STOCKHOLDERS AGREEMENT
of
ARDENT APEX HOLDINGS INC.
a Delaware corporation
Effective as of [●], 2025
(the "Closing Date")
PARTIES:
Ardent Apex Holdings Inc. a Delaware corporation (the "Company")
Ardent Capital Partners III LP a Delaware limited partnership ("Sponsor")
Northvale Sovereign Holdings Ltd. an exempted limited company organized under the laws of the Cayman Islands ("Northvale")
Summit Ridge Capital Partners LP a Delaware limited partnership ("Summit Ridge," and together with Northvale, the "Co-Investors")
The Management Rollover Participants Listed on Schedule A Hereto (collectively, the "Management Stockholders")
and
Each Other Person Who From Time to Time Becomes a Party Hereto by Executing a Joinder Agreement in the Form Attached as Exhibit A
(all of the foregoing, collectively, the "Stockholders")
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STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered into as of [●], 2025 (the "Closing Date"), by and among Ardent Apex Holdings Inc., a Delaware corporation (the "Company"), Ardent Capital Partners III LP, a Delaware limited partnership ("Sponsor"), Northvale Sovereign Holdings Ltd., an exempted limited company organized under the laws of the Cayman Islands ("Northvale"), Summit Ridge Capital Partners LP, a Delaware limited partnership ("Summit Ridge," and together with Northvale, the "Co-Investors"), the management rollover participants listed on Schedule A hereto (collectively, the "Management Stockholders"), and each other Person who from time to time becomes a party hereto by executing a Joinder Agreement in the form attached hereto as Exhibit A (together with the Company, Sponsor, the Co-Investors, and the Management Stockholders, collectively, the "Stockholders" and each individually, a "Stockholder").
RECITALS
WHEREAS, the Company was incorporated in the State of Delaware on March 5, 2025 (EIN: 93-2178435), and is the direct parent of Ardent Apex Merger Sub Inc., a Delaware corporation incorporated on March 7, 2025 ("Merger Sub"), which merged (the "Merger") with and into Luminex Systems Holdings Inc., a Delaware corporation incorporated on June 14, 2021 (EIN: 86-2547193) ("Luminex Holdings"), pursuant to that certain Agreement and Plan of Merger, dated as of March 24, 2025 (the "Merger Agreement"), by and among the Company, Merger Sub, and Luminex Holdings, with Luminex Holdings surviving the Merger as a direct, wholly owned subsidiary of the Company;
WHEREAS, the Merger constituted the acquisition by Sponsor, through the Company, of Luminex Holdings for aggregate equity consideration of Two Billion Eight Hundred Million Dollars ($2,800,000,000) (representing Twenty Dollars ($20.00) per share on one hundred forty million (140,000,000) fully diluted shares of common stock of Luminex Holdings), and Sponsor is a Delaware limited partnership formed on January 15, 2023, with its principal offices at 399 Park Avenue, 42nd Floor, New York, New York 10022;
WHEREAS, in connection with the Merger, certain management and employee stockholders of Luminex Holdings contributed a portion of their equity interests in Luminex Holdings to the Company in exchange for shares of the Company's Common Stock (as defined below) pursuant to individual Rollover Agreements, representing aggregate rollover equity of Four Hundred Five Million Twenty Thousand Dollars ($405,020,000);
WHEREAS, Northvale Sovereign Holdings Ltd. (PO Box 309, Ugland House, George Town, Grand Cayman, Cayman Islands) committed Two Hundred Million Dollars ($200,000,000), and Summit Ridge Capital Partners LP (161 North Clark Street, Suite 4700, Chicago, Illinois 60601) committed One Hundred Million Dollars ($100,000,000), in equity co-investment capital to the Company, for aggregate co-investment of Three Hundred Million Dollars ($300,000,000), in each case pursuant to separate Co-Investment Agreements entered into in connection with the Merger;
WHEREAS, Sponsor contributed Six Hundred Ninety-Five Million Nine Hundred Eighty Thousand Dollars ($695,980,000) in equity to the Company pursuant to an Equity Commitment Letter delivered in connection with the Merger Agreement; and
WHEREAS, the parties hereto desire to set forth their respective rights and obligations with respect to the Equity Securities of the Company, including matters relating to governance, transfer restrictions, exit rights, information rights, and certain other matters, in each case on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise. With respect to Sponsor, "Affiliate" shall include (a) Ardent Capital GP III LLC, (b) each fund, investment vehicle, or managed account that is managed, controlled, or advised by Ardent Capital GP III LLC or any of its Affiliates, and (c) any portfolio company of any such fund, vehicle, or account, but shall not include the Company or any of its subsidiaries solely by reason of Sponsor's ownership interest in the Company.
"Agreement" means this Stockholders Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Approved Sale" means a Sale of the Company that has been approved by the Board, including the affirmative vote of a majority of the Sponsor Directors then serving on the Board.
"Board" means the board of directors of Ardent Apex Holdings Inc.
"Business Day" means each day that is not a Saturday, Sunday, or other day on which banking institutions in New York, New York are authorized or required by law or executive order to close.
"Cause" means, with respect to any Management Stockholder, "Cause" as defined in such Management Stockholder's individual employment agreement with the Company or any of its subsidiaries; provided that in the absence of such definition in any applicable employment agreement, "Cause" shall mean (a) the Management Stockholder's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud, or dishonesty, (b) the Management Stockholder's willful and continued failure to perform his or her material duties after written notice and a reasonable cure period, (c) the Management Stockholder's material breach of any restrictive covenant agreement or this Agreement, (d) the Management Stockholder's commission of an act of fraud, embezzlement, or material dishonesty against the Company or any of its subsidiaries, or (e) the Management Stockholder's gross negligence or willful misconduct in the performance of his or her duties.
"Change of Control" means (a) any merger, consolidation, or business combination resulting in Sponsor and its Affiliates ceasing to hold, directly or indirectly, a majority of the outstanding voting securities of the surviving or resulting entity, (b) a sale, lease, exchange, or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to any Person or group of related Persons (other than Sponsor or its Affiliates), or (c) any other transaction or series of related transactions that results in a substantially similar change in the ultimate control of the Company.
"Closing Date" means the date of the effectiveness of the Merger under the Merger Agreement, which is the date first written above.
"Co-Investors" means Northvale Sovereign Holdings Ltd. and Summit Ridge Capital Partners LP, collectively, and their respective Permitted Transferees who hold Equity Securities.
"Co-Investment Agreements" means the separate Co-Investment Agreements entered into by Northvale and Summit Ridge, respectively, in connection with the Merger.
"Common Stock" means shares of common stock, par value $0.01 per share, of Ardent Apex Holdings Inc.
"Company" means Ardent Apex Holdings Inc., a Delaware corporation.
"Competitor" means any Person that is engaged, directly or through any subsidiary or Affiliate, in the enterprise software-as-a-service market, including businesses focused on enterprise resource planning (ERP), procurement automation, and supply-chain analytics, or any Person that derives more than twenty percent (20%) of its consolidated annual revenues from such activities; provided that the term "Competitor" shall not include any financial sponsor, institutional investor, or investment fund that holds a passive investment in a Competitor, so long as such financial sponsor, institutional investor, or investment fund does not control such Competitor.
"DGCL" means the General Corporation Law of the State of Delaware, as amended from time to time.
"Drag-Along Sale" has the meaning set forth in Section 7.1.
"Dragged Stockholders" has the meaning set forth in Section 7.1.
"Equity Commitment Letter" means the Equity Commitment Letter delivered by Sponsor in connection with the Merger Agreement, pursuant to which Sponsor committed to contribute equity capital to the Company to fund the Merger.
"Equity Securities" means (a) the Common Stock, (b) any options, warrants (including, without limitation, the warrants issued to the Mezzanine Lender pursuant to the Warrant Agreement representing 2.0% of the fully diluted equity of the Company), convertible securities, exchangeable securities, or other rights to acquire Common Stock, and (c) any other securities convertible into, exercisable for, or otherwise representing the right to receive Common Stock or any economic interest therein.
"Excluded Issuances" has the meaning set forth in Section 4.3.
"Fair Market Value" means, with respect to any Equity Securities at any time, the fair market value of such Equity Securities as determined in good faith by the Board; provided that if any Stockholder disputes the Board's determination, the dispute shall be resolved in accordance with the valuation dispute procedures set forth in Section 4.6.
"Family Member" means, with respect to any individual, such individual's spouse, domestic partner, lineal descendants (including adopted children and stepchildren), parents, siblings, and the spouses and domestic partners of the foregoing.
"GAAP" means United States generally accepted accounting principles, consistently applied.
"General Partner" means Ardent Capital GP III LLC, a Delaware limited liability company and the general partner of Sponsor.
"Good Leaver" means a Management Stockholder whose employment with the Company or its subsidiaries is terminated without Cause by the Company (or the applicable subsidiary) or who resigns for Good Reason.
"Good Reason" means, with respect to any Management Stockholder, "Good Reason" as defined in such Management Stockholder's individual employment agreement with the Company or any of its subsidiaries; provided that in the absence of such definition in any applicable employment agreement, "Good Reason" shall mean, without the Management Stockholder's prior written consent, (a) a material reduction in the Management Stockholder's base salary or target bonus opportunity, (b) a material diminution in the Management Stockholder's title, authority, duties, or responsibilities, (c) a relocation of the Management Stockholder's principal place of employment by more than fifty (50) miles, or (d) a material breach by the Company or its subsidiary of any employment agreement with such Management Stockholder, in each case, subject to customary notice and cure provisions.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of the Closing Date, among Stonebridge Credit Partners LLC (as administrative agent under the Senior Credit Facility), Crestline Mezzanine Partners II LP (as holder of the Subordinated Notes), the Company, and certain of its subsidiaries.
"IPO" means an underwritten initial public offering of Equity Securities of the Company (or any successor entity) pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, resulting in the listing of such Equity Securities on a nationally recognized securities exchange (including the New York Stock Exchange, the Nasdaq Global Select Market, or any successor thereto).
"Joinder Agreement" means a joinder agreement in substantially the form attached hereto as Exhibit A, pursuant to which a transferee of Equity Securities agrees to be bound by all of the terms and conditions of this Agreement as a Stockholder hereunder.
"Luminex" or "Luminex Holdings" means Luminex Systems Holdings Inc., a Delaware corporation and the surviving corporation in the Merger, and a direct, wholly owned subsidiary of the Company as of the Closing Date.
"Management Equity Plan" or "Management Equity Incentive Plan" means the Management Equity Incentive Plan of Ardent Apex Holdings Inc. adopted on or about the Closing Date by the Board, as it may be amended from time to time.
"Management Stockholders" means the Persons listed on Schedule A hereto, including, without limitation, Dr. Stefan Kessler, Annelise Gruber, Dr. Markus Vogt, and the other management and employee participants who contributed rollover equity in connection with the Merger, and their respective Permitted Transferees.
"Merger" has the meaning set forth in the Recitals.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of March 24, 2025, by and among Ardent Apex Holdings Inc., Ardent Apex Merger Sub Inc., and Luminex Systems Holdings Inc., as it may be amended or supplemented from time to time.
"Mezzanine Lender" means Crestline Mezzanine Partners II LP, in its capacity as lender under the Subordinated Notes and holder of the warrants issued pursuant to the Warrant Agreement.
"Northvale" means Northvale Sovereign Holdings Ltd., an exempted limited company organized under the laws of the Cayman Islands.
"Percentage Interest" means, with respect to each Stockholder, the percentage obtained by dividing (a) the number of shares of Common Stock held by such Stockholder (on a fully diluted basis, assuming the exercise, conversion, or exchange of all outstanding Equity Securities) by (b) the total number of shares of Common Stock outstanding (on the same fully diluted basis), in each case as of the relevant date of determination.
"Permitted Transferee" has the meaning set forth in Section 5.2.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, governmental authority, or other entity of any kind.
"Preemptive Rights Notice" has the meaning set forth in Section 4.1.
"Pro Rata Share" means, with respect to each Stockholder, such Stockholder's Percentage Interest, determined on a fully diluted basis as of the date of the applicable determination.
"Qualified IPO" means an IPO that yields aggregate gross proceeds to the Company and/or selling stockholders of at least Five Hundred Million Dollars ($500,000,000) and results in a public float representing at least twenty-five percent (25%) of the outstanding Common Stock (on a fully diluted basis) immediately following the consummation of such IPO.
"Registration Rights Agreement" means the Registration Rights Agreement entered into on or about the Closing Date by and among the Company and the Stockholders party thereto, as it may be amended from time to time.
"ROFR Notice" has the meaning set forth in Section 5.4.
"Rollover Agreements" means the individual Rollover Agreements entered into by each Management Stockholder in connection with the Merger, pursuant to which such Management Stockholder contributed a portion of his or her equity in Luminex Holdings to the Company in exchange for shares of Common Stock.
"Sale of the Company" means any transaction or series of related transactions that results in a Change of Control or constitutes an Approved Sale.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Selling Stockholder" has the meaning set forth in Section 5.4.
"Senior Credit Facility" means the senior secured credit facility in an aggregate principal amount of One Billion Four Hundred Million Dollars ($1,400,000,000) (consisting of a Term Loan B tranche of One Billion Two Hundred Million Dollars ($1,200,000,000) and a revolving credit facility of Two Hundred Million Dollars ($200,000,000)), with Stonebridge Credit Partners LLC acting as administrative agent and collateral agent, entered into on or about the Closing Date, as it may be amended, restated, refinanced, or replaced from time to time.
"SOFR" means the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (or a successor administrator), or if such rate is not available, such alternative benchmark rate as may be designated in accordance with the Senior Credit Facility.
"Sponsor" means Ardent Capital Partners III LP, a Delaware limited partnership, and its Permitted Transferees who hold Equity Securities.
"Sponsor Directors" means the directors designated by Sponsor pursuant to Section 3.1(a).
"Subordinated Notes" means the subordinated notes in the aggregate principal amount of Three Hundred Million Dollars ($300,000,000) issued by the Company (or its subsidiaries) to Crestline Mezzanine Partners II LP on or about the Closing Date, as they may be amended, restated, supplemented, or refinanced from time to time.
"Summit Ridge" means Summit Ridge Capital Partners LP, a Delaware limited partnership.
"Tag-Along Notice" has the meaning set forth in Section 6.2.
"Tag-Along Sale" has the meaning set forth in Section 6.1.
"Tag-Along Stockholder" has the meaning set forth in Section 6.1.
"Transfer" means any direct or indirect sale, assignment, transfer, pledge, hypothecation, encumbrance, gift, bequest, donation, or other disposition of Equity Securities, whether voluntary or involuntary, by operation of law or otherwise, including any transfer by foreclosure, execution, levy, or similar process. "Transfer" shall include, for the avoidance of doubt, any transfer, sale, assignment, or other disposition of a controlling interest in any entity whose primary asset consists of Equity Securities of the Company.
"Warrant Agreement" means the Mezzanine Warrant Agreement, dated on or about the Closing Date, by and between the Company and Crestline Mezzanine Partners II LP, pursuant to which the Company issued to Crestline warrants to purchase shares of Common Stock representing 2.0% of the fully diluted equity of the Company, on the terms and subject to the conditions set forth therein.
Section 1.2 — Interpretation
(a) The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing a gender include all genders.
(c) The word "including" (and correlative words such as "include" and "includes") shall mean "including, without limitation."
(d) References to "Sections," "Articles," "Schedules," and "Exhibits" are to Sections and Articles of, and Schedules and Exhibits to, this Agreement, unless otherwise indicated.
(e) References to any statute, rule, or regulation shall include any successor statute, rule, or regulation, and all amendments, modifications, and supplements thereto, unless the context otherwise requires.
(f) References to "dollars" or "$" mean United States dollars, unless otherwise specified.
(g) References to "days" mean calendar days, unless the term "Business Days" is used.
(h) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."
(i) All corporate, partnership, limited liability company, and other organizational terms used herein shall be construed and interpreted in accordance with the DGCL and the Delaware Revised Uniform Limited Partnership Act, as applicable, unless otherwise defined herein.
(j) This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
ARTICLE II — CAPITALIZATION AND STOCKHOLDER SCHEDULE
Section 2.1 — Authorized Capital
The authorized capital stock of the Company consists of shares of Common Stock, par value $0.01 per share. As of the Closing Date, the total number of shares of Common Stock issued and outstanding reflects the aggregate equity contributions made by the Stockholders to the Company in connection with the Merger, as further set forth in Section 2.2 and Schedule B hereto. The Company shall not issue any Equity Securities other than Common Stock without the prior approval of the Board in accordance with the protective provisions set forth in Section 3.5.
Section 2.2 — Stockholder Schedule
Schedule B attached hereto sets forth, as of the Closing Date, each Stockholder's name, number of shares of Common Stock held, Percentage Interest, and the dollar amount of such Stockholder's equity contribution or rollover, as applicable:
The foregoing percentages are presented on a fully diluted basis, but exclude the warrants held by Crestline Mezzanine Partners II LP representing 2.0% of the fully diluted equity of the Company, which warrants have not been exercised as of the Closing Date. Upon exercise of such warrants, Crestline shall become a Stockholder hereunder upon execution of a Joinder Agreement, and the Percentage Interests of all existing Stockholders shall be proportionally adjusted. For illustrative purposes, on an as-converted basis (assuming exercise of the Crestline warrants in full), Sponsor's Percentage Interest would be approximately 48.69%, and each other Stockholder's Percentage Interest would be proportionally reduced.
Section 2.3 — Equity Commitment Reconciliation
The aggregate equity sources for the Company in connection with the Merger are as follows:
In addition, the Merger was financed with (a) the Senior Credit Facility (Term Loan B: $1,200,000,000; Revolver: $200,000,000 — undrawn at closing) and (b) the Subordinated Notes ($300,000,000), for total sources of approximately $2,901,000,000, used to fund the aggregate equity consideration of $2,800,000,000, transaction costs, and working capital reserves.
Each Stockholder confirms that shares of Common Stock were issued to such Stockholder at a uniform price per share consistent with the $2,800,000,000 total equity valuation of Luminex Holdings, with the number of shares issued to each Stockholder determined by dividing such Stockholder's equity contribution (or rollover value, as applicable) by the per-share issuance price as set forth on Schedule B.
ARTICLE III — GOVERNANCE AND BOARD COMPOSITION
Section 3.1 — Board of Directors
(a) Size and Composition. The Board shall consist of seven (7) directors, designated as follows:
(i) Four (4) Sponsor Directors. Sponsor shall have the right to designate four (4) directors to the Board (each, a "Sponsor Director") for so long as Sponsor and its Affiliates collectively hold at least thirty percent (30%) of the outstanding Common Stock (on a fully diluted basis). The number of Sponsor Directors that Sponsor shall be entitled to designate shall be reduced as follows:
(A) if Sponsor and its Affiliates collectively hold less than thirty percent (30%) but at least twenty percent (20%) of the outstanding Common Stock (on a fully diluted basis), Sponsor shall be entitled to designate three (3) Sponsor Directors;
(B) if Sponsor and its Affiliates collectively hold less than twenty percent (20%) but at least ten percent (10%) of the outstanding Common Stock (on a fully diluted basis), Sponsor shall be entitled to designate two (2) Sponsor Directors; and
(C) if Sponsor and its Affiliates collectively hold less than ten percent (10%) of the outstanding Common Stock (on a fully diluted basis), Sponsor shall not be entitled to designate any Sponsor Directors.
(ii) One (1) Co-Investor Director. The Co-Investors shall have the right, acting jointly, to designate one (1) director to the Board (the "Co-Investor Director") for so long as the Co-Investors collectively hold at least ten percent (10%) of the outstanding Common Stock (on a fully diluted basis). The designation of the Co-Investor Director shall be made by agreement between Northvale (contact: Ahmad Al-Rashid) and Summit Ridge (contact: Karen Lindstrom); provided that if Northvale and Summit Ridge are unable to agree on the designation, Northvale shall have the right to designate the Co-Investor Director for so long as Northvale holds a greater Percentage Interest than Summit Ridge.
(iii) One (1) CEO Director. The then-serving Chief Executive Officer of the Company or Luminex Holdings (initially, Dr. Stefan Kessler) shall serve as a member of the Board in an ex officio capacity (the "CEO Director"), for so long as such individual remains the Chief Executive Officer.
(iv) One (1) Independent Director. One (1) director shall be an individual who is independent of all Stockholders, the Company, and the Company's subsidiaries, and who is not a current or former officer, employee, or consultant of any of the foregoing (the "Independent Director"). The Independent Director shall be selected by Sponsor in consultation with the Co-Investor Director and shall have relevant industry or financial expertise.
(b) Initial Directors. As of the Closing Date, the initial composition of the Board shall be as follows:
(i) Sponsor Directors: Theodore "Ted" Hargrove, Victoria Langford, Marcus Ellison, and Priya Chandrasekaran (or their respective designees);
(ii) Co-Investor Director: a designee to be identified jointly by Northvale and Summit Ridge prior to the Closing Date;
(iii) CEO Director: Dr. Stefan Kessler; and
(iv) Independent Director: to be determined prior to or promptly following the Closing Date, selected by Sponsor in consultation with the Co-Investor Director.
(c) Chairman. The Chairman of the Board shall be designated by Sponsor for so long as Sponsor retains the right to designate at least one (1) Sponsor Director. The initial Chairman shall be Theodore "Ted" Hargrove or Victoria Langford, as determined by Sponsor in its sole discretion. The Chairman shall preside over meetings of the Board and shall have such other duties as are customary for the chairman of a board of directors or as may be assigned by the Board from time to time.
(d) Removal and Vacancies. A director designated by a Stockholder or group of Stockholders pursuant to this Section 3.1 may be removed from the Board (with or without cause) only by the Stockholder(s) entitled to designate such director. Each Stockholder agrees to vote all of its Equity Securities (to the extent entitled to vote) and to take all other actions within its control to cause such removal when so requested by the designating Stockholder(s). Any vacancy in a Board seat designated by a Stockholder or group of Stockholders shall be filled by a replacement director designated by the same Stockholder(s) in accordance with this Section 3.1. No other Stockholder, director, or the Board itself shall fill such vacancy without the consent of the designating Stockholder(s).
(e) Loss of Designation Rights. If any Stockholder or group of Stockholders loses the right to designate one or more directors by reason of holding fewer Equity Securities than the applicable threshold set forth in this Section 3.1, the applicable Board seat(s) shall be promptly eliminated, and the Board shall be reduced in size accordingly; provided that any Board seat so eliminated may, at the election of Sponsor (for so long as Sponsor retains designation rights), be converted into a Sponsor-designated seat. Each Stockholder agrees to vote its Equity Securities and to take all other actions within its control to effectuate the foregoing, including executing and delivering any amendments to the Company's Certificate of Incorporation or Bylaws.
Section 3.2 — Board Meetings
(a) Frequency. The Board shall meet at least once per fiscal quarter and at such other times as the Chairman or any two (2) directors shall determine. Meetings of the Board may be held in person at such location as the Chairman shall designate, or by video conference, teleconference, or other means of contemporaneous communication that permits all participants to hear and communicate with each other, in accordance with the DGCL.
(b) Notice. Written notice of each meeting shall be delivered to each director not less than five (5) Business Days prior to such meeting (or such shorter period as all directors may agree), specifying the date, time, location (or means of remote participation), and an agenda for such meeting.
(c) Quorum. A quorum for the transaction of business at any meeting of the Board shall consist of a majority of the total number of directors then serving on the Board; provided, however, that at least two (2) Sponsor Directors must be present at or have waived their attendance for such meeting in order for a quorum to be established. If a quorum is not present at any duly called meeting, the meeting may be adjourned by any director present to a date not fewer than two (2) Business Days later, at which adjourned meeting the quorum requirement regarding Sponsor Directors shall not apply.
(d) Voting. Each director shall have one (1) vote, and all actions of the Board shall require the affirmative vote of a majority of the directors present at a duly constituted meeting, unless a higher vote is required by this Agreement, the DGCL, or the Company's Certificate of Incorporation or Bylaws.
(e) Written Consent. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all directors then in office consent thereto in writing (or by electronic transmission), and such written consent is filed with the minutes of proceedings of the Board.
Section 3.3 — Board Committees
(a) General. The Board may establish one or more committees from time to time. Sponsor shall have the right to designate a majority of the members of each committee of the Board for so long as Sponsor holds at least thirty percent (30%) of the outstanding Common Stock.
(b) Audit Committee. The Board shall establish an Audit Committee consisting of not fewer than three (3) directors. The Audit Committee shall include at least one (1) Independent Director and at least one (1) Co-Investor Director (for so long as the Co-Investors retain their designation right). The Audit Committee shall be responsible for oversight of the Company's financial reporting, internal controls, and relationship with the Company's outside auditors.
(c) Compensation Committee. The Board shall establish a Compensation Committee. Sponsor shall designate the chair of the Compensation Committee. The Compensation Committee shall include one (1) member recommended by management for input purposes; provided that such management-recommended member shall serve as a non-voting observer and shall not be considered a member for purposes of establishing a quorum or counting votes. The Compensation Committee shall be responsible for oversight of executive compensation, equity incentive plans, and related matters.
(d) Other Committees. The Board may establish such other committees as it may determine, subject to Sponsor's right to designate a majority of the members of each such committee.
Section 3.4 — Board Observer Rights
Crestline Mezzanine Partners II LP, in its capacity as the Mezzanine Lender and as a potential future Stockholder upon exercise of the warrants issued under the Warrant Agreement, shall have the right to designate one (1) non-voting observer (the "Board Observer") to attend all meetings of the Board and, at the Board's discretion, meetings of any committee thereof. The Board Observer shall receive copies of all notices, agendas, and materials provided to directors at the same time and in the same manner as such materials are provided to directors; provided, however, that the Company shall have the right to exclude the Board Observer from any portion of a meeting or withhold any materials if the Board determines, in good faith, that attendance or access thereto would create a conflict of interest or jeopardize an attorney-client or other legal privilege. The initial Board Observer designee shall be Vanessa Hartley, Partner, Crestline Mezzanine Partners II LP, 1345 Avenue of the Americas, 32nd Floor, New York, New York 10105, or such other representative as Crestline may designate by written notice to the Company. The Board Observer right shall terminate upon the earlier of (i) repayment in full of the Subordinated Notes and exercise or expiration of the warrants, or (ii) Crestline ceasing to hold any Equity Securities or economic interests in the Company.
Section 3.5 — Protective Provisions / Supermajority Consent Matters
(a) Actions Requiring Sponsor and Co-Investor Director Approval. For so long as Sponsor holds at least thirty percent (30%) of the outstanding Common Stock and the Co-Investors collectively hold at least ten percent (10%) of the outstanding Common Stock, the Company shall not, and shall not permit any of its subsidiaries to, take any of the following actions without the prior written approval of Sponsor (acting through a majority of the Sponsor Directors) and the Co-Investor Director:
(i) issue, sell, or authorize the issuance or sale of any Equity Securities (other than issuances under the Management Equity Incentive Plan up to the pool size approved by the Board and issuances upon exercise of the Crestline warrants);
(ii) consummate any merger, consolidation, recapitalization, Sale of the Company, or Change of Control;
(iii) amend, alter, or repeal, or adopt any provision inconsistent with, any provision of the Certificate of Incorporation or Bylaws of the Company or the certificate of incorporation, bylaws, or other organizational documents of Luminex Holdings or any material subsidiary;
(iv) declare, set aside, or pay any dividend or make any distribution on any Equity Securities (other than tax distributions made pursuant to Section 11.2);
(v) create, incur, assume, guarantee, or otherwise become liable for any indebtedness in excess of Twenty-Five Million Dollars ($25,000,000) in the aggregate (beyond amounts already committed and permitted under the Senior Credit Facility, the Subordinated Notes, and the Intercreditor Agreement);
(vi) enter into, amend, or terminate any transaction with any Affiliate of any Stockholder, other than transactions entered into in the ordinary course of business on arm's-length terms and on terms no less favorable to the Company than those available from unrelated third parties;
(vii) commence any voluntary case under any applicable bankruptcy, insolvency, reorganization, or similar law, or consent to the appointment of a receiver, trustee, liquidator, or similar official, or make a general assignment for the benefit of creditors, or take any action toward dissolution, liquidation, or winding up of the Company or any material subsidiary;
(viii) make or commit to make capital expenditures in excess of Fifteen Million Dollars ($15,000,000) individually or Forty Million Dollars ($40,000,000) in the aggregate in any fiscal year, in each case in excess of amounts set forth in the annual budget approved by the Board;
(ix) hire, terminate, or materially modify the compensation or employment terms of the Chief Executive Officer or Chief Financial Officer of the Company or Luminex Holdings;
(x) approve or modify the annual budget and business plan of the Company and its subsidiaries;
(xi) enter into any line of business that is materially different from the Company's and its subsidiaries' existing businesses of enterprise SaaS, including ERP, procurement automation, and supply-chain analytics; and
(xii) settle or compromise any litigation, claim, arbitration, or other legal proceeding involving the payment of amounts in excess of Ten Million Dollars ($10,000,000) in the aggregate (inclusive of all costs, fees, and expenses).
(b) Actions Requiring Sponsor-Only Approval. For so long as Sponsor holds at least fifty percent (50%) of the outstanding Common Stock, the following actions shall require the prior written approval of Sponsor (and shall not require the approval of the Co-Investor Director or any other Stockholder):
(i) the timing, pricing, and all terms and conditions of any IPO, including the determination of whether and when to pursue an IPO;
(ii) the selection, engagement, and termination of managing underwriters, co-managers, and investment banks in connection with any IPO or other capital-markets transaction; and
(iii) the engagement or termination of outside auditors of the Company and its subsidiaries (the current outside auditor being Hargrove Thornton LLP, with audit partner Margaret Dawson serving as the lead engagement partner).
(c) Lapse of Co-Investor Consent Right. If the Co-Investors collectively hold less than ten percent (10%) of the outstanding Common Stock, the consent of the Co-Investor Director shall no longer be required for the actions described in Section 3.5(a), and such actions shall require only the approval of Sponsor (for so long as Sponsor holds at least thirty percent (30%) of outstanding Common Stock).
Section 3.6 — Expense Reimbursement and D&O Insurance
(a) Expense Reimbursement. The Company shall reimburse each director (including the Board Observer) for all reasonable and documented out-of-pocket expenses incurred in connection with attendance at meetings of the Board or any committee thereof, or otherwise in the discharge of such director's duties, including travel, lodging, and meal expenses.
(b) D&O Insurance. The Company shall obtain and maintain, at its expense, directors' and officers' liability insurance from a nationally recognized insurance carrier, with coverage limits and terms reasonably acceptable to the Board (including the Sponsor Directors). In connection with the Merger, the Company is procuring a six-year tail directors' and officers' liability insurance policy from Palisade Mutual Insurance Co. (Policy No. PAL-DO-2025-11473, with an aggregate limit of Fifty Million Dollars ($50,000,000)) for the benefit of the former directors and officers of Luminex Holdings serving prior to the Closing Date, as required by the Merger Agreement.
Section 3.7 — Management Fee
Ardent Capital Partners III LP (or its designee, including Ardent Capital GP III LLC or any Affiliate thereof) shall be entitled to receive from the Company an annual management and monitoring fee (the "Management Fee") in an amount to be agreed upon by Sponsor and the Board, payable in equal quarterly installments in advance, commencing on the Closing Date. The Management Fee shall be subject to customary subordination provisions under the Senior Credit Facility and the Intercreditor Agreement and shall be documented in a separate management services agreement to be executed on or about the Closing Date. In the event of a Qualified IPO or a Sale of the Company, Sponsor shall be entitled to receive a lump-sum payment equal to the net present value of all future Management Fee payments through the end of the applicable term, discounted at a rate to be agreed, subject to the limitations of the Senior Credit Facility and the Intercreditor Agreement.
ARTICLE IV — PREEMPTIVE RIGHTS AND NEW ISSUANCES
Section 4.1 — Preemptive Rights
If the Company proposes to issue any new Equity Securities (other than Excluded Issuances as defined in Section 4.3), each Stockholder shall have the right to purchase up to such Stockholder's Pro Rata Share of such new Equity Securities, on the same terms and conditions (including price per security) as such Equity Securities are proposed to be issued. The Company shall deliver a written notice to each Stockholder (a "Preemptive Rights Notice") at least twenty (20) Business Days prior to the proposed issuance date, which Preemptive Rights Notice shall specify: (a) the type and number of Equity Securities proposed to be issued, (b) the proposed price per security (or the formula by which such price will be determined), (c) the proposed issuance date, and (d) all other material terms and conditions of the proposed issuance.
Section 4.2 — Exercise Period
(a) Each Stockholder shall have fifteen (15) Business Days from the date of receipt of the Preemptive Rights Notice (the "Exercise Period") to elect to purchase all or any portion of such Stockholder's Pro Rata Share of the proposed issuance by delivering a written election notice to the Company.
(b) Over-Allotment. If any Stockholder declines to purchase its full Pro Rata Share, or fails to respond within the Exercise Period, the Company shall promptly notify each Stockholder that did elect to purchase its full Pro Rata Share (each, an "Exercising Stockholder") of the aggregate amount of unsubscribed Equity Securities (the "Unsubscribed Securities"). Each Exercising Stockholder shall have the right, exercisable within five (5) Business Days of receipt of such notice, to purchase all or any portion of the Unsubscribed Securities on a pro-rata basis among all Exercising Stockholders electing to participate in the over-allotment, on the same terms and at the same price as set forth in the Preemptive Rights Notice.
Section 4.3 — Excluded Issuances
The preemptive rights granted in this Article IV shall not apply to the following issuances (collectively, "Excluded Issuances"):
(a) issuances of Equity Securities under the Management Equity Incentive Plan, up to the aggregate pool size approved by the Board from time to time;
(b) issuances of Common Stock upon the exercise of warrants held by Crestline Mezzanine Partners II LP pursuant to the Warrant Agreement (representing 2.0% of the fully diluted equity of the Company);
(c) issuances of Equity Securities in connection with a Qualified IPO;
(d) stock splits, stock dividends, combinations, recapitalizations, or other similar transactions affecting all holders of Common Stock equally and proportionally; and
(e) issuances of Equity Securities approved by the Board (including a majority of the Sponsor Directors) in connection with bona fide acquisitions of businesses, assets, or technologies, whether structured as mergers, stock purchases, asset purchases, or otherwise.
Section 4.4 — Failure to Exercise
If the Stockholders do not fully subscribe for all of the Equity Securities offered pursuant to Section 4.1 and Section 4.2 (including the over-allotment), the Company may issue the remaining unsubscribed Equity Securities to any third party within ninety (90) days following the expiration of the over-allotment period, at a price per security and on terms and conditions no more favorable to such third party than those set forth in the Preemptive Rights Notice. If the Company does not consummate such issuance within such ninety (90)-day period, the Company must again comply with this Article IV before issuing such Equity Securities.
Section 4.5 — Waiver by Management Stockholders
Each Management Stockholder acknowledges and agrees that such Management Stockholder's preemptive rights under this Article IV are conditioned upon such Management Stockholder's continued employment with the Company or any of its subsidiaries. Upon the termination of a Management Stockholder's employment for any reason, such Management Stockholder's preemptive rights under this Article IV shall automatically terminate; provided, however, that such termination of preemptive rights shall not affect any rights with respect to proposed issuances for which a Preemptive Rights Notice was delivered to such Management Stockholder prior to the date of such termination of employment.
Section 4.6 — Valuation Disputes
In the event of any dispute regarding the Fair Market Value of any Equity Securities for purposes of this Agreement (including for purposes of the preemptive rights under this Article IV and the call and put rights under Article XII), such dispute shall be resolved as follows:
(a) Sponsor and the disputing Stockholder(s) shall first attempt to agree upon a single independent appraiser (who shall be a nationally recognized valuation firm with experience in valuing enterprise SaaS businesses) to determine the Fair Market Value.
(b) If Sponsor and the disputing Stockholder(s) are unable to agree upon a single independent appraiser within fifteen (15) Business Days, then (i) Sponsor shall select one (1) independent appraiser, (ii) the disputing Stockholder(s) shall select one (1) independent appraiser, and (iii) the two (2) appraisers so selected shall jointly select a third independent appraiser within ten (10) Business Days. The determination of Fair Market Value by such third independent appraiser shall be final and binding upon all parties.
(c) The costs and expenses of the independent appraiser(s) shall be borne equally by Sponsor, on the one hand, and the disputing Stockholder(s), on the other hand, unless the Fair Market Value as finally determined differs from the Board's initial determination by less than ten percent (10%), in which case all costs shall be borne by the disputing Stockholder(s).
ARTICLE V — TRANSFER RESTRICTIONS
Section 5.1 — General Restriction on Transfer
No Stockholder shall Transfer any Equity Securities except in strict compliance with this Article V and all other applicable provisions of this Agreement. All Transfers of Equity Securities must comply with applicable federal and state securities laws (including the Securities Act and any applicable "blue sky" laws), and with the terms and conditions of the Senior Credit Facility, the Subordinated Notes, and the Intercreditor Agreement to the extent that such instruments restrict or condition the Transfer of equity interests in the Company. Any attempted Transfer of Equity Securities in violation of this Agreement shall be null and void and of no force or effect, and the Company shall not register any such purported Transfer on its books or records, shall not issue any certificate (or book-entry notation) representing any Equity Securities to any purported transferee, and shall not recognize any such purported transferee as a holder of Equity Securities for any purpose whatsoever.
Section 5.2 — Permitted Transfers
Notwithstanding the restrictions set forth in Section 5.1, the following Transfers shall be permitted without compliance with Sections 5.3 or 5.4, subject in each case to compliance with Section 5.6 (Joinder Requirement) and applicable securities laws (each transferee described below, a "Permitted Transferee"):
(a) Sponsor. Sponsor may Transfer Equity Securities to any Affiliate of Sponsor, including (i) any other fund, investment vehicle, or managed account managed, controlled, or advised by Ardent Capital GP III LLC or any of its Affiliates, (ii) Ardent Capital GP III LLC itself, or (iii) any successor fund managed by the same General Partner or its successors, in each case without the consent of any other Stockholder.
(b) Co-Investors. Northvale may Transfer Equity Securities to any Affiliate of Northvale, including any government-related entity or sovereign wealth fund under common ultimate ownership or control with Northvale. Summit Ridge may Transfer Equity Securities to any Affiliate of Summit Ridge, including any successor fund under common management with the team led by Karen Lindstrom, in each case without the consent of any other Stockholder (other than Sponsor to the extent required by Section 5.5).
(c) Management Stockholders. Each Management Stockholder may Transfer Equity Securities to (i) a Family Member of such Management Stockholder, (ii) a trust established solely for the benefit of such Management Stockholder and/or one or more Family Members of such Management Stockholder, or (iii) an entity wholly owned and controlled by such Management Stockholder, in each case provided that (A) the transferee executes a Joinder Agreement prior to the effectiveness of such Transfer, (B) the Transfer is effected solely for bona fide estate-planning purposes and not for value (i.e., no cash or other consideration is received by the transferring Management Stockholder in connection with such Transfer), and (C) the Management Stockholder remains jointly and severally liable with the transferee for all obligations under this Agreement.
(d) All Stockholders. Any Stockholder may Transfer Equity Securities pursuant to Article VI (Tag-Along Rights), Article VII (Drag-Along Rights), or Article VIII (IPO/Exit Provisions), in each case in accordance with the terms and conditions of such Article.
Section 5.3 — Lock-Up Period
(a) Management Stockholders. No Management Stockholder may Transfer any Equity Securities during the period commencing on the Closing Date and ending on the second (2nd) anniversary of the Closing Date (the "Management Lock-Up Period"), except (i) Permitted Transfers pursuant to Section 5.2(c), (ii) Transfers effected in connection with a Drag-Along Sale under Article VII, or (iii) Transfers required by operation of law.
(b) Co-Investors. No Co-Investor may Transfer any Equity Securities during the period commencing on the Closing Date and ending on the date that is eighteen (18) months following the Closing Date (the "Co-Investor Lock-Up Period"), except (i) Permitted Transfers pursuant to Section 5.2(b), (ii) Transfers effected in connection with a Drag-Along Sale under Article VII, or (iii) Transfers required by operation of law.
(c) Sponsor. Sponsor shall not be subject to any lock-up restriction and may Transfer Equity Securities to Permitted Transferees at any time, subject to compliance with the other provisions of this Agreement.
Section 5.4 — Right of First Refusal (ROFR)
After the expiration of the applicable Lock-Up Period, if any Stockholder (other than Sponsor) (in such capacity, a "Selling Stockholder") proposes to Transfer any Equity Securities to a bona fide third-party purchaser (other than a Permitted Transfer under Section 5.2), such Selling Stockholder shall comply with the following right of first refusal procedures: