▇▇▇. ▇▇.▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AGREEMENT
With Respect to
Common Stock of
APS PRACTICE MANAGEMENT, INC.
Effective Date: October 1, 1997
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this Agreement") is entered into effective as of
the close of business on October 1, 1997 (the Effective Time), between APS
Practice Management, Inc., a Texas corporation (Seller), MichaelR. ▇▇▇▇ (▇▇▇▇),
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇) and those persons and entities listed on Exhibit-A
hereto (such persons and entities are hereinafter collectively referred to as
the Purchasers and individually as a Purchaser). ▇▇▇▇ and ▇▇▇▇▇▇▇ are also each
referred to herein as a Shareholder and collectively as the Shareholders.
The parties hereto agree as follows:
ARTICLE I
Agreement of Purchase and Sale and Closing TC "ARTICLE I - Agreement of Purchase
and Sale and Closing"
1.1 PURCHASE AND SALE. Upon the basis of the representations and
warranties,for the consideration, and subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell to
Purchasers and Purchasers agree to purchase from Seller, in the
aggregate, two million (2,000,000) shares of common stock, $0.001 par
value per share, (collectively, the Shares) of Seller, allocated among
Purchasers as set forth on Exhibit-A.
1.2 PURCHASE PRICE. The aggregate purchase price (the Purchase Price) for
the Shares shall be five million dollars ($5,000,000) to be paid in
cash or wired funds at the Closing (the Closing Payment), by the
applicable Purchasers as described on Exhibit-A.
1.3 CLOSING.
The closing of the transactions contemplated by this Agreement (the
Closing) shall take place at the offices of Akin, Gump, Strauss, ▇▇▇▇▇
& ▇▇▇▇, L.L.P., 816Congress Avenue, Suite 1900, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
and shall be effective as of the Effective Time. The date on which the
Closing occurs is hereinafter referred to as the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF APSG
Each Purchaser (as to themselves only and not as to any other Purchaser)
represents and warrants to the Sellers that each of the following matters is
true and correct in all respects as of the Closing Date (with the understanding
that Seller and the Shareholders are relying materially on such representations
and warranties in entering into and performing this Agreement), which
representations and warranties shall also be deemed made as of the Effective
Time and which shall survive the Closing and not be merged therein:
2.1 DUE ORGANIZATION AND AUTHORIZATION . Such Purchaser has all necessary power
and authority to carry on its business as now conducted and to enter into and
perform this Agreement and each other agreement, instrument and document
required to be executed by such Purchaser in connection herewith. This Agreement
and each other agreement, instrument, and document required herein to be
executed by such Purchaser have been duly and validly authorized, executed and
delivered by such Purchaser and constitute the valid and binding obligations of
such Purchaser enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, conservatorship, receivership and other similar laws of
general application affecting the rights and remedies of creditors.
2.2 INVESTMENT INTENT. Such Purchaser (a) is acquiring the Shares for its own
account for investment and not with a view to or in connection with a
distribution, within the meaning of the Securities Act of1933, as amended (the
Act) thereof, (b) will not sell or transfer the Shares unless such Shares are
registered under the Act or such sale or transfer is exempt from such
registration requirements, (c) is able to bear the economic risk of its
acquisition of the Shares and (d) has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits of, and
protecting its interests with respect to, its acquisition of the Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and each of the Shareholders, jointly and severally, hereby represent and
warrant to each Purchaser that the following matters are true and correct in all
respects as of the Closing Date (with the understanding that each Purchaser is
relying materially on each such representation and warranty in entering into and
performing this Agreement), which representations and warranties shall also be
deemed made as of the Effective Time and which shall survive the Closing and not
be merged therein:
3.1 DUE ORGANIZATION. Seller is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Texas and has full power and
authority to carry on its business as now conducted and as proposed to be
conducted. Complete and correct copies of Sellers current Certificate and
Articles of Incorporation and Bylaws are attached hereto as Exhibit-B. Seller is
qualified to do business and is in good standing in Texas, and in no other
state.
3.2 SUBSIDIARIES
Seller does not directly or indirectly have, or possess any options or
other rights to acquire, any subsidiaries, or any direct or indirect
ownership interest, in whole or in part, in any person, business,
corporation, partnership, limited liability company, association,
joint venture, trust, or other entity.
3.3 DUE AUTHORIZATION. Each Shareholder and Seller represents and warrants that
(i)they have full power and authority to enter into and perform this Agreement
and each other agreement, instrument, and document required to be executed by
them in connection herewith; (ii)the execution, delivery, and performance of
this Agreement and such other agreements, instruments, and documents have been
duly authorized by all necessary action of Seller; (iii)this Agreement has been
duly and validly executed and delivered by the Seller and the Shareholders, and
constitutes a valid and binding obligation of Seller and the Shareholders
enforceable against them in accordance with its terms, subject to bankruptcy,
insolvency, conservatorship, receivership and other similar laws of general
application affecting the rights and remedies of creditors; (iv)the execution,
delivery, and performance of this Agreement, and each other agreement,
instrument and document required herein to be executed by Seller and/or the
Shareholders does not (a) cause any of them to violate any federal, state,
county, or local law, rule, or regulation applicable to them, (b)cause Seller or
any Shareholder to violate, or conflict with or permit the cancellation of, any
agreement to which Seller or Shareholder is a party, or by which they or any of
their respective properties are bound, or result in the creation of any lien,
security interest, charge, or encumbrance upon any of such properties, (c)
permit the acceleration of the maturity of any indebtedness of, or indebtedness
secured by the property of, any Shareholder or Seller, or (d) cause Seller or
any Shareholder to violate, or conflict with any provision of, the documents
creating or governing the Shareholder; and (v) no action, consent, waiver or
approval of, or filing with, any governmental authority is required by any
Shareholder or Seller in connection with the execution, delivery, or performance
of this Agreement (or any agreement or other document executed in connection
herewith by such Shareholder or Seller). Notwithstanding anything in this
Agreement to the contrary, each Shareholder is making the representations in
this Section 3.3 as to themselves only (and as to Seller where applicable) and
is not making any representation or warranty with respect to any of the matters
addressed in this Section 3.3 relating to any other Shareholder.
3.4 CAPITAL STOCK . The authorized
shares of all classes of capital stock of Seller consist of fifty-one
million two hundred twenty-two thousand two hundred twenty-four
(51,222,224) shares, consisting of and divided into:
(i) On class of fifty million (50,000,000) shares of common stock, $0.001
par value per share;
(ii) One class of two hundred twenty-two thousand two hundred twenty-four
(222,224) shares of serial founders common stock, $0.001 par value per
share (the Serial Founders Common Stock); and
(iii) One class of one million (1,000,000) shares of serial senior preferred
stock, $0.001 par value per share.
All shares of the Serial Founders Common Stock have been validly issued to the
Shareholders, consisting of 111,112 shares of Serial Founders Common Stock
issued to ▇▇▇▇ and 111,112 shares of Serial Founders Common Stock issued to
▇▇▇▇▇▇▇. No other shares of any class of Sellers capital stock are issued or
outstanding.
All shares of Serial Founders Common Stock are duly authorized, validly issued,
outstanding, fully paid, and non-assessable, and all such shares are owned
beneficially and of record by the Shareholders, free and clear of all liens.
There are no outstanding securities, obligations, conversion or other rights,
subscriptions, warrants, options, phantom stock rights, or (except for this
Agreement) other contracts of any kind that give any person or entity the right
to (a)purchase or otherwise receive or be issued any shares of capital stock of
Seller or any security or obligation of any kind convertible into or
exchangeable for any shares of capital stock of Seller, or (b) receive any
benefits or rights that are similar to those enjoyed by or accruing to any
holder of any of the Shares or the Serial Founders Common Stock, or that entitle
the holder to participate in the equity, income or election of directors or
officers of Seller. Notwithstanding the foregoing sentence, the parties hereto
acknowledge that the rights and preferences of the holders of the Serial
Founders Common Stock, as set forth in that certain designation of rights, a
complete and correct copy of which is attached hereto as Exhibit-C (the
Designation of Rights) confers upon the holders of the Serial Founders Common
Stock certain rights and obligations as therein provided. The Designation of
Rights have been duly authorized by all necessary corporate action on the part
of the shareholders and directors of Seller and have been validly filed in the
office of the Secretary of State of Texas. There have been no amendments or
modifications to the Designation of Rights, and Exhibit-C hereto contains a
complete and accurate copy thereof.
Upon the Closing, Purchasers will own one hundred percent (100%) of each and
every share of outstanding capital stock of Seller (except for the Serial
Founders Common Stock), subject to no liens, claims or encumbrances whatsoever
(other than restrictions on transfer imposed by Federal and applicable state
securities laws).
3.5 CONDUCT OF BUSINESS . Seller was incorporated in the state of Texas
on March26,1996, as Sun Valley Physician Management Corporation, and has engaged
in no business operations since the date of incorporation. There have never been
any shareholders of Seller, other than the Shareholders. A complete and correct
copy of all minutes, resolutions and consents adopted by the shareholders and
directors of Seller since its creation ar attached hereto as ExhibitD, and such
minutes, resolutions and consents are complete and correct in all respects, and
contain an accurate representation of all activities undertaken by the
shareholders and directors of Seller on behalf of Seller since Sellers creation.
3.6 LIABILITIES AND OBLIGATIONS. There are no liabilities against, owed by,
relating to or affecting Seller as of the Closing Date. Except for obligations
created pursuant to this Agreement, Seller has no contractual obligations
whatsoever, and has never incurred or discharged any such obligation since its
creation.
3.7 COMPLIANCE WITH LAWS. Seller has complied in all respects, and is in
compliance in all respects, with all federal, state, county, and local laws,
rules, regulations and ordinances currently in effect and applicable to Seller.
No claim has been made or threatened by any governmental authority against
Seller.
3.8 CLAIMS AND PROCEEDINGS. There are no (and since Sellers creation, there have
been no) claims, actions, suits, proceedings, or investigations pending or
threatened against Seller, or affecting Seller, at law or in equity, or before
or by any court, municipal or other governmental department, commission, board,
agency, or instrumentality.
3.9 TAXES. All federal, foreign, state, county, and local income, gross
receipts, excise, property, franchise, license, sales, use, withholding, and
other tax (collectively, Taxes) returns, reports, and declarations of estimated
tax (collectively, Returns) which were required to be filed by Seller on or
before the Closing Date hereof have been filed within the time and in the manner
provided by law, and all such Returns are true and correct and accurately
reflect the Tax liabilities of Seller. Complete and correct copies of all such
Returns have been provided to Purchasers. All Taxes, assessments, penalties, and
interest which have become due pursuant to such Returns have been paid. Seller
does not owe any federal income Taxes for any period prior to the Closing Date
Closing Date, and has never owed or paid any federal income Taxes. Seller has
not executed any presently effective waiver or extension of any statute of
limitations against assessments and collection of Taxes. There are no pending or
threatened claims, assessments, notices, proposals to assess, deficiencies, or
audits against Seller with respect to any Taxes owed or allegedly owed by
Seller. No federal income tax return of Seller has ever been filed. There are no
tax liens applicable to Seller.
3.10 PERSONNEL. Seller has never had any employees. Seller has never designated
or appointed any person or other entity to act for it or on its behalf pursuant
to any power of attorney or any agency.
3.11 INDEBTEDNESS TO AND FROM SHAREHOLDERS . Seller does not owe any
indebtedness to any of the Shareholders and, Seller does not have any
indebtedness owed to it from any of the Shareholders.
3.12 CERTAIN CONSENTS. There are no consents, waivers, or approvals required to
be executed and/or obtained by Seller or any Shareholder in connection with the
execution, delivery , and performance of this Agreement.
3.13 BROKERS. Neither Seller nor any Shareholder has engaged, or caused any
liability to be incurred to, any finder, broker, or sales agent (or has paid, or
will pay, any finders fee or similar fee or commission to any person) in
connection with the execution, delivery, or performance of this Agreement or the
transactions contemplated hereby.
3.14 No Known Breaches. Neither of the Shareholders has knowledge of any breach
or default by the other Shareholder of their respective representations and
warranties, covenants or other agreements made in this Agreement.
ARTICLE IV
COVENANTS AND AGREEMENTS
4.1 VOTING AGREEMENT. From and after the Closing Date, Shareholders agree to
exercise such voting rights as they may have as shareholders of Seller to elect
to the Board of Directors of Seller such person or persons as may be designated
by American Physicians Service Group, Inc., a Texas corporation (APSG). The
Shareholders each further agree to so vote any capital stock they own or may own
in Seller until such time as APSG (or its assignees) no longer owns at least
fifty percent (50%) of all the then issued and outstanding shares (of each and
every class) of common stock of Seller. Furthermore, each Shareholder covenants
and agrees to exercise its voting rights as a shareholder of Seller to
accomplish the consummation of the transactions contemplated by this Agreement.
4.2 EMPLOYMENT OF SHAREHOLDERS. Effective immediately after the Closing, each of
the Shareholders shall become at-will employees of Seller and shall devote their
full business time and attention to the affairs of Seller pursuant to the
direction of, and at the leisure of, the Board of Directors of Seller. Seller
shall have no obligation to increase the salaries, or to grant any bonuses to
either of the Shareholders, or to employ additional persons, except as may be
determined by the Board of Directors of Seller at its sole discretion, and
without implying any obligation whatsoever with respect thereto. Each of the
Shareholders acknowledges and agrees that they shall be at-will employees of
Seller and may be terminated by Seller at any time for any or no reason, at the
discretion of the Board of Directors. APSG agrees that, promptly after the
Closing Date, APSG will vote its shares to elect ▇▇▇▇▇▇▇ as Senior Vice
President and General Counsel of Seller and to elect ▇▇▇▇ as Senior Vice
President of Seller.
4.3 REIMBURSEMENT OF EXPENSES. All parties hereto covenant and agree that,
promptly after the Closing Date, Seller shall reimburse APSG in full for all
expenses incurred by APSG in the negotiation, preparation and entering into of
this Agreement, and in investigating, organizing, planning and conducting
negotiations with respect to, the business to be conducted by Seller after the
Closing. Without limiting the generality of the foregoing, all parties hereto
covenant and agree that APSG shall be entitled to prompt reimbursement after the
Closing Date of any and all amounts paid by APSG or its affiliates pursuant to
that certain letter dated February19,1997, from APSG to ▇▇▇▇ and ▇▇▇▇▇▇▇ (the
Letter Agreement). All parties hereto further agree that the Letter Agreement is
hereby declared void in all respects, is of no further force or effect, and each
of ▇▇▇▇, ▇▇▇▇▇▇▇ and Seller hereby fully release and discharge APSG and APSGs
affiliates, shareholders, directors, officers and employees, from and against
any and all obligations, claims, and causes of action which exist, or may exist,
known or unknown, with respect to the Letter Agreement.
4.4 NO IMPLIED OBLIGATIONS. The parties hereto acknowledge and agree that none
of Seller, any Purchaser, or any director of Seller designated by or elected by
any Purchaser shall be obligated in any respect to consider or approve any
transaction whatsoever that may be presented to, or come before, Seller or its
Board of Directors. At all times after the Closing, the Board of Directors of
Seller shall have sole, complete and independent discretion as to whether to
approve, disapprove,consider or not to consider any acquisition or other
transaction by Seller, and nothing contained in this Agreement or the conduct of
the parties hereto is intended, or should be construed, to indicate or imply
otherwise.
ARTICLE V
CLOSING OBLIGATIONS
5.1 PURCHASERS CLOSING OBLIGATIONS. At the Closing, each Purchaser shall:
(a) pay their respective portion of the Closing Payment (as described on
Exhibit-A); and
(b) deliver such good standing certificates and similar documents and
certificates as Seller or the Shareholders may reasonably require.
5.2 SELLERS AND THE SHAREHOLDERS CLOSING OBLIGATIONS. At the Closing, Seller
and the Shareholders shall:
(a) deliver the original certificates representing the Shares to the Purchasers,
and execute and deliver such other documents as the Purchasers may request in
order to evidence the ownership of the Shares on the books of Seller;
(b) deliver such good standing certificates, officer certificates, and similar
documents and certificates as counsel for the Purchasers may reasonably require;
and
(c) cause every director and officer of Seller (including, without limitation,
the Shareholders) to tender to the Purchasers written resignations from such
positions which are effective as of the Closing Date and which contain releases
of all claims, known or unknown, which such former directors and officers have
or might have against Seller.
ARTICLE VI
INDEMNIFICATION OF PURCHASERS
Each of the Shareholders, jointly and severally, agrees to indemnify and hold
harmless each Purchaser and each officer, director, employee, and affiliate
(including without limitation, Seller) of each Purchaser (collectively, the
Purchaser Indemnified Parties) from and against any and all damages, losses,
claims, liabilities, demands, charges, suits, penalties, costs, and expenses
(including court costs and attorneys fees and expenses incurred in investigating
and preparing for any litigation or proceeding) (collectively, Indemnified
Costs) in connection with the commencement or assertion of any action,
proceeding, demand, or claim by a third party (collectively, a third-party
action) which any of the Purchaser Indemnified Parties may sustain, arising out
of or relating to (a) any breach or default by any Shareholder of any of their
representations, warranties, covenants or agreements contained in this Agreement
or in any agreement or document executed in connection herewith, or (b) any
liability, direct or contingent, known or unknown, of Seller which arises from
or is based on facts, acts or omissions occurring at or prior to the Closing
Date.
ARTICLE VII
NONCOMPETITION
Each of the Shareholders hereby agrees that until the expiration of six(6)
months after any termination of such Shareholders employment with Seller,
whether terminated by either the Seller or the Shareholder, such Shareholder
will not, directly or indirectly, either through any kind of ownership (other
than ownership of securities of a publicly held corporation of which it owns
less than five percent (5%) of any class of outstanding securities), or as a
principal, agent, employer, employee, advisor, consultant, copartner or in any
individual or representative capacity whatever, either for its own benefit or
for the benefit of any other person, firm or corporation, without the prior
written consent of APSG, commit any of the following acts, which acts shall be
considered violations of this covenant not to compete:
(a) Solicit business from, divert business from, or attempt to convert to other
methods of using the same or similar products or services as provided by Seller,
APSG or their affiliates, any client, account, or location of the Seller , APSG
or their affiliates, or any potential client, account or location which Seller
or Sellers affiliates are then pursuing, considering or negotiating with; or
(b) Directly or indirectly solicit for employment or employ any employee of
APSG, Seller or any affiliate or entity related to any of them, or induce or
attempt to influence any employee of APSG, Seller or any such affiliate or
related entity to terminate his or her employment with APSG, Seller or any such
affiliate or related entity; or
(c) Provide physician practice management services, or engage in the physician
practice management business, or the business of acquiring physician practices,
with respect to any physicians or physician group, entity or organization, whose
primary specialty is obstetrics and/or gynecology (OB/GYN) anywhere within 100
miles of (i) any physician practice then managed or otherwise serviced by Seller
or Sellers affiliates, or (ii) any physician practice which Seller or Sellers
affiliates is then pursuing, considering or negotiating with for services,
acquisition or other business; or
(d) Directly or indirectly request or advise any patient or physician or any
other person, firm, corporation or other entity having a business relationship
with Seller or APSG or any affiliate or related entity, to withdraw, curtail or
cancel its business with Seller or such affiliate or related entity.
In addition to the foregoing, after the expiration of the six (6) month
post-employment termination period described above, and during the second six
(6) month period after any termination of a Shareholders employment with Seller,
whether terminated by either the Seller or the Shareholder, the terminated
Shareholder will provide Seller with a right-of-first refusal for all
transactions which such Shareholder may in any way be involved in or with,
concerning the providing of physician practice management services, the
physician practice management business, or the business of acquiring physician
practices, involving physicians or practices whose primary specialty isOB/GYN.
Pursuant to such right-of-first refusal, the applicable Shareholder shall, prior
to entering into any binding agreements with respect to the subject transaction,
provide written details concerning such transaction, and the terms thereof, to
Sellers Board of Directors, and provide Seller with at least thirty (30) days
thereafter to exercise its right of first refusal and engage in such transaction
on the same proposed terms and conditions. If Seller fails to exercise its right
of first refusal during such thirty (30) day period, same shall be deemed a
refusal to exercise its right of first refusal.
Each of the Shareholders has reviewed and carefully considered the provisions of
this ARTICLE and, having done so, each agrees that the restrictions set forth
herein (a) are fair and reasonable with respect to time, geographic area and
scope, (b)are not unduly burdensome to any of the Shareholders, and (c) are
reasonably required for the protection of the interests of APSG, Seller and
their affiliates.
Each of the Shareholders agrees that a violation on its part of any covenant
contained in this ARTICLE will cause APSG and Seller irreparable damage for
which remedies at law may be insufficient, and for that reason, each of the
Sellers agrees that APSG and Seller shall be entitled as a matter of right to
equitable remedies, including specific performance and injunctive relief,
therefor. The right to specific performance and injunctive relief shall be
cumulative and in addition to whatever other remedies, at law or in equity, that
APSG or Seller may have, including, specifically, recovery of additional
damages.
ARTICLE VIII
REGISTRATION RIGHTS
8.1 Incidental Registration Rights. For purposes of this ARTICLE VIII,
the Purchasers and the Shareholders are collectively referred to as the Covered
Parties and individually as a Covered Party. Each of the Covered Parties shall
have the incidental registration rights and other rights provided under this
ARTICLEVIII. The incidental registration rights described in this ARTICLE VIII
shall only apply with respect to shares of the Sellers common stock, $0.001 par
value per share, owned by any of the Covered Parties, and shall not apply with
respect to any other form of capital stock of Seller owned by any of the Covered
Parties including, without limitation, any Serial Founders common stock or any
preferred stock; and any reference in this ARTICLE VIII to Shares shall be
deemed to refer to the Shares of the Purchasers (as defined in Section1.1 above)
and to any shares of the $0.001 par value common stock of Seller which may
hereafter become owned by either of the Shareholders.
If Seller at any time proposes to register any of its common stock under
the Act for sale to the public, whether for its own account or for the account
of other security holders or both (except with respect to registration
statements on FormsS-4 or S-8 or another form not available for registering the
Shares for sale to the public or in connection with mergers, acquisitions,
exchange offers, dividend reinvestment plans or stock option or other employee
benefit plans of the Seller), it will give written notice to the Covered Parties
of its intention so to do, which notice shall include a list of the
jurisdictions in which the Seller intends to attempt to qualify the common stock
under the applicable state securities laws. Upon the written request of one or
more Covered Parties, given within 10 days after receipt of any such notice, to
register any of their Shares, Seller will, subject to the limitations and
conditions contained herein, use its best efforts to cause the Shares as to
which registration shall have been so requested (Covered Shares), pro rata
between the Covered Parties in a ratio equal to the respective number of Shares
then owned and requested to be registered by them, or such other ratio as may
have been agreed upon among the Covered Parties, to be included in the
securities to be covered by the registration statement proposed to be filed by
the Seller, all to the extent requisite to permit the sale or other disposition
by the Covered Parties; provided, however, that:
(i) Each Covered Party shall each have the right to request inclusion of
its Shares (and have such Shares included) in two registration statements that
are declared effective by the Securities and Exchange Commission (the
Commission).
(ii) If, at any time after giving such written notice of its intention
to register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Seller shall determine
for any reason not to register any securities at all (and in fact does not do
so), the Seller may, at its election, give written notice of such determination
to the Covered Parties who made a request as hereinabove provided and thereupon
the Seller shall be relieved of its obligation to register any Shares in
connection with that proposed registration.
(iii) If such registration involves an underwritten offering, the
Covered Parties requesting to be included in the Seller's registration must sell
their Covered Shares to the underwriters selected by the Seller on the same
terms and conditions as apply to the Seller and other selling parties under the
registration statement (except as otherwise set forth herein).
The number of Covered Shares to be included in such an offering may be
reduced if and to the extent that the managing underwriter, if any, shall be of
the opinion that such inclusion would adversely affect the marketing of the
securities to be sold by Seller therein (pro rata between the Covered Parties in
a ratio equal to the respective amounts of Covered Shares held by each.)
Notwithstanding anything to the contrary contained in this Section, in the event
that there is an underwritten public offering of securities of the Seller
pursuant to a registration covering Shares and a Covered Party does not elect to
sell its Covered Shares to the underwriters of the Seller's securities in
connection with such offering, such Covered Party shall refrain from selling
such Covered Shares during the period of distribution of the Sellers securities
by such underwriters, the period in which the underwriting syndicate
participates in the after market and during any lock-up period requested by such
underwriters; provided, however, that the Covered Parties shall, in any event,
be entitled to sell their Shares commencing on the 180th day after the effective
date of such registration statement.
8.2 REGISTRATION PROCEDURES. If and whenever the Seller is required by
the provisions of this ARTICLE to effect the registration of any of the Covered
Shares under the Act, Seller will, as expeditiously as possible:
(i) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering shall be on such form of
general applicability as may be satisfactory to the managing underwriter) with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus filed in
connection therewith as may be necessary to keep such registration statement
effective for the period of distribution and as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement in accordance with the Sellers intended
method of disposition set forth in such registration statement for such period;
(iii) furnish to the Covered Parties, as applicable, and each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as they may
reasonably request in order to facilitate the public sale or other disposition
of the Covered Shares covered by such registration statement;
(iv) use its best efforts to register or qualify the Covered Shares
covered by such registration statement under the securities or blue sky laws of
such jurisdictions as the Covered Parties, as applicable, or, in the case of an
underwritten public offering, the managing underwriter, shall reasonably request
(provided that the Seller will not be required to (1) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subsection, (2) subject itself to taxation in any such jurisdiction
or (3) consent to general service of process in any such jurisdiction);
(v) promptly notify the Covered Parties, as applicable, under such
registration statement and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Act when it becomes aware
of the happening of any event as a result of which the prospectus contained in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements contained therein not misleading in
light of the circumstances then existing;
(vi) use its best efforts (if the offering is underwritten) to furnish,
at the request of the Covered Parties, as applicable, on the date that the
Covered Shares are delivered to the underwriters for sale pursuant to such
registration: (1) an opinion dated such date of counsel representing the Seller
for the purposes of such registration, addressed to the underwriters and in
customary form and covering such matters as are customarily covered by opinions
of counsel in similar registrations and as may be required in the underwriting
agreement relating thereto, as may reasonably be requested by the underwriters
or by the Covered Parties, as applicable; and (2) a comfort letter dated such
date from the independent public accountants retained by the Seller, addressed
to the underwriters, in customary form and covering such matters as are
customarily covered by such comfort letters in similar registrations and as may
be required in the underwriting agreement relating thereto, as such underwriters
or the Covered Parties, as applicable, may reasonably request; and
(vii) make available for inspection by the Covered Parties, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant, or other agent retained by the Covered
Parties, or underwriter, all financial and other records, pertinent corporate
documents, and properties of the Seller, and cause the Seller's officers,
directors, and employees to supply all information reasonably requested by any
such Covered Party, underwriter, attorney, accountant, or agent in connection
with such registration statement.
For purposes of paragraphs (i) and (ii) above, the period of
distribution of Covered Shares in an underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Covered Shares in
any other registration shall be deemed to extend until the earlier of the sale
of all Covered Shares or 180 days after the effective date thereof.
In connection with each registration hereunder, the Covered Parties, as
applicable, will furnish to the Seller in writing such information with respect
to themselves and the proposed distribution by them as shall be requested by the
Seller in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration covering an underwritten public
offering, Seller agrees to enter into a written agreement with the managing
underwriter selected in the manner herein provided in such form and containing
such provisions as are customary in the securities business for such an
arrangement between major underwriters and companies of the Sellers size and
investment stature; provided that such agreement shall not contain any such
provision applicable to the Seller that is inconsistent with the provisions
hereof and, further, provided that the time and place of the closing under such
agreement shall be as mutually agreed upon between the Seller and such managing
underwriter.
The Seller will not be obligated to include any Shares owned by the
Covered Parties requesting that a proposed registration include such Shares if
the Seller delivers to the requesting Covered Parties the opinion of the Sellers
counsel (such counsel and the form of such opinion having been approved by the
Covered Parties in their reasonable discretion) to the effect that the requested
registration is not required to permit the proposed disposition or any resale of
such Shares, without restrictions on subsequent transfer, under the Act, which
opinion may be furnished to and relied upon by any broker through which the
Covered Parties may elect to sell any Shares.
8.3 CONDITIONS TO OBLIGATION TO REGISTER SHARES. The Sellers obligations
under this ARTICLE shall be subject to the following limitations and conditions:
(a) Seller shall have received from the Covered Parties, as
applicable, all such information as the Seller may reasonably request from the
Covered Parties concerning each of them and each of their methods of
distribution of the Covered Shares to enable Seller to include in the
registration statement all material facts required to be disclosed therein.
(b) Any request by the Covered Parties pursuant to this
Agreement for registration of the offering, sale and delivery of Shares shall
provide that each Covered Party, as applicable, (i)has a present intention to
sell such Shares; (ii) agrees to execute all consents, powers of attorneys and
other documents required in order to cause such registration statement to become
effective; (iii) agrees, if the offering is at the market, to give the Seller
written notice of the first bona fide offering of such Shares and to use the
prospectus forming a part of such registration statement only for a period of
180 days after the effective date of the registration statement unless the
offering is pursuant to a continuous registration pursuant to Rule 415
promulgated under the Act; (iv) subject to adverse events regarding the selling
price of the Shares, agrees to utilize its proposed method of distribution of
the registered securities; and (v) agrees to promptly notify Seller and each
underwriter, if any, with regard to any registration statement, at any time when
it becomes aware of the happening of any event as a result of which any
prospectus contained in such registration statement that has been provided to
the Covered Party includes an untrue statement of a material fact regarding the
Covered Party or omits to state a material fact regarding the Covered Party
required to be stated therein or necessary to make the statements contained
therein regarding such Covered Party not misleading in light of the
circumstances then existing.
8.4 DISTRIBUTION ARRANGEMENTS. Each Covered Party, as applicable, agrees
that, in disposing of its Shares in the registered public offering, such Covered
Party will comply with applicable rules promulgated by the Commission.
8.5 EXPENSES. All expenses incurred by the Seller in preparing and
complying with a registration covering any Shares, including, without
limitation, all registration, qualification, and filing fees, blue sky fees and
expenses, printing expenses, fees and disbursements of legal counsel and
independent public accountants for the Seller, the reasonable fees and expenses
of one law firm serving as legal counsel for the participating Covered Parties,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
escrow fees, fees of transfer agents and registrars, and costs of insurance, but
excluding any Selling Expenses, are herein called Registration Expenses. All
underwriting discounts, and selling commissions applicable to the sale of
Covered Shares are herein called Selling Expenses.
The Seller shall pay all Registration Expenses in connection with any
registration statement. All Selling Expenses in connection with any registration
statement shall be borne by each participating Covered Party in proportion to
the number of Covered Shares sold by each.
8.6 INDEMNIFICATION. In the event of a registration of any of the
Covered Shares under the Securities Act, the Seller shall indemnify and hold
harmless the Covered Party, as applicable, thereunder and each underwriter and
each associate, if any, of the Covered Parties, or underwriter, against any
losses, claims, damages, or liabilities, joint or several, to which the Covered
Parties, or underwriter or associate thereof may become subject under the Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Covered Shares were registered under the Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, 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 any violation by
Seller of any rule or regulation promulgated under the Act applicable to Seller
and relating to action or inaction by Seller in connection with any such
registration, and shall reimburse the Covered Parties, each underwriter and/or
associate thereof for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the Seller will not be liable in
any such case if and to 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 conformity with information
furnished by the Covered Parties, each underwriter and/or associate thereof in
writing specifically for use in such registration statement or prospectus.
In the event of a registration of any of the Covered Shares under the
Act, each of the Covered Parties, as applicable, severally and not jointly, will
indemnify and hold harmless the Seller and its affiliates, if any, and each
underwriter and each associate of any underwriter against all losses, claims,
damages or liabilities, joint or several, to which the Seller or such
underwriter or associate may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement under which such
Covered Shares were registered under the Act, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, 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, and will reimburse the Seller, each
underwriter and/or associate thereof for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that a Covered Party will
be liable hereunder in any such case if and only to 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
reliance upon and in conformity with information pertaining to such Covered
Party, furnished in writing to the Seller by that Covered Party specifically for
use in such registration statement or prospectus; and provided further, however,
that the liability of any Covered Party hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense that is equal
to the proportion that the public offering price of Covered Shares sold by such
Covered Party, under such registration statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
received by such Covered Party from the sale of Covered Shares covered by such
registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability it may have to any
indemnified party other than under this Section. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison with
counsel so elected; provided, however that, if the defendants in any such action
include both the indemnified party and the indemnifying party and if the
interests of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified party shall have the right
to select separate counsel and to assume its defense and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. The indemnifying party will
not be subject to any settlement made without its consent, which consent shall
not be unreasonably withheld. The indemnifying party will pay to the indemnified
party all sums due hereunder within 10 days of a final non-appealable judgment
or pursuant to the terms of a settlement agreement.
8.7 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Seller shall not enter into any agreement with any
holder or prospective holder of any securities of the Seller (nor shall the
Seller, in the absence of any such prior agreement, permit any such holder or
prospective holder) to include such securities in any registration contemplated
by this Agreement other than incidental (non-demand) registration rights that
are expressly subordinate to those granted the Covered Parties in this
Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 COLLATERAL AGREEMENTS, AMENDMENTS, AND WAIVERS. This Agreement (together
with the documents delivered pursuant hereto) supersedes all prior documents,
understandings, and agreements, oral or written (including without limitation,
the Letter Agreement), relating to the transactions contemplated herein and
constitutes the entire understanding among the parties with respect to the
subject matter hereof. Any modification or amendment to, or waiver of, any
provision of this Agreement (or any document delivered pursuant to this
Agreement unless otherwise expressly provided therein) may be made only by an
instrument in writing executed by each party thereto.
9.2 SUCCESSORS AND ASSIGNS. None of the parties rights or obligations under this
Agreement may be assigned without the prior written consent of all parties
hereto, except that APSG may assign its rights and obligations hereunder to any
entity, at least a majority of whose voting equity ownership interests is at the
time owned, directly or indirectly, by APSG. Any assignment in violation of the
foregoing shall be null and void. Subject to the preceding sentences of this
Section, the provisions of this Agreement (and, unless otherwise expressly
provided therein, of any document delivered pursuant to this Agreement) shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors, and permitted assigns.
9.3 EXPENSES. Except as provided in Section 4.3, and regardless of whether the
transactions contemplated hereby are consummated, each party hereto shall pay
all of its costs and expenses incurred by it in connection with this Agreement,
including the fees and disbursements of its counsel.
9.4 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws, such provision
shall be fully severable, this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement.
9.5 INFORMATION AND CONFIDENTIALITY. Each party hereto agrees that such party
shall hold in strict confidence all information and documents received from any
other party hereto, and if the Closing does not occur, each such party shall
return to the other parties hereto all such documents then in such receiving
partys possession without retaining copies; provided, however, that each partys
obligations under this Section shall not apply to (a) any information or
document required to be disclosed by law, (b)any information or document in the
public domain, or (c)any information or document that APSG discloses to any
potential lender to or investor in APSG or any of its affiliates.
9.6 WAIVER. No failure or delay on the part of any party in exercising any
right, power, or privilege hereunder or under any of the documents delivered in
connection with this Agreement shall operate as a waiver of such right, power,
or privilege; nor shall any single or partial exercise of any such right, power,
or privilege preclude any other or future exercise thereof or the exercise of
any other right, power or privilege.
9.7 NOTICES. Any notices required or permitted to be given under this Agreement
(and, unless otherwise expressly provided therein, under any document delivered
pursuant to this Agreement) shall be given in writing and shall be deemed
received (a) when personally delivered to the relevant party at its address as
set forth below or (b) if sent by mail, on the third day following the date when
deposited in the United States mail, certified or registered mail, postage
prepaid, to the relevant party at its address indicated below:
Any Purchaser: American Physicians Service Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Seller and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Shareholders: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
2415 Trail of the Madrones
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Each party may change its address for purposes of this Section by proper notice
to the other parties.
9.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, all covenants, agreements,
representations, and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing.
9.9 FURTHER ASSURANCES. At, and from time to time after, the Closing, each party
shall, at the request of another party, but without further consideration,
execute and deliver such other instruments of conveyance, assignment,
assumption, transfer and delivery and take such other action as such party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
9.10 CONSTRUCTION. This Agreement and any documents or instruments delivered
pursuant hereto or in connection herewith shall be construed without regard to
the identity of the person who drafted the various provisions of the same. Each
and every provision of this Agreement and such other documents and instruments
shall be construed as though all of the parties participated equally in the
drafting of the same. Consequently, the parties acknowledge and agree that any
rule of construction that a document is to be construed against the drafting
party shall not be applicable either to this Agreement or such other documents
and instruments.
9.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
9.12 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same instrument. Any party hereto may execute this Agreement by
signing any one counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
SIGNATURE PAGE TO
APS PRACTICE MANAGEMENT, INC.
STOCK PURCHASE AGREEMENT
Seller: APS PRACTICE MANAGEMENT, INC.
By:
Printed Name:
Title:
▇▇▇▇: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Purchasers: AMERICAN PHYSICIANS SERVICE GROUP, INC.
By:
Printed Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. TRUST
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Trustee
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Trustee
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
SIGNATURE PAGE TO
APS PRACTICE MANAGEMENT, INC.
STOCK PURCHASE AGREEMENT
▇. ▇. ▇▇▇▇▇▇ DESCENDANTS TRUST
By /s/ ▇▇▇▇ ▇▇▇▇▇▇, Grantor
▇▇▇▇ ▇▇▇▇▇▇, Grantor
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
EXHIBIT-A
LIST OF PURCHASERS
Name of Purchaser
Number of Shares
Closing Payment Obligation
American Physicians Service
Group, Inc.
1,874,600
$4,686,500
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
30,000
$ 75,000
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Trust
12,000
$ 30,000
▇▇▇▇▇▇ ▇. ▇▇▇▇
40,000
$100,000
▇. ▇. ▇▇▇▇▇▇ Descendants Trust
20,000
$50,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
4,000
$10,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
2,400
$6,000
▇▇▇▇▇ ▇▇▇▇▇▇
4,000
$10,000
▇▇▇▇ ▇▇▇▇▇▇▇▇
10,000
$25,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
3,000
$7,500
TOTALS
2,000,000
$5,000,000