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Exhibit 10.12
AGREEMENT TO TRANSFER STOCK AND STOCK PLEDGE
This agreement is made on November 1, 1996 by and between ▇▇▇▇ ▇▇▇▇▇▇,
D.D.S. ("▇▇. ▇▇▇▇▇▇"), an individual licensed to practice dentistry in Florida
whose mailing address is ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ and COAST DENTAL SERVICES, INC. ("Secured Party"), a Delaware corporation
whose mailing address is 25400 U. ▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
BACKGROUND INFORMATION
A. Coast Florida, P.A. ("Coast Fla.") is a Florida professional
association which employs dentists.
B. ▇▇. ▇▇▇▇▇▇ is the sole shareholder of Coast Fla.
C. Pursuant to a Services and Support Agreement (the "Support
Agreement") dated October 1, 1996, the Secured Party provides certain services
and support to the dental practices of Coast Fla.'s employed dentists.
D. ▇▇. ▇▇▇▇▇▇ has agreed to sell all of Coast Fla.'s shares owned
by him to the Secured Party's designee for value if certain events occur, and
the Secured Party desires its designee to purchase such shares if certain
events occur.
E. ▇▇. ▇▇▇▇▇▇ desires to pledge all of Coast Fla.'s shares owned
by him to secure the promise referenced in paragraph D above and Secured Party
desires to accept such security interest.
STATEMENT OF AGREEMENT
The parties acknowledge the accuracy of the above information and in
connection with the mutual promises and conditions contained herein and for
other valid consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.01 "COLLATERAL" means the shares of Coast Fla. stock owned by ▇▇.
▇▇▇▇▇▇ consisting of all of the validly issued and outstanding shares of Coast
Fla.
1.02 "TRANSFEREE" means the dentist(s) or professional association
licensed to practice dentistry in Florida chosen by the Secured Party to be the
purchaser of the Collateral.
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2. CONDITIONAL AGREEMENT TO TRANSFER STOCK. ▇▇. ▇▇▇▇▇▇ shall immediately
transfer the Collateral to the Transferee for the Purchase Price set forth in
Section 5 below if any of the following occurs (collectively, "Events of
Transfer"):
(a) ▇▇. ▇▇▇▇▇▇ dies,
(b) ▇▇. ▇▇▇▇▇▇ loses his Florida license to
practice dentistry for any reason,
(c) There is a default under the Support
Agreement by Coast Fla. or ▇▇. ▇▇▇▇▇▇,
(d) ▇▇. ▇▇▇▇▇▇ becomes insolvent by reason of his
inability to pay his debts as they mature; is adjudicated bankrupt or
insolvent; files a petition in bankruptcy, reorganization or similar proceeding
under the bankruptcy laws of the United States or has such a petition filed
against him which is not discharged within thirty (30) days; has a receiver or
other custodian, permanent or temporary, appointed for his business, assets or
property; has his bank accounts, property or accounts attached; has execution
levied against his business or property; makes an assignment for the benefit of
his creditors; or has any of his Shares attached or levied upon for payment of
his debts,
(e) ▇▇. ▇▇▇▇▇▇ is adjudicated incompetent by any
court of law,
(f) For any reason not otherwise an Event of
Default, ▇▇. ▇▇▇▇▇▇ no longer meets the qualifications to be a shareholder of a
Florida professional association, or
(g) This Agreement is breached by ▇▇. ▇▇▇▇▇▇.
3. GRANT OF SECURITY INTEREST. ▇▇. ▇▇▇▇▇▇ grants to Secured Party a
security interest in the Collateral to secure the promise set forth in Section
2 above.
4. DESIGNATION OF TRANSFEREE. The Secured Party shall designate
Transferee to purchase the Collateral upon an Event of Transfer.
5. PAYMENT OF PURCHASE PRICE. The purchase price for the Collateral
purchased by the Transferee (the "Purchase Price") shall be an amount equal to
the fair market value of the Collateral as of the date of the default,
determined by the nationally recognized firm of independent certified public
accountants selected by the Secured Party. Any determination of the
Collateral's fair market value by such firm shall be deemed a final
determination of the fair market value as of the determination date and shall
be conclusive upon all parties for purposes of this agreement as a commercially
reasonable price. The Purchase Price shall be payable
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to ▇▇. ▇▇▇▇▇▇ or his personal representative in cash and/or promissory note
within thirty (30) days after the Secured Party's receipt of the accounting
firm's Purchase Price determination. The promissory note shall be payable over
three (3) years and bear interest at the rate of eight percent (8%) per annum.
6. COMMERCIALLY REASONABLE DISPOSITION. The parties acknowledge that it
would be impossible to realize a commercially reasonable price on the
disposition of the pledged stock by public sale and very difficult to do so by
private sale, except on the terms and conditions in Section Section 4 and 5.
Therefore, the parties acknowledge that a disposition of the Collateral under
Section Section 4 and 5 is a commercially reasonable disposition, and agree
that the determination of price under Section 5 is commercially reasonable and
that they will be bound by the price.
7. TERM. This agreement shall continue for as long as the Support
Agreement and any renewals thereof are in effect.
8. REPRESENTATIONS AND WARRANTIES. ▇▇. ▇▇▇▇▇▇ represents and warrants
the following.
8.01 ▇▇. ▇▇▇▇▇▇. There is no provision of any agreement to which
▇▇. ▇▇▇▇▇▇ is a party or of any law that would be contravened by the execution,
delivery, or performance of this agreement; ▇▇. ▇▇▇▇▇▇'▇ name and description
of legal status at the beginning are correct; and the background information
listed as paragraphs A through E at the beginning are correct.
8.02 COLLATERAL. As to each item of Collateral, ▇▇. ▇▇▇▇▇▇ has
good title, free and clear of all claims, charges, liens, encumbrances,
restrictions, options, calls and defects of any kind or nature whatsoever,
except for a security interest granted hereby; no other person, entity, or
governmental authority has or claims any lien or other interest in the
Collateral; no adverse financing statements are on file; and there is no
litigation nor are there any proceedings by any public body, agency, or
authority presently pending or threatened against ▇▇. ▇▇▇▇▇▇, the outcome of
which might materially and adversely affect the Collateral.
8.03 COAST FLA. Coast Fla. will not issue, sell, or otherwise
cause to become outstanding any additional capital stock; there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require Coast Fla. to issue, sell, or otherwise cause to become
outstanding any of its capital stock; and there is no litigation nor are there
any proceedings by any public body, agency, or authority presently pending or
threatened against Coast Fla. or ▇▇. ▇▇▇▇▇▇, the outcome of which might
materially and adversely affect the continued operations of Coast Fla.
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8.04 SURVIVAL OF WARRANTIES. All representations and warranties
shall survive the execution and delivery of this agreement.
9. AFFIRMATIVE COVENANTS.
9.01 NO AGENCY AND DEFENSE AGAINST CLAIMS. Nothing in this agreement
shall make ▇▇. ▇▇▇▇▇▇ an agent of Secured Party for any purpose whatsoever.
▇▇. ▇▇▇▇▇▇ shall defend the Collateral against all claims, demands, and
defenses affecting Secured Party's security interest, regardless of merit, and
shall hold Secured Party harmless therefrom, including without limit harmless
from all attorneys' fees and other litigation expenses arising out of any such
claims, demands, or defenses.
10. CUSTODY AND HANDLING OF COLLATERAL AND RECORDS.
10.01 PROTECTION OF SECURED PARTY'S SECURITY INTEREST. Upon
execution of this agreement, ▇▇. ▇▇▇▇▇▇ shall give the Secured Party the share
certificate(s) representing the Collateral, duly endorsed in blank or, if not
endorsed in blank, ▇▇. ▇▇▇▇▇▇ shall give the Secured Party a duly executed
stock power in blank.
10.02 NO AUTHORITY TO SELL. ▇▇. ▇▇▇▇▇▇ shall not sell, assign,
pledge, hypothecate, encumber, or otherwise transfer any item of Collateral
except as expressly provided in this agreement. ▇▇. ▇▇▇▇▇▇ may sell or assign
the Collateral only if purchaser or assignee Collateral first agrees in writing
with the Secured Party to be bound by the terms of this agreement. If any
item of Collateral or any right therein is transferred contrary to this
agreement, Secured Party retains a security interest in such item and in the
proceeds of such disposition.
11. DEFAULT AND REMEDIES.
11.01 REMEDIES UPON DEFAULT. Upon the occurrence of any default and
continuously thereafter until waived in writing, Secured Party shall have the
right and option to immediately sell the Collateral to Transferee subject to a
subsequent determination of the Purchase Price to be paid later or to exercise
any other remedy available to Secured Party as a secured party under law or
equity.
11.02 CONSTRUCTION OF RIGHTS AND REMEDIES AND WAIVER OF NOTICE AND
CONSENT.
(a) This section applies to all rights and remedies
provided by this agreement or by law or equity.
(b) Unless otherwise expressly provided herein, any right
or remedy may be pursued without notice to or further consent of ▇▇. ▇▇▇▇▇▇,
both of which ▇▇. ▇▇▇▇▇▇ waives.
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(c) No forbearance in exercising any right or remedy
shall operate as a waiver thereof; no forbearance in exercising any right or
remedy on any one or more occasions shall operate as a waiver thereof on any
future occasion; and no single or partial exercise of any right or remedy shall
preclude any other exercise thereof or the exercise of any other right or
remedy.
12. MISCELLANEOUS.
12.01 NOTICES. Any notices, statements, requests, demands, consents,
or other documents ("notices") shall be in writing and shall be delivered
personally, by certified mail, postage prepaid, return receipt requested, or by
overnight courier (prepaid) to the addresses set forth in the first paragraph
hereof. When personally delivered, all notices shall be deemed given when
actually received. When mailed, all notices shall be deemed given three days
after mailing by certified mail and one day after mailing by overnight courier.
Any notices given pursuant to this Section 8.01 shall be deemed reasonable and
shall be effective, regardless of whether actually received.
12.02 GOVERNING LAW. This agreement shall be construed and
interpreted under the laws of the State of Florida.
12.03 BINDING EFFECT. This agreement shall be binding upon ▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇'▇ personal representatives, heirs, successors, and assigns,
as the case may be, and shall be binding upon and inure to the benefit of
Secured Party and its successors and assigns. ▇▇. ▇▇▇▇▇▇ may not assign this
agreement.
12.04 AMENDMENT. This agreement may be amended, but only by a
written amendment signed by Secured Party and ▇▇. ▇▇▇▇▇▇.
12.05 SEVERABILITY. If any provision of this agreement or the
application of any provision to any party or circumstance shall be adjudged
invalid or unenforceable to any extent, the application of the remainder of the
provision to the party or circumstance, the application of such provision to
other parties or circumstances, and the application of the remainder of this
agreement shall not be affected thereby. Each provision of this agreement
shall be valid and enforceable to the fullest extent permitted by law.
12.06 HEADINGS. The headings in this agreement are for convenience
of reference only and shall not be used in interpreting this agreement.
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12.07 NUMBER; GENDER. Where appropriate, the number of all words in
this agreement shall be both singular and plural and the gender of all pronouns
shall be masculine, feminine, neuter, or any combination thereof.
COAST DENTAL SERVICES, INC.
By:___________________________ ________________________________
▇▇▇▇ ▇▇▇▇▇▇, D.D.S.
Its:_____________________
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