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ALLION HEALTHCARE INC
|
SC 13D/A
Oct 28, 4:41 PM ET
ALLION HEALTHCARE INC SC 13D/A
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Contents
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1. Acquisition of Rollover Stock.
(a) Immediately prior to the Effective Time (as such term is defined in the Merger Agreement), the Exchanger shall surrender to the Company the Exchanger’s Exchange Shares (and the certificate(s) representing such Exchange Shares accompanied by duly executed stock powers), free and clear of all Liens (as defined in the Merger Agreement), and, simultaneously with such surrender, the Company shall issue to the Exchanger a certain number of shares of the Company’s Senior Preferred Stock, par value $0.01 per share (the “Senior Preferred Stock”), Junior Preferred Stock, par value $0.01 per share (the “Junior Preferred Stock,” and together with the Senior Preferred Stock, the “Preferred Stock”) and Common Stock, par value $0.01 per share (the “Common Stock,” and together with the Preferred Stock, with respect to the Exchanger, the Exchanger’s “Rollover Stock”), as set forth opposite the Exchanger’s name on Exhibit A attached hereto (the “Exchange”). Such Rollover Stock issued to the Exchanger shall have an aggregate value equal to the Rollover Amount.
(b) In connection with the acquisition of the Rollover Stock hereunder, and the execution, delivery and performance of this Agreement and the other agreements to which the Exchanger is a party (collectively, the “Documents”), the Exchanger represents and warrants to the Company that:
(i) The Exchanger is acquiring the Rollover Stock for investment for his own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. The Exchanger understands that the Rollover Stock has not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Exchanger’s representations as expressed herein. The Exchanger is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission.
(ii) The Exchanger has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Rollover Stock and has had full access to such other information concerning the Company as he has requested.
(iii) The Exchanger has had the opportunity to consult his own tax advisors with respect to the tax consequences to himself of the purchase, receipt or ownership of the Rollover Stock, including the tax consequences under federal, state, local, and other income tax laws of the United States or any other country and the possible effects of changes in such tax laws. The Exchanger acknowledges that none of the Company, its subsidiaries, affiliates, successors, beneficiaries, heirs and assigns and its and their past and present directors, officers, employees, and agents (including, without limitation, their attorneys) makes or has made any representations or warranties to the Exchanger regarding the tax consequences to the Exchanger of the purchase, receipt or ownership of the Rollover Stock, including the tax consequences under federal, state, local and other tax laws of the United States or any other country and the possible effects of changes in such tax laws.
(iv) The Exchanger is the legal and beneficial owner of the Exchange Shares as set forth opposite his or her name on Exhibit A attached hereto, free and clear of any Liens (as defined in the Merger Agreement).
(v) This Agreement constitutes the legal, valid and binding obligation of the Exchanger, enforceable in accordance with its terms (except as enforceability may be limited by principles of public policy, applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights and remedies generally or general principles of equity (regardless of whether considered and applied in a proceeding at law or in equity)), and the execution, delivery and performance of this Agreement by the Exchanger does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which the Exchanger is a party or any judgment, order or decree to which the Exchanger is subject.
(vi) The Exchanger is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Rollover Stock.
(vii) The Exchanger acknowledges that none of the Company or any of its officers, directors, representatives or affiliates has given the Exchanger any investment
2
advice, credit information, or opinion on whether the exchange of the Exchange Shares for the Rollover Stock is prudent. The Exchanger has not relied on the Company to furnish or make available any documents or other information regarding the credit, affairs, financial condition or business of the Company, or any other matter concerning the Company. Except as set forth herein, the Company acknowledges none of the Company or any of its officers, directors, representatives or affiliates has made any representation or warranty to the Exchanger.
(viii) The Exchanger acknowledges and agrees that there may be additional issuances of shares of Preferred Stock, Common Stock or other equity securities of the Company after the date hereof and the Preferred Stock and Common Stock equity interest of the Exchanger may be diluted pro rata in connection with any such issuance.
(c) As an inducement to the Company to issue the Rollover Stock to the Exchanger, and as a condition thereto, the Exchanger acknowledges and agrees that neither the issuance of the Rollover Stock to the Exchanger nor any provision contained herein shall entitle the Exchanger to remain in the employment of the Company or any of its Subsidiaries or affect the right of the Company or any such Subsidiary to terminate such the Exchanger’s employment at any time for any reason.
(d) Upon execution of this Agreement by the Exchanger, the Exchanger’s spouse shall execute the Consent in the form of Exhibit B attached hereto.
2. Restrictions on Transfer of Rollover Stock.
(a) Transfer of Rollover Stock. The holders of Rollover Stock shall not Transfer any interest in any shares of Rollover Stock, except pursuant to (i) the provisions of Sections 6 and 8(c) of the Stockholders Agreement or (ii) an Approved Sale (as defined in Section 4 of the Stockholders Agreement).
(b) Termination of Restrictions. The restrictions set forth in this Section 2 will continue with respect to each share of Rollover Stock (and will survive any Transfer thereof) until the earlier of (i) the Company’s initial Public Offering or (ii) the date on which such Rollover Stock has been Transferred in a transaction pursuant to any of clauses (i) through (ii) of Section 2(a) (provided that any transfer restrictions set forth in the Stockholders Agreement shall continue to apply to such Transferred shares of Rollover Stock to the extent set forth in the Stockholders Agreement).
3. Additional Restrictions on Transfer of Rollover Stock.
(a) Legend. The certificates representing the Rollover Stock will bear a legend in substantially the following form:
(b) Opinion of Counsel. No holder of Rollover Stock may Transfer any Rollover Stock (except pursuant to an effective registration statement under the Securities Act) without first delivering to the Company a written notice describing in reasonable detail the proposed Transfer, together with an opinion of counsel (reasonably acceptable in form and substance to the Company) that neither registration nor qualification under the Securities Act and applicable state securities laws is required in connection with such transfer. In addition, if the holder of the Rollover Stock delivers to the Company an opinion of counsel that no subsequent Transfer of such Rollover Stock shall require registration under the Securities Act, the Company shall promptly upon such contemplated Transfer deliver new certificates for such Rollover Stock that do not bear the Securities Act portion of the legend set forth in Section 3(a). If the Company is not required to deliver new certificates for such Rollover Stock not bearing such legend, the holder thereof shall not Transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this Section 3.
(b) Capital Stock and Related Matters.
(i) As of the Closing (as such term is defined in the Merger Agreement), the Company shall not have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation
features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans other than pursuant to and as contemplated by this Agreement, the other Exchange Agreements (as such term is defined in the Stockholders Agreement), the Purchase Agreement, the Management Purchase Agreements (as such term is defined in the Stockholders Agreement) and the Company’s Certificate of Incorporation. As of the Closing, the Company shall not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except pursuant to this Agreement, the other Exchange Agreements (as such term is defined in the Stockholders Agreement), the Purchase Agreement, the Management Purchase Agreements (as such term is defined in the Stockholders Agreement) and the Company’s Certificate of Incorporation. As of the Closing, all of the outstanding shares of the Company’s capital stock shall be validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to the best of the Company’s knowledge, contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Rollover Stock hereunder, except as expressly contemplated in the Stockholders Agreement or provided in the Purchase Agreement. Based in part on the investment representations of the Investor in Section 4 of the Purchase Agreement and of the Exchanger in Section 1(c) hereof, the Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, and the offer, sale and issuance of the Rollover Stock hereunder do not and will not require registration under the Securities Act or any applicable state securities laws. To the best of the Company’s knowledge, there are no agreements between the Company’s stockholders with respect to the voting or transfer of the Company’s capital stock or with respect to any other aspect of the Company’s affairs, except for this Agreement, the other Exchange Agreements (as such term is defined in the Stockholders Agreement), the Stockholders Agreement, the Purchase Agreement, the Management Purchase Agreements (as such term is defined in the Stockholders Agreement) and the Registration Agreement.
5. Definitions.
6. Notices. Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated:
7. General Provisions.
(a) Tax Treatment. Each of the parties hereto intend that the transactions contemplated by Section 1 qualify as part of an exchange of property for stock under Section 351 of the Internal Revenue Code of 1986, as amended. Each of the parties hereto shall prepare and file all tax returns in a manner consistent with such treatment, including filing the statements required by Treasury Regulation §1.351-3 with his, her or its federal income tax return filed for the taxable year in which includes the date of the Closing (as such term is defined in the Merger Agreement).
(b) Agreements Unchanged. Nothing in this Agreement shall amend, modify, alter or change any of the parties rights or obligations under the Merger Agreement, including, without limitation, the Exchangers’ indemnification obligations hereunder, under the Merger Agreement or under any other agreements pursuant to which they are a party. For purposes of clarity, the
Exchanger reaffirms the representations and warranties being made in the Merger Agreement with respect to the Company Stock, which include the Exchange Shares.
(c) Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any Rollover Stock in violation of any provision of this Agreement shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Rollover Stock as the owner of such stock for any purpose.
(d) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
(e) Complete Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith executed in connection with the Purchase Agreement embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.
(f) Counterparts. This Agreement may be executed in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same agreement. Any counterpart may be executed by facsimile signature and such facsimile signature shall be deemed an original.
(g) Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Exchanger, the Company, the Investor and their respective successors and assigns (including subsequent holders of Rollover Stock); provided that the rights and obligations of the Exchanger under this Agreement shall not be assignable except in connection with a permitted transfer of Rollover Stock hereunder.
(h) Choice of Law. The law of the State of Delaware will govern all questions concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity and interpretation of this Agreement and the exhibits hereto will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
(i) Remedies. Each of the parties to this Agreement (and the Investor as a third-party beneficiary) will be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including attorney’s fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.
(j) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company (through its Board), the Exchanger and the Investor.
(k) No Inducement. The Exchanger hereby represents and warrants that he has not been induced to agree to and execute this Agreement by any statement, act or representation of any kind or character by anyone, except as contained herein. The Exchanger further represents that he has fully reviewed this Agreement and has full knowledge of its terms, and executes this Agreement of his or her own choice and free will, after having received the advice of his attorney(s).
(l) Business Days. If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or holiday in the state in which the Company’s chief executive office is located, the time period shall be automatically extended to the business day immediately following such Saturday, Sunday or holiday.
(m) Code § 409A Amendment. The Company and the Exchanger agree to cooperate to amend this Agreement to the extent reasonably necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Exchanger under Code §409A and any temporary or final treasury regulations and Internal Revenue Service guidance thereunder, but only to the extent such amendment would not (and could not) have an adverse effect on the Company and would not provide the Exchanger with any additional rights, in each case as determined by the Company in its sole discretion.
(n) Adjustments of Numbers. All numbers set forth herein that refer to share prices or amounts will be appropriately adjusted to reflect stock splits, stock dividends, combinations of shares and other recapitalizations affecting the subject class of stock.
(o) The terms of Schedule 7(o) are incorporated by reference.
8. Effectiveness. This Agreement shall be a binding obligation of the parties as of the date it is executed but not effective until the Effective Date; provided that in the event that the Merger Agreement is terminated prior to the Effective Date, this Agreement shall be deemed void and of no further force and effect.