Exhibit 10.1
Dental Cooperative
Affiliate Member Practice Purchase Agreement
This Affiliate Member Practice Purchase Agreement (the "Agreement") is
effective as of the 16th day of November, 2006, by and among DENTAL COOPERATIVE,
INC., a Utah corporation ("Dental Cooperative"); the Provider; and those natural
persons, if any, who own Provider ("Dentist(s)"), all as specified on the
Signature Page. THIS AGREEMENT SUPERCEDES ANY AND ALL PRE-EXISTING AGREEMENTS OR
UNDERSTANDINGS AMONG THE PARTIES, WHETHER IN WRITING OR OTHERWISE. ANY SEPARATE
WRITING PURPORTING TO ALTER THE UNDERSTANDINGS SET FORTH BELOW OR EXEMPT A
PROVIDER FROM ANY OF THE UNDERSTANDINGS BELOW MUST BE IN WRITING AND REFERENCE
EXPLICITLY THE INTENT TO MODIFY THIS AGREEMENT.
RECITALS
WHEREAS, Dental Cooperative has entered into the business of acquiring,
operating and selling dental practices of retiring dentists or dentists that are
relocating.
WHEREAS, Dental Cooperative is interested in acquiring the Dental
Practice and Provider is interested in selling the Dental Practice to Dental
Cooperative.
WHEREAS, title to the Dental Practice Assets will be transferred at the
Closing.
WHEREAS, the purchase price will be paid over a five (5) year period
and during this period a properly licensed dentist or dentists will
independently manage and maintain the Dental Practice.
NOW, THEREFORE, in consideration of the mutual conditions,
representations and covenants contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. For purposes of this Agreement and each of the
Operative Documents (unless otherwise defined herein or therein), the following
terms shall have the following meanings:
"Approved Liabilities" has the meaning set forth in Section 3.2.
"Closing" and "Closing Date" have the respective meanings set forth in
Article 6.
"Collections" means the gross revenues of the Dental Practice arising
from the sale of any and all services and/or products in a given period
accounted for on a cash basis, representing amounts paid by patients or by
insurers or their representatives for services or products and any other revenue
of the Dental Practice.
"Confidential Information" has the meaning set forth in Section 9.1.
"Dental Office" means the location or facility specified on the
Signature Page (or in an attachment thereto) from which the Provider provides
Dental Services. This term will include, if applicable, mobile facilities.
"Dental Practice" means Provider's business of providing Dental
Services and all tangible and intangible assets of that business, including but
not limited to any and all licenses and leaseholds needed for the conduct of
such business. The Dental Practice does not, however, include any cash on hand,
accounts receivable, patient lists or HIPPA (Health Information Portability and
Privacy Act) protected health information.
"Dental Practice Assets" has the meaning set forth in Section 5.1(c).
"DPCA" means Dental Patient Care America, Inc.
"Dental Professional" means any licensed dental professional working at
a Dental Practice, whether an independent contractor or employee, including any
dentist, dental hygienist, anesthetist and other such position for which
licensure is required by law, who is employed or otherwise retained by the
Provider to provide Dental Services to patients.
"Dental Services" means all dental and related health care services,
and the sale of related dental products, including without limitation,
examination, diagnosis, preventive care, restoration, surgery and other therapy.
"Dentist(s)" has the meaning noted in the introduction to this
Agreement.
"Final Cash Payment" has the meaning set forth in Section 3.1(a).
"Indemnified Party" and "Indemnifying Party" have the meanings set
forth in Section 9.2(c).
"Market Price" means, as of a specific date, the average of the last
reported sale prices for the last fifteen trading days as officially reported by
the principal securities exchange on which DPCA's common stock is listed or
admitted to trading during said period, or, if DPCA's common stock is not listed
or admitted to trading on any national securities exchange during said period,
the average closing bid price of the common stock on the Nasdaq Stock Market
System or reported on the NASD's OTC Bulletin Board or the Pink Sheets or, if
DPCA's common stock is not quoted on Nasdaq, the OTC Bulletin Board or the Pink
Sheets, as determined in good faith by resolution of the board of directors of
the DPCA, based on the best information available to it.
"Material Adverse Change" means any effect or change that would be (or
could reasonably be expected to be) materially adverse to the business, assets,
condition (financial or otherwise), operating results, operations, or business
prospects of the Dental Practice (regardless of whether or not such adverse
effect or changes can be or has been cured at any time or whether Dental
Cooperative has knowledge of such effect or changes on the date hereof or at any
time hereafter), including any adverse changes, event, development, or effect
arising from or relating to the taking of any action contemplated by this
Agreement and the other agreements contemplated hereby.
"Operative Document" means each of this Agreement and every other
document or certificate to be executed and delivered between or among the
parties in connection with the transactions described herein.
"Practice Valuation" means an amount selected by Provider which amount
shall not be greater than the amount of Collections during any consecutive
twelve (12) month period during the twenty-four (24) month period immediate
prior to the Closing. The amount of the Practice Valuation is set forth in the
Signature Page of this Agreement.
"Provider" has the meaning noted in the introduction to this Agreement.
ARTICLE 2
OPERATIVE DOCUMENTS
Concurrently with the execution of this Agreement, the Provider, Dental
Cooperative and the Dentist(s) agree to and will execute the Operative
Documents. Each of the Operative Documents is an integral part of the agreement
described herein, and the effectiveness of each Operative Document is a
condition to the effectiveness of this Agreement and the other Operative
Documents.
ARTICLE 3
THE PURCHASE PRICE
Section 3.1 Payment of the Purchase Price.
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(a) Dental Cooperative shall issue 60,000 shares of DPCA'S
restricted common stock to Provider at the Closing as full payment to Provider
for all Dental Practice Assets other than goodwill. Dental Cooperative shall pay
Dentist the following amounts and other consideration described herein as full
payment for all goodwill associated with the Dental Practice Assets, (i) 60,000
shares of DPCA's restricted common stock will be issued to Dentist on the first,
second, third and fourth anniversary dates of the Closing, and (ii) Dentist
shall be paid an amount equal to fifty percent (50%) of the Practice Valuation
in the form of cash or cash equivalent on the five year anniversary of the
Closing (the "Final Cash Payment"). These payments shall constitute the full
purchase price for the Dental Practice Assets. Notwithstanding the foregoing, in
the event that Dentist dies, then the Final Cash Payment shall be paid to
Dentist's estate within 90 days following notice to Dental Cooperative of
Dentist's death.
(b) (i) Notwithstanding Section 3.1(a)(ii), on each of the
first four annual anniversary dates of this Agreement Dentist may elect to
receive restricted stock of DPCA with a Market Price on the annual anniversary
date in question equal to twelve and one-half percent (12.5%) of the Practice
Valuation. If Dentist elects to receive DPCA stock pursuant to this paragraph
Dentist must give written notice to the Dental Cooperative of the Dentist's
election to receive DPCA stock at least thirty days prior to the annual
anniversary date in question. Any stock certificates issued to Dentist pursuant
to this Section 3.1(b) shall bear on their face a legend indicating the
restrictions imposed by this Agreement.
(ii) Should Dentist elect an option described under
Section 3.1(b)(i) on the five (5) year anniversary date of this Agreement, then
the Final Cash Payment will be reduced by an amount equal to twelve and one-half
percent (12.5%)of the Practice Valuation for each time that Dentist elected to
received DPCA stock on an annual anniversary of this Agreement and the
provisions of Section 3.1(a), as applicable, shall otherwise remain unaltered.
For example, if the Final Cash Payment prior to any election to receive common
stock hereunder was $600,000 and the Dentist elected to receive DPCA stock on
the first and third anniversary dates of this Agreement, then the Final Cash
Payment would be reduced to $300,000.
(c) Each time the Provider and/or Dentist receives and/or
elects to receive DPCA stock under this Agreement, then Provider or Dentist, as
applicable, is deemed to make the representations and warranties set forth in
Appendix 5.
Section 3.2 Satisfaction of Liabilities. At Closing Provider will
retire all liabilities relating to the Dental Practice, except for current
liabilities incurred in Provider's ordinary course of business in operating the
Dental Practice and liabilities arising from equipment and facilities leases
relating directly to the Dental Practice (collective, "Approved Liabilities").
Section 3.3 Transfer of Title to the Dental Practice Assets. Title to
the Dental Practice Assets shall be transferred to Dental Cooperative or its
nominee on the Closing date.
Section 3.4 Additional Consideration. On the five year anniversary of
this Agreement, Dental Cooperative will cause DPCA to issue to Dentist
restricted stock of DPCA with a Market Price on the five year anniversary date
equal to eight percent (8%) of Collections during the one year period
immediately prior to said five year anniversary date.
ARTICLE 4
SPECIAL COVENANTS OF NON-COMPETITION
AND NON-SOLICITATION
Section 4.1 Non-Competition.
(a) Each of Dentist(s) and Provider agrees that, during the
term of this Agreement and for the twenty-four (24) months following the
termination of Dentist(s)' performing any services for Dental Cooperative
pursuant to a practice management arrangement, Dentist(s) shall not directly or
indirectly engage in, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or engaged or act
as a consultant to or in any manner by, any dental practice management business
competing with Dental Cooperative.
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(b) Each of Dentist(s) agrees that, during the term of this
Agreement and for the twenty-four (24) months following the termination of any
practice management arrangement with Dental Cooperative, Dentist(s) shall not
directly or indirectly provide Dental Services within a fifty mile radius of the
Dental Practice.
Section 4.2 Reasonableness of Restrictions. Each of Dentist(s) and
Provider has carefully read and considered the provisions of this Article 4 and,
having done so, agrees that the restrictions set forth in this Article contain
reasonable limitations as to time, geographical area, scope of activity to be
restrained, and do not impose a greater restraint than is necessary to protect
the goodwill or other legitimate business interests of Dental Cooperative. Each
of Dentist(s) and Provider further understands and agrees that, if at some later
date, a court of competent jurisdiction determines that the scope, duration or
geographic area of any covenant set forth in this Article is overbroad or
unenforceable for any reason, these covenants shall be reformed by the court to
the minimum extent necessary in order to make such covenants valid, legal and
enforceable under applicable law.
Section 4.3 Remedies. In the event of an actual or threatened breach of
the covenants in this Article 4 by Provider or Dentist(s), Dental Cooperative
shall be entitled to pursue such injunctive remedies as may be provided by law
or equity, without the necessity of posting a bond, cash or otherwise. The
foregoing injunctive relief shall be without prejudice and in addition to any
other action or remedy permitted to Dental Cooperative under this Agreement or
the Operative Documents or as otherwise permitted under the law.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Provider and
Dentist(s). Each of the Provider and Dentist(s), as applicable, hereby
represents and warrants to Dental Cooperative as of the Closing Date (and as of
such other date(s) where specifically stated), as follows:
(a) The Provider is a legal entity duly organized, validly
existing and in good standing under the laws of its state of organization and
has all requisite corporate, company or partnership power and authority (as
applicable) to enter into this Agreement and to consummate the transactions
contemplated hereby.
(b) Each of this Agreement and the other Operative Documents
have been duly executed and delivered by Provider, have been effectively
authorized by all necessary action, corporate or otherwise, and constitute a
legal, valid and binding obligation of Provider.
(c) Appendix "1" to this Agreement is a listing of all real
and personal property owned or leased by Provider and used in the Dental
Practice that are being sold to Provider (the "Dental Practice Assets"). The
Dental Practice Assets do not, however, include any cash on hand, accounts
receivable, patient list or HIPPA (Health Information Portability and Privacy
Act) protected health information. The Provider owns all of the real and
personal property so listed free and clear of any and all liens, leases,
security interests, mortgages, pledges or other encumbrances, except for
encumbrances arising out of the transactions described herein or otherwise as
set forth in Appendix "1".
(d) As a result of this Agreement, legal title to all Dental
Practice Assets shall transfer to Dental Cooperative or its nominee at Closing.
(e) There are no claims, disputes, actions, proceedings or
investigations of any nature pending or, to the Provider's and Dentist(s)'s best
knowledge and belief, threatened, against or involving the Dentist(s) or the
Provider or any of their respective agents that relate in any way to the Dental
Practice or to Dental Services.
(f) Appendix "2" is a list of all actual and potential claims
required to be disclosed by the Provider and Dentist(s) to their insurance
carrier(s). Neither the Provider nor Dentist(s) have been informed in writing by
any insurance carrier that any claims against the Provider or Dentist(s)
alleging dental malpractice are not fully covered by insurance, less any
deductible.
(g) To the best of the Provider's knowledge, all consents,
approvals, authorizations and other requirements prescribed by any law that must
be obtained or satisfied by the Provider to operate the Dental Practice or to
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execute and deliver this Agreement and the Operative Documents have been
obtained and satisfied. Provider shall provide evidence of such approvals and
authorizations if requested at the Closing.
(h) The information provided by the Provider and Dentist(s) to
Dental Cooperative in this Agreement, or in any Appendix is true in all material
respects and includes all material information which is necessary or advisable
to make the statements and facts contained herein or therein, in light of the
circumstances in which they are made, not false or misleading. Copies of all
documents delivered or made available to Dental Cooperative pursuant to this
Agreement are or will be complete and accurate copies of such documents.
(i) Appendix 3 is a complete and correct list of all material
contracts, obligations and commitments relating to the Dental Office and the
Dental Practice (whether written or oral), including without limitation all (i)
employment contracts, (ii) collective bargaining agreements, (iii) bonus,
pension, profit sharing, annuity, deferred compensation, retirement, stock
purchase, stock option, stock ownership, hospitalization, insurance and all
other employee benefit plans, and (iv) leases, mortgages, pledges, deeds of
trust, loans or credit agreements, contracts, and agreements not made in the
ordinary course of business that involve more than $2,500.00. Except as noted,
all such commitments are in full force and effect.
(j) Appendix 4 contains all financial statements, tax returns,
and accounts receivable aging reports given to Dental Cooperative. The same are
true, correct and complete. Provider's books of account have been kept in the
ordinary course of business in accordance with the Provider's regular method of
accounting, reflect bona fide transactions, and fairly reflect items reportable
in accordance with that method of accounting. No Material Adverse Change has
occurred in the Provider or in the Dental Practice since the date of such
financial statements.
(k) Provider and Dentist(s) have had an opportunity to consult
with their respective professional tax and legal advisors concerning this
Agreement, the other Operative Documents.
(l) Each time the Provider or Dentist receives and/or elects
to receive DPCA stock under this Agreement, Provider or Dentist, as applicable,
is deemed to make the representations and warranties set forth in Appendix 5.
Each of the Appendices attached to this Agreement shall be updated
within thirty (30) days as and if requested by Dental Cooperative. Upon the
request of Dental Cooperative, Provider shall make available copies of all
agreements and commitments referred to in this Section 5.1.
Section 5.2 Representations and Warranties of Dental Cooperative.
Dental Cooperative hereby represents, warrants and covenants to the Provider as
follows:
(a) Dental Cooperative is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah and
has all requisite corporate power and authority to enter into the Agreement and
to consummate the transactions contemplated hereby.
(b) Each of this Agreement and the other Operative Documents
has been duly executed and delivered by Dental Cooperative, has been effectively
authorized by all necessary action, corporate or otherwise, and constitutes a
legal, valid and binding obligation of Dental Cooperative.
(c) The execution and delivery of this Agreement and the other
Operative Documents, the consummation of the transactions contemplated hereby
and thereby, and the fulfillment of the terms hereof and thereof will not (i)
result in a material liability to Dental Cooperative, or (ii) result in a breach
of any of the terms or provisions of or constitute a default under or conflict
with, any material agreements, indenture or other instrument to which Dental
Cooperative is a party or by which it is bound, or any law applicable to Dental
Cooperative or (iii) provide a basis for the acceleration of any indebtedness,
liability or obligation of Dental Cooperative.
ARTICLE 6
CLOSING
Section 6.1 Closing. The Closing will take place on or before December
15, 2006, at a time and place to be agreed by the parties. Title to the Dental
Practice Assets shall be transferred to Dental Cooperative or its nominee on the
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Closing date. Closing may take place in a single location or by means of
overnight delivery services and in the form of counterpart signature pages.
Section 6.2 Conditions to Closing. The parties' duty to close shall be
subject to the fulfillment or waiver, on or before the Closing, of all of
conditions set forth below:
(a) No claim, action, suit, investigation or other proceeding
shall be pending or threatened before any court or governmental agency that
presents a substantial risk of restraint or prohibition of the transaction
contemplated by this Agreement or any other Operative Document.
(b) The representations and warranties of the parties hereto
shall be true and correct in all material respects, and the obligations and
undertakings of the parties to be performed prior thereto shall have been
performed in all material respects as of such time.
(c) (i) the operation of the Dental Practice shall have been
conducted in the ordinary course of business, consistent with past practices,
during any period covered by this Affiliate Member Practice Purchase Agreement;
(ii) there shall not have occurred any damage, destruction or loss with respect
to Provider's assets used in the Dental Practice, whether or not covered by
insurance; and (iii) during any period covered by this Affiliate Member Practice
Purchase Agreement there shall not have occurred any other event or condition
which has had or which reasonably may be expected to have a materially adverse
effect on the value of the Dental Practice, on the operation of the Dental
Office, or on the ability of the Provider, Dentist(s) or Dental Cooperative to
consummate the transactions contemplated herein.
(d) The parties shall have seen and approved, on or before the
Closing Date, each of the Operative Documents and all other needed instruments,
fully executed by them respectively.
(e) An independent audit of the financial statements of Dental
Practice shall have been completed and the results of the audit shall be
reasonably satisfactory to Dental Cooperative and DPCA. The independent auditor
shall be engaged by Dental Cooperative and Dental Cooperative shall bear the
cost of such auditor. Provider shall provide financial statements for the Dental
Practice consisting of: 1) a trial balance; 2) balance sheet; 3) statement of
operations; 4) and statement of cash flows. Such financial statements shall be
prepared according to generally accepted accounting principles utilizing the
accrual method of accounting. Provider shall make available such supporting
documentation as may be reasonably required by auditor to complete the audit.
ARTICLE 7
DEFAULT
Section 7.1 Events of Default. Any one or more of the following events
or situations shall be regarded as an "Event of Default" under this Agreement,
which shall allow the non-defaulting party to terminate this Agreement.
(a) Any of the representations and warranties made by
Dentist(s) and Provider, on the one hand, or Dental Cooperative on the other
hand, proves to be untrue or incorrect in any material respect when made, or
omits to state a material fact required to be stated in order to make such
statements, in the light of the circumstances under which made, not misleading
on the date made;
(b) Provider or Dentist(s) shall commence (by petition,
application, or otherwise) a voluntary case or other proceeding under the laws
of any jurisdiction seeking liquidation, reorganization, or other relief with
respect to Provider's or Dentist(s)'s debts under any bankruptcy, insolvency, or
other similar law now or hereafter in effect, or seeking the appointment of a
trustee, self-trusteeship, receiver, custodian, or other similar official of any
substantial part of Provider's or Dentist(s)'s property; or shall consent (by
answer or failure to answer, or otherwise) to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against Provider or Dentist(s); or shall make an
assignment for the benefit of creditors; or shall generally not pay Provider's
or Dentist(s)'s debts as they become due or not be able to pay such debts as
they become due; or admit in writing the inability to pay such debts as they
become due; or shall take any action to authorize any of the foregoing;
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(c) An involuntary case or other proceeding shall be commenced
under the laws of any jurisdiction against Provider or Dentist(s) seeking
liquidation, reorganization, or other relief with respect to Provider's or
Dentist(s)'s debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect, or seeking the appointment of a trustee, receiver,
custodian, or other similar official any substantial part of Provider's or
Dentist(s)'s property and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days, or a trustee,
receiver, custodian, or other official shall be appointed in such involuntary
case;
(d) Entry of any judgment exceeding $10,000 entered against
Provider or Dentist(s) that shall not be discharged within thirty (30) days from
entry;
(e) An attachment, garnishment, execution, or other process is
issued or a lien is filed against any of the assets of the Dental Practice or
against Dentist(s)' equity ownership in Provider;
(f) Transfer of an interest in any of the assets of the Dental
Practice or of Dentist(s)'s equity ownership in Provider contrary to the
provisions of this Agreement without the prior written consent of Dental
Cooperative;
(g) Any of the assets of the Dental Practice are lost, stolen,
or materially damaged, the aggregate uninsured value of which is in excess of
$10,000; or
(h) Failure of Provider or Dentist(s) to maintain licenses,
permits, and franchises necessary for operation of the Dental Practice.
Section 7.2 Cross Default. A breach or default of this Agreement by
either Provider or by Dentist(s) will be deemed a breach or default by both
Provider and Dentist(s). A breach or default of this Agreement by either
Provider or by Dentist(s) shall be considered a breach or default of the other
Operative Documents.
Section 7.3 Catastrophic Occurrences. In the event of an economic or
natural condition of such magnitude as to affect all businesses in the
geographic area of a Dental Practice, the parties will implement appropriate
steps to mitigate the impact of such occurrence on the obligations of both
parties under this Agreement.
ARTICLE 8
TERMINATION; RENEWAL
Section 8.1 Term. The term of this Agreement will run for five (5)
years from the date of Closing, unless earlier terminated or extended in
accordance with this Agreement.
Section 8.2 Effects of Termination; Payment of Practice Valuation;
Transfer of Dental Practice.
(a) Advances or Expenses. To the extent Dental Cooperative has
advanced any funds or paid any expenses of the Dental Practice as of the date of
termination of this Agreement, such amounts will be repaid by Provider, and
Dental Cooperative will have a lien on the Dental Practice for the payment of
such amounts.
(b) Payment of Remaining Purchase Price. On the five year
anniversary of the Closing date, Dental Cooperative shall pay Provider the Final
Cash Payment.
(c) Non-Compete and Non Solicitation Provisions. If this
Agreement is terminated by Provider after the first year following Closing for
an unremedied breach or default by Dental Cooperative, the provisions of Article
4 regarding non-compete and non-solicitation shall not continue in force after
the termination of this Agreement and the other Operative Documents; provided
that if there is any dispute between the parties concerning any breach or
default under this Agreement, the terms of Article 4 shall continue in force and
effect pending the final decision of a court of competent jurisdiction. The
non-compete and non-solicition provisions shall otherwise remain in full force
and effect following termination.
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Section 8.3 Operative Documents Independent. Any termination of this
Agreement shall not terminate the other Operative Documents unless expressly
provided in this Agreement or as separately agreed in writing between the
parties.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 Confidentiality.
(a) Provider Confidential Information. Dental Cooperative
shall protect all Confidential Information of the Provider and Dentist(s) that
it learns or receives, directly or indirectly, in connection with the
transactions or relationships contemplated herein, and shall not use the same
for its own benefit or the benefit of others except as contemplated in this
Agreement. Dental Cooperative shall not disclose any Confidential Information to
anyone other than Provider and Dentist(s) except with the express written
consent of Provider and Dentist(s). Notwithstanding the foregoing restrictions,
Dental Cooperative may use and disclose any information to the extent required
by applicable law or by an order of any court or other governmental authority,
but only after Provider and Dentist(s) have been so notified and have had the
opportunity, if possible, to obtain reasonable protection for such information
in connection with such disclosure. Dental Cooperative may also, under agreement
of confidentiality, disclose Confidential Information to its counsel,
accountants, potential financing sources and others assisting them, to the
extent necessary to obtain such assistance.
(b) Dental Cooperative Confidential Information. Each of
Provider and Dentist(s) shall, and shall cause their respective consultants,
advisors, representatives and every entity controlled by them to, keep and
maintain in strictest confidence, and shall not use for their benefit or the
benefit of others except in connection with the business and affairs of Dental
Cooperative, all Confidential Information (as defined below) of Dental
Cooperative that Provider and Dentist(s) learn or receive, directly or
indirectly, in connection with the transactions or relationships contemplated
herein. Each of Provider and Dentist(s) shall not disclose any Confidential
Information to anyone outside of Dental Cooperative except with Dental
Cooperative's express written consent. Notwithstanding the foregoing
restrictions, Provider and Dentist(s) may use and disclose any information to
the extent required by applicable law or an order of any court or other
governmental authority, but only after Dental Cooperative has been so notified
and have had the opportunity, if possible, to obtain reasonable protection for
such information in connection with such disclosure. Provider and Dentist(s) may
also, under agreement of confidentiality, disclose Confidential Information to
their respective counsel, accountants, potential financing sources and others
assisting them with respect to the transactions contemplated hereby, to the
extent necessary to obtain such assistance.
(c) Confidential Information Defined. The term "Confidential
Information" means (i) all information with respect to (w) Collections, (x)
profit or loss figures, (y) customers, clients, suppliers, sources of supply and
customer lists, and (z) trade secrets of Dental Cooperative or Provider; (ii)
any information relating to the contracts, agreements, business plans, budgets
or results of operations, or any other financial information of a party, to the
extent such information has not been made available to the public by that party;
and (iii) any other information marked or noted to be confidential by the party
at the time of disclosure; provided, however, that the term "Confidential
Information" shall not include any information (v) that was known to the other
party prior to the date hereof; (w) that is or becomes generally known to the
public through sources independent of the other party and through no fault of
the other party, (x) that is available or becomes available to the other party
from a third party who has a right to disclose it to the other party, (y) that
is independently developed or acquired by the other party without reliance in
any way upon the disclosing party's Confidential Information, or (z) any
information that is required to be disclosed by Dental Cooperative or its
affiliates through filings or other disclosures pursuant to applicable statutes
or regulations or by interpretations of such promulgated by the Securities and
Exchange Commission.
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Section 9.2 Indemnification.
(a) By Provider and Dentist(s). Provider and Dentist(s),
jointly and severally and in solido, shall indemnify, defend and hold Dental
Cooperative, its directors, officers, employees and representatives harmless
from and against any losses, liabilities, damages, costs (including without
limitation, court costs) and expenses (including without limitation, reasonably
attorneys' fees) that Dental Cooperative incurs as a result of, or with respect
to (i) any misrepresentation or breach of warranty by Provider or Dentist under
this Agreement, and (ii) any breach by Provider or Dentist(s) of, or any failure
by Provider or Dentist(s) to perform, any covenant or agreement required to be
performed by Provider or Dentist(s) under this Agreement.
(b) By Dental Cooperative. Dental Cooperative shall indemnify,
defend and hold Provider, its directors, officers, employees and
representatives, including Dentist(s), harmless from and against any losses,
liabilities, damages, costs (including without limitation, court costs) and
expenses (including without limitation, reasonably attorneys' fees) that
Provider or Dentist(s) incur as a result of, or with respect to (i) any
misrepresentation or breach of warranty by Dental Cooperative under this
Agreement, and (ii) any breach by Dental Cooperative of, or any failure by
Dental Cooperative to perform, any covenant or agreement required to be
performed by Dental Cooperative under this Agreement.
(c) Notice and Control of Litigation. If any claim or
liability is asserted in writing by a third party against a party entitled to
indemnification under this Section (the "Indemnified Party") that would give
rise to a claim under this Section, the Indemnified Party shall notify the
person giving the indemnity ("Indemnifying Party") in writing of the same within
fifteen (15) days of receipt of such written assertion of a claim or liability.
The Indemnifying party shall have the right to defend a claim and control the
defense, settlement and prosecution of any litigation. If the Indemnifying
Party, within ten (10) days after notice of such claim, fails to defend such
claim, the Indemnifying Party will (upon further notice to the Indemnifying
Party) have the right to undertake the defense, comprise or settlement of such
claim on behalf of and for the account and at the risk of the Indemnifying
Party.
Section 9.3 General Construction Principles. Words in any gender are
deemed to include the other genders. The singular is deemed to include the
plural and vice versa. The headings and underlined paragraph titles are for
guidance only and have no significance in the interpretation of this Agreement.
Section 9.4 Binding Effect. This Agreement is binding on and will inure
to the benefit of the parties and their respective successors and assigns.
Section 9.5 Notices. Any notices, payment, demand or communication
required or permitted to be given to any party by any provision of this
Agreement shall be in writing and sent by hand delivery or overnight courier to
the following addresses or to replacement addresses provided by notice under
this Section 9.5. Any such notice shall be deemed to be delivered, given and
received as of the date it is delivered into the hands of the agent who will
effect delivery.
(a) Notices to Dental Cooperative: Attention President
2150 South 0000 Xxxx, Xxxxx 000 Xxxx Xxxx Xxxx, Xxxx
00000
(b) Notices to Provider
[address provided on Signature Page]
(c) Notices to Dentist(s)
[address provided on Signature Page]
Section 9.6 Further Assurances. Each party hereto agrees to perform
such further acts, and to execute, acknowledge and deliver such documents, as
may be reasonably necessary, appropriate or desirable to carry out the
provisions and intent of this Agreement and the other Operative Documents.
Section 9.7 Governing Law. The internal laws of Utah (without reference
to the conflict of law principles thereof) shall govern the validity of this
Agreement and the construction of its terms.
9
Section 9.8 Dispute Resolution. Any dispute arising under this
Agreement that cannot be resolved between the parties shall be submitted to
binding under the auspices of the American Arbitration Association with venue of
the arbitration in Salt Lake City, Utah. A single independent arbitrator shall
be appointed through the AAA's normal selection procedures. The costs of the
arbitration assessed by AAA shall be split evenly among the parties to the
dispute regardless of the outcome of the arbitration. The AAA's Commercial
Arbitration Rules will govern the proceeding. No attorneys fees or costs of any
party may be awarded in the arbitration of any dispute. It is the intent of the
parties to resolve disputes without incentive to any party.
Section 9.9 Counterpart Execution. This Agreement may be executed in
any number of counterparts with the same effect as if all of the Parties hereto
had signed the same document. All counterparts shall be construed together and
shall constitute one agreement.
Section 9.10 Entire Agreement. This Agreement and the other Operative
Documents contain the entire agreement among the parties and there can be no
modification or variance other than in a separate agreement in writing signed by
all parties.
Section 9.11 Excluded Information. Provider shall not disclose to
Dental Cooperative any HIPPA protected health information where such disclosure
would result in a violation of the HIPPA privacy rules.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
SIGNATURE PAGE TO Affiliate Member Practice Purchase Agreement
Xxxxxxx X. Xxxxx DDS PC Dr. Xxxxxxx Xxxxx
----------------------- ----------------------
Name of Provider Name of Dentist(s)
Professional Corporation, Utah
Type of legal entity and state of organization
(Any additional notice addresses are on an attached sheet)
------------------------------------
------------------------------------
------------------------------------
Address of Dental Office
(Any additional locations are specified on an attached sheet)
Generalist? [X] Specialist? [ ]
Check one
Closing Date __________________________
Term of Agreement: 5 years Termination Date:______________
Practice Valuation: $1,000,000.00
IN WITNESS WHEREOF, the parties have executed this Agreement as of
November 17, 2006.
(date)
DENTAL COOPERATIVE, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title : President
"PROVIDER" Xxxxxxx X. Xxxxx DDS PC
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
"DENTIST(S)" X Xxxxxxx X. Xxxxx
------------------------------------
Dr. Xxxxxxx Xxxxx
11
APPENDIX 1
TO AFFILIATE MEMBER PRACTICE PURCHASE AGREEMENT
Listing of Real and Personal Property Owned or Leased by Provider
And Used in the Dental Practice
Including Liens, Security Interests and Encumbrances on Item Listed
[to be completed]
APPENDIX 2
TO AFFILIATE MEMBER PRACTICE PURCHASE AGREEMENT
Listing of Claims, Disputes, Actions and Proceedings
Involving Dentist(s) or Provider
[to be completed]
APPENDIX 3
TO AFFILIATE MEMBER PRACTICE PURCHASE AGREEMENT
Listing of Material Contracts Involving the Dental Practice
[to be complted]
APPENDIX 4
TO AFFILIATE MEMBER PRACTICE PURCHASE AGREEMENT
Financial Statements and Tax Returns of Provider (for two most recent years);
Accounts Receivable Aging Report for the Dental Practice
[to be completed]
APPENDIX 5
REPRESENTATIONS AND WARRANTIES IN CONNECTION WITH THE ACQUISITION OF DPCA STOCK
Provider and/or Dentist (individually and jointly referred to as
"Provider," as applicable, in this Appendix 5), hereby represent and warrant
that:
(a) Provider's representations are complete and accurate to the best of
Provider's knowledge, and Dental Cooperative and DPCA (jointly, the "Company")
may rely upon them. Provider will notify the Company immediately if any material
change occurs in any of this information before the issuance of Company shares
to Provider (the "Shares").
(b) Provider is able to bear the economic risk of an investment in the
Shares for an indefinite period of time, can afford the loss of the entire
investment in the Shares, and will, after making an investment in the Shares,
have sufficient means of providing for Provider's current needs and possible
future contingencies. Additionally, Provider's overall commitment to investments
that are not readily marketable is not disproportionate to Provider's net worth
and that the acquisition of the Shares will not cause such overall commitment to
become excessive.
(c) The Shares will not be sold by Provider without registration under
applicable securities acts or a proper exemption from such registration.
(d) The Shares are being acquired for Provider's own accounts and risk,
for investment purposes, and not on behalf of any other person or with a view
to, or for resale in connection with, any distribution thereof within the
meaning of the Securities Act of 1933. Provider is are aware that there are
substantial restrictions on the transferability of the Shares.
(e) Provider has had access to any and all information concerning the
Company that Provider and Provider's financial, tax and legal advisors required
or considered necessary to make a proper evaluation of this investment.
Specifically, Provider has had the opportunity to review and has received a copy
of DPCA's most recent annual report on Form 10-KSB and all subsequent filings by
DPCA with the Securities and Exchange Commission (the " Securities Filings"). In
making the decision to acquire the Shares, Provider and its advisers have relied
solely upon the Securities Filings and their own independent investigations, and
fully understand that there are no guarantees, assurances or promises in
connection with any investment hereunder and understand that the particular tax
consequences arising from this investment in DPCA will depend upon its
individual circumstances. Provider further understands that no opinion is being
given as to any securities or tax matters involving this transaction.
(f) All of the representations and warranties of Provider contained
herein and all information furnished by Provider to the Company are true,
correct and complete in all respects, and Provider agree to notify the Company
immediately of any change in any representation, warranty or other information
set forth herein.
(g) Provider also understands and agrees that stop transfer
instructions relating to the Shares will be placed in the DPCA's stock transfer
ledger, and that the certificates evidencing the Shares sold will bear legends
in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are "restricted securities" as that term is defined in Rule
144 under the Act. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the issuer.
The securities represented by this Certificate evidenced
hereby are subject to a stock cancellation arrangement (a copy
of which may be obtained upon written request from the
issuer), and by accepting any interest in such shares the
person accepting such interest shall be deemed to agree to and
shall become bound by all the provisions of that arrangement.
(h) Provider knows that the Shares subscribed for herein are offered
and sold pursuant to exemptions from registration under the Securities Act of
1933, and state securities law based, in part, on these warranties and
representations, which are the very essence of this Agreement, and constitute a
material part of the bargained-for consideration without which this Agreement
would not have been executed.
(i) Provider has the capacity to protect Provider's own interest in
connection with this transaction or has a pre-existing personal or business
relationship with the Company or one or more of its officers, directors or
controlling persons consisting of personal or business contacts of a nature and
duration such as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
such person with whom such relationship exists.
(j) The Shares were not offered to Provider by way of general
solicitation or general advertising and at no time was Provider presented with
or solicited by means of any leaflet, public promotional meeting, circular,
newspaper or magazine article, radio or television advertisement.
(k) Provider is an "accredited investor" as defined under Rule 501 of
Regulation D.
2
