EXHIBIT 10.18
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "AGREEMENT") is dated as of October 25,
1996, by and among Dental Care Alliance, Inc., a Delaware corporation (the
"COMPANY"), Xxxxxx X. Xxxxxxx, D.D.S., an individual residing in the State of
Florida ("XXXXXXX"), Xxxxxx Xxx Xxxxx, Xx., an individual residing in the State
of New Jersey ("XXXXX"), Xxxxxx X. Xxxxxx, an individual residing in the State
of New York ("XXXXXX"') and Crescent International Holdings Limited, a British
Virgin Islands corporation ("CIHL" and together with Matzkin, Smith, Xxxxxx and
CIHL, the "STOCKHOLDERS" and each individually, a "STOCKHOLDER") (Xxxxxx and
CIHL are referred to collectively as the "INVESTORS" and are each, individually
an "INVESTOR").
RECITALS:
A. The Company is authorized to issue 200,000 shares of Common Stock, $0.01
par value per share ("Common Stock"), of which 53,550 shares are issued and
outstanding and 15,000 shares of Series A Convertible Preferred Stock, $0.01 par
value per share ("Series A Preferred"), of which no shares are issued and
outstanding.
B. Each of the Stockholders currently holds that number of shares of
capital stock as set forth opposite such Stockholder's name:
COMMON STOCK SERIES A PREFERRED
------------ ------------------
Xxxxxxx 20,000 -
SRM 1993 Children's Trust 20,000 -
Xxxxx 6,500 -
Xxxxxx 167
CIHL 4,833
For purposes of the relations between Xxxxxxx and the other Stockholders in
this Agreement only, Xxxxxxx shall be deemed to own all interests of the Company
held by the SRM 1993 Children's Trust.
C. The Stockholders and the Company desire to promote their mutual interest
by imposing certain transfer restrictions on the shares of Common Stock and
Series A Preferred owned by the Stockholders (the "SHARES") and setting forth
their agreements and understandings regarding certain other matters relating to
the Shares and the Company.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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SECTION 1. DEFINITIONS. As used herein, the following terms shall have the
meanings herein specified.
(a) AFFILIATE. "Affiliate" of any Person means any person, corporation,
proprietorship, partnership, trust, limited liability company or other business
entity that, directly or indirectly, owns or controls, is under common ownership
or control with, or is owned or controlled by, such Person. For purposes of this
definition, "control" means the possession of the power to direct or cause the
direction of management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
(b) CERTIFICATE OF DESIGNATION. "Certificate of Designation" means that
certain Certificate of Designation Fixing Rights, Preferences, and Terms of the
Series A Convertible Preferred Stock With a Par Value of $0.01 per Share of
Dental Care Alliance, Inc., a Delaware Corporation.
(c) FIRST CLOSING. "First Closing" means the date of the funding of the
initial purchase of Series A Preferred by Investors pursuant to the Purchase
Documents.
(d) GAAP. "GAAP" means generally accepted accounting principles deemed
generally accepted under promulgations by the American Institute of Certified
Public Accountants.
(e) INVESTOR OPTION. "Investor Option" means that certain Option Agreement,
dated as of October 25, 1996, by and between CIHL and the Company.
(f) INVESTOR SUBSCRIPTION AGREEMENT. "Investor Subscription Agreement"
means that certain Subscription Agreement, dated as of October 2S, 1996, by and
among Xxxxxx, CIHL and the Company.
(g) PERMITTED ISSUANCE. "Permitted Issuance" means an issuance of Common
Stock or Underlying Common Stock (or any options or rights to acquire any Common
Stock or any securities convertible or exchangeable for Common Stock) by the
Company, (i) to employees, directors and officers, pursuant to a stock option
plan approved by the Board of Directors (1,530 shares of Common Stock to be
initially reserved for issuance pursuant to such plan), (ii) pursuant to the
exercise of options, warrants or rights (including, without limitation, rights
of conversion) to the extent that such options, warrants or rights were issued
pursuant to item (i) above, (iii) pursuant to a stock dividend, stock split or
other reclassification of the Common Stock, or (iv)
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pursuant to the Xxxxx Option, Xxxxx Subscription Agreement, Investor Option or
Investor Subscription Agreement.
(h) PERSON. "Person" means an individual, a sole proprietorship, a
corporation, a partnership, a trust, a limited liability company, an
unincorporated organization or a government organization or an agency or
political subdivision thereof.
(i) PUBLIC OFFERING. "Public Offering" means a firm commitment underwritten
public offering of Common Stock by the Company pursuant to the Securities Act.
(j) PURCHASE DOCUMENTS. "Purchase Documents shall mean the Investor
Subscription Agreement and Investor Option, as the same are amended, modified,
supplemented or restated from time to time.
(k) QUALIFIED INITIAL PUBLIC OFFERING. "Qualified Initial Public Offering'
shall be as defined in Schedule 1 to the Certificate of Designation.
(l) RELATED PARTY. "Related Party" means, with respect to a particular
Stockholder, any Person who is the Stockholder's grandparent, parent, brother,
sister, spouse, child, aunt, uncle or cousin, whether the relation is through
blood or marriage, and each trust created for the benefit of one or more of such
Persons and each corporation, entity or other organization in which 100% of the
beneficial interest is held by such Person.
(m) SECURITIES ACT. "Securities Act" means the Securities Act of 1933, as
amended, or any federal statute or statutes which shall be enacted to take the
place of such Act, together with all rules and regulations promulgated
thereunder.
(n) XXXXX OPTION. "Xxxxx Option" means that certain Option Agreement, dated
as of January 3, 1994, between Xxxxxx Xxx Xxxxx, Xx. and Golden Care Holdings,
L.C.
(o) XXXXX SUBSCRIPTION AGREEMENT. "Xxxxx Subscription Agreement" means that
certain Subscription Agreement, dated as of January 3, 1994, between Xxxxxx Xxx
Xxxxx, Xx. and Golden Care Holdings, L.C.
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(p) TRANSFER. "Transfer" means any transfer, sale, assignment,
hypothecation, pledge, conveyance, gift, encumbrance or other disposition,
irrespective of whether any of the foregoing are effected voluntarily or
involuntarily, by operation of law or otherwise. Without limiting the foregoing,
in the event Xxxxx, Xxxxxx or CIHL shall become Bankrupt or Insolvent or shall
become subject to any involuntary transfer of such party's shares by legal
process, such party shall be deemed to have proposed to Transfer such party's
Shares.
(q) TRANSFEREE. "Transferee" means the Person desiring to effect a Transfer
with a Stockholder.
(r) "UNDERLYING COMMON STOCK" means (i) Common Stock issued or issuable
upon conversion of the Series A Preferred issued or issuable upon conversion of
any notes, (ii) Common Stock issued or issuable upon exercise of any other
security convertible into shares of Common Stock, (iii) Common Stock or any
other security convertible into shares of Common Stock which are obtained upon
the exercise of any option or warrant issued or granted by the Company and
constitute fully-diluted equity in accordance with GAAP, and (iv) any Common
Stock issued or issuable with respect to the securities referred to in clauses
(i) and (ii) above by way of stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization. For purposes of this Agreement, any Person who holds Series A
Preferred will be deemed to be the holder of the Underlying Common Stock
obtainable upon conversion thereof regardless of any restriction or limitation
on the conversion of the Series A Preferred. As to any particular shares
constituting Underlying Common Stock, such shares will cease to be Underlying
Common Stock when they have been disposed of in any sale of the shares to the
public pursuant to an offering registered under the Securities Act or to the
public pursuant to the provisions of Rule 144 under the Securities Act (or any
similar provision then in force).
SECTION 2. GENERAL PROHIBITION. Prior to a Qualified Initial Public
Offering, a Stockholder may not, without the prior written consent of the
Company and the other Stockholders, Transfer to any Person any Shares owned by
such Stockholder other than in accordance with the terms of this Agreement. Any
purported or attempted Transfer of Shares by a Stockholder in violation of the
prohibition on Transfer of Shares contained herein shall be void AB INITIO and
of no force or effect.
SECTION 3. RESTRICTIONS ON TRANSFER OF SHARES.
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(a) Right of First Refusal.
i) Prior to a Qualified Initial Public Offering, any Stockholder (the
"TRANSFERRING STOCKHOLDER") who desires to Transfer more than 50\
of the Shares then owned by such Stockholder in one or a series of
related transactions to any Person other than a Related Party,
shall give written notice of the contemplated Transfer (the "OFFER
NOTICE") to the Company and to the other Stockholders (the "OTHER
STOCKHOLDERS"). The Offer Notice shall disclose in reasonable
detail the identity of the prospective transferee(s), the number
of Shares the Transferring Stockholder proposes to Transfer (the
"OFFERED SHARES") and the terms and conditions of the contemplated
Transfer. The Transferring Shareholder will not consummate any
Transfer until 45 days after the Offer Notice has been delivered
to the Company and to the Other Stockholders, unless all of the
Other Stockholders and the Company have notified the Transferring
Shareholder of their intent regarding the purchase of the Offered
Shares pursuant to SUBSECTION 3(a)(ii)-(iv) prior to the
expiration of such 45 day period.
ii) Each of the Other Stockholders may elect to purchase all (but not
less than all) of the Allotted Number (defined below) of the
Offered Shares, on the same terms and conditions as those set
forth in the Offer Notice, by delivering a written notice of such
election to the Transferring Stockholder and the other
Stockholders within 20 days after the Offer Notice has been
delivered to the Stockholders and the Company. The "ALLOTTED
NUMBER" shall mean, with respect to an individual Stockholder,
that portion of the Offered Shares (excluding any fractional
shares) equal to the product of (x) the quotient determined by
dividing the number of Common Stock and Underlying Common Stock
owned by such Stockholder by the aggregate number of Common Stock
and Underlying Common Stock owned by all of the Stockholders other
than the Transferring Stockholder and (y) the Offered Shares. Each
of the Other Stockholders who do not wish to purchase such
Stockholder's Allotted Number shall deliver a written notice of
such election to the Transferring Stockholder and the other
Stockholders within 14 days after the Offer Notice has been
delivered to the Stockholders and the Company. Failure of an Other
Stockholder to notify the Transferring Stockholder as provided
herein shall be deemed to be an election by such Other Stockholder
not to purchase such Other Stockholder's Allotted Number of
Offered Shares.
iii) If any of the Other Stockholders do not elect to purchase his or
its Allotted Number, each of the Other Stockholders desiring to
purchase Offered Shares in a number in excess of his or its
Allotted Number shall be
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entitled, within 5 days after such Stockholder receives written
notice of the other Stockholder's election not to purchase, to
purchase such proportion of those Offered Shares that remain thus
undisposed of, as the total number of shares of Common Stock and
Underlying Common Stock that he owns bears to the aggregate number
of shares of Common Stock and Underlying Common Stock owned by
those Other Stockholders desiring to purchase Offered Shares in
excess of their Allotted Numbers.
iv) The Transferring Stockholder shall notify the Company of any of
the Offered Shares not purchased by the Other Stockholders
pursuant to SUBSECTIONS 3(a)(ii)-(iii), and all of such shares
(but not less than all) may be purchased by the Company, on the
same terms and conditions as those set forth in the Offer Notice,
provided, that within 5 days after notice thereof was delivered to
the Company, the Company deliver a written notice of such election
to the Transferring Stockholder.
v) In the event that any or all of the Offered Shares are not
purchased by the Company, then such Offered Shares may be disposed
of, but only in accordance with the terms of the Offer Notice,
within ninety (90) days of the date thereof. In the event the
Offered Shares are not transferred to the transferee(s) named in
the Offer Notice within ninety (90) days of the Offer Notice and
in accordance with the terms of the Offer Notice, all restrictions
contained herein shall again be in full force and effect with
respect to the Offered Shares.
vi) The Company and the Stockholders agree that in the event that the
Transfer is one which is to be effected voluntarily by the
Transferring Stockholder, the purchase price per Share sold and
purchased pursuant to this Section shall be the price offered in a
Bona Fide Offer to a prospective transferee. As used herein, a
"BONA FIDE OFFER" from a Transferee must (i) irrevocable (subject
to standard sale conditions) and in writing and (ii) be an offer
that the Transferring Stockholder be willing to accept. The
Company and the Stockholders agree that in the event that the
Transfer is one which is to be effected involuntarily by the
Transferring Stockholder, the purchase price per Share sold and
purchased pursuant to this Section and the terms of payment shall
be as set forth in SCHEDULE 1.
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vii) Except as otherwise provided in this Agreement, the purchase price
for Shares sold and purchased pursuant to this Section shall be
paid to the Transferring Stockholder as provided in SCHEDULE 1.
viii)Shares Transferred by any Stockholder to a Related Party shall
remain subject to SECTION 3(a) and such transferee shall be deemed
a party to this Agreement for purposes of SECTION 3(a) and such
shares shall remain subject to SECTION 3(a).
ix) Shares transferred to Persons other than Related Parties in
accordance with the terms and conditions of this Agreement shall
no longer be subject to the provisions of this Agreement,
including, without limitation, any of the restrictions or benefits
contained herein.
(b) Investor Co-Sale Rights.
i) If Xxxxxxx desires to Transfer any shares of Common Stock then
owned by him in one or a series of related transactions to any
person other than a Related Party and other than in connection
with a Qualified Initial Public Offering or a sale to the Other
Stockholders pursuant to SECTION 3(a), he shall give written
notice (the "SALE Notice") to each Investor. The Sale Notice shall
disclose in reasonable detail the identity of the prospective
transferee(s), the number of shares of Common Stock Xxxxxxx
proposes to Transfer (the "XXXXXXX SALE SHARES") and the terms and
conditions of the proposed Transfer. Xxxxxxx will not consummate
any Transfer until the first to occur of (x) 45 days after the
Sale Notice has been given to the Investors or (y) 14 days after
the date on which the Investors have given Xxxxxxx written notice
of their election to participate in the contemplated Transfer
under this SUBSECTION 3(b). If an Investor elects to participate
in such Transfer, the Investor shall first convert into Common
Stock that number of Series A Preferred necessary to obtain the
Xxxxxxx Participation Amount. Upon conversion of the Investor's
Series A Preferred, the Investor shall be entitled to sell in the
contemplated Transfer, at the same price per share and on the same
terms, the Xxxxxxx Participation Amount by delivering written
notice to Xxxxxxx within 14 days after delivery of the Sale
Notice. Failure of an Investor to notify Xxxxxxx as provided
herein shall be deemed an election by such Investor not to
exercise his or its rights hereunder.
In the event that the Xxxxxxx Sale Shares constitute 10% or less of the
Common Stock then owned by Xxxxxxx, the "XXXXXXX PARTICIPATION AMOUNT" shall be
the number of shares of
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Common Stock equal to the product of (x) the quotient determined by dividing
the number of Common Stock and Underlying Common Stock owned by the Investor by
the aggregate number of Common Stock and Underlying Common Stock owned by the
Investor and Xxxxxxx and (y) the Xxxxxxx Sale Shares. In the event that the
Xxxxxxx Sale Shares constitute more than 10% of the Common Stock then owned by
Xxxxxxx, the "XXXXXXX PARTICIPATION AMOUNT" shall be equal to the lesser of (x)
the Xxxxxxx Sale Shares and (y) the Common Stock then owned by the Investor.
ii) If a Stockholder, other than Xxxxxxx, owning 5% or more of the
Common Stock and Underlying Common Stock (a "5% Holder"), desires
to Transfer any of the Shares then owned by him in one or a series
of related transactions to any Person other than a Related Party
and other than in connection with a Qualified Initial Public
Offering, he shall give written notice (the "Sale Notice") to the
Investor. The Sale Notice shall disclose in reasonable detail the
identity of the prospective transferee(s), the number of Shares
the 5% Holder proposes to Transfer (the "CO-SALE SHARES") and the
terms and conditions of the proposed Transfer. The 5% Holder will
not consummate any Transfer until the first to occur of (x) 45
days after the Sale Notice has been given to the Investor or (y)
l4 days after the date on which the Investors have given the 5%
Holder written notice of their election to participate in the
contemplated Transfer under this SUBSECTION 3(b). Failure of an
Investor to notify the 5% Holder as provided herein shall be
deemed an election by such Investor not to exercise his or its
rights hereunder. If the Investor elects to participate in such
Transfer, the Investor shall first convert into Common Stock that
number of Series A Preferred necessary to obtain the 5% Holder
Participation Number (as defined below). Upon conversion of the
Investor's Series A Preferred, the Investor shall be entitled to
sell in the contemplated Transfer, at the same price per share and
on the same terms, the 5% Holder Participation Number by
delivering written notice to the 5% Holder within 14 days after
delivery of the Sale Notice.
The "5% HOLDER PARTICIPATION NUMBER" shall be the number of the Shares
equal to the product of (x) the quotient determined by dividing the number of
Common Stock and Underlying Common Stock owned by the Investor by the aggregate
number of Common Stock and Underlying Common Stock owned by the Investor and 5%
Holder and (y) the Co-Sale Shares.
SECTION 4. PREEMPTIVE RIGHTS.
(a) Except for Permitted Issuances, if prior to a Qualified Initial Public
Offering, the Company authorizes the issuance or sale of any shares of Common
Stock or Underlying
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Common Stock or any rights or options to subscribe for or purchase shares of
Common Stock or Underlying Common Stock (collectively, "ADDITIONAL Shares"), the
Company will first offer to sell to each of the Stockholders a portion of such
stock or securities equal to the quotient determined by dividing (i) the number
of shares of Common Stock and Underlying Common Stock held by such Stockholder
by (ii) the total number of Common Stock and Underlying Common Stock held by all
the Company's stockholders. The Additional Shares sold to a Stockholder pursuant
to this Section shall be calculated to enable such Stockholder to maintain his
or its percentage interest in the Company on a fully-diluted basis (excluding
the effect of the exercise of all rights to acquire Common Stock or Underlying
Common Stock arising from a Permitted Issuance) immediately prior to the
proposed issuance. Each Stockholder shall be entitled to purchase Additional
Shares at a price and on terms which are no less favorable to such Stockholder
in any respect than any price or terms on which such Additional Shares is to be
offered to any other Person. The purchase price for all Additional Shares
offered to such Stockholder shall be payable in cash. The Company shall give
each Stockholder at least thirty (30) days' prior written notice of any such
proposed issuance setting forth in reasonable detail the proposed terms and
conditions thereof and shall offer to each Stockholder the opportunity to
purchase such Additional Shares at the same price, on the same terms and at the
same time as such Shares are proposed to be issued by the Company. If the terms
upon which such Additional Shares are being offered provide for consideration
other than cash, then the Company shall make a reasonable determination of the
cash value per share of such other consideration and such Stockholder shall pay
such cash value for the Additional Shares, if any, being purchased by such
Stockholder under this Section. A Stockholder may exercise his preemptive right
by delivery of an irrevocable written notice thereof to the Company not more
than fifteen t(15) days after receipt of the Company's notice, together with
cash or a certified check in the amount of the purchase price of the Additional
Shares being purchased by such Stockholder under this Section. Upon the issuance
of Additional Shares as contemplated by this Section, in the event any
Stockholder fails to exercise his preemptive rights as provided for in this
Section, such right shall be deemed irrevocably waived with respect to such
issuance of Additional Shares and such failure shall be deemed an election not
to exercise the preemptive rights granted hereunder with respect to such
issuance of Additional Shares. Upon a Public Offering, all preemptive rights
provided herein shall automatically expire without further action and be of no
further force or effect.
(b) Except for Permitted Issuances, if prior to a Qualified Public
Offering, the Company authorizes the issuance or sale of any securities other
than Additional Shares (collectively, "OTHER SECURITIES"), the Company will
first offer to sell to each of the Investors all, but not less than all, such
Other Securities. The Investors shall be entitled to purchase such Other
Securities at the price and on the terms as established by the Company and as
set forth in a written term sheet which shall provide for the terms and
conditions by which any potential investor shall purchase the Other Securities
and which has been approved by the Board of Directors of the Company in its sole
discretion (the "Term Sheet"). The purchase price for the Other Securities shall
be payable in cash. The Company shall give each Investor at least fifteen (15)
days' prior written notice of any proposed issuance of Other Securities, and
such notice shall
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include a copy of the Term Sheet. If the terms upon which such Other Securities
are being offered provide for consideration other than cash, then the Company
shall make a reasonable determination of the cash value per share of such other
consideration and such Investor shall pay such cash value for the Other
Securities, if any, being purchased by such Investor under this Section. An
Investor may exercise his preemptive right to purchase the Other Securities
under this SUBSECTION 4(b) by delivery of an irrevocable written notice thereof
to the Company not more than ten (10) days after receipt of the Company's
notice, together with cash or a certified check in the amount of the purchase
price of the Other Securities being purchased by such Investor under this
Section. Upon the issuance of Other Securities as contemplated by this Section,
in the event any Investor fails to exercise his preemptive rights as provided
for in this Section, such right shall be deemed irrevocably waived with respect
to such issuance of Other Securities and such failure shall be deemed an
election not to exercise the preemptive rights granted hereunder with respect to
such issuance of Other Securities. Upon a Public offering, all preemptive rights
provided herein shall automatically expire without further action and be of no
further force or effect.
SECTION 5. XXXXX PUT OPTION.
(a) In the event that, as of January 1, 2001, the Company has not completed
a Qualified Initial Public Offering, Xxxxx shall, at any time thereafter, have
the right to sell to the Company, and the Company shall be required to purchase,
all, but not less than all, of the Shares then owned by Xxxxx, by giving the
Company written notice of his election to do so. Such purchase shall occur not
later than one hundred twenty (120) days following the Company's receipt of such
written notice from Xxxxx. The purchase price for such Shares shall be
determined in accordance with SCHEDULE II attached hereto and made a part
hereof, and shall be paid as follows:
i) twelve and one-half percent (12.5%) of the purchase price to be
paid in cash on the date of closing specified in accordance with
this Section; and
ii) the remaining eighty-seven and one-half percent (87.5%) of the
purchase price to be evidenced by a Promissory Note (a "Note")
executed by the Company, which Note shall provide for deferred
payments thereunder over a period of seven (7) years from the date
of closing, paid in seven (7) equal annual installments payable on
the anniversary dates of the closing, plus interest on the unpaid
principal amount from time to time outstanding, at the rate of
interest published on January 1 of each applicable calendar year
(or the business day most closely approximating thereto after
January 1), by the WALL STREET JOURNAL and designated as the
"prime" rate of interest (the "Interest Rate") which Interest Rate
shall be effective from and after that date through the remainder
of such calendar
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year until the next change in the Interest Rate as provided
herein. Interest shall be calculated based upon a three hundred
and sixty (360) day year consisting of twelve (32) thirty (30) day
months and charged for the actual number of days elapsed.
Principal due under the Note shall be paid in seven (7) equal
annual installments, each payable on the anniversary date of the
closing. All accrued interest under the Note shall be paid in
quarterly installments, in arrears, payable on the first business
day of each January, April, July and October during the term of
the Note. A final payment of all outstanding principal and
interest owed thereunder shall be paid at maturity. The deferred
portion of the purchase price for Shares shall be secured by a
pledge of the Shares subject to purchase hereunder.
(b) Upon completion of a Qualified Initial Public Offering, the put option
provided for in this Section shall expire and be of no further force or effect.
(c) Notwithstanding anything to the contrary contained herein, Xxxxx agrees
not to exercise his rights pursuant to this SECTION 5 until a date no earlier
than six (6) months after the optional or mandatory redemption of the Investor's
Series A Preferred as provided in the Certificate of Designation.
SECTION 6. CALL OPTION ON XXXXX'X SHARES. At any time after January 1,
2003, the Company (or Xxxxxxx if the Company elects not to exercise its option
to purchase under this SECTION 7) shall have the right to purchase from Xxxxx,
and Xxxxx shall be required to sell to the Company or Xxxxxxx, as applicable,
all, but not less than all, of the Shares then owned by Xxxxx, by giving Xxxxx
written notice of its or his election to do so. Such purchase shall occur not
later than one hundred twenty (120) days following the date of delivery of such
written notice from the Company or Xxxxxxx, as applicable. The purchase price
shall be determined in accordance with SCHEDULE II attached hereto, and shall be
paid in accordance with the provisions of SUBSECTIONS 5(a)(i) AND (ii). Upon
completion of a Qualified Initial Public Offering, the call option provided for
in this Section shall expire and be of no further force or effect.
SECTION 7. DEMAND REGISTRATION. Subject to the satisfaction of each of the
requirements specified in this Section, the Company will use its best efforts to
effect the registration of Xxxxx or the Investors' Common Stock or Underlying
Common Stock, as applicable, as provided herein:
(a) If the Company shall receive at any time after the fourth (4th)
anniversary of the First Closing or nine (9) months after the consummation of a
Qualified Initial Public Offering, by the Company of its Common Stock, a written
request from either Xxxxx or the Investor (the "INITIATING HOLDER"), that the
Company effect the registration of such Initiating Holder's Common Stock or
Underlying Common Stock under the Securities Act, the Company shall promptly
give written notice of such proposed registration to all Stockholders, stating
that such holders have the
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right to request that any or all of the Common Stock or Underlying Common Stock
owned by them be included in such registration. The Company shall include in
such registration all Common Stock or Underlying Common Stock, as applicable,
with respect to which the Company receives written requests from the holders
thereof for inclusion therein subject to the limitations contained in this
Section, and thereupon the Company will, as expeditiously as possible, use its
best efforts to effect the registration, under the Securities Act, of such
Common Stock or Underlying Common Stock, as applicable, which the Company has
been requested to register for disposition by such holders.
(b) The demand registration rights provided for in SUBSECTION 7(a) shall be
deemed satisfied by the Company when one registration statement shall have been
filed by the Company with and made effective by the Securities and Exchange
Commission under the Securities Act pursuant to requests made pursuant to
SUBSECTION 7(a) and the offerings pursuant to each such registration statement
shall have closed. In addition to the rights provided in SUBSECTION 7(a), the
Investor shall be entitled to one demand registration on Form S-2 or Form S-3,
if available. The Company shall have no obligation to attempt registration of
any offering of Common Stock or Underlying Common Stock under the Securities Act
more often than once in any twelve (12) month period.
(c) If the Company at any time proposes or is required to register any of
its Common Stock or Underlying Common Stock under the Securities Act or any
applicable state securities or blue sky laws on a form which permits inclusion
of the Common Stock or Underlying Common Stock, as applicable, (other than on
Form S-4 or S-8), it will each such time give written notice to all holders of
then existing Common Stock or Underlying Common Stock, as applicable, of its
intention to do so. Upon the written request of any such holder given not later
than fifteen (15) days after the receipt of any such notice, the Company will
use its best efforts to cause all Common Stock or Underlying Common which such
holders shall have requested be registered to be registered under the Securities
Act and any applicable state securities or blue sky laws, all to the extent
required to permit the sale or other disposition by such holder of shares so
registered. No registrations of Common Stock or Underlying Common Stock under
this SUBSECTION 7(c) shall relieve the Company of its obligation to effect
registrations under SUBSECTION 7(a) hereof, or shall constitute a registration
request by any holder of Common Stock or Underlying Common Stock under
SUBSECTION 7(a).
(d) Whenever the Company is required by the provisions of this Agreement to
use its best efforts to effect the registration of Common Stock or Underlying
Common Stock, as applicable, of the Company under the Securities Act, the
Company will, as expeditiously as possible:
i) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such securities and use its
best efforts to cause such registration statement to become
effective;
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ii) prepare and file with the Securities and Exchange Commission such
post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for a
period of (Y) 120 days, or (Z) such time as necessary to permit
each Stockholder to dispose of all of such Stockholder's Common
Stock or Underlying Common Stock, as applicable, covered by the
registration statement, whichever first occurs, and to comply with
the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration
statement during such period in accordance with the intended
method or methods of disposition of securities;
iii) use its best efforts to register or qualify all the securities
covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as each seller shall
reasonably request, and do any and all other acts and things which
may be necessary under such securities or blue sky laws to enable
such seller to consummate the public sale or other disposition in
such jurisdiction of the securities owned by such seller covered
by such registration statement; PROVIDED, HOWEVER, that the
Company shall not be required to (X) qualify to do business as a
foreign business entity in any jurisdiction wherein it would not
otherwise be required to qualify but for this subparagraph, (Y)
subject itself to taxation in any such jurisdiction, or (Z)
consent to general service of process in any such jurisdiction;
and
iv) pay, to the fullest extent allowable under applicable state
securities and blue sky laws, all expenses incurred in effecting
the registration(s) provided for in SUBSECTION 7(a) AND (b)
hereof, and in effecting all of the registrations provided for in
SUBSECTION 7(c) hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and
disbursements of one law firm serving as counsel for the sellers
(who shall be selected by Investors), underwriting expenses (other
than underwriting discounts and commissions), expenses of any
audits incident to or required by any such registration and
expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to SUBSECTION 7(d)(iii). Other than as
provided in this SUBSECTION 7(d)(iv), the Company shall not be
required to pay for the individual expenses of any sellers. With
respect to a registration of securities pursuant to Section 7(a)
hereof, the Company shall not be required to pay for expenses as
set forth above for any such registration, the request for which
has been withdrawn by the sellers, in which case the sellers
causing the withdrawal of the registration statement shall
promptly reimburse the Company for all reasonable expenses paid on
13
their behalf and shall be responsible for all unpaid amounts
relating to the withdrawn registration statement.
(e) To the extent any Stockholder desires to include any Common Stock or
Underlying Common Stock owned by such Stockholder in an underwritten primary or
secondary offering of securities of the Company, whether pursuant to SUBSECTION
7(a), SUBSECTION 7(b), SUBSECTION 7(c) or otherwise, the following priorities
shall govern and control:
i) In the event the registration is an underwritten primary
registration on behalf of the Company and the managing
underwriters advise the Company in writing that, in their opinion,
the number of securities to be included in such registration
exceeds the number which can be sold at a price reasonably related
to the then current market value of such securities and without
materially and adversely affecting such offering, Company will
include in such registration (X) first, the Common Stock that the
Company proposes to sell, (Y) second, the Common Stock or
Underlying Common Stock, as applicable, requested by the
Stockholders to be included in such registration, PRO RATA among
the Stockholders on the basis of the number of Common Stock and
Underlying Common Stock that are owned by such Stockholders, and
(Z) third, other securities requested to be included in such
registration; and
ii) In the event the registration is an underwritten secondary
registration on behalf of the Stockholders, and the managing
underwriters advise the Company in writing that, in their opinion,
the number of shares of Common Stock and Underlying Common Stock
requested to be included in such registration exceeds the number
which can be sold at a price reasonably related to the then
current market value of such securities and without materially and
adversely affecting such offering, the Company will include in
such registration (Y) first, the Common Stock and Underlying
Common Stock requested to be included in such registration by the
Stockholders, pro RATA among the Stockholders on the basis of the
number of shares of Common Stock and Underlying Common Stock that
are owned by such Stockholders, and (Z) second, other securities
requested to be included in such registration; PROVIDED, however,
that the Company will make reasonable efforts to structure any
offering of its Common Stock pursuant to a registration under the
Securities Act so that the securities registered under SUBSECTION
7(c) may account for at least 25% of such offering.
14
(f) The Company shall have the right to select the investment banker or
bankers who shall serve as the manager and/or co-managers for all registrations
of offerings of securities under SECTION 7 hereof, PROVIDED, HOWEVER, that such
banker or bankers shall be of recognized standing.
(g) Notwithstanding anything to the contrary contained herein, no initial
Public Offering of the Company shall be made unless made on the following terms
and conditions:
i) The annual revenues of the Company for the most recently completed
fiscal year are $25,000,000 or more;
ii) The net proceeds to the Company from such initial Public Offering
of securities shall not be less than $10,000,000;
iii) Such initial Public Offering constitutes a Qualified Initial
Public Offering.
SECTION 8. INDEMNIFICATION-RELATING TO REGISTRATION OF SHARES. In the event
of a registration of any of the Shares under the Securities Act pursuant to
SECTION 7 hereof, the Company will indemnify and hold harmless each seller of
such Shares thereunder and each underwriter of Shares thereunder and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Shares were registered
under the Securities Act pursuant to SECTION 7, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such seller, such underwriter
or such controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Shares under the Securities
Act pursuant to SECTION 7 hereof, each seller of such Shares thereunder,
severally and not jointly, will indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of the Securities
Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls any
underwriter within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or
15
several, to which the Company or such officer or director or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Shares were registered under the Securities Act pursuant to SECTION 7
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus; PROVIDED, FURTHER, HOWEVER, that the
liability of each seller hereunder shall be limited to the proceeds (net of
underwriting discounts and commissions) received by such seller from the sale of
Shares covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this SECTION 8. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this SECTION 8 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; PROVIDED, HOWEVER, that, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right
to retain its own, counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain
16
counsel for the indemnified person as aforesaid or (ii) the indemnifying party
and such indemnified party shall have mutually agreed to the retention of such
counsel. It is understood that the indemnifying party shall not, in connection
with any action or related actions in the same jurisdiction, be liable for the
fees and disbursements of more than one separate firm qualified in such
jurisdiction to act as counsel for the indemnified party. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
SECTION 8 is unavailable or insufficient to hold harmless an indemnified party
under such paragraphs in respect of any losses, claims, damages or liabilities
or actions in respect thereof referred to therein, then each indemnifying party
shall in lieu of indemnifying such indemnified party contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, and the underwriters and the
sellers of such Shares, on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or actions
as well as any other relevant equitable considerations, including the failure to
give any notice under the third paragraph of this SECTION 8. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact relates to information supplied by
the Company, on the one hand, or the underwriters and the sellers of such
Shares, on the other, and to the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and each Stockholder agree that it would not be just and equitable
if contributions pursuant to this paragraph were determined by pro rata
allocation (even if all of the sellers of such Shares were treated as one entity
for such purpose) or by any other method of allocation which did not take
account. of the equitable considerations referred to above in this paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or action in respect thereof, referred to above in
this paragraph, shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
paragraph, the sellers of such Shares shall not be required to contribute any
amount in excess of the amount, if any, by which the total price at which the
Common Stock sold by each of them was offered to the public exceeds the amount
of any damages which they would have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission. No person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
The indemnification of underwriters provided for in this SECTION 8 shall be
on such other terms and conditions as are at the time customary and reasonably
required by such underwriters. In that event the indemnification of the sellers
of Shares in such underwriting shall at the sellers' request be modified to
conform to such terms and conditions.
17
SECTION 9. INDEMNIFICATION-STOCKHOLDER ACTING AS OFFICER OR DIRECTOR. The
Company shall indemnify and hold harmless each Stockholder, to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law (as
amended), from and against all liabilities, losses, costs, damages and expenses
(including reasonable attorneys' fees and costs) incurred or sustained by them
as a result of their service to the Company, as a director or officer.
SECTION 10. ENDORSEMENT OF STOCK CERTIFICATE. Each certificate evidencing
an ownership interest in the Company, now or hereafter held by any Stockholder
shall be stamped on the face or the back thereof with a legend in substantially
the following form:
"The shares represented by this Certificate were originally issued
on October 25, 1996, and have not been registered under the
Securities Act of 1933, as amended. The transfer of the securities
represented by this Certificate is subject to the conditions
specified in the Stockholders' Agreement, dated as of October 25,
1996, between the issuer (the "Company") and certain of its
stockholders, and the Company reserves the right to refuse
transfer of such securities until such conditions have been
fulfilled with respect to such transfer. A copy of such conditions
will be furnished by the Company to the holder hereof upon written
request and without charge."
SECTION 11. CONFIDENTIALITY. Each of the Stockholders (also referred to
herein as "he", "him" and "his") hereby agrees that he and his Affiliates have
been and will be, by virtue of his ownership of Shares of the Company, given
access to and possession of certain valuable and confidential information, both
verbal and written, which are proprietary to the Company and which information
is sufficiently secret to derive economic value, actual or potential, from not
being generally known to other persons who can obtain economic value from its
disclosure or use and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy or confidentiality (all of such
proprietary and confidential information and business relationships and any
other proprietary and confidential information collectively referred t-o herein
as the "'Confidential Information"). Such Confidential Information specifically
includes, without limitation: lists of actual or potential institutional and
individual clients and customers, methods of operation, information regarding
accounts, personnel files, contracts and agreements, trade secrets and other
information, documents and materials regarding the past, present and future
operations of the Company and its business; PROVIDED, HOWEVER, that Confidential
Information shall not be subject to the restrictions set forth in this Section
to the extent that (Y) it is or becomes available to the public from a source
other than any Stockholder, or (Z) it is required by law to be disclosed by the
Stockholder; PROVIDED, HOWEVER, that the Stockholder shall notify the President
of the Company in writing at least ten (10) days prior to making any such
18
contemplated disclosure of Confidential Information. The Stockholder covenants
and agrees that he will, and will use all reasonable efforts to cause his
Affiliates to, hold in confidence and not use or disclose, directly or
indirectly, to any Person, during the period that the Stockholder owns Shares of
the Company and at all times thereafter, except when and as specifically
authorized by the Company for its benefit, any Confidential Information. The
Stockholder further covenants and agrees that he will, and will use all
reasonable efforts to cause his Affiliates to, deliver to the Company all
tangible forms of such Confidential Information in his possession or control
and, in addition thereto, any and all other information that they may have with
respect to the Company. The Stockholder will not, and will use all reasonable
efforts to cause his Affiliates to not, retain any copies of such Confidential
Information.
SECTION 12. EQUITABLE REMEDIES: DEFAULT. The Stockholders agree that the
covenants contained in SECTIONS 2, 6 AND 11 hereof are vital to the viability of
the Company and each of its respective businesses. In that regard, each
Stockholder agrees that any breach or other action that, in the reasonable
judgment of the Company, constitutes a threatened breach (a "THREATENED BREACH")
of SECTION 2, 6 OR 11 hereof would cause irreparable and immediate harm to the
Company and that money would not be an adequate remedy in the event of any such
breach. By reason of the foregoing, Xxxxx agrees that the Company shall be
entitled to injunctive or other equitable relief in the event of any breach or
Threatened Breach of SECTION 2, 6 OR 11 hereof, and hereby irrevocably waives
any claim or defense that an adequate remedy is available at law and agrees not
to interpose any claim or defense that an adequate remedy at law exists. In
addition, each Stockholder agrees to reimburse the Company for any and all costs
and expenses (including, without limitation, attorneys' fees and costs) incurred
by the Company, as a result of their enforcing the terms and provisions of this
Agreement. Nothing herein shall prevent the Company from electing to seek any
monetary or other relief in addition to or in lieu of any equitable relief for
breach or Threatened Breach of SECTION 2, 6 OR 11 hereof. The failure of the
Company to promptly institute a legal action upon any such breach or Threatened
Breach shall not constitute a waiver of that or any other breach or Threatened
Breach hereof.
In addition to the foregoing, a breach or Threatened Breach of any of the
provisions of SECTION 2, 6 OR 11 hereof by one or more of any Stockholder's
Affiliates shall constitute an event of default by such Stockholder.
SECTION 13. BOARD OF DIRECTORS. The Stockholders hereby agree and
acknowledge that the Stockholders will vote their Shares in the following
manner:
(a) so long as any shares of Series A Preferred or Underlying Common Stock
shall be outstanding, the Company's Board of Directors (the "Board") shall at
all times consist of the following four (4) individuals (or in the event any
such individual is unwilling or unable to so serve, one of their representatives
shall so serve): (1) Xxxxxxx; (2) the Chief Operating Officer of
19
the Company (initially, Xxxxxxxx Xxxx); (3) a representative of CIHL (initially,
Xxxxxx); and (4) Xxxxx; and
(b) Xxxxxxx shall have three (3) votes and each of the other three (3)
Board members shall have one (1) vote each. Therefore, there shall be a total of
six (6) votes on each matter where the Board may vote or otherwise act. In the
event that this SUBSECTION 13(b) is not enforceable, whether pursuant to
applicable law or otherwise, the Stockholders agree to increase the size of the
Board to six (6) members and to elect three (3) representatives chosen by
Xxxxxxx to serve as directors. The parties hereto agree to vote their shares in
such a way that directors selected by Xxxxxxx shall have 50\ of the aggregate
number of votes held by the Board. In the event of a deadlock of the Board, then
to resolve any such issue causing a deadlock, the holders of Common Stock
together with the holders of the Series A Preferred voting on an as converted
basis shall vote on and decide any such matter.
(c) CIHL shall have the right, at its option and at its sole cost and
expense to appoint an observer to attend any and all Board meetings and receive
all materials distributed to the directors at such Board meetings (but such
individual shall not be a member of the Board or have any voting rights).
(d) There shall be an executive committee of the 90ard (the "EXECUTIVE
COMMITTEE") established that shall consist of the following three (3)
individuals: (1) Xxxxxxx; (2) one representative designated by CIHL (initially,
Xxxxxx); and (3) Xxxxx. The Executive Committee shall act on any issues
delegated to it by the Board from time to time. The Executive Committee shall
decide all matters within its purview by majority vote, and each member of the
Executive Committee shall have one vote upon each such matter, subject in all
events to review by the full Board.
(e) A compensation committee of the Board (the "COMPENSATION COMMITTEE")
shall be established when and as the Executive Committee shall determine. When
established, the Compensation Committee shall consist of the following three (3)
individuals: (1) Xxxxxxx; (2) one representative designated by CIHL (initially,
Xxxxxx); and (3) Xxxxx. The Compensation Committee shall act on any issues
delegated to it by the Board from time to time pertaining to compensation of the
Corporation's senior management, including, without limitation, the issuance of
stock options, bonuses, and/or other securities and/or property. The
Compensation Committee shall decide all matters within its purview in the same
manner as the Executive Committee, subject in all events to review by the full
Board.
(f) An audit committee of the Board (the "AUDIT COMMITTEE") shall be
established when and as the Executive Committee shall determine. When
established, the Audit Committee
20
shall consist of the following three (3) individuals: (1) Xxxxxxx; (2) one
representative designated by CIHL (initially, Xxxxxx); and (3) Xxxxx. The Audit
Committee shall act on any issues delegated to it by the Board from time to time
pertaining to the Corporation's accounting practices and financial controls,
selection of independent auditors and related items. The Audit Committee shall
decide all matters within its purview in the same manner as the Executive
Committee, subject in all events to review by the full Board.
SECTION 14. KEY-MAN LIFE INSURANCE. The Company shall increase the amount
of key-man life insurance policy on the life of Xxxxxx X. Xxxxxxx (the "XXXXXXX
LIFE INSURANCE") by the face amount of $1,500,000 from that currently in effect
as of the date hereof. The Xxxxxxx Life Insurance shall be in full force and
effect as of the First Closing. The Xxxxxxx Life Insurance policy shall name the
Company as beneficiary.
SECTION 15. HEADINGS. The headings, titles and subtitles herein are for
convenience of reference only and shall not in any manner affect the
construction or interpretation of any of the provisions hereof.
SECTION 16. PRIOR AGREEMENTS. This Agreement shall supersede all prior
agreements, communications, understandings and negotiations among the parties
hereto, including, without limitation, the Shareholders Agreement, dated as of
January 3, 1994, by and among Golden Care Holdings, L.C., a Florida limited
liability company (and a predecessor of the Company), Xxxxxxx and Xxxxx.
SECTION 17. ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and no representations, promises, agreements or understandings, written
or oral, not contained herein shall be of any force or effect.
SECTION 18. MUTUAL CONTRIBUTION. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted.
SECTION 19. NOTICES. Except as provided otherwise herein, all notices
referred to herein shall be in writing and will be delivered by (i) registered
or certified mail, return receipt requested and postage prepaid, (ii) reputable
overnight courier service, charges prepaid, or (iii) telecopier (and confirmed
by return facsimile) and will be deemed to have been given when so mailed or
sent (i) to the Company, at its principal executive offices and (ii) to the
Stockholders,
21
at each Stockholder's address as it appears in the stock records of the Company
(unless otherwise indicated by such Stockholder).
SECTION 20. TERM. This Agreement shall continue to be in full force and
effect so long as any of the Stockholders or their transferees hold, directly or
indirectly, Shares subject hereto.
SECTION 21. ASSIGNMENT: THIRD PARTY BENEFICIARIES. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns; provided, that Except as specifically provided
herein, neither this Agreement nor the benefits provided herein, shall be
assignable in any respect without the prior written consent of the Company
provided, however, such consent shall not be required in connection with an
assignment of this Agreement to an Affiliate of CIHL. Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
person or entity not party to this Agreement.
SECTION 22. AMENDMENT. Neither this Agreement nor any provisions hereof
shall be waived, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any such waiver, modification,
discharge or termination is sought.
SECTION 23. FURTHER ASSURANCES. Each party hereto agrees to execute any
further documents, agreements or instruments, and to perform any further acts
and deeds, that may be necessary to carry out the terms and provisions of this
Agreement.
SECTION 24. GOVERNING LAW. This Agreement Shall Be Construed, Performed And
Enforced In Accordance With, And Governed By The Internal Laws Of The State Of
Delaware, Without Giving Effect To The Principles Of Conflicts Of Law Thereof.
SECTION 25. VENUE. Any Action Or Proceeding To Enforce Any Provision Of, Or
Based On Any Right Arising Out Of, This Agreement Shall Be Brought Against Any
Of The Parties In State Or Federal Courts Located In Sarasota County, Florida
And Each Of The Parties Hereby Consents To The Non-Exclusive Jurisdiction Of
Such Courts (And Of The Appropriate Appellate Courts) In Any Such Action Or
Proceeding And Waives Any Objection To Venue Laid Therein; PROVIDED, That An
Action To Enforce A Judgment Obtained In Any Such Courts May Be Brought In Any
Appropriate Venue.
22
SECTION 26. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
or invalid under such law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or this Agreement.
SECTION 27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
[Signature Page Follows]
23
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Stockholders Agreement as of the date first written above.
Company:
DENTAL CARE ALLIANCE, INC.
By:______________________________
Title:___________________________
Stockholders:
_________________________________
XXXXXX XXX XXXXX, XX.
_________________________________
24
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Stockholders Agreement as of the date first written above.
Company:
DENTAL CARE ALLIANCE, INC.
By:_____________________________
Title:
Stockholders:
________________________________
XXXXXX XXX XXXXX, XX.
________________________________
XXXXXX X. XXXXXXX
25
Stockholders:
CRESCENT INTERNATIONAL
HOLDINGS LIMITED
By:____________________________
Title: Attorney-In-Fact
________________________________
XXXXXX X. XXXXXX
26
