SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 7)
FUQUA ENTERPRISES, INC.
(formerly Vista Resources, Inc.)
--------------------------------
(Name of Issuer)
Common Stock, par value $2.50 per share
---------------------------------------
(Title of Class of Securities)
361022-10-6
-----------
(CUSIP Number)
J. Rex Fuqua
One Atlantic Center
1201 West Peachtree Street
Suite 5000
Atlanta, Georgia 30309
Telephone: (404) 815-2000
- --------------------------------------------------------------------------------
(Name, Address, and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 5, 1997
-------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
<PAGE>
- ------------------------------
CUSIP NO. 361022-10-6
- ------------------------------
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
J. B. Fuqua
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
Not applicable.
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 693,917
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 435,698
Person With --------------------------
9. Sole Dispositive Power
693,917
--------------------------
10. Shared Dispositive Power
435,698
--------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
J. B. Fuqua may be deemed to own beneficially (through the power to
direct the vote and disposition thereof) 1,129,615 shares of the Common Stock
(372,232 individually, 160,843 as trustee for The Jennifer Calhoun Fuqua Trust,
160,842 shares as trustee for The Lauren Brooks Fuqua Trust, 69,698 as an
officer and director of The J. B. Fuqua Foundation, Inc., and 366,000 as an
officer and director of Fuqua Holdings, Inc.).
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Approximately 25.2%
- --------------------------------------------------------------------------------
14. Type of Reporting Person
IN
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-2-
<PAGE>
- ----------------------------------
CUSIP NO. 361022-10-6
- ----------------------------------
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
J. Rex Fuqua
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
Not Applicable
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
---------
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6. Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 310,142
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 435,698
Person With --------------------------
9. Sole Dispositive Power
310,142
--------------------------
10. Shared Dispositive Power
435,698
--------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
J. Rex Fuqua may be deemed to own beneficially (through the power to
direct the vote and disposition thereof) 745,840 shares of the Common Stock
(310,142 individually, 69,698 as an officer and director of The J. B. Fuqua
Foundation, Inc. and 366,000 as an officer and director of Fuqua Holdings,
Inc.).
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Approximately 16.6%
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14. Type of Reporting Person
IN
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-3-
<PAGE>
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CUSIP NO. 361022-10-6
- ----------------------------------
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Fuqua Holdings, Inc.
IRS I.D. No. 58-2185727
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2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
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3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
Not applicable.
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
Georgia
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Number of 7. Sole Voting Power
Shares 366,000
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 0
Person With --------------------------
9. Sole Dispositive Power
366,000
--------------------------
10. Shared Dispositive Power
0
--------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
Fuqua Holdings, Inc., the general partner of Fuqua Holdings - I, L.P.,
may be deemed to own beneficially (through the power of its sole directors and
shareholders, J. B. Fuqua and J. Rex Fuqua, to direct the vote and disposition
thereof) 366,000 shares of the Common Stock.
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
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13. Percent of Class Represented by Amount in Row (11)
Approximately 8.2%
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14. Type of Reporting Person
CO
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-4-
<PAGE>
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CUSIP NO. 361022-10-6
- ----------------------------------
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Fuqua Holdings - I, L.P.
IRS I.D. No. 58-2185724
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2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
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3. SEC Use Only
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4. Source of Funds
Not applicable.
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
Georgia
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 366,000
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 0
Person With --------------------------
9. Sole Dispositive Power
366,000
--------------------------
10. Shared Dispositive Power
0
--------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
Fuqua Holdings - I, L.P. may be deemed to own beneficially (through the
power of J. B. Fuqua and J. Rex Fuqua as the sole directors and shareholders of
Fuqua Holdings, Inc., the general partner of Fuqua Holdings-I, L.P., to direct
the vote and disposition thereof) 366,000 shares of the Common Stock.
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
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13. Percent of Class Represented by Amount in Row (11)
Approximately 8.2%
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14. Type of Reporting Person
PN
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-5-
<PAGE>
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CUSIP NO. 361022-10-6
- ----------------------------------
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The Jennifer Calhoun Fuqua Trust
IRS I.D. No. 58-6163768
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2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
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3. SEC Use Only
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4. Source of Funds
Not applicable.
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
Georgia
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Number of 7. Sole Voting Power
Shares 160,843
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 0
Person With --------------------------
9. Sole Dispositive Power
160,843
--------------------------
10. Shared Dispositive Power
0
--------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
The Jennifer Calhoun Fuqua Trust may be deemed to own beneficially
(through the power of its sole trustee, J. B. Fuqua, to direct the vote and
disposition thereof) 160,843 shares of the Common Stock.
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
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13. Percent of Class Represented by Amount in Row (11)
Approximately 3.6%
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14. Type of Reporting Person
OO
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-6-
<PAGE>
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CUSIP NO. 361022-10-6
- -----------------------------------
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The Lauren Brooks Fuqua Trust
IRS I.D. No. 58-6163767
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2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
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3. SEC Use Only
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4. Source of Funds
Not applicable.
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
Georgia
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Number of 7. Sole Voting Power
Shares 160,842
Beneficially --------------------------
Owned by 8. Shared Voting Power
Each Reporting 0
Person With --------------------------
9. Sole Dispositive Power
160,842
--------------------------
10. Shared Dispositive Power
0
--------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
The Lauren Brooks Fuqua Trust may be deemed to own beneficially
(through the power of its sole trustee, J. B. Fuqua, to direct the vote and
disposition thereof) 160,842 shares of the Common Stock.
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
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13. Percent of Class Represented by Amount in Row (11)
Approximately 3.6%
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14. Type of Reporting Person
OO
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-7-
<PAGE>
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CUSIP NO. 361022-10-6
- ----------------------------------
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The J. B. Fuqua Foundation, Inc.
IRS I.D. No. 23-7122039
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2. Check the Appropriate Box if a Member of a Group
(a) X
-----
(b)
-----
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3. SEC Use Only
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4. Source of Funds
Not applicable.
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e)
--------
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6. Citizenship or Place of Organization
Georgia
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Number of 7. Sole Voting Power
Shares 69,698
-----------------------------
Beneficially 8. Shared Voting Power
Owned by 0
-----------------------------
Each Reporting 9. Sole Dispositive Power
Person With 69,698
-----------------------------
10. Shared Dispositive Power
0
-----------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
The J. B. Fuqua Foundation, Inc. may be deemed to own beneficially
(through the power of its directors and officers to direct the vote thereof)
69,698 shares of the Common Stock.
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
--------
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Approximately 1.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person
CO
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-8-
<PAGE>
This Amendment No. 7 ("Amendment No. 7") amends the Schedule 13D, dated
March 27, 1989 (the "Schedule 13D"), of J. B. Fuqua, J. Rex Fuqua, Fuqua
Holdings, Inc., Fuqua Holdings - I, L.P., The Jennifer Calhoun Fuqua Trust, The
Lauren Brooks Fuqua Trust, and The J. B. Fuqua Foundation, Inc. (collectively,
the "Reporting Persons"), with respect to the common stock, par value $2.50 per
share (the "Common Stock"), of Fuqua Enterprises, Inc. (formerly Vista
Resources, Inc.), a Delaware corporation (the "Issuer"), as set forth below.
ITEM 4. PURPOSE OF TRANSACTION
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The information contained in Items 4 and 6 of the Schedule 13D is hereby
supplemented by the following:
On September 5, 1997, the Issuer entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Graham-Field Health Products, Inc., a
Delaware corporation ("Acquiror"), and GFHP Acquisition Corp., a Delaware
corporation ("Acquiror Sub"), pursuant to which Acquiror Sub will merge with and
into the Issuer (the "Merger"). Assuming the Merger occurs, each issued and
outstanding share of the Common Stock of the Issuer will be converted into
shares of common stock of the Acquiror, as set forth in and subject to the terms
of the Merger Agreement.
In connection with the Merger Agreement, the Reporting Persons entered
into that certain Stockholders Agreement, dated as of September 5, 1997 (the
"Stockholders Agreement"), with the Acquiror, BIL (Far East Holdings) Limited, a
Hong Kong corporation, BIL Securities (Offshore) Ltd., a New Zealand
corporation, and Irwin Selinger. Pursuant to the Stockholders Agreement, the
Reporting Persons have agreed, subject to various conditions set forth in the
Stockholders Agreement, to vote all of their shares of the Common Stock of the
Issuer in favor of the Merger and the Merger Agreement and against any other
proposal with respect to a merger, consolidation or other business combination,
or any acquisition or similar transaction involving the purchase of all or any
significant portion of the Issuer's assets or capital stock.
The Stockholders Agreement also provides that, following the Effective
Time, and for as long as the Restricted Group (which includes the Reporting
Persons) beneficially owns Outstanding Voting Securities representing 5% or more
of the Voting Power of all Outstanding Voting Securities (as such capitalized
terms are defined in the Stockholders Agreement), the Restricted Group shall
have the right to designate a member of the Board of Directors of the Acquiror
and, subject to certain exceptions set forth therein, the Restricted Group shall
vote the Voting Securities of Acquiror in accordance with the recommendation of
Acquiror's Board of Directors in connection with certain matters. The
Stockholders Agreement also provides restrictions on the ability of members of
the Restricted Group to directly or indirectly assign, sell, pledge, hypothecate
or otherwise transfer or dispose of their shares of the common stock of the
Acquiror. Additionally, the Restricted Group will be subject to certain
restrictions following the Effective Time with respect to their ability to
acquire additional shares of capital stock of the Acquiror. The Stockholders
Agreement terminates upon the earlier to occur of (i) the termination of the
Merger Agreement, (ii) the mutual written consent of the Reporting Persons and
the Acquiror, (iii) such time as the Restricted Group beneficially owns less
than 5% of the Voting Power of all Outstanding Voting Securities, and (iv) upon
a Change of Control (as such capitalized terms are defined therein). A complete
copy of the Stockholders Agreement is attached hereto as Exhibit 1 and is
incorporated herein by reference.
The Reporting Persons and the Acquiror also have entered into a
Registration Rights Agreement, dated as of September 5, 1997 (the "Registration
Rights Agreement"). The Registration Rights Agreement sets forth the rights of
the members of the Restricted Group to have their shares of Registrable
Securities (as defined therein) registered for sale by the Acquiror under
certain circumstances. A complete copy of the Registration Rights Agreement is
attached hereto as Exhibit 2 and is incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Stockholders Agreement, dated as of September 5, 1997 by and among
the Reporting Persons, Graham-Field Health Products, Inc., BIL (Far
East Holdings) Limited, BIL Securities (Offshore) Ltd., and Irwin
Selinger
Exhibit 2 Registration Rights Agreement, dated as of September 5, 1997 by
and among Graham-Field Health Products, Inc. and the Reporting
Persons
-9-
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 8, 1997
/s/ J. B. Fuqua
-----------------------------------------
J. B. FUQUA
/s/ J. Rex Fuqua
-----------------------------------------
J. REX FUQUA
FUQUA HOLDINGS, INC.
By: /s/ J. Rex Fuqua
-----------------------------------------
Name: J. Rex Fuqua
-----------------------------------------
Title: President
-----------------------------------------
FUQUA HOLDINGS - I, L.P.
By: FUQUA HOLDINGS, INC., its General Partner
By: /s/ J. Rex Fuqua
-----------------------------------------
Name: J. Rex Fuqua
-----------------------------------------
Title: President, Fuqua Holdings, Inc.
-----------------------------------------
THE JENNIFER CALHOUN FUQUA TRUST
By: /s/ J. B. Fuqua
-----------------------------------------
Name: J. B. Fuqua
-----------------------------------------
Title: Trustee
-----------------------------------------
-10-
<PAGE>
THE LAUREN BROOKS FUQUA TRUST
By: /s/ J. B. Fuqua
-----------------------------------------
Name: J. B. Fuqua
-----------------------------------------
Title: Trustee
-----------------------------------------
THE J. B. FUQUA FOUNDATION, INC.
By: /s/ J. B. Fuqua
-----------------------------------------
Name: J. B. Fuqua
-----------------------------------------
Title: Chairman/President
-----------------------------------------
-11-
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1 Stockholders Agreement, dated as of September 5, 1997 by and among
the Reporting Persons, Graham-Field Health Products, Inc., BIL
(Far East Holdings) Limited, BIL Securities (Offshore) Ltd., and
Irwin Selinger
2 Registration Rights Agreement, dated as of September 5, 1997 by
and among Graham-Field Health Products, Inc. and the Reporting
Persons
STOCKHOLDERS AGREEMENT
dated as of September 5, 1997
by and among
GRAHAM-FIELD HEALTH PRODUCTS, INC.,
BIL (FAR EAST HOLDINGS) LIMITED,
BIL SECURITIES (OFFSHORE) LTD.,
IRWIN SELINGER
and
THE OTHER INDIVIDUALS AND ENTITIES LISTED
ON THE SIGNATURE PAGES HERETO
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Stockholders Agreement to which
it is attached but is inserted for convenience only.
Page
No.
----
ARTICLE I
DEFINITIONS
1.01 Definitions........................................................... 2
ARTICLE II
BOARD OF DIRECTORS
2.01 Composition of Board of Directors..................................... 5
2.02 Resignations and Designations......................................... 6
ARTICLE III
TRANSFER OF SHARES
3.01 Restriction on Certain Transfers...................................... 6
3.02 Legend .............................................................. 7
ARTICLE IV
STANDSTILL
4.01 Limitation on Acquisition of Equity Securities........................ 8
4.02 Standstill............................................................ 8
ARTICLE V
COVENANTS OF THE STOCKHOLDERS IN CONNECTION WITH THE MERGER
5.01 Ownership of Target Shares; Approval of Merger Agreement.............. 9
5.02 No Solicitation....................................................... 10
5.03 Director Actions...................................................... 10
ARTICLE VI
COVENANTS OF BIL ENTITIES IN CONNECTION WITH THE MERGER
6.01 Approval of Merger Agreement.......................................... 10
6.02 Director Actions...................................................... 11
- i -
<PAGE>
Page
No.
----
ARTICLE VII
COVENANTS OF MR. SELINGER IN CONNECTION WITH THE MERGER
7.01 Approval of Merger Agreement.......................................... 11
7.02 Director Actions...................................................... 12
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
8.01 Authority............................................................. 12
8.02 No Conflicts.......................................................... 12
8.03 Governmental Approvals and Filings.................................... 13
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
9.01 Incorporation......................................................... 13
9.02 Authority............................................................. 13
9.03 No Conflicts.......................................................... 13
9.04 Governmental Approvals and Filings.................................... 14
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF THE BIL ENTITIES
10.01 Incorporation........................................................ 14
10.02 Authority............................................................ 14
10.03 No Conflicts......................................................... 15
10.04 Governmental Approvals and Filings................................... 15
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF MR. SELINGER
11.01 Authority............................................................ 15
11.02 No Conflicts......................................................... 16
11.03 Governmental Approvals and Filings................................... 16
ARTICLE XII
GENERAL PROVISIONS
12.01 Survival of Representations, Warranties, Covenants and Agreements.... 16
12.02 Termination.......................................................... 17
12.03 Amendment and Waiver................................................. 17
12.04 Notices.............................................................. 17
12.05 Irrevocable Appointment of Agent..................................... 19
12.06 Entire Agreement..................................................... 19
- ii -
<PAGE>
Page
No.
----
12.07 No Third Party Beneficiary........................................... 20
12.08 No Assignment; Binding Effect........................................ 20
12.09 Specific Performance; Legal Fees..................................... 20
12.10 Headings............................................................. 20
12.11 Invalid Provisions................................................... 20
12.12 Governing Law........................................................ 21
12.13 Consent to Jurisdiction and Service of Process....................... 21
12.14 Counterparts......................................................... 21
SCHEDULES
Schedule I Target Shares Owned by the Stockholders
Schedule II Company Shares Owned by the BIL Entities
Schedule III Company Shares Owned by Mr. Selinger
- iii -
<PAGE>
This STOCKHOLDERS AGREEMENT dated as of September 5, 1997 is made and
entered into by and among Graham-Field Health Products, Inc., a Delaware
corporation (the "Company"), BIL (Far East Holdings) Limited, a Hong Kong
corporation ("BIL Far East"), BIL Securities (Offshore) Ltd., a New Zealand
corporation ("BIL Securities" and, together with BIL Far East, the "BIL
Entities"), Irwin Selinger ("Mr. Selinger") and each of the stockholders of
Fuqua Enterprises, Inc., a Delaware corporation ("Target"), listed on the
signature pages hereto (the "Stockholders").
WHEREAS, the Company, GFHP Acquisition Corp., a Delaware corporation
wholly-owned by the Company ("Sub"), and Target have entered into an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement"), which
provides for the merger of Sub with and into Target and for Target to become a
wholly-owned subsidiary of the Company (the "Merger");
WHEREAS, at the Effective Time (as defined below) and in accordance with
the terms of the Merger Agreement, each share of common stock, par value $2.50
per share, of Target (the "Target Common Stock") will be converted into shares
of common stock, par value $.025 per share, of the Company (the "Company Common
Stock"), all as more fully described in the Merger Agreement;
WHEREAS, each Stockholder owns the number of shares of Target Common Stock
set forth opposite such Stockholder's name on Schedule I hereto, each of the BIL
Entities owns the number of shares of Company Common Stock and other shares of
capital stock of the Company set forth on Schedule II hereto and Mr. Selinger
owns the number of shares of Company Common Stock set forth on Schedule III
hereto;
WHEREAS, simultaneously with the execution and delivery of this
Stockholders Agreement, the Stockholders and the Company are entering into a
registration rights agreement providing for the registration for sale, under
certain circumstances, of their shares of Company Common Stock (the
"Registration Rights Agreement"); and
WHEREAS, as a condition to the Company's willingness to consummate the
Merger and to the Stockholders' willingness to vote their shares of Target
Common Stock in favor of the Merger, the Stockholders, the Company, the BIL
Entities and Mr. Selinger desire to establish in this Stockholders Agreement
certain terms and conditions concerning the acquisition and disposition of
securities of the Company by the Stockholders and the corporate governance of
the Company after the Effective Time;
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Stockholders Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. (a) Except as otherwise specifically indicated, the
following terms have the following meanings for all purposes of this
Stockholders Agreement:
"Affiliate" shall have the meaning assigned thereto in Rule 405, as
presently promulgated under the Securities Act.
"Beneficially owns" (or comparable variations thereof) has the meaning
set forth in Rule 13d-3 promulgated under the Exchange Act.
"Board of Directors" means the Board of Directors of the Company.
"Change of Control" means and shall be deemed to have occurred if
after the Effective Time individuals who qualify as Continuing Directors
shall have ceased for any reason to constitute at least a majority of the
Board of Directors.
"Continuing Director" means (i) any individual serving as a member of
the Board of Directors at the Effective Time (including the designee of the
Restricted Group pursuant to Section 2.01), for so long as such individual
is a member of the Board of Directors, and (ii) any individual who is
recommended or elected to serve as a member of the Board of Directors by at
least a majority of the Continuing Directors then in office, for so long as
such individual is a member of the Board of Directors.
"DGCL" means the General Corporation Law of the State of Delaware.
"Effective Time" means the time at which the Merger becomes effective
under the DGCL.
"Equity Securities" means Voting Securities, Convertible Securities
and Rights to Purchase Voting Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic
or foreign state, county, city or other political subdivision.
2
<PAGE>
"Liens" means any lien, claim, mortgage, encumbrance, pledge, security
interest, equity or charge of any kind.
"Person" means any individual, corporation, partnership, trust, other
entity or group (within the meaning of Section 13(d)(3) of the Exchange
Act).
"Representatives" of any entity means such entity's directors,
officers, employees, legal, investment banking and financial advisors,
accountants and any other agents and representatives of such entity.
"Restricted Group" means (i) any Stockholder, (ii) any and all Persons
directly or indirectly controlled by or under common control with any
Stockholder, (iii) if such Stockholder is an individual, (a) any member of
such Stockholder's family (including any spouse, parent, sibling, child,
grandchild or other lineal descendant, including adoptive children), (b)
the heirs, executors, personal representatives and administrators of any of
the foregoing persons, (c) any trust established for the benefit of any of
the foregoing persons and (d) any charitable foundations established by any
of the foregoing persons, and (iv) any and all groups (within the meaning
of Section 13(d)(3) of the Exchange Act) of which any Stockholder or any
Person directly or indirectly controlling, controlled by or under common
control with such Stockholder is a member, other than any such group not
acting for the purpose of acquiring, holding or beneficially owning Equity
Securities.
"Rule 144" means Rule 144 as presently promulgated under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means any Person in which the Company or Target, as the
case may be, directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than fifty percent (50%) of either the equity
interest in, or the Voting Power of, such Person.
"Voting Power" means, with respect to any Outstanding Voting
Securities, the highest number of votes that the holders of all such
Outstanding Voting Securities would be entitled to cast for the election of
directors or on any other matter (except to the extent such voting rights
are dependent upon events of default or bankruptcy), assuming, for purposes
of this computation, the conversion or exchange into Voting Securities of
Convertible Securities (whether presently convertible or exchangeable or
not) and the exercise of Rights to Purchase Voting Securities (whether
presently exercisable or not), in either case to the extent that any such
action would increase the number of such votes.
3
<PAGE>
"Voting Securities" means the Company Common Stock and any other
securities of the Company of any kind or class having power generally to
vote for the election of directors; "Convertible Securities" means
securities of the Company which are convertible or exchangeable (whether
presently convertible or exchangeable or not) into Voting Securities;
"Rights to Purchase Voting Securities" means options and rights issued by
the Company (whether presently exercisable or not) to purchase Voting
Securities or Convertible Voting Securities; and "Outstanding Voting
Securities" means at any time the then issued and outstanding Voting
Securities, Convertible Securities (which shall be counted at the maximum
number of Voting Securities for which they can be converted or exchanged)
and Rights to Purchase Voting Securities (which shall be counted at the
maximum number of Voting Securities for which they can be exercised).
(b) In addition, the following terms are defined in the Sections set forth
below:
"Agent" -- Section 12.05
"Alternative Proposal" -- Section 5.02
"BIL Entities" -- Preamble
"BIL Far East" -- Preamble
"BIL Securities" -- Preamble
"Business Combination" -- Section 4.02
"Company" -- Preamble
"Company Common Stock" -- Preamble
"Company Stockholders' Meeting" -- Section 5.01(c)
"Dispose" or "Disposition" -- Section 3.01(a)
"Merger" -- Preamble
"Merger Agreement" -- Preamble
"Mr. Selinger" -- Preamble
"Registration Rights Agreement" -- Preamble
"Requisite Stockholders" -- Section 12.05
"Selinger Shares" -- Section 7.01(a)
"Sub" -- Preamble
"Target" -- Preamble
"Target Common Stock" -- Preamble
"Target Shares" -- Section 5.01(a)
"Target Stockholders' Meeting" -- Section 5.01(c)
(c) Unless the context of this Stockholders Agreement otherwise requires,
(i) words of any gender include each other gender; (ii) words using the singular
or plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Stockholders Agreement; and (iv) the terms "Article" or "Section"
refer to the specified Article or Section of this Stockholders Agreement.
Whenever this Stockholders Agreement refers to a number of days, such number
shall refer to calendar days unless business days are specified.
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ARTICLE II
BOARD OF DIRECTORS
2.01 Composition of Board of Directors. (a) Effective at the Effective
Time, there shall be at least one vacancy on the Board of Directors either by
(i) an increase in the Board of Directors in accordance with the terms of the
Company's Certificate of Incorporation and Bylaws or (ii) director resignations.
Effective at the Effective Time, the Board of Directors shall elect one designee
of the Restricted Group to fill one vacancy on the Board of Directors created in
accordance with the preceding sentence, to serve from the Effective Time until
the end of his or her term.
(b) Thereafter, and subject to the next succeeding sentence, the Board of
Directors shall, at each meeting of stockholders of the Company at which the
term of any director designated by the Restricted Group expires, nominate for
election as a director of the Company, in accordance with the Company's
procedures for nomination of directors as provided for in its Bylaws, a designee
of the Restricted Group to stand for election for a succeeding term, and shall
vote all management proxies in favor of such nominee, except for such proxies
that specifically indicate to the contrary. Notwithstanding the foregoing, the
Stockholders shall cease to have the right to designate, or cause the nomination
or election of, any member of the Board of Directors from and after such date as
the Restricted Group beneficially owns Outstanding Voting Securities
representing less than 5% of the Voting Power of all Outstanding Voting
Securities. The obligation of the Board of Directors hereunder to nominate for
election as a director an individual designated by the Restricted Group shall be
subject to the foregoing limitation.
(c) Until such time as the Restricted Group beneficially owns Outstanding
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities, if any director designated by the Restricted
Group in accordance with this Section 2.01 shall decline or be unable to serve
for any other reason, the Board of Directors shall promptly upon the request of
the Restricted Group nominate or elect, as the case may be, a qualified person
recommended by the Restricted Group to replace such designee; provided that the
Restricted Group shall have such right only if and to the extent consistent with
the foregoing provisions of this Section 2.01.
(d) Until such time as the Restricted Group beneficially owns Outstanding
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities, at each meeting of stockholders of the Company,
the Restricted Group shall vote the Voting Securities held by the Restricted
Group (x) for the nominees recommended by the Board of Directors (provided such
nominees include the nominee referred to in paragraphs (a) and (b) above), (y)
on all other proposals of the
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Board of Directors, as the Restricted Group determines in its sole discretion,
and (z) on all proposals of any other stockholder of the Company, in accordance
with the recommendation of the Board of Directors. Notwithstanding the
foregoing, (i) to the extent that any member of the Restricted Group holds or is
empowered to vote or to effect the voting of Voting Securities in a fiduciary or
comparable capacity and, in the exercise of such duties, such member of the
Restricted Group determines that it is not appropriate to vote such Voting
Securities in accordance with the recommendation of the Board of Directors as
contemplated by clause (z) above, then such member of the Restricted Group may
vote such Voting Securities in such manner as he or she determines is
appropriate, and (ii) the provisions of this paragraph (d) shall terminate and
be of no further force or effect at such time as the members of the Restricted
Group notify the Company in writing that they irrevocably waive their right
under Article II to nominate a director and they cause their designee on the
Board of Directors to resign.
(e) The Restricted Group shall promptly provide to the Company, as the
Company may from time to time reasonably request, information regarding any
designee of the Restricted Group for the Board of Directors, for inclusion in
any form, report, schedule, registration statement, definitive proxy statement
or other documents required to be filed by the Company with the Securities and
Exchange Commission.
2.02 Resignations and Designations. At such time as the Restricted Group no
longer has the right to designate a director in accordance with this Article II,
the Restricted Group will cause the director designated by the Restricted Group
to resign from the Board of Directors.
ARTICLE III
TRANSFER OF SHARES
3.01 Restriction on Certain Transfers. Until such time as the Restricted
Group beneficially owns Outstanding Voting Securities representing less than 5%
of the Voting Power of all Outstanding Voting Securities, no member of the
Restricted Group shall, directly or indirectly, assign, sell, pledge,
hypothecate or otherwise transfer or dispose of ("Dispose" or a "Disposition")
any Equity Securities beneficially owned by such member of the Restricted Group,
except (A) a Disposition to a member of the Restricted Group who simultaneously
with such Disposition agrees in a written instrument in form and substance
satisfactory to the Company to be bound by the provisions of this Stockholders
Agreement as though an original signatory hereto, (B) a Disposition through a
bona fide underwritten public offering registered under the Securities Act
effected in accordance with the provisions of the Registration Rights Agreement,
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(C) a Disposition in a "brokers' transaction" pursuant to Rule 144(f), provided
that, until such time as the Restricted Group beneficially owns Outstanding
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities, any sales pursuant to this clause (C) shall be
subject to the volume limitations set forth in Rule 144(e) (regardless of
whether such volume limitations are applicable to such sale), (D) pursuant to a
merger or consolidation of the Company or a recapitalization of any Equity
Securities, (E) pursuant to a self-tender or exchange offer by the Company or a
third party tender offer recommended by the Board of Directors, (F) a
Disposition by way of gift to any tax-exempt charitable organization or
educational institution, (G) a Disposition to a Person who is eligible to file a
statement on Schedule 13G promulgated by the Securities and Exchange Commission
with respect to its holdings of Equity Securities pursuant to Rule 13d-1(b)(1)
promulgated under the Exchange Act, or (H) to a Person who, after giving effect
to such Disposition, would beneficially own less than 5% of the Voting Power of
all Outstanding Voting Securities (determined pursuant to the provisions of
Regulation 13D under the Exchange Act, except that a Person shall be deemed to
be the beneficial owner of a security if that Person has the right to acquire
beneficial ownership of such security without regard to the 60-day provision in
Rule 13d-3(d)(1)(i)).
3.02 Legend. Any Disposition of Equity Securities by any member of the
Restricted Group also shall be subject to the terms and conditions of this
Section 3.02. Each certificate representing Equity Securities beneficially owned
by any member of the Restricted Group shall be imprinted with a legend in the
following form until such time (subject to the provisions of the final sentence
of this Section 3.02) as all restrictions on the Disposition of such Equity
Securities hereunder are terminated:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS THEY ARE REGISTERED OR UNLESS
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. SUCH SHARES MAY ONLY BE
TRANSFERRED PURSUANT TO THE PROVISIONS OF ARTICLE III OF A CERTAIN
STOCKHOLDERS AGREEMENT DATED AS OF SEPTEMBER 5, 1997, BY AND AMONG
GRAHAM-FIELD HEALTH PRODUCTS, INC., BIL (FAR EAST HOLDINGS) LIMITED, BIL
SECURITIES (OFFSHORE) LTD., IRWIN SELINGER AND THE OTHER INDIVIDUALS AND
ENTITIES LISTED ON THE SIGNATURE PAGES THERETO, COPIES OF WHICH AGREEMENT
ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."
The Company shall not (i) give effect on its books to an attempted Disposition
of any Equity Securities which shall have been Disposed of in violation of any
provision of this Stockholders Agreement, or (ii) treat any transferee who
obtains any Equity Securities in violation of any provision of this Stockholders
Agreement as the owner of such Equity Securities or
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accord any transferee thereof the right to vote or to receive dividends in
respect of such Equity Securities. The Company will issue new certificates not
imprinted with the foregoing legend to any holder of Equity Securities not
subject to the restrictions on Disposition contained in this Stockholders
Agreement; provided that the Company may require an opinion of counsel
reasonably satisfactory to it to the effect that no legend is required under the
Securities Act or applicable state securities or blue sky laws.
ARTICLE IV
STANDSTILL
4.01 Limitation on Acquisition of Equity Securities. Following the
Effective Time and until the Restricted Group beneficially owns Outstanding
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities, no member of the Restricted Group shall, directly
or indirectly, purchase or acquire, or make any offer to or agree to purchase or
acquire, beneficial ownership of any Equity Securities, except (i) the
acquisition of Company Common Stock pursuant to the Merger Agreement, (ii) by
way of stock dividends, stock splits or other distributions or offerings made
available to holders of Equity Securities generally, (iii) in connection with a
Disposition permitted by Section 3.01(A) or (iv) pursuant to plans established
by the Company for members of the Board of Directors, officers and other
employees.
4.02 Standstill. Following the Effective Time and thereafter until such
time as the Restricted Group beneficially owns Outstanding Voting Securities
representing less than 5% of the Voting Power of all Outstanding Voting
Securities, no member of the Restricted Group will, and they will not assist or
encourage others (including by providing financing) to, directly or indirectly
(i) acquire or agree, offer, seek or propose (whether publicly or otherwise) to
acquire ownership (including but not limited to beneficial ownership) of any
substantial portion of the assets or Equity Securities of the Company, whether
by means of a negotiated purchase of assets, tender or exchange offer, merger or
other business combination, recapitalization, restructuring or other
extraordinary transaction (a "Business Combination"), (ii) engage in any
"solicitation" of "proxies" (as such terms are used in the proxy rules
promulgated under the Exchange Act, but disregarding clause (iv) of Rule
14a-1(1)(2) and including any exempt solicitation pursuant to Rule 14a-2(b)(1)
or (2)), or form, join or in any way participate in a "group" (as defined under
the Exchange Act), other than a group consisting solely of members of the
Restricted Group, with respect to any Equity Securities, (iii) subject to the
obligation of the designee of the Restricted Group on the Board of Directors to
exercise his or her fiduciary
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duties as a director, otherwise seek or propose to acquire control of the Board
of Directors, (iv) take any action that could reasonably be expected to force
the Company to make a public announcement regarding any of the types of matters
referred to in clause (i), (ii) or (iii) above, or (v) enter into any
discussions, negotiations, agreements, arrangements or understandings with any
third party with respect to any of the foregoing. No member of the Restricted
Group will request the Company or any of its Representatives to amend or waive
any provision of this paragraph (including this sentence) or Section 4.01 during
such period. If at any time during such period a member of the Restricted Group
is approached by any third party concerning its participation in any of the
types of matters referred to in clause (i), (ii) or (iii) above, such member
will promptly inform the Company of the nature of such contact and the parties
thereto.
ARTICLE V
COVENANTS OF THE STOCKHOLDERS IN CONNECTION WITH THE MERGER
5.01 Ownership of Target Shares; Approval of Merger Agreement. (a) Each
Stockholder represents and warrants to the Company that such Stockholder owns,
beneficially and of record, as of the date hereof, the number of shares of
Target Common Stock listed on Schedule I hereto (collectively, the "Target
Shares"), subject to no rights of others and free and clear of all Liens. Such
Stockholder's right to vote or Dispose of the Target Shares beneficially owned
by such Stockholder is not subject to any voting trust, voting agreement, voting
arrangement or proxy and such Stockholder has not entered into any contract,
option or other arrangement or undertaking with respect thereto.
(b) Until the Effective Time, no Stockholder will Dispose of any of the
Target Shares owned by such Stockholder or any interest therein, exercise any
right of conversion with respect to any such Target Shares, deposit any of such
Target Shares into a voting trust or enter into a voting agreement or
arrangement or grant any proxy with respect thereto or enter into any contract,
option or other arrangement or undertaking with respect to the direct or
indirect Disposition of any of the Target Shares.
(c) Each Stockholder will, with respect to those Target Shares that such
Stockholder either owns of record on the record date for voting at any annual or
special meeting of Target stockholders to be held for the purpose of voting on
the adoption of the Merger Agreement or for granting any written consent in
connection with the solicitation of written consents in lieu of such a meeting
(collectively, the "Target Stockholders' Meeting") or with respect to which such
Stockholder otherwise controls the vote, vote or cause to be voted such shares
(or execute written consents with respect to such shares) (i) in favor of the
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adoption of the Merger Agreement and the approval of the Merger and the other
transactions contemplated by the Merger Agreement, (ii) against any Alternative
Proposal (as defined in Section 5.02) and (iii) in favor of any other matter
necessary for the consummation of the transactions contemplated by the Merger
Agreement, including without limitation at the Target Stockholders' Meeting.
5.02 No Solicitation. Prior to the Effective Time, and subject to Section
5.03, each Stockholder shall not, and each Stockholder shall use best efforts to
cause such Stockholder's Affiliates and Representatives not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to the stockholders of Target) with respect to a merger,
consolidation or other business combination including Target or any of its
Subsidiaries or any acquisition or similar transaction (including, without
limitation, a tender or exchange offer) involving the purchase of all or any
significant portion of the assets of Target and its Subsidiaries taken as a
whole or any outstanding shares of the capital stock of Target or any Subsidiary
of Target (any such proposal or offer being hereinafter referred to as an
"Alternative Proposal"), or engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions or enter into
any agreements, arrangements or understandings, whether written or oral, with,
any Person relating to an Alternative Proposal (excluding the transactions
contemplated by the Merger Agreement), or otherwise facilitate any effort or
attempt to make or implement an Alternative Proposal. The Stockholders will
promptly notify the Company if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, such Stockholder or
any of such Persons.
5.03 Director Actions. Notwithstanding any other provision of this
Stockholders Agreement to the contrary, the covenants and agreements set forth
herein shall not prevent any member of the Restricted Group, or any designees of
the members of the Restricted Group, who serve on Target's Board of Directors
from taking any action, subject to the applicable provisions of the Merger
Agreement, while acting in such member's or designee's capacity as a director of
Target in accordance with his or her fiduciary duties.
ARTICLE VI
COVENANTS OF BIL ENTITIES IN CONNECTION WITH THE MERGER
6.01 Approval of Merger Agreement. (a) Each of the BIL Entities represents
and warrants to the Stockholders that it owns, beneficially and of record, as of
the date hereof, the
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number of shares of each class of capital stock of the Company listed on
Schedule II hereto (collectively, the "Company Shares").
(b) Until the Effective Time, none of the BIL Entities will Dispose of any
of the Company Shares or any interest therein, deposit any of the Company Shares
into a voting trust or enter into a voting agreement or arrangement or grant any
proxy with respect thereto or enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect Disposition of
any of the Company Shares.
(c) Each of the BIL Entities will, with respect to those Company Shares
that such BIL Entity either owns of record on the record date for voting at any
annual or special meeting of Company stockholders to be held for the purpose of
voting on the adoption of the Merger Agreement or for granting any written
consent in connection with the solicitation of written consents in lieu of such
a meeting (collectively, the "Company Stockholders' Meeting") or with respect to
which such BIL Entity otherwise controls the vote, vote or cause to be voted
such shares (or execute written consents with respect to such shares) (i) in
favor of the adoption of the Merger Agreement and the approval of the Merger and
the other transactions contemplated by the Merger Agreement, and (ii) in favor
of any other matter necessary for the consummation of the transactions
contemplated by the Merger Agreement, including without limitation at the
Company Stockholders' Meeting.
6.02 Director Actions. Notwithstanding any other provision of this
Stockholders Agreement to the contrary, the covenants and agreements set forth
herein shall not prevent any designees of either of the BIL Entities who serve
on the Company's Board of Directors from taking any action, subject to the
applicable provisions of the Merger Agreement, while acting in such designees'
capacity as a director of the Company in accordance with their fiduciary duties.
ARTICLE VII
COVENANTS OF MR. SELINGER IN CONNECTION WITH THE MERGER
7.01 Approval of Merger Agreement. (a) Mr. Selinger represents and warrants
to the Stockholders that he owns, beneficially and of record, as of the date
hereof, the number of shares of each class of capital stock of the Company
listed on Schedule III hereto (collectively, the "Selinger Shares").
(b) Until the Effective Time, Mr. Selinger will not deposit any of the
Selinger Shares into a voting trust or enter into a voting agreement or
arrangement or grant any proxy with respect thereto.
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(c) Mr. Selinger will, with respect to those Selinger Shares that Mr.
Selinger either owns of record on the record date for voting at the Company
Stockholders' Meeting or with respect to which Mr. Selinger otherwise controls
the vote, vote or cause to be voted such shares (or execute written consents
with respect to such shares) (i) in favor of the adoption of the Merger
Agreement and the approval of the Merger and the other transactions contemplated
by the Merger Agreement, and (ii) in favor of any other matter necessary for the
consummation of the transactions contemplated by the Merger Agreement, including
without limitation at the Company Stockholders' Meeting.
7.02 Director Actions. Notwithstanding any other provision of this
Stockholders Agreement to the contrary, the covenants and agreements set forth
herein shall not prevent Mr. Selinger from taking any action, subject to the
applicable provisions of the Merger Agreement, while acting in his capacity as a
director of the Company in accordance with his fiduciary duties.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to the Company as follows:
8.01 Authority. This Stockholders Agreement has been duly and validly
executed and delivered by each Stockholder and constitutes a legal, valid and
binding obligation of such Stockholder enforceable against such Stockholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
8.02 No Conflicts. The execution and delivery by each Stockholder of this
Stockholders Agreement do not, and the performance by each Stockholder of such
Stockholder's obligations under this Stockholders Agreement and the consummation
of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to such
Stockholder or any of such Stockholder's properties or assets; or
(b) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require such Stockholder to obtain any consent, approval or
action of, make any filing with
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or give any notice to any Person as a result or under the terms of, or (iv)
result in the creation or imposition of any Lien upon any of such
Stockholder's properties or assets under, any contract, agreement, plan,
permit or license to which such Stockholder is a party.
8.03 Governmental Approvals and Filings. No consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
any Stockholder is required in connection with the execution, delivery and
performance of this Stockholders Agreement or the consummation of the
transactions contemplated hereby, other than filings under the Exchange Act in
connection with such Stockholder's acquisition of Equity Securities and the
other transactions contemplated by this Stockholders Agreement and the Merger
Agreement.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholders as follows:
9.01 Incorporation. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Company has the requisite corporate power and authority to execute and deliver
this Stockholders Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
9.02 Authority. The execution and delivery by the Company of this
Stockholders Agreement, and the performance by the Company of its obligations
hereunder, have been duly and validly authorized by the Board of Directors of
the Company, no other corporate action on the part of the Company or its
stockholders being necessary. This Stockholders Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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9.03 No Conflicts. The execution and delivery by the Company of this
Stockholders Agreement do not, and the performance by the Company of its
obligations under this Stockholders Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the certificate of incorporation or bylaws of the
Company;
(b) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to the Company or
any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require the Company to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of
or (iv) result in the creation or imposition of any Lien upon the Company or any
of its properties or assets under, any contract, agreement, plan, permit or
license to which the Company is a party.
9.04 Governmental Approvals and Filings. No consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
the Company is required in connection with the execution, delivery and
performance of this Stockholders Agreement or the consummation of the
transactions contemplated hereby, other than filings under the Exchange Act in
connection with the Stockholders' voting agreement contained in this
Stockholders Agreement and the other transactions contemplated by this
Stockholders Agreement and the Merger Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF THE BIL ENTITIES
Each of the BIL Entities hereby represents and warrants to the Stockholders
as follows:
10.01 Incorporation. Each of the BIL Entities is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the BIL Entities has the requisite
corporate power and authority to execute and deliver this Stockholders
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
10.02 Authority. The execution and delivery by each of the BIL Entities of
this Stockholders Agreement, and the per formance by each of the BIL Entities of
its obligations hereunder, have been duly and validly authorized by all
necessary corporate actions on the part of such BIL Entity, no other corporate
action on the part of such BIL Entity or its stockholders being necessary. This
Stockholders Agreement has been duly and validly executed and delivered by each
of the BIL Entities and constitutes a legal, valid and binding obligation of
each of the BIL
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Entities in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
10.03 No Conflicts. The execution and delivery by each of the BIL Entities
of this Stockholders Agreement do not, and the performance by each of the BIL
Entities of its obligations under this Stockholders Agreement and the
consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the corporate charter documents of such BIL Entity;
(b) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to such BIL Entity
or any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require such BIL Entity to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of or (iv) result in the creation or imposition of any Lien upon such BIL Entity
or any of its properties or assets under, any contract, agreement, plan, permit
or license to which such BIL Entity is a party.
10.04 Governmental Approvals and Filings. No consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority on the
part of either BIL Entity is required in connection with the execution, delivery
and performance of this Stockholders Agreement or the consummation of the
transactions contemplated hereby, other than filings under the Exchange Act in
connection with the BIL Entities' voting agreement contained in this
Stockholders Agreement and the other transactions contemplated by this
Stockholders Agreement and the Merger Agreement.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF MR. SELINGER
Mr. Selinger hereby represents and warrants to the Stockholders as follows:
11.01 Authority. This Stockholders Agreement has been duly and validly
executed and delivered by Mr. Selinger and
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constitutes a legal, valid and binding obligation of Mr. Selinger enforceable
against Mr. Selinger in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
11.02 No Conflicts. The execution and delivery by Mr. Selinger of this
Stockholders Agreement do not, and the performance by Mr. Selinger of his
obligations under this Stockholders Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to Mr. Selinger or
any of his properties or assets; or
(b) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Mr. Selinger to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of, or (iv) result in the creation or imposition of any Lien upon any of Mr.
Selinger's properties or assets under, any contract, agreement, plan, permit or
license to which Mr. Selinger is a party.
11.03 Governmental Approvals and Filings. No consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority on the
part of Mr. Selinger is required in connection with the execution, delivery and
performance of this Stockholders Agreement or the consummation of the
transactions contemplated hereby, other than filings under the Exchange Act in
connection with Mr. Selinger's voting agreement contained in this Stockholders
Agreement and the other transactions contemplated by this Stockholders Agreement
and the Merger Agreement.
ARTICLE XII
GENERAL PROVISIONS
12.01 Survival of Representations, Warranties, Covenants and Agreements.
Notwithstanding any right of any party (whether or not exercised) to investigate
the accuracy of the representations and warranties of the other party contained
in this Stockholders Agreement, each party hereto has the right to rely fully
upon the representations and warranties of the others contained in this
Stockholders Agreement. Except as provided in Section 12.02, the
representations, warranties, covenants and
16
<PAGE>
agreements of each party hereto contained in this Stockholders Agreement will
survive until the termination of this Stockholders Agreement.
12.02 Termination. This Stockholders Agreement and all rights and
obligations of the parties hereunder, including, without limitation, the
provisions of Section 5.01 and Section 5.02, shall automatically terminate, and
shall cease to be of any further force and effect, upon the earlier to occur of
(i) the termination of the Merger Agreement in accordance with its terms, (ii)
the mutual written agreement of the Stockholders and the Company, (iii) such
time following the Effective Time as the Restricted Group beneficially owns
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities and (iv) a Change of Control. Notwithstanding the
termination of this Stockholders Agreement, nothing contained herein shall
relieve any party hereto from liability for breach of any of such party's
representations, warranties, covenants or agreements contained in this
Stockholders Agreement.
12.03 Amendment and Waiver. (a) This Stockholders Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
(b) Any term or condition of this Stockholders Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Stockholders Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Stockholders Agreement on any future
occasion. All remedies, either under this Stockholders Agreement or by law or
otherwise afforded, will be cumulative and not alternative.
12.04 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to any Stockholder, to:
c/o Fuqua Capital Corporation
One Atlantic Center
1201 West Peachtree Street
Suite 500
Atlanta, GA 30309
Facsimile No.: (404) 815-4528
Attn: J. Rex Fuqua
17
<PAGE>
with a copy to:
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, DC 20036-6802
Facsimile No.: (202) 776-2222
Attn: Edward J. O'Connell, Esq.
If to either of the BIL Entities, to:
BIL (Far East Holdings) Limited
c/o Brierley Investments Limited
10 Eastcheap, 3rd Floor
London EC 3M 1AJ
United Kingdom
Facsimile No.: 011-44-171-369-9112
Attn: Rodney F. Price, Chairman
with a copy to:
Brierley Investments Limited
22-24 Victoria Street
Level 6, Colonial Building
Wellington, New Zealand
Facsimile: 011-644-473-1631
Attn: Mark Horton, Corporate Secretary
If to the Company, to:
Graham-Field Health Products, Inc.
400 Rabro Drive East
Hauppauge, New York 11788
Facsimile No.: (516) 582-5608
Attn: Richard S. Kolodny, Esq.
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Facsimile No.: (212) 530-5219
Attn: Robert S. Reder, Esq.
If to Mr. Selinger, to:
Mr. Irwin Selinger
Graham-Field Health Products, Inc.
400 Rabro Drive East
Hauppauge, New York 11788
Facsimile No.: (516) 582-5608
18
<PAGE>
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Facsimile No.: (212) 530-5219
Attn: Robert S. Reder, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
12.05 Irrevocable Appointment of Agent. By the execution and delivery of
this Stockholders Agreement, including counterparts hereof, each Stockholder
hereby irrevocably constitutes and appoints J. Rex Fuqua as the true and lawful
agent and attorney-in-fact of each such Stockholder (such individual, or such
other individual as Stockholders who own a majority of the aggregate Equity
Securities then owned by all the Stockholders (the "Requisite Stockholders")
shall designate in writing to the Company from time to time, is herein referred
to as the "Agent"), to do or refrain from doing all such further acts and
things, and to execute all such documents, as the Agent shall deem necessary or
appropriate in connection with this Stockholders Agreement. Unless there is no
existing person that has been designated to act as Agent by the Requisite
Stockholders, all rights of the Stockholders under this Stockholders Agreement
(including without limitation the right to designate a director pursuant to
Section 2.01) shall be exercised by the Stockholders only through or by the
Agent in his or her capacity as agent of the Stockholders hereunder, and the
Company shall not be required to take directions from any other Stockholder for
so long as such Agent continues to serve and has not otherwise been removed as
Agent pursuant to notice to the Company from the Requisite Stockholders. If at
any time no Person is serving as Agent, the Company shall not be required to
take action except upon the direction of the Requisite Stockholders.
12.06 Entire Agreement. This Stockholders Agreement supersedes all prior
discussions and agreements among the parties hereto with respect to the subject
matter hereof, and contains, together with the Registration Rights Agreement,
the sole and entire agreement among the parties hereto with respect to the
subject matter hereof.
19
<PAGE>
12.07 No Third Party Beneficiary. The terms and provisions of this
Stockholders Agreement are intended solely for the benefit of each party hereto,
and it is not the intention of the parties to confer third-party beneficiary
rights upon any other Person.
12.08 No Assignment; Binding Effect. Neither this Stockholders Agreement
nor any right, interest or obligation hereunder may be assigned by any parties
hereto without the prior written consent of the other party hereto and any
attempt to do so will be void. Subject to the preceding sentence, this
Stockholders Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns
and legal representatives.
12.09 Specific Performance; Legal Fees. The parties acknowledge that money
damages are not an adequate remedy for violations of any provision of this
Stockholders Agreement and that any party may, in such party's sole discretion,
apply to a court of competent jurisdiction for specific performance for
injunctive or such other relief as such court may deem just and proper in order
to enforce any such provision or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection to the imposition
of such relief. The parties hereto agree that, in the event that any party to
this Stockholders Agreement shall bring any legal action or proceeding to
enforce or to seek damages or other relief arising from an alleged breach of any
term or provision of this Stockholders Agreement by any other party, the
prevailing party in any such action or proceeding shall be entitled to an award
of, and the other party to such action or proceeding shall pay, the reasonable
fees and expenses of legal counsel to the prevailing party.
12.10 Headings. The headings used in this Stockholders Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
12.11 Invalid Provisions. If any provision of this Stockholders Agreement
is held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Stockholders
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Stockholders Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof and (iii) the remaining provisions of this
Stockholders Agreement will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom.
20
<PAGE>
12.12 Governing Law. Except to the extent that the DGCL is mandatorily
applicable to the rights and obligations of the parties, this Stockholders
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to a contract executed and performed in such State,
without giving effect to the conflicts of laws principles thereof.
12.13 Consent to Jurisdiction and Service of Process. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York or any court of the State of New
York located in the Borough of Manhattan in the City of New York in any action,
suit or proceeding arising in connection with this Stockholders Agreement,
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein to the extent permitted by law), and agrees to
delivery of service of process by any of the methods by which notices may be
given pursuant to Section 12.04, with such service being deemed given as
provided in such Section; provided, however, that such consent to jurisdiction
is solely for the purpose referred to in this Section 12.13 and shall not be
deemed to be a general submission to the jurisdiction of said courts or in the
State of New York other than for such purpose. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the other in any other
jurisdiction.
12.14 Counterparts. This Stockholders Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
21
<PAGE>
IN WITNESS WHEREOF, each party hereto has signed this Stockholders
Agreement, or caused this Stockholders Agreement to be signed by its officer
thereunto duly authorized, as of the date first above written.
GRAHAM-FIELD HEALTH PRODUCTS, INC.
By: /s/ Irwin Selinger
--------------------------------
Name:
Title:
BIL (FAR EAST HOLDINGS) LIMITED
By: /s/ Rodney F. Price
--------------------------------
Name:
Title:
BIL SECURITIES (OFFSHORE) LTD.
By: /s/ Rodney F. Price
--------------------------------
Name:
Title:
/s/ Irwin Selinger
--------------------------------
IRWIN SELINGER
/s/ J. B. Fuqua
--------------------------------
J. B. FUQUA
/s/ J. Rex Fuqua
--------------------------------
J. REX FUQUA
FUQUA HOLDINGS - I, L.P.
By: FUQUA HOLDINGS, INC., its
General Partner
By: J. Rex Fuqua
---------------------------
Name: J. Rex Fuqua
Title: President
22
<PAGE>
THE JENNIFER CALHOUN FUQUA TRUST
By: /s/ J. B. Fuqua
--------------------------------
Name: J. B. Fuqua
Title: Trustee
THE LAUREN BROOKS FUQUA TRUST
By: /s/ J. B. Fuqua
--------------------------------
Name: J. B. Fuqua
Title: Trustee
THE J. B. FUQUA FOUNDATION, INC.
By: /s/ J. B. Fuqua
--------------------------------
Name: J. B. Fuqua
Title: Chairman, President
23
<PAGE>
SCHEDULE I
Target Shares Owned by the Stockholders
---------------------------------------
Stockholder Number
----------- ------
J. B. Fuqua 372,232
J. Rex Fuqua 310,142
Fuqua Holdings - I, L.P. 366,000
The Jennifer Calhoun Fuqua Trust 160,843
The Lauren Brooks Fuqua Trust 160,842
The J. B. Fuqua Foundation, Inc. 69,698
<PAGE>
SCHEDULE II
Company Shares Owned by the BIL Entities
----------------------------------------
BIL Far East
------------
Class Number
----- ------
Common Stock 2,118,696
Series B Cumulative Convertible Preferred Stock 3,527
BIL Securities
--------------
Common Stock 1,942,882
Series B Cumulative Convertible Preferred Stock 2,573
Series C Cumulative Convertible Preferred Stock 1,000
<PAGE>
SCHEDULE III
Company Shares Owned by Mr. Selinger
------------------------------------
Class Number
----- ------
Common Stock(1) 1,262,384
----------
(1) Includes 332,271 shares currently issuable upon the exercise of stock
options issued pursuant to the Company's Incentive Program and 5,500
shares owned by Mr. Selinger's wife as to which shares Mr. Selinger
disclaims any beneficial interest.
REGISTRATION RIGHTS AGREEMENT
dated as of September 5, 1997
between
GRAHAM-FIELD HEALTH PRODUCTS, INC.
and
THE INDIVIDUALS AND ENTITIES LISTED
ON THE SIGNATURE PAGES HERETO
<PAGE>
TABLE OF CONTENTS
-----------------
This Table of Contents is not part of the Registration Rights Agreement to
which it is attached but is inserted for convenience only.
Page
No.
----
1. Requested Registration................................................. 1
(a) Registration Request......................................... 1
(b) Registration Statement Form.................................. 2
(c) Registration Expenses........................................ 2
(d) Priority in Cutback Registrations............................ 2
(e) Preemption of Requested Registration......................... 2
2. Piggyback Registrations................................................ 3
(a) Right to Include Registrable Securities...................... 3
(b) Registration Expenses........................................ 3
(c) Priority in Cutback Registrations............................ 3
3. Registration Procedures................................................ 5
4. Underwritten Offerings................................................. 9
(a) Underwritten Requested Offering.............................. 9
(b) Underwritten Piggyback Offerings............................. 10
5. Holdback Agreements.................................................... 10
(a) By the Restricted Group...................................... 10
(b) By the Company........................................... 10
6. Indemnification........................................................ 11
(a) Indemnification by the Company............................... 11
(b) Indemnification by the Restricted Group...................... 12
(c) Notices of Claims, etc....................................... 13
(d) Contribution................................................. 14
(e) Other Indemnification........................................ 14
(f) Indemnification Payments..................................... 14
7. Covenants Relating to Rule 144......................................... 15
8. Other Registration Rights.............................................. 15
(a) No Existing Agreements....................................... 15
(b) Future Agreements............................................ 15
9. Definitions............................................................ 15
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10. Termination........................................................... 19
11. Miscellaneous......................................................... 19
(a) Notices...................................................... 19
(b) Entire Agreement............................................. 20
(c) Amendment.................................................... 21
(d) Irrevocable Appointment of Agent............................. 21
(e) Waiver....................................................... 21
(f) No Third Party Beneficiary................................... 21
(g) No Assignment; Binding Effect................................ 22
(h) Headings..................................................... 22
(i) Invalid Provisions........................................... 22
(j) Remedies; Legal Expenses..................................... 22
(k) Governing Law................................................ 23
(l) Counterparts................................................. 23
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<PAGE>
This REGISTRATION RIGHTS AGREEMENT dated as of September 5, 1997 is made
and entered into by and between Graham-Field Health Products, Inc., a Delaware
corporation (the "Company"), and each of the stockholders of Fuqua Enterprises,
Inc., a Delaware corporation ("Target"), listed on the signature pages hereto
(the "Stockholders"). Capitalized terms not otherwise defined herein have the
meanings set forth in Section 9.
WHEREAS, the Company, GFHP Acquisition Corp., a Delaware corporation
wholly-owned by the Company ("Sub"), and Target have entered into an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement"), pursuant to
which Sub will be merged with and into Target and Target will become a
wholly-owned subsidiary of the Company (the "Merger");
WHEREAS, at the Effective Time and in accordance with the terms of the
Merger Agreement, each share of common stock, par value $.10 per share, of
Target (including shares owned by the Stockholders) will be converted into
shares of Common Stock, all as more fully described in the Merger Agreement;
WHEREAS, concurrently with the execution and delivery of the Merger
Agreement, the Company, the BIL Entities, Irwin Selinger and the Stockholders
have entered into a Stockholders Agreement (the "Stockholders Agreement") of
even date herewith; and
WHEREAS, as a condition to the Stockholders' willingness to vote their
shares of Target capital stock in favor of the Merger and to become bound by the
provisions of the Stockholders Agreement, the Company has agreed to enter into
this Registration Rights Agreement providing for the Company's registration for
sale, under certain circumstances, of Registrable Securities owned by the
Stockholders;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Registration Rights Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Requested Registration. (a) Registration Request. At any time after the
Effective Time, upon the written request of
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<PAGE>
the Agent requesting that the Company effect the registration under the
Securities Act of all or part of the Restricted Group's Registrable Securities
and specifying the number of Registrable Securities to be registered and the
intended method of disposition thereof, the Company thereupon will use its best
efforts to effect the registration under the Securities Act of such Registrable
Securities, all to the extent requisite to permit the disposition (in accordance
with the intended methods thereof) of the Registrable Securities so to be
registered. Notwithstanding the foregoing, the Company may postpone taking
action with respect to a Requested Registration for a reasonable period of time
after receipt of the original request (not exceeding ninety (90) days) if, in
the good faith opinion of the Company's Board of Directors, effecting the
registration would adversely affect a material financing, acquisition,
disposition of assets or stock, merger or other comparable transaction or would
require the Company to make public disclosure of information the public
disclosure of which would have a material adverse effect upon the Company.
Subject to paragraph (d), the Company may include in such registration other
securities of the same class as the Registrable Securities for sale for its own
account or for the account of any other Person. Notwithstanding anything herein
to the contrary, the Company shall not be required to honor more than three (3)
requests for a Requested Registration which results in an Effective
Registration.
(b) Registration Statement Form. A Requested Registration shall be on such
appropriate registration form promulgated by the Commission as shall be selected
by the Company and shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods specified in the request for
such registration.
(c) Registration Expenses. The Company will pay all Registration Expenses
incurred in connection with a Requested Registration.
(d) Priority in Cutback Registrations. If a Requested Registration becomes
a Cutback Registration, the Company will include in any such registration to the
extent of the number which the Managing Underwriter advises the Company can be
sold in such offering (i) first, Registrable Securities requested to be included
in such registration by the Restricted Group, and (ii) second, other securities
of the Company proposed to be included in
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<PAGE>
such registration, allocated among the Company and any holders thereof in
accordance with the priorities then existing among the Company and the holders
of such other securities; and any securities so excluded shall be withdrawn from
and shall not be included in such Requested Registration.
(e) Preemption of Requested Registration. Notwithstanding anything to the
contrary contained herein, at any time within thirty (30) days after receiving a
written request for a Requested Registration, the Company may elect to effect an
underwritten primary registration in lieu of the Requested Registration if the
Company's Board of Directors believes that such primary registration would be in
the best interests of the Company. If the Company so elects to effect a primary
registration, the Company shall give prompt written notice to the Agent of its
intention to effect such a registration and shall afford the Restricted Group
rights contained in Section 2 with respect to Piggyback Registrations. In the
event that the Company so elects to effect a primary registration after
receiving a request for a Requested Registration, the request for a Requested
Registration shall be deemed to have been withdrawn and such primary
registration shall not be deemed to be an Effective Registration.
2. Piggyback Registrations. (a) Right to Include Registrable Securities.
Notwithstanding any limitation contained in Section 1, if the Company at any
time proposes after the Effective Time to effect a Piggyback Registration,
including in accordance with Section 1(e), it will each such time give written
notice (a "Notice of Piggyback Registration"), at least twenty (20) days prior
to the anticipated filing date, to the Agent of its intention to do so and of
the Restricted Group's right under this Section 2, which Notice of Piggyback
Registration shall include a description of the intended method of disposition
of such securities. Upon the written request of the Agent made within twenty
(20) days after receipt of a Notice of Piggyback Registration (which request
shall specify the Registrable Securities intended to be disposed of), the
Company will use its best efforts to include in the registration statement
relating to such Piggyback Registration, for offer and sale in accordance with
the intended method of disposition described in the Notice of Piggyback
Registration, all Registrable Securities which the Company has been so requested
to register. Notwithstanding the
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<PAGE>
foregoing, if, at any time after giving a Notice of Piggyback Registration and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to the Agent and, thereupon,
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith) without prejudice, however, to the right of the Agent on
behalf of the Restricted Group to request that such registration be effected as
a Requested Registration under Section 1, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities. No registration effected under this Section 2 shall relieve
the Company of its obligations to effect a Requested Registration under Section
1. There shall not be any limitation on the number of Effective Registrations
constituting Piggyback Registrations in which any Registrable Securities may be
included.
(b) Registration Expenses. The Company will pay all Registration Expenses
incurred in connection with each Piggyback Registration.
(c) Priority in Cutback Registrations. If a Piggyback Registration becomes
a Cutback Registration, the Company will include in such registration to the
extent of the amount of the securities which the Managing Underwriter advises
the Company can be sold in such offering:
(i) if such registration as initially proposed by the Company was
solely a primary registration of its securities, (w) first, the securities
proposed by the Company to be sold for its own account, (x) second, any
securities of the Company requested to be included in such registration by
the BIL Entities and any Warrants and Warrant Shares requested to be
included in such registration by the Warrant Holders, to be allocated in
accordance with any agreements in effect between the Company and the BIL
Entities and the Warrant Holders, (y) third, any Registrable Securities
requested to be included in such registration and any other securities of
- 4 -
<PAGE>
the Company requested to be included in such registration by any other
stockholder of the Company who, as of the date hereof, has the right to
have such stockholder's securities included in such registration, allocated
among all such holders on a pro-rata basis in accordance with their
respective ownership interests, and (z) fourth, any other securities of the
Company proposed to be included in such registration, allocated among the
holders thereof in accordance with the priorities then existing among the
Company and such holders; and
(ii) if such registration as initially proposed by the Company was in
whole or in part requested by holders of securities of the Company other
than the Restricted Group pursuant to demand registration rights, (w)
first, such securities held by the holders initiating such registration
and, if applicable, any securities proposed by the Company to be sold for
its own account, allocated in accordance with the priorities then existing
among the Company and such holders, (x) second, any securities of the
Company requested to be included in such registration by the BIL Entities
and any Warrants and Warrant Shares requested to be included in such
registration by the Warrant Holders, to be allocated in accordance with any
agreements in effect between the Company and the BIL Entities and the
Warrant Holders, (y) third, any Registrable Securities requested to be
included in such registration and any other securities of the Company
requested to be included in such registration by any other stockholder of
the Company who, as of the date hereof, has the right to have such
stockholder's securities included in such registration, allocated among all
such holders on a pro-rata basis in accordance with their respective
ownership interests, and (z) fourth, any other securities of the Company
proposed to be included in such registration, allocated among the holders
thereof in accordance with the priorities then existing among the Company
and the holders of such other securities;
and any securities so excluded shall be withdrawn from and shall not be included
in such Piggyback Registration. The Company covenants and agrees with the
members of the Restricted Group that, in the event a Piggyback Registration in
which Registrable Securities are requested to be included becomes a Cutback
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<PAGE>
Registration, the members of the Restricted Group will have priority over any
other holder of securities of the Company who, after the date hereof, obtains
the right to include securities in such Piggyback Registration.
3. Registration Procedures. If and whenever the Company is required to use
its best efforts to effect the registration of any Registrable Securities owned
by the Restricted Group under the Securities Act pursuant to Section 1 or
Section 2, the Company will use its best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended methods of
disposition thereof. Without limiting the foregoing, the Company in each such
case will, as expeditiously as possible:
(a) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause such
registration statement to become effective;
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and any prospectus used in connection therewith as
may be necessary to maintain the effectiveness of such registration statement
and to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (i) such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (ii) ninety (90) days after
such registration statement becomes effective;
(c) promptly notify the Agent and the underwriter or underwriters, if any:
(i) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
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<PAGE>
(ii) of any written request by the Commission for amendments or
supplements to such registration statement or prospectus;
(iii) of the notification to the Company by the Commission of its
initiation of any proceeding with respect to the issuance by the Commission
of, or of the issuance by the Commission of, any stop order suspending the
effectiveness of such registration statement; and
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale
under the applicable securities or blue sky laws of any jurisdiction.
(d) furnish to the Agent such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits and documents incorporated by reference), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 promulgated under the Securities Act, and such
other documents, as the Agent may reasonably request to facilitate the
disposition of the Registrable Securities covered by such registration
statement;
(e) use its best efforts to register or qualify all Registrable Securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the Agent shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be reasonably
necessary or advisable to enable the Restricted Group to consummate the
disposition in such jurisdictions of their Registrable Securities covered by
such registration statement, except that the Company shall not for any such
purpose be required (i) to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this paragraph (e) be obligated to be so qualified, (ii) to subject itself to
taxation in any such jurisdiction or
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<PAGE>
(iii) to consent to general service of process in any jurisdiction;
(f) use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Restricted Group to consummate the disposition of such Registrable Securities;
(g) furnish to the Agent a signed counterpart, addressed to the members of
the Restricted Group whose Registrable Securities are covered by such
registration statement (and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the effective date of
such registration statement (or, if such registration includes an
underwritten Public Offering, dated the date of any closing under the
underwriting agreement), reasonably satisfactory in form and substance to
the Agent, and
(ii) a "comfort" letter, dated the effective date of such registration
statement (and, if such registration includes an underwritten Public
Offering, dated the date of any closing under the underwriting agreement),
signed by the independent public accountants who have certified the
Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
the accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten Public
Offerings of securities and, in the case of the accountants' letter, such other
financial matters, as the Agent (or the underwriters, if any) may reasonably
request;
(h) notify the Agent, at any time when a prospectus relating thereto is
required to be delivered under the
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Securities Act, of the happening of any event as a result of which any
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
at the request of the Agent promptly prepare and furnish to the Agent a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(i) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve (12) months, but not more than eighteen (18) months, beginning with
the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 promulgated thereunder;
(j) make available for inspection by the Agent, any underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by the Agent or any such
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with such registration statement; provided that records which the
Company determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or
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omission in the registration statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made generally
available to the public;
(k) provide a transfer agent and registrar for all Registrable Securities
covered by such registration statement not later than the effective date of such
registration statement; and
(l) use its best efforts to cause all Registrable Securities covered by
such registration statement to be listed, upon official notice of issuance, on
any securities exchange on which any of the securities of the same class as the
Registrable Securities are then listed.
In the event of the issuance of any stop order suspending the effectiveness
of a registration statement which includes Registrable Securities, or any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction, the Company will use its reasonable best
efforts to promptly obtain the withdrawal of such order.
The Company may require the members of the Restricted Group whose
Registrable Securities are covered by such registration statement to, and such
members of the Restricted Group, as a condition to including Registrable
Securities in such registration, shall, furnish the Company with such
information and affidavits regarding such members of the Restricted Group and
the distribution of such securities as the Company may from time to time
reasonably request in writing in connection with such registration.
Each member of the Restricted Group agrees by acquisition of such
Registrable Securities that upon receipt of any notice to the Agent from the
Company of the happening of any event of the kind described in paragraph (h),
the Restricted Group will forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Agent's receipt of the copies of
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the supplemented or amended prospectus contemplated by paragraph (h) and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in their possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
period referred to in paragraph (b) shall be extended by a number of days equal
to the number of days during the period from and including the giving of notice
pursuant to paragraph (h) and to and including the date when the Agent shall
receive the copies of the supplemented or amended prospectus contemplated by
paragraph (h).
4. Underwritten Offerings. (a) Underwritten Requested Offering. In the case
of an underwritten Public Offering being effected pursuant to a Requested
Registration, the Managing Underwriter and any other underwriter or underwriters
with respect to such offering shall be selected by the Company, provided such
underwriters are of recognized national standing and are reasonably acceptable
to the Agent. Such underwriter or underwriters will be instructed to effect as
broad a distribution of the Registrable Securities to be sold by them as is
reasonably practicable and, in any event, to use their best efforts to refrain
from selling any Registrable Securities to any Person who beneficially owns, or
as a result of such purchase would beneficially own, more than 5% of the
outstanding shares of Common Stock. The Company shall enter into an underwriting
agreement in customary form with such underwriter or underwriters, which shall
include, among other provisions, indemnities to the effect and to the extent
provided in Section 6. Each member of the Restricted Group whose Registrable
Securities are to be offered in such underwritten Public Offering shall be a
party to such underwriting agreement and may, at its option, require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters also be made to
and for its benefit and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to its obligations. Such members of the Restricted Group
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding the Restricted Group and their ownership of the securities
being registered on
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their behalf and their intended method of distribution and any other
representation required by law.
(b) Underwritten Piggyback Offerings. If the Company at any time proposes
to register any of its securities in a Piggyback Registration and such
securities are to be distributed by or through one or more underwriters, the
Company will, subject to the provisions of Section 2(c), arrange for such
underwriters to include the Registrable Securities to be offered and sold by the
Restricted Group among the securities to be distributed by such underwriters. If
members of the Restricted Group elect to have any of their Registrable
Securities included in such Piggyback Registration, such members of the
Restricted Group shall be obligated to sell their Registrable Securities in such
Piggyback Registration through such underwriters on the same terms and
conditions as apply to the other Company securities to be sold by such
underwriters in connection with such Piggyback Registration. Each member of the
Restricted Group whose Registrable Securities are to be offered in such
underwritten Public Offering shall be a party to the underwriting agreement
between the Company and such underwriter or underwriters and may, at its option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters also be made to and for its benefit and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also be conditions precedent to its obligations. Such
members of the Restricted Group shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding the
Restricted Group and their ownership of the securities being registered on their
behalf and their intended method of distribution and any other representation
required by law.
5. Holdback Agreements. (a) By the Restricted Group. In the case of an
underwritten Public Offering, unless the Managing Underwriter otherwise agrees,
each member of the Restricted Group, by acquisition of such Registrable
Securities, agrees not to effect any public sale or distribution (including a
sale under Rule 144) of such securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven (7) days prior
to and the ninety (90)
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days after the effective date of any registration statement filed by the Company
in connection with a Public Offering (or for such shorter period of time as is
sufficient and appropriate, in the opinion of the Managing Underwriter, in order
to complete the sale and distribution of the securities included in such
registration), except as part of such registration statement, whether or not
such member of the Restricted Group participates in such registration.
(b) By the Company. Unless the Managing Underwriter otherwise agrees, the
Company agrees not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven (7) days prior to and the ninety (90) days
after the effective date of the registration statement filed in connection with
an underwritten offering made pursuant to a Requested Registration or Piggyback
Registration (or for such shorter period of time as is sufficient and
appropriate, in the opinion of the Managing Underwriter, in order to complete
the sale and distribution of the securities included in such registration),
except as part of such underwritten registration and except pursuant to
registrations on Form S-4 or Form S-8 promulgated by the Commission or any
successor or similar forms thereto. The Company shall cause each holder of
shares of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, purchased from the Company at any time
after the Effective Time (other than in a registered public offering), who at
the time and after giving effect to such purchase owns shares of Common Stock
and securities convertible into or exchangeable for shares of Common Stock
representing at least 10% of the shares of Common Stock outstanding on a fully
diluted basis, to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such purchased securities during any period
referred to in the preceding sentence (except as part of an underwritten
registration, if otherwise permitted).
6. Indemnification. (a) Indemnification by the Company. The Company shall,
to the full extent permitted by law, indemnify and hold harmless each member of
the Restricted Group whose Registrable Securities are covered by a Requested
Registration or a Piggyback Registration against any losses, claims, damages,
expenses or liabilities, joint or several (together, "Losses"), to which such
member of the Restricted Group
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<PAGE>
may become subject under the Securities Act or otherwise, insofar as such Losses
(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement filed in connection
with a Requested Registration or a Piggyback Registration in which Registrable
Securities of such member of the Restricted Group are included, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, and the Company will
reimburse such member of the Restricted Group for all reasonable legal or any
other expenses reasonably incurred by them in connection with investigating or
defending any such Loss (or action or proceeding in respect thereof); provided
that the Company shall not be liable in any such case to the extent that any
such Loss (or action or proceeding in respect thereof) arises out of or is based
upon (x) an untrue statement or alleged untrue statement or omission or alleged
omission made in any such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of such member of the Restricted Group specifically for use in the preparation
thereof or (y) a Restricted Group member's failure to send or give a copy of the
final prospectus to the Persons asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such member of the Restricted Group, and shall survive the transfer
of such securities by such member of the Restricted Group. In connection with an
underwritten Requested Registration or Piggyback Registration, the Company will
indemnify such underwriters, their officers and directors and each other Person,
if any, who controls such underwriters within the meaning of the Securities Act,
to the same extent as provided above with respect to the indemnification of the
members of the Restricted Group.
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<PAGE>
(b) Indemnification by the Restricted Group. Each member of the Restricted
Group, as a condition to including Registrable Securities in any registration
statement filed in connection with a Requested Registration or a Piggyback
Registration in which Registrable Securities of such member of the Restricted
Group are included, shall, to the full extent permitted by law, severally
indemnify and hold harmless the Company, its directors and officers, and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, against any Losses to which the Company or any such director or
officer or controlling Person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such member of the
Restricted Group specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling Person and shall survive the transfer of such
securities by any such members of the Restricted Group. In connection with an
underwritten Requested Registration or Piggyback Registration, each member of
the Restricted Group whose Registrable Securities are covered by such Requested
Registration or Piggyback Registration will severally indemnify the
underwriters, their officers and directors and each other Person, if any, who
controls such underwriters within the meaning of the Securities Act, to the same
extent as provided above with respect to the indemnification of the Company.
(c) Notices of Claims, etc. Promptly after receipt by an Indemnified Party
of notice of the commencement of any action
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or proceeding involving a claim referred to in the preceding paragraph (a) or
(b) of this Section 6, such Indemnified Party will, if a claim in respect
thereof is to be made against an Indemnifying Party pursuant to such paragraphs,
give written notice to the latter of the commencement of such action, provided
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under the preceding
paragraphs of this Section 6, except to the extent that the Indemnifying Party
is actually prejudiced by such failure to give notice. In case any such action
is brought against an Indemnified Party, the Indemnifying Party shall be
entitled to participate in and to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party, and after notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof; provided that the Indemnified Party may
participate in such defense at the Indemnified Party's expense. If the
Indemnifying Party is not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more than one
counsel for the Indemnified Parties with respect to such claim, unless the
Indemnified Parties shall have been advised by counsel that representation of
any such Indemnified Parties by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them, in which case such Indemnified Parties shall
have the right to select separate counsel the fees and expenses of which shall
be paid by the Indemnifying Party. No Indemnifying Party shall consent to entry
of any judgment or enter into any settlement without the consent of the
Indemnified Party, which consent will not be unreasonably withheld or delayed.
No Indemnifying Party shall be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld or
delayed. The indemnification provided for under this Registration Rights
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Party or any officer, director or
controlling Person of such Indemnified Party and will survive the transfer of
securities.
(d) Contribution. If the indemnity and reimbursement obligation provided
for in any paragraph of this Section 6 is unavailable or insufficient to hold
harmless an Indemnified Party
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in respect of any Losses (or actions or proceedings in respect thereof) referred
to therein, then the Indemnifying Party shall contribute to the amount paid or
payable by the Indemnified Party as a result of such Losses (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other hand in connection with statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations,
including the relative benefits received in connection with the transaction. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Indemnifying Party or the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this paragraph were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of
this paragraph. The amount paid by an Indemnified Party as a result of the
Losses referred to in the first sentence of this paragraph shall be deemed to
include any legal and other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any Loss which is the
subject of this paragraph.
No Indemnified Party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying Party was not
guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that specified in the
preceding paragraphs of this Section 6 (with appropriate modifications) shall be
given by the Company and the applicable members of the Restricted Group with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act. The provisions of this Section 6 shall be in addition to any
other rights to
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indemnification or contribution which an Indemnified Party may have pursuant to
law, equity, contract or otherwise.
(f) Indemnification Payments. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Losses are
incurred.
7. Covenants Relating to Rule 144. The Company will file reports in
compliance with the Exchange Act, will comply with all rules and regulations of
the Commission applicable in connection with the use of Rule 144 and will take
such other actions and furnish the members of the Restricted Group with such
other information as the Agent may request in order to avail the members of the
Restricted Group of such rule or any other rule or regulation of the Commission
allowing the members of the Restricted Group to sell any Registrable Securities
without registration.
8. Other Registration Rights. (a) No Existing Agreements. The Company
represents and warrants to the Restricted Group that there is not in effect on
the date hereof any agreement by the Company pursuant to which any holders of
securities of the Company have a right to cause the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction that would conflict or be inconsistent with any
provision of this Registration Rights Agreement.
(b) Future Agreements. The Company shall not hereafter agree with the
holders of any securities issued or to be issued by the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction that would conflict or be inconsistent with any
provision of this Registration Rights Agreement.
9. Definitions. (a) Except as otherwise specifically indicated, the
following terms will have the following meanings for all purposes of this
Registration Rights Agreement:
"Agent" has the meaning ascribed to it in Section 11(d).
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"BIL Entities" means, collectively, BIL (Far East Holdings) Limited, a Hong
Kong corporation, and BIL Securities (Offshore) Ltd., a New Zealand corporation,
or any of their respective permitted transferees and assignees.
"Business Day" means a day other than Saturday, Sunday or any other day on
which banks located in the State of New York are authorized or obligated to
close.
"Commission" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority.
"Common Stock" means shares of Common Stock, par value $.025 per share, of
the Company, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed (including without limitation by way of
merger or consolidation) or any stock resulting from any reclassification of
such Common Stock.
"Company" has the meaning ascribed to it in the preamble.
"Cutback Registration" means any Requested Registration or Piggyback
Registration to be effected as an underwritten Public Offering in which the
Managing Underwriter with respect thereto advises the Company in writing that,
in its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceed the number which can be sold in such offering without a
material reduction in the selling price anticipated to be received for the
securities to be sold in such Public Offering.
"DGCL" means the General Corporation Law of the State of Delaware.
"Effective Registration" means, subject to the last sentence of Section
1(e), a Requested Registration or a Piggyback Registration which includes
Registrable Securities, as the case may be, which (a) has been declared or
ordered effective in accordance with the rules of the Commission and (b) has
been kept effective for the period of time contemplated by Section 3(b).
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Notwithstanding the foregoing, a Requested Registration that does not become
effective after it has been filed with the Commission solely by reason of any
member of the Restricted Group's refusal to proceed shall be deemed to be an
Effective Registration for purposes of this Registration Rights Agreement.
"Effective Time" means the time at which the Merger becomes effective under
the DGCL.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Indemnified Party" means a party entitled to indemnity in accordance with
Section 6.
"Indemnifying Party" means a party obligated to provide indemnity in
accordance with Section 6.
"Inspectors" has the meaning ascribed to it in Section 3(j).
"Losses" has the meaning ascribed to it in Section 6(a).
"Managing Underwriter" means, with respect to any Public Offering, the
underwriter or underwriters managing such Public Offering.
"Merger" has the meaning ascribed to it in the preamble.
"Merger Agreement" has the meaning ascribed to it in the preamble.
"NASD" means the National Association of Securities Dealers.
"Notice of Piggyback Registration" has the meaning ascribed to it in
Section 2(a).
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union
or association.
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"Piggyback Registration" means any registration of securities of the
Company of the same class as the Registrable Securities under the Securities Act
(other than a registration (x) in respect of a dividend reinvestment or similar
plan for stockholders of the Company, (y) on Form S-4 or Form S-8 promulgated by
the Commission, or any similar or successor forms thereto, or (z) solely with
respect to convertible or exchangeable securities or rights to purchase
securities), whether for sale for the account of the Company or for the account
of any holder of securities of the Company (other than Registrable Securities),
including a registration by the Company under the circumstances described in
Section 1(e).
"Public Offering" means any offering of Common Stock to the public, either
on behalf of the Company or any of its securityholders, pursuant to an effective
registration statement under the Securities Act.
"Records" has the meaning ascribed to it in Section 3(j).
"Registrable Securities" means (i) the Shares and (ii) any additional
shares of Common Stock issued or distributed by way of a dividend, stock split,
merger, consolidation or other distribution in respect of the Shares, or
acquired by way of any rights offering or similar offering made in respect of
the Shares. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) they shall have been
distributed to the public pursuant to Rule 144 or all Registrable Securities
then owned by the Restricted Group can be sold in any three-month period
pursuant to Rule 144, (iii) they are transferred to or become owned by a Person
who is not a member of the Restricted Group or (iv) they shall have ceased to be
outstanding.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations under this Registration Rights
Agreement to effect the registration of Registrable Securities in a Requested
Registration or a Piggyback Registration, including, without limitation, all
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registration, filing, securities exchange listing and NASD fees, all
registration, filing, qualification and other fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and for the Restricted Group and of the Company's independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance, any
fees and disbursements of underwriters customarily paid by issuers of
securities; but excluding underwriting discounts and commissions and transfer
taxes, if any, in respect of Registrable Securities and the fees and
disbursements of any legal counsel retained by any member of the Restricted
Group, which shall be payable by the members of the Restricted Group.
"Registration Rights Agreement" means this Registration Rights Agreement,
as the same shall be amended from time to time.
"Requested Registration" means any registration of Registrable Securities
under the Securities Act effected in accordance with Section 1.
"Requisite Stockholders" has the meaning ascribed to it in Section 11(d).
"Restricted Group" means (i) any Stockholder, (ii) any and all Persons
directly or indirectly controlled by or under common control with any
Stockholder, (iii) if such Stockholder is an individual, (a) any member of such
Stockholder's family (including any spouse, parent, sibling, child, grandchild
or other lineal descendant, including adoptive children), (b) the heirs,
executors, personal representatives and administrators of any of the foregoing
persons, (c) any trust established for the benefit of any of the foregoing
persons and (d) any charitable foundations established by any of the foregoing
persons, and (iv) any and all groups (within the meaning of Section 13(d)(3) of
the Exchange Act) of which any Stockholder or any Person directly or indirectly
controlling, controlled by or under common control with such Stockholder is a
member, other than any such group not acting for the purpose of acquiring,
holding or beneficially owning any Registrable Securities.
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<PAGE>
"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shares" means, collectively, the shares of Common Stock received by the
Stockholders pursuant to the Merger Agreement.
"Stockholders" has the meaning ascribed to it in the preamble.
"Stockholders Agreement" has the meaning ascribed to it in the preamble.
"Sub" has the meaning ascribed to it in the preamble.
"Target" has the meaning ascribed to it in the preamble.
"Warrant Holders" means the holders of the Warrants (the "Warrants") issued
pursuant to the Warrant Agreement, dated as of March 12, 1992, as amended, by
and between the Company and John Hancock Mutual Life Insurance Company.
"Warrant Shares" means the shares of Common Stock issuable to the Warrant
Holders pursuant to the Warrants.
(b) Unless the context of this Registration Rights Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Registration Rights Agreement; and (iv) the
term "Section" refers to the specified Section of this Registration Rights
Agreement. Whenever this Registration Rights Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified.
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10. Termination. This Registration Rights Agreement shall automatically
terminate, and shall cease to be of any further force or effect, upon the
termination of the Merger Agreement in accordance with its terms.
11. Miscellaneous. (a) Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally or by facsimile transmission or mailed (first
class postage prepaid) to the parties at the following addresses or facsimile
numbers:
If to any Restricted Group member, to:
c/o Fuqua Capital Corporation
One Atlantic Center
1201 West Peachtree Street
Suite 500
Atlanta, GA 30309
Facsimile No.: (404) 815-4528
Attn: J. Rex Fuqua
with a copy to:
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, DC 20036-6802
Facsimile No.: (202) 776-2222
Attn: Edward J. O'Connell, Esq.
If to the Company, to:
Graham-Field Health Products, Inc.
400 Rabro Drive East
Hauppauge, New York 11788
Facsimile No.: (516) 582-5608
Attn: Richard S. Kolodny, Esq.
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<PAGE>
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Facsimile No.: (212) 530-5219
Attn: Robert S. Reder, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other parties hereto.
(b) Entire Agreement. This Registration Rights Agreement supersedes all
prior discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
(c) Amendment. This Registration Rights Agreement may be amended,
supplemented or modified only by a written instrument (which may be executed in
any number of counterparts) duly executed by or on behalf of each of the Company
and members of the Restricted Group owning a majority of the Registrable
Securities then outstanding.
(d) Irrevocable Appointment of Agent. By the execution and delivery of this
Registration Rights Agreement, including counterparts hereof, each member of the
Restricted Group hereby irrevocably constitutes and appoints J. Rex Fuqua as the
true and lawful agent and attorney-in-fact of each such member of the Restricted
Group in the various capacities provided for herein (such individual, or such
other individual as the holders of a majority of the Registrable Securities then
outstanding (the
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<PAGE>
"Requisite Stockholders") shall designate in writing to the Company from time to
time, is herein referred to as the "Agent"), and to do or refrain from doing all
such further acts and things, and to execute all such documents, as the Agent
shall deem necessary or appropriate in connection with this Registration Rights
Agreement. Unless there is no existing person who has been designated to act as
Agent by the Requisite Stockholders, all rights of the Restricted Group under
this Registration Rights Agreement shall be exercised by the members of the
Restricted Group only through or by the Agent in his or her capacity as agent of
the members of the Restricted Group hereunder, and the Company shall not be
required to take directions from any other member of the Restricted Group for so
long as such Agent continues to serve and has not otherwise been removed as
Agent pursuant to notice to the Company from the Requisite Stockholders. If at
any time no person is serving as Agent, the Company shall not be required to
take action except upon the direction of the Requisite Stockholders.
(e) Waiver. Any term or condition of this Registration Rights Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Registration Rights Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same term or condition of this Registration Rights Agreement on any future
occasion.
(f) No Third Party Beneficiary. The terms and provisions of this
Registration Rights Agreement are intended solely for the benefit of each party
hereto and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person entitled to
indemnity under Section 6.
(g) No Assignment; Binding Effect. Neither this Registration Rights
Agreement nor any right, interest or obligation hereunder may be assigned by any
party hereto without the prior written consent of the other party hereto and any
attempt to do so will be void; provided that any member of the Restricted Group
may assign such member's rights hereunder with respect to any Registrable
Securities transferred to another
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<PAGE>
member of the Restricted Group or, if such member is a natural person, to his or
her heirs and legal representatives. Subject to the foregoing, this Registration
Rights Agreement is binding upon, inures to the benefit of and is enforceable by
the parties hereto and their respective successors and assigns.
(h) Headings. The headings used in this Registration Rights Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
(i) Invalid Provisions. If any provision of this Registration Rights
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Registration Rights Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Registration
Rights Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof and (iii) the
remaining provisions of this Registration Rights Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
(j) Remedies; Legal Expenses. Except as otherwise expressly provided for
herein, no remedy conferred by any of the specific provisions of this
Registration Rights Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by any party
hereto shall not constitute a waiver by any such party of the right to pursue
any other available remedies.
Damages in the event of breach of this Registration Rights Agreement by a
party hereto would be difficult, if not impossible, to ascertain, and it is
therefore agreed that each such party, in addition to and without limiting any
other remedy or right it may have, will have the right to an injunction or other
equitable relief in any court of competent jurisdiction, enjoining any such
breach, and enforcing specifically the terms and provisions hereof and the
Company and each member of the Restricted Group each hereby waives any and all
defenses it may
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<PAGE>
have on the ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief. The existence of this right will
not preclude any such party from pursuing any other rights and remedies at law
or in equity which such party may have.
The parties hereto agree that, in the event that any party to this
Registration Rights Agreement shall bring any legal action or proceeding to
enforce or to seek damages or other relief arising from an alleged breach of any
term or provision of this Registration Rights Agreement by the other party, the
prevailing party in any such action or proceeding shall be entitled to an award
of, and the other party to such action or proceeding shall pay, the reasonable
fees and expenses of legal counsel to the prevailing party.
(k) Governing Law. This Registration Rights Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
a contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
(l) Counterparts. This Registration Rights Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, each party hereto has signed this Registration Rights
Agreement, or caused this Registration Rights Agreement to be signed on its
behalf by its duly authorized officer or agent, as of the date first above
written.
GRAHAM-FIELD HEALTH PRODUCTS, INC.
By: /s/ Irwin Selinger
---------------------------------
Name:
Title:
/s/ J. B. Fuqua
---------------------------------
J. B. FUQUA
/s/ J. Rex Fuqua
---------------------------------
J. REX FUQUA
FUQUA HOLDINGS - I, L.P.
By: FUQUA HOLDINGS, INC., its
General Partner
By: /s/ J. Rex Fuqua
---------------------------------
Name: J. Rex Fuqua
Title: President
THE JENNIFER CALHOUN FUQUA TRUST
By: /s/ J. B. Fuqua
---------------------------------
Name: J. B. Fuqua
Title: Trustee
THE LAUREN BROOKS FUQUA TRUST
By: /s/ J. B. Fuqua
--------------------------------
Name: J. B. Fuqua
Title: Trustee
THE J. B. FUQUA FOUNDATION, INC.
By: /s/ J. B. Fuqua
--------------------------------
Name: J. B. Fuqua
Title: Chairman, President
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