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EXHIBIT (C)(12)
EXECUTION COPY
RIGHT OF FIRST OFFER AGREEMENT
THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made as of
June 14, 1999 by and among Physicians' Specialty Corp., a Delaware corporation
(the "Company"), each of the entities identified as TA Investors in Section 2
below and ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. ("▇▇▇▇▇"). Capitalized terms used but not
otherwise defined herein are defined in Section 2 hereof.
WHEREAS, TA MergerCo, Inc., a Delaware corporation ("MergerCo"), has
been formed for the purpose of merging (the "Merger") with and into the Company
pursuant to the terms, and subject to the conditions, set forth in the Agreement
and Plan of Merger, dated as of the date hereof, by and among MergerCo and the
Company, as amended from time to time (the "Merger Agreement").
WHEREAS, following the Merger, each of the TA Investors and ▇▇▇▇▇ will
be stockholders of the Company.
WHEREAS, each of the parties hereto desire to enter into this Agreement
for the purpose of limiting the manner and terms by which the securities of the
Company held by the TA Investors may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Restrictions on Transfer of Stockholder Shares.
(a) First Offer Rights. At least 20 days prior to any sale,
transfer, assignment, pledge or other disposal (a "Transfer") of all or
substantially all of the Stockholder Shares by the TA Investors (other than a
Transfer pursuant to Section 1(b) below), the TA Investors shall deliver a
written notice (the "Transfer Notice") to ▇▇▇▇▇ of their desire to Transfer
Stockholder Shares of such class, specifying in reasonable detail the number of
shares to be transferred and the terms and conditions of the proposed transfer,
including the proposed price per Stockholder Share of such class. The Transfer
Notice shall constitute an irrevocable offer to sell all, but not less than all,
of the Stockholder Shares subject to such Transfer Notice (the "Offered Shares")
to ▇▇▇▇▇ on the basis described below, at a purchase price equal to the price
contained in the Transfer Notice. ▇▇▇▇▇ may elect to purchase all, but not less
than all, of the Offered Shares, upon the same terms and conditions as those set
forth in the Transfer Notice (the "Right of First Offer"), by delivering a
written notice (the "Acceptance Notice") of such election to the TA Investors
within 20 days after the Transfer Notice has been received by ▇▇▇▇▇. The closing
of the purchase of any
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Offered Shares pursuant to this Section 1(a) shall take place within 60 days
after the date on which the TA Investors receive the Acceptance Notice. If ▇▇▇▇▇
does not elect to purchase all of the Offered Shares, then the TA Investors may
transfer the Offered Shares to any Person for (i) a price no less than the price
specified in the Transfer Notice and (ii) other terms no more favorable to the
transferee(s) thereof than as specified in the Transfer Notice; provided,
however, that such Transfer must be completed within the 120-day period
immediately following the date on which the Transfer Notice has been received by
▇▇▇▇▇. Any Offered Shares not transferred within such 120-day period will be
again subject to the provisions of this Section 1(a) upon subsequent transfer.
(b) Permitted TA Transfers. The restrictions contained in this
Section 1 shall not apply with respect to any Transfer of Stockholder Shares (i)
in a Public Sale, (ii) in a Sale of the Company or a Transfer of Stockholder
Shares that has been approved by the Board of Directors of the Company or (iii)
by any TA Investor to any other TA Investor; provided, that the restrictions
contained in this Section 1 shall continue to be applicable to the Stockholder
Shares after the foregoing Transfer described in clause (iii); and provided,
further, that the transferees of such Stockholder Shares described in clause
(iii) shall agree in writing to be bound by the provisions of this Agreement, to
the extent that they are not already bound, which affect the Stockholder Shares
so transferred. All transferees permitted under Section 1(b)(iii) shall be
deemed a TA Investor for purposes of this Agreement.
(c) Transfers in Violation of Agreement; Termination of
Restrictions. Any transfer or attempted transfer of any Stockholder Shares by
the TA Investors in violation of any provision of this Section 1 shall be void,
and the Company shall not record such transfer on its books or treat any
purported transferee of such Stockholder Shares as the owner of such shares for
any purpose. The restrictions set forth in this Section 1 shall continue with
respect to each Stockholder Share of the TA Investors until the earlier of (i)
the transfer of such Stockholder Share in a Public Sale, (ii) the consummation
of a Sale of the Company that has been approved by the Board of Directors of the
Company, (iii) the consummation of a Qualified Public Offering or (iv) 365 days
from the effective date of the Merger.
2. Definitions.
"Affiliate" of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, where
"control" means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, contract or otherwise, and if such Person is a partnership,
"Affiliate" shall also mean each general partner and limited partner of such
Person. Without limiting the generality of the foregoing, each investment fund
managed by TA Associates, Inc. or any successor thereto shall be deemed to be an
Affiliate of each of the initial holders of the TA Shares.
"Common Stock" means the Company's Common Stock, par value $.001 per
share, and any capital stock of any class of the Company hereafter authorized
which is not limited to a fixed
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sum or percentage of par or stated value in respect to the rights of the holders
thereof to participate in dividends or in the distribution of assets upon any
liquidation, dissolution or winding up of the Company.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means the sale, in an underwritten public offering
registered under the Securities Act, of shares of the Company's Common Stock.
"Public Sale" means any sale of Stockholder Shares to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
adopted under the Securities Act.
"Qualified Public Offering" has the meaning set forth in the Company's
Amended and Restated Charter to be adopted in connection with the Merger.
"Sale of the Company" means (i) any sale, transfer or issuance or series
of sales, transfers and/or issuances of capital stock of the Company by the
Company or any holders thereof which results in any Person or group of Persons
(as the term "group" is used under the Exchange Act of 1934, as amended), other
than Persons who are holders of Stockholder Shares as of immediately after the
Merger, owning capital stock of the Company possessing the voting power (under
ordinary circumstances) to elect a majority of the Board, and (ii) any sale or
transfer of all or substantially all of the assets of the Company and its
Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Stockholder" means any TA Investor.
"Stockholder Shares" means (i) any capital stock of the Company
purchased or otherwise acquired by any Stockholder, (ii) any warrants, options
or other rights to subscribe for or to acquire, directly or indirectly, any
capital stock of the Company, purchased or otherwise acquired by any
Stockholder, whether or not then exercisable or convertible, and (iii) any stock
or other securities which are convertible into or exchangeable for, directly or
indirectly, any capital stock of the Company, purchased or otherwise acquired by
any Stockholder, whether or not then convertible or exchangeable, (iv) any
securities or rights issued or issuable directly or indirectly with respect to
the securities and rights referred to in clauses (i), (ii) and (iii) above by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization.
"TA Investors" means TA/Advent VIII, L.P., TA/Advent Atlantic and
Pacific IV, L.P., TA Investors LLC, and TA Executives Fund, LLC and their
Affiliates.
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"TA Shares" means any capital stock, warrants, options or other rights
which constitute Stockholder Shares hereunder and which were initially issued to
any TA Investor.
3. Miscellaneous Provisions.
(a) Amendment and Waiver. No modification, amendment, or waiver
of any provision of this Agreement will be effective against any party hereto
unless such modification, amendment or waiver is approved in writing by each
party hereto; provided, however, that Section 1 above may be modified, amended
or waived solely by the action of ▇▇▇▇▇ and each of the TA Investors. The
failure of any party to enforce any of the provisions of this Agreement will in
no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.
(b) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(d) Successors and Assigns. Except as expressly otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the TA Investors
and ▇▇▇▇▇ and the respective successors and assigns of each of them.
(e) Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
(f) Remedies. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto may in its sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
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(g) Notices. Any notice provided for in this Agreement shall be
in writing and shall be either (i) personally delivered, (ii) sent by registered
or certified mail (return receipt requested and postage prepaid), (iii) sent by
reputable overnight courier service (charges prepaid), or (iv) sent by
facsimile, in each case, to the Company at the address set forth below and to
any other recipient at the address indicated on the Notices Schedule attached
hereto, or if such recipient is not listed on the Notices Schedule attached
hereto, at the address indicated by the Company's records. Any Person may change
its address for purposes of this Agreement by providing prior notice of such
change to the other parties hereto in accordance with this Section. Notices will
be deemed to have been given hereunder (i) when delivered personally, (ii) three
days after being mailed, (iii) one day after deposit with a reputable overnight
courier service, or (iv) in the cases of notices sent by facsimile, when receipt
is acknowledged. The Company's address and ▇▇▇▇▇'▇ address is:
Physicians Specialty Corp
The Pavilion at Lake ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
President and Chairman
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The TA Investors' address is:
▇/▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, P.C.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(h) Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without giving
effect to any choice of law or other conflict
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of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
(i) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company's chief executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
(j) Construction. Whenever the context requires, each term stated
in either the singular or the plural shall include the singular and the plural,
and pronouns stated in either the masculine, the feminine or the neuter gender
shall include the masculine, feminine and neuter. All references to Sections and
Paragraphs refer to sections and paragraphs of this Agreement. The use of the
word "including" in this Agreement shall be by way of example rather than
limitation.
(k) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this RIGHT OF FIRST
OFFER AGREEMENT on the day and year first above written.
COMPANY:
PHYSICIANS' SPECIALTY CORP.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
President and Chairman
TA INVESTORS:
TA/ADVENT VIII, L.P.
By: TA Associates VIII LLC, its General
Partner
By: TA Associates, Inc., its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
TA/ATLANTIC AND PACIFIC IV, L.P.
By: TA Associates AP Partners IV, L.P.,
its General Partner
By: TA Associates, Inc., its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
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[Right of First Offer Agreement]
TA INVESTORS, LLC
By: TA Associates, Inc., its Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
TA EXECUTIVES FUND, LLC
By: TA Associates, Inc., its Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
INDIVIDUAL:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
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▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.