Exhibit 10.84
CO-SALE AGREEMENT
This CO-SALE AGREEMENT (this "Agreement") is entered into as
of the 31st day of August, 1999 by and among American Physicians Service Group,
Inc. ("APS"), FemPartners, Inc., a Delaware corporation (the "Company") and the
undersigned Preferred Holders (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Company, FemPartners of Central Texas, Inc., a
Delaware corporation ("Merger Sub") and Syntera HealthCare Corporation, a Texas
corporation ("Syntera") are parties to that certain Agreement and Plan of Merger
of even date herewith (the "Merger Agreement"), whereby Syntera was merged into
Merger Sub, and pursuant to which APS received certain shares of Common Stock
(as hereinafter defined) in exchange for all of its respective interest in and
to its shares of Syntera's capital stock (the "Merger");
NOW, THEREFORE, in consideration of the premises and the
mutual promises set forth in this Agreement;
THE PARTIES AGREE AS FOLLOWS:
1. Definitions. For purposes of this Agreement, the following
terms will have the meanings given in this Section 1:
1.1 Common Stock. "Common Stock" shall mean the $0.01
par value per share common stock of the Company.
1.2 Equity Securities. "Equity Securities" shall mean any
securities having voting rights in the election of the Board of Directors of the
Company, or any securities convertible into or exercisable for any shares of the
foregoing, or any agreement or commitment to issue any of the foregoing.
1.3 Preferred Holders. "Preferred Holders" shall mean
the holders of Preferred Stock, or any Equity Securities pursuant to a
conversion, redemption, exchange, or other such transfer of Preferred Stock.
1.4 Preferred Stock. "Preferred Stock" shall mean the par
value $0.01 per share Series A Convertible Preferred Stock of the Company, and
any Equity Securities received upon conversion, redemption, exchange or other
such transfer thereof.
2. Restriction on Transfer of Equity Securities by Preferred Holders.
Except as otherwise provided in this Agreement, each Preferred Holder will not
sell, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of
in any way, all or any part of or any interest in the Equity Securities now or
hereafter owned or held by the Preferred Holder. The Company and each Preferred
Holder agree that any sale, assignment, transfer, pledge, hypothecation or other
encumbrance or disposition of Equity Securities not made in conformance with
this Agreement will be null and void, will not be recorded on the books of the
Company and will not be recognized by the Company.
3. Agreement Among the Preferred Holders and APS.
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3.1 Transfer Notice. If at any time a Preferred Holder or
Preferred Holders propose to transfer Equity Securities to one or more third
parties (the "Selling Preferred Holders") pursuant to an understanding with such
third parties (a "Transfer"), then the Selling Preferred Holders shall give the
Company and APS written notice of the Selling Preferred Holders' intention to
make the Transfer (the "Transfer Notice"), which Transfer Notice shall include
(i) a description of the Equity Securities to be transferred ("Offered Shares"),
(ii) the identity of the prospective transferee(s) and (iii) the consideration
and the material terms and conditions upon which the proposed Transfer is to be
made. The Transfer Notice shall certify that the Selling Preferred Holders have
received a bona fide offer from the prospective transferee(s) and in good faith
believes a binding agreement for the Transfer is obtainable on the terms set
forth in the Transfer Notice. The Transfer Notice shall also include a copy of
any written proposal, term sheet or letter of intent or other agreement relating
to the proposed Transfer, and shall state that APS has ten (10) business days
following its receipt of the Transfer Notice within which to notify the Selling
Preferred Holders of any exercise of APS's rights under this Agreement.
3.2 Right of Co-Sale.
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(a) APS, upon notifying in writing the Selling
Preferred Holders identified in the Transfer Notice within ten (10) business
days after receipt of the Transfer Notice, shall have the right to participate
in such sale of Equity Securities on the same terms and conditions as specified
in the Transfer Notice. APS's notice to the Selling Preferred Holders shall
indicate the number of shares of Equity Securities that APS wishes to sell
(subject to subsection (b) below) under its right to participate. To the extent
APS exercises its right of participation in accordance with the terms and
conditions set forth below, the number of shares of Equity Securities that the
Selling Preferred Holders may sell in the Transfer shall be correspondingly
reduced.
(b) APS may sell all or any part of that number
of shares of Equity Securities equal to the product obtained by multiplying (i)
the aggregate number of shares of Equity Securities covered by the Transfer
Notice by (ii) a fraction, the numerator of which is the number of shares of
Common Stock owned by APS on the date of the Transfer Notice and the denominator
of which is the total number of shares of Common Stock (including shares of
Common Stock issuable upon conversion of Preferred Stock) owned by the Selling
Preferred Holders and APS on the date of the Transfer Notice.
(c) APS shall effect its participation in the
sale by promptly delivering to the Selling Preferred Holders for transfer to the
prospective purchaser one or more certificates, properly endorsed for transfer,
which represent the Common Stock which APS elects to sell.
(d) The stock certificate or certificates
that APS delivers to the Selling Preferred Holders pursuant to Section 3.2(c)
shall be transferred to the prospective purchaser upon the consummation of the
sale of the Equity Securities pursuant to the terms and conditions specified in
the Transfer Notice, and the Selling Preferred Holders shall concurrently
therewith cause to be remitted to APS that portion of the sale proceeds to which
APS is entitled by reason of its participation in such sale. To the extent that
any prospective purchaser prohibits such assignment or otherwise refuses to
purchase shares or other securities from APS, the Selling Preferred Holders
shall not sell to such prospective purchaser any Equity Securities unless and
until, simultaneously with such sale, the Selling Preferred Holders shall
purchase such shares or other securities from APS for the same consideration and
on the same terms and conditions as the proposed transfer described in the
Transfer Notice.
3.3 Non-Exercise of Rights. To the extent that APS has not
exercised its rights to participate in the sale of the Offered Shares within the
time periods specified in Section 3.2, the Selling Preferred Holders shall have
a period of thirty (30) business days from the expiration of such rights in
which to sell the Offered Shares upon terms and conditions (including the
purchase price) no more favorable than those specified in the Transfer Notice to
the third-party transferee(s) identified in the Transfer Notice. The third-party
transferee(s) shall acquire the Offered Shares free and clear of subsequent
co-sale rights under this Agreement. In the event the Selling Preferred Holders
do not consummate the sale or disposition of the Offered Shares within the
thirty (30) business day period from the expiration of these rights, the co-sale
rights shall continue to be applicable to any subsequent disposition of the
Offered Shares by the Selling Preferred Holders until such right lapses in
accordance with the terms of this Agreement. Furthermore, the exercise or
non-exercise of APS's rights under this Section 3 to participate in sales of
Equity Securities by the Selling Preferred Holders shall not adversely affect
APS's rights to subsequently participate in sales of Equity Securities by a
Preferred Holder.
3.4 Limitations to Co-Sale Rights. Notwithstanding the
provisions of Sections 3.1 and 3.2 of this Agreement, a Preferred Holder may
sell or otherwise assign, with or without consideration, Equity Securities to
(i) any person or entity controlling, controlled by or under common control with
the Preferred Holder or (ii) partners, members or stockholders of such Preferred
Holder (in each case, except where such person(s) were admitted as, or became,
partners, members or stockholders for the primary purpose of effecting a
transfer of Equity Securities exempt under this Section 3.4), or in the case of
individuals, to members of such Preferred Holder's immediate family or a trust
for the benefit of such immediate family members; provided that each such
transferee or assignee, prior to the completion of the sale, transfer, or
assignment shall have executed documents assuming the obligations of the
Preferred Holder under this Agreement with respect to the transferred
securities. The Preferred Holders acknowledge and agree that the co-sale rights
granted in Sections 3.1 and 3.2 of this Agreement apply to any sale of Equity
Securities by any Preferred Holder pursuant to Section 2.6 of that certain
Investors Rights Agreement, dated as of October 31, 1997, among the Company and
the other parties thereto, unless APS is the party that triggered the Preferred
Holders' rights to sale Equity Securities under Section 2.6 of the Investors
Rights Agreement. This Agreement shall not apply, however, to any transaction
described in Section 8 hereof.
3.5 Prohibited Transfers.
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(a) In the event a Preferred Holder should
sell any Equity Securities in contravention of the co-sale rights of APS under
Section 3.2 (a "Prohibited Transfer"), APS, in addition to such other remedies
as may be available at law, in equity or hereunder, shall have the put option
provided below, and the Preferred Holder shall be bound by the applicable
provisions of such option.
(b) In the event of a Prohibited Transfer, APS
shall have the right to sell to the Preferred Holder the number of shares of
Common Stock equal to the number of shares APS would have been entitled to
transfer to the third-party transferee(s) under Section 3.2 hereof had the
Prohibited Transfer been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the shares
are to be sold to a Preferred Holder under this subsection (b) shall be equal to
the effective price per share of Common Stock (on an as converted basis) paid by
the third-party transferee(s) to the Preferred Holder in the Prohibited
Transfer. The Preferred Holder shall also reimburse APS for any and all fees and
expense, including legal fees and expenses, incurred pursuant to the exercise or
the attempted exercise of APS's rights under Section 3.
(ii) Within ninety (90) days after the
later of the dates on which APS (A) received notice of the Prohibited Transfer
or (B) otherwise became aware of the Prohibited Transfer, APS shall, if
exercising the option created hereby, deliver to the Preferred Holder the
certificate or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer.
(iii) The Preferred Holder shall, upon
receipt of the certificate or certificates for the shares to be sold by APS,
pursuant to this subsection (b), pay the aggregate purchase price therefor and
the amount of reimbursable fees and expenses, as specified in subsection (b)(i)
above, in cash or by other means acceptable to APS.
(iv) Unless and until the Preferred Holder
has fully satisfied its payment and other obligations under this Section3.5(b),
(A) any attempt by a Preferred Holder to transfer Equity Securities in violation
of Section 3 hereof shall be void, and (B) the Company agrees it will not effect
such a transfer nor will it treat any alleged transferee(s) as the holder of
such shares without the written consent of APS.
4. Assignments and Transfers; No Third Party Beneficiaries.
This Agreement and the rights and obligations of the parties hereunder shall
inure to the benefit of, and be binding upon, their respective successors,
assigns and legal representatives, but shall not otherwise be for the benefit of
any third party.
5. Legend. Each existing or replacement certificate for shares
now owned or hereafter acquired by the Preferred Holder shall bear the following
legend upon its face:
"THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE TERMS AND CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND AMERICAN
PHYSICIANS SERVICE GROUP, INC. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
6. Notices. Any notice required or permitted by any provision of this
Agreement shall be given in writing and shall be delivered by facsimile,
personally or by courier, or by registered or certified mail, postage prepaid,
addressed (i) in the case of a Preferred Holder to the Preferred Holder's
address as set forth in the signature pages hereto or such other address as the
Preferred Holder may designate in writing from time to time, (ii) in the case of
the Company, to its principal office, (iii) in the case of APS, to APS's address
as set forth in the signature pages hereto or such other address as shall be
designated in writing from time to time by APS; and, (iv) in the case of any
permitted transferee of a party to this Agreement or its transferee, to such
transferee at its address as designated in writing by such transferee to the
Company from time to time. Notices that are mailed shall be deemed received five
(5) days after deposit in the United States mail. Notices sent by courier or
overnight delivery shall be deemed received two (2) days after they have been so
sent. Notices sent by facsimile shall be deemed received only upon receipt
mechanically confirmed by the sender's facsimile machine.
7. Further Instruments and Actions. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement. Each Preferred Holder
agrees to cooperate affirmatively with the Company and APS, to the extent
reasonably requested by the Company or APS, to enforce rights and obligations
pursuant hereto.
8. Term. This Agreement shall terminate immediately prior to the
earlier of (i) the closing of a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of the Company's Common Stock at a
price per share of not less than $7.00 (as adjusted for stock splits, reverse
stock splits and the like effected after the date of this Agreement) and an
aggregate offering price to the Company of not less than $20,000,000, or any
other underwritten public offering in which the holders of 75% of the
outstanding shares of Preferred Stock elect to cause the automatic conversion of
all the outstanding shares of Preferred Stock, and (ii) the closing of the
Company's sale of all or substantially all of its assets or the acquisition of
the Company by another entity by means of merger, consolidation or other
transaction or series of related transactions resulting in the exchange of the
outstanding shares of the Company's capital stock such that the stockholders of
the Company prior to any such transaction referred to in this clause (ii) own,
directly or indirectly, less than two-thirds of the voting power of the
surviving entity.
9. Entire Agreement. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof, supersedes all
other agreements between or among any of the parties with respect to the subject
matter hereof and cannot be altered or otherwise amended except pursuant to an
instrument in writing signed by each of the parties to this Agreement. This
Agreement shall be interpreted under the laws of the State of Texas.
10. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company, the written consent of each affected
Preferred Holder and the written consent of APS. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each Preferred
Holder and APS and their respective successors and assigns.
11. Separability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
12. Attorney's Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO
CO-SALE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
COMPANY: FEMPARTNERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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President and Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
APS: AMERICAN PHYSICIANS SERVICE GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
PREFERRED HOLDER:
By: /s/ Other Parties Named Therein
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