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EXHIBIT 1
COSALE AND VOTING AGREEMENT
This CoSale and Voting Agreement (this "Agreement") is made as of
March __, 2000 among XxxxxxXxxxxx.xxx, Inc., a Delaware corporation (the
"Company"), Essex Woodlands Health Ventures Fund IV, L.P., an Illinois
partnership ("Essex"), PaineWebber, as custodian for Xxxxxxx X. Punk, X.X.X.
("PW"), Punk, Ziegal & Company Investors, L.L.C. ("Punk"), and Chancellor V, L.
P. ("Invesco" and with Punk, PW and Essex collectively the "Investors"), Xxxxx
Xxxxx ("Xxxxx"), Xxxx Xxxxx ("Xxxxx"), Xxxxx Xxxxx ("X. Xxxxx") and Xxxxxxx
Xxxxxxx ("Xxxxxxx" and with Xxxxx, Xxxxx and X. Xxxxx collectively, the
"Founders") (the Investors and the Founders are sometimes referred to herein as
the "Shareholders").
RECITALS
A. The Founders own certain outstanding shares of Common Stock, par
value $0.001 per share ("Common Stock"), of the Company.
B. The Investors have purchased shares of Common Stock and warrants
(the "Warrants") to purchase Common Stock (the "Equity Securities") pursuant to
a Amended and Restated Stock Purchase Agreement dated March 3, 2000.
C. In order to induce the Investors to purchase the Common Stock, the
Shareholders have agreed to provide certain co-sale and voting rights with
respect to their holdings of the Company's Common Stock.
NOW, THEREFORE, in consideration of the mutual promises and other
consideration hereinafter set forth, the adequacy and receipt of which is hereby
acknowledged by the parties hereto, the parties agree as follows:
1. Right of Co-Sale.
1.1. The Right. If at any time any Founder (a "Selling Founder")
proposes to sell shares of Common Stock pursuant to a bona fide offer from a
party or parties other than other Founders or any of the Investors and such sale
is a private transaction, then the Selling Founder shall provide notice of such
proposed sale to the Investors, such notice containing (i) notice that the
Selling Founder intends on selling his shares, (ii) the material terms and
conditions of such sale, (iii) any written materials or agreements setting forth
the agreement between the Selling Founder and the purchaser, and (iv) each
Investor's "pro rata portion" (as defined below) in the sale (assuming all
Investors elect to be Co-Sellers). The Investors shall be entitled to sell their
pro rata portion on the same terms and conditions as the Selling Founder. If any
of the Investors notifies the Selling Founder in writing within 10 days after
receipt of the notification of such proposed sale from the Selling Founder, such
Investor or Investors (the "Co-Seller") shall have the right to sell up to its
pro rata portion of Common Stock which the Selling Founder proposes to sell to
such third party; whereupon the Selling Founder shall assign so much of his
interest in the agreement of sale as is proportionate to each Co-Seller's pro
rata portion in the sale of Common Stock (or such lesser amount if so elected by
such Co-Seller) and each Co-Seller shall assume its respective part of the
obligations of the Selling Founder under such agreement, provided, however, no
Co-Seller shall be required to give any covenants, representations or
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warranties other than with respect to title to its Equity Securities. For the
purposes of this Section 1.1 the "pro rata portion" which each Co-Seller shall
be entitled to sell shall be an amount of Equity Securities (assuming the
issuance of all shares of Common Stock, issuable upon exercise of the Warrants)
equal to a fraction of the total amount of Common Stock proposed to be sold, the
numerator of which is the aggregate of all Equity Securities (assuming the
conversion of all such securities to Common Stock) which are then held by such
Co-Seller and the denominator is the aggregate of all Common Stock then held by
the Selling Founder and all Equity Securities (assuming the conversion of all
such securities to Common Stock) then held by all Co-Sellers who have elected to
exercise their co-sale rights. Each of the Investors shall notify the Selling
Founder whether it elects to sell an amount equal to or less than its pro rata
portion of the Common Stock so offered
1.2. Failure to Notify. If within 10 days after the Selling Founder
gives the aforesaid notice to Investors, none of the Investors notifies the
Selling Founder that it desires to sell any or all of its pro rata portion of
the Common Stock described in such notice at the price and on the terms and
conditions set forth therein, then the Selling Founder may sell during the
120-day period immediately following the expiration of such 10-day period such
Common Stock as to which the Investors did not indicate a desire to sell to
other persons at the same price and upon the same terms and conditions as those
set forth in the notice. In the event the Selling Founder has not sold the
Common Stock on the same terms and conditions as those set forth in the notice
within such 120-day period, the Selling Founder shall not thereafter sell any
Common Stock without first notifying the Investors in the manner provided above.
1.3. Limitations to Right of Co-Sale. Without regard and not subject to
the provisions of this Agreement:
(a) a Founder may sell or otherwise assign for consideration or
gift Common Stock to any or all of his ancestors, descendants, spouse,
employees of the Company or to a custodian, trustee (including a
trustee of a voting trust), executor, or other fiduciary for the
account of or a trust for the benefit of his ancestors, descendants or
spouse, provided that each such transferee or assignee, prior to the
completion of the sale, transfer, gift or assignment, shall have
executed documents assuming the obligations of a Founder under this
Agreement with respect to the transferred securities;
(b) a Founder may sell shares of Common Stock, the proceeds of
which are used to exercise stock options issued under the Company's
stock option plan;
(c) a Founder may pledge and/or sell shares of Common Stock to the
Company; and
(d) a Founder may sell shares of Common Stock in the open market
in amounts not to exceed the limitations permitted under Rule 144.
2. Voting.
2.1. Designees to Board of Directors. The Shareholders agree to vote
all securities of the Company over which they have voting control and to take
all other necessary or desirable actions
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within their control (whether as shareholders, directors or officers of the
Company or otherwise, and including without limitation attendance at meetings in
person or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), and the Company shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board and shareholder meetings), so that:
(a) The Company shall have a Board of Directors comprising of no
more than eight (8) members;
(b) At the option of Essex, one designee of Essex and, at the
option of Invesco, one designee of Invesco shall be elected to the
Board of Directors; and
(c) In the event that a director designated by Essex or Invesco
for any reason ceases to serve as a member of the Board of Directors
during his or her term of office, at the option of Essex or Invesco, as
applicable, the resulting vacancy on the Board of Directors shall be
filled by a designee of Essex or Invesco, as applicable.
3. Committees.
3.1. Audit Committee. At the option of Essex and Invesco, as
applicable, the directors designated by Essex and Invesco shall serve as members
of the Audit Committee of the Company.
3.2. Compensation Committee. At the option of Essex and Invesco, as
applicable, the directors designated by Essex and Invesco shall serve as members
of the Compensation Committee.
4. Miscellaneous.
4.1. Legends. All instruments evidencing Equity Securities held by
Shareholders shall be legended, describing the obligations of Shareholders under
this Agreement.
4.2. Effectiveness and Termination. This Agreement, and the respective
rights and obligations of the Shareholders hereto, shall become effective on the
date hereof, and shall terminate:
(a) with respect to Section 1 above, upon the earlier of: (i) when
the Investors cease to own in the aggregate five percent (5%) or more
of the issued and outstanding shares of Common Stock of the Company,
and (ii) on the third anniversary of the date hereof;
(b) with respect to Sections 2 and 3 above and the obligation to
elect Essex to the Board of Directors and the Audit and Compensation
Committee, upon the later of (i) the fifth anniversary of the date
hereof, and (ii) the date on which Essex fails to own in the aggregate
more than 5% of the issued and outstanding Common Stock;
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(c) with respect to Sections 2 and 3 above and the obligation to
elect Invesco to the Board of Directors and the Audit and Compensation
Committee, upon the later of (i) the fifth anniversary of the date
hereof, and (ii) the date on which Invesco fails to own in the
aggregate more than 5% of the issued and outstanding Common Stock; and
(d) notwithstanding anything contained herein to the contrary,
this Agreement will terminate upon a Change of Control Transaction. A
"Change of Control Transaction" shall mean (i) a transaction in which
all of the shares of Common Stock are exchanged for cash or other
securities of a third party and such transaction results in the holders
of Common Stock holding less than fifty percent (50%) of the voting
power of the surviving entity, or (ii) the sale or transfer of all or
substantially all of the Company's assets.
4.3. Notices. All communications (other than those sent to shareholders
generally) provided for hereunder shall be in writing and delivered or mailed by
registered or certified mail, or by reputable overnight delivery, to the notice
addresses set forth in that Stock Purchase Agreement or, with respect to the
Founders, to the then current address set forth on the books and records of the
Company.
4.4. Successors and Assigns. This Agreement shall be binding upon the
Company, the Shareholders and their successors and assigns and shall inure to
the Investors' benefit and to the benefit of the Investors' respective
successors and assigns.
4.5. Complete Agreement; Amendments. This Agreement constitutes the
full and complete agreement of the parties hereto with respect to the subject
matter hereof. This Agreement supersedes and takes the place of all prior
agreements relating to its subject matter. No amendment, modification or
termination of any provisions of this Agreement shall be valid unless in writing
and signed by the Company and each of the Shareholders.
4.6. Severability. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
4.7. Specific Performance. In addition to any and all other remedies
that may be available at law, in the event of any breach of this Agreement, each
party hereto shall be entitled to specific performance of the agreements and
obligations of the Company and the other parties hereto hereunder and to such
other injunctive or other equitable relief as may be granted by a court of
competent jurisdiction.
4.8. Governing Law. This Agreement and securities issued and sold
hereunder shall be governed by and construed in accordance with the internal
laws of the State of Delaware.
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4.9. Captions. The descriptive headings of the various paragraphs or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
4.10. Number and Gender. Where required by the context, singular words
or pronouns shall be construed as plural, plural words and pronouns shall be
construed as singular and the gender of personal pronouns shall be construed as
either masculine, feminine or neuter.
4.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one Agreement binding on all the
parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY:
XXXXXXXXXXXX.XXX, INC.
By:
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Name:
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Its:
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FOUNDERS:
/s/ XXXXX XXXXX
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/s/ XXXXXXX XXXXXXX
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/s/ XXXXX XXXXX
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/s/ XXXX XXXXX
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INVESTORS:
ESSEX WOODLANDS HEALTH VENTURES
FUND, IV. L.P.
By its general partner:
ESSEX WOODLANDS HEALTH VENTURES,
IV. L.L.C.
By:
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Name:
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Managing Director
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