SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT dated as
of November 22, 1996, among BONE,
MUSCLE AND JOINT, INC., a Delaware
corporation (the "Corporation"), and
the STOCKHOLDERS (as defined herein).
Reference is made to the Restricted Stock Agreements dated as of
the date hereof among the Corporation and each of the SCOI Stockholders (as
hereinafter defined), pursuant to which the Corporation has agreed to sell and
issue an aggregate of up to 4,000,000 shares of Common Stock to the SCOI
Stockholders. It is deemed to be in the best interests of the Corporation and
the Stockholders to amend the Agreement to provide for a representative of the
SCOI Stockholders to serve as a member of the Board of Directors of the
Corporation and to include the SCOI Stockholders as Stockholders under this
Agreement.
Each of the Stockholders party hereto owns or has the right to
acquire that number of shares of Stock (as defined herein) set forth opposite
such Stockholder's name on Schedule I hereto. It is deemed to be in the best
interests of the Corporation and the Stockholders that provision made for the
continuity and stability of the business and policies of the Corporation and, to
that end, the Corporation and the Stockholders hereby set forth their agreement
with respect to the shares of Stock owned by the Stockholders.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and obligations hereinafter set forth, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS.
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As used herein, the following terms shall have the following respective
meanings:
(a) "AFFILIATE", with respect to any Stockholder means any
Person that directly or indirectly Controls, is Controlled by or is under common
Control with such Stockholder.
(b) "COMMON STOCK" means the Common Stock, $.001 par value, of
the Corporation.
(c) "CONTROL" and "CONTROLLED" means, with respect to any
Person, the power to direct or cause the direction of the management and
policies of such Person, whether directly or indirectly, through ownership of
voting securities, by contract or otherwise.
(d) "CORPORATION ACQUISITION" means the consummation of any of
the following involving the Corporation: (i) any
merger, consolidation, share exchange, business combination, or other similar
transaction pursuant to which Control of the Corporation would be transferred to
another Person; (ii) any sale, transfer or other disposition (other than in
connection with the creation of a security interest relating to an ordinary
course of business financing transaction) of 50% or more of the assets of the
Corporation, in a single transaction or series of transactions; or (iii) any
purchase, tender offer or exchange offer for in excess of 50% of the outstanding
shares of capital stock of the Corporation.
(e) "EXCLUDED SECURITIES" means (i) shares of Common Stock
issued or issuable upon exercise of any options granted pursuant to the
Corporation's 1996 Stock Option Plan; (ii) shares of Common Stock issued as a
stock dividend or upon any stock split or other subdivision or combination of
Common Stock; (iii) shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock or Series B Preferred Stock; and (iv) shares of Common
Stock issued by the Corporation to physicians and employees of a physician
practice group in connection with the execution and delivery of a management
services agreement between such physician(s) or such physician practice group
and the Corporation.
(f) "GROUP" means:
(i) In the case of any Investor or Stockholder who is an
individual, (A) such Stockholder, (B) the spouse and lineal
descendants of such Stockholder and (C) a trust for the benefit of any
of the foregoing;
(ii) In the case of any Investor or Stockholder that is a
partnership, (A) such partnership, (B) any of its limited or general
partners (and the direct or indirect equity holders of any
partnership, corporation or other entity which is such a partner) and
(C) any successor to such partnership, including without limitation,
any corporation or other business organization (and the direct or
indirect equity holders of such corporation or business organization)
to which such partnership shall sell all or substantially all of its
assets; and
(iii) In the case of any Investor or Stockholder that is a
corporation, (A) such corporation (and the direct or indirect equity
holders of such corporation) and (B) any successor to such
corporation, including, without limitation, any corporation or other
business organization ( the direct or indirect equity holders of such
corporation or business organization) to which such corporation shall
sell all or substantially all of its assets or with which it shall be
merged.
(g) "INITIAL GRANT" means the 850,000 shares of Common Stock
purchased by ▇▇▇▇▇▇ pursuant to the Purchase Agreement.
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(h) "INVESTOR" means each of (i) Delphi Ventures III, L.P., (ii)
Delphi BioInvestments III, L.P., (iii) Oak Investment Partners VI, L.P., (iv)
Oak VI Affiliates Fund, L.P., (v) ▇▇▇▇▇▇ & Company, Inc. and (vi) ▇▇▇▇▇▇, and
shall include any successor to, or assignee or transferee any Investor who or
that agrees in writing to be treated as an Investor pursuant to this Agreement
and to be bound by the terms and comply with the provisions hereof.
(i) "MEMBER of the Group" with respect to any Investor or
Stockholder means any member of the Group of such Investor or Stockholder.
(j) "▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D., Chairman, President and
Chief Executive Officer of the Corporation.
(k) "PERSON" shall be construed broadly and shall include an
individual, a partnership, a corporation, an association, a joint stock company,
a limited liability company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency political
subdivision thereof.
(l) "PROPORTIONATE PERCENTAGE" shall mean, as to each Investor
and Stockholder, that percentage figure which expresses the ratio that (x) the
number of outstanding shares of Common Stock then owned by such Investor or
Stockholder bears to (y) the aggregate number of outstanding shares of Common
Stock then outstanding (for purposes solely of the computation required under
clauses (x) and (y) above, all of the Corporation's securities that are
convertible into or exercisable or exchangeable (regardless of whether such
securities are convertible, exercisable or exchangeable at the time of
determination) for shares of Common Stock at the rate at which such securities
are (or, but for the lapse of time, would then be) convertible into or
exercisable or exchangeable shares of Common Stock in effect at the time of
delivery by the Corporation of the notice of the Offer contemplated by Section
4(a) shall be deemed to have been issued and be outstanding; provided, however,
that any employee stock options that are not then currently exercisable, shall
be excluded from the computation required under clause (y) above).
(m) "PURCHASE AGREEMENT" means the Stock Purchase Agreement
dated as of May 6, 1996 among the Corporation and the Investors.
(n) "SCOI STOCKHOLDERS" means each of the persons identified as
a SCOI Stockholder on Schedule I attached hereto, and shall include any
successor to, or assignee or transferee of, any SCOI Stockholder who agrees in
writing to be treated as a SCOI Stockholder pursuant to this Agreement and to be
bound by the terms and comply with the provisions hereof.
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(o) "SERIES A PREFERRED STOCK" means the Series A Convertible
Preferred Stock, $.01 par value, of the Corporation or any series of stock into
which the Series A Preferred stock is convertible pursuant to Sections 4, 5 and
6 of Article IV of the Amended and Restated Certificate of Incorporation of the
Corporation.
(p) "SERIES A-1 PREFERRED STOCK" means the Series A-1
Convertible Preferred Stock, $.01 par value, of the Corporation or any series
into which the Series A-1 Preferred Stock is convertible pursuant to Sections 4,
5 and 6 of Article IV of the Amended and Restated Certificate of Incorporation
of the Corporation.
(q) "SERIES B PREFERRED STOCK" means the Series B Convertible
Preferred Stock, $.01 par value, of the Corporation or any series of stock into
which the Series B Preferred stock is convertible pursuant to Sections 4, 5 and
6 of Article IV of the Amended and Restated Certificate of Incorporation of the
Corporation.
(r) "SERIES B-1 PREFERRED STOCK" means the Series B-1
Convertible Preferred Stock, $.01 par value, of the Corporation or any series
into which the Series B-1 Preferred Stock is convertible pursuant to Sections 4,
5 and 6 of Article IV of the Amended and Restated Certificate of Incorporation
of the Corporation.
(s) "STOCK" means (i) the presently issued and outstanding
shares of capital stock of the Corporation and any options exercisable therefor
(which options shall be deemed to be that number of shares of Stock for which
they are exercisable); (ii) any additional shares of capital stock of the
Corporation hereafter issued and outstanding; and (iii) any shares of capital
stock into which such shares may be converted or for which they may be exchanged
or exercised.
(t) "STOCKHOLDER" means each of the persons identified on
Schedule I attached hereto as the holder of Stock and shall include any other
person who agrees in writing with the parties hereto to be bound by and to
comply with all applicable provisions of this Agreement.
(u) "UNVESTED STOCK" shall have the meaning ascribed thereto in
Section 5 hereof.
(v) "VESTED STOCK" shall have the meaning ascribed thereto in
Section 5 hereof.
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SECTION 2. ELECTION OF DIRECTORS; VOTING; ETC.
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(a) Until this Agreement is terminated pursuant to Section 7
hereof, (i) the number of directors constituting the entire Board of Directors
of the Corporation shall be four and (ii) at each annual or special meeting of
the holders of any class of the capital stock of the Corporation called for the
purpose of electing directors of the Corporation, and at any time at which
holders of any class of the capital stock of the Corporation shall have the
right to vote for or consent in writing to the election of directors of the
Corporation, then, and in each such event, the Stockholders shall vote, and
shall cause their respective Affiliates to vote, all shares of Stock owned by
them and entitled to be voted in the election of directors for, or consent in
writing with respect to such shares in favor of, the election of a Board of
Directors of the Corporation constituted as follows:
(i) ▇▇▇▇▇▇;
(ii) one director designated by Oak Investment Partners VI,
Limited Partnership and Oak VI Affiliates Fund, Limited
Partnership ("Oak");
(iii) one director designated by Delphi Ventures III, L.P.
("Delphi"); and
(iv) one director designated by a majority in interest of
the SCOI Stockholders.
(b) The Stockholders shall vote their shares of Stock (i) to
remove any director whose removal is required by the parties with the power to
designate such director pursuant to Section 2(a) above and (ii) to fill any
vacancy created by the removal, resignation or death of a director or the
increase in the size of the Board of Directors, in each case for the election of
a new director designated and approved in accordance with the provisions of this
Section 2.
(c) For purposes of this Section 2, the SCOI Stockholders hereby
designate ▇▇▇▇▇ ▇▇▇, M.D., as their nominee to serve as a member of the Board of
Directors for each of the terms thereof ending on the date of the annual meeting
of stockholders occurring in 1997 and ending on the of the annual meeting of
stockholders occurring in 1998.
SECTION 3. RIGHT OF FIRST REFUSAL ON CORPORATION ISSUANCE.
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(a) Except in the case of Excluded Securities, the Corporation
shall not at any time after January 31, 1997 issue or sell or agree to issue or
sell any shares of capital stock or any options or other securities exercisable
for or convertible into shares of capital stock (collectively, the "Equity
Securities")
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of the Corporation, unless in each case the Corporation shall have first offered
to sell to each Investor such Investor's Proportionate Percentage (as
hereinafter defined) of such securities (the "Offered Securities"), at a price
and on such other terms as shall have been specified by the Corporation in
writing delivered to such Investor (the "Offer"), which Offer by its terms shall
remain open and irrevocable for a period of 15 business days (the "Offer
Period") from the date it is delivered by the Corporation to the Investors.
(b) Notice of each Investor's intention to accept, in whole or
in part, an Offer shall be evidenced by a writing signed by such Investor and
delivered to the Corporation prior to the end of the Offer Period, setting forth
the portion of the Offered Securities such Investor elect purchase (the "Notice
of Acceptance"). If any Investor shall subscribe for less than its Proportionate
Percentage of the Offered Securities to be sold, the other subscribing Investors
shall be entitled to purchase the balance of that Investor's Proportionate
Percentage in the same proportion in which they were entitled to purchase the
Offered Securities in the first place (excluding for such purposes such
Investor). The Corporation shall notify each Investor within five business days
following the expiration of the Offer Period of the amount of Offered Securities
which each Investor may purchase pursuant to the foregoing sentence, and each
Investor shall then have five business days from the delivery of such notice to
indicate such additional amount, if any, that such Investor wishes to purchase.
(c) In the event that Notices of Acceptance are not given by the
Investors in respect of all the Offered Securities, the Corporation shall have
120 days from the expiration of the foregoing 15-business day or 25-business day
period, whichever is applicable, to sell all or any pa such Offered Securities
as to which Notices of Acceptance have not been given by the Investors (the
"Refused Securities") to any other person or persons, but only upon terms and
conditions in all respects, including, without limitation, unit price and
interest rates, which are not more favorable, in the aggregate, to such other
person or persons or less favorable to the Corporation than those set forth in
the Offer. Upon the closing, which shall include full payment to the
Corporation, of the sale to such other person or persons of all the Refused
Securities, and upon the execution and delivery by each Investor subscribing for
Offered Securities of such documentation as shall be required to be executed and
delivered by all other purchasers in such transaction, such Investors shall
purchase from the Corporation, and the Corporation shall sell to such Investors,
the Offered Securities in respect of which Notices of Acceptance were delivered
to the Corporation by the Investors, on the terms specified in the Offer.
(d) In each case, any Offered Securities not purchased by the
Investors or any other person or persons in accordance
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with Section 4(c) may not be sold or otherwise disposed of until they are again
offered to the Investors under the procedures specified in Sections 4(a), (b)
and
(e) The rights granted under this Section 3 shall terminate as
to any Investor upon such Investor's failure to purchase all of such Investor's
Proportionate Percentage of the Offered Securities and such Investor shall
forfeit its rights under this Section 3 as to any subsequent issuance of Equity
Securities by the Corporation; provided, however, that the rights under this
Section 3 shall not terminate as to ▇▇▇▇▇▇ unless he fails to purchase the
following percentages of the Offered Securities: (i) 6.25 percent in the first
financing round to occur after the date hereof; and (ii) 3.00 percent in each
subsequent financing round.
SECTION 4. PROCEDURES ON SALE OF STOCK TO THIRD PARTIES. Except
as otherwise expressly provided in Section 5, each Investor and each Member of
the Group of each Investor shall sell or transfer or agree to sell or transfer
("Sell") Stock only in accordance with the following procedures; provided,
however, that with respect to ▇▇▇▇▇▇, Stock, as used in this Section 4, shall be
limited to Vested Stock (as defined in Section 5 hereof) and Unvested Stock (as
defined in Section 5 hereof) may not be the subject of any sale, transfer or
other disposition:
(a) In the event that any Investor or Member of the Group of an
Investor (such Investor or Member of the Group being hereinafter referred to as
a "Selling Investor") receives a bona fide offer from a third party (the
"Prospective Purchaser") to purchase all or any portion of the Stock owned by
the Selling Investor, the Selling Investor shall deliver to the other Investors
a written notice (the "Investor Offer Notice"), which shall be irrevocable for a
period of 15 business days after delivery thereof (the "Investor Offer Period"),
offering (the "Investor Offer") all of the Stock proposed to be Sold by the
Selling Investor to the Prospective Purchaser at the purchase price and on the
terms of the proposed Sale to the Prospective Purchaser (such Investor Offer
Notice shall include the foregoing information and all other relevant terms of
the proposed Sale, including the identification of the Prospective Purchaser).
The Investors shall have the right and option, for a period of 15 business days
after delivery of the Investors Offer Notice, to accept all or any portion of
its or his pro rata share in accordance with its or his Proportionate Percentage
of the Stock so offered at the purchase price and on the terms stated in the
Investor Offer Notice. Such acceptance shall be made by delivering a written
notice to the Selling Investor within said 15 business-day period.
(b) Sales of Stock under the terms of Section 4(a) shall be made
at the offices of the Corporation on a mutually satisfactory business day within
15 business days after the expiration of the Investor Offer Period. Delivery of
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certificates or other instruments evidencing such Stock duly endorsed for
transfer shall be made on such date against payment of the purchase price
therefor.
(c) If the Investors fail to accept all of the Stock offered for
Transfer pursuant to the Investor Offer Notice, then at any time within 60
business days after the expiration of the Investor Offer Period the Selling
Investor may Sell all or any part of the remaining Stock so off for Sale on the
terms stated in the Investor Offer Notice; provided, however, that the Selling
Investor may not, under any circumstances, Sell any Stock to the Prospective
Purchaser if the Board of Directors, in its sole discretion, determines in good
faith that the Prospective Purchaser is a competitor, or an Affiliate of a
competitor, of the Corporation or that such Prospective Purchaser's ownership of
Stock would be contrary to the best interests of the Corporation. In the event
that the Stock is not Transferred by the Selling Investor to the Prospective
Purchaser during such period, the right of the Selling Investor to Sell such
remaining Stock to the Prospective Purchaser shall expire and the obligations of
this Section 4 shall be reinstated.
SECTION 5. REPURCHASE OF STOCK UPON OCCURRENCE OF TERMINATING
EVENT.
(a) Anything contained in this Agreement to the contrary
notwithstanding, after the date (the "Termination Date") upon which the
employment of ▇▇▇▇▇▇ with the Corporation is terminated for any reason
whatsoever, including death, disability, termination by the Corporation, or
resignation by ▇▇▇▇▇▇ (hereinafter, a "Termination Event"), the Corporation
shall have the right to repurchase from ▇▇▇▇▇▇ shares of Unvested Stock (as
hereinafter defined) owned by ▇▇▇▇▇▇ on the terms specified in this Section 5.
(b) For purposes of this Section 5, the "Vested Stock" of ▇▇▇▇▇▇
on the Termination Date shall mean that number of shares of Stock that equals
the sum of (i) 150,000 and (ii) the product of 700,000 and a fraction, the
numerator of which equals the number of full calendar months elapsed since
January 1, 1996, and the denominator of which is 40; provided, however, that
such number of shares may be increased pursuant to the provisions of paragraphs
(f), (g), (h) and (i) of this Section 5.
(c) The "Unvested Stock" of ▇▇▇▇▇▇ on the Termination Date shall
mean that number of shares of Stock which equals the Initial Grant minus the
Vested Stock of ▇▇▇▇▇▇.
(d) Anything contained in this Agreement to the contrary
notwithstanding, upon the occurrence of a Termination Event, the Corporation
shall have the right, but shall not be obligated, to repurchase from ▇▇▇▇▇▇ and
▇▇▇▇▇▇ shall sell to the Corporation upon the exercise of such right, all shares
of Unvested Stock held by ▇▇▇▇▇▇ on the Termination Date, at a price
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equal to $.01 per share of Stock. Such right may be exercised by the Corporation
at any time during the 15 business-day period following the Termination Date by
giving written notice to ▇▇▇▇▇▇ of the exercise of such right.
(e) Each party hereto acknowledges that the Stock owned by
▇▇▇▇▇▇ on the date hereof, which is included in the Initial Grant, is
"restricted stock" within the meaning of Section 83(b) of the Internal Revenue
Code of 1986, as amended, and the Corporation shall cooperate with ▇▇▇▇▇▇
necessary to enable ▇▇▇▇▇▇ to file the election contemplated by said Section
83(b).
(f) If ▇▇▇▇▇▇'▇ employment with the Corporation is terminated
without Cause (as such term is defined in that certain letter of employment
dated as of the date hereof between the Corporation and ▇▇▇▇▇▇), an additional
number of shares of Unvested Stock shall become Vested Stock a the Termination
Date as follows: (i) if the Termination Date is prior to January 1, 1997,
210,000 additional shares of Unvested Stock shall become Vested Stock; (ii) if
the Termination Date is after December 31, 1996 but prior to January 1, 1998,
157,500 additional shares of Unvested Stock shall become Vested Stock; and (iii)
if the Termination Date is after December 31, 1997 but prior to January 1, 1999,
105,000 additional shares of Unvested Stock shall become Vested Stock.
(g) If ▇▇▇▇▇▇'▇ employment with the Corporation is terminated as
a result of his death or by reason of his becoming permanently disabled, 210,000
additional shares of Unvested Stock shall immediately become Vested Stock as of
the Termination Date.
(h) Simultaneously with the effectiveness of a registration
statement filed under the Securities Act for the initial public offering of
securities of the Corporation, fifty percent (50%) of the shares which
constitute Unvested Stock (as determined as of the date of such effectiveness)
shall immediately become Vested Stock.
(i) Simultaneously with the closing of a Corporation
Acquisition, one hundred percent (100%) of the shares which constitute Unvested
Stock (as determined as of the date of such closing) shall immediately become
Vested Stock.
SECTION 6. LEGEND ON STOCK CERTIFICATES.
Each certificate representing shares of Stock held by the
Stockholders shall bear a legend containing words substantially similar to the
following:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE
HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IN RESPECT OF
THE ELECTION OF DIRECTORS ARE
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SUBJECT TO THE TERMS AND CONDITIONS OF THE SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 22, 1996, AMONG BONE,
MUSCLE AND JOINT, INC. AND THE HOLDERS OF THE OUTSTANDING CAPITAL
STOCK OF SUCH CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF BONE, MUSCLE AND JOINT, INC."
SECTION 7. DURATION OF AGREEMENT.
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The rights and obligations of each Stockholder under this
Agreement shall terminate as to such Stockholder upon the earliest to occur of
(a) the transfer of all Stock owned by such Stockholder (including the Stock
owned by all Members of the Group of such Stockholder) and (b) the consummation
of a firm commitment underwritten public offering of the Corporation's Common
Stock registered pursuant to the Securities Act of 1933, as amended.
SECTION 8. COVENANTS WITH RESPECT TO SPECIAL MANDATORY
CONVERSION. Reference is hereby made to the Special Mandatory Conversion of the
Series A Preferred Stock and Series B Preferred Stock, as provided for in
Section 6 of Article Fourth of the Amended and Restated Certificate of
Incorporation. In the event that any shares of Series A-1 Preferred Stock or
Series B-1 Preferred Stock are issued, concurrently with such issuance, the
parties hereto agree to take all such action as may be required, including
amending the Amended and Restated Certificate of Incorporation, (a) to cancel
all authorized Series A-1 Preferred Shares or Series B-1 Preferred Shares that
remain unissued after such issuance, (b) to create and reserve for issuance upon
Special Mandatory Conversion of the Series A Preferred Shares or Series B
Preferred Shares a new series of Preferred Stock equal in number to the number
of shares of Series A-1 Preferred Stock or Series B-1 Preferred Stock so
canceled and to designate a Series A-2 Preferred Stock or Series B-2 Preferred
Stock, as applicable, with the designations, powers, preferences and rights and
the qualifications, limitations and restrictions identical to those then
applicable to the Series A Preferred Stock except that the conversion price for
such shares of Series A-2 Preferred Stock or Series B-2 Preferred Stock once
initially issued shall be the conversion price in effect immediately prior to
such issuance and shall not be subject to adjustment under any "anti-dilution"
provision by reason of subsequent equity financings at lower per share prices,
and (c) to amend the provisions of Section 6 of Article IV of the Amended and
Restated Certificate of Incorporation relating to Special Mandatory Conversion
of the Series A Preferred Shares and the Series B Preferred Shares to provide
that any such subsequent conversion will be into shares of Series A-2 Preferred
Stock or Series B-2 Preferred Stock, as relevant, rather than Series A-1
Preferred Stock or Series B-1 Preferred Stock. The parties hereto further agree
to take the same actions with respect to the Series A-2 Preferred Stock and
Series B-2 Preferred Stock and each subsequently authorized
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series of Preferred Stock upon initial issuance of shares of the last such
series to be authorized.
SECTION 9. WAIVER OF RIGHT OF FIRST REFUSAL. Pursuant to Section
3(a) of the Stockholders Agreement dated as of May 6, 1996 (the "Original
Agreement"), prior to issuing any capital stock of the Corporation, the
Corporation must deliver an Offer (as defined in the Original Agreement to each
Stockholder at least 15 business days prior to the proposed date of such
issuance. Further, pursuant to Section 3(e) of the Original Agreement, any
Stockholder that fails to purchase all of such Stockholder's Proportionate
Percentage of the Offered Securities (each as defined in the Original Agreement)
forfeits its rights under Section 3 with respect to any future issuances of
capital stock by the Corporation. ▇▇▇▇▇▇ & Company, Inc., hereby acknowledges,
by execution of this Agreement, (a) its waiver of the 15-day notice required
under Section 3(a) of the Original Agreement and (b) its forfeiture of the right
of first refusal granted under the Original Agreement, as amended hereby.
SECTION 10. INVESTOR RIGHTS AND OBLIGATIONS. Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge and
agree that the rights and obligations set forth in Sections 3 and 4 hereof shall
be applicable as to the Investors only and not as to any other Stockholder party
hereto.
SECTION 11. SCOI STOCKHOLDER TRANSFEREES. Any transferee of
Stock held by any SCOI Stockholder shall, as a condition to such transfer, agree
to be bound by this Agreement as a SCOI Stockholder.
SECTION 12. SEVERABILITY.
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It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular provision of this Agreement shall be
adjudicated by a court of competent jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
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SECTION 13. GOVERNING LAW.
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This Agreement shall be governed by, and construed in accordance
with, the domestic laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether in 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.
SECTION 14. SUCCESSORS AND ASSIGNS.
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This Agreement shall bind and inure to the benefit of the
parties and their respective successors and assigns, legal representatives and
heirs.
SECTION 15. NOTICES.
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All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or by telecopy or sent by
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or at such other address as may hereafter be designated
in writing by such party to the other parties:
(a) if to the Corporation, to:
Bone, Muscle and Joint, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇;
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; and
(b) if to the Stockholders, to their respective
addresses set forth on Schedule I attached hereto.
----------
All such notices, requests, consents and other communications shall be deemed to
have been delivered (i) in the case of personal delivery or delivery by
telecopy, on the date of such delivery; (ii) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
-12-
dispatch; and (iii) in the case of mailing, on the third business day after the
posting thereof.
SECTION 16. MODIFICATION.
------------
Neither this Agreement nor any provisions hereof can be
modified, changed, discharged or terminated except by an instrument in writing
signed by the Corporation and the holders of at least 80% of the issued and
outstanding capital stock of the Corporation.
SECTION 17. HEADINGS.
--------
The headings of the Sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
SECTION 18. NOUNS AND PRONOUNS.
------------------
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
shall include the plural and vice-versa.
SECTION 19. ENTIRE AGREEMENT.
----------------
This Agreement and the other writings referred to herein or
delivered pursuant hereto contain the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings with respect thereto.
SECTION 20. COUNTERPARTS.
------------
This Agreement may be executed in any number of counterparts,
and each such counterpart hereof shall be deemed to be an original instrument,
and all such counterparts together shall constitute but one agreement.
* * * *
-13-
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Stockholders Agreement on the date first above written.
CORPORATION:
BONE, MUSCLE AND JOINT, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, MD
▇▇▇▇▇▇ ▇▇▇▇▇▇, MD
President and Chief Executive
Officer
INVESTORS:
DELPHI VENTURES III, L.P.
By: DELPHI MANAGEMENT PARTNERS III, L.L.C,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Member
DELPHI BIOINVESTMENTS III, L.P.
By: DELPHI MANAGEMENT PARTNERS III, L.L.C,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Member
OAK INVESTMENT PARTNERS VI, LIMITED
PARTNERSHIP
By: OAK ASSOCIATES VI, LIMITED
PARTNERSHIP,
its General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇
General Partner
OAK VI AFFILIATES FUND, LIMITED
PARTNERSHIP
By: OAK VI AFFILIATES, LLC,
its General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
▇▇▇▇▇▇ & COMPANY, INC.
By:
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
SCOI STOCKHOLDERS:
▇▇▇▇▇ ▇. ▇▇▇, M.D., INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
▇▇▇▇▇ ▇. ▇▇▇, M.D.
President
▇▇▇▇▇▇ DEL ▇▇▇▇▇, M.D., INC.
By: /s/ ▇▇▇▇▇▇ del ▇▇▇▇▇, M.D.
President
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D., INC.
By: /s/ ▇▇▇▇ ▇.▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D., INC.
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D.
President
/s/ A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.,
A MEDICAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
President
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇▇ ▇. Jaivin, M.D.
▇▇▇▇▇▇▇▇ ▇. Jaivin, M.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE I
----------
Stockholders
------------
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
Investors:
---------
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D. 850,000 333,333 666,667
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Delphi Ventures III, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ 147,347 327,438 654,877
Delphi BioInvestments III, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ 2,653 5,895 11,790
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
Oak Investment Partners VI, L.P. 146,580 325,733 651,467
One ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Oak VI Affiliates Fund, Limited 3,420 7,600 15,200
Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & Company, Inc. 25,000 0 0
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
SCOI Stockholders:
------------------
▇▇▇▇▇ ▇. ▇▇▇, M.D., Inc. 311,094 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Del ▇▇▇▇▇, M.D., Inc. 159,096 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D., Inc. 250,485 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 252,352 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 278,686 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. 229,581 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 257,379 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 155,232 0 0
M.D., Inc.
c/o Southern California Orthopedic
Institute Medical Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
A. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D. 166,329 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 188,497 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., 189,580 0 0
A Medical Corporation
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., Inc. 166,989 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. 169,052 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 277,886 0 0
c/o Southern California Orthopedic
Institute Medical Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D. 252,639 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
▇▇▇▇▇▇▇▇ ▇. Jaivin, M.D. 169,202 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D. 184,070 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. 131,225 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. 170,626 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 20,000 0 0
c/o Southern California
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SERIES A SERIES B
PREFERRED PREFERRED
NAME AND ADDRESS COMMON STOCK STOCK STOCK
---------------- ------------ ----- -----
▇▇▇▇▇ ▇▇▇▇▇ 20,000 0 0
c/o Southern California --------- ------- -------
Orthopedic Institute Medical
Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
5,175,000 999,999 2,000,001