Sale
Offeree
|
6.3
|
Co-Sale
Notice
|
6.3
|
Covered
Person
|
4.1(e)
|
Dividend
Policy
|
3.1
|
3
Ecolab
Company Director
|
2.1(b)
|
Ecolab
Director
|
2.1(c)
|
Ecolab
Sub Director
|
2.1(c)
|
Ecolab
Supervisory Board Member
|
2.1(d)
|
Ecolab
Observer
|
2.4
|
Future
Shares
|
5.1
|
Future
Shares Exercise Period
|
5.1
|
Liens
|
4.1(d)
|
Majority
Holders
|
7
|
Notice
of Purchase
|
5.3
|
Offer
Notice
|
6.2
|
Offered
Shares
|
6.2
|
Offeree
|
6.2
|
Participating
Seller
|
7
|
Prohibited
Transfer
|
6.4
|
Proportionate
Percentage
|
5.5
|
Proposed
Buyer
|
7
|
Proposed
Sellers
|
7
|
Proposal
|
5.1
|
Put
Closing
|
4.1(d)
|
Put
Notice
|
4.1(a)
|
Put
Right
|
4.1(a)
|
Put
Shares
|
4.1(a)
|
Put
Window
|
4.1(a)
|
Refused
Future Shares
|
5.4
|
Relevant
Assets
|
8
|
Remaining
Future Shares
|
5.2
|
Remaining
Future Shares Exercise Period
|
5.2
|
Sale
|
7
|
Sale
Percentage
|
7
|
SEC
|
4.1(f)(1)
|
Second
Proposal
|
5.2
|
Stock
Consideration Shares
|
4.1(b)
|
Stock
Purchase Agreement
|
Preamble
|
Sub-Board
|
2.4
|
Take-Along
Notice
|
7.1
|
Transfer
|
6
|
Transferring
Holder
|
6.2
|
Valuation
Notice
|
4.2
|
Valuer
|
4.2
|
1.3 Certain
Matters of Construction.
The
words
“hereof”, “herein”, “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any particular Section or provision of this
Agreement, and reference to a particular Section of this Agreement shall include
all subsections thereof. Definitions shall be equally applicable to both the
singular and plural forms of the terms defined. The masculine, feminine and
neuter genders shall each include the other. Any reference in this Agreement
to
a “Section” refers to the corresponding Section of this Agreement, unless the
context indicates otherwise. The table of contents and the headings of Articles
and Sections are provided for convenience only and are not intended to affect
the construction or interpretation of this Agreement. All words used in this
Agreement should be construed to be of such gender or number as the
circumstances require. The term “including” means “including without limitation”
and is intended by way of example and not limitation. Any reference to a statute
is deemed also to refer to any amendments or successor legislation, and all
rules and regulations promulgated thereunder, as in effect at the relevant
time.
Any reference to a Contract or other document as of a given date means the
Contract or other document as amended, supplemented and modified from time
to
time through such date.
4
2.
|
VOTING
AGREEMENT.
|
2.1 Board
Representation.
Each
Stockholder hereby agrees to cast all votes to which such Stockholder is
entitled in respect of any Voting Shares now or hereafter owned by such
Stockholder, whether at any annual or special meeting of stockholders, by
written consent or otherwise, and otherwise to take all other reasonably
necessary or desirable actions with such Stockholder’s control (whether in such
Stockholder’s capacity as a stockholder, director, officer or otherwise), and
the Company shall take all reasonably necessary and desirable actions within
its
control (including, without limitation, calling directors’ and shareholders’
meetings), so that:
(a)
the
number of directors constituting the Board shall be not less than three (3);
(b)
Ecolab shall be entitled at any time to designate and have elected to the Board
any one individual (the “Ecolab
Company Director”).
At
any time when the Board shall consist of more than ten directors, Ecolab shall
be entitled to designate and have elected to the Board such number of Ecolab
Directors as constitutes not less than one-tenth of the total number of
directors (rounded up to the next highest whole number);
(c)
Ecolab
shall be entitled at any time to designate and have elected to the board of
directors or equivalent (each a “Sub
Board”)
of
each of the Company’s Subsidiaries any one individual (each an “Ecolab
Sub Director”
and
the
Ecolab Company Director(s) and the Ecolab Sub Directors being, collectively,
the
“Ecolab
Directors”);
(d)
in
the event that any Subsidiary forms, whether as a result of applicable
requirements of Law or otherwise, a supervisory board, Ecolab shall be entitled
at any time to designate and have elected to such supervisory board any one
individual (each an “Ecolab
Supervisory Board Member”);
and
(e)
the
removal from the Board or any Sub Board of any Ecolab Director or from any
Subsidiary’s supervisory board of an Ecolab Supervisory Board Member (in each
case with or without cause) shall be at the written request of Ecolab, but
only
upon such written request and under no other circumstances.
Ecolab
shall be entitled at any time to remove any Ecolab Director or Ecolab
Supervisory Board Member for any reason whatsoever and to appoint another
individual in his place.
5
2.2 Expenses.
Except
with the written approval of both Stockholders, all expenses
that any individual member of the Board, any Sub-Board, any supervisory board
of
a Subsidiary, or any committee of any of the foregoing organs may incur for
attending meetings or discharging duties in such capacity shall be borne by
the
Stockholder that designated such individual for election or appointment to
that
organ. So long as any Ecolab Director serves on the Board and for
two years
thereafter, the Company shall maintain directors and officers indemnity
insurance coverage satisfactory to the Ecolab Director and the Company’s
articles of incorporation and by-laws will provide for indemnification and
exculpation of directors to the fullest extent permitted under applicable
law.
2.3 Meetings
of the Board and Sub-Boards.
The
Company agrees that it will hold a meeting of the Board, and will cause each
of
its Subsidiaries to hold a meeting of such Subsidiary’s Sub-Board, at least two
(2) times per fiscal year.
2.4 Group
Matters.
Linkwell
and the Company agree that all decisions and matters that may affect any Group
Member or the Group as a whole shall be discussed and decided by the Board
in
accordance with the provisions of this Agreement.
2.5 The
Company.
The
Company agrees not to give effect to any action by any holder of Shares which
is
in contravention of this Section 2.
3.
|
COVENANTS
|
3.1 Dividend
Policy.
The
Stockholders shall, as soon as reasonably practicable after the date of this
Agreement, agree in good faith a dividend policy for the Company and for each
of
its Subsidiaries (the “Dividend
Policy”).
Until
the
Dividend Policy has been so agreed, the Company shall not, and shall cause
its
Subsidiaries not to, declare or pay any dividend or make any distribution on
any
Shares.
3.2 Financial
Information.
The
Company will provide to Ecolab the following reports:
3.2.1 As
soon
as practicable after the end of each fiscal year, and in any event within 90
days thereafter, audited consolidated balance sheets of the Company and its
Subsidiaries, as of the end of the fiscal year, and audited consolidated
statements of income and cash flows of the Company and its Subsidiaries for
the
year, prepared in accordance with United States generally accepted accounting
principles, consistently applied, and setting out in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
certified by independent public accountants of national standing;
and
3.2.2 As
soon
as practicable after the end of each fiscal quarter, and in any event within
45
days after each fiscal quarter, an unaudited quarterly report including a
balance sheet, profit and loss statement and cash flow analysis prepared in
accordance with United States generally accepted accounting principles,
consistently applied, (other than for accompanying notes and subject to changes
resulting from year-end audit adjustments) as of the end of and for the year
to
date and quarter ending on the last day of such fiscal quarter, and a comparison
of such results to the Company’s Annual Business Plan and Budget for such
period.
6
3.3 Inspection.
The
Company shall permit, and shall cause its Subsidiaries to permit, each
Stockholder, at such Stockholder’s expense, to visit and inspect any Group
Member’s properties, examine its books of account and records, and discuss its
affairs, finances and accounts with its officers, during normal business hours
of such Group Member as may be reasonably requested by such Stockholder;
provided, however, that no Group Member shall be obligated pursuant to this
Section
3.3
to
provide access to any information that it reasonably considers to be a trade
secret or confidential information (unless covered by an enforceable
confidentiality agreement) or the disclosure of which would adversely affect
the
attorney-client privilege between the Group Member and its counsel.
3.4 Business
Plan and Budget. The
Company shall furnish to the Board, no later than thirty (30) days prior to
the
start of each new fiscal year, an annual business plan (the “Business
Plan and Budget”)
for
the Company and its Subsidiaries, which business plan shall include annual
capital and operating budgets in reasonable detail, a projected financial
statement for such fiscal year on a monthly basis, and operating goals for
each
functional unit of the Company and its Subsidiaries, and promptly after
preparation from time to time, any revisions in the forecasts contained
therein.
In order
to be adopted, the capital expenditure proposals of each such annual Business
Plan and Budget shall need to be approved
by a majority of the Board (with all directors present and voting), except
that
capital expenditure proposals involving lines
of
business not related to infection control or healthcare
shall
need to be unanimously approved by the Board (with all directors present and
voting). The remainder of each such annual Business Plan and Budget shall need
to be approved by a majority of the Board (and not just of those present at
the
relevant meeting). The provisions of this Section
3.4
shall in
no circumstances be deemed to constitute an exception or qualification to the
obligations of the Company to obtain the affirmative vote of the Ecolab Director
to those matters set forth in paragraphs (a) through (v) of Section
3.5
below.
3.5 Negative
Covenants and Agreements.
The
Company hereby covenants and agrees that it shall not, and shall not permit
its
Subsidiaries to, do any of the following without the prior written approval
of
Ecolab:
(a) make
any
loan or advance to, or own any stock or other securities of, any corporation,
partnership or other entity unless it is wholly owned by the
Company;
(b) make
any
loan or advance to any Person, including, without limitation, any employee
or
director, except advances and similar expenditures in the ordinary course of
business;
(c) directly
or indirectly guarantee or otherwise in any way become liable with respect
to
the obligations or liabilities of any Person, other than a Subsidiary, except
by
endorsement of instruments or items of payment for deposit to the general
account of the Company or any Subsidiary;
7
(d) make
any
capital expenditures or incur any research and development costs, in each case,
in one or a series of related transactions, in excess of 125% of the amounts
set
forth in the Business Plan and Budget for the relevant fiscal year;
(e) incur
indebtedness for borrowed money, unless, immediately following such incurrence,
each of the following ratios would continue to be met: (i) a Total Debt to
Capital Ratio of less than 20%, (ii) a Current Ratio of greater than 2, and
(iii) a Debt to Total Asset Ratio of less than 15%;
(f) except
to
the extent reasonably necessary to secure permitted indebtedness, pledge,
encumber, or grant any security interest in, any asset of the Company or any
of
its Subsidiaries;
(g) enter
into or be a party to any transaction with any director, officer or employee
of
the Company or any Subsidiary of the Company or any “associate” (as defined in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934) of any such
Person;
(h) enter
into or be a party to any transaction with any Affiliate (other than
Subsidiaries) other than on an arm’s length basis with terms materially
comparable to those that would be available from a non-affiliated third party;
provided that such transaction is reasonably necessary to conduct the business
and operations of the Company in the ordinary course;
(i) issue
or
sell any equity securities (i) of any class of share other than Common Stock,
(ii) to any Ecolab Competitor, or (iii) if such issuance or sale would result
in
Ecolab and its Affiliates together holding less than 25% of the Fully Diluted
Shares immediately following such issuance or sale;
(j) change
the principal business of the Company or any of its Subsidiaries, enter new
lines of business, or exit the current line of business;
(k) effect
any Business Sale, except in accordance with Section
8;
(l) other
than a Business Sale, effect any sale, lease, assignment, transfer or other
conveyance (other than the grant of a mortgage or security interest in
connection with permitted indebtedness for borrowed money) of any substantial
part (i.e., more than ten percent (10%) of the book value as reflected on the
most recent fiscal-year-end consolidated balance sheet of the Company) of the
properties or assets of the Company or any of its Subsidiaries, or any
consolidation or merger involving the Company or any of its
Subsidiaries;
8
(m) effect
any reduction of capital, recapitalization, liquidation, dissolution or
winding-up of the Company or any of its Subsidiaries;
(n) effect
any sale, lease, assignment, transfer or other conveyance (other than the grant
of a mortgage or security interest in connection with permitted indebtedness
for
borrowed money) of any assets of the Company or any of its Subsidiaries, other
than of obsolete equipment or of inventory in the ordinary course of
trading;
(o) approve
or consummate a sale of all or any part of the equity capital of any Subsidiary
of the Company to any Person or group of affiliated Persons;
(p) amend
the
articles of incorporation or the By-laws or any organizational document of
the
Company or any of its Subsidiaries;
(q) purchase
or redeem, or set aside any sums for the purchase or redemption of,
stock;
(r) declare
or pay any dividend or make any distribution on any shares, except for dividends
or other distributions in accordance with the Dividend Policy;
(s) adopt
any
stock option, restricted stock or other equity incentive plan, or grant to
any
of the Company’s or any of its Subsidiaries’ employees, consultants, officers,
directors or affiliates options to purchase shares;
(t) acquire,
whether by merger, consolidation or otherwise, the securities of, or assets
representing all or substantially all or any substantial part of the business
of, any other Person;
(u) enter
into any joint venture, partnership or other strategic alliance which requires
the investments, expenditures or contributions of cash, property or services
by
the Company or any of the Company’s Subsidiaries with an aggregate value in
excess of U.S. $250,000 during any fiscal year; or
(v) form
or
organize a Subsidiary, whether wholly-owned or otherwise.
4.
|
PUT
AND CALL RIGHTS
|
4.1 Put
Option.
(a) At
any
time (i) after the second anniversary but prior to the fourth anniversary of
Closing, or (ii) in the period of three (3) months following: (A) any material
breach by the Company or a Subsidiary of any of the Commercial Agreements that
may have a cumulative impact on Ecolab of US$ 50,000 or more, (B) the end of
the
seventh (7th) month after the Closing Date, if Shanghai Likang Disinfectant
High-Tech Company, Limited (“Likang
Disinfectant”)
fails
to complete the acquisition and become the registered owner of the land-use
rights, free and clear of Encumbrances (as evidenced by the receipt of valid
land-use right certificates and building ownership certificates) for the 4,384
square meter plot of land and the workshops constructed thereon located at
Xx.
0000, Xxx Xxxx Xxxx Xxxx, Xxxxxxx Xxxxxxxx that Likang Disinfectant purchased
from Xxxxx-Xxx Pharmaceutical pursuant to an agreement dated August 5, 2005,
or
(C) the incurrence by any Company Subsidiary of any material fine, penalty,
disruption of operations, expense, costs or other loss as a result of such
Company Subsidiary not having any land use rights, building ownership rights
or
governmental authorization that it may require in respect of its operations
(each, a “Put
Window”),
Ecolab shall have the right (the “Put
Right”)
to
require Linkwell to purchase, and Linkwell shall be obligated to purchase,
all
of the shares of Common Stock purchased by Ecolab pursuant to the Stock Purchase
Agreement (the “Put
Shares”).
Ecolab may exercise the Put Right by providing written notice (the “Put
Notice”)
to
Linkwell and the Company at any time during a Put Window. Ecolab shall have
no
Put Right if Ecolab has, prior to the date it would otherwise issue a Put
Notice, acquired all of the outstanding equity interests of the
Company.
9
(b) Linkwell
shall, within five (5) business days after its receipt of the Put Notice,
determine whether the consideration payable for the Put Shares shall be either
(a) cash in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000)
(the “Cash
Consideration”),
or
(b) shares of common stock in the capital of Linkwell in an amount calculated
pursuant to Section (c) below (the “Stock
Consideration Shares”),
and
shall inform Ecolab in writing of such determination.
(c) If
Linkwell elects to pay Stock Consideration Shares for the Put Shares, the number
of shares of Linkwell common stock forming the Stock Consideration Shares shall
be the lesser of (a) Ten Million (10,000,000) shares of Linkwell common stock,
or (b) such number of shares of Linkwell common stock as is determined by
dividing (i) 3,500,000 by (ii) the average daily closing price of Linkwell
common stock, as derived from the OTC Bulletin Board website, for the twenty
(20) days on which Linkwell shares of common stock were traded on the OTC
Bulletin Board prior to the date of the Put Notice.
(d) The
closing of a transaction pursuant to the Put Right (the “Put
Closing”)
shall
be held on a date mutually agreed upon by Linkwell and Ecolab but in any event
no later than 90 days following Linkwell’s receipt of the Put Notice. At the Put
Closing, Ecolab shall deliver to Linkwell, against payment of the aggregate
Put
Price, stock certificates, together with stock powers duly endorsed in blank,
or
affidavits of lost stock certificates (together with indemnification therefor
reasonably satisfactory to Linkwell), if applicable, evidencing the Put Shares.
If Linkwell has elected to pay Cash Consideration for the Put Shares, at the
Put
Closing, Linkwell shall deliver to Ecolab the Cash Consideration by wire
transfer of immediately available funds to such account as Ecolab may designate.
The Put Shares shall be delivered to Linkwell at the Put Closing free and clear
of all liens, claims, charges and encumbrances, other than the restrictions
imposed by this Agreement and by applicable law (collectively, “Liens”),
and
such transfer shall be effected using documentation containing representations
only as to Ecolab’s title, authority and capacity to sell the Put Shares. If
Linkwell has elected to pay Stock Consideration Shares for the Put Shares,
then
Linkwell shall at the Put Closing deliver to Ecolab a certificate representing
the Stock Consideration. The Stock Consideration Shares shall be delivered
free
and clear of all Liens.
10
(e) If
Linkwell elects to pay Stock Consideration Shares for the Put Shares,
Linkwell
shall effect the registration under the Securities Act of all of the Stock
Consideration Shares in accordance with the terms of the Registration Rights
Agreement.
4.2 Call
Option.
If
Linkwell is subject to a Change of Control Transaction, Linkwell shall within
five business days thereof notify Ecolab in writing of the same and Ecolab
shall have the right (the “Call
Right”)
to
require Linkwell to sell, and Linkwell shall be obligated to sell and to cause
its Affiliates to sell, all of the equity interests then owned by Linkwell
and
its Affiliates in any Group Member (the “Call
Shares”).
Ecolab may exercise the Call Right by providing written notice (the
“Call
Notice”)
to
Linkwell and the Company by no later than the date falling thirty (30) days
after its receipt of notification of the Change of Control Transaction from
Linkwell. The purchase price for the Call Shares shall be agreed between Ecolab
and Linkwell, provided, that, if agreement has not been reached within thirty
(30) days after Linkwell’s receipt of the Call Notice, either party may by
notice to the other (the “Valuation
Notice”)
require a price for the Call Shares to be established by an independent
certified public accountant (the “Valuer”)
(acting as an expert and not as an arbitrator). The Valuer shall be agreed
upon
by Ecolab and Linkwell or, in default of agreement within five business days
after receipt of the Valuation Notice, appointed by the President for the time
being of the American Institute of Certified Public Accountants (or any person
for the time being performing the functions of that official) on the application
of either Ecolab or Linkwell. The Valuer shall determine the fair price of
the
Call Shares being sold on a going concern basis between a willing seller and
a
willing purchaser and on the basis that each Call Share, whatever its class,
has
the same value corresponding to its proportion of the value of all the Call
Shares taken as a whole and that no additional or reduced value is attached
to
any holding of Call Shares by virtue only of that holding comprising or after
purchase conferring or giving rise to a majority or minority of the total issued
share capital of the Company. Any costs of the Valuer shall be borne by Ecolab
and Linkwell equally. The purchase price for the Call Shares as agreed between
Ecolab or Linkwell or, failing such agreement, determined by the Valuer shall
hereafter be the “Call
Purchase Price”.
The
closing of a transaction pursuant to the Call Right (the “Call
Closing”)
shall
be held on a date mutually agreed upon by Linkwell and Ecolab but in any event
no later than 90 days following Linkwell’s receipt of the Call Notice. At the
Call Closing, Linkwell shall deliver, and cause its relevant Affiliates to
deliver, to Ecolab, against payment of the Call Purchase Price, stock
certificates, together with stock powers duly endorsed in blank, or affidavits
of lost stock certificates (together with indemnification therefor reasonably
satisfactory to Ecolab), if applicable, evidencing the Call Shares. At the
Call
Closing, Ecolab shall pay to Linkwell the Call Purchase Price by wire transfer
of immediately available funds to such account as Linkwell may designate.
Receipt of the Call Purchase Price into such account shall be a good and valid
discharge of payment by Ecolab of any portion of the Call Purchase Price
attributable to Affiliates of Linkwell. The Call Shares shall be delivered
to
Ecolab at the Call Closing free and clear of all Liens, and such transfer shall
be effected using documentation containing representations only as to Linkwell’s
and its relevant Affiliates’ title, authority and capacity to sell the Call
Shares.
11
5.
|
PREEMPTIVE
RIGHTS.
|
5.1 Right
of First Offer.
The
Company shall not issue or sell any of its equity securities, including but
not
limited to Common Stock or securities convertible into, or options, warrants,
or
other rights to purchase Common Stock (collectively, the “Future
Shares”),
to
any Person without providing each Stockholder the right to subscribe for its
Proportionate Percentage (as defined in Section
5.5)
of such
Future Shares at a price and on such other terms (including the method of
purchase) which are at least as favorable as shall be offered to such third
party and which shall have been specified by the Company in a writing delivered
to each Stockholder (the “Proposal”);
provided,
however,
that
each Stockholder shall have the option of purchasing Future Shares with cash,
regardless of the method of purchase offered to such Person. The Proposal by
its
terms shall remain open and irrevocable for a period of twenty (20) days from
the date it is delivered by the Company to each Stockholder (the “Future
Shares Exercise Period”).
The
Proposal shall also certify that the Company has either (a) if the Company
intends to sell the Future Shares to a specific purchaser or group of
purchasers, received a firm offer from a prospective purchaser, who shall be
identified in such certification or that the Company in good faith believes
a
binding agreement of sale is obtainable for consideration having a fair market,
cash equivalent or present value set forth in such certification, or (b) if
the
Company has no specific purchaser in mind, intends in good faith to offer its
securities at the price and on the terms set forth in such
certification.
5.2 Second
Proposal.
If any
Stockholder shall subscribe for less that its Proportionate Percentage of the
Future Shares set forth in the Proposal to it, then the Company, at the end
of
the Future Shares Exercise Period, shall give notice in the same manner to
each
Stockholder who did subscribe for its entire Proportionate Percentage of the
Future Shares of the number of Future Shares which the Stockholders had not
elected to purchase during the Future Shares Exercise Period (the “Remaining
Future Shares”)
and
stating that such Stockholder may elect to purchase at the same price any or
all
of the Remaining Future Shares (the “Second
Proposal”),
which
Second Proposal by its terms shall remain open and irrevocable for a period
of
five days from the date it is delivered by the Company to each such Stockholder
(the “Remaining
Future Shares Exercise Period”).
If
the total number of Remaining Future Shares is sufficient to satisfy the
elections of the Stockholders who received the Second Proposal, such Remaining
Future Shares shall be allocated to them in accordance with their elections;
if
not, the available Remaining Future Shares shall be allocated among such
Stockholders according to their respective Proportionate Percentage
(provided
that
such allocation shall be adjusted if necessary so that no Stockholder is
allocated more Remaining Future Shares than it has elected to
purchase).
5.3 Notice.
Notice
of each Stockholder’s intention to accept, in whole or in part, the Proposal or
the Second Proposal made pursuant to Section
5.1
or
5.2,
respectively, shall be evidenced by a writing signed by such Stockholder and
delivered to the Company prior to the end of the Future Shares Exercise Period
or the Remaining Future Shares Exercise Period setting forth that portion of
the
Future Shares or the Remaining Future Shares which the Stockholder elects to
purchase (the “Notice
of Purchase”).
12
5.4 Sale
to Third Persons.
In the
event that the Stockholders elect not to purchase all (or any part) of the
Future Shares or the Remaining Future Shares, the Company shall have ninety
(90)
days from the expiration of the later of the Future Shares Exercise Period
or
the Remaining Future Shares Exercise Period to offer and sell all or any part
of
such Future Shares not purchased by the Stockholders (the “Refused
Future Shares”)
to one
or more other Persons, but only upon terms and conditions in all respects which
are no more favorable to such other Persons or less favorable to the Company
than those set forth in the Proposal and the Second Proposal, as the case may
be; provided,
however,
that
such sale shall be to the same Persons or their Affiliates identified in the
Proposal, if so identified pursuant to Section
5.1.
In the
event that the Company so sells the Refused Future Shares to such other Persons,
the sale to each Stockholder of the Future Shares and the Remaining Future
Shares in respect of which a Notice of Purchase was delivered to the Company
by
such Stockholder shall occur upon the closing of the sale to such other Persons
of Refused Future Shares (which closing shall include full payment to the
Company). If there are no Refused Future Shares, the sale to such Stockholder
of
such Future Shares shall occur within twenty (20) days after the expiration
of
the Future Shares Exercise Period or the Remaining Future Shares Exercise
Period, whichever is later. If such offering or sale of Refused Future Shares
shall be terminated, the Company shall promptly give such Stockholder written
notice of such termination and such Stockholder may, but shall not be required
to, purchase such Future Shares and Remaining Future Shares, in which case
such
purchase shall occur within thirty (30) days after the date of such termination.
In any event, the sale to such Stockholder of such Future Shares and Remaining
Future Shares shall be on the terms specified in the Proposal and the Second
Proposal. Any Refused Future Shares not purchased by such other Persons within
such 90-day period shall remain subject to this Section
5.
5.5 Proportionate
Percentage.
The
term “Proportionate
Percentage”
in
this
Section
5
shall
mean, as to any Stockholder, that percentage figure which expresses the ratio
which (i) the number of Fully Diluted Shares then owned by such Stockholder
bears to (ii) the aggregate number of Fully Diluted Shares held by the
Stockholders.
5.6 No
Further Financing Obligation.
For the
avoidance of doubt, neither Ecolab nor any of Ecolab’s Affiliates are under any
obligation to provide any further financing, whether in the form of loan or
share capital or otherwise, to any Group Member, or to give any guarantee,
security or indemnity in respect of any of the liabilities or obligations of
any
Group Member.
13
6.
|
CERTAIN
TRANSFER RIGHTS AND RESTRICTIONS; RIGHTS OF FIRST
OFFER.
|
No
Stockholder shall sell, pledge, assign, grant a participation interest in,
encumber or otherwise transfer or dispose of any Shares held by such Stockholder
to any other Person, whether directly, indirectly, voluntarily, involuntarily,
by operation of law, pursuant to judicial process (including, without
limitation, divorce decree) or otherwise (collectively, a “Transfer”),
except as permitted by this Section 6.
Any
attempted Transfer of Shares by a Stockholder not permitted by this Section
6
shall be
null and void, and the Company shall not in any way give effect to any such
impermissible Transfer.
6.1 Transfers
of Shares to Affiliate.
A
Stockholder may Transfer any or all of its Shares to an Affiliate of such
Stockholder.
6.2 Sale
or Transfer of Linkwell Shares.
For the
avoidance of doubt, nothing in this Agreement shall prohibit the sale, transfer,
pledge,
assignment, encumbrance or other transfer or disposition by Ecolab or any of
its
Affiliates of any shares held from time to time by Ecolab or any of its
Affiliates in the capital of Linkwell, whether as a result of the exercise
of
the Put Option or otherwise.
6.3 Rights
of First Offer on Transfers by Other Stockholders.
Except
as provided in Sections
4
and
6.1,
no
Stockholder shall Transfer any Shares to any Person, unless such Stockholder
(the “Transferring
Holder”)
first
(i) gives the Company and the other Stockholders not less than thirty (30)
days prior written notice of its intent to Transfer such Shares (the
“Offer
Notice”),
which
notice shall set forth the principal terms of the proposed Transfer, including
the number and type of Shares to be Transferred (the “Offered
Shares”),
the
purchase price therefor, the identity of any proposed transferee or transferees
(if known) and any other material term of the proposed transaction and
(ii) offers to Transfer the Offered Shares, to the other Stockholders
(individually an “Offeree”
and
collectively the “Offerees”),
on
the terms set forth in such Offer Notice (or, in the case of a Transfer all
or a
portion of the consideration for which would consist of property other than
cash, at each Offeree’s option, for cash in an amount equal to the fair market
value of the relevant pro rata portion of the total consideration proposed
to be
received in respect of the Offered Shares). Each Offeree may elect to purchase,
pro rata according to Offerees’ respective holdings of Common Stock, the Offered
Shares at the price and on the terms specified in the Offer Notice by delivering
written notice of such election to the Transferring Holder within fifteen (15)
days after the delivery of the Offer Notice. Failure of an Offeree to respond
to
the Offer Notice within such 15-day period will be deemed to constitute
notification to the Transferring Holder and the Company of such Offeree’s
decision not to purchase any of the Offered Shares. In the event that all of
the
Offered Shares are not purchased by the Offerees as provided above, the Company
will have the right to purchase all of the remaining Offered Shares not
purchased by the Offerees. The Company may exercise such right as to all of
such
remaining Offered Shares by giving notice to the Transferring Holder no later
than fifteen (15) days after the date of the Offer Notice. In the event that
all
of the Offered Shares are to be purchased by the Offerees and/or the Company,
the Transfer of such Offered Shares will be consummated in accordance with
the
Offer Notice and in any event within sixty (60) days after the delivery of
the
Offer Notice. The Transferring Holder
shall
deliver to the Offerees and/or the Company (as the case may be) against payment
of the relevant purchase price, stock certificates, together with stock powers
duly endorsed in blank, or affidavits of lost stock certificates (together
with
indemnification therefor reasonably satisfactory to the Company), if applicable,
evidencing the Offered Shares. The Offered Shares shall be delivered to the
Offerees and/or the Company (as the case may be) free and clear of all Liens,
and such transfer shall be effected using documentation containing
representations only as to the Transferring Holder’s title, authority and
capacity to sell the Offered Shares. If
the
Offerees and/or the Company have not elected to purchase all of the Offered
Shares, the Transferring Holder may, subject to Section
6.3,
within
ninety (90) days after the delivery of the Offer Notice, Transfer any of the
Offered Shares not Transferred to the Offerees and/or the Company to the
transferee or transferees specified in the Offer Notice, if any, or to an
Affiliate thereof, at not less than the price set forth in the Offer Notice,
and
on other terms and conditions no more favorable to the transferees than offered
to the Offerees in the Offer Notice. In the event the Offered Shares are not
sold within the applicable period specified above, such Shares shall again
become subject to the restrictions on Transfer contained in this Section 6.2.
14
6.4 Right
of Co-Sale.
If the
Offerees and/or the Company have not elected to purchase all of the Offered
Shares and the remaining Offered Shares proposed to be transferred by the
Transferring Holder represent more than 10% of the Fully Diluted
Shares,
then
each Offeree who has not exercised its right of first offer under Section
6.2
(a
“Co-Sale
Offeree”)
may
Transfer to the purchaser that number of Shares equal to (a) the total number
of
Shares held by such Offeree multiplied by (b) (i) the total number of Shares
proposed to be sold by the Transferring Holder to the Purchaser divided by
(ii)
the total number of Shares held by the Transferring Holder. Each Co-Sale Offeree
that wishes to participate in the sale must give written notice (a “Co-Sale
Notice”)
to the
Company and the Transferring Holder within fifteen (15) days after its receipt
of the Offer Notice. Any failure to deliver a Co-Sale Notice within such period
will be deemed a waiver of these Co-Sale rights regarding the proposed transfer
to the purchaser. If a Co-Sale Notice is given by any Co-Sale Offeree, such
Co-Sale Offeree’s relevant Shares will be transferred to the purchaser at the
same price per share and on the same terms as the Transferring Holder’s Shares
are transferred to the purchaser. Each
Co-Sale Offeree will deliver to the purchaser the certificates evidencing the
Shares to be sold by such Co-Sale Offeree, duly endorsed, or with stock powers
or other appropriate instruments duly endorsed, for transfer with signature
guaranteed, free and clear of any Liens, against delivery of the applicable
consideration.
The
consummation of the transaction will occur, and all deliveries made, at the
same
time, date and location as the Transferring Holder and the purchaser consummate
the sale of the
Offered Shares not Transferred to the Offerees and/or the Company pursuant
to
Section
6.2.
6.5 Remedies.
Any
attempt by the Transferring Holder to Transfer Shares in violation of this
Section
6
will be
void and the Company agrees it will not effect a Transfer nor will it treat
any
alleged transferee as the holder of shares without the written consent of
Offerees holding a majority of the Fully Diluted Shares held in aggregate by
the
Offerees. In the event that any Transferring Holder should sell any Shares
in
contravention of the right of first offer and/or co-sale rights contained in
this Section
6
or the
Purchaser refuses to acquire shares from any of the Co-Sale Offerees (a
“Prohibited
Transfer”),
each
Offeree, in addition to other remedies available at law, in equity or under
this
Agreement, will have the right to sell to the Transferring Holder the type
and
number of Shares equal to the number of shares each Offeree would have been
entitled to Transfer to the Purchaser under this Section
6
had the
Prohibited Transfer been effected under and in compliance with the terms hereof.
The Transferring Holder will upon tender of the Shares for purchase by an
Offeree pay in cash the price per share paid by the Purchaser to the
Transferring Holder in the Prohibited Transfer. The Transferring Holder will
also reimburse each Offeree for any and all fees and expenses, including legal
fees and expenses, incurred pursuant to the exercise or the attempted exercise
of the Offeree’s under this Section 6 and enforcement of the Offeree’s rights
hereunder.
15
7.
|
“TAKE
ALONG” RIGHTS.
|
Subject
to Sections 4.2,
6.2
and
6.3,
each
Stockholder (a “Participating
Seller”)
hereby
agrees, if requested at any time after the fourth anniversary of Closing by
other Stockholders holding at least two-thirds of the Fully Diluted Shares
then
held by all Stockholders (“the Majority
Holders”),
to
Transfer for value (for purposes of this Section 7,
a
“Sale”)
a
specified percentage (for purposes of this Section 7,
the
“Sale
Percentage”)
of the
Shares then owned by such Participating Seller to an Independent Third Party
(for purposes of this Section 7,
the
“Proposed
Buyer”)
in the
manner and on the terms set forth in this Section
7
in
connection with the Sale by one or more Stockholders (collectively, the
“Proposed
Sellers”)
of the
Sale Percentage of the total number of Fully Diluted Shares held by the Majority
Holders to the Proposed Buyer; provided,
however,
that no
Participating Seller shall be obligated to sell Shares pursuant to this
Section 7
unless
at least 100% of all Fully Diluted Shares are Transferred in the
Sale.
7.1 Procedure.
If the
Majority Holders elect to exercise their rights under this Section
7,
a
notice (the “Take
Along Notice”)
shall
be furnished by the Proposed Sellers to each other holder of Shares. The Take
Along Notice shall set forth the principal terms of the proposed Sale, including
the number of Shares to be purchased from the Proposed Sellers, the Sale
Percentage, the purchase price and the name and address of the Proposed Buyer.
If the Majority Holders consummate the Sale referred to in the Take Along
Notice, each Participating Seller shall be bound and obligated to Sell the
Sale
Percentage of the Shares in the Sale on the same terms and conditions with
respect to each Share sold, as the Proposed Sellers shall sell each Share in
the
Sale. If at the end of 180 days following the date of the effectiveness of
the
Take Along Notice the Proposed Sellers have not completed the Sale, each
Participating Seller shall be released from his obligation under the Take Along
Notice, the Take Along Notice shall be null and void, and it shall be necessary
to comply anew with the provisions of this Section
7,
unless
the failure to complete such Sale resulted from any failure by any Participating
Seller to comply in any material respect with the provisions of this
Section 7.
7.2 Further
Assurances.
Each
Participating Seller shall, whether in his capacity as a Participating Seller,
stockholder, officer or director of the Company, or otherwise, take or cause
to
be taken all such actions as may be reasonably requested in order expeditiously
to consummate a Sale pursuant to Section
7.1.
Each
such Participating Seller agrees (i) to vote all Shares with respect to which
such Participating Seller holds power to vote in favor of any proposal to
stockholders in connection with the Sale which is approved by the holders of
a
majority of the outstanding shares of Common Stock entitled to vote with respect
to such matter and (ii) to execute and deliver such agreements as may be
necessary for the Participating Seller to be subject to the same terms and
conditions with respect to the Sale as apply to the Proposed Sellers, including
without limitation, an agreement by such Participating Seller to be subject
to
such purchase price escrow or adjustment provisions as may apply to Stockholders
generally and to be liable in respect of any individual representations,
warranties and indemnities to be given by selling Stockholders in the Sale
regarding such matters as legal capacity or due organization of such
Participating Seller, authority to participate in the Sale and ownership (free
and clear of liens) of Shares to be sold by such Participating Seller;
provided,
however,
that
the aggregate amount of such liability shall not exceed either such
Participating Seller’s pro rata portion of any such liability, in accordance
with such Participating Seller’s portion of the total number of Shares included
in the Sale or the net proceeds received by such Participating Seller from
the
Sale, whichever is less.
16
7.3 Closing.
The
closing of a Sale pursuant to Section
7.1
shall
take place at such time and place as the Majority Holders shall specify by
notice to each Participating Seller. At the closing of any Sale under this
Section
7,
each
Participating Seller shall deliver the certificates evidencing the Shares to
be
sold by such Participating Seller, duly endorsed, or with stock powers or other
appropriate instruments duly endorsed, for transfer with signature guaranteed,
free and clear of any Liens, against delivery of the applicable
consideration.
8.
|
RIGHT
OF FIRST OFFER ON A BUSINESS SALE
|
The
Company shall not, and shall cause its Subsidiaries not to, and
Linkwell agrees to take such steps as are necessary to ensure that neither
the
Company nor any Subsidiary does, effect
any sale, lease, assignment, transfer or other conveyance (other than the grant
of a mortgage or security interest in connection with permitted indebtedness
for
borrowed money) of the issued share capital of, or of all or substantially
all,
of the properties or assets of, the Company or any of its Subsidiaries, whether
by consolidation, merger or otherwise (in each case, a “Business
Sale”),
unless
the Company or the relevant Subsidiary (the “Business
Seller”)
first
(i) gives Ecolab not less than sixty (60) days prior written notice of its
intent to effect the Business Sale (the “Business
Sale Notice”),
which
notice shall set forth the principal terms of the proposed Business Sale,
including the purchase price therefor, the identity of any proposed transferee
or transferees (if known) and any other material term of the proposed
transaction and (ii) offers to sell to Ecolab the relevant shares or assets
proposed to form part of the Business Sale (the “Relevant
Assets”),
on
the terms set forth in the Business Sale Notice (or, in the case of a proposed
sale all or a portion of the consideration for which would consist of property
other than cash, at Ecolab’s option, for cash in an amount equal to the fair
market value of such non-cash consideration). Ecolab may elect to purchase,
or
to cause one of its Affiliates to purchase, the Relevant Assets at the price
and
on the terms specified in the Business Sale Notice by delivering written notice
of such election to the Company within thirty (30) days after the delivery
of
the Business Sale Notice. Failure of Ecolab to respond to the Business Sale
Notice within such 30-day period will be deemed to constitute notification
of
Ecolab’s decision not to purchase, or to cause one of its Affiliates to
purchase, the Relevant Assets. In the event that Ecolab elects to purchase,
or
to cause one of its Affiliates to purchase, the Relevant Assets, the purchase
and sale thereof shall be effected using customary documentation in a form
reasonably satisfactory to Ecolab and shall be consummated in accordance with
the Business Sale Notice and in any event within ninety (90) days after the
delivery of the Business Sale Notice (which 90-day period shall be extended
by
the number of days which elapse between the filing for and receipt of an
necessary regulatory approvals prior to consummation). The Business
Seller
shall
deliver to Ecolab or its designated Affiliate, against payment of the relevant
purchase price, title to and possession of the Relevant Assets (and if the
Relevant Assets are equity securities, stock certificates, together with stock
powers duly endorsed in blank), free and clear of all Liens. If
Ecolab
has not elected to purchase, or to cause one of its Affiliates to purchase,
the
Relevant Assets, the Business Seller may, within one hundred and twenty (120)
days after the delivery of the Business Sale Notice, sell all of the Relevant
Assets to the transferee or transferees specified in the Business Sale Notice,
if any, or to an Affiliate thereof, at not less than the price set forth in
the
Business Sale Notice, and on other terms and conditions no more favorable to
the
transferees than offered to Ecolab in the Business Sale Notice. In the event
the
Relevant Assets are not sold to a third Person within the 120-day period
specified above, such Relevant Assets shall again become subject to the
restrictions on sale or transfer contained in this Section 8.
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9.
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REMEDIES.
|
The
Company and the Stockholders shall have all remedies available at law, in equity
or otherwise in the event of any breach or violation of this Agreement or any
default hereunder by the Company or any holder of Shares. The parties
acknowledge and agree that in the event of any breach of this Agreement, in
addition to any other remedies which may be available, each of the parties
hereto shall be entitled to specific performance of the obligations of the
other
parties hereto and, in addition, to such other equitable remedies (including,
without limitation, preliminary or temporary relief) as may be appropriate
in
the circumstances.
10.
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NON-COMPETE
COVENANT.
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During
the period commencing on the Closing and ending on the termination of this
Agreement in accordance with its terms, Linkwell will not, and will cause its
Affiliates not to:
(a) anywhere
in the world, directly or indirectly, whether as a principal, agent, employee
or
otherwise, or alone or in association with any Person, own, share in the
earnings of, invest in the stock, bonds or other securities of, manage, operate,
control, participate in the ownership, management, operation, or control of,
finance (whether as a lender, investor or otherwise), guaranty the obligations
of, be employed by, associated with, or otherwise aid or assist in any manner
any Person that is engaged in or competitive with the business of any Group
Member (including without limitation the marketing, sale, manufacture and
distribution of C&S products to acute care customers in the People’s
Republic of China) (a “Competing
Activity”).
Linkwell will not be in violation of this Section
10(a)
solely
by reason of investing in stock, bonds or other securities of any Person engaged
in a Competing Activity (but without otherwise participating in such business),
if (i)
such
stock, bonds or other securities are listed on any national securities exchange
or have been registered under Section 12(g) of the Securities Exchange Act
of
1934 and (ii)
such
investment does not exceed, in the case of any class of the capital stock of
any
one issuer, 1% of the issued and outstanding shares of such capital stock,
or,
in the case of bonds or other securities, 1% of the aggregate principal amount
thereof issued and outstanding;
18
(b) except
if
the Parties expressly agree in writing, directly
or indirectly (i) solicit the business of any Person who is a customer of any
Group Member, (ii) cause, induce or attempt to cause or induce any customer,
supplier, independent contractor, licensee, licensor, or franchisee or other
business relation of any Group Member to cease or reduce the extent of its
business relationship with such Group Member or to deal with any competitor
of
such Group Member or (iii) in any way interfere with the relationship between
any Group Member and any of its customers, suppliers, licensees, licensors,
franchisees or other business relations.
11.
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LEGENDS.
|
Each
certificate representing Shares shall have the following legend endorsed
conspicuously thereupon:
“The
securities represented by this certificate were issued in a private placement,
without registration under the Securities Act of 1933, as amended (the “Act”),
and may not be sold, assigned, pledged or otherwise transferred in the absence
of an effective registration under the Act covering the transfer or an opinion
of counsel, satisfactory to the issuer, that registration under the Act is
not
required. The shares of stock represented by this certificate are subject to
restrictions on voting and transfer and requirements of sale set forth in the
Stockholders Agreement dated as of __, 2007, as amended and in effect from
time
to time. The Company will furnish a copy of such agreement to the holder of
this
certificate without charge upon written request. By accepting any interest
in
the shares of stock, the person accepting the interest agrees to and will be
bound by all the provisions of such Stockholders Agreement.”
The
Company agrees that it will cause the certificates evidencing the Shares issued
after the date hereof to bear the legend required by this Section
11.
12.
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TERMINATION.
|
This
Agreement shall terminate as to all parties upon the execution of a written
instrument or termination by the Company and all of the Stockholders at that
time. In addition, this Agreement shall terminate with respect to a Stockholder
when such Stockholder no longer owns any Shares.
19
13.
|
MISCELLANEOUS.
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13.1 Additional
Parties.
Notwithstanding anything to the contrary in this Agreement, no issuance or
Transfer of any Shares to any Person who is not a party to this Agreement shall
be effective until such Person has duly executed and delivered to the Company
a
written acknowledgement and agreement in form and substance reasonably
satisfactory to the Company that the Shares to be issued or transferred to
such
Person are subject to all the provisions of this Agreement and that such
Affiliate is bound hereby and a party hereto to the same extent as, and is
for
purposes of this Agreement a, Stockholder. The Company shall not issue, and
shall not permit the transfer of, any Shares on its books or issue a new
certificate representing any such Shares unless and until such Person shall
have
complied with the terms of this Section
13.1.
13.2 Authority;
Effect.
Each
party hereto represents and warrants to and agrees with each other party that
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized on behalf of such
party and do not violate any agreement or other instrument applicable to such
party or by which its assets are bound. This Agreement does not, and shall
not
be construed to, give rise to the creation of a partnership among any of the
parties hereto, or to constitute any of such parties members of a joint venture
or other association.
13.3 Notices.
All
notices and other communications under this Agreement must be in writing and
are
deemed duly delivered when (a) delivered if delivered personally or by
nationally recognized overnight courier service (costs prepaid), (b) sent by
facsimile with confirmation of transmission by the transmitting equipment (or,
the first business day following such transmission if the date of transmission
is not a business day) or (c) received or rejected by the addressee, if sent
by
certified mail, return receipt requested; in each case to the following
addresses or facsimile numbers and marked to the attention of the individual
(by
name or title) designated below (or to such other address, facsimile number
or
individual as a party may designate by notice to the other
parties):
If
to the
Company:
000
Xxxxx
Xxxxxx Xxxx
Xxxxxxx
Xxxxxxxx
Xxxxxxx,
Xxxxx 000000
Fax:
(0000) 00000000
Attn:
Secretary
20
If
to
Linkwell:
Linkwell
Corporation
000
Xxxxx
Xxxxxx Xxxx
Xxxxxxx
Xxxxxxxx
Xxxxxxx,
Xxxxx 000000
Fax:
(0000) 00000000
Attn:
Secretary
with
a
copy (which will not constitute notice) to:
Xxxxx
& Xxxxxxxx LLP
000
Xxxxxx Xx.
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxx X. Xxxxx
If
to
Ecolab:
Ecolab
Inc.,
Ecolab
Center,
000
Xxxxxxx Xxxxxx Xxxxx,
Xx.
Xxxx,
XX 00000-0000
Fax:
(000) 000-0000
Attention:
General Counsel
with
a
copy (which will not constitute notice) to:
Xxxxx
& XxXxxxxx LLP
Xxx
Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx, 00000
Fax:
000
000 0000
Attention:
Xxxxxx X. Xxxx
13.4 Amendment.
This
Agreement may not be amended, supplemented or otherwise modified except in
a
written document signed by each party to be bound by the amendment and that
identifies itself as an amendment to this Agreement.
13.5 Waivers
and Remedies.
The
parties may (a) extend the time for performance of any of the obligations or
other acts of any other party to this Agreement, (b) waive any inaccuracies
in
the representations and warranties of any other party to this Agreement
contained in this Agreement or in any certificate, instrument or document
delivered pursuant to this Agreement or (c) waive compliance with any of the
covenants, agreements or conditions for the benefit of such party contained
in
this Agreement. Any such extension or waiver by any party to this Agreement
will
be valid only if set forth in a written document signed on behalf of the party
or parties against whom the waiver or extension is to be effective. No extension
or waiver will apply to any time for performance, inaccuracy in any
representation or warranty, or noncompliance with any covenant, agreement or
condition, as the case may be, other than that which is specified in the written
extension or waiver. No failure or delay by any party in exercising any right
or
remedy under this Agreement or any of the documents delivered pursuant to this
Agreement, and no course of dealing between the parties, operates as a waiver
of
such right or remedy, and no single or partial exercise of any such right or
remedy precludes any other or further exercise of such right or remedy or the
exercise of any other right or remedy. Any enumeration of a party’s rights and
remedies in this Agreement is not intended to be exclusive, and a party’s rights
and remedies are intended to be cumulative to the extent permitted by law and
include any rights and remedies authorized in law or in equity.
21
13.6 Entire
Agreement.
This
Agreement (together with the Stock Purchase Agreement and any documents and
instruments referred to therein that are to be delivered at the Closing)
constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements or representations by or among the parties, or any
of
them, written or oral, with respect to the subject matter of this
Agreement.
13.7 Assignment
and Successors.
This
Agreement binds and benefits the parties and their respective successors and
permitted assigns. Nothing expressed or referred to in this Agreement will
be
construed to give any Person, other than the parties to this Agreement, any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement except such rights as may inure
to
a successor or permitted assignee under this Section.
The
rights and obligations of the Stockholders hereunder are not assignable without
the prior written consent of the other Stockholders. The rights and obligations
of the Company hereunder may not be assigned under any circumstances. Any
purported assignment in contravention of the foregoing shall be void and of
no
effect.
13.8 Severability.
If any
provision of this Agreement is held invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement are not affected or impaired in any way and the parties agree to
negotiate in good faith to replace such invalid, illegal and unenforceable
provision with a valid, legal and enforceable provision that achieves, to the
greatest lawful extent under this Agreement, the economic, business and other
purposes of such invalid, illegal or unenforceable provision.
13.9 Interpretation.
The
language used in this Agreement is the language chosen by the parties to express
their mutual intent, and no provision of this Agreement will be interpreted
for
or against any party because that party or its attorney drafted the
provision.
13.10 Governing
Law.
The
internal laws of the State of Delaware (without giving effect to any choice
or
conflict of law provision or rule that would cause the application of laws
of
any other jurisdiction) govern all matters arising out of or relating to this
Agreement and all of the transactions it contemplates, including its validity,
interpretation, construction, performance and enforcement and any disputes
or
controversies arising therefrom.
22
13.11 Specific
Performance.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. The parties accordingly agree that,
in addition to any other remedy to which they are entitled at law or in equity,
the parties are entitled to injunctive relief to prevent breaches of this
Agreement and otherwise to enforce specifically the provisions of this
Agreement. Each party expressly waives any requirement that any other party
obtain any bond or provide any indemnity in connection with any action seeking
injunctive relief or specific enforcement of the provisions of this
Agreement.
13.12 Jurisdiction
and Service of Process.
Any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated by this Agreement must be brought in the courts of
the
State of Minnesota, County of Xxxxxx, or, if it has or can acquire jurisdiction,
in the United States District Court for the District of Minnesota. Each of
the
parties knowingly, voluntarily and irrevocably submits to the exclusive
jurisdiction of each such court in any such action or proceeding and waives
any
objection it may now or hereafter have to venue or to convenience of forum.
Any
party to this Agreement may make service on another party by sending or
delivering a copy of the process to the party to be served at the address and
in
the manner provided for the giving of notices in Section
13.3.
Nothing
in this Section
13.12,
however, affects the right of any party to serve legal process in any other
manner permitted by law.
13.13 Waiver
of Jury Trial.
Each
of the parties knowingly, voluntarily and irrevocably waives, to the fullest
extent permitted by law, all right to trial by jury in any action, proceeding
or
counterclaim (whether based on contract, tort or otherwise) arising out of
or
relating to this Agreement or the transactions contemplated by this Agreement
or
the actions of any party to this Agreement in negotiation, administration,
performance or enforcement of this Agreement.
13.14 Counterparts.
The
parties may execute this Agreement in multiple counterparts, each of which
constitutes an original as against the party that signed it, and all of which
together constitute one agreement. This Agreement is effective upon delivery
of
one executed counterpart from each party to the other parties. The signatures
of
all parties need not appear on the same counterpart. The delivery of signed
counterparts by facsimile or email transmission that includes a copy of the
sending party’s signature is as effective as signing and delivering the
counterpart in person.
[The
remainder of this page has been intentionally left blank.]
23
The
parties have executed and delivered this Agreement as of the date indicated
in
the first sentence of this Agreement.
Ecolab
Inc.
By:
Xxxxxxx
X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
President, International Sector
|
|
Linkwell
Tech Group, Inc.
By:
/s/ Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
Chairman and CEO
|
|
Linkwell
Corporation
By:
/s/ Xxxxxxx
Xxxx
Name:
Xxxxxxx Xxxx
Title:
Chairman and CEO
|
Signature
Page to Stockholders Agreement
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