EXHIBIT 4
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PSYCHIATRIC SOLUTIONS, INC.
SECOND AMENDED AND RESTATED VOTING AGREEMENT
THIS SECOND AMENDED AND RESTATED VOTING AGREEMENT (the "AGREEMENT") is
made and entered into this 28th day of June, 2002 by and among PSYCHIATRIC
SOLUTIONS, INC., a Delaware corporation (the "COMPANY"), those certain holders
of the Company's Common Stock, par value of $0.01 per share (the "COMMON STOCK")
and/or options to acquire the Company's Common Stock and/or Series A Preferred
Stock, par value $0.01 per share (the "SERIES A PREFERRED STOCK"), listed on
EXHIBIT A hereto (the "KEY Stockholders"), the persons and entities listed on
EXHIBIT B hereto (the "INVESTORS"), and The 1818 Mezzanine Fund II, L.P. ("1818
FUND").
WITNESSETH:
WHEREAS, as of the date hereof, (i) the Key Stockholders who are
signatories to this Agreement are the beneficial owners of an aggregate of Five
Million Eight Hundred Twenty Thousand Five Hundred Twenty-Five (5,820,525)
shares of Common Stock and/or options to acquire such Common Stock and Two
Hundred Fifty-Nine Thousand Four Hundred (259,400) shares of Series A Preferred
Stock, and (ii) the Investors who are signatories to this Agreement are the
beneficial owners of an aggregate of Fourteen Million Five Hundred Twelve
Thousand Three Hundred Thirty-Six (14,512,336) shares of Series A or Series B
Preferred Stock;
WHEREAS, the Company sold shares of its Series A Preferred Stock to
certain of the Investors pursuant to that certain Series A Preferred Stock
Purchase Agreement, dated as of April 11, 1997, by and among the Company and the
other parties thereto; and
WHEREAS, the Company sold shares of its Series B Preferred Stock, par
value $0.01 per share (the "SERIES B PREFERRED STOCK" and, together with the
Series A Preferred Stock, the "PREFERRED STOCK"), to certain of the Investors
pursuant to that certain Series B Preferred Stock Purchase Agreement, dated as
of January 14, 1999, by and among the Company and the other parties thereto; and
WHEREAS, the Company now intends to issue certain warrants to 1818 Fund
to purchase shares of Common Stock in connection with the transactions described
in that certain Securities Purchase Agreement, dated as of June 28, 2002,
between the Company and 1818 Fund (the "SECURITIES PURCHASE AGREEMENT"), and the
Company, the Key Stockholders, the Investors, and 1818 Fund have agreed to
provide for the future voting of their shares of the Company's capital stock as
set forth in this Agreement; and
WHEREAS, the Company and certain of the Key Stockholders and Investors
are parties to that certain Amended and Restated Voting Agreement, dated as of
January 14, 1999 (as amended through the date hereof, the "PRIOR VOTING
AGREEMENT") and the parties hereto wish to amend and restate the Prior Voting
Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. VOTING
1.1 KEY STOCKHOLDER SHARES; INVESTOR SHARES.
(a) The Key Stockholders each agree to hold all shares of
voting capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof, and any and all other
securities of the Company legally or beneficially acquired by each of the Key
Stockholders after the date hereof (hereinafter collectively referred to as the
"KEY STOCKHOLDER Shares"), subject to, and to vote the Key Stockholder Shares in
accordance with, the provisions of this Agreement.
(b) The Investors each agree to hold all shares of voting
capital stock of the Company now owned or hereinafter acquired by them
(including but not limited to all shares of Common Stock issued upon conversion
of the Company's Preferred Stock) registered in their respective names or
beneficially owned by them as of the date hereof (and any and all other
securities of the Company legally or beneficially acquired by each of the
Investors after the date hereof) (hereinafter collectively referred to as the
"INVESTOR SHARES") subject to, and to vote the Investor Shares in accordance
with, the provisions of this Agreement.
1.2 VOTING.
(a) Prior to the earlier of (i) the consummation and
effectiveness of the merger contemplated by that certain Agreement and Plan of
Merger dated as of May 6, 2002, by and between PMR Corporation ("PMR"), PMR
Acquisition Corporation, and the Company (the "PMR MERGER"), and (ii) the date
of the closing of a firmly underwritten public offering of the Company's Common
Stock pursuant to a registration statement filed with, and declared effective
under, the Securities Act of 1933, as amended (an "IPO"), at any annual or
special meeting or other action of the shareholders called for the purpose of
electing to or removing directors from the Company's Board of Directors, the Key
Stockholders and the Investors agree to vote all of their Key Stockholder Shares
and Investor Shares, respectively, during the term of this Agreement so as
always to cause the Board of Directors to consist of the following designated
nominees:
(i) With respect to the five (5) members of the
Board of Directors that the Company's Second Amended and Restated
Certificate of Incorporation (the "RESTATED CERTIFICATE") provides are
to be elected by the holders of Preferred Stock, (A) one (1) designee
nominated by Acacia Venture Partners, L.P. who shall initially be X.
Xxxx Xxxxxx, (B) one (1) designee nominated by Oak Investment Partners
VII, Limited Partnership who shall initially be Xxx X. Xxxxxx (C) one
(1) designee nominated by FCA Venture Partners II, L.P., who shall
initially be Xxxx Xxxx, and (D) two (2) persons expected to be outside
industry representatives, nominated by the holders of a majority of
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the Investor Shares in consultation with the Company's management, who
initially shall be Xxxxxxx XxXxxxxx and Xxxxx Xxxxx;
(ii) With respect to the four (4) members of the
Board of Directors that the Company's Restated Certificate provides are
to be elected by the holders of Common Stock, (A) Xxxxxxx X. X.
Xxxxxxxx, M.D., or such other person then serving as chairman and/or
Chief Medical Officer of the Company, (B) Xxxx X. Xxxxxx, or such other
person then serving as President and/or Chief Executive Officer of the
Company, (C) one (1) designee nominated by 1818 Fund, and (D) one (1)
person expected to be an outside industry representative, designated by
the holders of a majority of shares of Common Stock of the Company, who
initially shall be Xx Xxxxxxx, Xx.;
(b) Upon the consummation of the PMR Merger and until the
Vote Termination Date, at any annual or special meeting or other action of the
shareholders called for the purpose of electing to or removing directors from
PMR's Board of Directors, the Key Stockholders and the Investors agree to vote
all of their shares of capital stock of PMR, including, without limitation, any
shares, par value $0.01 per share, of common stock of PMR (the "PMR COMMON
STOCK") received in exchange for Key Stockholder Shares and Investor Shares in
connection with the PMR Merger, to cause one member of the Board of Directors of
PMR to be a person designated by 1818 Fund; provided, that notwithstanding
anything to the contrary contained herein, this Section 1.2(b) shall not be
binding on Xxxxxxx X. X. Xxxxxxxx, M.D., Xxxxxxx X. Xxxxx or K. Xxxxx XxXxxxx.
The "VOTE TERMINATION DATE" shall occur when both of the following clauses (x)
and (y) have been satisfied: (x) the indebtedness owed to the 1818 Fund under
the Securities Purchase Agreement has been repaid in full; and (y) either of the
following has happened: (i) the 1818 Fund owns less than 50% of the shares of
stock (assuming exercise of the warrants issued to the 1818 Fund pursuant to the
Securities Purchase Agreement) issued pursuant to the Securities Agreement, or
(ii) the fifth anniversary of the date hereof has occurred.
(c) After the consummation of an IPO but prior to the
consummation of the PMR Merger, and until the Vote Termination Date, any annual
or special meeting or other action of the shareholders called for the purpose of
electing to or removing directors from the Company's Board of Directors, the Key
Stockholders and the Investors agree to vote all of their shares of capital
stock of the Company to cause one member of the Board of Directors to be a
person designated by 1818 Fund; provided, that notwithstanding anything to the
contrary contained herein, this Section 1.2(c) shall not be binding on Xxxxxxx
X. X. Xxxxxxxx, M.D., Xxxxxxx X. Xxxxx or K. Xxxxx XxXxxxx.
Unless otherwise provided for herein, in the event of
any termination, removal or resignation of any Director designated pursuant to
Section 1.2(a), (b) or (c), the Key Stockholders and the Investors shall take
all actions necessary and appropriate to cause such vacancy to be filled in
accordance with the provisions of Section 1.2(a), (b) or (c), as the case may
be.
1.3 LEGEND.
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(a) Concurrently with the execution of this Agreement, there
shall be imprinted or otherwise placed, on certificates representing the Key
Stockholder Shares and the Investor Shares the following restrictive legend (the
"LEGEND"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A VOTING AGREEMENT WHICH PLACES
CERTAIN RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED
HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL
BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT
WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO PSYCHIATRIC SOLUTIONS,
INC. AT ITS PRINCIPAL PLACE OF BUSINESS."
(b) The Company agrees that, during the term of this
Agreement, it will not remove, and will not permit to be removed (upon
registration of transfer, reissuance of otherwise), the Legend from any such
certificate and will place or cause to be placed the Legend on any new
certificate issued to represent Key Stockholder Shares or Investor Shares
theretofore represented by a certificate carrying the Legend.
1.4 SUCCESSORS. The provisions of this Agreement shall be binding
upon the successors in interest to any of the Key Stockholder Shares or Investor
Shares. The Company shall not permit the transfer of any of the Key Stockholder
Shares or Investor Shares on its books or issue a new certificate representing
any of the Key Stockholder Shares or Investor Shares unless and until the person
to whom such security is to be transferred shall have executed a written
Agreement, substantially in the form of this Agreement, pursuant to which such
person becomes a party to this Agreement and agrees to be bound by all the
provisions hereof as if such person were a Key Stockholder or Investor, as
applicable.
1.5 OTHER RIGHTS. Except as provided by this Agreement, each Key
Stockholder and Investor shall be entitled to exercise the full rights of a
shareholder with respect to the Key Stockholder Shares and the Investor Shares,
respectively.
SECTION 2. TERMINATION
2.1 This Agreement shall continue in full force and effect from the
date hereof through the earliest of the following dates, on which it shall
terminate in its entirety:
(a) ten (10) years from the date of this Agreement; and
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(b) the date the parties hereto terminate this Agreement by
written consent of holders of a majority in interest of the Investor Shares,
holders of a majority in interest of the Key Stockholder Shares, and 1818 Fund.
Notwithstanding any provision contained in this
Agreement to the contrary, all of the rights granted under this Agreement to the
Key Stockholders and the Investors (other than to 1818 Fund) shall terminate
immediately upon the consummation and effectiveness of the PMR Merger; provided
that the consummation and effectiveness of the PMR Merger shall not terminate
the obligations of the Key Stockholders and the Investors under this Agreement
and that the Key Stockholders and Investors shall continue to be bound by such
obligations. All rights granted under this Agreement to 1818 Fund shall remain
in full force and effect following the consummation and effectiveness of the PMR
Merger. In addition, notwithstanding any provision contained in this Agreement
to the contrary, neither the PMR Merger nor any other transaction in which the
capital stock of the Company is exchanged, converted, reconstituted or
reclassified for the capital stock of the Company or another company shall
constitute an IPO or shall result in the termination of the rights granted
hereunder to 1818 Fund.
SECTION 3. MISCELLANEOUS
3.1 OWNERSHIP. Each Key Stockholder represents and warrants to the
Investors that (a) he or she now owns the Key Stockholder Shares, free and clear
of liens or encumbrances, and has not, prior to or on the date of this
Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than one which has expired or terminated
prior to the date hereof, and (b) such Key Stockholder has full power and
capacity to execute, deliver and perform this Agreement, which has been duly
executed and delivered by, and evidences the valid and binding obligation of,
such Key Stockholder enforceable in accordance with its terms.
3.2 FURTHER ACTION. If and whenever the Key Stockholder are sold,
the Key Stockholders or the personal representative of the Key Stockholders
shall do all things and execute and deliver all documents and make all
transfers, and cause any transferee of the Key Stockholder to do all things and
execute and deliver all documents, as may be necessary to consummate such sale
consistent with this Agreement.
3.3 SPECIFIC PERFORMANCE. The parties hereto hereby declare that it
is impossible to measure in money the damages which will accrue to a party
hereto or to their heirs, personal representatives, or assigns by reason of a
failure to perform any of the obligations under this Agreement and agree that
the terms of this Agreement shall be specifically enforceable. If any party
hereto or his heirs, personal representatives, or assigns institutes any action
or proceeding to specifically enforce the provisions hereof, any person against
whom such action or proceeding is brought hereby waives the claim or defense
therein that such party or such personal representative has an adequate remedy
at law, and such person shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.
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3.4 GOVERNING LAW. This Agreement, and the rights of the parties
hereto, shall be governed by and construed in accordance with the laws of the
State of Delaware as such laws apply to agreements among Delaware residents made
and to be performed entirely within the State of Delaware.
3.5 AMENDMENT. This Agreement may be amended only by an instrument
in writing signed by the Company, holders of a majority in interest of the
Investor Shares, holders of a majority in interest of the Key Stockholder
Shares, and the 1818 Fund.
3.6 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable, the validity and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
3.7 SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
3.8 ADDITIONAL SHARES. In the event that subsequent to the date of
this Agreement any shares or other securities (other than any shares or
securities of another corporation issued to the Company's stockholders pursuant
to a plan of merger) are issued on, or in exchange for, any of the Key
Stockholder or Investor Shares by reason of any stock dividend, stock split,
consolidation of shares, reclassification or consolidation involving the
Company, such shares or securities shall be deemed to be Key Stockholder or
Investor Shares, as the case may be, for purposes of this Agreement.
3.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
3.10 WAIVER. No waivers of any breach of this Agreement extended by
any party hereto to any other party shall be construed as a waiver of any rights
or remedies of any other party hereto or with respect to any subsequent breach.
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3.11 ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party
shall be entitled to all costs and expenses of maintaining such suit or action,
including reasonable attorneys' fees.
3.12 EXPENSES. The Company acknowledges and agrees that it shall
reimburse 1818 Fund for all reasonable out-of-pocket expenses (including travel
related expenses) of 1818 Fund and its representative incurred in connection
with such representative's duties as a member of the Board of Directors of the
Company.
3.13 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, representations,
warranties or undertakings, other than those set forth herein or therein. This
Agreement, together with the exhibits hereto, supersedes all prior agreements
and understandings among the parties with respect to such subject matter,
including, without limitation, the Prior Voting Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this SECOND
AMENDED AND RESTATED VOTING AGREEMENT as of the date first above written.
COMPANY:
PSYCHIATRIC SOLUTIONS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
Its: President
INVESTORS:
Name: Xxxxxxx X.X. Xxxxxxxx, MD
------------------------------------
(Print Investor's name)
By: /s/ Xxxxxxx X.X. Xxxxxxxx, MD
------------------------------------
(Signature)
Title: Chairman
-----------------------------------
(if applicable)
Name: South Park Venture Partners, L.P.
-----------------------------------
(Print Investor's name)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(Signature)
Title: General Partner
-----------------------------------
(if applicable)
Name: South Pointe Venture Partners, L.P.
------------------------------------
(Print Investor's name)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(Signature)
Title: General Partner
-----------------------------------
(if applicable)
Name: Acacia Venture Partners, L.P.
------------------------------------
(Print Investor's name)
By: /s/ Xxxxx X. Xxxx
------------------------------------
(Signature)
Title: General Partner
----------------------------------
(if applicable)
CGJR HEALTHCARE SERVICES
Name: CGJR HEALTHCARE SERVICES
PRIVATE EQUITIES, LP
CGJR II, L.P.
CGJR/MF III, L.P.
-----------------------------------
(Print Investor's name)
By: CGJR CAPITAL MANAGEMENT, INC.
AS GP OF ALL 3
By: /s/ Xxxxxxxxxxx Xxxxx, Jr.
-------------------------------------
(Signature)
Title: President
----------------------------------
(if applicable)
XXXXXXX ASSOCIATES, LLC
By: /s/ Xxxx X. Xxxx
-------------------------------------
Prin.
FCA VENTURE PARTNERS II, L.P.
By: Xxxxxxx XX Ventures
Capital Group, LLC
General Partner
By: /s/ Xxxx X. Xxxx
-------------------------------------
Prin.
FCA VENTURE PARTNERS I, L.P.
BY DC INVESTMENTS, LLC
ITS: GENERAL PARTNER
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Its: Managing Partner
OAK INVESTMENT PARTNERS VII,
LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Its: Managing Member of Oak
Associates VII, LLC, the
General Partner of Oak Investment
Partners VII, Limited Partnership
OAK VII AFFILIATES FUND,
LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Its: Managing Member of Oak VII
Affiliates, LLC, the General
Partner of Oak VII Affiliates
Fund, Limited Partnership
THE 1818 MEZZANINE FUND II, L.P.
BY: XXXXX BROTHERS XXXXXXXX & CO.,
ITS GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
KEY STOCKHOLDERS
/s/ Xxxxxxx X.X. Xxxxxxxx, M.D.
-----------------------------------------
Xxxxxxx X.X. Xxxxxxxx, M.D.
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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EXHIBIT A
LIST OF KEY STOCKHOLDERS NUMBER OF SHARES
NUMBER OF COMMON
STOCKHOLDERS SHARES/OPTIONS
------------ ----------------
Xxxxxxx Associates, L.L.C. 1,126,841 (1)
K. Xxxxx XxXxxxx 1,026,441 (1)
Xxxx X. Xxxxxx 1,626,441
Xxxxxxx X. Xxxxx 1,048,441 (1)
Xxxxxxx X. X. Xxxxxxxx, M.D. 1,251,761
K. Xxxxx XxXxxxx also owns 3,000 shares of Series B Preferred Stock. Xxxx X.
Xxxxxx also owns 8,000 shares of Series B Preferred Stock. Xxxxxxx Associates,
LLC also owns 8,400 shares of Series B Preferred Stock.
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(1) No Options.
A-1
EXHIBIT B
LIST OF INVESTORS
SERIES A SERIES B
STOCKHOLDERS PREFERRED STOCK PREFERRED STOCK
------------ --------------- ---------------
Acacia Venture Partners, L.P. 4,124,000 1,395,732
CGJR Health Care Services Private Equities, L.P. 250,000 177,417
CGJR II, L.P. 160,000 57,251
CGJR/MF III, L.P. 90,000 32,400
FCA Venture Partners I, L.P. 400,000 33,600
FCA Venture Partners II, L.P. 0 1,604,200
Oak VII Affiliates Fund, Limited Partnership 110,250 34,758
Oak Investment Partners VII, Limited Partnership 4,389,750 1,383,976
South Park Venture Partners, L.P. 246,000 20,460
South Pointe Venture Partners, L.P. 0 2,542
B-1
