EXHIBIT 2
FORM OF STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, dated as of June 21, 2002 (this
"Agreement"), among the undersigned stockholders (each, a "Stockholder" and
collectively, the "Stockholders") of Aros Corporation, a Delaware corporation
("Parent"). Capitalized terms used herein without definition shall have the
meanings assigned to them in the Merger Agreement (defined below).
WHEREAS, Parent, Aros Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Acquisition Sub"), and ReGen Biologics,
Inc., a Delaware corporation (the "Company") have entered into an Agreement
and Plan of Merger, dated as of June 7, 2002 (the "Merger Agreement"),
pursuant to which, effective as of the date hereof, Acquisition Sub has merged
with and into the Company (the "Merger"), and each outstanding share of ReGen
Common Stock and ReGen Preferred Stock has been converted into the right to
receive shares of Aros Common Stock, Aros Series A Stock and/or Aros Series B
Stock on the terms and subject to the conditions set forth in the Merger
Agreement;
WHEREAS, as of the date hereof, each Stockholder is the owner of
shares of Aros Common Stock, Aros Series A Stock and/or Aros Series B Stock
(with respect to each Stockholder, such Stockholder's "Existing Parent Shares"
and, together with any shares of capital stock of the Parent acquired after
the date hereof, whether upon the exercise of warrants, options, conversion of
convertible securities or otherwise, such Stockholder's "Parent Shares");
WHEREAS, as an inducement and a condition to effecting the Merger
under the Merger Agreement, the Stockholders have agreed to enter into this
Agreement;
WHEREAS, among other things, the Stockholders desire to set forth
their agreement with respect to the voting of their respective Parent Shares
in connection with the constitution of and election of members to the Board of
Directors of Parent upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. VOTING.
1.1. Agreement to Vote Parent Shares. Upon consummation of the
Merger, each Stockholder hereby agrees, severally and not jointly, that such
Stockholder shall, and shall cause the holder of record on any applicable
record date to, from time to time, at any meeting (whether annual or special
and whether or not an adjourned or postponed meeting) of stockholders of the
Parent, however called, in accordance with Parent's certificate of
incorporation, bylaws and applicable law:
(a) if a meeting is held, appear at such meeting or
otherwise cause the Parent Shares to be counted as
present thereat for purposes of establishing a
quorum; and
(b) vote or consent (or cause to be voted or
consented), in person or by proxy, all Parent
Shares, and any other voting securities of Parent
(whether acquired heretofore or hereafter) that are
beneficially owned or held of record by such
Stockholder or as to which such Stockholder has,
directly or indirectly, the right to vote or direct
the voting, or take such other necessary or
desirable action within such Stockholder's control
in favor of the following:
(1) The authorized number of directors on
Parent's Board of Directors shall be
maintained at seven (7) members;
(2) The following persons shall be elected to
Parent's Board of Directors:
(i) The then current Chief Executive
Officer of Parent, who shall
initially be Xxxxxx X. Xxxxxx,
Xx.;
(ii) Two (2) designees of Sanderling
Ventures, one of whom shall
initially be Xx. Xxxxxx X.
XxXxxx;
(iii) One (1) designee of Centerpulse
USA Holding Co., who shall
initially be Xxxxxxx Frtischi;
(iv) One (1) designee of a majority of
the members of the Board of
Directors of Parent immediately
prior to the Effective Time, who
shall initially be Xxxx X.
Xxxxxxx; and
(v) Two (2) designees of a majority
of the foregoing members of the
Board of Directors of Parent, one
of whom shall initially be Xx.
Xxxxxxx Xxxxxxxx;
(3) Any Director designated in accordance
herewith shall be removed upon the request
of the party or group who designated such
Director and, upon such removal, or upon
any resignation of any such Director, an
individual selected by the party entitled
to designate such Director hereunder shall
be elected to Parent's Board of Directors;
provided, however, that this provision
shall not apply with respect to the
director designated pursuant to clause
(iv) above; when such director's initial
term concludes or if a replacement is
earlier required, then such director shall
be nominated and elected in accordance
with Parent's certificate of
incorporation, bylaws and applicable law.
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(4) An amendment to Parent's certificate of
incorporation to increase the number of
shares of Parent's authorized common stock
by an amount sufficient for issuance upon
conversion or exercise of the Aros Series
A Stock, the Aros Series B Stock and the
ReGen Options and Warrants assumed by
Parent;
(5) The amendment of Parent's bylaws as
described in Exhibit A hereto and as may
otherwise be required to provide for the
governance of Parent as contemplated by
this Agreement and the Merger Agreement;
(6) A reverse stock split;
(7) An increase in the number, as of the date
hereof, of Parent Shares available for
issuance pursuant to options issued under
the Parent's Employee Stock Option Plan by
3.0 million Parent Shares; and
(8) A change in the name of Parent and an
accompanying ticker symbol change, both as
determined by the Board of Directors of
Parent subsequent to the Effective Time.
(c) vote or consent (or cause to be voted or
consented), in person or by proxy, all Parent
Shares, and any other voting securities of Parent
(whether acquired heretofore or hereafter) that are
beneficially owned or held of record by such
Stockholder or as to which such Stockholder has,
directly or indirectly, the right to vote or direct
the voting, (i) against any amendment or change to
the certificate of incorporation or bylaws of
Parent providing for the election of less than
seven (7) directors, or any other amendment or
change to the certificate of incorporation or
bylaws inconsistent with the terms of this
Agreement or (ii) in favor of any amendment or
change to the certificate of incorporation or
bylaws necessary to be made to render such
certificate of incorporation or bylaws consistent
with the terms of this Agreement.
1.2. Failure to Designate. If any party fails to designate a
representative to fill a directorship pursuant to the terms of Section 1.1,
the election of a person to such directorship shall be accomplished in
accordance with Parent's certificate of incorporation, bylaws and applicable
law.
1.3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Parent any direct or indirect ownership or
incidence of ownership of or with respect to any Parent Shares now owned or
hereafter issued to the Stockholders pursuant to the Merger or otherwise. All
rights, ownership and economic benefits of and relating to the Parent Shares
shall remain vested in and belong to the Stockholders, and Parent shall have
no authority to direct the Stockholders in the voting of any of the Parent
Shares, except as otherwise provided herein, or in the performance of the
Stockholders' duties or responsibilities as stockholders of the Parent.
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1.4. No Inconsistent Agreements. Each Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and the
Merger Agreement, the Stockholder (a) has not entered, and shall not enter at
any time while this Agreement remains in effect, into any voting agreement or
voting trust with respect to the Parent Shares and (b) has not granted, and
shall not grant at any time while this Agreement remains in effect, a proxy or
power of attorney with respect to the Parent Shares, in case of either (a) or
(b), which is inconsistent with such Stockholder's obligations pursuant to
this Agreement.
1.5. Legend.
(a) Concurrently with the execution of this Agreement,
there shall be imprinted or otherwise placed, on
certificates representing the Parent Shares, the
following restrictive legend (the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT WHICH
PLACES CERTAIN RESTRICTIONS ON THE VOTING OF THE SHARES
REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN
SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT.
A COPY OF SUCH STOCKHOLDERS' AGREEMENT WILL BE FURNISHED TO
THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS."
(b) Parent agrees that, during the term of this
Agreement, it will not remove, and will not permit
to be removed (upon registration of transfer,
reissuance of otherwise), the Legend from any such
certificate and will place or cause to be placed
the Legend on any new certificate issued to
represent Parent Shares theretofore represented by
a certificate carrying the Legend.
2. REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER. Each Stockholder
hereby, severally and not jointly, represents and warrants to other
Stockholders as follows:
2.1. Authorization; Validity of Agreement; Necessary Action. Such
Stockholder has full power and authority, or legal capacity in the case of an
individual stockholder, to execute and deliver this Agreement, to perform such
Stockholder's obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by such
Stockholder of this Agreement and the consummation by such Stockholder of the
transactions contemplated hereby have been duly and validly authorized by such
Stockholder and no other actions or proceedings on the part of such
Stockholder are necessary to authorize the execution and delivery by such
Stockholder of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
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such Stockholder, and, assuming this Agreement constitutes a valid and binding
obligation of Parent, constitutes a valid and binding obligation of such
Stockholder, enforceable in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally.
2.2. Consents and Approvals; No Violations. None of the
execution, delivery or performance of this Agreement by such Stockholder nor
the consummation of the transactions contemplated hereby nor compliance with
any of the provisions hereof by such Stockholder will (i) require any filing
with, or approval of, any Governmental Entity, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, amendment, cancellation
or acceleration) under, or result in the creation or imposition of any lien
upon any of the assets or properties of such Stockholder under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract,
agreement, judgment, order, notice, decree, statute, law or other instrument
or obligation to which such Stockholder is a party or by which such
Stockholder or any of such Stockholder's properties or assets may be bound or
(iii) violate any order or law applicable to such Stockholder or any of such
Stockholder's properties or assets, except in each case as would not have a
material adverse effect on such Stockholder's ability to consummate the
transactions contemplated hereby.
2.3. No Group. Each Stockholder is acting individually and not
as part of a "group" as defined in the Exchange Act.
2.4. Shares. Each Stockholder owns all of his, her or its
respective Existing Parent Shares, free and clear of all liens, encumbrances,
charges, pledges and other security interests.
3. MISCELLANEOUS.
3.1. Further Agreements.
(a) Each Stockholder, severally and not jointly, hereby
agrees, while this Agreement is in effect, and
except as contemplated hereby, that upon any sale,
transfer, pledge, or other disposition of any
Parent Shares to any Person, such Person or entity
shall agree to be bound by all of the terms and
conditions of this Agreement, and the Stockholder
shall deliver a duly executed copy of the Agreement
to Parent to evidence such Agreement prior to any
such sale, transfer, pledge or other disposition.
(b) Each Stockholder shall not request that the Parent
or its transfer agent register the transfer
(book-entry or otherwise) of any certificate or
uncertificated interest representing any of such
Stockholder's Parent Shares, and hereby consents to
the entry of stop transfer instructions by the
Parent of any transfer of such Stockholder's Parent
Shares, unless such transfer is made in compliance
with this Agreement.
(c) In the event of a stock dividend or distribution,
or any change in the Parent's capital stock by
reason of any stock dividend or distribution,
split-up, recapitalization, combination, exchange
of shares or the like, the
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term "Parent Shares," as applicable, shall be
deemed to refer to and include the Parent Shares as
well as all such stock dividends and distributions
and any shares into which or for which any or all
of the Parent Shares may be changed or exchanged.
3.2. Termination.
(a) This Agreement shall terminate and no party shall
have any rights or duties hereunder upon the
earliest to occur of (i) the fifth (5th)
anniversary of the Effective Time, (ii) a Change of
Control of Parent (as defined below) or (iii) the
re-listing of the Parent Shares on a national
securities exchange or the NASDAQ National Market
System. Upon any termination of this Agreement,
this Agreement shall thereupon become void and of
no further force and effect, provided, however,
that nothing in this Section 3.2 shall relieve or
otherwise limit any party of liability for breach
of this Agreement.
(b) For purposes of this Agreement, "Change of Control"
of Parent shall mean the earliest to occur of (i) a
merger or consolidation to which Parent is a party
and which results in, or is effected in connection
with, a change in ownership of a majority of the
outstanding shares of voting stock of Parent, (ii)
any sale or transfer of all or substantially all of
the assets of Parent to any Person not an affiliate
of Parent, (iii) the sale by the stockholders of
Parent of a majority of the voting stock of Parent
to any Person not an affiliate of Parent or (iv) a
liquidation or dissolution of Parent. A Change of
Control shall not include any change in ownership
of Parent Shares contemplated by or resulting from
the Merger.
3.3. Several Obligations; Capacity; Reliance.
(a) The representations, warranties, covenants,
obligations, agreements and conditions of this
Agreement applicable to the Stockholders are
several and not joint.
(b) The obligations of the Stockholders hereunder are
several and not joint and the covenants and
agreements of the Stockholders herein are made only
in their capacity as stockholders of the Company
and not as directors.
(c) Each Stockholder understands and acknowledges that
Parent is entering into the Merger Agreement in
reliance upon such Stockholder's execution and
delivery of this Agreement.
3.4. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate the transactions contemplated by this
Agreement.
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3.5. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by nationally recognized overnight courier or by
registered or certified mail (postage prepaid, return receipt requested), or
by electronic mail, with a copy thereof to be delivered or sent as provided
above or by facsimile or telecopier, as follows:
(a) If to Parent:
Aros Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Wing
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Ph.D.
With copies to:
Xxxxxx Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Price, Esq.
Facsimile: (000) 000-0000
and:
Xxxx Xxxxxxx LLP
0000 Xxxxxx Xxxx.
XxXxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
(b) If to any of the Stockholders, to the address set
forth under its name on such Stockholders'
signature page hereto;
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. All such
notices or communications shall be deemed to be received (i) in the case of
personal delivery, nationally recognized overnight courier or registered or
certified mail, on the date of such delivery and (ii) in the case of facsimile
or telecopier or electronic mail, upon confirmed receipt.
3.6. Interpretation. When a reference is made in this Agreement
to Sections, subsections, Schedules or Exhibits, such reference shall be to a
Section, subsection, Schedule or Exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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3.7. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
3.8. Entire Agreement; No Third Party Beneficiaries. This
Agreement, the Merger Agreement and the documents referred to herein and
therein constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof, and are not intended to confer upon any
Person other than the parties hereto and thereto any rights or remedies
hereunder and thereunder.
3.9. Amendments; Assignment. This Agreement may be amended (or
provisions of this Agreement waived) only by an instrument in writing signed
by (a) Parent and (b) the holders of at least a majority of the outstanding
Parent Shares at the time of such amendment or approval. Any amendment or
waiver so effected shall be binding upon Parent, each of the parties hereto
and any assignee of any such party. No waivers of any breach of this Agreement
extended by any party hereto to any other party shall be construed as a waiver
of any rights or remedies of any other party hereto or with respect to any
subsequent breach. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns.
Unless a Stockholder has complied with Sections 3.1(b) and 3.1(c) hereof,
neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned, in whole or in part, by any such Stockholder
without the prior written consent of the other parties, and any purported
assignment without such consent shall be void.
3.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor will any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive
to, and not exclusive of, any rights or remedies otherwise available.
3.11. Governing Law; Enforcement. This Agreement and the rights
and duties of the parties hereunder shall be governed by, and construed in
accordance with, the law of the State of Delaware. 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. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled at law or in
equity.
3.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
[Signatures Next Page]
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IN WITNESS WHEREOF, each of the Stockholders has signed this
Agreement or caused this Agreement to be signed by their respective officers
or other authorized person thereunto duly authorized as of the date first
written above.
STOCKHOLDERS
If an individual:
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Name:
Notices Address:
If a corporation, partnership or other legal
entity:
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By:
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Name:
Title:
Notices Address:
