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EXHIBIT 10.21
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT made this 12th day of February, 1997
effective as of October 7, 1996 (the "Effective Date"), by and among XXXXX
XXXXXX, M.D., ("Xxxxxx"), XXXXXXX X. XXXXXX, M.D. ("Xxxxxx"), PINNACLE EYE CARE,
INC., a Georgia corporation ("Pinnacle Eye Care") which Pinnacle Eye Care is
affiliated with Xxxxxx and Xxxxxx (collectively, with Xxxxxx and Xxxxxx, the
"Pinnacle Group"), XXXXX X. XXXXX, M.D., ("Xxxxx"), ATLANTA EAR, NOSE & THROAT
ASSOCIATES, P.C. ("Atlanta ENT"), XXXXX X. XXXXX, M.D. ("Xxxxx"), OTOLARYNGOLOGY
OF MEMPHIS, P.C. ("Otolaryngology of Memphis" and, together with Xxxxx, the
"Memphis Group"), XXXXXX X. XXXXXXXX ("Xxxxxxxx"), PREMIER HEALTHCARE
("Premier") and PHYSICIANS' SPECIALTY CORP. (the "Company") (each a "Party" and
all collectively hereafter referred to as the "Parties").
W I T N E S S E T H :
WHEREAS, the Parties hereto (other than the Company) entered into an
agreement dated June 26, 1996, as amended by the Addendum to such agreement (the
"Formation Agreement") in connection with the proposed formation of the Company
(and the Parties agree that the reference in the Formation Agreement to "various
professional corporations affiliated with Xxxxxx and Xxxxxx" refers to Pinnacle
Eye Care); and
WHEREAS, the Parties hereto desire to amend or terminate the Formation
Agreement, as set forth below;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Termination of Parties to the Formation Agreement. Effective as of
the Effective Date, the Formation Agreement shall terminate with respect to the
Pinnacle Group and the Memphis Group (the "Terminating Parties") and, except as
specifically set forth herein, neither the Pinnacle Group nor the Memphis Group
shall have any further rights or obligations under the Formation Agreement. The
Parties hereto understand that Tritt, Atlanta ENT, Xxxxxxxx, Premier and the
Company (the "Non-Terminating Parties") shall remain as parties to the Formation
Agreement which, except as specifically set forth herein, shall remain in full
force and effect with respect to the Non-Terminating Parties, subject to such
further changes or amendments thereto as the Non-Terminating Parties may agree
to.
2. Resignations from Boards of Directors. Each of Xxxxxx and Xxxxx
hereby confirm their resignations from the Board of Directors of each of the
Company, PSC Management Corp. and PSC Acquisition Corp. effective as of August
1, 1996.
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3. Payment of Outstanding Loans. The promissory notes issued by the
Company on July 22, 1996 in connection with loans made to the Company by Atlanta
ENT, the Memphis Group, the Pinnacle Group, Xxxxx and Xxxxxxxx in the aggregate
principal amount of $485,000 (the "Original Principal") shall remain in full
force and effect provided, however, that the promissory notes issued to the
Pinnacle Group and to the Memphis Group (collectively, the "Note(s)") are hereby
amended and subject to the following provisions:
(a) Of the Remaining Funds (as defined in subparagraph (b)
below), the amounts corresponding to the percentages set forth below opposite
the respective Holder of the Notes shall be paid by the Company upon execution
of this Termination Agreement as a pre-payment of a portion of the principal
amount of such Note, by certified check:
Percentage of Amount of
Holder Remaining Funds Prepayment
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Pinnacle Group 31.92% $48,459.77
Memphis Group 19.11% $29,012.10
(b) Remaining Funds shall mean $151,816.31, which equals the
Original Principal less all expenses incurred by the Company, including accrued
but unpaid expenses, through October 7, 1996 in connection with the organization
of the Company, a proposed initial public offering of Company securities
("IPO"), and related matters.
(c) The outstanding principal amount of the Notes, after
giving effect to the pre-payments made pursuant to sub paragraph (a) above,
together with accrued interest, shall be payable pursuant to the terms of the
Notes (with the term "IPO" contained in the Notes to be defined herein).
(d) Contemporaneously with the closing of an IPO, the Company
shall reimburse the Pinnacle Group and the Memphis Group for out-of-pocket
travel expenses incurred by them in connection with the proposed IPO in the
maximum amount of $5,000 for the Pinnacle Group and in the maximum amount of
$5,000 for the Memphis Group upon submission of appropriate invoices and
evidences of payment.
(e) The Company shall provide representatives of the Memphis
Group and the Pinnacle Group, upon reasonable notice and at the expense of the
Pinnacle Group and the Memphis Group, with access to such financial and
accounting information of the Company as is necessary to verify the amount of
Remaining Funds, subject to confidentiality restrictions.
4. Access to Financial Information The Company hereby authorizes Xxxxxx
Xxxxxxxx & Co. to release to the Pinnacle Group and to the Memphis Group,
respectively, copies of the draft financial statements, to the extent completed,
of the respective entity that were prepared in contemplation of an IPO and the
work papers relating to such financial statements.
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5. Release. Each Party hereby releases and forever discharges
each other Party and each of his/its agents, successors, owners, assigns,
employees, officers, affiliates, subsidiaries, parent entities, and any entity
or person which directly or indirectly controls, is controlled by, or is under
common control with it, from any actions, causes of action, suits, liabilities,
claims, demands, damages or causes of any kind or nature whatsoever, in
connection with any thing or matter from the beginning of time through the date
hereof, whether presently existing or arising in the future, whether known or
unknown, including but not limited to those which arise out of the Formation
Agreement, except to the extent of any obligation specifically incurred under
this Termination Agreement or the Notes. Each releasing Party shall indemnify
and hold each other Party harmless from any and all loss, cost or liability
resulting from the assertion of the released claims by, through or under the
releasing Party or any party affiliated with the releasing Party.
6. Miscellaneous.
(a) This Termination Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Georgia without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Georgia or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Georgia.
(b) Each of the parties submits to the jurisdiction of any
state or federal court sitting in Atlanta, Georgia, in any action or proceeding
arising out of or relating to this Termination Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party with respect
thereto. Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.
(c) Each of the Pinnacle Group and the Memphis Group
understands that, although the Company has a letter of intent from an investment
banking firm and is preparing a registration statement intended to be filed with
the Securities and Exchange Commission relating to an IPO, none of the other
Parties hereto makes any representation that any IPO will ever occur, or as to
the size or valuation of any such IPO.
(d) This Termination Agreement shall be binding upon and inure
to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Termination Agreement sets forth
the entire agreement and understanding among the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them, except as specifically set
forth herein.
(e) This Termination Agreement may be executed in
counterparts. Upon the execution and delivery of this Termination Agreement by
any Party and payment to such Party of the amounts set forth in Subparagraph
3(a) hereof, this Agreement shall become a binding
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obligation of such Party with respect to such Party's rights and obligations as
herein provided; subject, however, to the right hereby reserved to the Company
to enter into this Termination Agreement with other Parties hereto.
(f) The Company, Tritt, Atlanta ENT, Xxxxxxxx and Premier
agree that if on or before December 31, 1997 (the "Completion Date"), the IPO is
not completed but the Company or Atlanta ENT (or an affiliate thereof) (referred
to in this sub-paragraph (f) as collectively, a "Company Successor"), completes
a public offering, private financing or other sale of securities, or obtains a
loan, in which it receives net cash proceeds or other non-cash consideration
from third parties of at least $250,000 (a "Third Party Financing") or receives
aggregate net cash proceeds or other non-cash consideration from a series of
Third Party Financings of at least $250,000, then contemporaneously with the
receipt by the Company Successor of such proceeds or non-cash consideration of
the Third Party Financing, and notwithstanding anything contained in the Notes
or in this Agreement (other then the provisions of this Section (f)) to the
contrary, the Company Successor shall pay to the Pinnacle Group and the Memphis
Group the outstanding principal amount, together with accrued interest, of their
respective Notes (after giving effect to any pre-payments received by the
Pinnacle Group or the Memphis Group, as applicable), in accordance with the
terms of the Notes, and any amounts owed under Section 3(d) of this Agreement,
provided that:
(i) in the event a Company Successor obtains
non-cash consideration in connection with a Third Party Financing on or before
the Completion Date, payment under this Section (f) of the Notes and any amounts
owed under Section 3(d) of this Agreement may be deferred, to the extent that
the net cash proceeds received are less than the amount necessary to pay such
obligations, until such time as the Company Successor is able (giving effect to
legal and contractual restrictions on resale) to sell such portion of such
non-cash consideration as is necessary to result in net cash proceeds sufficient
to pay such obligations;
(ii) notwithstanding the foregoing, a Third Party
Financing shall not include (x) any sale of the assets or stock of Atlanta ENT
to a third party which is engaged in the physician practice management business;
(y) any financing obtained by Atlanta ENT in the ordinary course of business,
such as receivables, equipment or similar financing; or (z) any personal loan or
loan secured by real or personal property of any Company Successor who is an
individual; and
(iii) unless and until the amounts payable under the
Notes and Section 3(d) of this Agreement have been paid, nothing contained in
this Section (f) shall relieve the Company from its obligations under the Notes
and said Section 3(d).
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IN WITNESS WHEREOF, the Parties hereto have executed this Termination
Agreement as of the day and year first above written.
THE PINNACLE GROUP
/s/ Xxxxx Xxxxxx, M.D. By: /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX, M.D., individually XXXXX XXXXXX, Authorized Officer
Pinnacle Eye Care
/s/ Xxxxxxx X. Xxxxxx, M.D. By: /s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX, M.D., individually XXXXXXX X. XXXXXX, Authorized Officer
Pinnacle Eye Care
ATLANTA EAR, NOSE & THROAT
ASSOCIATES, P.C.
/s/ Xxxxx X. Xxxxx, M.D. By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX, M.D., individually XXXXX X. XXXXX, Authorized Officer
THE MEMPHIS GROUP
/s/ Xxxxx X. Xxxxx, M.D. By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX, M.D., individually XXXXX X. XXXXX, President,
Otolaryngology of Memphis, P.C.
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PREMIER HEALTHCARE
a Division of XXXX, XXXXXXXX & CO.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX, individually XXXXXX X. XXXXXXXX, President
PHYSICIANS' SPECIALTY CORP.
By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX, President
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