EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT, dated as of August 30, 1996, among
PHYSICIAN SUPPORT SYSTEMS, INC., a Delaware corporation (the "Company"), Eltman
Eltman & Cooper, P.C. ("Cooper, P.C."), each of the shareholders of EE&C
Financial Services, Inc., a New York corporation ("EEC"), listed on the
signature pages hereof (together with Cooper, P.C., collectively, the
"Stockholders"), and PETER D. COOPER, as representative of the Stockholders (the
"Representative").
Introduction
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Pursuant to an Agreement and Plan of Merger, dated as of August 30,
1996 (the "Merger Agreement"), among the Company, PSS EE&C Financial Services,
Inc., a Delaware corporation ("Merger Subsidiary") and a wholly owned subsidiary
of the Company, and EEC, certain Stockholders have the right to receive shares
of common stock, par value $.001 per share (the "Common Stock"), of the Company
upon the effective time of the merger (the "Merger") of Merger Subsidiary with
and into EEC.
Pursuant to letter agreements between each of Elaine Scialo ("Scialo")
and Cooper P.C. and the Company (the "Letter Agreements"), each of Scialo and
Cooper P.C. are surrendering certain notes in exchange for shares of Common
Stock.
As a condition to the Merger and the execution of the Letter
Agreements, the Company must enter into this Agreement.
The parties hereto agree as follows:
1. Definitions. As used herein, the following terms have the
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following respective meanings:
Commission means the Securities and Exchange Commission, or any other
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federal agency at the time administering the Securities Act.
Distribution Period means, (a) in the case of a distribution of
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Registrable Shares in a firm commitment underwritten public offering, the period
of time as each underwriter has completed the distribution of all securities
purchased by it, but in any case not more than 30 days, and (b) in the case of
any other registration of Registrable Shares, the period ending on the earlier
of (i) the sale of all Registrable Shares covered by such registration and (ii)
21 days or, in the case of a registration pursuant to Section 3(b), 45 days
following the effective date of the registration statement utilized in
connection with such registration under the Securities Act; provided that, for
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the purpose of calculating the minimum number of days that the registration
statement must remain effective pursuant to clause (ii) above, any day that a
Stockholder is prohibited pursuant to Section 4(e) from selling Registrable
Shares shall not be counted.
Effective Time means the time at which the Merger becomes effective as
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set forth in the Merger Agreement.
Pooling Period means the period beginning at the Effective Time of the
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Merger and continuing until such time as financial results covering at least 30
days of combined operations of
the Company and EEC shall have been published by the Company within the meaning
of Section 201.01 of the Commission's Codification of Financial Reporting
Policies.
Registrable Shares means the shares of Common Stock issued to certain
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Stockholders pursuant to the Merger Agreement and to Scialo and Cooper P.C.
pursuant to the Letter Agreements (including any additional shares issued as a
stock dividend thereon or any shares issued as the result of a stock split
(including reverse stock split), recapitalization, reorganization, stock
exchange or other combination), which bear the legend set forth in Section 10.
Representative means Peter D. Cooper, or such other person notified in
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writing to the Company by holders of a majority of the Registrable Shares, in
such person's capacity as representative of the Stockholders.
Securities Act means the Securities Act of 1933, as amended.
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2. Incidental Registration. (a) If at any time after the Pooling
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Period, the Company proposes to register any Common Stock under the Securities
Act (other than on Forms S-4, S-8 or any other form which does not permit
registration of securities by selling stockholders for sale to the public for
cash) in connection with the proposed offer and sale for cash either for its own
account or on behalf of any holder of Common Stock it will give written notice
to the Stockholders of its intention to do so. Upon a Stockholder's written
request to the Company, given within 10 business days after receipt of any such
notice, to register any of such Stockholder's Registrable Shares, the Company
will use its reasonable best efforts to cause the Registrable Shares as to which
registration shall have been so requested to be included in the shares of Common
Stock to be covered by the registration statement proposed to be filed by the
Company; provided that nothing set forth in this Agreement shall prevent the
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Company from, at any time, withdrawing, abandoning or delaying any registration
of such Common Stock.
(b) The Company shall have the sole right to select the managing
underwriter or underwriters. The managing underwriter for such offering shall
have the authority, in its sole discretion, to reduce the number of Registrable
Shares to be included in such registration if and to the extent that it
determines that inclusion of such Registrable Shares would adversely effect the
marketing of the other Common Stock to be sold thereunder. Any such reduction
in the shares included in any such offering shall be effected (i) first, by
excluding shares ("Piggyback Shares") of Common Stock that otherwise would be
included by virtue of incidental or piggyback registration rights (but not
demand registration rights) granted to stockholders (including the
Stockholders), which exclusion shall be effected on a pro rata basis based upon
the number of shares of Common Stock so requested to be registered in such
offering by all such stockholders proposing to sell Piggyback Shares and (ii)
second, only to the extent necessary and after the exclusion of all Piggyback
Shares, by excluding shares of Common Stock included in such registration by the
Company and any stockholder of the Company who shall have exercised a demand
registration right in connection with such offering, which exclusion shall be
effected on a pro rata basis based upon the number of shares of Common Stock
proposed to be registered on behalf of the Company and on behalf of any such
holder of demand registration rights.
(c) (i) If at any time after the Pooling Period any of the following
persons: (A) Peter W. Gilson ("PG"), (B) Hamilton F. Potter III ("HP"), (C) any
member of PG's or HP's immediate family, (D) any partnership, trust or other
entity whose beneficiaries or beneficial owners are comprised of PG, HP and/or
their immediate family members, and/or (E) any affiliate of PG or HP (other than
PSS) (collectively, the "Affiliated Persons"), causes PSS to register any shares
of Common Stock under the Securities Act (other than on Forms S-4, S-8 or any
other form which does not permit registration of securities by selling
stockholders for sale to the public for cash) in connection with the proposed
offer and sale for cash for such person's own account, the Company
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will give written notice to the Stockholders of such intended registration. Upon
a Stockholder's written request to the Company to register up to the Pro Rata
Portion (defined below) of any of such Stockholder's Registrable Shares, given
within 10 business days after receipt of any such notice, the Company will use
its reasonable best efforts to cause the Registrable Shares as to which
registration shall have been so requested to be included in the shares of Common
Stock to be covered by such registration statement; provided that nothing shall
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prevent the Company from, at any time, withdrawing, abandoning or delaying any
such registration, so long as the registration of the Affiliate Persons' shares
of Common Stock is similarly affected.
(ii) For the purposes of this Agreement, the term "Pro Rata Portion"
shall mean that portion of a Stockholder's Registrable Shares which shall be
equal to the product of (A) the total number of such Stockholder's Registrable
Shares and (B) the greatest of the individual quotients obtained in each case by
dividing (x) the number of shares of Common Stock proposed to be registered by
each Affiliate Person by (y) the total number of shares of Common Stock held by
such Affiliated Person.
(iii) In the event of an underwritten offering of shares referred to
in this Section 2(c), the managing underwriter for such offering shall have the
authority to reduce the number of shares of Common Stock to be included in such
registration if and to the extent that it determines that inclusion of all of
such shares would adversely affect the marketing of the shares to be sold
thereunder; provided, that any such reduction in the shares of Common Stock
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included in any such offering shall be effected on a pro rata basis based upon
the aggregate number of shares of Common Stock to be registered in such offering
by all such stockholders (including the Affiliated Persons and the Stockholders)
proposing to sell shares of Common Stock.
(d) If any registration pursuant to this Section 2 shall be
underwritten, in whole or in part, the Company or the managing underwriter or
underwriters may require that the Registrable Shares requested for inclusion
pursuant to this Section 2 be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters.
3. Demand Registration. (a) At any time after the Pooling Period,
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the Representative may request that the Company register any or all of the
Registrable Shares under the Securities Act for public sale (the "Demand
Rights"); provided that (i) the greater of at least 65% or 153,000 of the
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Registrable Shares are included in such registration, (ii) not more than 15% of
the Registrable Shares may be registered pursuant to an underwritten public
offering before August 31, 1997, (iii) not more than three Demand Rights may be
requested in the aggregate and (iv) not more than one Demand Right may be
exercised in any 9-month period. To request a Demand Right, Stockholders
wishing to include in a Demand Right a number of Registrable Shares at least
equal to the minimum number of Registrable Shares required to be included
therein shall notify the Representative of their desire to so request a Demand
Right. The Representative shall then request a Demand Right by giving the
Company written notice thereof. Prior to giving such notice to the Company, the
Representative shall provide reasonable notice to the other Stockholders of his
intention to so request a Demand Right and provide each such Stockholder with a
reasonable opportunity to sell Registrable Shares in connection with such
registration.
(b) The Stockholders exercising their Demand Rights shall have the
right, in their sole discretion, to register such Registrable Shares pursuant to
an underwritten offering or a non-underwritten offering. If such a registration
is to be pursuant to an underwritten offering, the Company shall have the right,
in its sole discretion and to the exclusion of any holder of Registrable Shares,
to select a managing underwriter or underwriters in connection with such
registration statement filed pursuant to this Section 3 and shall have the right
to include any additional shares of Common Stock in a registration statement
filed pursuant to this Section 3. The managing underwriter for such offering
shall have the authority, in its sole discretion, to reduce the number of
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shares of Common Stock to be included in a registration pursuant to this Section
3 if and to the extent that it determines that inclusion of all of such shares
of Common Stock would adversely effect the marketing of the other shares of
Common Stock to be sold thereunder. Any such reduction in the shares included in
any such offering shall be effected (i) first, by excluding Piggyback Shares,
which exclusion shall be effected on a pro rata basis based upon the number of
shares of Common Stock so requested to be registered in such offering by all
such stockholders proposing to sell Piggyback Shares, (ii) second, only to the
extent necessary and after the exclusion of all Piggyback Shares, by excluding
shares of Common Stock included in such registration by the Company and (iii)
third, only to the extent necessary and after the exclusion of all Piggyback
Shares and shares of Common Stock to be included in the Offering, by excluding
shares of Common Stock of any Stockholder who shall have exercised a Demand
Right in connection with such offering, which exclusion shall be effected on a
pro rata basis based upon the number of shares of Common Stock proposed to be
registered on behalf of any such Stockholder.
(c) Notwithstanding anything to the contrary set forth in this
Section 3, the Stockholders may on one occasion rescind a request for a Demand
Right and such rescinded request shall not be considered a request for a Demand
Right for purposes of Section 3(a), provided that: (i) a written rescission
notice signed by all of the Stockholders that had requested that Registrable
Shares be included in such Demand Right (a "Rescission Notice") shall be
received by the Company prior to the Company's filing a registration statement
relating to such Demand Right, (ii) the Company shall not have incurred
documented out-of-pocket expenses in excess of $100,000 in connection with
fulfilling its obligations hereunder relating to such Demand Right and (iii) the
Stockholders may not request another Demand Right within three months after
rescinding a Demand Right pursuant to this Section 3(c).
4. Preparation and Filing. If and whenever the Company is under an
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obligation pursuant to the provisions of Section 2 or 3 to effect the
registration of any Registrable Shares, the Company shall, as expeditiously as
practicable:
(a) prepare and diligently pursue the filing with the Commission of a
registration statement with respect to such securities and use its reasonable
efforts to cause such registration statement to become and remain effective for
the Distribution Period, but no longer;
(b) prepare and file with the Commission such amendments and
supplements to such registration statements and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for the Distribution Period, but no longer;
(c) furnish to the holders of Registrable Shares included in such
registration statement such number of copies of a summary prospectus or other
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such holders of
Registrable Shares may reasonably request in order to facilitate the public sale
or other disposition of such Registrable Shares;
(d) use its reasonable efforts to register or qualify the Registrable
Shares covered by such registration statement under the securities or "blue sky"
laws of such states as each holder of such Registrable Shares shall reasonably
request (provided, that the Company shall not be required to consent to general
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service of process for all purposes in any jurisdiction where it is not then
qualified) and do any and all other acts or things which may be necessary or
advisable to enable such seller to consummate the public sale or other
disposition in such jurisdictions of such securities;
(e) notify each Stockholder selling Registrable Shares covered by such
registration statement, at any time during the Distribution Period when a
prospectus relating thereto covered by such registration statement is required
to be delivered under the Securities Act, of the happening of
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any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing and at the request of such Stockholder, prepare and furnish to
such Stockholder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; and
(f) use its reasonable efforts to furnish, at the request of any
Stockholder requesting registration of Registrable Shares pursuant to Section 2
or 3 on the date that such Registrable Shares are delivered to the underwriters
for sale in connection with a registration pursuant to Section 2 or 3, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, stating that such registration statement has become effective
under the Securities Act and that (A) to the best of such counsel's knowledge,
no stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the registration statement, the related
prospectus, and each amendment or supplement thereof, comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except no opinion or
statement is required regarding financial statements and other financial and
statistical data) and (C) to such other effects as may reasonably be requested
by counsel for the underwriters, if any, and (ii) a letter dated such date, from
the independent certified public accountants of the Company, stating that they
are independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included or incorporated by reference in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters with
respect to the registration in respect of which such letter is being given as
such underwriters, if any, may reasonably request.
(g) Notwithstanding anything to the contrary contained herein, the
Company shall have the right to deregister any Registrable Shares that remain
unsold at the conclusion of any Distribution Period.
5. Stockholders' Lock-Up; Cooperation. If any Registrable Shares of
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a Stockholder are included in an underwritten registration pursuant to Section 2
or 3 each Stockholder, as a condition to receiving the rights granted hereunder,
may be required to, and if required such Stockholder shall, enter into an
agreement (a "Lock-up Agreement"), pursuant to which such Stockholder shall
refrain from selling any Registrable Shares not included in such registration
during the period of distribution of Common Stock by such underwriters and for a
period of up to 180 days following the effective date of such registration. In
connection with each registration pursuant to Section 2 or 3 hereof, the
Stockholders selling Registrable Shares shall furnish in writing to the Company
and any underwriter participating in such offering such information with respect
to themselves and the proposed distribution by them as shall be reasonably
necessary in order to assure compliance with Federal and applicable state
securities laws.
6. Underwriting Agreement. In connection with each registration
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pursuant to Section 2 or 3 covering an underwritten public offering, the Company
and the Stockholders agree to enter into a written agreement with the managing
underwriter or underwriters in such form and containing such provisions as are
usual and customary in the securities business for such an
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arrangement between reputable underwriters and companies of the Company's size
and investment stature; provided, that such agreement shall not contain any such
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provision applicable to the Company or the Stockholders which is inconsistent
with the provisions of this Agreement; and provided, further, that the time and
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place of the closing under said underwriting agreement shall be as mutually
agreed upon between the Company and such managing underwriter.
7. Expenses. All expenses incurred by the Company in complying with
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this Agreement, including, without limitation, all registration and filing fees,
fees and expenses of complying with securities and "blue sky" laws, printing
expenses and fees and disbursements of counsel, and of the independent certified
public accountants shall be paid by the Company; provided, that counsel to the
securityholders and all underwriting discounts and selling commissions
applicable to the Registrable Shares covered by registrations effected hereunder
shall not be borne by the Company but shall be borne by the seller or sellers.
8. Indemnification. (a) In the event of any registration of any
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Registrable Shares under the Securities Act pursuant to this Agreement or
registration or qualification of any Registrable Shares under state securities
or "blue sky" laws pursuant to this Agreement, the Company shall indemnify and
hold harmless the Stockholder owning such Registrable Shares and each other
person, if any, who controls such holder, within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which any of the foregoing persons 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 an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or any document prepared or
furnished by the Company incident to the registration or qualification of any
Registrable Shares pursuant to this Agreement, 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 or,
with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made, not misleading, or any
violation by the Company of the Securities Act or state securities or "blue sky"
laws applicable to the Company and relating to action or inaction required of
the Company in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse such Stockholder or other
person acting on behalf of such Stockholder and each such controlling person for
any legal or any other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, that the Company shall not be liable (i) in any such case to
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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 the registration statement, the preliminary prospectus
or prospectus or the amendment or supplement or any document incident to the
registration or qualification of any Registrable Shares pursuant to this
Agreement in reliance upon and in conformity with written information furnished
to the Company by such Stockholder or such underwriter specifically for use in
the preparation thereof and (ii) to any broker or other person acting on behalf
of such Stockholder to the extent that any such loss, claim, damage or liability
arises out of or is based upon any representation or other statement of such
broker or other person that is not in conformity with the preliminary prospectus
or prospectus.
(b) Each Stockholder hereby indemnifies and holds harmless the Company,
each director of the Company, each officer of the Company who shall sign such
registration statement and any person who controls the Company within the
meaning of the Securities Act, and before Registrable Shares held by such
Stockholder shall be included in any registration pursuant to this Agreement,
any underwriter acting on such Stockholder's behalf shall agree to indemnify and
hold harmless the Company, each director of the Company, each officer of the
Company who shall sign such registration statement and any person who controls
the Company within the meaning of the
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Securities Act (in each case in the same manner and to the same extent as set
forth in (a) above) with respect to any untrue statement or omission from such
registration statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, if such untrue statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Stockholder or such underwriter, as the case
may be, specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus or amendment or supplement; provided
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that, the maximum amount of liability in respect of such indemnification shall
be limited, in the case of each Stockholder who, at any time during the
registration or the year preceding the registration, was not an officer or
director of the Company or any of its subsidiaries, to an amount paid for such
Registrable Shares upon the sale thereof pursuant to such registration.
(c) Each party entitled to indemnification hereunder (the "indemnified
party") shall give notice to the party required to provide indemnification (the
"indemnifying party") promptly after such indemnified party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
indemnifying party (at its expense) to assume the defense of any claim or any
litigation resulting therefrom; provided, that counsel for the indemnifying
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party, who shall conduct the defense of such claim or litigation, shall be
reasonably satisfactory to the indemnified party, and the indemnified party may
participate in such defense, but only at such indemnified party's expense; and
provided, further, that the omission by any indemnified party to give notice as
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provided herein shall not relieve the indemnifying party of its obligations
under this Section 8 except to the extent that the omission results in a failure
of actual notice to the indemnifying party and such indemnifying party is
damaged as a result of the failure to give notice. 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; it being further understood that the Stockholders
collectively will be considered one indemnified party for purposes of this
sentence. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. Notwithstanding anything to the contrary herein, the Representative
shall act on behalf of the Stockholders in connection with any proceeding
brought or claim made under this Section 8, including conducting the defense of
any such claim if the Stockholders are the indemnifying party, and all notices
and consents referred to in this Section 8(c) shall be sufficient if given to or
by the Representative.
9. Rule 144 Matters. For so long as any Stockholder holds Registrable
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Shares that may not be sold, without restriction, under Rule 144 under the
Securities Act or any successor rule, the Company shall (a) make and keep public
information generally available, as those terms are defined in Rule 144 under
the Securities Act and (b) file with the Commission in a timely manner reports
and other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended.
10. Stock Legend. Each certificate representing Registrable Shares
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shall be stamped or otherwise imprinted with a legend substantially as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES OR
BLUE SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR IN A TRANSACTION WHICH IS NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THE ACT OR ANY APPLICABLE STATE SECURITIES OR
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BLUE SKY LAWS AND, IN THE CASE OF A TRANSACTION NOT SUBJECT TO SUCH
REGISTRATION REQUIREMENTS, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER THE ACT."
11. Representations and Warranties. (a) The Company hereby represents
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and warrants to each other party that:
(i) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Company. The Company has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and has duly executed and
delivered this Agreement. This Agreement constitutes the valid and binding
obligation of the Company, enforceable against it in accordance with its
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles.
(ii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance by the
Company with any of the provisions hereof will (A) conflict with or result in a
breach of the charter, by-laws or other constitutive documents of the Company,
(B) conflict with or result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the provisions of any
note, bond, lease, mortgage, indenture, license, franchise, permit, agreement or
other instrument or obligation to which the Company is a party, or by which the
Company or the Company's properties or assets, may be bound or affected, except
for such conflict, breach or default as to which requisite waivers or consents
shall be obtained before the Closing, or (C) violate any law, statute, rule or
regulation or order, writ, injunction or decree applicable to the Company or the
Company's properties or assets or (D) result in the creation or imposition of
any security interest, lien or other encumbrance upon any of the Company's
properties or assets of such Stockholder. No consent or approval by, or any
notification of or filing with, any person, firm, corporation, partnership,
joint venture, association or entity (governmental or private) (each, a "person"
and collectively, "persons") is required in connection with the execution,
delivery and performance by the Company of this Agreement or the consummation of
the transactions contemplated hereby, except as set forth in the Merger
Agreement.
(b) Representations and Warranties of the Stockholders. Each of the
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Stockholders represents and warrants to each other party that:
(i) Such Stockholder has all requisite power, capacity and authority to
enter into this Agreement and to consummate the transactions contemplated hereby
and has duly executed and delivered this Agreement. This Agreement constitutes
the valid and binding obligation of such Stockholder, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles.
(ii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance by such
Stockholder with any of the provisions hereto will (A) conflict with or result
in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the provisions of any note, bond, lease, mortgage,
indenture, license, franchise, permit, agreement or other instrument or
obligation to which such Stockholder is a party, or by which such Stockholder or
such Stockholder's properties or assets may be bound or affected, except for
such conflict, breach or default as to which requisite waivers or consents shall
be obtained before the Closing (which waivers or consents are set forth in
Section 2.1(d) of the Disclosure Schedule (defined in the Merger Agreement), (B)
violate any law, statute,
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rule or regulation or order, writ, injunction or decree applicable to such
Stockholder or such Stockholder's properties or assets or (C) result in the
creation or imposition of any security interest, lien or other encumbrance upon
any property or assets of such Stockholder. No consent or approval by, or any
notification of or filing with, any person is required in connection with the
execution, delivery and performance by such Stockholder of this Agreement or the
consummation of the transactions contemplated hereby except as set forth in the
Merger Agreement.
(c) Representations and Warranties of the Representative. The
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Representative represents and warrants to each other party that:
(i) The Representative has all requisite power, capacity and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby and has duly executed and delivered this Agreement. This Agreement
constitutes the valid and binding obligation of the Representative, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
(ii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance by the
Representative with any of the provisions hereto will (A) conflict with or
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the provisions of any note, bond, lease, mortgage,
indenture, license, franchise, permit, agreement or other instrument or
obligation to which the Representative is a party, or by which the
Representative or the Representative's properties or assets may be bound or
affected, (B) violate any law, statute, rule or regulation or order, writ,
injunction or decree applicable to the Representative or the Representative's
properties or assets or (C) result in the creation or imposition of any security
interest, lien or other encumbrance upon any property or assets of the
Representative. No consent or approval by, or any notification of or filing
with, any person is required in connection with the execution, delivery and
performance by the Representative of this Agreement or the consummation of the
transactions contemplated hereby except as set forth in the Merger Agreement.
12. Representative. Each of the Stockholders agrees to indemnify and
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hold harmless the Representative by reason of his acting or failing to act in
connection with any of the transactions contemplated hereby and against any
loss, liability or expense the Representative may sustain or incur as a result
of serving as the Representative hereunder, except such losses, liabilities and
expenses which are determined in a final judgment of a court to have resulted
primarily from the gross negligence or willful misconduct of the Representative.
Each of the Stockholders hereby agrees to reimburse the Representative upon his
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Representative in the performance of his duties under
this Agreement. If the Representative dies or becomes incapacitated, the
executor, guardian or other representative of the Representative's estate shall
have the authority hereunder to act as Representative hereunder or to appoint a
successor to act as Representative hereunder, provided any such successor
Representative is reasonably acceptable to the Company.
13. Termination of Registration Rights. No Stockholder shall be
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entitled to execute any registration right provided for in this Agreement at any
time during which all the Registrable Shares held by such Stockholder may be
sold without restriction of any kind under Rule 144.
14. Miscellaneous.
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(a) Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the Company and the Stockholders with respect to the
transactions contemplated hereby
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and thereby and supersede all prior agreements or understandings among the
parties with respect thereto.
(b) Headings. Descriptive headings are for convenience only and shall
--------
not control or affect the meaning or construction of any provision of this
Agreement.
(c) Notices. All notices or other communications provided for in this
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Agreement shall be in writing and shall be sent by confirmed telecopy (with an
undertaking to provide a hard copy) or delivered by hand or sent by overnight
courier service prepaid to the address specified below.
If to the Company:
Physician Support Systems, Inc.
Route 230 and Eby-Chiques Road
P.O. Box 36
Mt. Joy, Pennsylvania 117552
Telecopy: (717) 653-0567
Attention: Peter W. Gilson
Hamilton F. Potter III
David S. Geller
If to the Representative:
Peter D. Cooper
c/o EE&C Financial Services, Inc.
60 Park Place
Newark, New Jersey 07102
Telecopy: (201) 624-8240
If to a Stockholder, to the address or telecopy number for such Stockholder set
forth on Annex A attached hereto or to such other address as the party to whom
notice is to be given may have furnished to the other party in writing in
accordance herewith.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(e) Amendments. This Agreement shall not be altered or otherwise
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amended except pursuant to an instrument in writing signed by each of (i) the
Company and (ii) the holders of two-thirds of the number of Registrable Shares
then outstanding. Each Stockholder acknowledges that by operation of this
subsection, the holders of two-thirds of the then outstanding Registrable Shares
will have the right and power to diminish or eliminate certain rights of the
Stockholders under this Agreement.
(f) Transferability. The registration and other rights granted to the
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Stockholders hereunder are non-transferable and cannot be assigned or
transferred in any manner to any third party without the prior written consent
of the Company. Notwithstanding the foregoing, any Stockholder may assign the
registration rights granted to such Stockholder herein to such Stockholder's
spouse or children or trusts, partnerships or corporations for the sole benefit
of such persons and, upon such Stockholder's death to such Stockholder's estate
or to no more than two: (i) private or public foundations exempt from federal
income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, to which Registrable Shares have been
10
transferred in transactions that do not result in the recognition of taxable
income or capital gain for federal income tax purposes; and/or (ii) revocable or
irrevocable inter vivos trusts, partnerships or other entities to which
Registrable Shares have been transferred in transactions that do not result in
the recognition of taxable income or capital gain for federal income tax
purposes.
(g) CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered as of the date first above written.
PHYSICIAN SUPPORT SYSTEMS, INC.
By: /s/ Peter M. Gilson
----------------------------
Name: Peter M. Gilson
Title: President
REPRESENTATIVE:
/s/ Peter D. Cooper
-------------------------------
Peter D. Cooper
STOCKHOLDERS:
/s/ Elaine Scialo
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Elaine Scialo
/s/ Christopher Becker
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Christopher Becker
/s/ Robert Schwartz
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Robert Schwartz
/s/ William Hecht
-------------------------------
William Hecht
/s/ Randy Cooper
-------------------------------
Randy Cooper
ELTMAN ELTMAN & COOPER, P.C.
By: /s/ Peter D. Cooper
----------------------------
Name: Peter D. Cooper
Title: Partner
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