STOCK TRANSFER RESTRICTION AGREEMENT
AMONG
XXXXX MEDICAL GROUP, P.C.,
a District of Columbia Profession Corporation
MEDI-CEN MANAGEMENT, INC.,
a Maryland Corporation
P. XXXXXX XXXXXX, M.D.,
AND
XXXXX X. XXXXXX, M.D.
December 31, 1997
STOCK TRANSFER RESTRICTION AGREEMENT
THIS AGREEMENT made as of the 31 day of Dec. 1997, by and among Xxxxx
Medical Group, P.C., a District of Columbia professional corporation (the
"Corporation"), Medi-Cen Management, Inc. a Maryland corporation ("MMI"), P.
Xxxxxx Xxxxxx, M.D. and Xxxxx X. Xxxxxx, M.D. (individually, the "Stockholder"
and together the "Stockholders").
W I T N E S S E T H:
WHEREAS, the Stockholders collectively are the holder of 4000 shares of
issued and outstanding $1.00 par value common stock of the Corporation,
constituting all of the issued and outstanding common stock of the Corporation;
WHEREAS, the Corporation and the Stockholders believe that it is in the
best interest of the Corporation to restrict the transferability of the stock in
the Corporation; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties covenant and agree as follows:
1. Restrictions On Shares. Except as otherwise provided herein, the
Stockholders shall not sell, assign, transfer, gift, pledge, hypothecate,
encumber or otherwise dispose of, whether voluntarily, involuntarily, by
operation of law or otherwise, any shares of the stock of the Corporation which
the
Stockholders now own or may hereafter acquire (the "Stock"). In addition, the
Stockholders shall not cause the Corporation to authorize, approve or declare
any dividend or other distribution with respect to the Stock.
2. Automatic Transfer of Shares in Certain Events.
(a) By execution of this Agreement, each Stockholder hereby agrees
that all of the shares of Stock of the Corporation held by the Stockholders
(or any heir, executor, administrator, personal representative, estate,
testamentary beneficiary, donee, trustee in bankruptcy, successor or
assignee of the Stockholders) shall be transferred, or deemed transferred,
to the Designated Transferee (defined below) without further action by the
Stockholders upon the occurrence any of the following events (each a
"Transfer Event"):
(i) the date of death of the last Stockholder to die;
(ii) the date the last of all of the Stockholders is determined
by a court of competent jurisdiction to be incompetent, or permanently
disabled so as to be unable to render any professional services on
behalf of the Corporation;
(iii) the date the last of all of the Stockholders becomes
disqualified under applicable law to be a shareholder of the
corporation;
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(iv) the date upon which any of the shares of Stock held by the
Stockholders are transferred or attempted to be transferred
voluntarily, involuntarily by operation of law or otherwise to any
person; or
(v) the date of filing any petition for or other document causing
or intended to cause a judicial, administrative, voluntary or
involuntary dissolution of the Corporation.
(b) Transfer of Stock. Upon the occurrence of a Transfer Event with
respect to the Stockholders, subject to the terms set forth below, all of
the Stock of the Corporation held by the Stockholders or their successors
and assigns shall be immediately transferred, or deemed transferred, to the
Designated Transferee without further action by the Stockholders:
(i) The purchase price for the Stock transferred to the
Designated Transferee pursuant to this Section 2 shall be the stated
par value of the Stock.
(ii) Payment of the purchase price for the Stock shall be made to
the Stockholders in cash or by certified or cashiers check. The time
for payment of the purchase price for the Stock hereunder shall be at
10:00 a.m. on the first business day following receipt by the
Designated Transferee of notice of such Transfer Event (provided,
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however, that in the absence of such notice, the Designated Transferee
shall upon becoming aware of any such Transfer Event promptly notify
the Stockholders, the Corporation and of such Transfer Event and
tender to the Stockholders the purchase price for the Stock). The
Designated Transferee shall tender the purchase price at the principal
office of the Corporation.
(iii) Notwithstanding anything to the contrary herein, upon the
occurrence of a Transfer Event, the Stock will be immediately
transferred, or deemed transferred, to the Designated Transferee
effective upon the date of such Transfer Event irrespective of the
date of payment for such Stock.
(c) Definition. For purposes of this Agreement, "Designated
Transferee" shall mean an individual, designated by MMI, and otherwise
meeting the qualifications for ownership of the Corporations shares.
(d) Deposit and Custody of Stock. Upon release of the Certificate from
Xxxxxx Xxxxx Bank the parties agree that MMI shall hold stock certificate
no. 5 (the "Certificate") of the Corporation, evidencing 4000 shares of the
Stock of the Corporation, duly endorsed in blank, for the benefit of the
Designated Transferee. Upon the occurrence of a Transfer Event, MMI shall
endorse the Certificate in the name of the Designated Transferee and
release the Certificate to the Clerk of the
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Corporation for cancellation by the Clerk, registration of the shares
represented thereby in the name of the Designated Transferee on the books
of the Corporation, and issuance of a new certificate in the name of the
Designated Transferee.
(e) Deliveries by Designated Transferee. Notwithstanding anything
herein to the contrary, release by MMI of a Certificate to the Clerk of the
Corporation shall be contingent on MMI's prior or concurrent receipt of:
(i) a stock transfer power executed by the Stockholder covering
the Stock transferred to the Designated Transferee;
(ii) issuance by the Corporation of a new stock certificate
evidencing the Designated Transferee's ownership of the Stock in the
Corporation; and
(iii) a copy of this Agreement duly executed by the Designated
Transferee substituting the Designated Transferee for the Stockholders
hereunder.
3. Other Matters.
(a) Upon the occurrence of a Transfer Event, the Stockholders shall be
disqualified as stockholders of the Corporation, and shall immediately
resign, as President and/or as any other officer of the Corporation.
(b) After occurrence of a Transfer Event, the Stockholder, and any
person who acquires the Stock, other than
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the Designated Transferee, shall neither have nor exercise any right or
privilege as a stockholder of the Corporation, including any right to
receive any unallocated or undistributed dividend.
4. Restrictions on Certificates. Upon the execution of this Agreement, the
Stockholders shall surrender their certificates representing shares of the Stock
subject to this Agreement to the Corporation for the purpose of placing notice
of the restrictions on transfer occasioned by this Agreement substantially as
follows:
IN ADDITION, THE OWNERSHIP AND TRANSFER OF THESE SHARES AND THE RIGHTS AND
OBLIGATIONS OF SHAREHOLDERS ARE SUBJECT TO THE LIMITATIONS OF THE DISTRICT
OF COLUMBIA PROFESSIONAL CORPORATION ACT. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS OF A STOCK TRANSFER RESTRICTION
AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE CORPORATION AND AVAILABLE
WITHOUT CHARGE), AND NO TRANSFER OF THE SHARES REPRESENTED HEREBY OR OF
SHARES ISSUED IN EXCHANGE THEREFOR SHALL BE VALID OR EFFECTIVE UNTIL THE
TERMS AND CONDITIONS OF SUCH AGREEMENT SHALL HAVE BEEN FULFILLED.
After such notice has been placed on such certificate, it shall be returned
to the Stockholder. All Stock which is subject to this Agreement and which is
issued to the Stockholders after the date of this Agreement shall bear the same
notice.
5. Subordination. Notwithstanding any other provision of this Agreement,
this Agreement and any and all rights created
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hereunder shall be subordinate to the rights of Allegiance Bank, N.A. (the
"Bank") under that certain Commercial Pledge and Security Agreement dated
January 17, 1997, by and between Xxxxx Medical Group, P.C. as Borrower, Xxxxx X.
Xxxxxxx xx Xxxxxx and Xxxxx X. Xxxxxxx xx Xxxxxx as Grantor, and the Bank as
Lender.
6. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) telexed,
telecopied or made by facsimile transmission, (iii) sent by overnight courier,
or (iv) sent by certified or registered mail, return receipt requested, postage
prepaid.
If to the Corporation: Xxxxx Medical Group, P.C.
0000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
If to the Stockholders: P. Xxxxxx Xxxxxx, M.D.
Xxxxx X. Xxxxxx, M.D.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to MMI: Medi-Cen Management, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by
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hand, at the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii) if telexed, telecopied or made by facsimile
transmission, at the time that receipt thereof has been acknowledged by
electronic confirmation or otherwise, (iii) if sent by overnight courier, on the
next day following the day such mailing is made (or in the case that such
mailing is made on Saturday, on the immediately following Monday), or (iv) if
sent by certified or registered mail, on the 3rd day following the time of such
mailing thereof to such address (or in the case that such 3rd day is a Sunday,
on the immediately following Monday).
7. Successors. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, and their authorized successors or assigns. The
rights of any party hereunder may not be assigned without the consent of the
remaining parties hereto.
8. Additional Stockholders. Each holder of any of the capital stock of the
Corporation or any rights to acquire capital stock of the Corporation, including
any holder of any warrant, option or other security convertible into or
exchangeable for capital stock of the Corporation, shall execute a counterpart
of this Agreement acknowledging that the restrictions contained herein shall
apply to such stock or rights to acquire stock in the Corporation.
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9. Third Party Beneficiary. The parties hereto acknowledge that the
Designated Transferee, if and when he or she becomes a Designated Transferee,
shall have standing to enforce the provisions of this Agreement.
10. Governing Law. This Agreement, the rights and obligations hereunder,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the District of Columbia.
11. Complete Agreement. All understandings and agreements heretofore had
between the parties hereto with respect to the transactions contemplated hereby
are merged into this Agreement, and this Agreement reflects all the
understandings of the parties with respect to such transactions.
12. Captions. The section titles or captions in this Agreement are for
convenience of reference only. They shall not be considered to be a part of this
Agreement, and they in no way define, limit, extend or describe the scope or
intent of any provision hereof.
13. Modification. This Agreement cannot be modified, extended or amended
except by written agreement signed by all of the parties hereto.
14. Arbitration. Any dispute regarding the meaning and interpretation of
this Agreement shall be submitted to arbitration. The parties hereto agree that
all disputes arising
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under this Agreement shall be settled by arbitration in accordance with the
rules of the American Arbitration Association in the District of Columbia (the
"Association"), then in effect, before a single arbitrator chosen by mutual
agreement of the parties or, if the parties are unable to agree on an
arbitrator, by the Association. A determination of the dispute by the arbitrator
shall be final and binding on the parties to the extent provided by law. The
cost of the arbitration, other than attorney's and consultancy fees, shall be
borne equally by the parties.
15. Confidentiality. The existence and the terms and conditions of this
Agreement are confidential and shall not be disclosed to any third party by any
party to this Agreement without the prior written consent of all other parties
to this Agreement.
16. Counterparts. This Agreement may be executed in two or more
counterparts and each counterpart, when so executed and delivered shall
constitute a complete and original instrument, and it shall not be necessary
when making proof of this Agreement or any counterpart thereto to produce or
account for any other counterparts.
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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument on the date first written above.
Xxxxx Medical Group, P.C.
By: /s/ P. Xxxxxx Xxxxxx 12/31/97
----------------------------------
P. Xxxxxx Xxxxxx, President
Medi-Cen Management, Inc.
By: /s/ Xxxxxx Xxxxxx 12/31/97
----------------------------------
Xxxxxx Xxxxxx, CEO
By: /s/ P. Xxxxxx Xxxxxx 12/31/97
----------------------------------
P. Xxxxxx Xxxxxx, M.D.,
Individually
By: /s/ Xxxxx X. Xxxxxx, M.D.12/31/97
----------------------------------
Xxxxx X. Xxxxxx, M.D.
Individually
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