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EXHIBIT 10(hh)
STOCKHOLDERS AGREEMENT dated as of September 30, 1997 (this
"Agreement") among Novametrix Medical Systems Inc., a Delaware corporation (the
"Corporation"), and the stockholders of the Corporation signing this Agreement
(the "Stockholders").
W I T N E S S E T H:
WHEREAS, each of the Stockholders is the beneficial owner of
the number of shares of common stock, $.01 par value ("Common Stock"), of the
Corporation, Class A Warrants to purchase the number of shares of Common Stock
("A Warrants") and Class B Warrants to purchase the number of shares of Common
Stock ("B Warrants") set forth opposite such Stockholder's name on the signature
page hereto and is a member of a group (the "13D Group") which has filed a
statement in respect of their holdings of the Corporation's securities on
Schedule 13D under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
NOW, THEREFORE, in consideration of the mutual benefits to be
derived and the conditions and promises herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Voting Agreement. The Corporation agrees that the 1997
annual meeting (the "1997 Meeting") of the Corporation's stockholders will be
held not later than October 14, 1997. Provided that none of the executive
officers of the Corporation has actual knowledge of any Solicitation (as
hereinafter defined) relating to the Corporation on the date hereof which
Solicitation is not publicly supported by a resolution of a majority of the
current members of the Board of Directors of the Corporation (a "Dissident
Solicitation"), each of the Stockholders, for the benefit of the Corporation and
as an inducement to the Corporation to enter into this Agreement, agrees to vote
or cause to be voted at the 1997 Meeting all of the shares of Common Stock which
he or she has the right to vote and of which he or she has the right to direct
the vote in favor of persons (the "Continuing Director Nominees") who shall be
nominated as directors by a majority of the current directors of the
Corporation. Immediately upon any of the executive officers of the Corporation
obtaining actual knowledge of any Dissident Solicitation, the Corporation shall
inform the Stockholder Representative of such Dissident Solicitation. The terms
"Solicitation" and "Solicit" shall mean (i) any solicitation (within the
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meaning of the Exchange Act) of a proxy (as defined in the Exchange Act), (ii)
any request for a proxy, whether or not accompanied, preceded or followed by a
proxy or included in a form of proxy, (iii) any request or recommendation to
execute or not to execute, or to revoke or not to revoke, a proxy, (iv) the
furnishing of a form of proxy or other communication to security holders under
circumstances reasonably calculated to result in the procurement, withholding or
revocation of a proxy or (v) any public statement, favorable or unfavorable,
regarding any proposal, nominee or other matter in any proxy.
2. The 13D Director. (a) Provided that (i) none of the
Stockholders shall have breached any of their agreements hereunder and (ii)
there shall not have been a Dissident Solicitation, then the Corporation shall
use its best efforts to cause the Board of Directors of the Corporation (x) to
increase by one the number of Class C directors of the Corporation and to elect
John P. Mahoney, M.D. (the "13D Director") as a Class C director of the
Corporation at a meeting of the Board of Directors to be held within 24 hours of
the adjournment of the 1997 Meeting and (y) to nominate the 13D Director for
reelection as a Class C director at the 1998 annual meeting of the Corporation's
stockholders. Attached hereto as Annex A is a form of the agreement of the
current directors of the Corporation concerning this Section 2; such form of
agreement, executed by a majority of the current directors of the Corporation,
is being delivered to the Stockholders contemporaneously herewith.
(b) Notwithstanding the foregoing, if the Stockholders shall
at any time beneficially own (within the meaning of Rule 13d-3 under the
Exchange Act) in the aggregate less than five percent (5%) of the shares of
Common Stock outstanding or 460,270 shares of Common Stock, whichever is less,
then the Stockholders shall have no further rights under this Section 2 and the
13D Director shall promptly resign as a director of the Corporation. The 13D
Director has executed a contingent resignation in the form of Annex B hereto.
3. By-law Amendment. The amendment to the By-laws of the
Corporation set forth on Annex C hereto will be proposed for adoption at the
next meeting of the Board of Directors of the Corporation. Each of the
Stockholders agrees that such amendment is appropriate and agrees not to oppose
or challenge its adoption.
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4. Appointment of Stockholder Representative.
(a) Each Stockholder hereby makes, constitutes and appoints
John P. Mahoney, M.D. to be such Stockholder's true and lawful attorney in fact
and agent (the "Stockholder Representative"), for such Stockholder and in such
Stockholder's name, as effectively as such Stockholder could act for himself or
herself, with full power of substitution in the premises, to take all actions
which under this Agreement are to be or may be taken by such Stockholder,
including, without limitation, to give and receive all consents, waivers,
amendments, notices and other communications to be given or which may be given
or to be received or which may be received under this Agreement. The incapacity
of any Stockholder shall not terminate the agency and power of attorney granted
hereby to the Stockholder Representative. Upon the death of any Stockholder,
such Stockholder's executors, administrators, legal representatives and heirs
may only exercise rights under this Agreement through the Stockholder
Representative as their sole and exclusive agent. Such agency and power of
attorney is irrevocable and coupled with an interest, and the provisions of this
Section 4 are independent and severable and shall be enforceable notwithstanding
any rights or remedies that any Stockholder may have in connection with, or in
any way arising out of, the transactions contemplated by this Agreement. The
obligations hereunder of Dr. Mahoney, as representative, shall not be terminated
by operation of law, whether by his death or incapacity or by the occurrence of
any other event. In the event Dr. Mahoney should die or become incapacitated, or
for any other reason become unable to perform his responsibilities hereunder, or
resign such position, the Stockholders holding a majority of the shares of
Common Stock held by all Stockholders shall select another representative by
written notice executed by such Stockholders and delivered to the Corporation to
fill such vacancy and such substituted representative shall be deemed the
Stockholder Representative for all purposes of this Agreement.
(b) The Corporation shall be entitled to rely conclusively on
the actions, communications, instructions, decisions and agreements of the
Stockholder Representative as being the actions, communications, instructions,
decisions and agreements of each of the Stockholders (without the need to
communicate or otherwise confirm such with any Stockholder), and no Stockholder
shall have any claim or cause of action against the Corporation for any action
taken or not taken by the Corporation in reliance
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upon the actions, communications, instructions, decisions or agreements of the
Stockholder Representative.
(c) All actions, communications, instructions, decisions and
agreements of the Stockholder Representative shall be conclusive and binding
upon all of the Stockholders and no Stockholder shall have any claim or cause of
action against the Stockholder Representative for any action taken or not taken
by the Stockholder Representative in his role as such, except for any action or
omission taken or made fraudulently or in bad faith with respect to such
Stockholder.
5. No Solicitation.
(a) From the date hereof through the date of the 1997 Meeting,
none of the Stockholders and none of their respective affiliates or associates
shall become, provide information to or assist a Participant (as hereinafter
defined) in any Dissident Solicitation. The term "Participant" shall mean (i)
any committee or group which Solicits proxies, any member of such committee or
group, and any person whether or not named as a member who, acting alone or with
one or more other persons, directly or indirectly takes the initiative, or
engages, in organizing, directing or arranging for the financing of any such
committee or group; (ii) any person who finances or joins with another to
finance the Solicitation of proxies; (iii) any person who lends money or
furnishes credit or enters into any other arrangements, pursuant to any contract
or understanding with a Participant, for the purpose of financing or otherwise
inducing the purchase, sale, holding or voting of securities of the Corporation
by any Participant or other persons, in support of or in opposition to a
Participant; and (iv) any person who Solicits proxies. The terms "affiliate" and
"associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 under the Exchange Act, as in effect on the date hereof.
(b) This Section 5 shall not be deemed to amend or modify in
any way that certain Rights Agreement dated as of March 14, 1989, as amended,
between the Corporation and the rights agent thereunder.
6. Public Announcements. Subject to Section 5(a), each of the
Stockholders will consult with the Corporation before issuing any press release
or making any public statement with respect to this Agreement or any of the
transactions contemplated hereby.
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7. Reorganization, Etc. The provisions of this Agreement shall
apply mutatis mutandi to any shares of capital stock resulting from any stock
split or reverse split, stock dividend, reclassification of the capital stock of
the Corporation, consolidation, merger or reorganization of the Corporation.
8. Notices. Any notice or other communication under this
Agreement shall be in writing and sufficient if delivered personally, by
telecopy or sent by registered or certified mail, postage prepaid, addressed as
follows:
If to the Corporation:
5 Technology Drive
Wallingford, Connecticut 06492
Telephone: (203) 265-7701
Telecopy: (203) 269-0189
Attention: President
with a copy to:
Haythe & Curley
237 Park Avenue
New York, New York 10017
Telephone: (212) 880-6000
Telecopy: (212) 682-0200
Attention: John J. Butler, Esq.
If to any Stockholder:
To the address as set forth opposite such
Stockholder's name on Annex D hereto.
with a copy to:
Cobb, Cole & Bell, PA
150 Magnolia Avenue
P.O. Box 2491
Daytona Beach, Florida 32115
Telephone: (904) 255-8171
Telecopy: (904) 258-5068
Attention: John P. Ferguson, Esq.
If to the Stockholder Representative:
806 Ivanhoe Road
Tallahassee, Florida 32308
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with a copy to:
Cobb, Cole & Bell, PA
150 Magnolia Avenue
P.O. Box 2491
Daytona Beach, Florida 32115
Telephone: (904) 255-8171
Telecopy: (904) 258-5068
Attention: John P. Ferguson, Esq.
All such notices and communications shall be deemed to have been duly given at
the time delivered by hand, if personally delivered, upon confirmation of
receipt, if sent by telecopy, or five (5) business days after being deposited in
the mail, if sent by registered or certified mail. Any party may, upon written
notice to the other parties hereto, change the address to which notices or other
communications to such party are to be delivered or mailed.
9. Expenses. Provided that none of the Stockholders shall
have breached any of their agreements hereunder, within 10 days after the 1997
Meeting, the Corporation shall pay directly or reimburse the Stockholders for
the reasonable out-of-pocket expenses of the Stockholders not to exceed $10,000
in the aggregate incurred in connection with this Agreement and any statements
they shall have filed on Schedule 13D under the Exchange Act with respect to
their holdings of the Corporation's securities. Except as set forth in the
preceding sentence, the Corporation, on the one hand, and the Stockholders, on
the other hand, shall bear their respective expenses in connection with this
Agreement.
10. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
11. Entire Agreement. This Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof.
All of the parties hereto agree that this Agreement may be amended or modified
or any provision hereof may be waived by a written agreement between the
Stockholder Representative and the Corporation. This Agreement supersedes all
prior understandings, negotiations and agreements relating to the subject matter
hereof.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be
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performed entirely within such State, without regard to any conflict of laws
principles of such State which would apply the laws of any other jurisdiction.
13. Jurisdiction; Waiver of Trial by Jury. THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY CONNECTICUT STATE OR UNITED
STATES FEDERAL COURT SITTING IN THE CITY OF NEW HAVEN, CONNECTICUT OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW HAVEN, CONNECTICUT, STATE OR FEDERAL COURT. THE
PARTIES AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. THE PARTIES FURTHER WAIVE TRIAL BY JURY,
ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO ANY ACTION OR
PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE PARTIES
FURTHER AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A CONNECTICUT STATE OR UNITED STATES FEDERAL
COURT SITTING IN NEW HAVEN, CONNECTICUT.
14. Headings. The headings in this Agreement are solely for
convenience of reference and shall not affect the interpretation of any of the
provisions hereof.
15. Severability. If any provision herein contained shall be
held to be illegal or unenforceable, such holding shall not affect the validity
or enforceability of the other provisions of this Agreement.
16. Binding Effect. Provided that this Agreement shall have
been duly and validly executed by the Corporation and Stockholders beneficially
owning an aggregate of at least 90% of the shares of Common Stock beneficially
owned by all of the members of the 13D Group, this Agreement shall be binding
upon and inure to the benefit of the Corporation and its successors and
permitted assigns and the Stockholders who have signed this Agreement and their
respective executors, administrators, legal representatives and heirs, as
applicable.
17. Specific Enforcement. Each of the parties hereto hereby
consents and agrees that, in the event of a breach or threatened breach by any
party of any provision this Agreement, the Corporation, in the case of a breach
by any Stockholder, or the Stockholder Representative, in the case of a breach
by the Corporation, shall be entitled to an injunction or similar equitable
relief restraining the party
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breaching or threatening a breach from committing or continuing any such breach
or threatened breach or granting specific performance of any act required to be
performed under this Agreement by the party breaching or threatening a breach,
without the necessity of showing any actual damage or that money damages would
not afford an adequate remedy and without the necessity of posting any bond or
other security.
18. Construction. The parties hereto agree that this Agreement
is the product of negotiations among sophisticated parties, each of whom were
represented by counsel, and each of whom had an opportunity to participate in,
and did participate in, the drafting of each provision hereof.
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IN WITNESS WHEREOF, each of the parties hereto has executed
this Stockholders Agreement on the date first above written.
NOVAMETRIX MEDICAL SYSTEMS
INC.
By:
----------------------------
Name:
Title:
6,470 730 /s/ Charles F. Manning, Jr., M.D.
------ ---------- ---------- --------------------------------
Shares A Warrants B Warrants Charles F. Manning, Jr., M.D.
58,8601 /s/ Meredith S. Manning
------- ---------- ---------- -----------------------
Shares A Warrants B Warrants Meredith S. Manning
4,470 /s/ John P. Mahoney, M.D.
------- ---------- ---------- ------------------------
Shares A Warrants B Warrants John P. Mahoney, M.D.
1,2642 /s/ Barbara P. Mahoney
------- ---------- ---------- ----------------------
Shares A Warrants B Warrants Barbara P. Mahoney
88,0003 /s/ Todd A. Patterson, M.D.
- -------- ---------- ---------- --------------------------
Shares A Warrants B Warrants Todd A. Patterson, M.D.
88,0003 /s/ Rose M. Patterson
- -------- ---------- ---------- ---------------------
Shares A Warrants B Warrants Rose M. Patterson
10,0004 /s/ Gary W. Cater, M.D.
- -------- ---------- ---------- ----------------------
Shares A Warrants B Warrants Gary W. Cater, M.D.
- --------
1 Owned jointly with Charles F. Manning, Jr., M.D.
2 An additional 173,741 Shares and 10,400 B Warrants are owned jointly
with John P. Mahoney, M.D.
3 Owned jointly by Todd A. Patterson, M.D. and Rose M. Patterson.
4 Owned jointly by Gary W. Cater, M.D. and Teresa C. Cater.
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10,0004 /s/ Teresa C. Cater
- -------- ---------- ---------- -------------------
Shares A Warrants B Warrants Teresa C. Cater
5,5005 /s/ David T. Stewart, M.D.
------ ---------- ---------- -------------------------
Shares A Warrants B Warrants David T. Stewart, M.D.
/s/ Gillian L. Stewart
------ ---------- ---------- ----------------------
Shares A Warrants B Warrants Gillian L. Stewart
400 1,000 /s/ Arthur R. Carlson
------ ---------- ---------- ---------------------
Shares A Warrants B Warrants Arthur R. Carlson
200 /s/ Virginia Lynn Carlson
------ ---------- ---------- -------------------------
Shares A Warrants B Warrants Virginia Lynn Carlson
32,145 20,430 /s/ Sandra Schwemmer, M.D.
- -------- ---------- ----------- ---------------------------
Shares A Warrants B Warrants Sandra Schwemmer, M.D.
81,020 2,090 /s/ Mike Stary, M.D.
- -------- ---------- ---------- -------------------
Shares A Warrants B Warrants Mike Stary, M.D.
32,4406 2,946 /s/ Henry J. Yee
- -------- ---------- ---------- -----------------
Shares A Warrants B Warrants Henry J. Yee
2,908 /s/ Angela S. Yee
------ ---------- ---------- -----------------
Shares A Warrants B Warrants Angela S. Yee
- --------
(4) Owned jointly by Gary W. Cater, M.D. and Teresa C. Cater.
(5) Owned jointly by David T. Stewart, M.D. and Gillian L. Stewart.
(6) Owned jointly by Henry J. Yee and Angela S. Yee.
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Annex A to Stockholders Agreement
DIRECTORS' AGREEMENT
Reference is hereby made to that certain Stockholders
Agreement dated as of September 30, 1997 (the "Stockholders Agreement") among
Novametrix Medical Systems Inc., a Delaware corporation (the "Corporation"), and
the stockholders of the Corporation who are a party thereto (the
"Stockholders"). All capitalized terms used herein and not otherwise defined
herein shall have the same respective meanings as in the Stockholders Agreement.
Provided that none of the Stockholders shall have breached any of their
agreements under the Stockholders Agreement and there shall not have been a
Solicitation relating to the Corporation on or after the date thereof which
Solicitation is not publicly supported by a resolution of a majority of the
current members of the Board of Directors of the Corporation, then each of the
undersigned hereby agrees, in his capacity as a director of the Corporation, to
(x) to increase by one the number of Class C directors of the Corporation and to
elect John P. Mahoney, M.D. (the "13D Director") as a Class C director of the
Corporation at a meeting of the Board of Directors to be held within 24 hours of
the adjournment of the 1997 Meeting and (y) to nominate the 13D Director for
reelection as a Class C director at the 1998 annual meeting of the Corporation's
stockholders.
________________________________ ___________________________
Paul A. Cote Vartan Ghugasian
________________________________ ___________________________
Thomas M. Haythe William J. Lacourciere
________________________________ ___________________________
Phortios T. Paulson Steven J. Shulman
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Annex B to Stockholders Agreement
CONTINGENT RESIGNATION
Novametrix Medical Systems Inc.
If (i) I am elected as a director of Novametrix Medical
Systems Inc., a Delaware corporation (the "Corporation"), and (ii) the
stockholders of the Corporation who are a party to that certain Stockholders
Agreement dated as of September --, 1997 with the Corporation beneficially own
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) in
the aggregate less than 460,270 shares of common stock, $.01 par value, of the
Corporation, then effective upon the occurrence of the circumstance set forth in
clause (ii) I hereby resign my position as a director of the Corporation.
-------------------------------
John P. Mahoney, M.D.
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Annex C to Stockholders Agreement
AMENDMENT TO THE BY-LAWS
The By-Laws of the Corporation will be amended to provide that
the election of directors by the Board of the Directors of the Corporation, a
change in the number or classification of directors of the Corporation or the
election or removal of officers of the Corporation must be by the affirmative
vote of a majority of the full Board of Directors of the Corporation, at a
meeting for which notice of the proposed action has been given.
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Annex D to Stockholders Agreement
STOCKHOLDERS
Name Address
Charles F. Manning, Jr., M.D. 1831 Ox Bottom Road
Meredith S. Manning Tallahassee, Florida 32312
John P. Mahoney, M.D. 806 Ivanhoe Road
Barbara P. Mahoney Tallahassee, Florida 32308
Todd A. Patterson, M.D. 2700 Cline Street
Rose M. Patterson Tallahassee, Florida 32312
Gary W. Cater, M.D. 2569 Noble Drive
Teresa C. Canter Tallahassee, Florida 32312
David T. Stewart, M.D. 2528 Noble Drive
Gillian L. Stewart Tallahassee, Florida 32312
Arthur R. Carlson 6329 Coach House Court
Virginia Lynn Carlson Tallahassee, Florida 32312
Sandra Schwemmer, M.D. 160 Key Heights Drive
Miami, Florida 33070-2010
Mike Stary, M.D. 16780 S.W. 277th Street
Miami, Florida 33031-2722
Henry J. Yee 5137 Hampton Lake Drive
Angela S. Yee Marietta, Georgia 30068