EXECUTION COPY
SECOND AMENDMENT TO STOCKHOLDERS' AGREEMENT
THIS SECOND AMENDMENT is dated as of June 29, 2001 (this "SECOND
AMENDMENT") to the Stockholders' Agreement dated as of March 30, 1999, as
amended (the "STOCKHOLDERS Agreement"), by and among OraSure Technologies, Inc.
(as successor to STC Technologies, Inc.), a Delaware corporation (the
"COMPANY"), and the Investors identified therein. Capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Stockholders' Agreement.
WHEREAS, the Stockholders' Agreement provides the Investors with
certain rights and the parties now desire to supplement and amend the terms of
the Stockholders' Agreement pursuant to the terms of this Second Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the Company and the Investors hereby agree as follows:
1. Limitations on Registration Rights; Holdback.
(a) The Company may delay the filing, delay the effectiveness or
suspend the effectiveness of a registration statement of the Company covering
Restricted Shares as contemplated by Sections 3.4, 3.5 or 3.6 of the
Stockholders' Agreement or otherwise prepared by the Company (including any
shelf registration statement on Form S-3) (a "REGISTRATION STATEMENT") or
require the Investors to suspend sales or other dispositions of Restricted
Shares under an effective Registration Statement, in each case for such time as
may be required by the Company, if (i) in the Board's judgment, the sale of
Restricted Shares thereunder would interfere with or be detrimental to a planned
offering by the Company of any of the Company's securities, (ii) in the Board's
judgment, the sale of Restricted Shares thereunder would have a material adverse
effect on the business, prospects, operations, results of operations, assets,
liabilities, or condition (financial or otherwise) of the Company; (iii) the
Company is engaged in discussions concerning any possible merger, acquisition,
financing, business combination, restructuring or sale of all or any substantial
portion of the Company or its assets, or any similar transaction or (iv) the
Company would be required to disclose in such Registration Statement material
information that it would not otherwise be required to disclose in its filings
with the Commission pursuant to the Exchange Act and that it has not then
disclosed in such filings with the Commission (each an "ALLOWED DELAY").
Notwithstanding the foregoing, the Company shall not be entitled to exercise its
right to defer filing or effectiveness of or to suspend sales or other
dispositions under a Registration Statement pursuant to an Allowed Delay for
more than ninety (90) consecutive days. In the event of an Allowed Delay, the
Company shall promptly (x) notify the Investors in writing (a "DELAY Notice") of
the existence (but not the substance) of the Allowed Delay and (y) advise the
Investors in writing to cease all sales or other dispositions under such
Registration Statement until the expiration of the period provided for in the
Delay Notice. To the extent required by the Stockholders' Agreement, upon
expiration of the Allowed Delay, the Company shall again be required to file,
cause the effectiveness of, or permit the resumption of sales and dispositions
under the Registration Statement.
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(b) If the Company shall at any time register any of its
securities under the Securities Act, for offer or sale to the public, then the
Investors shall not make any short sale, assignment, transfer, pledge,
hypothecation, gift or other disposition (including the grant of any option for
sale) of any Restricted Shares (other than for the public sale of those
Restricted Shares included in and sold pursuant to such registration) without
the prior written consent of the Company for such period as may be designated by
the Company and, if the registration shall be, in whole or in part, an
underwritten offering, the managing underwriter; provided that no such period
shall begin more than ten (10) days prior to the effectiveness of a Registration
Statement pursuant to which such public offer or sale will be made and shall not
last more than ninety (90) days after the effective date of such Registration
Statement.
(c) The Company shall use its commercially reasonable efforts to
keep any Registration Statement covering Restricted Shares effective, including,
but not limited to, preparing and filing with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective
until the earlier of (i) the sale of all Restricted Shares covered thereby or
(ii) two years following the effective date of such Registration Statement.
Notwithstanding the foregoing, the Company's obligations pursuant to this
Section 1(c) and Section 3 of the Stockholders Agreement are subject to the
terms of Section 1(a) hereof.
2. Obligations of the Investors. In connection with any registration of
the Restricted Shares, each of the Investors shall:
(a) furnish to the Company such information regarding itself, the
Restricted Shares held by it and the intended method of disposition of the
Restricted Shares held by it as shall be reasonably requested by the Company and
shall execute such documents in connection with such registration as the Company
may reasonably request;
(b) cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement or any amendment or supplement thereto;
(c) upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3.7(e) of the Stockholders
Agreement, immediately discontinue disposition of Restricted Shares pursuant to
a Registration Statement covering such Restricted Shares until the Investor's
receipt of the copies of the supplemented or amended prospectus contemplated by
such Section 3.7(e) and, if so directed by the Company, deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession, of the
prospectus covering such Restricted Shares current at the time of receipt of the
notice of the happening of an event as described in such Section 3.7(e);
(d) upon receipt of any Delay Notice, immediately discontinue the
sale or disposition of Restricted Shares until the expiration of the Allowed
Delay or any extension thereof pursuant to a subsequent Delay Notice; and
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(e) comply with all applicable laws and regulations in connection
with any sale, transfer or other disposition of Restricted Shares.
3. Indemnification. Each prospective seller, and any underwriter acting
on its behalf, of Restricted Shares registered pursuant to any Registration
Statement prepared by the Company, whether or not pursuant to Section 3 of the
Stockholders' Agreement, will indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 3.9(a) of the Stockholders'
Agreement) the Company, each director of the Company, each officer of the
Company who signs such Registration Statement and any person who controls the
Company within the meaning of the Securities Act, with respect to any untrue
statement or omission from such Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, if such untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such seller or such underwriter specifically for use
in the preparation of such Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement; provided, however, that the maximum
amount of liability in respect of such indemnification shall be limited, in the
case of each prospective seller, to an amount equal to the net proceeds actually
received by such prospective seller from the sale of Restricted Shares effected
pursuant to such Registration Statement.
4. Acknowledgment of Obligations. Each prospective seller, and any
underwriter acting on its behalf, of Restricted Shares registered pursuant to
any Registration Statement prepared by the Company, whether or not pursuant to
Section 3 of the Stockholders' Agreement, shall be bound by all of the
applicable terms and provisions set forth in the Stockholders' Agreement and
this Second Amendment.
5. Termination of Certain Provisions. Sections 2.1, 2.2, 2.4(a)(xiv),
2.4(b), 2.4(c), 2.7(e)(i), 2.9, and 2.12 of the Stockholders' Agreement are
hereby terminated in their entirety and neither the Company nor any Investor
shall have any further rights or obligations under such Sections.
6. Miscellaneous.
(a) Successors and Assigns. Except as otherwise expressly provided
in the Stockholders' Agreement or this Second Amendment, the provisions of the
Stockholders' Agreement and this Second Amendment shall bind and inure to the
benefit of the Company and each of the Investors and the respective successors
and assigns of the Company and each of the Investors. Subject to the
requirements of Section 3 of the Stockholders' Agreement, the Restricted Shares
held by the Investors and all of the rights and obligations set forth in the
Stockholders Agreement and this Second Amendment may be freely assigned, in
whole or in part, by each Investor to any member of such Investor's Group;
provided, however, upon the acceptance any Restricted Shares by any transferee
of the Investor, such transferee shall automatically be bound by the obligations
imposed under the Stockholders' Agreement and this Second Amendment to the same
extent as if such transferee were an Investor. Upon any such transfer of
Restricted Shares by an Investor, such Investor shall, as a condition to such
transfer, deliver to the Company a written notice of such proposed transfer by
which such the transferee is and the securities of the Company owned or acquired
by such transferee are identified. A
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transferee to whom rights are transferred pursuant to this Section 6(a) will be
thereafter deemed to be an Investor for the purpose of the execution of such
transferred rights and may not again transfer such rights to any other person or
entity, other than as provided in this Section 6(a). Neither this Agreement nor
any of the rights or duties of the Company set forth herein shall be assigned by
the Company, in whole or in part, without having first received the written
consent of the Investors holding a majority of the voting power of the
outstanding Series A Preferred Shares held by all Investors, with each such
holder entitled to the number of votes for each such share of Series A Preferred
Stock as equals the number of shares of Common Stock (including fractional
shares) into which each such share of Series A Preferred Stock is then
convertible, rounded up to the nearest one-tenth of a share.
(b) Except as otherwise provided herein, the provisions of the
Stockholders' Agreement, including, but not limited to, Section 3 thereof, shall
remain in full force and effect. To the extent that the terms of the
Stockholders' Agreement conflict with the terms of this Second Amendment, the
terms of this Second Amendment shall control.
(c) The Stockholders' Agreement and this Second Amendment
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
(d) Failure of any party to exercise any right or remedy under
this Second Amendment or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
(e) This Second Amendment shall be enforced, governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflict of laws principles. In the event that any provision of this
Second Amendment is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.
(f) This Second Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Second Amendment, once executed by a
party, may be delivered to the other party hereto by facsimile transmission of a
copy of this Second Amendment bearing the signature of the party so delivering
this Second Amendment. This Second Amendment shall be effective upon execution
by the holders of not less than fifty percent (50%) of the outstanding
Restricted Shares pursuant to Section 11 of the Stockholders' Agreement.
(g) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Second Amendment and the consummation of the transactions
contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company and the Investors have caused this
Second Amendment to be duly executed as of the date first above written.
ORASURE TECHNOLOGIES, INC.
By: /s/ Robert D. Thompson
Name: Robert D. Thompson
Title: Chief Executive Officer
HEALTHCARE VENTURES V, L.P.
By: HealthCare Partners V, its General Partner
By: /s/ Jeffrey Steinberg
Name: Jeffrey Steinberg
Title: Administrative Partner
HUDSON TRUST
By:---------------------------------------
Name:-------------------------------------
Title:------------------------------------
PENNSYLVANIA EARLY STAGE PARTNERS, L.P.
By: Pennsylvania Early Stage Partners GP,
L.L.C., its General Partner
By: /s/ Michael Bolton
Name: Michael Bolton
Title: Managing Director
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