EXHIBIT 10.5
EXECUTION COPY
SILVER KEY MINING COMPANY, INC.
A Nevada Corporation
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT dated as of October 22, 2002 (the "Agreement"),
is entered into by and among Silver Key Mining Company, Inc., a Nevada
corporation (the "Company"), Stanford Venture Capital Holdings, Inc., a Delaware
corporation ("Stanford"), and the undersigned members of Provider Acquisition,
LLC, a Florida limited liability company ("PAL") (the "Minority Members").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Securities Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Minority Members have entered into the First Amended and
Restated Limited Liability Company Agreement of PAL (the "LLC Agreement"); and
WHEREAS, the Minority Members have agreed to a lock-up of their
membership units in PAL ("Units") for a five year period ending September 19,
2007; and
WHEREAS, the Minority Members have agreed that such lock-up terms shall
extend to any securities received as merger consideration in respect of such
Units; and
WHEREAS, PAL, Health Quality Systems, Inc., a Florida corporation
("HQS") and the Company have entered into an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of October 16, 2002, pursuant to which each Unit
will be exchangeable for 0.74606 shares of Common Stock, par value of $0.001 per
share, of the Company; and
WHEREAS, an aggregate of 227,105 shares of Common Stock of the Company
will be issued to the Minority Members upon the Effective Date of the Merger, in
the amounts set forth on Schedule A attached hereto (such shares of capital
stock and all securities for which Shares of capital stock are exchangeable or
convertible, referred to collectively as the "Shares"); and
WHEREAS, it is condition to the consummation of such Merger Agreement
that this Agreement by executed and delivered by each of the Minority Members;
and
WHEREAS, pursuant to the Securities Purchase Agreement dated as of
October 16, 2002 (the "Securities Purchase Agreement") entered into by and among
the Company and Stanford, Stanford has agreed to acquire such securities of the
Company set forth in the Securities Purchase Agreement; and
WHEREAS, it is a condition to the Securities Purchase Agreement that
the Minority Members execute this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. PROHIBITED TRANSFERS
(a) The Minority Members shall not sell, assign, transfer, pledge,
hypothecate, mortgage, encumber or otherwise dispose (a "Transfer") of all or
any of their Shares prior to June 30, 2007 and provided further that following
June 30, 2007 the Minority Members shall Transfer their Shares only in
compliance with the volume limitations set forth in Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), whether or not
such Stockholder is subject to such volume limitation. The term "dispose"
includes, but is not limited to, the act of selling, assigning, transferring,
pledging, hypothecating, encumbering, mortgaging, giving and any other form of
disposing or conveying, whether voluntary or by operation of law, except for, a
private sale where the purchaser agrees to be bound by each and all the
restrictions in this Agreement as if such purchaser was an original Stockholder.
(b) The Shares are deemed "restricted securities" as defined by Rule
144 promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), and the
Minority Members shall represent, in writing to the Company prior to the
issuance of share certificates representing the Shares, that (i) they are
acquiring the Shares for investment purposes only and without the intent to make
a further distribution of the Shares, (ii) they are each an accredited investor
within the meaning of Rule 501(a) under the Securities Act, and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in securities in general and of
an investment in the Company in particular, (iii) they are aware of the limits
on resale imposed by virtue of the nature of the transactions contemplated by
this Agreement, and (iv) they have been given the opportunity to ask questions
of, and receive answers from, the officers of the Company regarding the Company,
its current and proposed business operations and the Company's Common Stock, and
the officers of the Company have made available to such Stockholder all
documents and information that such stockholder has requested relating to an
investment in the Company.
(c) Notwithstanding the foregoing, the Minority Members may transfer
all or any of their Shares (i) by way of gift to any member of their family or
to any trust for the benefit of any such family member of the Minority Members,
provided that any such transferee shall agree in writing with the Company, as a
condition to such transfer, to be bound by all of the provisions of this
Agreement to the same extent as if such transferee were one of Minority Members,
or (ii) by will or the laws of descent and distribution, in which event each
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such transferee shall be bound by all of the provisions of this Agreement to the
same extent as if such transferee were one of the Minority Members. As used
herein, the word "family" shall include any spouse, lineal ancestor or
descendant, brother or sister.
(d) No transfer of Shares otherwise permitted by this Agreement may
be made unless (i) the Shares shall have first been registered under the
Securities Act; (ii) the Company shall have first been furnished with an opinion
of legal counsel, reasonably satisfactory to the Company, to the effect that
such transfer is exempt from the registration requirements of the Securities
Act; or (iii) such transfer is within the limitations of and in compliance with
Rule 144 under the Securities Act.
(e) Any transfer or other disposition of Shares in violation of the
restrictions on transfer contained herein shall be null and void and shall not
entitle the Minority Members or any proposed transferee or other person to have
any Shares transferred upon the books of the Company.
2. RELEASE OF SHARES FROM TRANSFER RESTRICTIONS UPON REQUEST
Stanford may be petitioned (the "Petition") in writing by any of the
Minority Members hereto (the "Requesting Party") to waive some or all of the
restrictions of this Agreement with respect to Shares. If Stanford releases any
of the restrictions on the Requesting Party's Shares in accordance with the
Petition ("Waived Restrictions"), then Stanford shall notify the Requesting
Party of such consent and release.
3. VOTING AND DIVIDEND Rights
It is understood that the Minority Members have the right to vote all
of the Shares held by them and that they shall be entitled to all dividends or
distributions made by the Company arising in respect of the Shares, in cash,
stock or other property, including warrants, options or other rights.
4. SPECIFIC ENFORCEMENT
The parties hereby acknowledge and agree that they may be irreparably
damaged in the event that this Agreement is not specifically enforced. Upon a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any party, any other party shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction, without showing
any actual damage, and/or a decree for specific performance, in accordance with
the provisions hereof.
5. LEGEND All certificates evidencing any of the Shares subject to this
Agreement shall also bear a legend substantially as follows during the term of
this Agreement:
"The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance with and subject to all the terms and
conditions of a certain Lock-Up Agreement dated as of October
22, 2002 as it may be amended from time to time, a copy of
which may be obtain from the Company upon request and without
charge."
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6. NOTICES
Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free transmission
and mailing a copy of such confirmation, postage prepaid by certified mail,
return receipt requested) or two business days following deposit of such notice
with an internationally recognized courier service, with postage prepaid and
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by five days
advance written notice to each of the other parties hereto.
Company: Silver Key Mining Company, Inc.
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxx 000
Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: President
with a copy to: Xxxxxx & Xxxx, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Stanford: Stanford Venture Capital Holdings, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Stanford Financial Group
0000 Xxxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Minority Members: At the address set forth
on the signature page
7. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Florida, without regard to its principles of conflict
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of laws. Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any party in
the federal courts of Florida or the state courts of the State of Florida, Miami
Dade County, and each of the parties consents to the jurisdiction of such courts
and hereby waives, to the maximum extent permitted by law, any objection,
including any objections based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions.
8. MISCELLANEOUS
(a) Entire Agreement. This Agreement supersedes all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof. This Agreement, including any certificate, schedule, exhibit or other
document delivered pursuant to its terms, constitutes the entire agreement among
the parties hereto with respect to the subject matters hereof and thereof, and
supersedes all prior agreements and understandings, whether written or oral,
among the parties with respect to such subject matters.
(b) Amendments. This Agreement may not be amended except by an
instrument in writing signed by the party to be charged with enforcement.
(c) Waiver. No waiver of any provision of this Agreement shall be
deemed a waiver of any other provisions or shall a waiver of the performance of
a provision in one or more instances be deemed a waiver of future performance
thereof.
(d) Construction. This Agreement has been entered into freely by
each of the parties, following consultation with their respective counsel, and
shall be interpreted fairly in accordance with its respective terms, without any
construction in favor of or against either party.
(e) Binding Effect of Agreement. This Agreement shall inure to the
benefit of, and be binding upon the successors and assigns of each of the
parties hereto.
(f) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or unenforceability of this
Agreement in any other jurisdiction.
(g) Attorneys' Fees. If any action should arise between the parties
hereto to enforce or interpret the provisions of this Agreement, the prevailing
party in such action shall be reimbursed for all reasonable expenses incurred in
connection with such action, including reasonable attorneys' fees.
(h) Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of this
Agreement.
(i) Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, will be deemed to constitute one and the same agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the undersigned.
SILVER KEY MINING COMPANY, INC. STANFORD VENTURE CAPITAL
HOLDINGS, INC.
By: X. Xxxxxxxx Xxxxx By: Xxx Xxxxx
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Name: X. Xxxxxxxx Xxxxx Name: Xxx Xxxxx
----------------- ---------
Title: President Title: President
MINORITY MEMBERS:
Xxxxxx X. Xxxxxx, Trustee for Xxxxx Xxxxx,
Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx & Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
----------------
(Signature)
Address: 0000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
The Estate of Xxxxxxx Xxxxxx
By: Xxxxxx X. Xxxxx
---------------
Name: Xxxxxx X. Xxxxx
Title: Personal Representative
Address: 0000 Xxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
----------------
Address: 0000 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
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