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EXHIBIT 4.4
GERIMED OF AMERICA, INC.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made as of January 1,
1994 by and between GERIMED OF AMERICA, INC., a Colorado corporation (the
"Company"), and each person or entity whose signature appears at the end of this
Agreement (hereinafter separately referred to as "Shareholder" and collectively
referred to as "Shareholders").
RECITALS
A. Collectively, the Shareholders own all of the issued and outstanding
shares of the Common Stock, $.0001 par value, of the Company (the "Common
Stock").
B. The Company and the Shareholders desire to enter into this Agreement
for the purposes, among others, of: (i) limiting the manner and terms by which
Common Stock may be transferred; and (ii) providing a mechanism for the purchase
and sale of Common Stock among the Shareholders.
C. The Company and the Shareholders desire to enter into this Agreement
knowing that it is in the Company's best interest and fair to each of the
Shareholders.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. NO ENCUMBRANCE. During the term of this Agreement, no Shareholder
shall pledge, hypothecate or otherwise encumber any Common Stock or contract to
pledge, hypothecate or encumber such shares. Any attempted pledge, hypothecation
or encumbrance of Common Stock by a Shareholder shall be void and of no force
and effect.
2. RESTRICTIONS ON TRANSFER OF COMMON STOCK.
(a) Transfer of Common Stock. No Shareholder shall sell, transfer,
assign, gift or otherwise dispose of (a "Transfer") any Common Stock or interest
therein, except pursuant to the provisions of this paragraph 2.
(b) Right of First Refusal.
(i) At least sixty (60) days prior to making any Transfer of
any Common Stock (the "Election Period"), a Shareholder desiring to
Transfer Common Stock (the "Transferring Shareholder") shall deliver a
written notice (the
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"Transfer Notice") to the Company and the other Shareholders (the
"Other Shareholders").
(ii) If the proposed Transfer is a sale or other assignment,
the Transfer Notice shall (1) disclose in reasonable detail the
proposed terms and conditions of the Transfer, including, but not
limited to, the proposed transferee, the consideration to be paid and
the method of payment for the Common Stock and (2) be accompanied by a
written bona fide offer from the proposed transferee.
(iii) If the proposed Transfer is a gift, the Transfer Notice
shall disclose in reasonable detail the proposed transferee and the
proposed terms and conditions of the Transfer.
(iv) Within thirty (30) days after the delivery of the Transfer
Notice (the "Company's Option Period"), the Company may elect to
purchase all or any portion of the Common Stock specified in the
Transfer Notice by delivering a written notice of election (an
"Election Notice") to the Transferring Shareholder and the Other
Shareholders. If the Company has not elected to purchase all of the
Common Stock specified in the Transfer Notice within such 30-day
period, each Other Shareholder may elect to purchase all or any portion
of the Common Stock specified in the Transfer Notice which the Company
has not elected to purchase by delivering an Election Notice to the
Transferring Shareholder as soon as practical, but in any event prior
to the expiration of the Election Period. If the Other Shareholders
have in the aggregate elected to purchase more than the number of
available shares, (1) the shares shall be allocated among the Other
Shareholders electing to purchase shares according to each such Other
Shareholder's Pro Rata Share (as defined below) and (2) each Other
Shareholder's Election Notice shall be deemed amended to reflect the
change in the amount of shares elected to be purchased. Each
Shareholders "Pro Rata Share" shall be the amount of shares of Common
Stock available multiplied by a factor with the numerator being the
number of shares the Other Shareholder elected to purchase and the
denominator being the total number of shares the Other Shareholders in
the aggregate elected to purchase.
(v) Subject to subparagraph (vii) below, if the Company and/or
any Other Shareholders (individually, an "Electing Party") elect to
purchase Common Stock from the Transferring Shareholder and the
proposed Transfer is a sale or other assignment: (1) each Electing
Party shall purchase that amount of Common Stock covered by such
Electing Party's Election Notice at the price, and on the terms
specified in the Transfer Notice and (2) the transfer of Common Stock
shall be consummated as soon as practical after delivery of Election
Notices which in the aggregate account for all of the Common Stock to
be Transferred, but in any event within thirty (30) days after the
expiration of the Election Period.
(vi) Subject to subparagraph (vii) below, if the Company and/or
any Other Shareholders elect to purchase Common Stock from the
Transferring Shareholder and the proposed Transfer is a gift: (1) each
Electing Party shall
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purchase that amount of Common Stock covered by such Electing Party's
Election Notice at its Fair Market Value (as defined by paragraph 6
below) and on the following terms: 10% cash at time of closing, 90%
pursuant to a 5 year recourse promissory note, which shall provide that
principal shall be paid in five equal annual installments, along with
any and all interest accrued thereon, executed by the respective
Electing Party and Principal amounts outstanding under such note shall
accrue interest at the publicly announced prime rate of Norwest Bank
Denver, N.A., adjusted on the first day of each month; (2) for purposes
of paragraph 6, all Election Notices shall be deemed to have been
received by the Transferring Shareholder at that point in time where
Election Notices in the aggregate account for all of the Common Stock
to be Transferred, but in no case earlier than the expiration of the
Election Period; (3) if at the end of the Election Period the Electing
Parties have in the aggregate elected to purchase all of the Common
Stock which the Transferring Shareholder proposes to Transfer, the
Electing Parties shall then agree, for purposes of para-graph 6, on a
per share value of the Common Stock to be purchased and shall deliver,
within ten (10) days after the expiration of the Election Period, a
written notice to the Transferring Shareholder setting forth such per
share value, which written notice shall be the Purchasing Party's
Valuation for purposes of paragraph 6; (4) the purchase and sale of the
Common Stock covered by each Electing Shareholder's Election Notice
shall be closed within thirty (30) days after the determination of such
Common Stock's Fair Market Value.
(vii) If prior to the expiration of the Election Period, the
Electing Parties have not in the aggregate elected to purchase all of
the Common Stock which the Transferring Shareholder proposes to
Transfer or if the Electing Parties fail to give the Transferring
Shareholder written notice within the 10-day period set forth in
subparagraph (vi) above, if applicable, the Electing Parties will be
deemed to have waived their election rights and the Transferring
Shareholder may Transfer such Common Stock within ninety (90) days
after expiration of the Election Period, on the terms specified in the
Transfer Notice, subject to the provisions of paragraph 5 hereof. If a
Transfer of such Common Stock is not consummated within ninety (90)
days after expiration of the Election Period on the terms specified in
the Transfer Notice, such Common Stock shall again be subject to the
provisions of this paragraph 2.
3. PURCHASE OF SHAREHOLDER'S SHARES.
(a) Right to Purchase upon the Death or Disability of a
Shareholder. The Company shall have the right for a period of six (6) months
following a Shareholder's death or disability (within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended), to elect to purchase
all, but not less than all, of such Shareholder's Common Stock, on the terms
provided herein. Such Common Stock shall be purchased at its Fair Market Value
(as defined in paragraph 6 below) as of the date of death or disability. If the
Company elects to purchase Common Stock under this subparagraph 3(a), the
Company must deliver written notice to the personal representative of the
deceased Shareholder's estate or the disabled Shareholder (the
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"Selling Shareholder") within the 6-month period described above, notifying the
Selling Shareholder of the Company's intention to purchase the Common Stock,
which notice shall contain the Purchasing Party's Valuation required by
paragraph 6 below. The Selling Shareholder shall cooperate with the Company to
effectuate the purposes of this Agreement.
(b) Right to Purchase Upon Involuntary Transfers.
(i) If any Common Stock owned by a Shareholder shall be levied
upon, sequestered, administered by a receiver or a trustee in
bankruptcy, or transferred in any other involuntary transfer, or
otherwise transferred by operation of law, the Shareholder shall give
the Company prompt written notice of such occurrence.
(ii) The Company shall have, for a period of thirty (30) days
after receipt of the written notice, the right to elect to purchase all
(but not less than all) of such Shareholder's Common Stock at a
purchase price equal to the Fair Market Value (as defined in paragraph
6 below) of such Common Stock as of the date of the event giving rise
to the Company's rights under this subparagraph 3(b) and on the terms
provided herein. Such right shall apply even though the Common Stock
may actually have been sold at the time of exercise thereof. The
Company may exercise its right to purchase such Common Stock by giving
the Shareholder, bankruptcy trustee, or other individual or entity then
having legal title to the Common Stock (the "Title Holder") written
notice of its election to purchase such Common Stock. Any Common Stock
which the Company does not elect to purchase within the 30-day period
may be transferred by the Title Holder, subject to the provisions of
paragraph 5 hereof. Any Common Stock transferred and any subsequent
transferee shall continue to be subject to all of the provisions of
this Agreement, including this subparagraph 3(b).
(c) Right to Purchase Upon Termination of Employment. If any
Shareholder is or subsequently becomes an employee of the Company ("Employee
Shareholder"), upon termination of such employment with the Company for any
reason other than the death or disability of such Employee Shareholder, the
Company shall have the right for a period of twelve (12) months after the date
of termination of the Employee Shareholder's employment with the Company to
purchase all (but not less than all) of such Employee Shareholder's Common Stock
at a purchase price equal to the Fair Market Value (as defined in paragraph 6
below) of such Common Stock as of the date of termination of the Employee
Shareholder's employment with the Company. If the Company elects to purchase an
Employee Shareholder's Common Stock pursuant to this subparagraph 3(c), the
Company shall deliver written notice to the Employee Shareholder within the
12-month election period notifying the Employee Shareholder of the Company's
intention to purchase the Common Stock and setting forth the Purchasing Party's
Valuation required by paragraph 6. If the Company does not elect to purchase an
Employee Shareholder's Common Stock pursuant to this subparagraph 3(c), such
Common Stock shall continue to be subject to all of the provisions of this
Agreement,
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including this subparagraph 3(c) if the Employee Shareholder is subsequently
reemployed by the Company.
(d) Purchase Terms.
(i) The purchase and sale of Common Stock under this paragraph
3 shall be closed within thirty (30) days after the determination of
such Common Stock's Fair Market Value.
(ii) Payment for the Common Stock purchased under this
paragraph 3 shall be made as follows: 10% cash at time of closing, 90%
pursuant to a five (5) year note, which shall provide that principal
shall be paid in five equal annual installments, along with any and all
interest accrued thereon, executed by the Company. Principal amounts
outstanding under such note shall accrue interest at the publicly
announced prime rate of Norwest Bank Denver, N.A., adjusted on the
first day of each month.
4. LEGEND. Each certificate evidencing Common Stock and each
certificate issued in exchange for or upon the transfer of any Common Stock (if
such shares remain subject to this Agreement) shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The securities represented by this certificate are subject to a
Shareholders Agreement dated as of January 1, 1994, among the issuer of such
securities (the "Company") and all of the Company's shareholders. A copy of such
Shareholders Agreement will be furnished without charge by the Company to the
holder hereof upon written request."
5. TRANSFER. Prior to transferring any Common Stock to any person or
entity, the transferring Shareholder shall cause the prospective transferee to
execute and deliver to the Company and the other Shareholders a counterpart of
this Agreement.
6. DEFINITION OF FAIR MARKET VALUE. "Fair Market Value" shall mean the
value assigned by the following process to a Shareholder's Common Stock:
(a) Where the Company and/or Other Shareholders (individually, a
"Purchasing Party") elect to purchase Common Stock under subparagraphs
2(b)(vi), 3(a), 3(b) or 3(c), each Purchasing Party shall include in
its required written notice (the "Purchase Notice") the Purchasing
Party's determination of the fair market value of the Common Stock
elected or required to be purchased (the "Purchasing Party's
Valuation").
(b) If the Transferring Shareholder, Selling Shareholder, Employee
Shareholder or Title Holder (the "Selling Party") accepts a Purchasing
Party's Valuation or fails to either (1) object to such value within
the 10-day period set forth below or (2) deliver the Selling Party's
Valuation (as defined below) to each Purchasing Party within the 30-day
period set forth below, the Purchasing Party's Valuation shall be
deemed to be the "Fair Market Value" for purposes of the applicable
transaction.
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(c) If the Selling Party disagrees with a Purchasing Party's
Valuation, such Selling Party shall deliver a written notice of
objection to the Purchasing Party within ten (10) days after the date
of delivery of the Purchasing Party's Valuation to the Selling Party
and shall, within thirty (30) days after delivery of such Purchasing
Party's Valuation, deliver to the Purchasing Party written notice of
the Selling Party's determination of the fair market value of the
Common Stock covered by the Purchase Notice (the "Selling Party's
Valuation"). If the Purchasing Party accepts the Selling Party's
Valuation, fails to deliver written notice of objection to such value
to the Selling Party within the required 10-day period or fails to
contact JAG (as defined below) within the required 10-day period set
forth in subparagraph (iv) below, the Selling Party's Valuation shall
be deemed to be the "Fair Market Value" for purposes of the applicable
transaction.
(d) If the Purchasing Party disagrees with the Selling Party's
Valuation, the Purchasing Party shall give the Selling Party written
notice of objection within ten (10) days after the date the Selling
Party's Valuation is delivered to the Purchasing Party. Within ten (10)
days after delivery of the notice of objection to the Selling Party's
Valuation, the Purchasing Party shall ask the Judicial Arbiter Group,
Inc. of Denver, Colorado ("JAG") to select a certified public
accountant or an investment banker practicing in Colorado who has
experience in valuing health care companies similar to the Company (the
"Appraiser"). The Appraiser shall determine, in his opinion, the fair
market value of the Common Stock (the "Appraised Value"). The "Fair
Market Value" for the applicable transaction shall then be deemed to be
either the Purchasing Party's Valuation or the Selling Party's
Valuation, whichever is closest to the Appraised Value. The decision of
the Appraiser shall be binding upon the Purchasing Party and the
Selling Party who shall each pay one-half (1/2) of the cost of the fees
charged by JAG and the Appraiser.
7. TRANSFERS IN VIOLATION OF AGREEMENT. Any transfer or attempted
transfer of any Common Stock in violation of any provision of this Agreement
shall be void, and the Company shall not record such transfer on its books or
treat any purported transferee of such Common Stock as the owner of such shares
for any purpose.
8. TERM. This Agreement shall terminate upon the occurrence of any of
the following events:
(a) Cessation of the Company's business;
(b) The bankruptcy, receivership or dissolution of the Company;
(c) Written agreement of Shareholders holding fifty-one (51%) of
the issued and outstanding Common Stock;
(d) At such time as all of the issued and outstanding Common Stock
of the Company shall be owned by one person;
(e) The simultaneous death of the Shareholders; or
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(f) The date a registration statement for the sale, in an
underwritten public offering registered under the Securities Act of
1933, as amended, of capital stock of the Company is declared effective
by the Securities and Exchange Commission.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein,
no modification, amendment or waiver of any provisions of this Agreement shall
be effective against the Company or the Shareholders unless such modification,
amendment or waiver is approved in writing by the Company and the Shareholders.
The failure of any party to enforce any of the provisions of this Agreement
shall in no way be construed as a waiver of such provisions and shall not affect
the right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
10. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
12. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Shareholders and any
subsequent holders of Common Stock and the respective successors and assigns of
each of them, so long as they hold Common Stock.
13. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
14. REMEDIES. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that the Company and any Shareholder may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of this
Agreement, in addition to seeking damages for breach of this Agreement.
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15. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charge
prepaid) to the Company at the address set forth below and to any other
recipient at such address as indicated by the Company's records, or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been
delivered hereunder when delivered personally, three (3) days after deposit in
the U.S. mail and one (1) day after deposit with a reputable overnight courier
service. The Company's address is:
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
16. GOVERNING LAW. This Agreement and the rights of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Colorado.
17. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
18. GENDER. Whenever applicable, the pronouns designating the
"masculine" or the "neuter" shall equally apply to "feminine," "neuter" and
"masculine" genders. Furthermore, whenever applicable in this Agreement, the
"singular" shall include the "plural" and the reverse.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written, or if subsequent to such
date, the date indicated below such parties' signature.
"COMPANY"
GERIMED OF AMERICA, INC.,
a Colorado corporation
By:
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Xxxxx X. Xxxxxxxx, President
Date:
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"SHAREHOLDER"
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Date:
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