Document:

ex1-4.htm

Exhibit 10.1

 

 

STOCKHOLDER RIGHTS AGREEMENT

 

This STOCKHOLDER RIGHTS AGREEMENT (this “Agreement”) is made as of April 27, 2016 by and between National Holdings Corporation, a Delaware corporation (the “Company”), and FBIO Acquisition, Inc. (the “Major Stockholder”).

 

RECITALS

 

WHEREAS, concurrently with the execution of this Agreement, the Company, Fortress Biotech, Inc., a Delaware corporation, and the Major Stockholder have entered into that certain Agreement and Plan of Merger (as it may be amended, modified and supplemented from time to time, the “Merger Agreement”), capitalized terms used but not defined herein shall have the meanings assigned to them in the Merger Agreement;

 

WHEREAS, in accordance with the Merger Agreement, the Major Stockholder has agreed to commence the Offer to purchase all of the issued and outstanding Shares of the Company at the Offer Price and may acquire a number of Shares which constitutes a Partial Acquisition under the Merger Agreement; 

 

WHEREAS, Section 6.14 of the Merger Agreement provides that this Agreement will become effective only upon the consummation of a Partial Acquisition; and

 

WHEREAS, the purpose of this Agreement is to give the Major Stockholder the right to nominate, in certain circumstances, individuals to the board of directors of the Company (the “Board”) and to protect the stockholders of the Company who remain stockholders of the Company following the consummation of the Offer.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties hereto do hereby covenant and agree as follows:

 

ARTICLE 1.

EFFECTIVENESS AND TERMINATION OF THIS AGREEMENT

 

1.1     Effectiveness of this Agreement. This Agreement shall be binding upon each party upon such party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the consummation of a Partial Acquisition (the “Effective Date”). In the event that the Merger Agreement is validly terminated in accordance with its terms prior to a Partial Acquisition or if the Merger Condition is satisfied, this Agreement shall automatically and immediately terminate and become null and void and be of no further force or effect, and the parties shall have no obligations hereunder.

 

1.2     Effectiveness of Article 2. Notwithstanding Section 1.1, the provisions of Article 2 shall only become effective if, at the Acceptance Time, the Major Stockholder and its Affiliates own at least 35% of all then outstanding Shares.

 

1.3     Termination. This Agreement shall terminate upon the third anniversary of the Effective Date. 

 

 

 

 

 

ARTICLE 2.
RESTRICTIVE COVEANTS

 

2.1     Going Private Transactions. Until the earlier of (a) the date that is three years after the Effective Date and (b) the date that the Major Stockholder and its Affiliates own less than 20% of all then outstanding Shares, the Major Stockholder shall, and shall cause its Affiliates to, refrain from proposing, initiating or entering into any transaction or series of related transactions (including, a reverse stock split, a cash-out merger or similar transaction) with respect to the Company that constitute or result in (i) a “going private transaction” (as defined in Section 13(e) of the Exchange Act and the regulations of the Securities and Exchange Commission issued thereunder), (ii) an acquisition of any outstanding shares of the Company from any stockholder primarily for cash, or (iii) an acquisition, merger or sale with or into a Person whose securities are not listed on a national securities exchange immediately following the consummation of such transaction or transactions, provided, however, that nothing in this Section 2.1 shall prohibit any transaction or series of related transactions (x) where the per share cash consideration paid to the stockholders of the Company other than the Major Stockholder or its Affiliates in connection with such transaction or series of related transactions is greater than or equal to the Offer Price, as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like that occur after the Effective Date, (y) not proposed or initiated by the Major Stockholder or any of its Affiliates, or (z) that is approved by the holders of a majority of all then outstanding Shares (excluding from both the numerator and the denominator any Shares held by the Major Stockholder and its Affiliates).

 

2.2     Reverse Stock Splits. Until the earlier of (a) the date that is three years after the Effective Date and (b) the date that the Major Stockholder and its Affiliates own less than 20% of all then outstanding Shares, the Major Stockholder shall, and shall cause its Affiliates to, refrain from proposing, initiating or entering into any transaction or series of related transactions with respect to the Company that would result in a reverse stock split of a ratio greater than or equal to 100 to 1.

 

2.3     Business Combinations. Until the earlier of (a) the date that is one year after the Effective Date and (b) the date that the Major Stockholder and its Affiliates own less than 20% of all then outstanding Shares, the Major Stockholder shall, and shall cause its Affiliates to, refrain from making any proposal or offer with respect to any sale of substantially all of the stock or assets, merger, joint venture, partnership, consolidation, tender offer, exchange offer, share exchange, business combination or similar transaction or series of related transactions with respect to the Company or any of its Subsidiaries, on the one hand, and the Major Stockholder or any of its Affiliates, on the other hand; provided, however, that nothing in this Section 2.3 shall prohibit any transaction or series of related transactions if (i) (x) the board of directors of the Company obtains an opinion from an independent investment banking firm that such transaction or series of related transactions is fair to the Remaining Stockholders from a financial point of view and (y) a majority of the disinterested members of the Board approve such transaction or series of related transactions or (ii) such transaction or series of related transactions is approved by the holders of a majority of all then outstanding Shares (excluding from both the numerator and the denominator any Shares held by the Major Stockholder and its Affiliates). 

 

ARTICLE 3.
GOVERNANCE

 

3.1     Board of Directors. 

 

(a)     As of the Effective Date, the number of directors of the Board shall be set at seven directors. After the conclusion of the 2016 annual meeting of stockholders of the Company, the size of the Board may be increased or decreased by the Board in accordance with the Company’s Amended and Restated By-laws as may then be in effect. 

 

 

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(b)     From and after the Effective Date, in the event of a Partial Acquisition, the Major Stockholder and the Company acknowledge and agree that the manner of selecting nominees for election to the Board at the 2016 annual meeting of stockholders of the Company (the “2016 Annual Meeting”) shall be as follows: 

 

(i)     the Major Stockholder shall have the right, in connection with the 2016 Annual Meeting, to designate for nomination by the Board or its committee for election as Class III directors at the 2016 Annual Meeting two nominees (the “2016 Major Stockholder Designees”); provided that, each such 2016 Major Stockholder Designee (A) meets the applicable director independence requirements of the Securities and Exchange Commission, The Nasdaq National Market (or any other securities exchange on which the securities of the Company may be listed from time to time) and the Company’s corporate governance guidelines (the “Independent Director Rules”), as applicable, and (B) (x) has relevant business and financial experience, (y) has not been a party to or involved in an event that would be required to be disclosed pursuant to Item 401(f) of Regulation S-K under the Securities Act and (z) satisfies the requirements of Section 8 of the Clayton Act (the “Director Qualification Standards”); and 

 

(ii)     the Company or the Board (or its committee) shall (A) nominate such 2016 Major Stockholder Designees for election to the Board, (B) recommend that the applicable Company’s stockholders vote in favor of the 2016 Major Stockholder Designees at the 2016 Annual Meeting, and (C) (C) use its reasonable best efforts to cause the election of each such 2016 Major Stockholder Designee to the Board. 

 

(c)     In connection with each annual or special meeting of stockholders of the Company at which directors are to be elected following the 2016 Annual Meeting and through the third anniversary of the Effective Date (each such annual or special meeting, an “Election Meeting”) for so long as the Major Stockholder holds any Shares, the Major Stockholder and the Company acknowledge and agree that the manner of selecting nominees for election to the Board shall be as follows:

 

(i)     the Major Stockholder shall have the right to designate for nomination by the Board or its committee all of the directors of the Board (the “Major Stockholder Designees”) to be elected at such Election Meeting; provided that, each such Major Stockholder Designee meets the applicable Independent Director Rules, if such independence of the Major Stockholder Designees is necessary for the Company to satisfy the applicable Independent Director Rules, and satisfies the Director Qualification Standards; and

 

(ii)     the Company or the Board (or its committee) shall (A) nominate such Stockholder Designees for election to the Board, (B) recommend that the applicable Company’s stockholders vote in favor of the Major Stockholder Designees in all subsequent Election Meetings, and (C) use its reasonable best efforts to cause the election of each such Major Stockholder Designee to the Board.

 

(d)     In the event of the death, disability, resignation or removal of any 2016 Major Stockholder Designee or Major Stockholder Designee, subject to the continuing satisfaction of the applicable ownership threshold set forth in Section 3.1(c), the Major Stockholder is entitled to designate as a replacement for such 2016 Major Stockholder Designee or Major Stockholder Designee an individual satisfies the criteria and qualifications set forth in Section 3.1(b)(i) or Section 3.1(c)(i), as applicable, and the Company and the Board (or its committee) shall cause such newly designated person to fill such resulting vacancy.

 

(e)     Each of the Company and the Major Shareholder agrees that it will take all necessary action within its control to cause the matters addressed by this Article 3 to be carried out in accordance with the provisions hereof.

 

 

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(f)     The Company shall pay the reasonable out-of-pocket expenses (including travel expenses) incurred by each of the Company’s directors in connection with attending the meetings of the Board and any committee thereof. The Company shall use its best efforts to maintain in effect at all times directors and officers indemnity insurance coverage reasonably satisfactory to the Major Stockholder, and the certificate of incorporation and bylaws of the Company shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable Law.

 

ARTICLE 4.
MISCELLANOUS

 

4.1     Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the specific subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. 

 

4.2     Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (a) four business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one business day after being sent for next business day delivery, fees prepaid, via a reputable nationwide overnight courier service, or (c) immediately upon delivery by hand or by facsimile (with a written or electronic confirmation of delivery), in each case to the intended recipient as set forth below:

 

If to the Company:

 

National Holdings Corporation

410 Park Ave, 14th Floor

New York, New York 10022
Attention: Robert Fagenson
E-mail: rfagenson@nhldcorp.com

 

with a copy (which shall not constitute notice) to

 

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue

New York, New York 10017

Attention: Kenneth Koch
E-mail: KRKoch@mintz.com

Fax: 212-983-3115

If to the Major Stockholder:

 

c/o Fortress Biotech, Inc.

2 Gansevoort Street, 9th Floor

New York, New York 10014

Attention: Michael S. Weiss

E-mail: mweiss@fortressbiotech.com

with a copy (which shall not constitute notice) to

 

Alston & Bird LLP

90 Park Avenue, 15th Floor

New York, New York 10016

Attention: Mark F. McElreath and David A. Brown
E-mail: mark.mcelreath@alston.com; dave.brown@alston.com

Fax: 212-922-3995

 

 

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or to such other Persons or addresses as may be designated in writing by the party to receive such notice as provided above.

 

4.3     Modifications and Amendments. This Agreement may not be amended or modified in any respect except by an instrument in writing signed by or on behalf of the Company and the Major Stockholder; provided, however, if any such amendment or modification is made prior to the third anniversary of the Effective Date and such amendment or modification is materially adverse to the Remaining Stockholders, such amendment or modification shall require the approval of the Remaining Stockholders who own at least a majority of the then outstanding Shares (excluding from both the numerator and the denominator any Shares held by the Major Stockholder and its Affiliates). 

 

4.4     Assignment. The rights and obligations under this Agreement may not be assigned by any party hereto, except that any party may assign its rights and obligations under this Agreement to (a) a successor party, by consolidation or merger (whether or not such party is the surviving corporation) or operation of law, and (b) a purchaser of all or substantially all of the assigning party’s assets; provided, that such assignee expressly assumes in writing the obligations of the assignor hereunder.

 

4.5     Successor and Assigns. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. 

 

4.6     Governing Law and Venue; Specific Performance. 

 

(a)     THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. The parties hereto hereby irrevocably submit to the personal jurisdiction of the courts of the State of Delaware and the federal courts of the United States of America located in the county of Delaware in the State of Delaware solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any Action for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such Action may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such Action shall be heard and determined in such a Delaware state or federal court. The parties hereto hereby consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such Action in the manner provided in Section 4.2 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.

 

(b)     The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by any party in accordance with their specific terms or were otherwise breached by such party. It is accordingly agreed that the non-breaching parties, and any third-party beneficiary, shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions of this Agreement against the other party, this being in addition to any other remedy to which such party is entitled at law or in equity, and each party hereby waives any requirement for the posting of any bond or similar collateral in connection therewith. Each party hereby agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that (i) the other party has an adequate remedy at law, or (ii) an award of specific performance is not an appropriate remedy for any reason at law or in equity.

 

 

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4.7     Severability. Any term or provision of this Agreement that is held by a court of competent jurisdiction or other Governmental Entity to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other Governmental Entity declares that any term or provision of this Agreement is invalid, void or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

 

4.8     Interpretation. The headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Terms defined in the singular shall also include the plural and vice versa. A reference in this Agreement to $ or dollars is to U.S. dollars. The parties hereto have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

4.9     No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto or any third-party beneficiary in exercising any right, power or remedy under this Agreement, and no course of dealing among the parties hereto or any third-party beneficiary, shall operate as a waiver of any such right, power or remedy of the party. No single or partial exercise of any right, power or remedy under this Agreement, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such Person from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy under this Agreement shall not constitute a waiver of the right of such Person to pursue other available remedies. 

 

4.10     Counterparts. This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each party and delivered (by electronic communication, facsimile or otherwise) to the other party. 

 

 

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       In Witness Whereof, the parties have executed this Agreement as of the date first set forth above.

 

	
 
	
NATIONAL HOLDINGS CORPORATION

	
 
	
 

	
 
	
By:       /s/ Robert B. Fagenson

	 	Name:  Robert B. Fagenson
	 	Title:    Chief Executive Officer

 

 

[Signature Page – Stockholder Rights Agreement]

 

 

	
 
	
FBIO ACQUISITION, INC.

	
 
	
 

	
 
	
By:       /s/ Lindsay A. Rosenwald, MD

	 	Name:  Lindsay A. Rosenwald, MD
	 	Title:    CEO and President

 

 

 

[Signature Page – Stockholder Rights Agreement]ex1-2.htm

Exhibit 10.2

 

 

FORM OF SUPPORT AND VOTING AGREEMENT 

 

This SUPPORT AND VOTING AGREEMENT (this “Agreement”), dated as of April 27, 2016, is by and among Fortress Biotech, Inc., a Delaware corporation (“Parent”), FBIO Acquisition, Inc., a Delaware corporation and an indirect, wholly-owned Subsidiary of Parent (“Acquisition Sub”), the Person listed as a “Stockholder” on the signature page hereto (the “Stockholder”), and solely for the limited purposes set forth in Section 10(b), [____________], a Delaware corporation (the “Company”).

 

RECITALS:

 

WHEREAS, the Stockholder is, as of the date hereof, the record and beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which meaning will apply for all purposes of this Agreement) of the number of shares of common stock, par value $0.02 per share (the “Company Common Stock”), of the Company, set forth on his, her or its signature page hereto (together with any shares of Company Common Stock which the Stockholder may acquire beneficial ownership of at any time in the future during the period from the date hereof until termination of this Agreement pursuant to Section 6(a) (the “Term”), referred to herein as the “Shares”); and

 

WHEREAS, as a condition and inducement to Parent’s and Acquisition Sub’s willingness to enter into the Agreement and Plan of Merger, dated as of the date hereof (as it may be amended, modified and supplemented from time to time, the “Merger Agreement”; capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Merger Agreement) with the Company, Parent has requested that the Stockholder, and the Stockholder has agreed to, enter into this Agreement with respect to all of the Shares beneficially owned by the Stockholder at any time during the Term.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein and in the Merger Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

 

SECTION 1.      Grant of Irrevocable Proxy; Appointment of Proxy. 

 

(a)     The Stockholder hereby agrees that, during the Term, the Stockholder will, at every meeting of the stockholders of the Company called for such purpose, and at every adjournment or postponement thereof (or in any other circumstances upon which a vote, consent or approval is sought, including by written consent), not vote any of his, her or its Shares at such meeting in favor of, or consent to, and will vote against and not consent to, the approval of any (i) Acquisition Proposal, (ii) reorganization, recapitalization, dissolution, liquidation or winding-up of the Company or any other extraordinary transaction involving the Company other than the Offer, the Merger or any of the other transactions contemplated by the Merger Agreement, or (iii) corporate action, the consummation of which would prevent or materially delay the consummation of any of the transactions contemplated by the Merger Agreement. The Stockholder shall use his, her or its commercially reasonable efforts to ensure that, during the Term, any other Person having voting power with respect to any of his, her or its Shares will not vote any such Shares in favor of or consent to, and will vote against, the approval of the matters described in clauses (i) through (iii) of the preceding sentence. 

 

 

 

 

 

(b)     The Stockholder hereby revokes (or agrees to cause to be revoked) any and all previous proxies granted with respect to the Shares as they relate to the matters set forth in Section 1(a). By entering into this Agreement, the Stockholder hereby grants a proxy appointing Parent as the Stockholder’s attorney-in-fact and proxy, with full power of substitution, for and in the Stockholder’s name, to vote, express consent or dissent, or otherwise to utilize such voting power in the manner contemplated by Section 1(a) as Parent or its proxy or substitute shall, in Parent’s sole discretion, deem proper with respect to the Shares. 

 

(c)     The Stockholder hereby affirms that the proxy granted by the Stockholder pursuant to this Section 1 is irrevocable and is granted in consideration of Parent and Acquisition Sub entering into this Agreement and the Merger Agreement and incurring certain related fees and expenses. The Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and, except as set forth in this Section 1 or in Section 6, is intended to be irrevocable in accordance with the provisions of Section 212 of the DGCL. If, during the Term, for any reason the proxy granted herein is not irrevocable, then the Stockholder agrees that it shall vote his, her or its Shares in accordance with Section 1(a) as instructed by Parent in writing. The parties agree that the foregoing shall be a voting agreement created under Section 218 of the DGCL. 

 

(d)     Parent hereby acknowledges and agrees that the proxy set forth in this Section 1 shall not be exercised to vote, consent or act on any matter except as specifically contemplated by Section 1(a), and Parent agrees not to exercise the proxy granted herein for any purpose other than the purposes described in Section 1(a). The proxy set forth in this Section 1 shall be revoked, terminated and of no further force or effect automatically without further action of any party upon the termination of this Agreement. The power of attorney granted herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of the Stockholder.

 

SECTION 2.      Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to Parent and Acquisition Sub as follows:

 

(a)     The Stockholder (i) is the record and beneficial owner of the Shares set forth on the signature page hereto, and (ii) except as set forth on Schedule I hereto, neither holds nor has any beneficial ownership interest in any other shares of Company Common Stock or any performance-based stock units, restricted stock, deferred stock units, options (including any granted pursuant to a Stock Plan) or warrants to acquire shares of Company Common Stock or other right or security convertible into or exercisable or exchangeable for shares of Company Common Stock.

 

(b)     The execution, delivery and performance by the Stockholder of this Agreement and the consummation by the Stockholder of the transactions contemplated hereby are within the powers of the Stockholder and, if applicable, have been duly authorized by all necessary corporate, company, partnership, trust or other action. If this Agreement is being executed in representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into and perform this Agreement.

 

 

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(c)     This Agreement has been duly authorized, executed and delivered by the Stockholder and, assuming this Agreement constitutes a valid and binding obligation of Parent and Acquisition Sub, constitutes the valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) that the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

 

(d)     Neither the execution and delivery of this Agreement by the Stockholder nor the consummation by the Stockholder of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which the Stockholder is a party or by which the Stockholder or any of his, her or its Shares are bound, except as could not reasonably be expected, either individually or in the aggregate, to impair, impede, delay or frustrate the ability of the Stockholder to perform the Stockholder’s obligations hereunder or to consummate the transactions contemplated hereby. The consummation by the Stockholder of the transactions contemplated hereby will not (i) violate any provision of any law, judgment, order or decree applicable to the Stockholder, or (ii) require any consent, approval, or notice under any statute, law, rule or regulation applicable to the Stockholder other than as required under the Exchange Act and the rules and regulations promulgated thereunder or by any other applicable U.S. state or federal securities laws, except as could not reasonably be expected, either individually or in the aggregate, to impair, impede, delay or frustrate the ability of the Stockholder to perform the Stockholder’s obligations hereunder or to consummate the transactions contemplated hereby. 

 

(e)     The Shares and the certificates, if any, representing the Shares owned by the Stockholder are now, and at all times during the Term will be (except for any Shares Transferred during the Term as permitted by Section 5(b)), held by the Stockholder, by a nominee or custodian for the benefit of the Stockholder, or by the depository under the Offer, free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, options, rights (other than community property interests), understandings or arrangements or any other encumbrances or restrictions whatsoever on title, transfer, or exercise of any rights of a stockholder in respect of such Shares (collectively, “Encumbrances”), except for (i) any such Encumbrances arising hereunder, and (ii) Encumbrances imposed by federal or state securities laws (collectively, “Permitted Encumbrances”).

 

(f)     As of the date of this Agreement, there are no Actions pending or, to the knowledge of the Stockholder, threatened against the Stockholder at law or in equity before or by any Governmental Entity that could reasonably be expected to impair the ability of the Stockholder to perform the Stockholder’s obligations hereunder or to consummate the transactions contemplated hereby.

 

 

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SECTION 3.      Representations and Warranties of Parent and Acquisition Sub. Each of Parent and Acquisition Sub hereby, jointly and severally, represent and warrant to the Stockholder as follows:

 

(a)     Each of Parent and Acquisition Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and each of Parent and Acquisition Sub has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. 

 

(b)     This Agreement has been duly authorized, executed and delivered by each of Parent and Acquisition Sub, and, assuming this Agreement constitutes a valid and binding obligation of the Stockholder, constitutes the valid and binding obligation of each of Parent and Acquisition Sub, enforceable against each of them in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

 

(c)     Neither the execution and delivery of this Agreement by Parent or Acquisition Sub nor the consummation by Parent or Acquisition Sub of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which Parent or Acquisition Sub is a party or by which Parent or Acquisition Sub or any of its assets are bound, except as could not reasonably be expected, either individually or in the aggregate, to impair, impede, delay or frustrate the ability of Parent or Acquisition Sub to perform its obligations hereunder or to consummate the transactions contemplated hereby. The consummation by each of Parent and Acquisition Sub of the transactions contemplated hereby will not (i) violate any provision of any law, judgment, order or decree applicable to Parent or Acquisition Sub or (ii) require any consent, approval, or notice under any statute, law, rule or regulation applicable to Parent or Acquisition Sub other than as required under the Exchange Act and the rules and regulations promulgated thereunder or by any other applicable U.S. state or federal securities laws, except as could not reasonably be expected, either individually or in the aggregate, to impair, impede, delay or frustrate the ability of Parent or Acquisition Sub to perform its obligations hereunder or to consummate the transactions contemplated hereby.

 

SECTION 4.      Acquisition Proposals; Non-Solicitation. 

 

(a)     Acquisition Proposals. The Stockholder agrees that it will promptly (and in any event, within 48 hours) notify, or cause another stockholder of the Company or a Person acting on behalf of all of the Stockholder to notify, Parent and Acquisition Sub immediately following the Stockholder’s learning that any inquiries, proposals or offers with respect to an Acquisition Proposal are received by, any information is requested from, or any such discussions or negotiation are sought to be initiated or continued with, it or any of its Representatives indicating, in connection with such notice, the name of such Person and the material terms and conditions of any proposals or offers (including copies of any written requests, proposals or offers, including proposed agreements), and thereafter shall keep Parent and Acquisition Sub informed, on a current basis, of the status and terms of such proposals or offers (including any amendments thereto and, in no event later than 48 hours after receipt, copies of any additional or revised written requests, proposals or offers, including proposed agreements) and the status of any such discussions or negotiations. The Stockholder agrees that it will not enter into any agreement with any Person subsequent to the date hereof that prohibits it from providing any information to Parent or Acquisition Sub in accordance with this Section 4(a). Without limiting the generality of the foregoing or Section 4(b), the Stockholder shall notify Parent and Acquisition Sub in advance of beginning to provide information to any Person relating to an Acquisition Proposal or beginning discussions or negotiations with any person regarding an Acquisition Proposal. Any violations of the restrictions set forth above by any Representative of the Stockholder shall be deemed to be a breach of this Section 4(a) by the Stockholder. 

 

 

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(b)     No Solicitation or Negotiation. 

 

(i)     The Stockholder shall not, nor shall it authorize or permit any of his, her or its Representatives to, directly or indirectly, except in connection with any action of the Company or any of its Representatives expressly permitted by Section 6.2 of the Merger Agreement, (A) initiate, solicit, knowingly encourage, induce or assist any inquiries or the making, submission, announcement or consummation of any proposal or offer that constitutes, or could reasonably be expected to lead to, any Acquisition Proposal, (B) engage in, continue or otherwise participate in any discussions or negotiations regarding, or provide or furnish any information or data relating to the Company or any of its Subsidiaries (other than to notify a Person of the provisions of Section 6.2 of the Merger Agreement), or afford access to the business, properties, assets, books, records or personnel of the Company or any of its Subsidiaries to any Person (other than Parent, Acquisition Sub, or any of their respective Affiliates, designees or Representatives) that could reasonably be expected to initiate, solicit, encourage, induce or assist the making, submission or commencement of any proposal or offer that constitutes, or could reasonably be expected to lead to, any Acquisition Proposal, (C) approve, recommend or enter into, any letter of intent or similar document, agreement or commitment, or agreement in principle (whether written or oral, binding or nonbinding) with respect to an Acquisition Proposal (other than a confidentiality agreement contemplated by Section 6.2 of the Merger Agreement) or (D) otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal. 

 

(ii)     The Stockholder shall, and shall cause its Representatives to, immediately cease and cause to be terminated any and all existing discussions or negotiations with any Person conducted heretofore with respect to any proposal that constitutes, or is reasonably expected to lead to, any Acquisition Proposal and request the prompt return or destruction of all confidential information previously furnished.

 

(c)     Notwithstanding the foregoing, nothing herein shall limit or affect any actions taken by the Stockholder in compliance with the Merger Agreement.

 

 

5

 

 

SECTION 5.      Transfers.

 

(a)     Prior to the termination of this Agreement, except as otherwise provided herein, in the Merger Agreement or in that certain Voting Agreement by and between the Stockholder and Acquisition Sub entered into on the date hereof, the Stockholder shall not, directly or indirectly: (i) transfer, assign, sell, gift-over, hedge, pledge or otherwise dispose (whether by sale, liquidation, dissolution, dividend or distribution) of, enter into any derivative arrangement with respect to, create or suffer to exist any Encumbrances (other than Permitted Encumbrances) on or consent to any of the foregoing (“Transfer”), any or all of the Shares or any right or interest therein; (ii) enter into any contract, option or other agreement, arrangement or understanding with respect to any Transfer; (iii) grant any proxy, power-of-attorney or other authorization or consent with respect to the voting of any of the Shares; (iv) deposit any of the Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of the Shares; or (v) take or cause the taking of any other action that would make any representation or warranty of the Stockholder contained herein untrue or incorrect in any material respect or in any way restrict, limit or interfere in any material respect with the performance of the Stockholder’s obligations hereunder, or seek to do or solicit any of the foregoing actions, or cause or permit any other Person to take any of the foregoing actions. Without limiting the generality of the foregoing, during the Term, the Stockholder shall not tender, agree to tender or cause or permit to be tendered any Shares of the Stockholder into or otherwise in connection with any tender or exchange offer, except pursuant to the Offer.

 

(b)     Notwithstanding Section 5(a), the Stockholder may make Transfers (i) in connection with the tendering of Shares pursuant to the Offer and (ii) by will or by operation of law or other transfers for estate planning purposes; provided that with respect to (ii) above, such transferee shall agree in writing to be bound by this Agreement prior to the consummation of any such Transfer, and as Parent may otherwise agree in writing in its sole discretion.  

 

SECTION 6.      Termination. 

 

(a)     This Agreement, and all rights and obligations of the parties hereunder, shall terminate immediately upon the earliest to occur of the following: 

 

(i)     the Effective Time; 

 

(ii)     termination of the Merger Agreement for any reason, including such termination resulting from the consummation of a Partial Acquisition; or

 

(iii)     the mutual written consent of Parent and the Stockholder.

 

(b)     No termination of this Agreement shall relieve any party hereto from any liability for any breach of any provision of this Agreement prior to such termination and this Section 6 and Sections 10(c) and (d) shall survive the termination of this Agreement. 

 

SECTION 7.      Public Announcements. The Stockholder, and each of the Stockholder’s Affiliates, if any, shall not, and shall cause their respective Representatives, if any, not to, directly or indirectly, make any press release, public announcement or other public communication with respect to this Agreement or the Merger Agreement or any of the transactions contemplated hereby and thereby, without the prior written consent of Parent, except as may be required by applicable Laws. The Stockholder hereby (a) consents to and authorizes the publication and disclosure by Parent, Acquisition Sub and the Company (including in the Offer Documents, Schedule 14D-9 or any other publicly filed documents relating to the Merger, the Offer or any other transaction contemplated by the Merger Agreement) of: (i) the Stockholder’s identity; (ii) the Stockholder’s ownership of the Shares; and (iii) the nature of the Stockholder’s commitments, arrangements and understandings under this Agreement; and (b) agrees as promptly as practicable to notify Parent, Acquisition Sub and the Company of any required corrections with respect to any written information supplied by the Stockholder specifically for use in any such Offer Documents, Schedule 14D-9 or other disclosure document. Notwithstanding the foregoing, nothing in this Agreement shall limit or affect any actions taken by the Stockholder (or any of the Stockholder’s Representatives) who is an officer or member of the board of directors of the Company, solely in his or her capacity as such, in each case only as permitted by the Merger Agreement. 

 

 

6

 

 

SECTION 8.     Adjustments. In the event that, during the Term, (a) the number of issued and outstanding Shares or securities convertible or exchangeable into or exercisable for Shares changes as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer, or other similar transaction, or (b) the Stockholder shall become the beneficial owner of any additional shares of Company Common Stock, then the terms of this Agreement shall apply to the shares of Company Common Stock held by the Stockholder immediately following the effectiveness of the events described in clause (a) or the Stockholder becoming the beneficial owners thereof as described in clause (b), as though, in either case, they were Shares hereunder. In the event that the Stockholder shall become the beneficial owner of any other securities entitling the holder thereof to vote or give consent with respect to the matters set forth in Section 1, then the terms of Section 1 shall apply to such other securities as though they were Shares hereunder. 

 

SECTION 9.     Waiver of Appraisal and Dissenters’ Rights and Actions. The Stockholder hereby (a) waives and agrees not to exercise any rights (including under Section 262 of the DGCL) to demand appraisal of any Shares owned by the Stockholder or rights to dissent from the Merger which may arise with respect to the Merger, and (ii) agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or other Action, against Parent, Acquisition Sub, the Company or any of their respective successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the making or consummation of the Offer or consummation of the Merger, including any Action (x) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement or (y) alleging a breach of any fiduciary duty of the board of directors of the Company in connection with the Merger Agreement or the transactions contemplated thereby.

 

SECTION 10.      Miscellaneous.

 

(a)     Further Assurances. Each party shall execute and deliver any additional documents and take such further actions as may be reasonably necessary or desirable to carry out all of the provisions hereof, including all of the parties’ obligations under this Agreement, including, without limitation, to vest in Parent the power to vote the Shares to the extent contemplated by Section 1.

 

(b)     Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated; provided, however, any fees or expenses incurred by the Stockholder in connection with complying with his, her or its obligations under Section 16 of the Exchange Act with respect to the matters contemplated hereby shall be paid by the Company.

 

 

7

 

 

(c)     Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (i) four business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one business day after being sent for next business day delivery, fees prepaid, via a reputable nationwide overnight courier service or (iii) immediately upon delivery by hand or by facsimile (with a written or electronic confirmation of delivery), in each case to the intended recipient as set forth below:

 

if to Parent or Acquisition Sub, to: 

 

Fortress Biotech, Inc.

2 Gansevoort Street, 9th Floor

New York, New York 10014

Attention: Michael S. Weiss

Email: mweiss@fortressbiotech.com

 

with a copy to: 

 

Alston & Bird LLP

90 Park Avenue, 15th Floor

New York, New York 10016

Attention: Mark F. McElreath and David A. Brown

Email: mark.mcelreath@alston.com and dave.brown@alston.com

 

if to the Stockholder, to the address set forth on his, her or its signature page hereto, 

 

or to such other Persons or addresses as may be designated in writing by the party to receive such notice as provided above.

 

(d)     Entire Agreement. This Agreement (including any schedules hereto), taken together with the Merger Agreement and the documents and instruments contemplated thereby (including the Company Disclosure Schedule and the Confidentiality Agreement), constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties hereto, with respect to the subject matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NONE OF PARENT, ACQUISITION SUB OR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OR AS TO THE ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION, MADE BY, OR MADE AVAILABLE BY, ITSELF OR ANY OF ITS REPRESENTATIVES, WITH RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION, EXECUTION OR DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. 

 

 

8

 

 

(e)     Governing Law and Venue; Waiver of Jury Trial; Specific Performance. 

 

(i)     THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. The parties hereto hereby irrevocably submit to the personal jurisdiction of the courts of the State of Delaware and the federal courts of the United States of America located in the county of Delaware in the State of Delaware solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any Action for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such Action may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such Action shall be heard and determined in such a Delaware state or federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.

 

(ii)     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10(e).

 

(iii)     The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by any party in accordance with their specific terms or were otherwise breached by such party. It is accordingly agreed that, prior to the termination of this Agreement pursuant to Section 6, the non-breaching parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions of this Agreement against the other party, this being in addition to any other remedy to which such party is entitled at law or in equity, and each party hereby waives any requirement for the posting of any bond or similar collateral in connection therewith. Prior to the termination of this Agreement pursuant to Section 6, each party hereby agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that (i) the other party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or in equity.

 

 

9

 

 

(f)     Assignment; Successors and Assigns. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder, other than collateral assignments for the benefit of lenders under existing security agreements existing as of the date hereof, without the prior written approval of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 10(f) shall be null and void. 

 

(g)     Severability. Any term or provision of this Agreement that is held by a court of competent jurisdiction or other Governmental Entity to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other Governmental Entity declares that any term or provision of this Agreement is invalid, void or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. 

 

(h)     Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(i)     Counterparts. This Agreement may be executed in counterparts (each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered (by electronic communication, facsimile or otherwise) to the other parties. 

 

(j)     Amendment. This Agreement may be amended at any time by the parties hereto by written agreement executed and delivered by each of the parties hereto. 

 

(k)     Action in the Stockholder’s Capacity Only. The Stockholder, if a director or officer of the Company, does not make any agreement or understanding herein as a director or officer of the Company. The Stockholder signs this Agreement solely in his, her or its capacity as an owner of the Shares, and nothing herein shall limit or affect any actions taken in the Stockholder’s capacity as an officer or director of the Company, including complying with or exercising the Stockholder’s fiduciary duties as a member of the board of directors of the Company.

 

(l)     No Ownership Interest. Except as otherwise provided herein, nothing contained in this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to the Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to the Stockholder, and Parent shall have no authority to manage, direct, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct the Stockholder in the voting of any of the Shares, except as otherwise provided herein. 

 

 

10

 

 

 

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY] 

 

 

 

11

 

 

IN WITNESS WHEREOF, Parent, Acquisition Sub and the Stockholder have caused this Agreement to be duly executed and delivered as of the date first written above.

 

FORTRESS BIOTECH, INC.

 

By:                                                                                

Name:     

Title:     

 

FBIO ACQUISITION, INC. 

 

By:                                                                                

Name:     

Title:     

 

 

[Signature Page – Support and Voting Agreement]

 

 

STOCKHOLDER

 

 

________________________________

Name: ___________________________

 

 

Address for purposes of Section 10(c):

 

________________________________

 

________________________________

 

________________________________

 

Facsimile: ________

 

 

Number of Shares: ________

 

 

[Signature Page – Support and Voting Agreement]

 

 

For the limited purposes set forth in Section 10(b):

 

NATIONAL HOLDINGS CORPORATION

 

 

By:                                                                            

Name:     

Title:

 

 

 

[Signature Page – Support and Voting Agreement]

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