1
EXHIBIT 10.4
STOCKHOLDER AGREEMENT (INTERPORE)
STOCKHOLDER AGREEMENT dated as of February 11, 1998, among CROSS
MEDICAL PRODUCTS, INC., a Delaware corporation ("Cross"), and the individuals
and other parties listed on Schedule A attached hereto (each, a "Stockholder"
and, collectively, the "Stockholders").
WHEREAS, Interpore International, a California corporation
("Interpore"), Buckeye International, Inc., a Delaware corporation and a wholly
owned subsidiary of Interpore ("Sub"), and Cross propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement"; capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement)
providing for the merger of Sub with and into Cross (the "Merger"), upon the
terms and subject to the conditions set forth in the Merger Agreement; and
WHEREAS, each Stockholder owns the number of shares of common
stock, no par value per share, of Interpore (the "Common Stock"), set forth
opposite his or its name on Schedule A attached hereto (such shares of Common
Stock, together with any other shares of capital stock of Interpore acquired by
such Stockholder after the date hereof and during the term of this Agreement
(including through the exercise of any stock options, warrants or similar
instruments), being collectively referred to herein as the "Subject Shares");
and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Cross has requested that each Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Cross to enter into, and in
consideration of its entering into, the Merger Agreement, and in consideration
of the promises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. Representations and Warranties of each Stockholder. Each
Stockholder hereby, severally and not jointly, represents and warrants to Cross
as of the date hereof in respect of himself or itself as follows:
(a) Authority. The Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Stockholder and constitutes a valid and binding obligation of
the Stockholder enforceable against the Stockholder in accordance with its
terms. Except for the expiration or termination of the waiting periods under the
HSR Act and informational filings with the SEC, the execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, (i) conflict with, or
result in any violation of, or default (with or without notice or lapse of time
or both) under any provision of the articles of incorporation or by-laws (if
any) of the Stockholder, any trust agreement, loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Stockholder or to the
8
2
Stockholder's property or assets, (ii) require any filing with, or permit,
authorization, consent or approval of, any Federal, state or local government or
any court, tribunal, administrative agency or commission or other governmental
or regulatory authority or agency, domestic, foreign or supranational or (iii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets,
including the Subject Shares. If the Stockholder is a natural person and is
married, and the Stockholder's Subject Shares constitute community property or
otherwise need spousal or other approval for this Agreement to be legal, valid
and binding, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, the Stockholder's spouse,
enforceable against such spouse in accordance with its terms. No trust of which
such Stockholder is a trustee requires the consent of any beneficiary to the
execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby.
(b) The Subject Shares. The Stockholder is the record and
beneficial owner of, or is trustee of a trust that is the record holder of, and
whose beneficiaries are the beneficial owners of, or is the beneficial owner of,
and is the owner of a sole proprietorship that is the record holder of, and has
good and valid title to, the Subject Shares set forth opposite his or its name
on Schedule A attached hereto, free and clear of any Liens whatsoever except as
shown on Schedule A which impose no restrictions on the Stockholder's right to
vote the Subject Shares. The Stockholder does not own, of record or
beneficially, any shares of capital stock of Interpore other than the Subject
Shares set forth opposite his or its name on Schedule A attached hereto. The
Stockholder has the sole right to vote such Subject Shares, and none of such
Subject Shares is subject to any voting trust or other agreement, arrangement or
restriction with respect to the voting of such Subject Shares, except as
contemplated by this Agreement. The Stockholder represents that any proxies
heretofore given in respect of the Stockholder's Subject Shares are not
irrevocable, and that all such proxies are hereby revoked.
2. Representations and Warranties of Cross. Cross hereby
represents and warrants to each Stockholder that Cross has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by Cross and constitutes a valid and binding obligation
of Cross enforceable against Cross in accordance with its terms.
3. Covenants of each Stockholder. Until the termination of this
Agreement in accordance with Section 8, each Stockholder, severally and not
jointly, agrees as follows:
(a) At any meeting of stockholders of Interpore called to
vote upon the Merger and the Merger Agreement or at any annual meeting at which
such matters are voted upon, and at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval with respect to the
Merger and the Merger Agreement is sought, the Stockholder shall vote (or cause
to be voted) the Subject Shares in favor of the Merger, the adoption by
Interpore of the Merger Agreement and the approval of the terms thereof and each
of the other transactions contemplated by the Merger Agreement.
(b) The Stockholder shall not, nor shall it permit any
director, officer, partner, employee or agent or any investment banker, attorney
or other adviser or representative
2
3
of the Stockholder to, directly or indirectly, except as contemplated by this
Agreement, directly or indirectly, grant any proxies or powers of attorney with
respect to the Subject Shares, deposit the Subject Shares into a voting trust,
enter into a voting agreement with respect to the Subject Shares, dispose of any
Subject Shares or permit the Subject Shares to be encumbered by or subject to
any security interest, lien, claim, pledge, option, agreement, limitation in
voting rights, charge or other encumbrance of any nature.
(c) Subject to the terms of Section 12, during the term of
this Agreement, the Stockholder shall not, nor shall it permit any director,
officer, partner, employee or agent or any investment banker, attorney or other
adviser or representative of the Stockholder to, directly or indirectly, (i)
solicit, initiate or encourage the submission of, any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by Interpore or any other Alternative
Transaction as such term is defined in Section 7.3(e) of the Merger Agreement (a
"Competing Proposal") or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Competing Proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by an investment banker or
attorney retained by, or other adviser or representative of, such Stockholder,
whether or not such person is purporting to act on behalf of such Stockholder,
shall be deemed to be a violation of this Section 3(c) by such Stockholder.
(d) Until the Merger is consummated or the Merger Agreement
is terminated, the Stockholder shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by the Merger
Agreement.
(e) The Stockholder, and any beneficiary of a revocable trust
for which such Stockholder serves as trustee, shall not take any action to
revoke or terminate such trust or take any other action which would restrict,
limit or frustrate in any way the transactions contemplated by this Agreement.
Each such beneficiary hereby acknowledges and agrees to be bound by the terms of
this Agreement applicable to it.
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and
appoints Joseph A. Mussey and Paul A. Miller, in their respective capacities as
officers of Cross, and any individual who shall hereafter succeed to their
respective offices of Cross, and each of them individually, such Stockholder's
proxy and attorney-in-fact (with full power of substitution), for and in the
name, place and stead of such Stockholder, to vote such Stockholder's Subject
Shares, or grant a consent or approval in respect of such Subject Shares, in
favor of adoption of the Merger Agreement and the related transactions
contemplated by the Merger Agreement.
3
4
(b) Such Stockholder represents that any proxies heretofore
given in respect of such Stockholder's Subject Shares are not irrevocable, and
that all such proxies are hereby revoked.
(c) Such Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 4 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. Such
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest, and may under no circumstances be revoked. Such Stockholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 212(e) of the
Delaware General Corporation Law (the "DGCL").
5. Further Assurances. Each Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as Cross may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
6. Certain Events.
(a) Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such Stockholder's Subject Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Subject Shares shall pass, whether by operation of law or
otherwise, including such Stockholder's heirs, guardians, administrators or
successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of
Interpore affecting the Common Stock, or the acquisition of additional shares of
Common Stock or other voting securities of Interpore by any Stockholder, the
number of Subject Shares listed in Schedule A beside the name of such
Stockholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Common Stock or
other voting securities of Interpore issued to or acquired by such Stockholder.
(b) Each Stockholder agrees that such Stockholder will tender
to Interpore, within 10 business days after the date hereof (or, in the event
Subject Shares are acquired subsequent to the date hereof within 10 business
days after the date of acquisition), any and all certificates representing such
Stockholder's Subject Shares in order that Interpore may inscribe upon such
certificates the legend in accordance with Section 5.15 of the Merger Agreement.
7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any Stockholder, on the
one hand, without the prior written consent of Cross nor by Cross, on the other
hand, without the prior written consent of the Stockholders, except that Cross
may assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Cross. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
4
5
8. Termination. This Agreement shall terminate on the earlier of
(i) the Effective Time or (ii) the date upon which the Merger Agreement is
terminated in accordance with its terms.
9. General Provisions.
(a) Amendments. This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to Cross in accordance with
Section 8.2 of the Merger Agreement and to the Stockholders at their respective
addresses set forth on Schedule A attached hereto (or at such other address for
a party as shall be specified in like notice).
(c) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(d) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been signed
by each of the parties and delivered to the other party, it being understood
that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
(g) Voidability. If prior to the execution hereof, the Board
of Directors of Interpore shall not have duly and validly authorized and
approved by all necessary corporate action, this Agreement, the Merger Agreement
and the transactions contemplated hereby and thereby, so that by the execution
and delivery hereof Cross would become, or could reasonably be expected to
become an "interested stockholder" with whom Cross would be prevented for any
period pursuant to Section 203 of the DGCL from engaging in any "business
combination" (as such terms are defined in Section 203 of the DGCL), then this
Agreement shall be void and
5
6
unenforceable until such time as such authorization and approval shall have been
duly and validly obtained.
10. Enforceable. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any court of the United States located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (iii) agrees that such party
will not bring any action relating to this Agreement or the transactions
contemplated hereby in any court other than a court of the United States located
in the State of Delaware or a Delaware state court.
11. Public Announcements. No Stockholder shall issue any press
release or other public statement with respect to the transactions contemplated
by this Agreement and the Merger Agreement without the prior written consent of
Interpore.
12. Stockholder Capacity. No person executing this Agreement who
is or becomes during the term hereof a director or officer of Interpore makes
any agreement or understanding herein in his or her capacity as such director or
officer. Without limiting the generality of the foregoing, each Stockholder
signs solely in his or her capacity as the record holder and beneficial owner
of, or the trustee of a trust whose beneficiaries are the beneficial owners of,
or as the beneficial owner of, and as the owner of a sole proprietorship that is
the record holder of, such Stockholder's Subject Shares and nothing herein shall
limit or affect any actions taken by a Stockholder in his or her capacity as an
officer or director of Interpore in exercising its rights under the Merger
Agreement.
13. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
6
7
IN WITNESS WHEREOF, Cross has caused this Agreement to be
signed by its officer thereunto duly authorized and each Stockholder has signed
this Agreement, all as of the date first written above.
CROSS MEDICAL PRODUCTS, INC., A DELAWARE
CORPORATION
By: /S/ JOSEPH A. MUSSEY
-------------------------------------------
Name: Joseph A. Mussey
Title: President and Chief Executive Officer
/S/ DAVID C. MERCER
----------------------------------------------
David C. Mercer, an Individual
BURR, EGAN DELEAGE & CO.
By: /S/ GUY P. NOHRA
-------------------------------------------
Name: Guy P. Nohra
-----------------------------------------
Title: General Partner
---------------------------------------