STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") made as of the ____ day of
______, 1997 by and among COASTAL PHYSICIAN NETWORKS, INC., a North Carolina
corporation ("CPN"), COASTAL PHYSICIAN GROUP OF FLORIDA, INC., a Florida
corporation ("CPG") (collectively, CPN and CPG may be referred to as "Sellers"),
and ▇▇▇▇▇ MEDICAL GROUP LLC, a North Carolina limited liability
company("Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CPN owns all of the issued and outstanding stock (the "Valley
Women's Center Stock") of Valley Women's Center, Inc. ("Valley Women's Center");
and
WHEREAS, CPG owns all of the issued and outstanding stock (the "CPG Clinic
Stock") of Minor Emergency Center of North Broward, Inc. ("Minor Emergency"),
Lehigh Medical Associates, Inc. ("Lehigh"), Springs Pediatrics, Inc.
("Springs"), and Plantation Pediatrics, Inc. ("Plantation")(collectively, Minor
Emergency, Lehigh, Springs, and Plantation may be referred to as the "CPG
Clinics," and, together with the Valley Women's Center, the "Clinics;" and the
Valley Women's Center Stock and the CPG Clinic Stock may be referred to
collectively as the "Stock"); and
WHEREAS, the parties hereto have reached an understanding pursuant to which
the Sellers will sell and the Purchaser will purchase all of the Stock, all
pursuant to the terms and conditions more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
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PURCHASE AND SALE OF STOCK
--------------------------
Section 1.1 Purchase and Sale of the Stock. Subject to the terms and
conditions contained herein, the Purchaser agrees to purchase from the Sellers
and the Sellers agree to sell, assign and transfer to the Purchaser on the
Closing Date provided for in Section 1.2 hereof, the Stock, which is all of the
issued and outstanding capital stock of Valley Women's Center and the CPG
Clinics.
Section 1.2 Closing Date. The closing date (the "Closing Date") shall be on
a date mutually acceptable to the parties and shall be effective as of May 31,
1997 (the "Effective Date"). The parties will use their best efforts to satisfy
all conditions precedent referred to in this Agreement by the Closing Date. The
closing of this transaction (the "Closing") shall be held at the offices of
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the parties may agree.
Section 1.3 Purchase Price. This Agreement is being executed in conjunction
with two Asset Purchase Agreements of even date through which four direct or
indirect subsidiaries of Coastal Physician Group, Inc. ("Coastal"), including
Sellers, Integrated Provider Networks, Inc. and Sunlife OB/GYN Services of
Broward County, Inc. (the "Combined Sellers"), will sell the stock and/or assets
of the seven clinics listed in Section 1.5 (the "Combined Clinics") to three
related entities, including Purchaser, Mebane Medical Center of North Carolina
LLC and Women's & Children's Centers of Florida LLC (the "Combined Purchasers").
The aggregate purchase price to be paid to the Combined Sellers for the Combined
Clinics (the "Purchase Price") shall be an amount equal to the greater of fifty
thousand dollars ($50,000.00) or the Appraised Value (as defined below). Within
thirty (30) days of the Closing Date, the parties shall have an appraisal of the
Combined Clinics performed by an independent third party appraiser (the
"Appraiser"). If the total net fair market value of the Combined Clinics
according to the Appraiser (the "Appraised Value") is in excess of $50,000.00,
the Purchase Price shall be the Appraised Value.
Section 1.4 Payment of Purchase Price. Fifty thousand dollars ($50,000.00)
shall be paid by the Combined Purchasers at Closing in cash or other immediately
available funds. If the Appraised Value is greater than $50,000.00, then the
balance shall be paid to the Combined Sellers by the Combined Purchasers in the
form of a promissory note payable over one year, with an annualized interest
rate of twelve percent (12%).
Section 1.5 Allocation of Purchase Price. The Combined Sellers and the
Combined Purchasers agree to allocate the Purchase Price among the following
seven Combined Clinics in accordance with the Appraised Value after receiving
the appraisal described in Section 1.3: Valley Women's Center, Inc., Lehigh
Medical Associates, Inc., Springs Pediatrics, Inc., Plantation Pediatrics, Inc.,
Minor Emergency Center of North Broward, Inc., Mebane Medical Center (assets),
and Women & Children's Center (assets). The parties hereto agree to use such
allocation for the purpose of preparing tax returns and reports.
ARTICLE II
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REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
----------------------------------------------
VALLEY WOMEN'S CENTER
---------------------
In order to induce the Purchaser to enter into this Agreement and the
transactions contemplated hereby, CPN hereby represents and warrants to the
Purchaser as follows:
Section 2.1 Corporate Organization and Authority. CPN is a corporation duly
organized, validly existing and in good standing under the laws of the State of
North Carolina, with full corporate power and authority to conduct its business
as now conducted, own its assets, own or lease and operate its properties, and
enter into and perform its obligations under this Agreement. This Agreement
constitutes, and all assignments, agreements and other instruments and documents
to be executed and delivered by CPN will constitute, CPN's legal, valid and
binding obligations, enforceable against CPN in accordance with their respective
terms.
CPN, by all appropriate corporate action, has duly authorized the execution
and delivery of this Agreement, the documents of transfer and assignment
contemplated hereby in consummation
of all the transactions contemplated herein and the performance of all
obligations of CPN pursuant to this Agreement.
Section 2.2 Title to Stock of Valley Women's Center. CPN is the true and
lawful beneficial and record owner of all the stock of the Valley Women's Center
Stock and has good and marketable title thereto, free and clear of mortgages,
pledges, liens, security interests or other encumbrances (other than a pledge of
the Valley Women's Center Stock to First Union National Bank, as agent for the
lenders, that will be released at closing). Subject to obtaining such release,
which CPN agrees to use its best efforts to obtain, CPN has full right and power
and authority to sell, transfer and deliver such Valley Women's Center Stock,
and upon delivery of such Valley Women's Center Stock, and upon delivery of the
certificate or certificates therefor as contemplated in this Agreement, CPN will
transfer to the Purchaser valid and marketable title thereto including all
voting and other rights to such Valley Women's Center Stock, free and clear of
all claims, liens, charges, encumbrances and equities whatsoever. The failure by
Seller to obtain the release of First Union National Bank ("FUNB"), as agent for
that certain bank group with loans outstanding to Coastal (the "Lenders"), shall
not constitute a default hereunder by Seller.
Section 2.3 Financial Statements. The financial statements of Valley
Women's Center attached hereto as Schedule 2.3 accurately and completely reflect
the assets and liabilities of Valley Women's Center as of the date of such
financial statements. Since the date of the financial statements, there have
been no changes in the assets, liabilities, financial condition, business or
affairs of Valley Women's Center which would, in the aggregate, have a material
adverse effect on Valley Women's Center, its assets, liabilities or financial
condition.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES WITH RESPECT TO CPG CLINICS
----------------------------------------------------------
In order to induce the Purchaser to enter into this Agreement and the
transactions contemplated hereby, the CPG hereby represents and warrants to the
Purchaser as follows:
Section 3.1 Corporate Organization and Authority. CPG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, with full corporate power and authority to conduct its business as now
conducted, own its assets, own or lease and operate its properties, and enter
into and perform its obligations under this Agreement. This Agreement
constitutes, and all assignments, agreements and other instruments and documents
to be executed and delivered by CPG will constitute CPG's legal, valid and
binding obligations, enforceable against CPG in accordance with their respective
terms.
CPG, by all appropriate corporate action has duly authorized the execution
and delivery of this Agreement, the documents of transfer and assignment
contemplated hereby in consummation of all the transactions contemplated herein
and the performance of all obligations of CPG pursuant to this Agreement.
Section 3.2 Title to CPG Clinic Stock. CPG is the true and lawful
beneficial and record owner of all the stock of the CPG Clinic Stock and has
good and marketable title thereto, free and clear of mortgages, pledges, liens,
security interests or other encumbrances (other than a pledge
of the CPG Clinic Stock to FUNB, as agent for the Lenders, that will be released
at closing). Subject to obtaining such release, which CPG agrees to use its best
efforts to obtain, CPG has full right and power and authority to sell, transfer
and deliver such CPG Clinic Stock, and upon delivery of such CPG Clinic Stock,
and upon delivery of the certificate or certificates therefor as contemplated in
this Agreement, CPG will transfer to the Purchaser valid and marketable title
thereto, including all voting and other rights to such CPG Clinic Stock, free
and clear of all claims, liens, charges, encumbrances and equities whatsoever.
Section 3.3 Financial Statements. The financial statements of the CPG
Clinics attached hereto as Schedule 3.3 accurately and completely reflect the
assets and liabilities of the CPG Clinics as of the date of such financial
statements. Since the date of the financial statements, there have been no
changes in the assets, liabilities, financial condition, business or affairs of
the CPG Clinics which would, in the aggregate, have a material adverse effect on
the CPG Clinics, their assets, liabilities or financial condition.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
In order to induce the Sellers to enter into this Agreement and the
transactions contemplated hereby, Purchaser hereby represents and warrants to
Seller as follows:
Section 4.1 Company Organization and Authority. Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of North Carolina, with full power and authority to
conduct its business as now conducted, own its assets, own or lease and operate
its properties, and enter into and perform its obligations under this Agreement.
This Agreement constitutes, and all agreements and other instruments and
documents to be executed and delivered by Purchaser will constitute Purchaser's
legal, valid and binding obligations, enforceable against Purchaser in
accordance with their respective terms.
Purchaser, by all appropriate limited liability company action, has duly
authorized the execution and delivery of this Agreement, the documents of
transfer and assignment contemplated hereby in consummation of all the
transactions contemplated herein and the performance of all obligations of
Purchaser pursuant to this Agreement.
ARTICLE V
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COVENANTS AND AGREEMENTS OF SELLERS AND PURCHASER
-------------------------------------------------
Section 5.1 Assignment of Real Property Leases. To the extent that any
leases of office or other space occupied by the Clinics have been entered into
in the name of Coastal, or any affiliates of Coastal, such leases shall be
assigned to the appropriate Clinic or Purchaser at Closing. Purchaser shall use
their its efforts to obtain any required consents to or approvals for assignment
of the leases to the appropriate Clinic or Purchaser, and Sellers agrees to
fully cooperate in having the leases assigned. If such consents or approvals are
obtained, the leases shall be assigned to the Clinics or Purchaser and the
Clinics and Purchaser shall, jointly and severally, indemnify and hold harmless
Coastal, the Sellers and any affiliate of the Sellers, against and in respect of
any and all claims arising under or out of said leases after the Closing Date.
In the event consents or approvals
are not obtained with respect to any lease, Coastal or its affiliate will remain
as the tenant on such lease and the Clinic will continue to use and occupy the
space in the manner in which the space is now used and occupied through the term
of the lease and the Clinics or Purchaser will pay to or on behalf of Coastal or
its affiliate all rent and other sums due under such lease.
Section 5.2 Management Contract. On or before the Closing Date, Purchaser
and Coastal, or an entity related to or controlled by Coastal, including but not
limited to CPG or IPN, shall enter into a management services agreement (the
"Management Services Agreement"), whereby Coastal shall provide management
services for the Clinics in return for a management fee equal to eight percent
(8%) of the defined revenues of the Clinics. The Management Services Agreement
shall be terminable by either party upon thirty (30) days written notice.
Section 5.3 Failure to Pay-off Lenders. In the event that Coastal's current
debt to the Lenders is not repaid in full on or before June 30, 1997, then the
transactions described in this Agreement and the related transactions
contemplated in the two Asset Purchase Agreements discussed in Section 1.3
herein shall be automatically rescinded, retroactive to the Effective Date. In
the event such a rescission occurs, Coastal or the Combined Sellers shall repay
to the Combined Purchasers the $50,000 payment called for under Section 1.4, and
the Combined Purchasers and the Combined Sellers shall take all actions
(including the payment of monies) necessary to restore the relative positions of
the Combined Sellers and the Combined Purchasers to the respective positions
they would be in if the transactions contemplated herein and those transactions
discussed in Section 1.3 never occurred. The parties agree to promptly execute
and deliver any contracts, instruments and documents and take such further
action as are necessary to effect such rescission.
Section 5.4 Call Option.
(a) Coastal will retain for a period of twelve (12) months from the date of
Closing a call option (the "Call Option") on the Combined Clinics, whereby
Coastal or an affiliate of Coastal may repurchase all (but not less than all,
except as provided in Subsection (b) below) of the Combined Clinics from the
Combined Purchasers. In the event Coastal notifies the Combined Purchasers of
its intention to exercise this option, Coastal will repay the Combined
Purchasers their Investment (as defined below) in the Combined Clinics together
with a twelve percent (12%) annualized return on such Investment. The Combined
Purchasers' Investment in the Combined Clinics shall equal the sum of the
Purchase Price and any capital contributed or loaned to the Combined Clinics'
operations during the period of Combined Purchasers' ownership. Upon receipt of
notice of Coastal's intention to exercise its Call Option, the Combined
Purchasers shall repay to the Combined Clinics, on or before the date of closing
of the re-sale, any distributions received by the Combined Purchasers from the
Combined Clinics, whether received in the form of dividends, distributions or
proceeds from loans or sale of assets. The Combined Purchasers shall also cause
the release of any liens and encumbrances incurred against any of the Combined
Clinics during the period of Purchaser's ownership thereof. The parties agree to
execute any and all agreements or other documents necessary to effect the
repurchase under the Call Option.
(b) If within twelve (12) months from the Closing Date, Purchaser is
presented with a bona fide offer to purchase one or more of the Combined Clinics
by a third party purchaser other than Coastal, Purchaser shall notify Coastal in
writing of its the existence of such an offer. From the date such notification
is received, Coastal shall have thirty (30) days (the "Notification Period") in
which to determine whether to exercise its Call Option under this section,
provided that the Notification Period shall in no way extend the twelve month
period during which the Call Option is in effect. In the event Coastal does not
elect to exercise its Call Option within the Notification Period, Purchaser may
sell any or all of the Combined Clinics that were a part of the bona fide offer
of which Coastal was notified to such third party purchaser making such an
offer. The Call Option shall remain in effect with respect to any remaining of
the Combined Clinics for the balance of the original twelve month period, and,
if exercised, the Purchaser's Investment required to be paid by Coastal shall be
that applicable to such remaining of the Combined Clinics.
Section 5.5 Marketing of Clinics. For a period of twelve (12) months from
the date of Closing, Coastal shall have a right to market, in its discretion,
any or all of the Clinics to potential third party purchasers ("Potential
Purchasers"). Purchaser agrees to cooperate with Coastal in such marketing
activities and to provide access and information in regard to the Clinics to
Coastal or Potential Purchasers as reasonably requested.
Section 5.6 Lehigh Clinic Provisions. The parties hereto acknowledge that
CPG has signed a term sheet dated March 11, 1997 as of March 14, 1997 (the "Term
Sheet) with a third party purchaser, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D. ("Edelman") and
negotiations have taken place concerning the sale of Lehigh to Edelman.
Purchaser hereby agrees to assume any and all obligations or liabilities of
Coastal or CPG under the Term Sheet and to indemnify and hold harmless Coastal
and CPG from any loss or damages resulting from any claims, litigation, actions,
suits, proceedings, judgments, counsel fees, costs and expenses related to the
Term Sheet or any other binding written or oral agreements between CPG and
Edelman relating to the sale of Lehigh to Edelman.
Section 5.7 Insurance. Sellers and each Clinic shall bear the risk of loss
from fire or other casualty through the Effective Date. In the event of any fire
or casualty through the Effective Date causing any material loss of a Clinic's
assets, Purchaser shall have the right to terminate this Agreement and all of
Purchaser's obligations hereunder.
Section 5.8 Professional Liability Provisions. The Purchaser shall obtain
professional liability coverage for the physicians and providers who are
employees, agents or independent contractors of all Clinics subsequent to the
Effective Date, with limits of no less than those limits which exist as of the
Effective Date. Purchaser shall maintain, in full force and effect and
uninterrupted, such professional liability coverage for a period of one (1) year
following the Effective Date. Such professional liability insurance shall at all
times name Sellers (as necessary and appropriate), as an additional named
insured party and shall require the insurance company to provide at least thirty
(30) days written notice to Sellers of any reduction, modification or
termination of such coverage. The Sellers shall be responsible for professional
liability insurance coverage with respect to their respective Clinics through
the Effective Date. The Sellers may, but shall have no obligation to, purchase
an extended reporting endorsement or "tail" insurance for the
professional liability coverage if each respective Seller, in its sole
discretion, shall deem such to be in its best interest. Each respective Seller
represents that it is not currently aware of any threatened or pending claims,
suits or litigation with respect to their respective Clinic or any of the
physicians or employees of their respective Clinic. The Purchaser and the
Clinics shall indemnify and hold harmless the Seller from any and all costs,
claims and expenses, including without limitation, reasonable attorneys fees
arising out of accidents or claims made by patients of the respective Clinics
against the Sellers, the Clinic or any or their physicians occurring subsequent
to the Effective Date.
Section 5.9 Employee Benefits. For a transition period of up to 30 days,
each respective Seller will continue to provide those employee benefits which it
is lawfully able to provide to those employees of the respective Clinics which
remain employees of the respective Clinics subsequent to the Effective Date;
provided, Purchaser shall reimburse each respective Seller for all costs and
expenses of providing said benefits.
ARTICLE VI
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CONDITIONS TO OBLIGATIONS OF PURCHASER
--------------------------------------
The obligations of the Purchaser to consummate the transactions provided
for herein on the Closing Date are subject to the fulfillment of the following
conditions:
Section 6.1 Representations and Warranties. The representations and
warranties of the Sellers herein contained shall be true in all material
respects on and as of the Closing Date with the same force and effect as if made
on and as of such date and the covenants of the Sellers set forth herein shall
have been complied with to the Closing Date, and a certificate to such effect
shall be executed and delivered to the Purchaser by the Sellers as of the
Closing Date.
Section 6.2 Stock Certificates. The Purchaser shall have duly endorsed
stock transfer powers. The Sellers will deliver duly endorsed certificate(s)
representing the Stock upon receipt of the certificates from FUNB.
Section 6.3 Consents and Approvals. The Sellers shall have obtained all
consents and approvals, including without limitation, all consents and approvals
required by any lender, required for the transfer of the Purchased Assets by the
Sellers to the Purchaser.
Section 6.4 Closing of Related Transactions. The two Asset Purchase
Agreements referred to in Section 1.3 and a Receivables Purchase Agreement of
even date shall be executed in conjunction with this Agreement, and the sales of
the other Combined Clinics and the Receivables contemplated therein shall close
contemporaneously with the sale of the Clinics contemplated herein.
Section 6.5 Sellers' Documents. The Sellers shall have caused to be
delivered to Purchaser, at or before the Closing, the following:
(a) Good Standing Certificates. Good standing certificates issued by the
appropriate official of the states of incorporation of the Sellers and the
Clinics.
(b) Articles of Incorporation and Bylaws. The Sellers and the Clinics shall
have delivered to Purchaser a true and complete copy of their Articles of
Incorporation and Bylaws.
(c) Corporate Resolutions. True and correct copies of resolutions of the
shareholders and board of directors of the Sellers authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby.
(d) Assignment of Real Estate Lease. An Assignment of real property leases
as provided in Section 5.1.
Section 6.6 Other Assurances. The Sellers and each Clinic shall have
delivered to the Purchaser such other and further certificates, assurances and
documents as Purchaser may reasonably request in order to evidence the accuracy
of the representations and warranties made pursuant to Article II, Article III,
the performance of covenants and agreements to be performed pursuant to Article
V at or prior to the Closing, and the fulfillment of the conditions to
Purchaser's obligations.
Section 6.7 FUNB and Lenders. At or prior to Closing, Sellers shall provide
a written release from FUNB, as agent for the Lenders, of the Clinics in a form
satisfactory to Purchaser. In addition, FUNB, as agent for the Lenders, shall
also provide at Closing a UCC-3 Termination Statement for any outstanding
Financing Statement on record against any of the Clinics in any jurisdiction.
Purchaser, to its satisfaction and in its discretion, must be satisfied that,
after Closing, the Clinics will have no liability or obligation to FUNB or the
Lenders and FUNB and the Lenders will have no lien on the Stock or the assets,
rights, or interests of the Clinics.
ARTICLE VII
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CONDITIONS TO OBLIGATIONS OF SELLERS
------------------------------------
The obligations of the Sellers to consummate the transactions provided for
herein on the Closing Date are subject to the fulfillment of the following
conditions on the Closing Date:
Section 7.1 Representations and Warranties. The representations and
warranties of the Purchaser herein contained shall be true in all material
respects on and as of the Closing Date with the same force and effect as if made
on and as of such date, and the covenants of the Purchaser set forth herein
shall have been complied with to the Closing Date.
Section 7.2 Payment of Purchase Price. The Purchaser shall have paid the
Purchase Price in the manner described in Sections 1.3 and 1.4 hereof.
Section 7.3 Closing of Related Transactions. The two Asset Purchase
Agreements referred to in Section 1.3 and a Receivables Purchase Agreement of
even date shall be executed in conjunction with this Agreement, and the sales of
the other Combined Clinics and the Receivables contemplated therein shall close
contemporaneously with the sale of the Clinics as contemplated herein.
Section 7.4 Purchaser's Documents. The Purchaser shall have performed and
complied, in all material respects with its covenants and agreements made herein
to be performed by or complied with by it on or prior to the Closing Date.
Purchaser shall have caused to be delivered to Sellers, at or before the
Closing, the following:
(a) Articles of Organization and Operating Agreement. Purchaser shall have
delivered to Sellers a true and complete copy of its Articles of Organization
and Operating Agreement.
(b) Company Resolutions. True and complete copies of resolutions of the
managers of Purchaser authorizing the execution, delivery and performance of
this Agreement and the transactions contemplated hereby.
Section 7.5 Other Assurances. The Purchaser shall have delivered to the
Sellers such other and further certificates, assurances and documents as Sellers
may reasonably request in order to evidence the accuracy of the representations
and warranties made pursuant to Article IV, the performance of covenants and
agreements to be performed pursuant to Article V at or prior to the Closing, and
the fulfillment of the conditions to Sellers' obligations.
ARTICLE VIII
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INDEMNIFICATION
---------------
In addition to the indemnities included elsewhere in this Agreement, the
parties hereto agree to indemnify and hold each other harmless as follows:
Section 8.1 Indemnification by the Sellers. The Sellers agrees to indemnify
and hold the Purchaser harmless at all times after the date of this Agreement
from, against and in respect of:
(a) Any and all loss, liability, damage or deficiency resulting from any
misrepresentation, breach of warranty or nonfulfillment of any covenants or
agreements on the part of the Sellers contained herein or in any certificate or
document furnished by the Sellers pursuant hereto and any loss or damage
resulting from any claims, litigation, actions, suits, proceedings, judgments,
counsel fees, costs and expenses incident to such misrepresentation, breach or
nonfulfillment;
(b) Any obligation or liability, contingent or otherwise, of the Sellers in
respect of any profit derived from the sale of the Stock pursuant to this
Agreement;
(c) Any liability or obligation, whether assessed or unassessed, of Clinics
for federal, state or local taxes owed and due through the Closing Date
(provided that for local ad valorem taxes, such taxes shall not be considered
due for purposes of this subsection until the last date upon which such taxes
can be paid without penalty);
(d) Any liability or obligation for the preparation or filing of any tax
returns to be filed through the Closing Date and the payment of any taxes, or
charges or levies in the nature of a tax, assessed or imposed upon Clinics'
business or property that are required to be paid through the
Closing Date (Sellers shall assume all liabilities for filing and the
correctness of returns filed and payment of all taxes reported or to be reported
through the Closing Date).
(e) All liabilities incurred by Sellers arising out of or in connection
with the operation of the Valley Women's Center and the CPG Clinics through the
Closing Date, provided that, within twenty-four (24) months following the
Closing Date, Purchaser provides written notice to the Sellers, pursuant to
which Purchaser asserts a claim, stating with particularity all material facts
relating to such claim.
Section 8.2 Indemnification by the Purchaser. The Purchaser agree to
indemnify and hold the Sellers harmless at all times after the date of this
Agreement from and against any and all loss, liability, damage or deficiency
resulting from (i) any misrepresentation, breach of warranty or nonfulfillment
of any covenants or agreements on the part of the Purchaser contained herein or
in any certificate or document furnished by the Purchaser pursuant hereto and
any loss or damage resulting from any claims, litigation, actions, suits,
proceedings, judgments, counsel fees, costs and expenses incident to such
misrepresentation, breach or nonfulfillment; and (ii) all liabilities arising
out of or in connection with the operation of the Clinics by the Purchaser
subsequent to the Closing Date.
Section 8.3 Third Party Claims. Should any claim be made by a person not a
party to this Agreement with respect to any matter to which the foregoing
indemnity relates, the party against whom such claim is asserted (the
"Indemnified Party"), within a reasonable period of time, shall give written
notice to the other party (the "Indemnifying Party") of any such claim, and the
Indemnifying Party shall thereafter defend or settle any such claim, at its sole
expense, on its own behalf and with counsel of its selection. In such defense or
settlement of any claims, the Indemnified Party shall cooperate with the
Indemnifying Party to the maximum extent reasonably possible. Any payment
resulting from such defense or settlement, together with the total expense
thereof, shall be binding on Sellers and Purchaser for the purpose of this
Article VIII.
Section 8.4 Settlement. Notwithstanding the foregoing, should any claim be
made by a person not a party to this Agreement with respect to any matter to
which the foregoing indemnity relates, the Indemnified Party, on not less than
thirty (30) days' notice to the Indemnifying Party, may make settlement of such
claim, and such settlement shall be binding on the Indemnifying Party and the
Indemnified Party for the purposes of this Article VIII; provided, however, that
if within said thirty (30) day period the Indemnifying Party shall have
requested the Indemnified Party not to settle such claim and to deny such claim
at the expense of the Indemnifying Party, the Indemnified Party will promptly
comply and the Indemnifying Party shall have the right to defense on its own
behalf with counsel of its selection. Any payment or settlement resulting from
such contest, together with the total expense thereof, shall be binding on
Sellers and Purchaser for the purposes of this Article VIII.
ARTICLE IX
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BROKERAGE
---------
The Sellers and the Purchaser represent and warrant to the other that the
negotiations relative to this Agreement have been carried on by the Sellers
directly with the Purchaser and by the
Purchaser directly with the Sellers, without the intervention of any person. The
Sellers shall indemnify the Purchaser and the Purchaser shall indemnify the
Sellers and hold the other party or parties harmless against and in respect of
any claim for brokerage or other commissions relative to this Agreement, or to
the transactions contemplated hereby, and also in respect of all expenses of any
character incurred by the Purchaser, on the one hand, and by the Sellers and any
of the Clinics, on the other hand, in connection with this Agreement or such
transactions, arising out of any claim for any such brokerage or other
commissions alleged to be due as a result of the actions or conduct of the
indemnifying party.
ARTICLE X
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FURTHER ASSURANCES;
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ACCESS AND INFORMATION
----------------------
Section 10.1 Further Assurances. The Sellers and Purchaser all hereby
covenant and agree that at any time and from time to time they will promptly
execute and deliver to the others such further instruments and documents and
take such further action as the parties may from time to time reasonably request
in order to further carry out the intent and purpose of this Agreement.
Section 10.2 Access and Information. Through the Closing Date, the Sellers
shall cause the Clinics to give Purchaser and its agents, attorneys, accountants
and representatives full access, during normal working hours of the Clinics to
each of the Clinics' properties, affairs, books, records, contracts and
documents, including, without limitation, all contracts, leases, evidence of
indebtedness and audit work papers of the internal auditors of the Clinics, as
Purchaser may reasonably request; provided, however, that until the Closing,
Purchaser shall not disclose and shall cause its agents, attorneys, accountants
and representatives not to disclose to any other party any confidential data or
information secured from the Clinics, and, if the Closing does not occur as
herein provided, Purchaser will promptly return to the Clinics, at Purchaser's
expense, all books, records and other documents and papers obtained from the
Clinics and all copies thereof.
ARTICLE XI
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NATURE AND SURVIVAL OF REPRESENTATIONS
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All statements contained in any certificate or other instrument delivered
by or on behalf of the Sellers pursuant hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations and warranties
by the Sellers hereunder. All representations, warranties, and agreements made
by the Sellers in this Agreement, or pursuant hereto, except as otherwise
expressly stated, shall survive the Closing and any investigation at any time
made by or on behalf of the Sellers as follows:
(a) The representations, warranties and covenants regarding title to the
Stock, contained in Sections 2.2 and 3.2 hereof, shall survive forever;
(b) All other representations, warranties, and covenants made hereunder
shall be effective for a period of eighteen (18) months following the Effective
Date.
ARTICLE XII
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MISCELLANEOUS
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Section 12.1 Third Party Beneficiary. Coastal, its successors and assigns
are intended to be direct third-party beneficiaries of the covenants contained
in this Agreement and may enforce the same in their own name, as applicable.
Section 12.2 Notices; Addresses. All notices, requests, demands, and other
communications hereunder shall be in writing, and shall be deemed to have been
duly given if delivered or mailed, first class postage prepaid, addressed as
follows:
CPN: Coastal Physician Networks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
CPG: Coastal Physician Group of Florida, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
PURCHASER: ▇▇▇▇▇ Medical Group LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager
Section 12.3 Expenses. The parties hereto shall pay all of their own
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective legal counsel and
financial advisors.
Section 12.4 Counterparts. This Agreement may be executed simultaneously 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.
Section 12.5 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction, shall as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 12.6 Assigns. This Agreement shall be binding upon and inure to the
benefit of any and all successors, assigns, or other successors in interest of
the Purchaser, Coastal and Sellers.
Section 12.7 Public Announcement. Prior to Closing, no party will make any
public announcements with respect to this transaction without the approval of
the other parties, except as otherwise required by law, by the Securities
Exchange Commission, or that are recommended by legal counsel. In any
announcements after Closing, all parties agree to avoid any disparagement of
another party.
Section 12.8 Remedies. In the event that any party defaults or fails to
perform any of the conditions or obligations of such party under this Agreement
or any other agreement, document or instrument executed in connection with this
Agreement, or in the event that any such party's representations or warranties
contained herein or in any such other agreement, document or instrument are not
true and correct as of the date hereof and as of the Closing, the other parties
shall be entitled to exercise any and all rights and remedies available to them
by or pursuant to this Agreement or at law or in equity.
Section 12.9 Captions. The captions and headings set forth in this
Agreement are for convenience of reference only and shall not be construed as a
part of this Agreement.
Section 12.9 Merger Clause. This Agreement contains the final, complete and
exclusive statement of the agreement between the parties with respect to the
transactions contemplated herein and all prior or contemporaneous written or
oral agreements with respect to the subject matter hereof are merged herein.
Section 12.10 Amendments. No change, amendment, qualification or
cancellation hereof shall be effective unless in writing and executed by all of
the parties hereto by their duly authorized officers.
Section 12.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
(Signature Page Follows)
IN WITNESS WHEREOF, the parties have duly executed this Agreement under
seal as of the date first above written.
COASTAL PHYSICIAN NETWORKS, INC.
By:
--------------------------------
Its:
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ATTEST:
By:
--------------------------
Secretary
[Corporate Seal]
COASTAL PHYSICIAN GROUP
OF FLORIDA, INC.
By:
--------------------------------
Its:
-------------------------------
By:
--------------------------
Secretary
[Corporate Seal]
▇▇▇▇▇ MEDICAL GROUP LLC
By: (SEAL)
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Manager