10.2 Stock Transfer Restriction Agreement by and among South Georgia
Nephrology, P.C., Dr. Andrew Queler, and the Company dated July
21, 2000.
STOCK TRANSFER RESTRICTION AGREEMENT
BY AND AMONG
SOUTH GEORGIA NEPHROLOGY, P.C.,
A GEORGIA CORPORATION,
DIALYSIS CORPORATION OF AMERICA, INC.,
A FLORIDA CORPORATION,
AND
ANDREW QUELER, M.D.
DATED: July 21, 2000
STOCK TRANSFER RESTRICTION AGREEMENT
This Stock Transfer Restriction Agreement (the "Agreement") is made and
entered into as of July 21, 2000 (the "Effective Date"), by and among SOUTH
GEORGIA NEPHROLOGY, P.C., a Georgia corporation ("Medical Group"), DIALYSIS
CORPORATION OF AMERICA, INC., a Florida corporation ("DCA") and ANDREW QUELER,
M.D. (the "Stockholder").
R E C I T A L S
---------------
WHEREAS, the Stockholder is the sole holder of all of the issued and
outstanding Medical Group common stock (the "Stock"); and
WHEREAS, Medical Group and the Stockholder believe that is in the best
interest of Medical Group to restrict the transferability of the Stock.
A G R E E M E N T
-----------------
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and intending to be legally bound hereby, the parties
covenant and agree as follows:
1. Restrictions On Shares. Except as otherwise provided in this
----------------------
Agreement, the Stockholder shall not sell, assign, transfer, gift or pledge,
whether voluntarily, involuntarily, by operation of law or otherwise, any
interest in any of the shares of Stock that the Stockholder now owns or may
hereafter acquire. In addition, the Stockholder shall not permit Medical
Group to (a) authorize, approve or declare any dividend or other distribution
with respect to the Stock or (b) issue additional Stock or other equity
interests or options or rights thereto unless the recipient thereof duly
executes a copy of this Agreement.
2. Automatic Transfer of Shares in Certain Events.
----------------------------------------------
(a) Transfer Events. By executing this Agreement, the Stockholder
---------------
hereby agrees that all of the shares of Stock owned by the Stockholder (or
held by any heir, personal representative, estate, successor or assignee of
the Stockholder) shall be transferred, or deemed transferred, to the
Designated Transferee (as defined below) immediately and without further
action by the Stockholder upon the date of any of the following events (each
a "Transfer Event"):
(i) the Stockholder's date of death;
(ii) the date the Stockholder is determined by a court of
competent jurisdiction to be incompetent;
(iii) the date the Stockholder becomes permanently disabled
so as to be unable to render any professional services on behalf
of Medical Group for a period of at least sixty (60) consecutive
days;
(iv) the date the Stockholder becomes disqualified, under
applicable law, whether by loss of his or her license to practice
medicine, or otherwise, to be a shareholder of Medical Group;
(v) the date the Stockholder is convicted of any felony or
any crime of moral turpitude, whether or not a felony;
(vi) the date of termination or notice of intent to terminate,
whichever first occurs, of the Medical Director Agreement ("MDA")
of even date herewith between DCA of South Georgia, LLC and Medical
Group;
(vii) the date upon which any of the shares of Stock held by
the Stockholder are transferred or attempted to be transferred
voluntarily, involuntarily by operation of law or otherwise to
any person who is not the Stockholder's immediate successor as the
Medical Group's designated Medical Director under the MDA;
(viii) the date upon which the Stockholder ceases to be Medical
Group's designated Medical Director under the MDA;
(ix) the date of termination, change, or material breach of
the Employment Agreement of even date herewith between Medical Group
and the Stockholder; or
(x) the date of filing any petition for or other document
that causes, or is intended to cause, a judicial, administrative,
voluntary or involuntary dissolution of Medical Group.
(b) Transfer of Stock. Immediately, upon the occurrence of a
-----------------
Transfer Event, the Designated Transferee shall pay to the Stockholder a
purchase price for the Stock transferred pursuant to this Section 2, in
an amount equal to the stated par value of the Stock. Payment of the
purchase price for the Stock shall be made to the Stockholder in cash or
by certified or cashiers check. The time for payment of the purchase price
for any Stock transferred hereunder shall be at 10:00 am on the first
business day following receipt by the Designated Transferee of notice of
such Transfer Event (provided, however, that in the absence of any such
notice, the Designated Transferee shall, upon becoming aware of any such
Transfer Event, promptly notify the Stockholder, Medical Group and DCA of
such Transfer Event and tender to the Stockholder the purchase price for
the Stock). Unless otherwise agreed upon by the
2
parties, the Designated Transferee shall tender the purchase price at the
principal office of Medical Group.
(c) Definition. For the purposes of this Agreement, the term
----------
"Designated Transferee" shall mean the individual then holding the position
of designated Medical Director for Medical Group under the MDA, whether in
an acting, interim or permanent capacity (provided that such Designated
Transferee is permitted to hold the Stock pursuant to applicable Georgia law).
(d) Deposit and Custody of Stock. DCA hereby acknowledges
----------------------------
receipt of stock certificate no. (the "Certificate") of Medical
---------
Group, evidencing shares of the Stock of Medical Group, which stock
--------
certificate has been delivered by the Stockholder upon execution hereof and
has been duly endorsed by the Stockholder in blank. DCA agrees to hold such
Certificate in trust for the benefit of the Designated Transferee. Upon the
occurrence of a Transfer Event, DCA shall endorse the Certificate in the name
of the Designated Transferee and shall release the Certificate to the Medical
Group's secretary for cancellation by the secretary, for registration of the
shares represented thereby in the name of the Designated Transferee on the
books of Medical Group, and for issuance of a new certificate in the name of
the Designated Transferee.
(e) Deliveries by Designated Transferee. Notwithstanding anything
-----------------------------------
to the contrary herein, release of the certificate by DCA to the secretary of
Medical Group shall be contingent on DCA's prior or concurrent receipt of:
(i) a stock transfer power executed by the Designated
Transferee covering the Stock transferred to the Designated
Transferee;
(ii) issuance by Medical Group of a new stock certificate
evidencing the Designated Transferee's ownership of the Stock in
Medical Group; and
(iii) a copy of this Agreement duly executed by the Designated
Transferee substituting the Designated Transferee for the Stock-
holder hereunder.
3. Other Matters.
-------------
(a) Upon the occurrence of a Transfer Event, the Stockholder shall
be disqualified as a stockholder of Medical Group, and shall immediately
resign, or be deemed to have resigned, as a Director, as President and as
any other officer of Medical Group.
3
(b) Upon the occurrence of a Transfer Event, the parties hereto or
their personal representatives and assigns shall do all things and execute
and deliver all papers as may be necessary to consummate the stock transfer,
free and clear of all liens, security interests, claims and encumbrances with
the exception of any security interest remaining under the Loan and Security
Agreement of even date herewith between Medical Group and DCA.
(c) After occurrence of a Transfer Event, the Stockholder, and any
person other than the Designated Transferee who acquires the Stock, shall
neither have nor exercise any right or privilege as a stockholder of Medical
Group, including any right to receive any unallocated or undistributed
dividend.
4. Legend on Certificates. Medical Group shall cause the following
----------------------
legend to be included on all certificates representing the Shares;
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS OF A STOCK TRANSFER RESTRICTION AGREEMENT BY AND
AMONG THE STOCKHOLDER NAMED HEREIN, SOUTH GEORGIA NEPHROLOGY,
P.C. AND DIALYSIS CORPORATION OF AMERICA, INC., DATED AS OF
, 2000 (A COPY OF WHICH IS AVAILABLE UPON REQUEST,
-----------
FREE OF CHARGE, FROM THE SECRETARY OF THE CORPORATION). NO
TRANSFER OF THE SHARES REPRESENTED HEREBY OR SHARES ISSUED
IN EXCHANGE THEREFORE SHALL BE VALID OR EFFECTIVE UNLESS AND
UNTIL THE TERMS AND CONDITIONS OF SUCH STOCK TRANSFER RE-
STRICTION AGREEMENT HAVE BEEN FULFILLED.
All Stock that is subject to this Agreement and is issued to or held by the
Stockholder after the date of this Agreement shall bear the same notice.
5. Notices. Any notices to be given hereunder by either party to the
-------
other shall be deemed to be received by the intended recipient (a) when
delivered personally, (b) the day following delivery to a nationally
recognized overnight courier service with proof of delivery, or (c) three
(3) days after mailing by certified mail, postage prepaid with return
receipt requested, in each case addressed to the parties as set forth
below:
If to Medical Group: SOUTH GEORGIA NEPHROLOGY, P.C.
Attention:
4
If to the Stockholder: ANDREW QUELER, M.D.
If to DCA: DIALYSIS CORPORATION OF AMERICA, INC.
27 Miller Avenue, Suites 2 & 3
Lemoyne, PA 17043
Attn: Stephen W. Everett, President
With a copy to: Lawrence E. Jaffe, Esq.
777 Terrace Avenue
Hasbrouck Heights, NJ 07604
Any party may change the address for notice by notifying the other party, in
writing, of the new address.
6. Successors. This Agreement shall be binding upon and shall inure to
----------
the benefit of the parties hereto, and their authorized successors or assigns.
The rights of any party hereunder may not be assigned without the consent of
the remaining parties hereto.
7. Additional Stockholders. Each holder of any of the capital stock of
-----------------------
Medical Group or of any rights to acquire capital stock of Medical Group,
including any holder of any warrant, option or other security convertible
into or exchangeable for capital stock of Medical Group, shall execute a
counterpart of this Agreement acknowledging that the restrictions contained
herein shall apply to such stock or to such rights to acquire stock in
Medical Group.
8. Third Party Beneficiary. The parties hereto acknowledge that the
-----------------------
Designated Transferee, if and when he or she becomes a Designated Transferee,
shall have standing to enforce the provisions of this Agreement.
9. Governing Law. This Agreement, the rights and obligations hereunder,
-------------
and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Georgia.
10. Entire Agreement and Amendments. All understandings and agreements
-------------------------------
heretofore had between the parties hereto with respect to the transactions
contemplated hereby are merged into this Agreement, and this Agreement
reflects all the understandings of the parties with respect to such
transactions. This Agreement cannot be modified, extended or amended except
by written agreement signed by all of the parties hereto.
11. Arbitration. Any disputes arising under this Agreement or any
-----------
breach of this Agreement, shall be determined by arbitration in the State
of Georgia in accordance with the rules of the American Arbitration
Association ("Association") then in effect, by a single
5
arbitrator selected by mutual agreement of the parties or, if the parties
are unable to agree on an arbitrator, by the Association; provided that
this paragraph shall not restrict the right of either party to institute
a legal proceeding to enable such party to obtain temporary injunctive
relief during the pendency of any such arbitration. A determination of the
dispute by the arbitrator shall be final and binding on the parties to the
extent permitted by law. The cost of the arbitration, other than attorneys'
or other consultancy fees, shall be borne equally by the parties.
12. Corporate Authority. Medical Group and DCA are authorized to enter
-------------------
into this Agreement by resolutions duly adopted by the Directors of the
respective corporations.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original Agreement, but all
of which together shall constitute one and the same instrument.
14. Term of Agreement. This Agreement shall terminate on the later of
-----------------
twelve (12) months from the effective date hereof or upon payment in full of
the loan and termination of the Loan and Security Agreement of even date
herewith between Medical Group and DCA. Provided that, in the event a
Transfer Event as defined in Section 2(a) occurs after twelve months from
the effective date hereof, the Stockholder shall be given a grace period of
four (4) days to pay in full the principle and accumulated interest remaining
on the loan between Medical Group and DCA. If the Stockholder fulfills the
payment obligation within the grace period and has caused no material
adverse financial consequences to DCA during the grace period, this
Agreement will be deemed to have terminated on the date of the Transfer
Event.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
SOUTH GEORGIA NEPHROLOGY, P.C.
a Georgia corporation ("Medical Group")
/s/ Andrew Queler
By: ---------------------------------------
Its:
STOCKHOLDER:
/s/ Andrew Queler
---------------------------------------
Andrew Queler, M.D.
DIALYSIS CORPORATION OF AMERICA, INC.
a Florida corporation ("DCA")
/s/ Stephen W. Everett
By: --------------------------------------
Its: President