Exhibit 10.22
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") is entered into this 21st day
of December, 2000, by and among Pediatric Services of America, Inc., a Delaware
corporation (the "Company"), The D3 Family Fund, L.P., a Washington limited
partnership (the "D3 Fund"), Xxxxx Xxxxxxxxxx, and Haredale, Ltd., a Bahamas
corporation (collectively, with the D3 Fund, and Xxxxx Xxxxxxxxxx,
"Purchasers").
WHEREAS, Purchasers are the beneficial owners of 14.9% of the outstanding
common stock of the Company as of December 20, 2000;
WHEREAS, Purchasers have expressed an interest in acquiring in excess of
15% of the outstanding common stock of the Company;
WHEREAS, under the Rights Agreement dated as of September 22, 1998 between
the Company and Chasemellon Shareholder Services, L.P., n/k/a Mellon Investor
Services LLC [sic], (the "Rights Plan"), as amended December 21, 2000 (the
"First Amendment"), such ownership would cause Purchasers to be deemed an
Acquiring Person as defined in the Rights Plan; and
WHEREAS, the Company and Purchasers agreed to enter into this Agreement as
a condition to the Board of Directors of the Company deeming Purchasers a
Special Acquiring Person, as defined in the First Amendment, in the event that
Purchasers, together with their Affiliates and Associates, as hereinafter
defined, acquire 15% or more, but less than 20%, of the outstanding Common Stock
of the Company in one or more transactions;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Standstill Agreement. For a period of two (2) years from the date of
this Agreement, the Purchasers, together with their Affiliates and Associates
shall not, directly or indirectly, alone or in concert with others:
(a) acquire, offer to acquire or agree to acquire, or announce an
intention to acquire or offer to acquire, whether by purchase, tender or
exchange offer, through the acquisition of control of another person, by joining
a partnership, limited partnership, syndicate or other "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act"), and Rule 13d-5
promulgated thereunder or otherwise, or obtain a right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights, warrants or options,
or obtain the right to vote or dispose of or have "Beneficial Ownership" of (as
determined pursuant to Section 1(e) of the Rights Plan), including pursuant to
any agreement, arrangement or understanding, whether or not in writing, or
otherwise, any securities of the Company or any rights to acquire any securities
of the Company or any subsidiary thereof in an amount equal to or greater than
20%;
(b) except with the approval of the Board of Directors of the Company,
seek election to, seek to place a representative on, or seek the removal of any
member of, the Board of the Directors of the Company;
(c) except for a request made solely to the Board of Directors of the
Company, request, or announce its intention to request, the Company (or its
officers, employees or agents) to amend or waive any provision of this
Agreement.
In addition to the foregoing prohibitions, Purchasers acknowledge that they are
bound by the terms of the Rights Plan and the First Amendment. Purchasers shall
not, however, be prohibited from consulting with the Board of Directors of the
Company with respect to business matters normally discussed between shareholders
and the management or board of directors of a publicly-traded company.
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2. Company's Right of First Refusal.
(a) For a period of two (2) years from the date of this Agreement, if
Purchasers desire to offer, sell, assign, pledge, transfer or dispose of
("Transfer") any more than 10,000 of their shares of capital stock of the
Company in any single trading day (the "Offered Shares"), Purchaser shall notify
the Company in writing of the proposed transfer (the "Notice"). The Company
shall have the right to purchase any or all of the Offered Shares at a price
equal to the average closing price of the last five (5) trading days as quoted
on the OTC Bulletin Board (or other regulated quotation service, trading market
or national securities exchange upon which the Company's securities are listed)
on the date of the Notice.
(b) In lieu of or in addition to exercising its right to purchase any
or all of the Offered Shares, the Company shall have the right to direct the
opportunity to purchase any or all of the Offered Shares to one or more
purchasers of the Company's choosing (the "Additional Purchasers") at the price
set forth in Section 2(a) above.
(c) If the Company and/or the Additional Purchasers, or any one or more
thereof, elects to purchase any or all of the Offered Shares, the Company and/or
the Additional Purchasers, as appropriate, shall give notice of acceptance to
the Purchaser within five (5) working days of the Notice, designating who will
purchase the Offered Shares, the number of Offered Shares to be purchased by
each, and a place, date and time for the closing of the sale and purchase of the
Offered Shares, which closing shall occur not more than five (5) working days
after the date the notice of acceptance from the Company and/or the Additional
Purchasers is duly given.
(d) In the event the Company and/or the Additional Purchasers elect not
to exercise their right of first refusal to purchase any or all of the Offered
Shares, Purchasers shall have the right to sell the Offered Shares pursuant to
this Section 2(d). Subject to compliance with all applicable legal restrictions
on such sales, Purchasers may sell in any one day up to an amount of shares
equal to twice the average daily reported volume of trading in the Company's
securities as reported through the automated quotation system of a registered
securities association during the two calendar weeks preceding the date of sale;
provided, however, under this subsection, Purchasers may, in the context of a
negotiated block sale to an arm's length buyer, dispose of the Offered Shares in
a block sale or sales at a price within 10% of the price determined in
accordance with Section 2(a) of this Agreement.
3. Definitions. The following terms will have the following meanings for
purposes of this Agreement:
(a) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(b) "Associate" shall mean:
(i) any corporation or organization, or parent or subsidiary of
such corporation or organization, of which a Person is an officer, director or
partner or is, directly or indirectly, the Beneficial Owner of 10 percent or
more of any class of equity securities;
(ii) any trust or other estate in which a Person has a beneficial
interest of 10 percent or more or as to which such Person serves as trustee or
in a similar fiduciary capacity; and
(iii) any parent, brother or sister (whether by whole of half
blood), ancestor, lineal descendant or spouse of Xxxxx Xxxxxxxxxx, or any such
relative of such spouse, who receive common shares of the Company through the
estate of Xxxxx Xxxxxxxxxx or through the distribution by any Purchaser of
common shares of the Company whose ownership is attributable to Xxxxx
Xxxxxxxxxx.
(c) All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Exchange Act.
4. Notice. Any notices, requests, instructions or other documents required
to be given hereunder shall be in writing, effective when delivered personally
or by overnight delivery through a nationally
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recognized overnight delivery service, or by facsimile (with a confirmatory copy
sent by overnight courier), to each of the parties at the addresses below or at
such other address as the parties may designate in writing.
5. Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by, and interpreted, in accordance with the laws of the State of
Delaware, U.S.A., without giving effect to any conflicts-of-law principles.
6. Entire Agreement; Amendment. This Agreement represents the sole
understanding of the parties with respect to the subject matter contained
herein, superseding all previous written or oral communications,
representations, understandings, arrangements or agreements. No amendment or
modification of this Agreement or waiver of the terms and conditions herein
shall be binding unless approved in writing by the Company.
7. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first above written.
WITNESS: Pediatric Services of America, Inc.
By: /s/ Xxxxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------------- -----------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
Chairman of the Board, President
and Chief Executive Officer
Pediatric Services of America, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
WITNESS: The D3 Family Fund, L.P.
By: /s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
-------------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxxxxxx Xxxxx Xxxxxxxxxx, President
Xxxxxxxxxx Investment Management
Company, Inc.
General Partner of the D3 Family Fund, L.P.
00000 XX 0/xx/ Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
WITNESS: Haredale, Ltd.
By:/s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
-------------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxxxxxx Xxxxx Xxxxxxxxxx
Portfolio Manager
Haredale, Ltd.
X.X. Xxx X-0000
Xxxxxx, Xxx Xxxxxxxxxx
The Bahamas
WITNESS: Xxxxx Xxxxxxxxxx
By: /s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
-------------------------- --------------------------
Name: Xxxxxxxx Xxxxxxxxxx Xxxxx Xxxxxxxxxx, Individually
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