EXECUTION COPY
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AMENDED AND RESTATED
VOTING AND SUBSCRIPTION AGREEMENT
among
ORTHOFIX INTERNATIONAL N.V.,
and the
SIGNIFICANT SHAREHOLDERS OF BREG, INC.
identified on the signature pages hereto
Dated as of December 22, 2003
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AMENDED AND RESTATED
VOTING AND SUBSCRIPTION AGREEMENT
AMENDED AND RESTATED VOTING AND SUBSCRIPTION AGREEMENT, dated as of
December 22, 2003 (this "Agreement"), among ORTHOFIX INTERNATIONAL N.V., a
company organized under the laws of the Netherlands Antilles ("Parent"), and the
shareholders (each a "Significant Shareholder") of BREG, INC., a California
corporation (the "Company") identified on the signature pages hereto.
WHEREAS, Parent and certain Significant Shareholders identified on the
signature pages thereto entered into a Voting and Subscription Agreement, dated
as of November 20, 2003 (the "Original Agreement");
WHEREAS, Parent and such Significant Shareholders wish to amend and
restate the Original Agreement by, among other things, adding certain additional
Significant Shareholders as parties thereto and restating Exhibits A, B and C
attached thereto;
WHEREAS, Parent and Trevor Acquisition, Inc., a Delaware corporation
and an indirect wholly-owned subsidiary of Parent ("Merger Sub"), have entered
into an Acquisition Agreement dated as of November 20, 2003 (as amended from
time to time, the "Acquisition Agreement"; capitalized terms used but not
defined in this Agreement shall have the meanings ascribed to them in the
Acquisition Agreement), with the Company and Xxxxxxx X. Xxxxx, as Shareholders'
Representative, pursuant to which Merger Sub will merge with and into the
Company (the "Merger");
WHEREAS, as of the date hereof, the Significant Shareholders are the
record and beneficial owners of the number of Shares set forth in column 2
opposite each Significant Shareholder's name in Exhibit A hereto (the "Existing
Shares" and, together with any shares of Company Common Stock acquired by
Significant Shareholders after the date hereof, whether upon the exercise of
warrants, options, conversion of convertible securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares, gift, bequest, inheritance or as a successor in interest in
any capacity or otherwise and any shares into which or for which any or all of
the Existing Shares and additional shares may be changed or exchanged, the
"Shares");
WHEREAS, the Significant Shareholders wish to purchase from Parent, and
Parent wishes to issue and sell to the Significant Shareholders, immediately
following the Effective Time of the Merger, shares of common stock, par value
$0.10 per share, of Parent (the "Parent Common Stock") as set forth herein; and
WHEREAS, as an inducement and a condition to entering into the
Acquisition Agreement and incurring the obligations set forth therein, Parent
has required that the Significant Shareholders agree to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
VOTING AGREEMENT
SECTION 1.01. Voting Agreement. (a) Each Significant Shareholder hereby
agrees that, from and after the date hereof and until the earlier to occur of
the Effective Time and the termination of this Agreement in accordance with its
terms, at every meeting of the shareholders of the Company, however called, and
at every adjournment thereof, and in every action by consent of the shareholders
of the Company, such Significant Shareholder shall, provided that such
Significant Shareholder has not received notice from Parent (which notice may be
delivered at any such meeting) stating Parent's intention to exercise the Proxy
(as defined below) at such meeting, appear at any such meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum, and shall vote or consent (or cause to be voted or consented) such
Significant Shareholder's Shares: (i) in favor of the approval and adoption of
the Acquisition Agreement, the Merger and all the transactions contemplated by
the Acquisition Agreement and this Agreement and otherwise in such manner as may
be necessary to consummate the Merger; (ii) except as otherwise agreed to in
writing in advance by Parent, against any action, proposal, agreement or
transaction that is intended or could reasonably be expected to result in a
breach of any covenant, obligation, agreement, representation or warranty of the
Company contained in the Acquisition Agreement or of such Significant
Shareholder contained in this Agreement; and (iii) against any action, proposal,
agreement or transaction, including, but not limited to, any Competing
Transaction (other than the Acquisition Agreement or the Transactions), that
could be reasonably expected to result in any of the conditions to the Company's
obligations under the Acquisition Agreement (whether or not theretofore
terminated) not being fulfilled or that could reasonably be expected to impede,
interfere with or prevent, delay, postpone, discourage or adversely affect the
Acquisition Agreement, the Merger or this Agreement.
(b) If a Significant Shareholder fails for any reason to vote his, her
or its Shares as required by Section 1.01(a), the holder of the Proxy shall have
the right to vote such Significant Shareholder's Shares at any meeting of the
Company's shareholders and in any action by written consent of the Company's
shareholders in accordance with Section 1.01(a) and the Proxy. The vote of a
holder of the Proxy shall control in any conflict between a vote of such
Significant Shareholder's Shares by a holder of the Proxy and a vote of such
Significant Shareholder's Shares by such Significant Shareholder with respect to
the matters set forth in Section 1.01(a).
(c) Each Significant Shareholder hereby agrees that such Significant
Shareholder shall not enter into any agreement or understanding with any person
the effect of
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which would be inconsistent with or violative of any provision contained in
Section 1.01(a) or (b).
(d) No provision of this Agreement shall limit or otherwise restrict
any Significant Shareholder with respect to any act or omission that such
Significant Shareholder may undertake or authorize in such Significant
Shareholder's capacity as a director or officer of the Company.
SECTION 1.02. Irrevocable Proxy. Concurrently with the execution of
this Agreement, each Significant Shareholder has delivered to Parent a proxy in
the form attached as Exhibit D hereto (the "Proxy"), which such Significant
Shareholder agrees shall be irrevocable to the fullest extent permissible by
law, with respect to the Shares.
ARTICLE II
PURCHASE AND SALE OF PARENT COMMON STOCK
SECTION 2.01. Purchase and Sale of Parent Common Stock. (a) Upon the
terms and subject to the conditions of this Agreement and completion of the
Merger, each Significant Shareholder shall purchase from Parent, and Parent
shall issue and sell to such Significant Shareholder, immediately following the
Effective Time and upon such Significant Shareholder's surrender of Certificates
evidencing its Shares in accordance with Section 3.02 of the Acquisition
Agreement, at a per share purchase price equal to the Average Parent Stock Price
(as defined below), the number of shares of Parent Common Stock equal to the
quotient determined by dividing (i) the value of the Parent Common Stock to be
purchased by such Significant Shareholder (as set forth in Column 5 opposite the
name of such Significant Shareholder on Exhibit A attached hereto) by (ii) the
Average Parent Stock Price, and rounding the result down to the nearest whole
share. Each Significant Shareholder shall pay the aggregate purchase price for
the shares of Purchaser Common Stock to be purchased by such Significant
Shareholder in cash out of the proceeds to be received by such Significant
Shareholder upon completion of the Merger and Parent shall be entitled to offset
such aggregate purchase price from the cash proceeds otherwise payable to such
Significant Shareholder in connection with the completion of the Merger. With
respect to the Xxxxxxx X. Xxxxx Revocable Trust dated December 15, 1997 and the
Xxxxxx Revocable Trust dated September 23, 1994, each hereby agrees that,
immediately after the Effective Time, Parent shall deposit into escrow all of
the shares of Parent Common Stock to be issued to such Significant Shareholder
under this Section 2.01(a), to be held and disbursed by the escrow agent in
accordance with the terms of the share escrow agreement to be entered into by
such Significant Shareholder, Parent and the escrow agent prior to the Effective
Time (substantially in the form attached hereto as Exhibit G).
For purposes of this Section 2.01, "Average Parent Stock Price" means
$38.00.
(b) Between the date of this Agreement and the Effective Time, each of
the Significant Shareholders listed on Exhibit C attached hereto will use its
reasonable efforts to cause each of the shareholders of the Company listed on
Exhibit B attached hereto (the
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"Additional Shareholders") to enter into a Subscription Agreement in the form
attached hereto as Exhibit F (a "Subscription Agreement") pursuant to which each
Additional Shareholder will agree to purchase from Parent, at a per share
purchase price equal to the Average Parent Stock Price, the number of shares of
Parent Common Stock equal to the quotient determined by dividing (i) the value
of the Parent Common Stock to be purchased by such Additional Shareholder (as
set forth in Column 5 opposite the name of such Additional Shareholder on
Exhibit B attached hereto) by (ii) the Average Parent Stock Price, and rounding
the result down to the nearest whole share. In the event that one or more
Additional Shareholders fails to enter into a Subscription Agreement prior to
the Effective Time or fails to complete the transactions contemplated thereby
(each such Additional Shareholder being a "Defaulting Shareholder"), then each
Significant Shareholder agrees, severally and not jointly, to purchase from
Parent (in addition to the shares purchased under Section 2.01(a)), and Parent
shall issue and sell to such Significant Shareholder, at a per share purchase
price equal to the Average Parent Stock Price, the number of shares of Parent
Common Stock equal to the number determined by multiplying (i) the quotient
determined by dividing (A) the aggregate value of the Parent Common Stock to be
purchased by all of the Defaulting Shareholders (as set forth in Column 5
opposite the names of the Defaulting Shareholders on Exhibit B attached hereto)
by (B) the Average Parent Stock Price, by (ii) the percentage set forth in
Column 6 opposite the name of such Significant Shareholder on Exhibit A attached
hereto, and rounding the result down to the nearest whole share.
SECTION 2.02. Restricted Securities. The shares of Parent Common Stock
to be issued pursuant to this Agreement have not been, and will not be,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and will be issued in a transaction that is exempt from the registration
requirements of the Securities Act. Such shares of Parent Common Stock will be
"restricted securities" under the federal securities laws and cannot be offered
or resold except pursuant to registration under the Securities Act or an
available exemption from registration. All certificates representing such shares
of Parent Common Stock shall bear, in addition to any other legends required
under applicable securities laws, the following legend:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be transferred except pursuant to registration under the
Securities Act or pursuant to an available exemption from registration."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SIGNIFICANT SHAREHOLDERS
Each Significant Shareholder hereby severally represents and warrants
to Parent as follows:
SECTION 3.01. Organization, Qualification. (a) Such Significant
Shareholder, if it is an individual, has all legal capacity to enter into this
Agreement and to deliver the Proxy, to carry out his or her obligations
hereunder and to consummate the transactions contemplated
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hereby. If such Significant Shareholder is married, the spouse of such
Significant Shareholder has signed a consent to this Agreement substantially in
the form of Exhibit E attached hereto.
(b) Such Significant Shareholder, if it is a corporation or other legal
entity, is duly organized, validly existing and, if applicable, in good standing
under the Laws of the jurisdiction of its incorporation or formation and has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or, if
applicable, in good standing or to have such power, authority and governmental
approvals would not, individually or in the aggregate, prevent or materially
delay consummation of the transactions contemplated by this Agreement or
otherwise prevent or materially delay such Significant Shareholder from
performing its obligations under this Agreement.
(c) Such Significant Shareholder, if it is a corporation or other legal
entity, is not in violation of any of the provisions of its certificate of
incorporation, bylaws or equivalent organizational documents.
SECTION 3.02. Authority Relative to this Agreement. Such Significant
Shareholder has all necessary power and authority to execute and deliver this
Agreement and the Proxy, to perform such Significant Shareholder's obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
and the Proxy have been duly and validly executed and delivered by such
Significant Shareholder and constitute legal, valid and binding obligations of
such Significant Shareholder, enforceable against such Significant Shareholder
in accordance with their terms.
SECTION 3.03. No Conflict. (a) The execution and delivery of this
Agreement and the Proxy by such Significant Shareholder do not, and the
performance of this Agreement and the Proxy by such Significant Shareholder
shall not, (i) conflict with or violate the certificate of incorporation or
bylaws or equivalent organizational documents of such Significant Shareholder
(if such Significant Shareholder is a corporation or other legal entity), (ii)
assuming satisfaction of the requirements set forth in Section 3.03(b) below,
conflict with or violate the terms of any trust agreements or equivalent
organizational documents of such Significant Shareholder (if such Significant
Shareholder is a trust), (iii) conflict with or violate any Law applicable to
such Significant Shareholder or by which the Shares owned by such Significant
Shareholder are bound or affected or (iv) result in any breach of, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the Shares owned by such Significant Shareholder pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which such Significant
Shareholder is a party or by which such Significant Shareholder or the Shares
owned by such Significant Shareholder are bound or affected, except for any such
conflicts, violations, breaches, defaults or other occurrences that would not,
individually or in the aggregate, prevent or materially delay consummation of
the transactions contemplated by this Agreement and the Proxy or otherwise
prevent or materially
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delay such Significant Shareholder from performing its obligations under this
Agreement and the Proxy.
(b) The execution and delivery of this Agreement and the Proxy by such
Significant Shareholder does not, and the performance of this Agreement and the
Proxy by such Significant Shareholder shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority on the part of such Significant Shareholder, except (i) for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), Blue Sky Laws, state takeover Laws and the pre-merger
notification requirements of the HSR Act and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, prevent or
materially delay consummation of the transactions contemplated by this Agreement
and the Proxy or otherwise prevent such Significant Shareholder from performing
its material obligations under this Agreement and the Proxy.
SECTION 3.04. Title to the Shares. As of the date hereof, such
Significant Shareholder is the record and beneficial owner of the number of
Existing Shares set forth in column 2 opposite such Significant Shareholder's
name in Exhibit A hereto and of options to purchase the number of Shares set
forth in column 3 opposite such Significant Shareholder's name in Exhibit A
hereto. Such Existing Shares and options to purchase Shares are all the
securities of the Company owned, either of record or beneficially, by such
Significant Shareholder. The Shares and options to purchase Shares owned by such
Significant Shareholder are now, and at all times during the term hereof will
be, owned free and clear of all Encumbrances, other than any Encumbrances
created by this Agreement and the Original Agreement. Except as provided in this
Agreement and the Original Agreement, such Significant Shareholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares owned by such Significant Shareholder.
SECTION 3.05. Private Placement Representations. (a) Issuance Not
Registered. Such Significant Shareholder understands and acknowledges that the
issuance of the shares of Parent Common Stock to be issued to it pursuant to
this Agreement will not be registered under the Securities Act, and that such
shares of Parent Common Stock will be "restricted securities" under the federal
securities law. Such Significant Shareholder understands and acknowledges that
such shares of Parent Common Stock cannot be offered or resold except pursuant
to registration under the Securities Act or an available exemption from
registration.
(b) Investment Intent. Such Significant Shareholder will acquire the
shares of Parent Common Stock issued to such Significant Shareholder hereunder
for such Significant Shareholder's own account for investment and not with a
view to the distribution thereof. Such Significant Shareholder has no present
intention of distributing any portion thereof (or any interest therein).
(c) Investment Experience and Status. Such Significant Shareholder has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its investment in shares of Parent
Common Stock pursuant to this Agreement
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and protecting such Significant Shareholder's own interests in connection with
such transaction. Such Significant Shareholder has the financial ability to bear
the economic risk of such Significant Shareholder's investment in shares of
Parent Common Stock pursuant to this Agreement and such Significant Shareholder
has no need for liquidity with respect to such Significant Shareholder's
investment therein at this time.
(d) Accredited Investor. Such Significant Shareholder is an "accredited
investor" (as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act) for one or more of the following reasons:
(i) such Significant Shareholder is an individual whose individual net
worth, or joint net worth with his or her spouse, presently exceeds
$1,000,000;
(ii) such Significant Shareholder is an individual who had an income in
excess of $200,000 in each of the two most recent years, or joint income
with their spouses in excess of $300,000 in each of those years (in each
case including foreign income, tax exempt income and the net amount of
capital gains and losses but excluding any income of other family members
and any unrealized capital appreciation) and has a reasonable expectation
of reaching the same income level in the current year;
(iii) such Significant Shareholder is a corporation, partnership,
Massachusetts business trust or nonprofit organization within the meaning
of Section 501(c)(3) of the Internal Revenue Code, in each case not formed
for the specific purpose of acquiring the Shares and with total assets in
excess of $5,000,000; or
(iv) such Significant Shareholder is a trust with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the
Shares, where the purchase is directed by a "sophisticated person" as
defined in Regulation 506(b)(2)(ii).
(e) No General Solicitation. Such Significant Shareholder acknowledges
that such Significant Shareholder is not acquiring the shares of Parent Common
Stock as a result of any general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act).
(f) Acknowledgement of Receipt of Information. Such Significant
Shareholder has been furnished with materials relating to Parent and has been
given the opportunity to ask questions of and receive answers from Parent, or
from a person or persons acting on Parent's behalf, concerning the terms and
conditions of this investment.
(g) Professional Advice. With respect to the tax and other economic
considerations involved in acquiring the shares of Parent Common Stock, such
Significant Shareholder is not relying on Parent or the Company, and such
Significant Shareholder has carefully considered and has, to the extent such
Significant Shareholder believes such discussion necessary, discussed with such
Significant Shareholder's professional legal, tax, accounting and
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financial advisors the implications of acquiring the shares of Parent Common
Stock for such Significant Shareholder's particular tax and financial situation.
SECTION 3.06. No Implied Representation and Warranties. Each
Significant Shareholder hereby acknowledges and agrees that none of Parent or
any of its respective officers, directors, partners, employees, Affiliates or
representatives is making any representation or warranty whatsoever, express or
implied (including any warranty of merchantability, suitability or fitness for a
particular purpose or quality with respect to any tangible assets or as to the
condition or workmanship thereof, or as to the absence of any defects therein,
whether latent or patent), except those representations and warranties contained
in this Voting and Subscription Agreement or the Parent Disclosure Schedule or
in any certificate contemplated hereby and delivered by Parent in connection
with the Transactions. In particular, each Significant Shareholder hereby
acknowledges and agrees that none of Parent or Merger Sub has made or is making
any representation or warranty to such Significant Shareholder with respect to
any financial projection or forecast provided to any person in connection with
the Transactions. With respect to any such financial projection or forecast
delivered by or on behalf of Parent to the Company or any Significant
Shareholder, each Significant Shareholder acknowledges that there are
uncertainties inherent in attempting to make such financial projections and
forecasts and that it is making its own evaluation of such projections and
forecasts.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as described in the Parent SEC Reports (as defined in Section
4.06), Parent hereby represents and warrants to the Significant Shareholders
that:
SECTION 4.01. Capitalization. (a) The authorized capital stock of
Parent consists of 30,000,000 shares of Parent Common Stock. As of November 4,
2003, (i) 14,221,497 shares of Parent Common Stock were issued and outstanding,
all of which are validly issued, fully paid and non-assessable, (ii) no shares
of Parent Common Stock were held in the treasury of Parent, (iii) no shares of
Parent Common Stock were held by subsidiaries of Parent and (iv) 2,030,064
shares of Parent Common Stock were reserved for future issuance pursuant to
stock options. Except for as a result of the issuance of shares of Parent Common
Stock pursuant to stock options granted under the stock option plans of Parent
(the "Parent Stock Option Plans"), there has been no change in the number of
shares of Parent Common Stock issued and outstanding since November 4, 2003.
Except as set forth in this Section 4.01 or Section 4.09 and except for warrants
to purchase 25,809 shares of Parent Common Stock and except for the stock
options granted pursuant to the Parent Stock Option Plans, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of Parent or
obligating Parent to issue or sell any shares of capital stock of, or other
equity interests in, Parent. All shares of Parent Common Stock subject to
issuance as previously stated in this Section 4.01, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and non-assessable. There
are no outstanding contractual obligations of Parent to repurchase,
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redeem or otherwise acquire any shares of Parent Common Stock. There are no
outstanding contractual obligations of Parent to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
other person.
(b) The shares of Parent Common Stock to be issued pursuant to Section
2.01 of this Agreement will be duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights created by statute, the
Parent's Deed of Incorporation or Bylaws or any agreement to which the Parent is
a party or is bound.
SECTION 4.02. Authority Relative to This Agreement. Parent has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery of this
Agreement by Parent and the consummation by Parent of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Parent are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by Parent and, assuming due authorization,
execution and delivery by the Significant Shareholders, constitutes a legal,
valid and binding obligation of Parent, enforceable against Parent in accordance
with its terms.
SECTION 4.03. No Conflict; Required Filings and Consents. (a) Except as
set forth in Section 4.03 of the Parent Disclosure Schedule, the execution and
delivery of this Agreement by Parent do not, and the performance of this
Agreement by Parent will not, (i) conflict with or violate the Deed of
Incorporation, Certificate of Incorporation, Bylaws or other organizational
documents of Parent, (ii) assuming that all consents, approvals, authorizations
and other actions described in Section 4.03(b) have been obtained and all
filings and obligations described in Section 4.03(b) have been made, conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Parent or by which any property or asset of Parent is bound or affected, or
(iii) result in any breach of, or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of Parent pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Parent is a party or by which Parent or any property or asset of Parent is bound
or affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent or materially delay consummation of
the transactions contemplated by this Agreement or otherwise prevent or
materially delay Parent from performing its obligations under this Agreement and
would not, individually or in the aggregate, have a Parent Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Parent do not, and
the performance of this Agreement by Parent will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, except (i) for applicable requirements, if any, of the
Exchange Act, Blue Sky Laws and state takeover laws, the XXX Xxx,
0
and filing and recordation of appropriate merger documents as required by the
CGCL and the DGCL, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, prevent or materially delay
consummation of the transactions contemplated by this Agreement or otherwise
prevent Parent from performing its material obligations under this Agreement.
SECTION 4.04. No Vote Required. No vote of the shareholders of Parent
is required by Law, Parent's Deed of Incorporation or Bylaws or otherwise in
order for Parent to consummate the transactions contemplated by this Agreement.
SECTION 4.05. Permits; Compliance. Each of Parent and Merger Sub is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for Parent or Merger Sub to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Parent Permits"), except where the failure to have, or the suspension or
cancellation of, any of the Parent Permits would not, individually or in the
aggregate, prevent or materially delay consummation of any of the Transactions
or otherwise prevent or materially delay Parent from performing its obligations
under this Agreement or the Acquisition Agreement and would not, individually or
in the aggregate, have a Parent Material Adverse Effect. No suspension or
cancellation of any of the Parent Permits is pending or, to the knowledge of
Parent, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Parent Permits would not, individually or in the
aggregate, prevent or materially delay consummation of any of the Transactions
or otherwise prevent or materially delay Parent from performing its obligations
under this Agreement or the Acquisition Agreement and would not, individually or
in the aggregate, have a Parent Material Adverse Effect. Neither Parent nor
Merger Sub is in conflict with, or in default, breach or violation of, (a) any
Law applicable to Parent or Merger Sub or by which any property or asset of
Parent or Merger Sub is bound or affected, or (b) any note, bond, mortgage,
indenture, contract, agreement, lease, license, Parent Permit, franchise or
other instrument or obligation to which Parent or Merger Sub is a party or by
which Parent or Merger Sub or any property or asset of Parent or Merger Sub is
bound, except for any such conflicts, defaults, breaches or violations that
would not, individually or in the aggregate, prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent from performing its obligations under this Agreement or the Acquisition
Agreement and would not, individually or in the aggregate, have a Parent
Material Adverse Effect.
SECTION 4.06. SEC Filings; Financial Statements. (a) Parent has filed
all forms, reports and documents required to be filed by it with the SEC since
January 1, 2001 (collectively, the "Parent SEC Reports"). The Parent SEC Reports
(i) were prepared in all material respects in accordance with either the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations promulgated thereunder, and (ii) did not, at the time
they were filed, or, if amended, as of the date of such amendment, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
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(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Parent SEC Reports was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly
presents, in all material respects, the consolidated financial position, results
of operations and cash flows of Parent and its consolidated subsidiaries as at
the respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments which have not had, and would not
have a Parent Material Adverse Effect).
SECTION 4.07. Absence of Certain Changes or Events. Since December 31,
2002, except as expressly contemplated by this Agreement or as set forth in
Section 4.07 of the Parent Disclosure Schedule, or as specifically disclosed in
any Parent SEC Report filed since December 31, 2002 and prior to the date of
this Agreement, (a) Parent has conducted its business only in the ordinary
course and in a manner consistent with past practice, and (b) there has not been
any Parent Material Adverse Effect.
SECTION 4.08. Absence of Litigation. Except as specifically disclosed
in any Parent SEC Report filed prior to the date of this Agreement or as set
forth in Section 4.08 of the Parent Disclosure Schedule, there is no Action
pending or, to the knowledge of Parent, threatened against Parent, or any
property or asset of Parent, by or before any Governmental Authority that (a)
individually or in the aggregate, has had or would have a Parent Material
Adverse Effect or (b) seeks to or would, individually or in the aggregate,
materially delay or prevent the consummation of any of the Transactions or
otherwise prevent or materially delay Parent from performing its obligations
under this Agreement or the Acquisition Agreement. Neither Parent nor any
material property or asset of Parent is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of Parent, continuing investigation by, any Governmental
Authority, that would, individually or in the aggregate, prevent or materially
delay consummation of any of the Transactions or otherwise prevent or materially
delay Parent from performing its obligations under this Agreement or the
Acquisition Agreement or would, individually or in the aggregate, have a Parent
Material Adverse Effect.
SECTION 4.09. Existing Agreements. Parent has heretofore furnished to
the Shareholders' Representative complete and correct copies of each of the
Existing Agreements, as that term is defined in Section 5.16(b) of this
Agreement. Other than the Existing Agreements and the Original Agreement, there
are no other agreements or contracts pursuant to which Parent is or could be
obligated to register under the Securities Act any shares of Parent Common Stock
for itself or any Existing Holders, as that term is defined in Section 5.16(a)
of this Agreement.
11
ARTICLE V
COVENANTS OF SIGNIFICANT SHAREHOLDERS AND PARENT
SECTION 5.01. No Disposition or Encumbrance of Shares. Each Significant
Shareholder hereby agrees that, except as contemplated by this Agreement and the
Acquisition Agreement in accordance with its terms, such Significant Shareholder
shall not (a) sell, transfer, tender, assign, pledge, encumber, contribute to
the capital of any entity, hypothecate, give or otherwise dispose of, grant a
proxy or power of attorney with respect to, deposit into any voting trust or
enter into a voting arrangement or agreement, or create or permit to exist any
Encumbrances of any nature whatsoever with respect to, any of such Significant
Shareholder's Shares (or agree or consent to, or offer to do, any of the
foregoing), (b) take any action that would make any representation or warranty
of such Significant Shareholder herein untrue or incorrect in any material
respect or have the effect of preventing or adversely affecting such Significant
Shareholder from performing such Significant Shareholder's obligations hereunder
or (c) directly or indirectly, initiate, solicit or encourage any person to take
actions that could reasonably be expected to lead to the occurrence of any of
the foregoing.
SECTION 5.02. No Solicitation of Transactions. Each Significant
Shareholder agrees that between the date of this Agreement and the date of
termination of the Acquisition Agreement in accordance with its terms, such
Significant Shareholder will not, directly or indirectly, through any officer,
director, employee, agent or advisor or other representative, solicit, initiate
or encourage, or take any other action to facilitate, any inquiries or the
making of any proposal or offer that constitutes, or may reasonably be expected
to lead to, any Competing Transaction, or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of the officers, directors or
employees of such Significant Shareholder, or any investment banker, financial
advisor, attorney, accountant or other representative retained by such
Significant Shareholder, to take any such action. Each Significant Shareholder
shall notify Parent as promptly as practicable (and in any event within one (1)
day after the Significant Shareholder attains knowledge thereof), orally and in
writing, if any proposal or offer, or any inquiry or contact with any person
with respect thereto, regarding a Competing Transaction is made, specifying the
material terms and conditions thereof and the identity of the party making such
proposal or offer or inquiry or contact (including material amendments or
proposed material amendments). Each Significant Shareholder immediately shall
cease and cause to be terminated all existing discussions or negotiations with
any parties conducted heretofore with respect to a Competing Transaction.
SECTION 5.03. Further Action; Reasonable Best Efforts. Upon the terms
and subject to the conditions hereof, each Significant Shareholder listed on
Exhibit C attached hereto shall use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws and regulations to
consummate and make effective this Agreement, including, without limitation,
using its reasonable best efforts to obtain all Permits, consents, approvals,
authorizations,
12
qualifications and orders of Governmental Authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
this Agreement.
SECTION 5.04. Additional Shares. Each Significant Shareholder agrees,
while this Agreement is in effect, to give a prompt written notice to Parent of
the number of any new Shares acquired by such Significant Shareholder after the
date hereof (other than pursuant to the exercise of options reflected on Exhibit
A).
SECTION 5.05. Release. (a) Each Significant Shareholder listed on
Exhibit C attached hereto, on behalf of itself and its past or present
directors, officers, managers, employees, principals, agents, representatives,
attorneys, partners, predecessors, successors, assigns, beneficiaries, parents,
subsidiaries, affiliates, divisions, owners, co-owners, heirs, administrators
and executors, hereby completely and fully releases and forever discharges,
effective upon the Effective Time, the Company and its Subsidiaries, including
their respective past or present directors, officers, managers, employees,
principals, agents, representatives, attorneys, partners, predecessors,
successors, assigns, beneficiaries, parents, subsidiaries, affiliates,
divisions, owners, co-owners, heirs, administrators and executors, from any and
all suits, claims, causes of action, rights, actions, demands, damages, losses,
costs, expenses (including, without limitation, legal fees), penalties,
liabilities or proceedings of any nature whatsoever which have been, could have
been or could be brought in any forum, whether foreign or domestic, in law or in
equity or otherwise, whether known or unknown, fixed or contingent, including,
without limitation, all claims for compensatory, incidental, consequential,
statutory, punitive or exemplary damages, equitable relief or penalties, except
for any claims arising in connection with or pursuant to (i) any employment
arrangement or Indemnification Agreement between such Significant Shareholder
and the Company, (ii) Section 7.05 of the Acquisition Agreement, as applicable,
and (iii) the Acquisition Agreement and this Agreement.
(b) Each Significant Shareholder listed on Exhibit C attached hereto,
on behalf of itself and its past or present directors, officers, managers,
employees, principals, agents, representatives, attorneys, partners,
predecessors, successors, assigns, beneficiaries, parents, subsidiaries,
affiliates, divisions, owners, co-owners, heirs, administrators or executors,
effective upon the date hereof, hereby further agrees to opt-out of any
certified class of plaintiffs established for the purpose for seeking
compensatory, incidental, consequential, statutory, punitive or exemplary
damages, equitable relief or penalties, against the Company arising directly or
indirectly from, or relating in any way to any class-action shareholder
litigation relating to claims of fraud, xxxxxxx xxxxxxx, breaches of fiduciary
duty, violations of the CGCL or the DGCL, the Securities Act and/or the Exchange
Act and any rules promulgated thereunder arising from or relating to the
Acquisition Agreement and the Merger.
(c) Each Significant Shareholder listed on Exhibit C attached hereto
expressly waives the benefits of section 1542 of the Civil Code of the State of
California, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
13
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.
SECTION 5.06. Disclosure. Each Significant Shareholder hereby agrees to
permit Parent to publish and disclose in any document filed with the SEC and in
any press release or other disclosure document in which Parent reasonably
determines in its good faith judgment that such disclosure is required by law,
including the rules and regulations of the Securities and Exchange Commission,
or appropriate, in connection with the Merger and any transactions related
thereto, such Significant Shareholder's identity and ownership of the Company
Common Stock and the nature of such Significant Shareholder's commitments,
arrangements and understandings under this Agreement.
SECTION 5.07. Public Announcement. Each Significant Shareholder agrees
to not make any public announcement in opposition to, or in competition with,
the Acquisition Agreement or the consummation of the Merger.
SECTION 5.08. Confidentiality. Each Significant Shareholder agrees to,
and (if applicable) shall use such Significant Shareholder's reasonable efforts
to cause its agents, representatives, affiliates (other than in the case of a
limited partnership, the limited partners thereof), employees, officers and
directors to:
(a) treat and hold as confidential (and not disclose or provide access
to any person other than Parent and its agents, representatives, affiliates,
employees, officers and directors) all information relating to trade secrets,
patent and trademark applications, product development, price, customer and
supplier lists, pricing and marketing plans, policies and strategies, details of
client and consultant contracts, operations methods, product development
techniques, business acquisition plans, new personnel acquisition plans and all
other confidential information with respect to the Company, Parent, any
affiliates of Parent or their businesses;
(b) in the event that such Significant Shareholder or any agent,
representative, affiliate, employee, officer or director of such Significant
Shareholder becomes legally compelled to disclose any such information, provide
Parent with prompt written notice of such requirement so that Parent may seek a
protective order or other remedy or waive compliance with this Section 5.08; and
(c) in the event that such protective order or other remedy is not
obtained, or Parent waives compliance with this Section 5.08, furnish only that
portion of such confidential information which is legally required to be
provided and exercise its best efforts to obtain assurances that confidential
treatment will be accorded such information;
provided, however, that this sentence shall not apply to any information that,
(i) at the time of disclosure, is available publicly and was not disclosed in
breach of this Agreement by such Significant Shareholder or such Significant
Shareholder's agents, representatives, affiliates, employees, officers or
directors, (ii) must be disclosed under applicable laws or regulations or
14
judicial or administrative proceedings (subject to clauses (b) and (c) above),
or (iii) shall be disclosed to such Significant Shareholder's legal advisors who
need to know such information in connection with advising the Significant
Shareholder as to his legal rights and obligations. Each Significant Shareholder
agrees and acknowledges that remedies at law for any breach of such Significant
Shareholder's obligations under this Section 5.08 are inadequate and that in
addition thereto Parent shall be entitled to seek equitable relief, including
injunction and specific performance, in the event of any such breach.
SECTION 5.09. Use of Intellectual Property. Each Significant
Shareholder acknowledges that, from and after the Closing, the name "Breg, Inc."
and all similar or related names, marks and logos (all of such names, marks and
logos being the "Company Names") shall be owned by the Company, neither such
Significant Shareholder nor any of its affiliates shall have any rights in the
Company Names, and neither such Significant Shareholder nor any of its
affiliates will contest the ownership or validity of any rights of Parent or the
Company in or to the Company Names. From and after the Closing, neither such
Significant Shareholder nor any of the affiliates of such Significant
Shareholder shall use any of the Owned Intellectual Property or any of the
Licensed Intellectual Property, except pursuant to valid licenses thereto.
SECTION 5.10. Acknowledgement and Approval of the Acquisition
Agreement. Each Significant Shareholder hereby acknowledges and agrees that such
Significant Shareholder has received a copy of the Acquisition Agreement,
including all schedules and exhibits thereto, and that such Significant
Shareholder has reviewed and understands the terms thereof. EACH SIGNIFICANT
SHAREHOLDER AGREES TO BE BOUND BY THE TERMS OF THE ACQUISITION AGREEMENT AND ALL
AGREEMENTS CONTEMPLATED THEREBY AND ACCEPTS AND ASSUMES AND AGREES TO PERFORM
THE OBLIGATIONS OF A SHAREHOLDER AND A SIGNIFICANT SHAREHOLDER UNDER THE
ACQUISITION AGREEMENT AND ALL AGREEMENTS CONTEMPLATED THEREBY, INCLUDING,
WITHOUT LIMITATION, THE ESCROW AGREEMENT AND ARTICLES VIII AND XI OF THE
ACQUISITION AGREEMENT.
SECTION 5.11. No Solicitation of Employees. Each Significant
Shareholder listed on Exhibit C attached hereto hereby agrees that, without the
prior written consent of Parent, such Significant Shareholder shall not for a
period of three years from the Effective Time, directly or indirectly, for the
purpose of conducting or engaging in any business that manufactures, produces or
supplies products or services of the kind manufactured, produced or supplied by
the Company as of the Effective Time, (i) call upon, solicit, advise or
otherwise do, or attempt to do, business that pertains to the manufacture,
production or supply of products or services of the kind manufactured, produced
or supplied by the Company as of the Effective Time with any customer of the
Company with whom the Company had any dealings prior to the Effective Time, (ii)
take away or interfere or attempt to interfere with any custom, trade, business
or patronage of the Company, or (iii) solicit for employment any person who is
employed by the Company prior to the Effective Time.
SECTION 5.12. Non-Competition. During the period commencing at the
Effective Time and concluding on the third anniversary of the Effective Time,
each Significant
15
Shareholder listed on Exhibit C attached hereto shall not, whether for such
Significant Shareholder's own account or for the account of any other
individual, partnership, firm, corporation or other business organization or
entity, without the prior written consent of Parent, directly or indirectly, own
an interest in, manage, operate, join, control, lend money or render financial
or other assistance to or participate in or be connected with, as an officer,
employee, partner, stockholder, consultant or otherwise, any individual,
partnership, firm, corporation or other business organization or entity (other
than Parent or any affiliate of Parent) that is engaged in any business in which
the Company or the Subsidiary is actively engaged as of the Effective Time;
provided, however, that an investment in securities which are registered under
Section 12(g) of the Exchange Act, not exceeding 1% of any class of capital
stock of the issuer, shall not be a violation of this Section 5.12.
SECTION 5.13. Shareholders' Representative. Each Significant
Shareholder hereby acknowledges and affirms (a) the appointment of Xxxxxxx X.
Xxxxx as the Shareholders' Representative pursuant to Section 11.05 of the
Acquisition Agreement and (b) the authority of the Shareholders' Representative
to perform the actions specified in the Acquisition Agreement or the Escrow
Agreement, as applicable, to be performed by the Shareholders' Representative.
SECTION 5.14. Employment Agreements. Each Significant Shareholder who
has entered into an employment agreement with the Company agrees that none of
the transactions contemplated by the Acquisition Agreement, this Agreement or
that otherwise may be necessary to consummate the Merger, shall trigger any
prong of the definition of "good reason" (as defined in such Significant
Shareholder's employment agreement).
SECTION 5.15. Nasdaq Quotation. Parent shall promptly prepare and
submit to the Nasdaq National Market a listing application covering the shares
of Parent Common Stock to be issued herewith, and shall use its reasonable
efforts to obtain, prior to the Effective Time, approval for the quotation of
such Parent Common Stock, subject to official notice of issuance to the Nasdaq
National Market.
SECTION 5.16. Piggyback Registration Rights. (a) If, after the
Effective Time, Parent proposes to register any shares of Parent Common Stock
for itself or any of its shareholders (the shareholders at such time being the
"Existing Holders") under the Securities Act on a Registration Statement on Form
S-1, Form S-2 or Form S-3 (or an equivalent general registration form then in
effect), Parent shall give written notice of such proposal to the Significant
Shareholders at least 10 days before the anticipated filing date. Such notice
shall specify the number of shares of Parent Common Stock proposed to be
registered, the proposed filing date of such Registration Statement, any
proposed means of distribution of such shares and the proposed managing
underwriter, if any. Subject to Section 5.16(b), upon the written request of any
Significant Shareholder, given within 10 days after the receipt of any such
written notice by facsimile confirmed by mail (which request shall specify the
shares of Parent Common Stock intended to be disposed of by the Significant
Shareholder), Parent shall use commercially reasonable efforts to include in the
Registration Statement the shares of Parent Common Stock referred to in the
Significant Shareholder's request; provided, however, that if such Registration
Statement relates to a Public Offering, then any participation in such Public
Offering by the
16
Significant Shareholder shall be on substantially the same terms as the Parent's
(or its other shareholders') participation therein; and provided further that
the number of shares of Parent Common Stock to be included in any such Public
Offering shall not exceed the maximum number that the managing underwriter of
such Public Offering considers in its reasonable commercial judgment to be
appropriate based on market conditions and other relevant factors (the "Maximum
Number"). A Significant Shareholder shall have the right to withdraw a request
to include shares of Parent Common Stock in any Public Offering pursuant to this
Section 5.16 by giving written notice to Parent of its election to withdraw such
request at least five business days prior to the proposed effective date of such
Registration Statement.
(b) If the lead managing underwriter for any Public Offering to be
effected pursuant to Section 5.16(a) of this Agreement shall advise Parent and
the Significant Shareholders (each, a "Seller" and, collectively, the "Sellers")
in writing that the number of shares of Parent Common Stock sought to be
included in such Public Offering (including those sought to be offered by
Parent, those sought to be offered by the Sellers and those sought to be offered
by Existing Holders) is more than the Maximum Number, the shares of Parent
Common Stock to be included in such Public Offering shall be allocated pursuant
to the following procedures: First, Parent shall be entitled to include all of
the shares of Parent Common Stock that it has proposed to include, and second,
to the extent that any other securities may be included without exceeding the
Maximum Number, and subject to rights of any holders of Parent Common Stock
under any other agreements (the "Existing Agreements"), the Significant
Shareholders shall be entitled to participate in that registration on a basis no
less favorable than that of any other holder of Parent Common Stock.
(c) Notwithstanding anything to the contrary in Section 5.16(a) or
Section 5.16(b), the Significant Shareholders shall be entitled to participate
in a Public Offering effected by Parent pursuant to a request under an Existing
Agreement only to the extent that the terms of such Existing Agreement permit
the Significant Shareholders to so participate.
(d) Notwithstanding the foregoing, if Parent shall furnish to the
Significant Shareholders a certificate signed by its Chairman, Chief Executive
Officer or Chief Financial Officer stating that filing a Registration Statement
or maintaining effectiveness of a current Registration Statement would have a
material adverse effect on Parent or its shareholders in relation to any
material financing, acquisition or other corporate transaction, and Parent has
determined in good faith that such disclosure is not in the best interests of
Parent and its shareholders, Parent shall be entitled to postpone filing or
suspend the use by the Significant Shareholders of the Registration Statement
for a reasonable period of time, but not in excess of 120 consecutive days (a
"Blackout Period").
For the purposes of this Section 5.16:
"Public Offering" shall mean an offering of shares of Parent Common
Stock or securities convertible into or exchangeable for Parent Common
Stock on a broadly-distributed basis, not limited to sophisticated
investors (except for qualified institutional
17
buyers pursuant to Rule 144A under the Securities Act), pursuant to a
firm-commitment or best-efforts underwriting or purchase arrangement;
"Registration Statement" shall mean any registration statement of
Parent under the Securities Act that covers any of the shares of Parent
Common Stock, including the prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits
and all material incorporated by reference or deemed to be incorporated by
reference in such Registration Statement.
ARTICLE VI
TERMINATION
SECTION 6.01. Termination. This Agreement, and all rights and
obligations of the parties hereunder shall terminate upon the earliest of (a)
any termination of the Acquisition Agreement in accordance with its terms and
(b) as between Parent and a Significant Shareholder, agreement of Parent and
such Significant Shareholder to terminate this Agreement. Nothing in this
Section 6.01 shall relieve any party of liability for any breach of this
Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement may not be amended except by an
instrument in writing signed by all the parties hereto.
SECTION 7.02. Waiver. Any party to this Agreement may (i) extend the
time for the performance of any obligation or other act of any other party
hereto, (ii) waive any inaccuracy in the representations and warranties of
another party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement of another party contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 7.03. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or email or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 7.03):
(a) if to a Significant Shareholder, to the address set forth after
such Significant Shareholder's name on the signature pages, with a copy to:
18
Xxxxxxx X. Xxxxx
as Shareholders' Representative
0000 Xxxxxx Xxxxxxxx
Xxxxxx Xxxxx Xx, XX 00000
with a copy to:
Xxxx X. Xxxx, A Professional Law Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxx
with an additional copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx
Email: xxxxxxx@xxxxxx.xxx
(b) if to Parent:
Orthofix International N.V.
00000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxx
Email: xxxxxxx@xxxxxxxx.xxx
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Email: xxxxxxxxx@xxxxxxxx.xxx
SECTION 7.04. 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 by this Agreement is not affected in
any manner materially 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
19
as closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the fullest extent possible.
SECTION 7.05. Further Assurances. The Significant Shareholders and
Parent will execute and deliver all such further documents and instruments and
take all such further action as may be necessary in order to consummate the
transactions contemplated hereby.
SECTION 7.06. Assignment. This Agreement shall not be assigned by
operation of Law or otherwise, except that Parent may assign all or any of its
rights and obligations hereunder to any affiliate of Parent; provided that no
such assignment shall relieve the assigning party of its obligations hereunder
if such assignee does not perform such obligations.
SECTION 7.07. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. The Company is an intended third party beneficiary with
respect to the obligations of the Significant Shareholders under Sections 5.05,
5.09, 5.11 and 5.12 of this Agreement.
SECTION 7.08. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 7.09. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California applicable to
contracts executed in and to be performed in that State (other than those
provisions set forth herein that are required to be governed by the CGCL). All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any state or federal court sitting in the
State of California. The parties hereto hereby (a) submit to the exclusive
jurisdiction of any state or federal court sitting in the State of California
for the purpose of any Action arising out of or relating to this Agreement
brought by any party hereto, and (b) irrevocably waive, and agree not to assert
by way of motion, defense, or otherwise, in any such Action, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the Action
is brought in an inconvenient forum, that the venue of the Action is improper,
or that this Agreement or the Transactions may not be enforced in or by any of
the above-named courts.
SECTION 7.10. Expenses. All costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
20
SECTION 7.11. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 7.12. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate 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.
SECTION 7.13. Beneficial Owner. In this Agreement, "beneficial owner"
has the meaning ascribed to that term in Rule 13d-3(a) of the Exchange Act, and
"beneficially owned" has a consequent meaning.
SECTION 7.14. Original Agreement. This Agreement supersedes the
Original Agreement.
SECTION 7.15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY ACTIONS OR PROCEEDINGS DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.15.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ORTHOFIX INTERNATIONAL N.V.
/s/ XXXXXXX XXXXXXXX
---------------------------
Name:
Title:
SIGNIFICANT SHAREHOLDERS:
XXXXXXX X. XXXXX
/s/ XXXXXXX X. XXXXX
---------------------------
Address:
XXXXXXX X. XXXXX, TRUSTEE OR
SUCCESSOR TRUSTEE OF THE XXXXXXX X.
XXXXX REVOCABLE TRUST DATED
DECEMBER 15, 1997
By /s/ XXXXXXX X. XXXXX, TRUSTEE
-------------------------------
Name:
Title:
Address:
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
---------------------------
Address:
XXXXXXX XXXXXX
TRUSTEE UNDER DECLARATION OF TRUST,
DATED JANUARY 19, 1987
By /s/ XXXXXXX X. XXXXXX, TRUSTEE
--------------------------------
Name:
Title:
Address:
XXXXXXX XXXXXX, TRUSTEE UNDER
DECLARATION OF TRUST, DATED
JANUARY 19, 1987
By /s/ XXXXXXX XXXXXX, TRUSTEE
------------------------------
FIRST REGIONAL BANK CUSTODIAN FBO
XXXXXXX X. XXXXXX XXX
By /s/ XXXXX X. XXXXX
---------------------------
Name:
Title:
Address:
FIRST REGIONAL BANK CUSTODIAN FBO
XXXXXXX X. XXXXXX XXX
By /s/ XXXXXXX X. XXXXXX
-----------------------------
XXXXXXX X. XXX, XX.
/s/ XXXXXXX X. XXX, XX.
---------------------------
Address:
XXXXXXX XXXXX XXX, XX., TRUSTEE OR
SUCCESSOR TRUSTEE OF THE XXXXXXX
XXXXX XXX, XX., REVOCABLE TRUST
DATED THE 1ST DAY OF DECEMBER 1998
By /s/ XXXXXXX X. XXX, XX., TRUSTEE
---------------------------------
Name:
Title:
Address:
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
---------------------------
Address:
XXXXXXX XXXXXXX XXXXXX, TRUSTEE
OR SUCCESSOR TRUSTEE OF THE XXXXXX
REVOCABLE TRUST DATED SEPTEMBER 23,
1994
By /s/ XXXXXXX X. XXXXXX, TRUSTEE
--------------------------------
Name:
Title:
Address:
XXXXXXX XXXXXXXX XXXXXX,
TRUSTEE OR SUCCESSOR TRUSTEE OF
THE XXXXXX REVOCABLE TRUST DATED
SEPTEMBER 23, 1994
By /s/ XXXXXXX X. XXXXXX, TRUSTEE
-------------------------------
FIRST REGIONAL BANK CUSTODIAN, FBO
XXXXXXX X. XXXXXX XXX
By /s/ XXXXX X. XXXXX
---------------------------
Name:
Title:
Address:
FIRST REGIONAL BANK CUSTODIAN, FBO
XXXXXXX X. XXXXXX XXX
By /s/ XXXXXXX X. XXXXXX
----------------------------
XXXXXXX X. XXXXX
/s/ XXXXXXX X. XXXXX
---------------------------
Address:
XXXX X. XXXXXX
/s/ XXXX X. XXXXXX
---------------------------
Address:
XXXXXXXX X. XXXXXX
/s/ XXXXXXXX X. XXXXXX
---------------------------
Address:
FIRST REGIONAL BANK CUSTODIAN FBO
XXXXXXXX X. XXXXXX XXX
By /s/ XXXXX X. XXXXX
--------------------------
FIRST REGIONAL BANK CUSTODIAN FBO
XXXXXXXX X. XXXXXX XXX
By /s/ XXXXXXXX X. XXXXXX
---------------------------
Name:
Title:
Address:
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
---------------------------
Address:
XXXXXXX X. XXXXX
/s/ XXXXXXX X. XXXXX
---------------------------
Address:
XXXXXXX XXXXXXXX
/s/ XXXXXXX XXXXXXXX
---------------------------
Address:
XXXXX X. XXXXXX
/s/ XXXXX X. XXXXXX
---------------------------
Address:
