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Exhibit (c)(3)
STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of December 17, 1997, among Invacare Corporation, an Ohio
corporation (the "Buyer"), Inva Acquisition Corp., a Massachusetts corporation
and a wholly owned subsidiary of Buyer (the "MergerCo."), and the stockholders
identified on the signature page hereof (the "Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement, Buyer,
MergerCo., and Suburban Ostomy Supply Co., Inc., a Massachusetts corporation
(the "Company"), have entered into an Agreement and Plan of Merger (as such
agreement may hereafter be amended from time to time, the "Merger Agreement"),
pursuant to which MergerCo. will be merged with and into the Company (the
"Merger");
WHEREAS, in furtherance of the Merger, Buyer, MergerCo. and the Company desire
that as soon as practicable (and not later than five business days) after the
announcement of the execution of the Merger Agreement, MergerCo. shall commence
a cash tender offer (the "Offer") to purchase at a price of $11.75 per share all
outstanding shares of Common Stock (as defined in Section 1 hereof) of the
Company, including all of the Shares (as defined in Section 2 hereof)
beneficially owned by the Stockholders; and
WHEREAS, as an inducement and a condition to entering into the Merger Agreement,
Buyer and MergerCo. have required that the Stockholders agree, and Stockholders
have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having beneficial ownership of such securities as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" as within the meaning of Section 13(d)(3) of
the Exchange Act.
(b) "Common Stock" shall mean at any time the Common Stock, no
par value, of the Company.
(c) "Permitted Transferee" means, as to any Stockholder, any
one or more of the following Persons to whom such Stockholder transfers Shares:
(i) the spouse, child, grandchild or parent of such Stockholder, (ii) a trust
created for the exclusive benefit of the Stockholder and any one or more of the
Persons identified in clause (i), or (iii) a charitable organization or trust
created for the exclusive benefit of a charitable organization.
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(d) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
(e) Capitalized terms used and not defined herein have the
respective meanings ascribed to them in the Merger Agreement.
2. TENDER OF SHARES.
(a) In order to induce Buyer and MergerCo. to enter into the
Merger Agreement, the Stockholders hereby agree to validly tender (or cause the
record owner of such shares to validly tender), and not to withdraw, pursuant to
and in accordance with the terms of the Offer, not later than the fifteenth
business day after commencement of the Offer pursuant to Section 1.1 of the
Merger Agreement and Rule 14d-2 under the Exchange Act, the number of shares of
Common Stock set forth opposite the Stockholder's name on Schedule I hereto (the
"Existing Shares"), all of which are Beneficially Owned by such Stockholder, and
any shares of Common Stock acquired by such Stockholder in any capacity after
the date hereof and prior to the termination of this Agreement by means of
purchase, dividend, distribution or in any other way (such shares of Common
Stock, together with the Existing Shares, the "Shares"). The Stockholders hereby
acknowledge and agree that MergerCo.'s obligation to accept for payment and pay
for the Shares in the Offer, including the Shares Beneficially Owned by the
Stockholders, is subject to the terms and conditions of the Offer.
(b) The Stockholders hereby permit Buyer and MergerCo. to
publish and disclose in the Offer Documents and, if approval of the Company's
stockholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC), their identity and ownership of
the Shares, and the nature of their commitments, arrangements and understandings
under this Agreement.
3. ADDITIONAL AGREEMENTS.
(a) VOTING AGREEMENT. Each Stockholder shall, at any meeting
of the holders of Common Stock, however called, or in connection with any
written consent of the holders of Common Stock, vote (or cause to be voted) the
Shares (if any) then held of record or Beneficially Owned by such Stockholder,
(i) in favor of the Merger, the execution and delivery by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
actions contemplated by the Merger Agreement and this Agreement and any actions
required in furtherance thereof and hereof; and (ii) against any Transaction
Proposal and against any action or agreement that would impede, frustrate,
prevent or nullify this Agreement, or result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or which would result in any of the
conditions set forth in Annex I to the Merger Agreement or set forth in Article
VIII of the Merger Agreement not being fulfilled.
(b) NO INCONSISTENT ARRANGEMENTS. Each Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and the
Merger Agreement, such Stockholder shall not (i) transfer (which term shall
include, without limitation, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of the Shares or any interest therein,
(ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of the Shares or any interest therein,
(iii) grant any proxy,
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power-of-attorney or other authorization in or with respect to the Shares, (iv)
deposit the Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares or (v) take any other action that would
in any way restrict, limit or interfere with the performance of such
Stockholder's obligations hereunder or the transactions contemplated hereby or
by the Merger Agreement. Notwithstanding the foregoing, a Stockholder may
transfer Shares to a Permitted Transferee if prior to such transfer such
Permitted Transferee executes a counterpart of this Agreement in form
satisfactory to Buyer agreeing to be bound by all of the terms hereof as if such
Permitted Transferee were an original signatory of this Agreement.
(c) GRANT OF IRREVOCABLE LIMITED PROXY; APPOINTMENT OF LIMITED
PROXY. (i) Each Stockholder hereby irrevocably grants to, and appoints, Buyer
and Thomas R. Miklich and Thomas J. Buckley, or any one of them, in their
respective capacities as officers of Buyer, and any individual who shall
hereafter succeed to any such office held by such individuals with Buyer, and
each of them individually, the Stockholder's limited proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of the
Stockholder, solely for the purpose of voting the Shares, or granting a consent
or approval in respect of the Shares in favor of the Merger and against any
Transaction Proposal, (ii) Each Stockholder represents that any proxies
heretofore given in respect of such Stockholder's Shares are not irrevocable,
and that any such proxies are hereby revoked; (iii) Each Stockholder understands
and acknowledges that Buyer and MergerCo. are entering into the Merger Agreement
in reliance upon such Stockholder's execution and delivery of this Agreement.
Each Stockholder hereby affirms that the irrevocable limited proxy set forth in
this Section 3(c) is given in connection with the execution of the Merger
Agreement, and that such irrevocable limited proxy is given to secure the
performance of the duties of such Stockholder under this Agreement. Each
Stockholder hereby further affirms that the irrevocable limited proxy is coupled
with an interest and may under no circumstances be revoked except upon
termination in accordance with the provisions of Section 8. Each Stockholder
hereby ratifies and confirms all that such irrevocable limited proxy holder may
lawfully do or cause to be done by virtue hereof. Such irrevocable limited proxy
is executed and intended to be irrevocable in accordance with the provisions of
Chapter 156B, Section 41 of the Massachusetts General Laws.
(d) NO SOLICITATION. The Stockholders hereby agree, in their
capacities as Stockholders of the Company, that neither the Stockholders nor any
of their subsidiaries or affiliates shall (and each Stockholder shall cause its
officers, directors, employees, representatives and agents, including, but not
limited to, investment bankers, attorneys and accountants, not to), directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Buyer, any of its affiliates or
representatives) concerning any Transaction Proposal. The Stockholders will
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Transaction Proposal. The
Stockholders will immediately communicate to Buyer the terms of any proposal,
discussion, negotiation or inquiry (and will disclose any written materials
received by any Stockholder in connection with such proposal, discussion,
negotiation or inquiry) and the identity of the party making such proposal or
inquiry which any Stockholder may receive in respect of any such transaction.
Any action taken by the Company or any member of the Board of Directors of the
Company in accordance with Section 7.6 of the Merger Agreement shall be deemed
not to violate this Section 3(d).
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(e) CONSULTATION. Each party shall promptly consult with the
others and provide any necessary information and material with respect to all
filings made by such party with any governmental entity in connection with this
Agreement and the Merger Agreement, the Offer and the transactions contemplated
hereby and thereby.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each Stockholder hereby
separately represents and warrants (solely with respect to such Stockholder and
not with respect to any other Stockholder) to Buyer and MergerCo. as follows:
(a) OWNERSHIP OF SHARES. The Stockholder is the record and
Beneficial Owner of the Existing Shares, as set forth on Schedule I. On the date
hereof, the Existing Shares constitute all of the Shares owned of record or
Beneficially Owned by the Stockholders. The Stockholder has sole voting power
and sole power to issue instructions with respect to the matters set forth in
Sections 2, 3 and 4 hereof, sole power of disposition and sole power to agree to
all of the matters set forth in this Agreement, in each case with respect to all
of the Existing Shares with no limitations, qualifications or restrictions on
such rights, subject to applicable securities laws and the terms of this
Agreement.
(b) POWER; BINDING AGREEMENT. The Stockholder has the power
(corporate, partnership or other) and authority to enter into and perform all of
such Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any other
agreement to which the Stockholder is a party including, without limitation, any
voting agreement, proxy arrangement, pledge agreement, stockholders agreement or
voting trust. This Agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding agreement of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this Agreement or the consummation by
the Stockholder of the transactions contemplated hereby.
(c) NO CONFLICTS. Except for filings under the HSR Act and the
Exchange Act (i) no filing with, and no permit, authorization, consent or
approval of, any governmental entity is necessary for the execution of this
Agreement by the Stockholder and the consummation by the Stockholder of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by the Stockholder, the consummation by the Stockholder of the
transactions contemplated hereby or compliance by the Stockholder with any of
the provisions hereof shall (A) conflict with or result in any breach of any
organizational documents applicable to the Stockholder, (B) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of kind to which the Stockholder is a party or by which
the Stockholder or any of its properties or assets may be bound, or (C) violate
any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to the Stockholder or any of its properties or assets.
(d) NO ENCUMBRANCES. Except as permitted by this Agreement,
the Existing
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Shares and the certificates representing the Existing Shares are now, and at all
times during the term hereof will be, held by the Stockholder, or by a nominee
or custodian for the benefit of the Stockholder, free and clear of all liens,
claims, charges or encumbrances ("Encumbrances"), proxies, voting trusts or
agreements, understandings or arrangements or any other rights whatsoever,
except for any such Encumbrances or proxies arising hereunder.
(e) NO FINDER'S FEES. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Stockholder.
(f) RELIANCE BY BUYER AND MERGERCO. The Stockholder
understands and acknowledges that Buyer and MergerCo. are entering into the
Merger Agreement and commencing the Offer in reliance upon the Stockholder's
execution and delivery of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF BUYER AND THE MERGERCO. Each of Buyer and
MergerCo. hereby represents and warrants to the Stockholders as follows:
(a) POWER; BINDING AGREEMENT. Buyer and MergerCo. each has the
corporate power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by each of Buyer and MergerCo. will not violate any other agreement to which
either of them is a party. This Agreement has been duly and validly executed and
delivered by each of Buyer and MergerCo. and constitutes a valid and binding
agreement of each of Buyer and the Purchaser, enforceable against each of Buyer
and MergerCo. in accordance with its terms.
(b) NO CONFLICTS. Except for filings under the HSR Act and the
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any governmental entity is necessary for the execution of this
Agreement by each of Buyer and MergerCo. and the consummation by each of Buyer
and MergerCo. of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by each of Buyer and MergerCo., the
consummation by each of Buyer and MergerCo. of the transactions contemplated
hereby or compliance by each of Buyer and MergerCo. with any of the provisions
hereof shall (A) conflict with or result in any breach of any organizational
documents applicable to either of Buyer or MergerCo., (B) result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which either of Buyer or MergerCo. is a party or by
which either of Buyer or MergerCo. or any of their properties or assets may be
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either of Buyer or MergerCo. or any of
their properties or assets.
6. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further lawful action as may be necessary
or desirable to consummate and make effective the agreements set forth in
Sections 2 and 3 of this Agreement.
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7. STOP TRANSFER. No Stockholder shall request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Shares, unless such transfer is made in compliance with
this Agreement. In the event of a stock dividend or distribution, or any change
in the Common Stock by reason of any stock dividend, split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall refer to
and include the Shares as well as all such stock dividends and distributions and
any shares into which or for which any or all of the Shares may be changed or
exchanged.
8. TERMINATION. The covenants, agreements and proxy contained herein with
respect to the Shares, and all other obligations of the Stockholders hereunder,
shall terminate upon the termination of the Merger Agreement in accordance with
its terms.
9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) BINDING AGREEMENT. This Agreement and the obligations
hereunder shall attach to the Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of the Shares shall pass, whether
by operation of law or otherwise, including, without limitation, any
Stockholder's administrators or successors. Notwithstanding any transfer of
Shares, the transferor shall remain liable for the performance of all
obligations of the transferor under this Agreement.
(c) ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
parties hereto; provided that Buyer or MergerCo. may assign, in its sole
discretion, its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of Buyer, but no such assignment shall relieve Buyer or
MergerCo. of its obligations hereunder if such assignee does not perform such
obligations.
(d) AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto
(e) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if given) by hand delivery or telecopy (with a
confirmation copy sent for next day delivery via courier service, such as
Federal Express), or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the Stockholder, to the address set forth on Schedule I hereto,
with a copy to:
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
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Boston, MA 02110
Attn: James Westra
Telephone No.: (617) 951-6600
Telecopy No.: (617) 951-1295
If to Buyer or MergerCo.,
Invacare Corporation
One Invacare Way
Elyria, Ohio 44035
Attention: Thomas R. Miklich
Chief Financial Officer, Secretary and Treasurer
Telephone No.: (440) 329-6111
Telecopy No.: (440) 366-9008
with a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
Attn: Dale C. LaPorte
Telephone No.: (216) 622-8200
Telecopy No.: (216) 241-0816
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) SEVERABILITY. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of 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 portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore in the event of any such breach the aggrieved party shall be entitled
to the remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
(h) REMEDIES CUMULATIVE. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) NO WAIVER. The failure of any party hereto to exercise any
right, power or
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remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
(j) NO THIRD PARTY BENEFICIARIES. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law thereof; PROVIDED,
however, that the laws of the respective jurisdictions of incorporation of each
of the parties shall govern the relative rights, obligations, powers, duties and
other internal affairs of such party and its board of directors.
(l) WAIVER OF JURY TRIAL. Each party hereto hereby waives any
right to a trial by jury in connection with any action, suit or proceeding
brought in connection with this Agreement.
(m) DESCRIPTIVE HEADINGS. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, Buyer and MergerCo. have caused this Agreement to
be duly executed as of the day and year first above written.
BUYER: STOCKHOLDERS:
INVACARE CORPORATION /s/ Herbert Gray
By: /s/ Thomas R. Miklich ----------------------------------
-------------------------------- Herbert Gray
Name: Thomas R. Miklich
----------------------------
Title: CFO /s/ Donald Benovitz
---------------------------- ----------------------------------
Donald Benovitz
SUMMIT VENTURES III, L.P.
MERGERCO.: By: Summit Partners III, L.P.,
Its General Partner
INVA ACQUISITION CORP. By: Stamps, Woodsum & Co. III,
By: /s/ Thomas R. Miklich Its General Partner
-------------------------------
Name: Thomas R. Miklich By: /s/ Martin J. Mannion
---------------------------- ------------------------------
Title: Director General Partner
----------------------------
SUMMIT INVESTORS II, L.P.
By: /s/ Martin J. Mannion
------------------------------
Authorized Signatory
SUMMIT SUBORDINATED DEBT
FUND, L.P.
By: Summit Partners SD, L.P.,
Its General Partner
By: Stamps, Woodsum & Co. III,
Its General Partner
By:/s/ Martin J. Mannion
-------------------------------
General Partner
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SCHEDULE I
NUMBER OF SHARES BENEFICIALLY OWNED
-----------------------------------
ADDRESS
STOCKHOLDER OPTIONS DIRECT OWNERSHIP
- ----------- ------- ----------------
Herbert Gray 300 Boylston St. Apt 5-10 620,000 (as individual) 186,000
Boston, MA 02116 33,634 (as trustee)
Donald Benovitz One Everett Terrace 245,366 (as individual) 124,000
South Natick, MA 01760 33,634 (as trustee)
Summit Ventures III, L.P. 600 Atlantic Ave. Suite 2800 3,357,509
Boston, MA 02110-2227
Summit Investors II, L.P. 600 Atlantic Ave. Suite 2800 78,696
Boston, MA 02110-2227
Summit Subordinated 600 Atlantic Ave. Suite 2800 498,626
Debt Fund, L.P. Boston, MA 02110-2227
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