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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
AUGUST 21, 1996
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THE COMPANY DOCTOR
(Exact name of registrant as specified in its charter)
DELAWARE 1-14150 72-1234136
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
SUITE 1800
5215 NORTH O'CONNOR
IRVING, TEXAS 75039
(Address of principal executive offices)
(214) 401-8300
(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The Company Doctor (the "Company") and Donald F. Angle, M.D., P.A., a
Texas professional association of physicians and other medical professionals
(the "Physician Group") have entered into Stock Purchase Agreements (the
"Agreements") to acquire all of the outstanding capital stock of Doctors' Inn,
Incorporated and Francisco J. Guerra, M.D., P.A., from Henry H. Calderoni, M.D.
and Francisco J. Guerra, M.D. (the "Physicians"). Pursuant to the Agreements,
the Company and the Physician Group have acquired the Physicians' existing
practice specializing in occupational and family medicine in El Paso, Texas
(the "Practice"). Simultaneously with the execution of the Agreements, the
Company and the Physician Group entered into an addendum to their practice
management agreement pursuant to which the Company manages the various medical
practices of the Physician Group to include the Practice. The Company assists
the Physician Group in the marketing and expansion of their medical practices
and expects to install its management information system in the newly
acquired facility as soon as practicable.
Pursuant to the Agreements, the Company and the Physician Group have
acquired all outstanding shares in exchange for (i) 113,376 shares of the
Company's Common Stock issued to each Physician, (ii) $350,000 in cash paid to
each Physician and (iii) promissory notes executed by the Company in the
principal amount of $950,000 payable to each Physician. The notes bear
interest at the rate of 9.5% per annum and provide for a lump sum payment of
$500,000 not later than April 15, 1997 and monthly payments of $25,000
commencing September 15, 1996 and continuing until all principal and interest
is paid.
The Company has agreed to register the Common Stock issued to the
Physicians, such registration to be effective no later than February 28, 1997.
If the Common Stock has not been registered by such date, each Physician may
elect, no later than March 31, 1997, to have the Company repurchase his Common
Stock for the greater of $1.125 million or the market value of the shares based
on the average of the closing price on The Nasdaq Stock Market for the five
trading days immediately prior to February 28, 1997. The Company has also
agreed to lease from the Physicians and their affiliates the real property and
facilities on which the Practice is located for a period of ten years at the
initial base rate of $16.00 per square foot for the currently existing
facilities which total approximately 3,100 square feet. The Physicians intend
to enlarge the facilities at their own expense and the Company will have final
approval of the design and scope of the improvements, the contractor retained
and the cost of the improvements. The Company has committed to lease the
additional facilities at an initial rate calculated to provide an internal rate
of return on investment of 15% to the Physicians, but not less than $16.00 per
square foot. The Physicians have entered into standard physician employment
agreements with the Physician Group to perform as Staff Physicians for standard
compensation rates. In addition, the Physicians have entered into standard
Regional Medical Director employment agreements to serve as Regional Medical
Co-Directors of the Practice.
The closing of the transactions contemplated by the Agreement were
consummated on August 21, 1996, effective as of July 1, 1996.
2
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) It is impracticable to provide the required financial
statements relative to the Practice at this time. In accordance with Item
7(a)(1) of Form 8-K, the Registrant will file the required financial statements
as an amendment to this Form 8-K as soon as practicable, but not later than 60
days after this report on Form 8-K must be filed.
(b) It is impracticable to provide the required pro forma
financial information relative to the Practice and the Registrant at this time.
In accordance with Item 7(b)(2) of Form 8-K, the Registrant will file the
required financial statements as an amendment to this Form 8-K as soon as
practicable, but not later than 60 days after this report on Form 8-K must be
filed.
(c) The following exhibits are furnished herewith in accordance
with the provisions of Item 601 of Regulation S-K:
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- ---------
2.5 Stock Purchase Agreement by and among Doctors' Inn, 2
Incorporated, Henry H. Calderoni, M.D.,
Francisco J. Guerra, M.D. and the Company
2.6 Stock Purchase Agreement by and among 2
Francisco J. Guerra, M.D., P.A.,
Francisco J. Guerra, M.D. and the Physician Group
2.7 Stock Purchase Agreement by and among Henry H. Calderoni, 2
M.D., P.A., Henry H. Calderoni, M.D. and the
Physician Group
ITEM 8. CHANGE OF FISCAL YEAR
Not applicable.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE COMPANY DOCTOR
Date: September 5, 1996 By: /s/ Fred G. Parrish
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Fred G. Parrish, Chief Operating Officer
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EXHIBIT INDEX
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- ---------
2.5 Stock Purchase Agreement by and among Doctors' Inn, 2
Incorporated, Henry H. Calderoni, M.D.,
Francisco J. Guerra, M.D. and the Company
2.6 Stock Purchase Agreement by and among 2
Francisco J. Guerra, M.D., P.A.,
Francisco J. Guerra, M.D. and the Physician Group
2.7 Stock Purchase Agreement by and among Henry H. Calderoni, 2
M.D., P.A., Henry H. Calderoni, M.D. and the
Physician Group
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EXHIBIT 2.5
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into effective July 1, 1996 (the "Effective Date"), by and among THE COMPANY
DOCTOR, a Delaware corporation ("Purchaser"), DOCTORS' INN, INCORPORATED, a
Texas corporation ("DII"), HENRY H. CALDERONI, an individual resident of El
Paso, Texas ("Calderoni"), and FRANCISCO J. GUERRA, an individual resident of
El Paso, Texas ("Guerra"). Calderoni and Guerra are collectively referred to
herein as the "Sellers."
WHEREAS, the Sellers desire to sell, and Purchaser desires to
purchase, all of the 2,000 outstanding shares of capital stock, $1.00 par value
(the "Stock"), of DII in exchange for the consideration set forth herein;
WHEREAS, Purchaser is authorized to issue 25,000,000 shares of Common
Stock, $.01 par value (the "TCD Stock"), of which 4,641,535 shares of TCD Stock
are issued and outstanding as of the Effective Date;
WHEREAS, the parties to this Agreement previously agreed in June 13,
1996 to the substantive terms and provisions hereof, including, but not limited
to, the transfer and delivery of the Stock in exchange for TCD Stock, and have
at all times since June 13, 1996 conducted their respective businesses and
foregone other business opportunities in reliance on the consummation of the
transaction described herein; and
NOW, THEREFORE, in consideration of the mutual representations,
warranties, and covenants contained herein, and on the terms and subject to the
conditions herein set forth, the parties hereby agree as follows:
1. Purchase and Sale. On the terms and subject to the conditions
set forth herein, each Seller agrees to and does hereby sell and deliver to
Purchaser, and Purchaser agrees to and does hereby purchase from Sellers, all
of the shares of Stock, free and clear of any liens, liabilities, security
interests, claims, and encumbrances.
2. Purchase Price. In exchange for the Stock, Purchaser shall
pay to each Seller 113,376 shares of TCD Stock (which the parties agree equals
$1,125,000.00 divided by the average of the closing trading price on NASDAQ of
a share of TCD Stock for the five most recent trading days prior to the Closing
Date (as defined herein)). Such aggregate number of shares set forth and
calculated in this Section 2 being referred to hereinafter as the "TCD Shares."
Stock Purchase Agreement Page -1-
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3. Registration of TCD Shares. Upon Sellers' written request at
any time after the Effective Date and before December 15, 1996, Purchaser shall
file a registration statement under the Securities Act of 1933, as amended (the
"Securities Act") relating to, and shall use its best efforts to cause to be
effective, the registration under the Securities Act of the TCD Shares not
later than February 28, 1997 (the "Registration"). If Purchaser fails to
timely cause the Registration in accordance with this Section 3, Sellers shall
have the right, exercisable by Sellers giving written notice to Purchaser
subsequent to February 28, 1997, but prior to March 31, 1997, to rescind the
transfer of the TCD Shares, in which event (i) Sellers shall return the TCD
Shares to Purchaser and (ii) Purchaser shall pay to each Seller within 15 days
after Purchaser receives Sellers' notice of rescission of the transfer of the
TCD Shares the greater of (i) $1,125,000.00 or (ii) the market value of the TCD
Shares owned by that Seller, which would have been registered pursuant to this
Section 3, calculated based upon the average of the closing trading price on
NASDAQ of a share of TCD Stock for the five most recent trading days prior to
February 28, 1997.
4. Building Leases. Purchaser agrees to lease the land and
facilities, and additional space to be constructed at the facilities, at 1865
Lee Trevino Avenue, El Paso, Texas 70936, from Calderoni, Guerra, and/or their
respective Children's Trusts on the basic terms and conditions set forth on
Exhibit E attached hereto. Such lease shall be pursuant to a definitive
written lease agreement to be entered into by the parties no later than 10 days
after the Closing Date.
5. Closing. The transactions contemplated hereby will be
consummated at a Closing (herein so called) to be held on August 21, 1996, at
such time and place as the parties agree. The date on which Closing occurs is
referred to herein as the "Closing Date." At Closing, the parties shall
execute and deliver, or cause to happen, the following:
a. Sellers shall deliver to Purchaser certificates, duly
endorsed for transfer or accompanied by duly executed stock powers,
representing all of the Stock, with such Stock being free and clear of
all liens, liabilities, security interests, claims, and encumbrances;
and
b. Each party to this Agreement shall perform any and
all further acts and execute and deliver any and all documents and
instruments that may be reasonably necessary to carry out the
provisions of this Agreement.
6. Representations and Warranties of DII and Sellers. DII and
Sellers hereby jointly and severally represent and warrant to Purchaser as
follows:
Stock Purchase Agreement
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a. DII is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas.
DII has all necessary power and authority under applicable corporate
law and its Articles of Incorporation and Bylaws to execute, deliver,
and perform this Agreement and to own or lease its properties and to
carry on its business as presently conducted. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board
of Directors and shareholders of DII, and no other corporate
proceedings on the part of DII are necessary for DII to authorize this
Agreement or to consummate the transactions contemplated hereby. This
Agreement constitutes a legal, valid, and binding obligation of DII
enforceable against DII in accordance with its terms (except to the
extent that enforcement is affected by laws pertaining to bankruptcy,
reorganization, insolvency, and creditors' rights and by the
availability of injunctive relief, specific performance, and other
equitable remedies).
b. The authorized capital stock of DII consists of
500,000 shares, $1.00 par value, of which 2,000 shares are issued and
outstanding. All such issued and outstanding Stock is duly
authorized, validly issued, and nonassessable. All of the Stock is
owned of record and beneficially by Sellers. None of the Stock was
issued or will be transferred under this Agreement in violation of any
preemptive or preferential rights of any person.
c. Sellers are the true and lawful owners, of record and
beneficially, of the Stock; none of the Stock is subject to any
outstanding options, warrants, calls, or similar rights of any other
person to acquire the same; none of the Stock is subject to any
restrictions on transfer thereof; and Sellers have the full power and
authority to convey, and will convey to Purchaser at Closing, good and
marketable title to the Stock, free and clear of any liens,
liabilities, security interests, claims, or encumbrances.
d. Except as may be required by the Securities Act,
state securities laws, the Texas Business Corporation Act, as amended
(the "Texas Law"), or the Delaware General Corporation Law, as amended
(the "DGCL"), there is no requirement applicable to DII or Sellers to
make any filing with, or to obtain any permit, authorization, consent,
or approval of, any governmental or regulatory authority as a
condition to the lawful consummation by DII and Sellers of the
transactions contemplated by this Agreement.
e. DII has delivered to Purchaser complete and accurate
copies of the minutes of all its directors and shareholders
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meetings, and all actions by written consent of the directors and
shareholders, of DII since its inception (collectively, the
"Minutes"). The Minutes represent all corporate actions taken by DII.
f. With respect to Taxes (as defined below):
(1) All returns and reports of, or relating to,
any foreign, federal, state, or local Tax that are required to
be filed for, by, or on behalf of, or with respect to, DII,
including, but not limited to, those relating to the income,
business, operations, or assets of DII, have been timely filed
with the appropriate foreign, federal, state, and local
authorities; and
(2) All Taxes due and payable as of the Closing
Date have been paid.
(3) For purposes of this Agreement, "Taxes" shall
mean all taxes, charges, fees, levies, or other assessments of
whatever kind of nature, including, without limitation, all
net income, gross income, gross receipts, sales, use,
value-added, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, estimated,
severance, stamp, net worth, environmental, occupance, or
property taxes, custom duties, fees, assessments, or charges
of any kind whatsoever (together with any interest and any
penalties, additions to tax, or additional amounts) imposed by
any taxing authority (domestic or foreign) upon, or payable
by, DII.
g. There are no liabilities or obligations of DII
whatsoever, accrued, fixed, contingent, or otherwise (known or unknown
and asserted or unasserted), existing on the date hereof
(collectively, the "Liabilities" and singly, a "Liability"), except
for those Liabilities set forth in Exhibit A. Except as set forth in
Exhibit A, DII is not liable upon or with respect to, or obligated in
any other way to provide funds in respect of, or to guarantee or
assume in any manner, any Liability of any person, corporation,
association, partnership, joint venture, trust, or other entity. DII
knows of no basis for the assertion of any Liability of any nature or
in any amount other than those set forth in Exhibit A. The aggregate
amount of Liabilities of DII does not exceed $100,000.00 (including
any future payments due on any Liability).
h. There is set forth on Exhibit B a list of all
outstanding contracts and agreements, whether or not in writing, which
relate to DII, including, but not limited to,
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insurance policies to which DII is a party or to which the properties,
assets, and rights of DII are subject. DII and Sellers are in full
compliance with, and have not defaulted on, such outstanding contracts
and agreements.
i. There is no claim, litigation, action, suit, or
proceeding, administrative or judicial, pending or, to DII's or
Sellers' knowledge, threatened against DII or Sellers, at law or in
equity, before any federal, state, local, or foreign court, or
regulatory agency, or other governmental authority, including, without
limitation, any unfair labor practice or grievance proceeding or
otherwise.
j. Set forth in Exhibit C is a true, complete, and
correct list of all employee benefit plans as defined in section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not subject to ERISA, and any other severance,
termination, change of control, stock based, or group insurance plan
which DII currently maintains, or has ever maintained, with respect to
any of its current or former employees (collectively the "Plans").
Each of the Plans is being, and has been, maintained, operated, and
administered in all material respects in accordance with its
respective terms and all applicable laws, including, but not limited
to, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code"), and that no material liability or obligation has been
incurred (and is unsatisfied) or is expected to be incurred by DII
(either directly or indirectly, including as a result of an
indemnification obligation) under, or pursuant to, any applicable law,
including titles I and IV of ERISA and the penalty, excise tax, or
joint and several liability provisions of the Code relating to
employee benefit plans. Each Plan intended to be qualified under
section 401(a) of the Code, and the trust (if any) forming a part
thereof, has received a favorable determination letter from the
Internal Revenue Service ("IRS") as to its qualification under the
Code and to the effect that each such trust is exempt from taxation
under section 501(a) of the Code and all amendments necessary to
maintain the qualification of such Plans have been made within the
time allowed by the Code and ERISA and, to the knowledge of DII and
Sellers, no event has occurred or condition exists which could
adversely affect such determination. With respect to each Plan which
is an "employee welfare benefit plan," as defined in section 3(1) of
ERISA, (i) no such plan is unfunded or funded through a "welfare
benefit fund," as defined in section 419 of the Code, (ii) each such
plan which is a "group health plan," as defined in section 5000(b)(1)
of the Code, is in compliance in all material respects with the
applicable requirements of section 4980B of the Code, (iii) no such
plan provides retiree medical benefits to former employees of DII or
any related
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entity, and (iv) there are no unpaid or overdue insurance premiums
required to be paid with respect to such plan. There are no actions,
suits, or claims, other than routine claims for benefits, pending or,
to the knowledge of DII or Sellers, threatened with respect to any of
the Plans or against any trustee, fiduciary, or administrator of the
Plans. There are no investigations or audits of any Plan by any
governmental authority currently pending and there have been no such
investigations or audits that have been concluded that resulted in any
liability of DII that have not been fully discharged, and no Plan has
been submitted to the IRS under the voluntary compliance resolution or
closing agreement programs.
k. DII and Sellers are in compliance in all material
respects with all applicable Environmental Laws (as defined below),
which compliance includes, but is not limited to, the possession by
DII or Sellers of all material permits and other governmental
authorizations required under applicable Environmental Laws, and
material compliance with the terms and conditions thereof. For
purposes of this Agreement, "Environmental Laws" means all federal,
state, local, and foreign laws and regulations relating to pollution
or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface, or
subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases, or threatened
releases of, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of,
chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum products, or any other substance that is otherwise a danger
to health, reproduction, or the environment.
l. Except for those assets listed in Exhibit B which
require third party consent to transfer, DII has good and marketable
title to its assets free and clear of any pledges, liens,
encumbrances, security interests, equities, charges, and restrictions
of any nature whatsoever. Furthermore, DII does not own any real
property.
m. DII and Sellers are in compliance in all material
respects with all applicable laws relating to employment and
employment practices, including, without limitation, wages, workplace
safety, equal employment opportunity, and nondiscrimination ("Labor
Laws"). Neither DII nor Sellers has received any notice of
noncompliance or violation of any Labor Law that is pending or
unresolved; no action is pending, or to the best knowledge of DII and
Sellers, threatened before the National Labor Relations Board, the
Equal Opportunity Commission, the U.S. Department of Labor, or any
other
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foreign, federal, state, or local governmental authority or court
relating to employment matters or any Labor Law; and there is no
pending or, to the best knowledge of DII and Sellers, threatened
arbitration, suit, litigation, or proceeding, against DII, Sellers, or
any current or former director, shareholder, officer, or supervisory
employee of DII, alleging wrongful termination, racial, religious,
sexual, or age discrimination, improper post-termination conduct, or
breach of conduct or covenant of employment.
n. Except as set forth in Exhibit D, since July 1, 1996,
Sellers have not caused DII to do any of the following, and DII has
not:
(1) sold, leased, optioned, or transferred any
material portion of the assets of DII;
(2) suffered any material loss, or material
interruption in use, of any material asset or property
(whether or not covered by insurance), on account of fire,
flood, riot, strike, or other hazard or Act of God;
(3) made any material change in the conduct or
nature of its business or operations;
(4) waived any material rights arising out of the
conduct of, or with respect to, its business or operations;
(5) made or committed to make any capital
expenditures in an amount in excess of $5,000.00;
(6) declared or paid any dividend or other
distributions with respect to its capital shares or redeemed,
repurchased, or otherwise acquired any of its own capital
shares;
(7) made any material increase in the rate or
terms of compensation payable by DII to, or any increase in
the rate or terms of, any bonus, insurance, pension, or other
employee benefit plan on behalf of any director, officer, or
key employee of DII;
(8) made any change in accounting methods,
principles, or practices, except as required by generally
accepted accounting principles;
(9) suffered any creation, occurrence, or
assumption of any material indebtedness for money borrowed
other than in the form of accounts payable for goods and
services in the ordinary course of business;
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(10) assumed, guaranteed, or incurred any
liability for the obligations of any other person or suffered
the subjecting of any property or assets of DII to mortgage,
lien, pledge, or other encumbrance other than purchase money
security interests or liens for taxes yet due and payable in
the ordinary course of business;
(11) without limitation by the enumeration of any
of the foregoing, entered into any material transaction
(including borrowing, leasing, or capital financing or any
lease of real property) other than in the ordinary course of
business;
(12) incurred any material liabilities other than
in the ordinary course of business;
(13) suffered or been threatened with any adverse
change which has had or could have a material adverse effect
on DII; or
(14) agreed to do any of the foregoing.
o. DII and Sellers are in compliance in all material
respects with each "Governmental Requirement." Governmental
Requirement shall mean any and all laws (including, but not limited
to, applicable common law principles), statutes, ordinances, codes,
rules, regulations, interpretations, guidelines, directions, orders,
judgments, writs, injunctions, procedures, decrees, decisions, or
similar items or pronouncements, promulgated, issued, passed, or
enacted by any Governmental Authority (which shall mean any and all
federal, Texas, or local governments, governmental institutions,
public authorities, and other governmental entities of any nature
whatsoever, and any subdivisions or instrumentalities thereof,
including, but not limited to, departments, boards, bureaus,
commissions, agencies, courts, administrations, and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc
and whether now or hereafter constituted and/or existing).
Governmental Requirement specifically includes applicable provisions
of the federal Social Security Act (including the federal Medicare and
Medicaid Anti-Fraud and Abuse Amendments [42 U.S.C. Section 1320a-7,
7a, and 7b] and the federal Physician Anti-Self Referral Law [42
U.S.C. Section 1395nn]), the Texas Medical Practice Act (Article
4495b of the Texas Revised Civil Statutes), and the Texas Illegal
Remuneration Law (Texas Health and Safety Code Section 161.091).
p. Except as specifically noted therein, all of the
financial statements of DII have been prepared from the books and
records of DII in accordance with the income tax method consistently
applied throughout the periods indicated and
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fairly present the financial condition of DII at such dates and the
results of operations and (where applicable) changes in financial
condition for such periods.
q. The representations and warranties set forth in this
Section 5 shall survive the consummation of the transactions
contemplated in this Agreement.
7. Representations and Warranties of Purchaser. Purchaser
represents and warrants to DII and Sellers as follows:
a. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware. Purchaser has all necessary power and authority under
applicable corporate law and its Certificate of Incorporation and
By-Laws to own or lease its properties and to carry on its business as
presently conducted.
b. The authorized capital stock of Purchaser consists of
25,000,000 shares, $0.01 par value, of which 4,641,535 shares are
issued and outstanding.
c. Purchaser has all necessary power and authority under
applicable corporate law and its Certificate of Incorporation and
By-Laws to execute and deliver this Agreement and perform fully its
obligations under this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors (and
stockholders if required) of Purchaser and no other corporate
proceedings on the part of Purchaser are necessary for Purchaser to
authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement constitutes a legal, valid, and
binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms (except to the extent performance is
affected by laws pertaining to bankruptcy, reorganization, insolvency,
and creditors rights, and by the availability of injunctive relief,
specific performance, and other equitable remedies).
d. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not (i) violate any provision of the Certificate of Incorporation
or By- Laws of Purchaser, (ii) violate, conflict with, or result in
the breach of any of the terms of or constitute a default under, any
agreement, contract, lease, or other instrument to which Purchaser is
a party or to which its assets or properties may be bound or subject,
or (iii) violate any order, judgment, award, or decree of any court,
arbitrator, or governmental or regulatory
Stock Purchase Agreement Page -9-
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body against or binding upon, Purchaser or upon the properties,
assets, or business of Purchaser.
e. The Stock is being purchased by Purchaser for its own
account for the purposes described in this Agreement. Purchaser is
not participating, directly or indirectly, in an underwriting with
respect to its purchase of the Stock. Purchaser is capable of
evaluating the economic merits and risks of an investment in the
Stock. The Purchaser represents that the Stock is being acquired by
Purchaser in a transaction not involving a public offering and not
with a view to distribution or resale as those terms are used in the
Securities Act, and the rules, regulations, and interpretations of the
Securities and Exchange Commission promulgated under that Act.
Purchaser agrees not to make any disposition of any of the Stock which
in any way will render the transaction in which the Stock is sold or
issued to Purchaser no longer an exempted transaction under applicable
securities laws.
f. Purchaser acknowledges that its principals and agents
are sophisticated business people who have had, or prior to the
Closing will have, full opportunity to (i) examine the financial
statements and the books and records of DII, as well as the Exhibits
to this Agreement, (ii) investigate the business of DII, and (iii) ask
questions of Sellers and the key personnel of DII. Based on such
investigations, Purchaser has independently determined, or will
determine prior to Closing, that DII, and its business, are suitable
for Purchaser's purposes, and that the consideration being given by
Purchaser for the Stock is fair. Purchaser acknowledges that Sellers
have not made any representations or warranties of any kind with
respect to DII except as contained in this Agreement.
g. The representations and warranties set forth in this
Section 6 shall survive the consummation of the transactions
contemplated in this Agreement.
8. Covenants of Sellers. Sellers hereby jointly and severally
covenant and agree as follows:
a. Sellers are subject to, and agree to be bound by, the
provisions, restrictions, conditions, obligations, and/or requirements
contained in the individual investment letters from Sellers to
Purchaser, each dated July 1, 1996.
b. For a period of one year beginning on the earlier of
the date of Registration or February 28, 1997, Sellers shall not sell,
assign, transfer, deliver, burden, pledge, or
Stock Purchase Agreement Page -10-
<PAGE> 11
encumber in any one month more than one-twelfth (1/12th) of the TCD
Shares.
9. Covenants of DII. DII hereby covenants and agrees that (i)
prior to the Closing Date, DII shall terminate and thereafter shall liquidate
as promptly as possible the Plans, including but not limited to, the Doctors'
Inn, Inc. Pension Plan (the "Pension Plan") and make any and all required
contributions to each of such plans or obtain such required contributions from
the participating employers, in order to enable such termination and
liquidation and to comply with applicable law, and (ii) within forty-five (45)
days after the Closing Date, DII shall take any additional action necessary to
terminate such plans, including with respect to the Pension Plan, and any other
qualified retirement plan maintained by DII, filing an application for
determination with the IRS that the termination of such plan will not adversely
affect such plan's qualified status under section 401(a) of the Code or the
tax-exempt status of the related trust, if any, under section 501(a) of the
Code.
10. Indemnifications.
a. Purchaser. Purchaser hereby agrees to indemnify,
defend, and hold harmless Seller (and any affiliated party of Seller),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys' fees and expenses
asserted against, resulting to, imposed upon or incurred by Seller or
any affiliated party, directly or indirectly, caused by reason of or
resulting from or arising out of (i) any misrepresentation or any
breach or nonfulfillment of any representation, warranty, covenant and
agreement of Purchaser contained in or made pursuant to this
Agreement, and (ii) any act or omission of Purchaser occurring after
the Closing Date which relates to the ownership or operation of DII,
or its successor in interest.
b. Seller. Seller hereby agrees to indemnify, defend
and hold harmless Purchaser (and any affiliated party of Purchaser),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys' fees and expenses
asserted against, resulting to, imposed upon or incurred by Purchaser
or any affiliated party, directly or indirectly, caused by reason of
or resulting from or arising out of any (i) misrepresentation or any
breach or nonfulfillment of any representation, warranty, covenant and
agreement of Seller contained in or made pursuant to this Agreement,
but expressly excluding any
Stock Purchase Agreement Page -11-
<PAGE> 12
claims of a malpractice nature arising after the date of this
Agreement which are asserted against Seller and are covered by
professional medical malpractice insurance, and (ii) any deficiency in
funding or failure to fund any Plan.
11. Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments,
certificates, and other documents and take such other action as any other party
hereto may reasonably require in order to carry out this Agreement and the
transactions contemplated hereby.
12. Miscellaneous.
a. Entire Agreement. This Agreement and the other
agreements expressly contemplated herein supersede any and all other
agreements, either oral or written, between the parties hereto with
respect to the subject matter hereof and contain all of the covenants
and agreements between the parties with respect thereto.
b. Modification and Waiver. No change or modification
of this Agreement shall be valid or binding upon the parties hereto
unless such change or modification shall be in writing and signed by
all the parties hereto. No waiver of any term or condition of this
Agreement shall be enforceable unless it shall be in writing signed by
the party against which or whom it is sought to charged. The waiver
by either party of a breach of any provision of this Agreement by any
other shall not operate or be construed as a waiver of any subsequent
breach by such other party.
c. Governing Law. The laws of the State of Texas shall
govern the validity or enforceability and the interpretation or
construction of all provisions of this Agreement and all issues
hereunder.
d. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of
which shall constitute one and the same document. Faxed signatures to
this Agreement will be binding and enforceable without the requirement
that the manually executed signature page be delivered.
e. Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees,
costs, and necessary disbursements in addition to any other relief to
which the prevailing party may be entitled.
Stock Purchase Agreement Page -12-
<PAGE> 13
f. Assignment. Neither party may assign this Agreement
without the prior, express, and written consent of the other party
hereto, which consent may be withheld in such other party's sole
discretion.
g. Binding Effect. This Agreement shall be binding upon
the parties hereto, together with their respective personal
representatives, heirs, successors, and permitted assigns.
h. No Third Party Beneficiaries. This Agreement does
not create, and shall not be construed as creating, any right
enforceable by any person not a party to this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK, SIGNATURES ARE ON NEXT PAGE.]
Stock Purchase Agreement Page -13-
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the Effective Date.
SELLER
/s/ HENRY H. CALDERONI, M.D.
--------------------------------------
Henry H. Calderoni
SELLER
/s/ FRANCISCO J. GUERRA, M.D.
--------------------------------------
Francisco J. Guerra
DII
DOCTORS' INN, INC.,
a Texas corporation
By: /s/ HENRY H. CALDERONI, M.D.
-----------------------------------
-----------------, ----------------
PURCHASER
THE COMPANY DOCTOR,
a Delaware corporation
By: /s/ KEN AIKEN
-----------------------------------
Ken Aiken, Vice President
Stock Purchase Agreement Page -14-
<PAGE> 1
EXHIBIT 2.6
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into effective July 1, 1996, by and among FRANCISCO J. GUERRA, M.D., P.A.
("Guerra P.A."), a Texas professional association, FRANCISCO J. GUERRA, M.D.,
an individual resident of El Paso, Texas ("Seller"), and DONALD F. ANGLE, M.D.,
P.A., a Texas professional association ("Purchaser").
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
all of the 1,000 outstanding shares of capital stock, $1.00 par value (the
"Stock"), of Guerra P.A. in exchange for the consideration set forth herein;
WHEREAS, the parties to this Agreement previously agreed in jUNE 13,
1996 to the substantive terms and provisions hereof, including but not limited
to the transfer and delivery of the Guerra P.A. Stock in exchange for cash and
a promissory note, and have at all times since June 13, 1996 conducted their
respective businesses and foregone other business opportunities in reliance on
the consummation of the transaction described herein; and
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the parties hereby agree as follows:
1. Purchase and Sale. On the terms and subject to the conditions
set forth herein, Seller agrees to and does hereby sell and deliver to
Purchaser, and Purchaser agrees to and does hereby purchase from Seller, all of
the shares of Stock, free and clear of any liens, security interests, claims,
and encumbrances.
2. Purchase Price. In exchange for the Stock, Purchaser shall
pay the following consideration (in the aggregate, the "Purchase Price"):
a. Cash in the amount of $350,000.00; and
b. Promissory Note (herein so called) in the amount of
$950,000.00.
3. Closing. The transactions contemplated hereby will be
consummated at a Closing (herein so called) to be held on August 21, 1996, at
such time and place as the parties agree. The date on which Closing occurs is
referred to herein as the "Closing Date." At Closing, the parties shall
execute and deliver, or cause to happen, the following:
a. Purchaser shall pay to Seller the cash portion of the
Purchase Price and shall execute and deliver to Seller a
Stock Purchase Agreement
Page -1-
<PAGE> 2
Promissory Note in the form of Exhibit A attached hereto, against
delivery by Seller of certificates representing all of the Stock, duly
endorsed for transfer or accompanied by duly executed stock powers;
b. Purchaser and Seller shall execute and deliver the
Employment Agreements (as defined in Section 5 of this Agreement);
c. Seller (in his individual capacity and as the
shareholder, director, and officer of Guerra P.A.) and Guerra P.A.
shall execute and deliver to Purchaser such documents as Purchaser or
its counsel may require in order to consummate the merger of Guerra
P.A. into Purchaser after Closing; and
d. Each party to this Agreement shall perform any and
all further acts and execute and deliver any and all documents and
instruments that may be reasonably necessary to carry out the
provisions of this Agreement.
4. Merger. The parties contemplate that, as soon as possible
after the execution hereof, Guerra P.A. will be merged with and into Purchaser.
Seller will deliver all necessary approvals for such merger to Purchaser
contemporaneously with execution of this Agreement.
5. Employment. Purchaser agrees to employ Seller pursuant to the
Employment Agreements (herein so called) in the form of Exhibit B1 and Exhibit
B2 attached hereto. Such employment will be solely pursuant to the terms of
the Employment Agreements, and nothing in this Agreement shall constitute a
separate employment agreement or define any terms of Seller's employment by
Purchaser.
6. Termination of Employee Benefit Plans. Prior to the Closing
Date, Seller shall terminate its participation in any and all employee benefit
plans in which it is a participating employer, including, but not limited to,
the Doctors' Inn, Inc. Pension Plan, terminate any and all employee benefit
plans for which it is the sponsoring employer, and make any and all required
contributions to each of such plans. In addition, within forty-five (45) days
after the Closing Date, Seller shall take any additional action necessary to
terminate its participation or sponsorship of such plans, including with
respect to any qualified retirement plan for which Seller is a sponsor, filing
an application for determination with the Internal Revenue Service ("IRS") that
the termination of such plan will not adversely affect such plan's qualified
status under section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), or the tax-exempt status of the related trust, if any, under
section 501(a) of the Code.
Stock Purchase Agreement Page -2-
<PAGE> 3
7. Representations and Warranties of Guerra P.A. and Seller.
Guerra P.A. and Seller, jointly and severally, represent and warrant that the
following are true and correct as of this date:
a. Organization and Good Standing. Guerra P.A. is a
professional association duly organized, validly existing and in good
standing under the laws of Texas.
b. Ownership of Shares. Seller is the owner of all of
the shares, and the shares are owned by Seller free and clear of all
liabilities, liens, encumbrances, pledges, trusts, voting trusts or
shareholders' agreements, equities, charges, options, conditional sale
or title retention agreements, restrictions, or any other burdens.
c. Liabilities and Obligations. There are no
liabilities or obligations of Guerra P.A. whatsoever, accrued, fixed,
contingent or otherwise (known or unknown and asserted or unasserted),
existing on the date hereof, except for those liabilities set forth in
Exhibit C. Except as set forth in Exhibit C, Guerra P.A. is not
liable upon or with respect to, or obligated in any other way to
provide funds in respect of or to guarantee or assume in any manner,
any debt, obligation or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity, and
Guerra P.A. and Seller know of no basis for the assertion of any other
claims or liabilities of any nature or in any amount.
d. Contracts and Commitments with Third Parties. There
is set forth on Exhibit D a list of all outstanding contracts and
agreements, whether or not in writing, which relate to Guerra P.A.,
including, but not limited to, insurance policies to which Guerra P.A.
is a party.
e. Litigation. Except as set forth in Exhibit F, there
is no claim, litigation, action, suit, or proceeding, administrative
or judicial, pending or, to Seller's knowledge, threatened against
Seller or Guerra P.A., at law or in equity, before any federal, state,
local, or foreign court, or regulatory agency, or other governmental
authority, including, without limitation, any unfair labor practice or
grievance proceedings or otherwise.
f. Taxes. As of the date hereof, all returns and
reports of or relating to any foreign, federal, state, or local tax
that are required to be filed on or before the Closing Date for, by,
on behalf of, or with respect to Guerra P.A., including, but not
limited to, those relating to the income, business, operations, or
assets of Guerra P.A., have been or will be timely filed with the
appropriate foreign,
Stock Purchase Agreement Page -3-
<PAGE> 4
federal, state, and local authorities on or before the Closing Date;
g. Employee Benefit Plans. Set forth in Exhibit E is a
true, complete, and correct list of all employee benefit plans as
defined in section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether or not subject to ERISA, and
any other severance, termination, change of control, stock based, or
group insurance plan which Seller currently maintains, or has ever
maintained, with respect to any of its current or former employees
(collectively the "Plans"). Seller represents and warrants that each
of the Plans is being, and has been, maintained, operated, and
administered in all material respects in accordance with its
respective terms and all applicable laws, including, but not limited
to ERISA and the Code, and that no material liability or obligation
has been incurred (and is unsatisfied) or is expected to be incurred
by Seller (either directly or indirectly, including as a result of an
indemnification obligation) under or pursuant to any applicable law,
including Titles I and IV of ERISA and the penalty, excise tax, or
joint and several liability provisions of the Code relating to
employee benefit plans. Each Plan intended to be qualified under
section 401(a) of the Code, and the trust (if any) forming a part
thereof, has received a favorable determination letter from the IRS as
to its qualification under the Code and to the effect that each such
trust is exempt from taxation under section 501(a) of the Code and all
amendments necessary to maintain the qualification of such Plans have
been made within the time allowed by the Code and ERISA and, to the
knowledge of Seller, no event has occurred or condition exists which
could adversely affect such determination. With respect to each Plan
which is an "employee welfare benefit plan," as defined in section
3(1) of ERISA, (i) no such plan is unfunded or funded through a
"welfare benefit fund," as defined in section 419 of the Code, (ii)
each such plan which is a "group health plan," as defined in section
5000(b)(1) of the Code, is in compliance in all material respects with
the applicable requirements of section 4980B of the Code, (iii) no
such plan provides retiree medical benefits to former employees of
Seller or any related entity, and (iv) there are no unpaid or overdue
insurance premiums required to be paid with respect to such plan.
There are no actions, suits, or claims, other than routine claims for
benefits, pending or, to the knowledge of Seller, threatened with
respect to any of the Plans or against any trustee, fiduciary, or
administrator of the Plans. There are no investigations or audits of
any Plan by any governmental authority currently pending and there
have been no such investigations or audits that have been concluded
that resulted in any liability of Seller that have not been fully
Stock Purchase Agreement Page -4-
<PAGE> 5
discharged and no Plan has been submitted to the IRS under the
voluntary compliance resolution or closing agreement programs.
h. Except as set forth in Exhibit G, since July 1, 1996,
Seller has not caused Guerra P.A. to do any of the following, and
Guerra P.A. has not:
(1) sold, leased, optioned, or transferred any
material portion of the assets of Guerra P.A.;
(2) suffered any material loss, or material
interruption in use, of any material asset or property
(whether or not covered by insurance), on account of fire,
flood, riot, strike, or other hazard or Act of God;
(3) made any material change in the conduct or
nature of its business or operations;
(4) waived any material rights arising out of the
conduct of, or with respect to, its business or operations;
(5) made or committed to make any capital
expenditures in an amount in excess of $5,000.00;
(6) declared or paid any dividend or other
distributions with respect to its capital shares or redeemed,
repurchased, or otherwise acquired any of its own capital
shares;
(7) made any material increase in the rate or
terms of compensation payable by Guerra P.A. to, or any
increase in the rate or terms of, any bonus, insurance,
pension, or other employee benefit plan on behalf of any
director, officer, or key employee of Guerra P.A.;
(8) made any change in accounting methods,
principles, or practices, except as required by generally
accepted accounting principles;
(9) suffered any creation, occurrence, or
assumption of any material indebtedness for money borrowed
other than in the form of accounts payable for goods and
services in the ordinary course of business;
(10) assumed, guaranteed, or incurred any
liability for the obligations of any other person or suffered
the subjecting of any property or assets of Guerra P.A. to
mortgage, lien, pledge, or other encumbrance other than
purchase money security interests or liens for taxes yet due
and payable in the ordinary course of business;
Stock Purchase Agreement Page -5-
<PAGE> 6
(11) without limitation by the enumeration of any
of the foregoing, entered into any material transaction
(including borrowing, leasing, or capital financing or any
lease of real property) other than in the ordinary course of
business;
(12) incurred any material liabilities other than
in the ordinary course of business;
(13) suffered or been threatened with any adverse
change which has had or could have a material adverse effect
on Guerra P.A.; or
(14) agreed to do any of the foregoing.
i. Survival of Representations and Warranties. The
representations and warranties set forth in this Section 7 shall
survive the consummation of the transactions contemplated in this
Agreement.
8. Representations and Warranties of Purchaser. As a material
inducement to Seller and Guerra P.A to enter into this Agreement and perform
its obligations hereunder, Purchaser represents and warrants to Seller, which
warranties and representations shall survive the consummation of the
contemplated transactions, that:
a. Disclosure. Purchaser has analyzed, or has had the
opportunity to analyze, and is familiar with the business operations
of Guerra P.A., its current financial statements and all other
financial information, and other exhibits and related documents to
this Agreement. Purchaser understands that all books, records and
documents of Seller relating to this transaction have been available
for inspection by Purchaser upon reasonable notice. Purchaser confirms
that all documents requested by same have been made available, and
additionally, has been supplied with all of the additional information
concerning this transaction which has been requested. In making a
decision to purchase the Shares, Purchaser has relied upon information
provided in writing by Seller, or found in the books, records, or
documents of Seller, and Purchaser's analysis of such information and
has had an opportunity to ask questions of and receive answers from
persons acting on behalf of Seller to verify the accuracy and
completeness of such information.
b. Performance. Purchaser has the financial and
operational capability to timely and fully perform each of the
obligations and liabilities of Guerra P.A. Purchaser shall use its
best efforts to secure the release of Seller, if
Stock Purchase Agreement Page -6-
<PAGE> 7
Seller has any such personal liability, on any obligations and
liabilities remaining after the Closing.
c. Organization. Purchaser is a professional
association duly organized, validly existing, and in good standing
under the laws of the State of Texas.
d. Authority. Purchaser has full association power and
authority to enter into and perform this Agreement and each other
agreement, instrument, and document required to be executed by
Purchaser in connection herewith.
e. Execution of Agreement. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate any provision of the Articles
of Association or Bylaws of Purchaser, (ii) violate, conflict with, or
result in the breach of any of the terms of or constitute a default
under, any agreement, contract, lease, or other instrument to which
Purchaser is a party or to which its assets or properties may be bound
or subject, or (iii) violate any order, judgment, award, or decree of
any court, arbitrator, or governmental or regulatory body against, or
binding upon, Purchaser or upon the properties, assets, or business of
Purchaser.
9. Indemnifications.
a. Purchaser. Purchaser hereby agrees to indemnify,
defend, and hold harmless Seller (and any affiliated party of Seller),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys' fees and expenses
asserted against, resulting to, imposed upon or incurred by Seller or
any affiliated party, directly or indirectly, caused by reason of or
resulting from or arising out of (i) any misrepresentation or any
breach or nonfulfillment of any representation, warranty, covenant and
agreement of Purchaser contained in or made pursuant to this
Agreement, and (ii) any act or omission of Purchaser occurring after
the Closing Date which relates to the ownership or operation of Guerra
P.A., or its successor in interest.
b. Seller. Seller hereby agrees to indemnify, defend
and hold harmless Purchaser (and any affiliated party of Purchaser),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys' fees and expenses
asserted against, resulting to, imposed upon or incurred by Purchaser
or any
Stock Purchase Agreement Page -7-
<PAGE> 8
affiliated party, directly or indirectly, caused by reason of or
resulting from or arising out of any misrepresentation or any breach
or nonfulfillment of any representation, warranty, covenant and
agreement of Seller contained in or made pursuant to this Agreement,
but expressly excluding any claims of a malpractice nature arising
after the date of this Agreement which are asserted against Seller and
are covered by professional medical malpractice insurance.
10. Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments,
certificates, and other documents and take such other action as any other party
hereto may reasonably require in order to carry out this Agreement and the
transactions contemplated hereby.
11. Miscellaneous.
a. Entire Agreement. This Agreement and the other
agreements expressly contemplated herein supersede any and all other
agreements, either oral or written, between the parties hereto with
respect to the subject matter hereof and contain all of the covenants
and agreements between the parties with respect thereto.
b. Modification and Waiver. No change or modification
of this Agreement shall be valid or binding upon the parties hereto
unless such change or modification shall be in writing and signed by
all the parties hereto. No waiver of any term or condition of this
Agreement shall be enforceable unless it shall be in writing signed by
the party against which or whom it is sought to charged. The waiver
by either party of a breach of any provision of this Agreement by any
other shall not operate or be construed as a waiver of any subsequent
breach by such other party.
c. Governing Law. The laws of the State of Texas shall
govern the validity or enforceability and the interpretation or
construction of all provisions of this Agreement and all issues
hereunder.
d. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of
which shall constitute one and the same document. Faxed signatures to
this Agreement will be binding and enforceable without the requirement
that the manually executed signature page be delivered.
e. Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees,
costs, and necessary disbursements in
Stock Purchase Agreement Page -8-
<PAGE> 9
addition to any other relief to which the prevailing party may be
entitled.
f. Assignment. Neither party may assign this Agreement
without the prior, express, and written consent of the other party
hereto, which consent may be withheld in such other party's sole
discretion.
g. Binding Effect. This Agreement shall be binding upon
the parties hereto, together with their respective personal
representatives, heirs, successors, and permitted assigns.
h. No Third Party Beneficiaries. This Agreement does
not create, and shall not be construed as creating, any right
enforceable by any person not a party to this Agreement.
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Stock Purchase Agreement Page -9-
<PAGE> 10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SELLER:
/s/ FRANCISCO J. GUERRA, M.D.
-----------------------------------------
FRANCISCO J. GUERRA, M.D.
PURCHASER:
/s/ DONALD F. ANGLE, M.D., P.A.
By: /s/ DONALD F. ANGLE, M.D.
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
GUERRA P.A.
FRANCISCO J. GUERRA, M.D., P.A.
By: /s/ FRANCISCO J. GUERRA, M.D.
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Stock Purchase Agreement Page -10-
<PAGE> 1
EXHIBIT 2.7
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into effective July 1, 1996, by and among HENRY H. CALDERONI, M.D., P.A.
("Calderoni P.A."), a Texas professional association, HENRY H. CALDERONI, M.D.,
an individual resident of El Paso, Texas ("Seller"), and DONALD F. ANGLE, M.D.,
P.A., a Texas professional association ("Purchaser").
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
all of the 1,000 outstanding shares of capital stock, $1.00 par value (the
"Stock"), of Calderoni P.A. in exchange for the consideration set forth
herein;
WHEREAS, the parties to this Agreement previously agreed June 13, 1996
to the substantive terms and provisions hereof, including but not limited to
the transfer and delivery of the Calderoni P.A. Stock in exchange for cash and
a promissory note, and have at all times since June 13, 1996 conducted their
respective businesses and foregone other business opportunities in reliance on
the consummation of the transaction described herein; and
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the parties hereby agree as follows:
1. Purchase and Sale. On the terms and subject to the conditions
set forth herein, Seller agrees to and does hereby sell and deliver to
Purchaser, and Purchaser agrees to and does hereby purchase from Seller, all of
the shares of Stock, free and clear of any liens, security interests, claims,
and encumbrances.
2. Purchase Price. In exchange for the Stock, Purchaser shall
pay the following consideration (in the aggregate, the "Purchase Price"):
a. Cash in the amount of $350,000.00; and
b. Promissory Note (herein so called) in the amount of
$950,000.00.
3. Closing. The transactions contemplated hereby will be
consummated at a Closing (herein so called) to be held on August 21, 1996, at
such time and place as the parties agree. The date on which Closing occurs is
referred to herein as the "Closing Date." At Closing, the parties shall
execute and deliver, or cause to happen, the following:
a. Purchaser shall pay to Seller the cash portion of the
Purchase Price and shall execute and deliver to Seller a
Stock Purchase Agreement Page -1-
<PAGE> 2
Promissory Note in the form of Exhibit A attached hereto, against
delivery by Seller of certificates representing all of the Stock, duly
endorsed for transfer or accompanied by duly executed stock powers;
b. Purchaser and Seller shall execute and deliver the
Employment Agreements (as defined in Section 5 of this Agreement);
c. Seller (in his individual capacity and as the
shareholder, director, and officer of Calderoni P.A.) and Calderoni
P.A. shall execute and deliver to Purchaser such documents as
Purchaser or its counsel may require in order to consummate the merger
of Calderoni P.A. into Purchaser after Closing; and
d. Each party to this Agreement shall perform any and
all further acts and execute and deliver any and all documents and
instruments that may be reasonably necessary to carry out the
provisions of this Agreement.
4. Merger. The parties contemplate that, as soon as possible
after the execution hereof, Calderoni P.A. will be merged with and into
Purchaser. Seller will deliver all necessary approvals for such merger to
Purchaser contemporaneously with execution of this Agreement.
5. Employment. Purchaser agrees to employ Seller pursuant to the
Employment Agreements (herein so called) in the form of Exhibit B1 and Exhibit
B2 attached hereto. Such employment will be solely pursuant to the terms of
the Employment Agreements, and nothing in this Agreement shall constitute a
separate employment agreement or define any terms of Seller's employment by
Purchaser.
6. Termination of Employee Benefit Plans. Prior to the Closing
Date, Seller shall terminate its participation in any and all employee benefit
plans in which it is a participating employer, including, but not limited to,
the Doctors' Inn, Inc. Pension Plan, terminate any and all employee benefit
plans for which it is the sponsoring employer, and make any and all required
contributions to each of such plans. In addition, within forty-five (45) days
after the Closing Date, Seller shall take any additional action necessary to
terminate its participation or sponsorship of such plans, including with
respect to any qualified retirement plan for which Seller is a sponsor, filing
an application for determination with the Internal Revenue Service ("IRS") that
the termination of such plan will not adversely affect such plan's qualified
status under section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), or the tax-exempt status of the related trust, if any, under
section 501(a) of the Code.
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7. Representations and Warranties of Calderoni P.A. and Seller.
Calderoni P.A. and Seller, jointly and severally, represent and warrant that
the following are true and correct as of this date:
a. Organization and Good Standing. Calderoni P.A. is a
professional association duly organized, validly existing and in good
standing under the laws of Texas.
b. Ownership of Shares. Seller is the owner of all of
the shares, and the shares are owned by Seller free and clear of all
liabilities, liens, encumbrances, pledges, trusts, voting trusts or
shareholders' agreements, equities, charges, options, conditional sale
or title retention agreements, restrictions, or any other burdens.
c. Liabilities and Obligations. There are no
liabilities or obligations of Calderoni P.A. whatsoever, accrued,
fixed, contingent or otherwise (known or unknown and asserted or
unasserted), existing on the date hereof, except for those liabilities
set forth in Exhibit C. Except as set forth in Exhibit C, Calderoni
P.A. is not liable upon or with respect to, or obligated in any other
way to provide funds in respect of or to guarantee or assume in any
manner, any debt, obligation or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity, and
Calderoni P.A. and Seller know of no basis for the assertion of any
other claims or liabilities of any nature or in any amount.
d. Contracts and Commitments with Third Parties. There
is set forth on Exhibit D a list of all outstanding contracts and
agreements, whether or not in writing, which relate to Calderoni P.A.,
including, but not limited to, insurance policies to which Calderoni
P.A. is a party.
e. Litigation. Except as set forth in Exhibit F, there
is no claim, litigation, action, suit, or proceeding, administrative
or judicial, pending or, to Seller's knowledge, threatened against
Seller or Calderoni P.A., at law or in equity, before any federal,
state, local, or foreign court, or regulatory agency, or other
governmental authority, including, without limitation, any unfair
labor practice or grievance proceedings or otherwise.
f. Taxes. As of the date hereof, all returns and
reports of or relating to any foreign, federal, state, or local tax
that are required to be filed on or before the Closing Date for, by,
on behalf of, or with respect to Calderoni P.A., including, but not
limited to, those relating to the income, business, operations, or
assets of Calderoni
Stock Purchase Agreement Page -3-
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P.A., have been or will be timely filed with the appropriate foreign,
federal, state, and local authorities on or before the Closing Date;
g. Employee Benefit Plans. Set forth in Exhibit E is a
true, complete, and correct list of all employee benefit plans as
defined in section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether or not subject to ERISA, and
any other severance, termination, change of control, stock based, or
group insurance plan which Seller currently maintains, or has ever
maintained, with respect to any of its current or former employees
(collectively the "Plans"). Seller represents and warrants that each
of the Plans is being, and has been, maintained, operated, and
administered in all material respects in accordance with its
respective terms and all applicable laws, including, but not limited
to ERISA and the Code, and that no material liability or obligation
has been incurred (and is unsatisfied) or is expected to be incurred
by Seller (either directly or indirectly, including as a result of an
indemnification obligation) under or pursuant to any applicable law,
including Titles I and IV of ERISA and the penalty, excise tax, or
joint and several liability provisions of the Code relating to
employee benefit plans. Each Plan intended to be qualified under
section 401(a) of the Code, and the trust (if any) forming a part
thereof, has received a favorable determination letter from the IRS as
to its qualification under the Code and to the effect that each such
trust is exempt from taxation under section 501(a) of the Code and all
amendments necessary to maintain the qualification of such Plans have
been made within the time allowed by the Code and ERISA and, to the
knowledge of Seller, no event has occurred or condition exists which
could adversely affect such determination. With respect to each Plan
which is an "employee welfare benefit plan," as defined in section
3(1) of ERISA, (i) no such plan is unfunded or funded through a
"welfare benefit fund," as defined in section 419 of the Code, (ii)
each such plan which is a "group health plan," as defined in section
5000(b)(1) of the Code, is in compliance in all material respects with
the applicable requirements of section 4980B of the Code, (iii) no
such plan provides retiree medical benefits to former employees of
Seller or any related entity, and (iv) there are no unpaid or overdue
insurance premiums required to be paid with respect to such plan.
There are no actions, suits, or claims, other than routine claims for
benefits, pending or, to the knowledge of Seller, threatened with
respect to any of the Plans or against any trustee, fiduciary, or
administrator of the Plans. There are no investigations or audits of
any Plan by any governmental authority currently pending and there
have been no such investigations or audits that have been concluded
that
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<PAGE> 5
resulted in any liability of Seller that have not been fully
discharged and no Plan has been submitted to the IRS under the
voluntary compliance resolution or closing agreement programs.
h. Except as set forth in Exhibit G, since July 1, 1996,
Seller has not caused Calderoni P.A. to do any of the following, and
Calderoni P.A. has not:
(1) sold, leased, optioned, or transferred any
material portion of the assets of Calderoni P.A.;
(2) suffered any material loss, or material
interruption in use, of any material asset or property
(whether or not covered by insurance), on account of fire,
flood, riot, strike, or other hazard or Act of God;
(3) made any material change in the conduct or
nature of its business or operations;
(4) waived any material rights arising out of the
conduct of, or with respect to, its business or operations;
(5) made or committed to make any capital
expenditures in an amount in excess of $5,000.00;
(6) declared or paid any dividend or other
distributions with respect to its capital shares or redeemed,
repurchased, or otherwise acquired any of its own capital
shares;
(7) made any material increase in the rate or
terms of compensation payable by Calderoni P.A. to, or any
increase in the rate or terms of, any bonus, insurance,
pension, or other employee benefit plan on behalf of any
director, officer, or key employee of Calderoni P.A.;
(8) made any change in accounting methods,
principles, or practices, except as required by generally
accepted accounting principles;
(9) suffered any creation, occurrence, or
assumption of any material indebtedness for money borrowed
other than in the form of accounts payable for goods and
services in the ordinary course of business;
(10) assumed, guaranteed, or incurred any
liability for the obligations of any other person or suffered
the subjecting of any property or assets of Calderoni P.A. to
mortgage, lien, pledge, or other encumbrance other than
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<PAGE> 6
purchase money security interests or liens for taxes yet due and
payable in the ordinary course of business;
(11) without limitation by the enumeration of any
of the foregoing, entered into any material transaction
(including borrowing, leasing, or capital financing or any
lease of real property) other than in the ordinary course of
business;
(12) incurred any material liabilities other than
in the ordinary course of business;
(13) suffered or been threatened with any adverse
change which has had or could have a material adverse effect
on Calderoni P.A.; or
(14) agreed to do any of the foregoing.
i. Survival of Representations and Warranties. The
representations and warranties set forth in this Section 7 shall
survive the consummation of the transactions contemplated in this
Agreement.
8. Representations and Warranties of Purchaser. As a material
inducement to Seller and Calderoni P.A to enter into this Agreement and perform
its obligations hereunder, Purchaser represents and warrants to Seller, which
warranties and representations shall survive the consummation of the
contemplated transactions, that:
a. Disclosure. Purchaser has analyzed, or has had the
opportunity to analyze, and is familiar with the business operations
of Calderoni P.A., its current financial statements and all other
financial information, and other exhibits and related documents to
this Agreement. Purchaser understands that all books, records and
documents of Seller relating to this transaction have been available
for inspection by Purchaser upon reasonable notice. Purchaser confirms
that all documents requested by same have been made available, and
additionally, has been supplied with all of the additional information
concerning this transaction which has been requested. In making a
decision to purchase the Shares, Purchaser has relied upon information
provided in writing by Seller, or found in the books, records, or
documents of Seller, and Purchaser's analysis of such information and
has had an opportunity to ask questions of and receive answers from
persons acting on behalf of Seller to verify the accuracy and
completeness of such information.
b. Performance. Purchaser has the financial and
operational capability to timely and fully perform each of the
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<PAGE> 7
obligations and liabilities of Calderoni P.A. Purchaser shall use its
best efforts to secure the release of Seller, if Seller has any such
personal liability, on any obligations and liabilities remaining after
the Closing.
c. Organization. Purchaser is a professional
association duly organized, validly existing, and in good standing
under the laws of the State of Texas.
d. Authority. Purchaser has full association power and
authority to enter into and perform this Agreement and each other
agreement, instrument, and document required to be executed by
Purchaser in connection herewith.
e. Execution of Agreement. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate any provision of the Articles
of Association or Bylaws of Purchaser, (ii) violate, conflict with, or
result in the breach of any of the terms of or constitute a default
under, any agreement, contract, lease, or other instrument to which
Purchaser is a party or to which its assets or properties may be bound
or subject, or (iii) violate any order, judgment, award, or decree of
any court, arbitrator, or governmental or regulatory body against, or
binding upon, Purchaser or upon the properties, assets, or business of
Purchaser.
9. Indemnifications.
a. Purchaser. Purchaser hereby agrees to indemnify,
defend, and hold harmless Seller (and any affiliated party of Seller),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys' fees and expenses
asserted against, resulting to, imposed upon or incurred by Seller or
any affiliated party, directly or indirectly, caused by reason of or
resulting from or arising out of (i) any misrepresentation or any
breach or nonfulfillment of any representation, warranty, covenant and
agreement of Purchaser contained in or made pursuant to this
Agreement, and (ii) any act or omission of Purchaser occurring after
the Closing Date which relates to the ownership or operation of
Calderoni P.A., or its successor in interest.
b. Seller. Seller hereby agrees to indemnify, defend
and hold harmless Purchaser (and any affiliated party of Purchaser),
at any time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest,
penalties, court costs and
Stock Purchase Agreement Page -7-
<PAGE> 8
reasonable attorneys' fees and expenses asserted against, resulting
to, imposed upon or incurred by Purchaser or any affiliated party,
directly or indirectly, caused by reason of or resulting from or
arising out of any misrepresentation or any breach or nonfulfillment
of any representation, warranty, covenant and agreement of Seller
contained in or made pursuant to this Agreement, but expressly
excluding any claims of a malpractice nature arising after the date of
this Agreement which are asserted against Seller and are covered by
professional medical malpractice insurance.
10. Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments,
certificates, and other documents and take such other action as any other party
hereto may reasonably require in order to carry out this Agreement and the
transactions contemplated hereby.
11. Miscellaneous.
a. Entire Agreement. This Agreement and the other
agreements expressly contemplated herein supersede any and all other
agreements, either oral or written, between the parties hereto with
respect to the subject matter hereof and contain all of the covenants
and agreements between the parties with respect thereto.
b. Modification and Waiver. No change or modification
of this Agreement shall be valid or binding upon the parties hereto
unless such change or modification shall be in writing and signed by
all the parties hereto. No waiver of any term or condition of this
Agreement shall be enforceable unless it shall be in writing signed by
the party against which or whom it is sought to charged. The waiver
by either party of a breach of any provision of this Agreement by any
other shall not operate or be construed as a waiver of any subsequent
breach by such other party.
c. Governing Law. The laws of the State of Texas shall
govern the validity or enforceability and the interpretation or
construction of all provisions of this Agreement and all issues
hereunder.
d. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of
which shall constitute one and the same document. Faxed signatures to
this Agreement will be binding and enforceable without the requirement
that the manually executed signature page be delivered.
e. Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement,
Stock Purchase Agreement Page -8-
<PAGE> 9
the prevailing party shall be entitled to reasonable attorneys' fees,
costs, and necessary disbursements in addition to any other relief to
which the prevailing party may be entitled.
f. Assignment. Neither party may assign this Agreement
without the prior, express, and written consent of the other party
hereto, which consent may be withheld in such other party's sole
discretion.
g. Binding Effect. This Agreement shall be binding upon
the parties hereto, together with their respective personal
representatives, heirs, successors, and permitted assigns.
h. No Third Party Beneficiaries. This Agreement does
not create, and shall not be construed as creating, any right
enforceable by any person not a party to this Agreement.
[THIS SPACE INTENTIONALLY BLANK, SIGNATURES ARE ON FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SELLER:
/S/ HENRY H. CALDERONI, M.D.
------------------------------------------
HENRY H. CALDERONI, M.D.
PURCHASER:
DONALD F. ANGLE, M.D., P.A.
By: /S/ DONALD F. ANGLE, M.D.
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Name:
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Title:
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CALDERONI P.A.
HENRY H. CALDERONI, M.D., P.A.
By: /S/ HENRY H. CALDERONI, M.D.
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Name:
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Title:
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