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EXHIBIT 10.4
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
____________________________
d/b/a ____________, AS SELLER,
____________________________,
AS SHAREHOLDER
AND
ORTHODONTIX INC., AS BUYER
______________, 1997
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made this
_____ day of ____ , 1997, by and among _____ , d/b/a ______ , a _____
professional corporation ("Seller"), _______ ("Shareholder") and Orthodontix,
Inc., a Florida corporation ("Buyer").
RECITALS
A. Seller is a professional corporation performing orthodontic and
related services through the Shareholder and other licensed professionals (the
"Business").
B. Buyer is a Florida corporation. Buyer and its affiliates have
developed systems, procedures and strategies to maximize the productivity,
efficiency and profitability of orthodontic practices. Buyer and its affiliates
are experienced in providing capital improvements, management and related
services to orthodontic practices.
C. Shareholder is an orthodontist licensed to practice in the State of
______________ and is the sole director, officer, and owner of 100% of the
outstanding capital stock of Seller. Shareholder is employed by Seller pursuant
to an employment agreement, a copy of which is attached hereto and incorporated
by reference hereby as Exhibit II to this Agreement (the "Shareholder Employment
Agreement").
D. Embassy Acquisition Corp. ("Embassy") will become the sole
shareholder of Buyer at the Closing (as such term is hereinafter defined at
Section 1.1 of this Agreement) pursuant to the consummation of a business
combination transaction between Buyer and Embassy, concurrent with the Closing,
which will, among other things, require each share of Common Stock to be
delivered to the Seller hereunder to be exchanged for one share of Embassy
Common Stock (the "Embassy Combination").
E. Buyer desires to acquire from Seller, and Seller desires to sell to
Buyer, upon the terms and subject to the conditions herein set forth, certain of
the properties, assets and rights associated with the Business of Seller, more
particularly described as those certain assets attached hereto and incorporated
by reference hereby as Exhibit "A" to this Agreement (the "Assets") solely in
exchange for the Consideration (as such term is hereinafter defined at Section
2.1 (a) of this Agreement). Seller desires to promptly liquidate thereafter, and
distribute the Consideration to Shareholder in connection with the liquidation.
F. Buyer desires to assume those certain liabilities of Seller, more
particularly described as those certain liabilities attached hereto and
incorporated by reference hereby as Exhibit "B" to this Agreement.
G. It is intended that for federal income tax purposes the transactions
contemplated hereunder shall qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended.
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H. This Agreement is being entered into in connection with the
execution of a Services Agreement (the "Services Agreement") between Orthodontix
Professional, P.A., a _________ professional corporation affiliated with Buyer,
and a professional corporation wholly owned by the Shareholder substantially in
the form attached hereto as Exhibit "I." The execution of the Services Agreement
is a condition precedent to the consummation of the transactions contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, which are hereby
incorporated herein, and of the mutual promises herein contained, it is hereby
agreed as follows:
1. CONVEYANCE OF ASSETS
1.1 ASSETS TO BE ACQUIRED FROM SELLER. Upon the terms and subject to
the conditions set forth in this Agreement, Buyer shall acquire from Seller, and
Seller shall sell, transfer and deliver to Buyer or its assignee, on the date of
the closing of the Embassy Combination at the offices of Buyer, or on such other
date and at such other place as agreed to by the parties (the "Closing"), all of
the properties, assets and rights of Seller relating to the Assets, other than
the Excluded Assets as described in Section 1.2 hereof. The Assets, include,
without limitation, the following:
(a) All machinery and equipment associated with or related to
the Assets listed in Exhibit "A" together with all parts, tools and accessories
and the like relating thereto ("Equipment");
(b) All of Seller's office furniture, fixtures and office
equipment and all parts relating thereto associated with or related to the
Assets listed in Exhibit "A" hereto ("Office Equipment");
(c) All of Seller's materials and inventory, including
packaging or supplies in stock, in transit and/or on order, and other items in
connection with the Assets listed in Exhibit "A" hereto ("Inventory");
(d) All goodwill incident to or associated with the Assets,
all of Seller's telephone numbers, telephone and advertising listings (to the
extent transferable), patient lists (to the extent transferable) and all other
information and data relating to the patients or suppliers of Seller or
otherwise related to the Assets, and all of Seller's product development, design
and product patents, trademarks, trade names, service marks, copyrights,
computer programs and software, trade secrets, processes, know how and product
specifications, promotional displays and materials associated with or related to
the Assets, all Intellectual Property (as defined in Section 3.20) and any
applications related thereto ("Intangible Assets");
(e) Subject to compliance with professional and other
obligations and the patient's consent thereto, all of the Seller's right, title
and interest in and to the accounts with
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vendors, suppliers, service providers, patients and other third parties,
including all of Seller's rights under each of the scheduled contracts and
agreements listed in Exhibit "A" hereto (the "Assigned Contracts"); and
(f) All trade and other accounts receivable of Seller (the
"Accounts Receivable") arising prior to the closing.
(g) All of Seller's right, title and interest in and to the
Shareholder Employment Agreement.
1.2 EXCLUDED ASSETS. Notwithstanding anything in Section 1.1 to the
contrary, the Assets do not include the following ("Excluded Assets"):
(a) All Assets not specifically conveyed pursuant to Section
1.1 hereof;
(b) Minutes, minute books and stock record books of Seller;
(c) Seller's cash on hand and in bank accounts and any other
cash or cash equivalents and all marketable and other securities;
(d) Any rights, liabilities or obligations arising under, or
with respect to, any of Seller's Plans (as such term is defined in Section 3.16
below), including, but not limited to, any rights, liabilities or obligations
arising under, or with respect to, the health care continuation requirements
under Section 4980B of the Internal Revenue Code of 1986, as amended (the
"Code") and Part 6 of Subtitle B of Title I of ERISA ("COBRA");
(e) The consideration to be received by and the rights of
Seller under this Agreement;
(f) All claims of Seller, whether or not pending or
liquidated, for loss or damages against any parties with respect to the
operations of Seller prior to the Closing, other than those related to the
Assets purchased pursuant to this Agreement;
(g) The real property described on Schedule 1.2(g); and
(h) The vehicles described on Schedule 1.2(h).
2. CONSIDERATION
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2.1 CONSIDERATION.
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(a) CONSIDERATION. Buyer shall acquire the Assets from Seller
for $ _____ of value (the "Consideration"). At the Closing, the Consideration
shall be paid by Buyer to Seller in cash consideration and in stock
consideration as referenced below:
(i) CASH CONSIDERATION. At the Closing, Seller shall
receive $ ____ cash (the "Cash Consideration"). The
Cash Consideration shall be delivered by Buyer to
Seller, at Buyer's option, in the form of a cashier's
check or wire transfer of funds to such account as
Seller may designate; and
(ii) STOCK CONSIDERATION. All Consideration less the
Cash Consideration (the "Remainder
Consideration")shall be payable at the Closing by
Buyer to Seller by the delivery of the aggregate
number of shares of common stock, par value $.0001
per share of Orthodontix, equal to the quotient of
(x) the Remainder Consideration divided by (y) the
Share Value (the "Stock Consideration"). The term
Share Value shall mean the average of the closing bid
and ask price, as reported on the OTC Electronic
Bulletin Board or similar quotation board of
Embassy's shares of Common Stock for the 15 trading
days immediately preceding the date of the Closing.
It is acknowledged by the parties hereto that the
Stock Consideration shall be delivered to Seller in
the form of shares of Embassy Common Stock as a
result of the Embassy Combination.
The certificates of Embassy representing the Stock Consideration shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE RECEIVED
ON ___________ IN A TRANSACTION GOVERNED BY RULE 145 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), BY A PERSON
WHO MAY BE DEEMED AN "AFFILIATE" AS THE TERM IS USED IN RULE
145 AND MAY NOT BE TRANSFERRED OTHERWISE THAN PURSUANT TO THE
PROVISIONS OF RULE 145 OR AS OTHERWISE ALLOWED BY THE
PROVISIONS OF THE UNDERTAKING GIVEN BY SUCH PERSON TO THE
ISSUER OF THE SECURITIES.
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE RESTRICTED UNDER THE TERMS OF THAT CERTAIN LOCK-UP
AGREEMENT BETWEEN THE ISSUER OF THE SECURITIES AND THE HOLDER
OF THE SECURITIES, A COPY OF WHICH AGREEMENT MAY BE OBTAINED
FROM THE ISSUER UPON WRITTEN REQUEST THEREFOR. NO TRANSFER OF
ANY SECURITIES
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REPRESENTED BY THIS CERTIFICATE WILL BE MADE ON THE BOOKS OF
THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH
SUCH AGREEMENT.
2.2 ASSUMPTION OF ASSUMED LIABILITIES. Buyer shall (a) assume and agree
to pay and satisfy only those obligations and liabilities of Seller as reflected
on that certain Exhibit "B" attached hereto and incorporated by reference
hereby; and (b) pursuant to a lease assignment and assumption agreement to be
executed and delivered at the Closing (the "Lease Assumption Agreement") in the
form of Exhibit "C" hereto, assume and agree to pay and satisfy only those
obligations and liabilities of Seller accruing under that certain lease
agreement dated ________ between Seller and _____________ from and after the
Closing (collectively, the "Assumed Liabilities"). Except for the Assumed
Liabilities, Buyer shall not assume, and Seller shall be and remain liable for,
any and all obligations, liabilities and indebtedness of Seller, whether due or
to become due, absolute or contingent, direct or indirect, or asserted or
unasserted and whether relating to Seller, Seller's business, the Assets or
otherwise. Seller shall indemnify Buyer and Buyer's officers, directors and
affiliates from and against any and all losses (including attorneys' fees and
costs) arising out of or in any way related to medical malpractice claims
against Seller or Shareholder, whether vested or contingent, as of the date of
this Agreement. The following items shall be apportioned as of 11:59 p.m. on the
day preceding the Closing: (i) personal property taxes, sewer rents and charges
and other state, county, metropolitan and municipal taxes and assessments and
charges affecting the Assets; (ii) rents and other payments under any of the
Contracts; (c) charges for water, electricity, gas, oil, steam and all other
utilities; and (iv) such other items as are customarily apportioned in
connection with the sale of similar property, including employee salaries,
expenses and taxes, all such items prior to such time being for the account of
Seller and all such times after such time being the account of Buyer. At the
Closing, Seller or Buyer, as the case may be, shall deliver to the other a check
for the net amount owing under this Section 2.2. If any such item cannot
accurately be apportioned at the Closing or subsequent thereto, such item shall
be apportioned or reapportioned, as the case may be, as soon as practicable
after the Closing or the date on which the apportionment error is discovered, as
applicable.
2.3 RESERVED.
2.4 AGENCY RELATIONSHIP. In the event that, following the Closing,
Seller receives any funds, documents or instruments which constitute or are
delivered in respect of the Assets transferred to Buyer pursuant to this
Agreement, Seller agrees to hold such funds, documents or instruments in trust
for Buyer and as Buyer's agent therefor.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER
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As an inducement to Buyer to enter into and perform its obligations
under this Agreement, Seller and Shareholder jointly and severally, make to
Buyer the representations and warranties set forth below:
3.1 CORPORATE STATUS. Seller is a professional corporation duly
organized, validly existing and in good standing under the laws of the State of
______ . Seller has no subsidiaries and has no interest in or any agreement to
acquire or hold an interest in any corporation, joint venture, partnership,
syndicate or other incorporated or unincorporated venture. Seller has all
requisite power to own, lease and license its properties and assets and to carry
on its business in the manner and in the places where such properties and assets
are owned, leased, licensed or operated or such businesses are conducted. Seller
has all applicable licenses and permits and is duly qualified to do business in,
and is in good standing in all jurisdictions in which its ownership, leasing or
licensing of property and assets makes such qualification necessary.
3.2 AUTHORITY FOR AGREEMENT. Seller has full right, power and authority
to enter into this Agreement and to perform its obligations hereunder. The entry
into and performance hereof has been duly authorized by all necessary corporate
action on the part of Seller in accordance with its corporate charter, bylaws
and applicable law, and this Agreement constitutes a valid agreement binding
upon and enforceable against Seller in accordance with its terms. Shareholder is
an orthodontist licensed to practice in the State of ____________________ , owns
100% of the outstanding capital stock of the Seller and has full right, power
and authority to enter into this Agreement and to perform his obligations
hereunder and thereunder, and this Agreement constitutes a valid agreement
binding upon and enforceable against Shareholder in accordance with its terms.
3.3 NO BREACH OR DEFAULT. The execution and delivery of this Agreement
by the Seller and the consummation of the transactions herein provided will not:
(a) Result in a breach of any of the terms or conditions of,
or constitute a default under, or in any manner release any party thereto from
any obligation under any mortgage, note, bond indenture, contract, agreement,
license or other instrument or obligation of any kind or nature to which the
Seller is a party, or by which it, any of the Assets or Seller's business may be
bound or affected, other than prohibitions on transferring certain of the
Assets, all of which prohibitions shall have been waived in writing by the
aggrieved parties prior to the Closing;
(b) Violate any order, writ, injunction or decree of any
court, administrative agency or governmental body or require the approval,
consent or permission of any governmental or regulatory body or authority; or
(c) Violate any provision of the corporate charter or bylaws
of Seller.
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3.4 SELLER'S CONSENTS. To the best knowledge of Seller and Shareholder
other than certain consents referred to in Section 6.7 hereof, no consent,
approval or authorization of any governmental authority or other person or
entity is required for the execution and delivery of this Agreement and the
consummation by Seller and Shareholder of the transactions contemplated hereby.
3.5 FINANCIAL.
(a) Seller's books, accounts and records are, and have been,
maintained in Seller's usual, regular and ordinary manner, in accordance with
good accounting practices and all material transactions to which Seller is or
has been a party are properly reflected therein.
(b) Seller has provided Buyer with (i) complete and correct
copies of the unaudited balance sheets, statements of income and retained
earnings, statements of cash flows and notes to financial statements of Seller,
all as and for the years ended December 31, 1996, December 31, 1995 and December
31, 1994 respectively and for the six month period ended June 30, 1997
(collectively, the "Financial Statements"). The Financial Statements present
fairly the financial position of Seller as of the dates thereof, and the results
of operations and cash flows of Seller for the respective periods covered by
said statements, in accordance with generally accepted accounting principles
("GAAP") consistently applied.
(c) Seller has no material obligation or liability of any
nature whatsoever (direct or indirect, matured or unmatured, known or unknown,
absolute, accrued, contingent or otherwise), whether or not required by GAAP to
be set forth on, reflected on or reserved against on a balance sheet (all of the
foregoing herein collectively being referred to as "Liabilities"), except for:
(i) Liabilities set forth on, reflected on or
reserved against on the face of the Balance Sheet of
Seller as of June 30, 1997 (the "Balance Sheet
Date");
(ii) Liabilities which were incurred by Seller
subsequent to the Balance Sheet Date, but only to the
extent that such Liabilities were incurred in the
ordinary course of Seller's business and consistent
with past practice;
(iii) Liabilities under the executory portion of any
written purchase order, sales order, lease, agreement
or commitment of any kind by which Seller is bound
and which was entered into in the ordinary course of
Seller's business and consistent with past practice;
(iv) Liabilities under the executory portion of
permits, licenses and governmental directives and
agreements which have been issued to Seller;
(v) Liabilities for allowances, refunds and
concessions as set forth on Schedule 3.5; and
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(vi) Liabilities pursuant to the litigation listed on
Schedule 3.11.
3.6 NO MATERIAL CHANGE. Except as set forth on Schedule 3.6, since the
Balance Sheet Date, there has not been:
(a) Any material adverse change in Seller's financial
condition, properties, assets, liabilities or Business or a decrease in Seller's
net worth;
(b) Any material damage, destruction or loss of any properties
of Seller, whether or not covered by insurance;
(c) Any change in the manner in which Seller's business has
been conducted, including, without limitation, collection of accounts receivable
and payment of accounts payable;
(d) Any change in the accounting principles, methods or
practices or any change in the depreciation or amortization policies or rates
utilized by Seller;
(e) Any voluntary or involuntary sale, assignment,
abandonment, surrender, termination, transfer, license or other disposition, of
any kind or nature, of any property or right (including, without limitation, any
Equipment, Office Equipment, Accounts Receivable, Intangible Assets, business
records or Contracts (as defined in Section 3.10 below), excepting only
transfers in accordance with past practices or collection of Accounts Receivable
in the ordinary course of business;
(f) Any change in the treatment and protection of trade
secrets or other confidential information relating to Seller's business;
(g) Any change in Seller's business or Seller's relationships
with any customer or supplier which might reasonably be expected to adversely
affect any of the Assets, Seller's business or the prospects of Buyer with
respect to any of the foregoing;
(h) Any strike, material grievance proceeding or other labor
dispute, any union organizational activity or other occurrence, event or
condition of any similar character which might reasonably be expected to
adversely affect any of the Assets, Seller's business or the prospects of Buyer
with respect to any of the foregoing;
(i) Any loan or advance by Seller to any party other than
credit extended to clients in the ordinary course of business as previously
conducted;
(j) Any incurrence by Seller of debts, liabilities or
obligations of any nature whether accrued, absolute, contingent, direct,
indirect or inchoate, or otherwise, and whether due or to become due, except:
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(i) current liabilities incurred for services
rendered in the ordinary course of Seller's business
and entered into at arms' length;
(ii) obligations incurred in the ordinary course of
Seller's business entered into at arms' length;
(iii) liabilities on account of taxes and
governmental charges, but not penalties, interest or
fines in respect thereof;
(iv) obligations or liabilities incurred by virtue of
the execution of this Agreement; or
(v) liabilities pursuant to the litigation listed on
Schedule 3.11; or
(k) Any occurrence not included in paragraphs (a) through (j)
of this Section 3.6 which has resulted, or which Seller has reason to believe
might reasonably be expected to result, in a material adverse change in the
Assets, Seller's business or the prospects of Buyer with respect to any of the
foregoing.
3.7 ACCOUNTS RECEIVABLE. Attached hereto as Schedule 3.7 is a true,
correct and complete list setting forth the names of all persons from whom
Seller has Accounts Receivable and the amounts thereof. Schedule 3.7(a), to be
delivered at the Closing, is a true, correct and complete list setting forth the
names of all patients from whom Seller has, as of the Closing, Accounts
Receivable and the amounts thereof.
3.8 TAX STATUS.
(a) Seller has filed all tax returns (foreign, federal, state
and local) required to be filed by it on or before the date of this Agreement
under the laws of all jurisdictions wherein the location of the Assets, the
nature or transaction of Seller's business or other requirements subject it to
liability for taxes or other governmental charges ("Applicable Tax Laws"), and
all taxes shown to be due and payable on said returns, all assessments received
by Seller and all other taxes and installments of taxes or other governmental
charges (foreign, federal, state and local) due and payable by or with respect
to Seller under Applicable Tax Laws on or before the date hereof have been paid.
(b) There are no agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment of any tax or
deficiency against Seller or the Assets.
(c) To Seller's knowledge, there are no actions, suits,
proceedings, investigations, audits or claims now pending against or related to
Seller or the Assets regarding any tax or assessment, or any material matters
under discussion with any taxing authority relating to any taxes or assessments,
or any claims for additional taxes or assessments asserted by any such
authority.
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3.9 TITLE TO ASSETS. All of the Assets are owned directly by Seller
and Seller will convey to Buyer at the Closing good title to all of the Assets,
free and clear of all security interests, liens, claims, encumbrances,
mortgages, pledges, conditional sale and other title retention agreements,
assessments, covenants, restrictions, reservations and other burdens and charges
of every kind and nature.
3.10 CONTRACTS AND AGREEMENTS. Attached hereto as Schedule 3.10 is a
true, correct and complete schedule of all of the contracts, agreements, leases,
subleases, plans, arrangements, commitments and other documents to which Seller
is a party or which in any manner relate to, or affect, the Assets ("Contracts")
including:
(a) All collective bargaining, union and employment
agreements and all agreements with or pertaining to employees, advisers,
independent contractors or consultants (whether or not legally binding),
including the Shareholder Employment Agreement, and all agreements providing for
the services of independent contractors;
(b) All Plans, as defined in Section 3.16 below, including
all single employer or multiemployer pension, profit sharing, retirement, bonus,
stock option, stock bonus, annuity, bond purchase, deferred compensation, group
life, vacation, health and accident insurance and other single employer or
multiemployer employee benefit or welfare plans, agreements, arrangements or
commitments, whether or not legally binding;
(c) All agreements with suppliers whereby Seller has agreed
to purchase goods and services;
(d) All loan agreements, financing commitments, indentures,
mortgages, security agreements, pledges, conditional sale or title retention
agreements, equipment obligations or personal property lease or lease purchase
agreements;
(e) All contracts, agreements, commitments and arrangements,
written or oral, with any Affiliate (as defined in Section 12.1) of Seller;
(f) All leases, subleases or other contracts, agreements or
commitments relating to personal property or interest therein;
(g) All contracts, agreements or commitments with any
federal, state or local governmental agency;
(h) All partnership and joint venture agreements;
(i) All letters of credit, guarantees, letters of comfort and
similar arrangements running to the account of or for the benefit of Seller;
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(j) All other contracts or agreements pertaining to the
acquisition or disposition of assets outside the ordinary course of business;
and
(k) All contracts, agreements or commitments, if any, other
than those of the types covered by Section 3.10 (a) through (j) above which
materially affect the Assets or the financial condition, business or prospects
of Seller.
Except as specifically indicated on Schedule 3.10, to the best
knowledge of Seller and Shareholder all of the contracts, agreements, leases,
commitments and the like therein enumerated are and remain in full force and
effect in accordance with their terms. To the best knowledge of Seller and
Shareholder neither Seller nor any other party to any Contract is in default, or
alleged to be in default, thereunder and there exists no condition or event
which, after notice or lapse of time or both, would constitute such a default by
Seller or by any other party to any such Contract. To the best knowledge of
Seller and Shareholder except as specifically indicated on said Schedule 3.10,
no consent from any party to any Contract is required in order for such Contract
to remain in full force and effect in accordance with its terms upon the
consummation of the sale of the Assets as herein provided.
3.11 LITIGATION AND GOVERNMENTAL ACTION. Except as set forth on
Schedule 3.11, to the best knowledge of Seller and Shareholder, there are no
suits, actions or claims, governmental investigations or inquiries, legal,
administrative or arbitration proceedings pending or, to the knowledge of Seller
and Shareholder, threatened against Seller, or to which Seller is a party
(whether or not covered by insurance) which in any manner relate to or affect
the Assets or Seller's business, and neither Seller nor Shareholder knows of any
basis or grounds for any suit, action, claim, investigation, inquiry or
proceeding. Except as set forth on Schedule 3.11, no claim has been made against
Seller (whether or not covered by insurance) wherein professional malpractice
was alleged with regard to any services provided by Seller. Except as set forth
on Schedule 3.11, there is not outstanding any notice, order, writ, injunction
or decree of any court, governmental agency or arbitration tribunal relating to
or affecting the Assets or Seller's business.
3.12 COMPLIANCE WITH LAWS AND REGULATIONS. Seller has at all times
complied and to the best knowledge of Seller and Shareholder, is presently
complying, in all material respects, with all laws, rules, regulations, orders
and requirements (foreign, federal, state and local) applicable to it in all
jurisdictions in which the Assets are located or Seller's business is conducted
or to which the Assets or Seller's business are subject which have a material
impact on Seller or the Assets or Seller's business, including, without
limitation, all applicable, labor, wage and hour and price laws and regulations,
all applicable civil rights and equal opportunity employment laws and
regulations, all state and federal antitrust laws, the Environmental Laws
(defined in Section 3.19(g) below) and the Federal Occupational Health and
Safety Act. Except as otherwise disclosed pursuant to this Agreement, neither
Seller nor Shareholder knows of any assertion by any party that Seller has
violated any such laws, rules, regulations, orders or requirements and no notice
in that regard has been received by Seller.
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3.13 STATUS OF EMPLOYEES.
(a) Schedule 3.13 is a true, correct and complete list
setting forth the names and current salaries or rates of compensation of all
employees of Seller and all independent contractors, including individuals who
render services on a regular basis to Seller.
(b) Since the Balance Sheet Date, no person or entity has
received any extraordinary compensation except as specified on Schedule 3.13 and
there has been no increase in the compensation or rate of compensation payable
to any employee or regular independent contractor of Seller nor any material
change in employee benefit arrangements, nor has any increase in compensation or
material change in employee benefit arrangements been promised to employees
orally or in writing (whether or not legally binding).
(c) To the best knowledge of Seller and Shareholder, all
persons employed by Seller other than Shareholder are employees at will or
otherwise employed such that Seller may lawfully terminate their employment
without creating any material cause of action against Buyer or otherwise giving
rise to any material liability of Buyer under the Workers Adjustment Retraining
and Notification Act ("WARN") or for wrongful discharge, breach of contract,
tort or any other cause at law or in equity.
(d) To the best knowledge of Seller and Shareholder, Seller
has not, prior to and including the date of Closing, violated any provision of
COBRA. No COBRA violation exists or will exist with respect to any employees of
Seller prior to and including the date of the Closing.
(e) As of the date of the Closing, Seller will not be and
will never have been an enterprise subject to WARN and will not incur and will
never have incurred liabilities, penalties, other charges or all of the above
under WARN.
3.14 ASSETS AND RIGHTS. The Assets, together with the Excluded Assets,
constitute all of the assets, properties and rights of every type and
description, real, personal and mixed, tangible and intangible, which are used
in and necessary for the conduct of Seller's business.
3.15 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule
3.15, neither Seller nor any Affiliate of Seller owns, directly or indirectly,
an equity interest of one percent (1%) or more in, or is an employee or agent
of, any corporation, firm, association or business organization which is (i) a
competitor of Seller or (ii) a customer of or supplier of goods or services of
any kind to Seller or (iii) a lessor to Seller of any of the Assets. Schedule
3.15 contains a summary of the terms of all relationships and transactions
between Seller and its Affiliates since January 1, 1997.
3.16 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Agreement, the term "Plans" means:
(i) all employee benefit plans as defined in Section 3(3) of ERISA; (ii) all
other severance pay, vacation, deferred
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compensation, excess benefit, stock, stock option, and incentive plans,
contracts, schemes, programs, funds, commitments, or arrangements of any kind;
and (iii) all other plans, contracts, schemes, programs, funds, commitments, or
arrangements providing money, services, property, or other benefits, whether
written or oral, qualified or nonqualified, funded or unfunded, and including
any that have been frozen or terminated, which pertain to any employee, former
employee, director, officer, shareholder, consultant, or independent contractor
of Seller or any Affiliate of Seller and (x) to which Seller or any Affiliate of
Seller is or has been a party or by which any of them is or has been bound or
(y) with respect to which Seller or any Affiliate of Seller has made any
payments or contributions or to which Seller or any Affiliate of Seller may
otherwise have any liability (including any such plan or arrangement formerly
maintained by Seller or any Affiliate of Seller). All Plans are listed and
briefly described on Schedule 3.16. For purposes of this Section 3.16 only,
"Affiliate" shall mean any corporation or other business entity that is included
in a controlled group of corporations within which Seller is also included, as
provided in Section 414(b) of the Code; or which is a trade or business under
common control with Seller, as provided in Section 414(c) of the Code; or which
constitutes a member of an affiliated service group within which Seller is also
included, as provided in Section 414(m) of the Code; or which is required to be
aggregated with Seller pursuant to regulations issued under Section 414(o) of
the Code.
(b) Each Plan is in compliance with ERISA and other
applicable laws (including, without limitation, compliance with the health care
continuation requirements of COBRA and any proposed regulations promulgated
thereunder). Except as set forth in Schedule 3.16, Seller and each applicable
Affiliate of Seller have received favorable determination letters as to the
qualification under the Code of each pension plan, as defined in Section 3(2) of
ERISA, and there have been no amendments or other developments since the date of
such determination letters which would cause the loss of such qualified status.
No violation of ERISA has at any time occurred in connection with the
administration of any of the Plans, and there are no actions, suits, or claims
(other than routine, non-contested claims for benefits) pending or threatened
against the Plans, or any administrator or fiduciary thereof, which could result
in any liability.
(c) Full payment as of the Closing has been made of: (i) all
amounts which Seller and any Affiliate of Seller are required, under the terms
of all Plans, to have paid as contributions to such Plans as of the last day of
the most recent fiscal year prior to the Closing; and (ii) all pro rata amounts
which Seller and any Affiliate of Seller are required to pay as contributions to
each such Plan for the fiscal year that includes the date of the Closing.
(d) Neither Seller nor any Affiliate of Seller provides, nor
have they at any time provided, coverage under any welfare plan, as defined in
Section 3(1) of ERISA (including, but not limited to, life insurance,
disability, medical, dental, prescription drugs, or accidental death or
dismemberment) to any of their retirees, other than any continuation or
conversion coverage which any such retiree may have purchased at his own
expense.
(e) Neither Seller nor any Affiliate currently maintains,
administers or contributes to, or at any time in the past has maintained,
administered or contributed to a defined
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benefit plan subject to Section 4021 of ERISA or a multiemployer plan as defined
in Section 3(37) of ERISA.
3.17 REAL PROPERTY. Seller uses no offices or other places of
business, and neither owns, uses, leases nor occupies any real property other
than the real property described on Schedule 3.17 (the "Leased Property") and
none of the Assets is situated at any location other than the Leased Property.
To the best knowledge of Seller and Shareholder, neither the whole nor any
portion of the Leased Property is subject to any pending condemnation, taking or
other similar proceeding by any public authority, and Seller neither knows nor
has any grounds to believe that any such condemnation or taking is threatened or
contemplated with respect to the Leased Property. To the best knowledge of
Seller and Shareholder there is no plan, study or effort by any governmental
authority or agency which in any way affects or would affect the present use or
zoning of the Leased Property nor any existing, proposed or contemplated plan to
widen, modify or realign any street or highway adjoining the Leased Property. To
the best knowledge of Seller and Shareholder, neither the Leased Property nor
the occupancy by or operation of Seller's business at the Leased Property is in
violation of any law or any building, zoning, fire, health, or other ordinance,
code or regulation, and has not received notice alleging any such violation or
requiring or calling attention to the need for any work, repairs, construction,
alterations or installation on or in connection with the Leased Property which
has not been heretofore complied with by Seller. To the best knowledge of Seller
and Shareholder, the zoning classification of the Leased Property permits the
operations presently conducted thereon.
3.18 CONDITION OF ASSETS. All of the Assets of a tangible nature are
in good condition and repair, ordinary wear and tear excepted, and is adequately
insured against damage or loss. All of such property is located at the Leased
Property.
3.19 ENVIRONMENTAL MATTERS.
(a) Seller has not, and to the best knowledge of Seller and
Shareholder, no other person or persons have, manufactured, discharged,
dispersed, released, stored, treated, transported, generated or disposed of
Hazardous Material (as defined in paragraph (g) below), or allowed Hazardous
Material to be located on, under or about or transported from or to the Leased
Property, including, without limitation, the soil, surface water and subsurface
water of, under or on the Leased Property, or any other property used in
connection with Seller's business.
(b) Seller has not, and to the best knowledge of Seller and
Shareholder no other person or persons have, used, installed, incorporated into
or disposed of asbestos or asbestos containing materials on, under or about the
Leased Property, or any other property used in connection with Seller's
business, or transported from the Leased Property any asbestos or asbestos
containing materials.
(c) Seller has not, and to the best knowledge of Seller and
Shareholder no other person or persons have, used or located polychlorinated
biphenyls ("PCBs") on, under or about the
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Leased Property, or any other property used in connection with Seller's
business, or transported from the Leased Property any PCBs.
(d) Seller has not, and to the best knowledge of Seller and
Shareholder, no other person or persons have, located underground storage tanks
on or under the Leased Property, or any other property used in connection with
Seller's business.
(e) To the best knowledge of Seller and Shareholder, no
investigation, administrative order, consent order and agreement, litigation or
settlement with respect to Hazardous Material, is proposed, threatened,
anticipated or in existence with respect to the Leased Property, any other
property used in connection with Seller's business, or otherwise relating to the
Assets or Seller's business.
(f) To the best knowledge of Seller and Shareholder, the
Leased Property and Seller's operations are and at all times have been, in
compliance with the Environmental Laws (as defined in paragraph (g) below). No
actual or constructive notice, demand, claim or other communications have been
given to or served on Seller or any predecessor of Seller or anyone acting on
Seller's behalf or in its interest from any entity, governmental body or
individual claiming any violation of any of the Environmental Laws, or demanding
payment, contribution, remedial action or any other action or inaction with
respect to any actual or alleged environmental damage or injury to persons, real
property, personal property or natural resources (any of the foregoing whether
now existing or hereafter brought, is herein called a "Claim"), and no basis for
any Claim exists.
(g) "Hazardous Material" means asbestos, asbestos-containing
materials, PCBs, petroleum products, urea formaldehyde foam insulation and any
other hazardous, toxic or special substance, material or waste that is defined,
determined or identified as such in any federal, state or local statute, law,
regulation, ordinance, order or code, in each case as amended and whether now
existing or hereafter enacted or promulgated (collectively, the "Environmental
Laws"), including, without limitation, the Federal Water Pollution Control Act,
33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et. seq.; the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 3000 (f) et. seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et. seq.; the Federal Solid Waste Disposal
Act, 42 U.S.C. Section 6901 et seq.; and the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et. seq.; and the Florida Air and Water Pollution Control Act, 29 F.S. Section
403.011, et seq and the Florida Environmental Land and Water Management Act of
1972, 28 F.S. Section 380.012, et seq. (collectively, the "Florida Environmental
Laws").
3.20 INTELLECTUAL PROPERTY.
(a) Schedule 3.20 identifies all of the following which are
used in Seller's business and in which Seller has any rights: (i) all
trademarks, service marks, slogans, trade names, trade dress and the like
(collectively with the associated good will of each, "Trademarks"), together
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with information regarding all registrations and pending applications to
register any such rights; (ii) all Trademarks significant to Seller's business
which are presently being used in the business at common law; (iii) all
proprietary formulations, manufacturing methods, know-how and trade secrets
which are material to Seller's business; (iv) all patents on and pending
applications to patent any technology or design; (v) all registrations of and
applications to register copyrights; and (vi) all licenses of rights in computer
software, Trademarks, patents, copyrights, unpatented formulations,
manufacturing methods, other know-how and other intellectual property, whether
to or by Seller ("Licenses"). The scheduled rights are referred to hereafter
collectively as the "Intellectual Property."
(b) (i) As indicated on Schedule 3.20, Seller is the owner of
or duly licensed to use each scheduled Trademark and its associated good will;
(ii) each listed Trademark registration owned by Seller exists and has been
maintained in good standing; (iii) each patent and application included in the
Intellectual Property exists, is owned by or licensed to Seller; (iv) each
copyright registration and application to register copyrights listed on Schedule
3.20 is owned or licensed to Seller, and each copyright registration and
application owned by Seller has been maintained in good standing; (v) each
License listed on Schedule 3.20 has been maintained in good standing; (b) to the
best knowledge of Seller and Shareholder, no other firm, corporation,
association or person claims the right to use in connection with similar or
closely related goods and in the same geographic area, any ▇▇▇▇ which is
identical or confusingly similar to any of the Trademarks; (vi) neither Seller
nor Shareholder has received notice of any claim that any third party asserts
ownership rights in any of the Intellectual Property; (vii) neither Seller nor
Shareholder has received notice of any claim that Seller's use of any
Intellectual Property infringes any right of any third party; and (viii) neither
Seller nor Shareholder has knowledge or a reason to believe that any third party
is infringing any of Seller's rights in any of the Intellectual Property.
3.21 PATIENTS AND SUPPLIERS. Neither Seller nor Shareholder knows or
has any reason to believe that, either as a result of the transactions
contemplated hereby or for any other reason, any present patient or supplier of
Seller will not continue to conduct business with Buyer after the Closing in
substantially the same manner as it has conducted business with Seller in the
past.
3.22 BROKERAGE. There are no claims for commissions or other
compensation in connection with any of the transactions contemplated by this
Agreement based on any arrangement or agreement binding on Seller or
Shareholder.
3.23 INTELLECTUAL PROPERTY INSURANCE. Seller's commercial insurance
provides coverage with respect to the infringement by Seller of the intellectual
property rights of others.
3.24 PROFESSIONAL LIABILITY INSURANCE. Seller has maintained
professional liability insurance in an amount of not less than $1,000,000 in the
aggregate (on a claims-made basis) from at least that period of time which is
the greater of five years or the period in which the Shareholder has been
practicing orthodontics, and will maintain professional liability insurance
(professional malpractice) in that amount through the Closing (the "Professional
Liability Insurance").
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3.25 SELLER'S 1996 EARNINGS. Seller's earnings for the prior fiscal
year were as set forth on the Financial Statements.
3.26 NEGATIVE REPRESENTATIONS.
(a) Since the Balance Sheet Date, Seller has not sold or
transferred any material assets or property relating to Seller's business except
in the usual and ordinary course of business and except for cash applied in
payment of Seller's liabilities in the usual and ordinary course of its business
or made any distribution or payment to any of its stockholders or employees
except for compensation to employees in the usual and ordinary course of its
business at the rates specified on Schedule 3.13.
(b) Seller is not a party to any agency, broker's, finder's
or franchise agreement.
3.27 FULL DISCLOSURE. No representation or warranty by Seller or
Shareholder in this Agreement or in any statement, schedule, certificate,
exhibit or other document furnished to Buyer pursuant hereto contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements herein or therein not misleading.
There are no facts known to Seller and not disclosed herein which might
reasonably be expected to affect materially and adversely the value of the
Assets.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
------------------------------------------
As an inducement to Seller and Shareholder to enter into and perform
their obligations under this Agreement, Buyer makes to Seller and Shareholder
the representations and warranties set forth below:
4.1 CORPORATE STATUS. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida.
4.2 AUTHORITY FOR AGREEMENT. Buyer has full right, power and authority
to enter into this Agreement and to perform its obligations hereunder. The entry
into and performance hereof have been duly authorized by all necessary corporate
action on the part of Buyer in accordance with its corporate charter, bylaws and
applicable law and this Agreement constitutes a valid agreement, binding upon
and enforceable against Buyer in accordance with its terms.
4.3 NO BREACH OR DEFAULT. The execution and delivery of this Agreement
and the consummation of the transactions herein provided will not:
(a) Result in the breach of any of the terms or conditions
of, or constitute a default under, or in any manner release Buyer from any
obligations under any mortgage, note, bond,
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contract, indenture, agreement, license or other instrument or obligation of any
kind or nature to which Buyer is now a party or by which any of its properties
or assets may be bound or affected;
(b) Violate any order, writ, injunction or decree of any
court, administrative agency or governmental body or require the approval,
consent or permission of any governmental body or agency which has not been
heretofore obtained; or
(c) Violate any provision of the corporate charter or bylaws
of Buyer.
4.4 LITIGATION AND GOVERNMENTAL ACTION. There are no suits, actions or
claims, nor any governmental investigations or inquiries, nor any legal,
administrative or arbitration proceedings, pending or, to the knowledge of
Buyer, threatened against Buyer or Orthodontix or to which Buyer or Orthodontix
is a party, which represent material adverse risks to the business of Buyer or
Orthodontix, and Buyer knows of no basis or grounds for any such suit, action,
claim, investigation, inquiry or proceeding.
4.5 BROKERAGE. There are no claims for commissions or other
compensation in connection with any of the transactions contemplated by this
Agreement based on any arrangement or agreement binding on Buyer.
4.6 FULL DISCLOSURE. No representation or warranty by Buyer in this
Agreement or in any statement, schedule, certificate, exhibit or other document
furnished to Seller pursuant hereto or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements herein or therein not misleading.
5. CONDUCT PENDING CLOSING
--------------------------
Seller and Shareholder, as the case may be, covenants and agrees as
follows:
5.1 CONDUCT OF OPERATIONS. During the period from the date of this
Agreement to the Closing, the Business shall be operated by Seller solely in the
usual and ordinary course of such business and in compliance with the terms of
this Agreement, and all additions to and substitutions for and changes of form
of the Assets occurring from the date hereof to the Closing shall be deemed to
constitute Assets hereunder. Without limiting the generality of the foregoing:
(a) Seller and Shareholder will use their best efforts to
preserve the business and organization of Seller's business so as to: (i)
maintain and keep in full force and effect the Contracts (including, without
limitation, the Contracts with Seller's vendors) in accordance with their
existing terms; (ii) keep available the services of the present employees and
agents of Seller; (iii) maintain the integrity of all confidential information
regarding the business; and (iv) preserve the good will
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of, and Seller's business and contractual relationships with, suppliers,
patients, licensors and others having business relations with Seller.
(b) No new assets will be acquired by or on behalf of Buyer
without Buyer's written consent except in the ordinary course of business and in
an individual amount not to exceed $5,000.00. Buyer shall be advised prior to
Closing of any new such Assets.
(c) All Assets of a tangible nature will be kept and
maintained in as good operating condition and repair as they are on the date
hereof, ordinary wear and tear excepted, and to the extent applicable, all
intangible Assets will be maintained in full force and effect.
(d) Seller will continue to collect its accounts receivable
through the Closing and pay its accounts payable in a commercially reasonable
manner and in accordance with present practice or as otherwise agreed upon by
Buyer and Seller.
(e) No expenditure or commitment for the purchase of any
other capital asset shall be made or entered into without Buyer's written
consent.
(f) Seller will not sell, transfer or encumber any material
assets or property relating to Seller's business, except in the usual and
ordinary course of business and except for cash applied in payment of Seller's
liabilities in the usual and ordinary course of its business or make any
payments or distributions to any of its officers, directors, shareholders or
employees except for compensation to employees in the usual and ordinary course
of its business at the rates specified in Schedule 3.13 and cash distributions
to its stockholders of cash owned by Seller immediately prior to the Closing and
not transferred to Buyer, and which in no event shall include the proceeds of
the Assets transferred to Buyer hereunder.
(g) Seller shall not otherwise incur or pay any liability
other than in the ordinary course of business with respect to Seller's business
or on behalf of Buyer.
(h) No litigation shall be instituted or compromised or
settled by Seller without Buyer's prior written consent.
(i) Until the Closing, Seller shall maintain adequate
professional liability insurance.
(j) Seller will take such actions as Buyer reasonably
requests and otherwise use its best efforts to cause fulfillment of all the
conditions to which the parties' obligations are subject.
(k) Seller and Shareholder will promptly notify Buyer in
writing if any of them is advised or is aware that any patient or supplier
(including Seller's patients) of Seller's business intends to cease doing
business with Seller.
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\
5.2 ACCESS TO RECORDS AND PREMISES. From and after the date hereof,
Seller shall give to Buyer, Buyer's counsel, accountants, engineers and other
representatives full access during normal business hours and upon reasonable
notice to all of the offices, properties, and other records of Seller so that
Buyer may, at its sole expense, investigate and inspect them, and Seller will
furnish to Buyer copies of all documents and information concerning the Assets
as Buyer may reasonably request. Any such investigation or inspection by Buyer
shall not be deemed a waiver of, or otherwise limit, the representations,
warranties and covenants of Seller.
5.3 NOTICE OF CHANGES. Between the date hereof and the Closing, Seller
and Shareholder agree to notify Buyer in writing promptly of any occurrence or
state of facts (other than changes occurring in the ordinary course of business)
which will result in any of the warranties and representations contained in
Article 3 hereof not being true and correct if restated as of the Closing.
5.4 TRANSFEREE LIABILITY. The parties agree that Buyer will not by
virtue of the transactions which are the subject hereof assume any liabilities
or obligations of Seller whatsoever except for the Assumed Liabilities, and,
accordingly, Seller and Shareholder agree to take all actions necessary to fully
protect Buyer from and against any and all transferee liability arising out of
the transactions which are the subject of this Agreement. Such actions shall
include, without limitation, the following:
(a) Any and all transferee liabilities assessed or otherwise
asserted against Buyer under the "Bulk Sales" article of the Uniform Commercial
Code or the tax or revenue laws or regulations of any foreign or domestic
jurisdiction shall be Indemnified Liabilities pursuant to Article 10 below.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
-------------------------------------------
All obligations of Buyer under this Agreement with respect to the
Closing are subject, at Buyer's option, to the fulfillment of each of the
following conditions precedent:
6.1 SELLER'S CLOSING DOCUMENTS. Seller shall have executed (as
appropriate) and delivered to Buyer all of the documents to be provided by it
pursuant to Section 8.2 hereof.
6.2 SHAREHOLDER'S CLOSING DOCUMENTS. Shareholder shall have executed
and delivered (as appropriate) to Buyer all of the documents to be provided by
him pursuant to Section 8.3 hereof.
6.3 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of Seller and Shareholder contained in this Agreement shall be true and accurate
in all material respects as of the date when made and on the Closing as if made
again on and with respect to the Closing.
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6.4 OBLIGATIONS. Seller and Shareholder shall have performed in all
material respects all duties and obligations required by this Agreement to be
performed by them prior to or on the date of Closing.
6.5 NO SUITS OR ACTIONS. No suit or action by any party, nor any
investigation, inquiry or proceeding by any governmental authority, nor any
legal or administrative proceeding shall have been instituted or threatened on
or before the Closing which:
(a) Questions the validity or legality of any
transaction contemplated hereby;
(b) Seeks to enjoin any transaction contemplated hereby;
(c) Seeks material damages on account of the
consummation of any transaction contemplated hereby; or
(d) Is a petition of bankruptcy by or against Seller or
is an assignment for the benefit of creditors.
6.6 CASUALTY PRIOR TO CLOSING. None of the Assets shall have been
materially lost or damaged, and no notice shall have been received or action
initiated by any governmental authority having the right of eminent domain
regarding the damaging, taking or acquiring by such authority of any of the
Assets. In the event of any non-material loss or damage, all insurance proceeds
or rights to collect insurance proceeds with respect thereto shall become
Assets, assignable or otherwise deliverable to Buyer at the Closing.
6.7 ASSIGNMENT OF CONTRACTS; CONSENTS FROM THIRD PARTIES.
(a) Seller shall, on or prior to the Closing and to the
extent required by Buyer, have assigned to Buyer all of Seller's rights under
the Contracts and all of Seller's rights under all other contracts and
agreements entered into in the ordinary course of business; and all consents
with respect to any of the foregoing necessary in order for Buyer to fully and
effectively succeed to all of Seller's rights thereunder shall have been
obtained and shall be in form and content reasonably satisfactory to Buyer and
its counsel.
(b) The transfer of each of the Licenses listed on Schedule
6.7(b) which shall be evidenced by a separate agreement ("Assignment and
Assumption Agreement"), substantially in the form of Exhibit "D" attached
hereto, or in such other form as may be reasonably acceptable to Buyer and its
counsel. Each transferred License must expire no sooner than one year after the
Closing. To the extent required for the valid assignment of any such License,
Seller shall obtain, on or prior to the Closing, the written consent of the
licensor to the assignment to Buyer in form and content reasonably satisfactory
to Buyer and its counsel.
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(c) Seller shall, on or prior to the Closing and to the
extent requested by Buyer, have assigned to Buyer all of Seller's rights under
any and all permits or licenses or similar authorizations related to the conduct
of Seller's business to the extent assignable.
(d) All governmental consents, permissions and approvals to
the transactions herein provided for or contemplated, together with all
governmental licenses, permits and the like which are required for the
consummation of the transactions herein provided for shall have been received by
Buyer on or prior to Closing and shall be in form and content reasonably
satisfactory to Buyer and its counsel.
6.8 PROOF OF INSURANCE. Seller shall have delivered to Buyer prior to
Closing, proof satisfactory to Buyer, that Seller has maintained professional
malpractice insurance through the Closing.
6.9 LIEN SEARCHES. Seller, at its expense, shall have delivered to
Buyer UCC lien searches, which shall report results, as are satisfactory to
Buyer. All liens with respect to the Assets shall have been released and
releases (including Form UCC-3s) shall be delivered to Buyer on or before the
date of Closing.
6.10 ADVERSE CHANGE. There shall have occurred no material adverse
change in the condition of the Assets.
6.11 FAILURE OF CONDITIONS. In the event that any of the conditions
set forth in this Article 6 have not been fulfilled as of the Closing and in the
further event that Buyer shall not have elected to waive such condition and
consummate this transaction notwithstanding such nonfulfillment, Buyer may at
its sole option elect to cancel this Agreement by written notice to Seller
provided that such election shall not be deemed to terminate or in any way
affect any claims or causes of action Buyer may otherwise have against Seller or
Shareholder by virtue of misrepresentations or breaches of the obligations
hereunder of Seller or Shareholder; provided, however, that in the event any of
the consents referred to in Article 6 hereof shall not have been obtained,
Buyer's sole remedy therefor shall be to elect not to consummate the Closing.
7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
--------------------------------------------
All obligations of Seller under this Agreement with respect to the
Closing are subject, at its option, to the fulfillment of each of the following
conditions precedent;
7.1 BUYER'S CLOSING DOCUMENTS. Buyer shall have executed (as
appropriate) and delivered to Seller, on or before the Closing all of the
documents listed in Section 8.4 hereof which are to be delivered to Seller.
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7.2 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of Buyer contained in this Agreement shall be true and accurate in all material
respects as of the date when made and on the Closing as if made again on and
with respect to the Closing.
7.3 COVENANTS AND AGREEMENTS. Buyer shall have performed in all
material respects all duties and obligations required by this Agreement to be
performed by it prior to or on the Closing.
7.4 NO SUITS OR ACTIONS. No suit or action by any party, nor any
investigation, inquiry or proceeding by any governmental authority, nor any
legal or administrative proceeding shall have been instituted or threatened on
or before the Closing which:
(a) Questions the validity or legality of any transaction
contemplated hereby;
(b) Seeks to enjoin any transaction contemplated hereby; or
(c) Seeks material damages on account of the consummation of
any transaction contemplated hereby.
7.5 FAILURE OF CONDITIONS. In the event that any of the conditions set
forth in this Article 7 have not been fulfilled as of the Closing and in the
further event that Seller shall not have elected to waive such condition and
consummate this transaction notwithstanding such nonfulfillment, Seller may at
its option elect to cancel this Agreement by written notice to Buyer provided
that such election shall not be deemed to terminate or in any way affect any
claims or causes of action Seller and Shareholder may otherwise have against
Buyer by virtue of misrepresentations or breaches of Buyer's obligations
hereunder.
8. CLOSING
-------
8.1 TIME AND PLACE OF CLOSING. The consummation of this purchase and
sale of the Assets and the related transactions and deliveries herein provided
for shall take place at 10:00 a.m., local time, on the date of the closing of
the Embassy Combination at the offices of Buyer, or at such other time or place
as the parties may mutually agree (the "Closing").
8.2 DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, the following
shall be delivered or provided to Buyer by Seller:
(a) Seller shall execute and deliver warranty bills of sale
and other sufficient instruments of conveyance and transfer as shall be
effective to vest in Buyer all of Seller's title to and interest in the Assets;
(b) Seller shall deliver copies of resolutions of its Board
of Directors and shareholders authorizing the execution of this Agreement and
the consummation of the transactions
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herein provided for, which resolutions shall have been certified as true,
correct and in full force and effect as of the Closing by the Secretary of
Seller;
(c) Seller shall deliver a certified copy of Seller's
articles of incorporation and bylaws, as amended, and a good standing
certificate issued by the Secretary of the State of incorporation of Seller no
more than ten (10) days prior to the Closing;
(d) Seller shall deliver the affidavits and certificates
provided for in Section 5.4;
(e) Seller shall deliver keys and combinations, as
appropriate, to all locks used on or in connection with any of the Assets;
(f) Seller shall execute and deliver the Lease Assumption
Agreement substantially in the form of Exhibit "C" attached hereto;
(g) Seller shall execute and deliver the Assignment and
Assumption Agreements as provided in Section 6.7;
(h) Seller shall have delivered the Accounts Receivable list
as of the date of the Closing provided for in Section 3.7 above; and
(i) Seller shall deliver a certificate dated the date of the
Closing ("Seller's Closing Certificate") executed by the President of Seller
certifying that: (i) all representations and warranties of Seller contained in
this Agreement or in any schedule or exhibit hereto or in any statement
(including financial statements), certificate, exhibit or other document
delivered pursuant hereto were true and accurate as of the date when made; (ii)
all of said representations and warranties are, by the execution and delivery of
Seller's Closing Certificate, made again on and as of the date of the Closing
and are then true and accurate in all material respects; and (iii) Seller has
performed and complied in all material respects with all the covenants,
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing.
8.3 DOCUMENTS TO BE DELIVERED BY SHAREHOLDER. At the Closing, the
following instruments, documents and showings shall be delivered or provided to
Buyer by Shareholder:
(a) Shareholder shall deliver a certificate dated the date of
the Closing ("Shareholder's Closing Certificate") executed by Shareholder
certifying that: (i) all representations and warranties contained in this
Agreement or in any schedule or exhibit hereto or in any statement (including
financial statements), certificate, exhibit or other document delivered pursuant
hereto were true and accurate as of the date when made; (ii) all of said
representations and warranties are, by the execution and delivery of the
Shareholder Closing Certificate, made again on and as of the date of the Closing
and are then true and accurate in all material respects; and (iii) Seller and
Shareholder have performed and complied in all material respects with all the
covenants, agreements
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and conditions required by this Agreement to be performed or complied with by
them prior to or on the date of the Closing; and
(b) Shareholder shall deliver the Services Agreement
substantially in the form of Exhibit "I" attached hereto.
(c) Shareholder shall execute and deliver the Lock-Up
Agreement substantially in the form of Exhibit "E" attached hereto.
8.4 DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, the following
instruments, documents and showings shall be delivered or provided by Buyer:
(a) Buyer shall deliver copies of resolutions of the Board of
Directors of Buyer authorizing the execution of this Agreement and the
consummation of the transactions herein provided for, which resolutions are
certified as true, correct and in full force and effect as of the date of the
Closing by the Secretary of Buyer;
(b) Buyer shall deliver a cashier's or certified check or
confirmation of the wire transfer of funds reflecting the Cash Consideration;
(c) Buyer shall deliver certificates reflecting the Stock
Consideration;
(d) Buyer shall execute and deliver the Lease Assumption
Agreement provided for in Section 2.2;
(e) Buyer shall execute and deliver the assignment and
assumption agreements as provided in Section 6.7; and
(f) Buyer shall provide a certificate dated the date of the
Closing ("Buyer's Closing Certificate") executed by an officer of Buyer
certifying that: (i) all representations and warranties of Buyer contained in
this Agreement or in any schedule or exhibit hereto or in any certificate,
exhibit or other document delivered pursuant hereto were true and accurate as of
the date when made; (ii) all of said representations and warranties are, by the
execution and delivery of the Buyer's Closing Certificate, made again on and as
of the date of the Closing and are then true and accurate in all material
respects; and (iii) Buyer has performed and complied in all material respects
with all the covenants, agreements and conditions required by this Agreement to
be performed or complied with by it prior to or on the Closing.
9. POST CLOSING OBLIGATIONS OF THE PARTIES
------------------------------------------
9.1 FURTHER OBLIGATIONS OF THE PARTIES. On and after the Closing:
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(a) Each party shall execute all certificates, instruments
and other documents and take all actions reasonably requested by the other party
to effectuate the purposes of this Agreement and to consummate and evidence the
consummation of the transactions herein provided for; and
(b) Seller shall take all action reasonably necessary or
appropriate to transfer to Buyer or Buyer's assignee the Assets.
9.2 TRANSFER TAXES. Seller shall be responsible for and pay when due,
whether before, at or after the Closing or out of the proceeds it receives
pursuant to Section 2.1, all sales, use, transfer, and similar taxes, fees and
charges of whatever nature, imposed by law on Seller, due any governmental
authority as a result of the transactions contemplated by this Agreement.
9.3 PAYMENT TO SELLER'S CREDITORS. Seller covenants and agrees
promptly to pay when due all amounts due from Seller to all parties who or which
are creditors of Seller, within the meaning of Article Six of the Uniform
Commercial Code as in effect in applicable jurisdictions (collectively, the
"Bulk Sales Statutes") (except to the extent of the Assumed Liabilities, as to
which Buyer will make such payment and satisfaction). Any and all amounts
asserted against or paid by Buyer with respect to claims of Seller's creditors
shall be Indemnified Liabilities for the purposes of Article 10 below, whether
or not Buyer and/or Seller have complied with the provisions of the Bulk Sales
Statutes.
9.4 ONGOING EMPLOYMENT RELATIONSHIPS.
(a) All employees of Seller other than Shareholder shall be
terminated by Seller as of the close of business on the Closing, and shall be
hired by Buyer effective the opening of business the day following the date of
the Closing at the salaries or rates of compensation set forth on Schedule 3.13.
(b) The employees of Seller other than Shareholder shall have
the right to participate in the employee benefit plans of Buyer's Parent to the
same extent as Parent's employees.
9.5 LIQUIDATION AND DISSOLUTION OF SELLER. Seller shall promptly adopt
a plan of complete liquidation and dissolution and pursuant thereto, shall
distribute to Shareholder the Consideration and its other remaining assets,
after providing for the payment of all its liabilities to Shareholder and shall
dissolve under the laws of the state of ____. The liquidation and dissolution
shall be completed by no later than one year from the date of Closing.
10. SURVIVAL OF WARRANTIES AND INDEMNIFICATION
----------------------------------------------
10.1 SURVIVAL AND EXTENT OF REPRESENTATIONS, WARRANTIES
INDEMNIFICATIONS, AND COVENANTS. All representations, warranties,
indemnifications and covenants contained in this Agreement or in any Closing
Certificate of Seller and Shareholder shall survive the Closing
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hereunder and shall continue in full force and effect thereafter for a period of
three (3) years from the Closing.
10.2 INDEMNIFICATION BY SELLER AND SHAREHOLDER. Seller and Shareholder
jointly and severally, hereby agree (notwithstanding the Closing and regardless
of any investigation at any time made by or on behalf of Buyer, or of any
information that Buyer may have in respect thereof or the failure by Buyer to
examine the operations, premises, books, records and accounts of Seller prior to
the Closing) to indemnify, save, defend and hold harmless Buyer from and against
and to the extent same constitute out-of-pocket expenditures by Buyer, to
promptly reimburse Buyer for all losses, liabilities, indebtedness, damages,
actions, causes of action, debts, dues, judgments, penalties, fines, costs,
obligations, taxes, expenses and fees, including all reasonable attorney's fees
and court costs, incurred by or asserted against the Buyer (all of such losses,
liabilities and other items being hereinafter collectively referred to as
"Indemnified Liabilities") resulting from, arising out of, relating to, in the
nature of or caused by (i) the breach of any representation, warranty or
covenant of Seller or Shareholder contained in this Agreement; (ii) any
obligation, liability, or indebtedness of Seller set forth on Schedule 2.2
hereto, or which was outstanding prior the Closing and known to Seller and not
otherwise assumed by Buyer; or provisions of Section 2.2 and not otherwise
assumed by Buyer, or (iii) the cost and expense of defending any action, demand
or claim by any third party against or affecting Seller which, if true or
successful, would give rise to a breach of any of the representations,
warranties or covenants of Seller or would obligate Buyer to any obligation,
liability or indebtedness referred to in the preceding clauses even if such
action, demand or claim ultimately proves to be untrue or unfounded.
10.3 INDEMNIFICATION BY BUYER. Buyer hereby agrees to indemnify, save,
defend and hold harmless Seller and Shareholder from and against and, to the
extent same constitute out-of-pocket expenditures by Seller or Shareholder, to
promptly reimburse them for all losses, liabilities, indebtedness, damages,
actions, causes of action, debts, dues, judgments, penalties, fines, costs,
obligations, taxes, expenses and fees, including all reasonable attorneys' fees
and court costs incurred by or asserted against Seller or Shareholder(all of
such losses, liabilities and other items being hereinafter collectively referred
to as "Indemnified Liabilities"), resulting from, arising out of, relating to,
in the nature of or caused by (i) the breach of any representation, warranty or
covenant of Buyer; or (ii) the cost and expense of defending any action, demand
or claim by any third party against or affecting Buyer which, if true or
successful, would give rise to a breach of any of the representations,
warranties or covenants of Buyer or would obligate Seller to any obligation,
liability or indebtedness referred to in the preceding clauses even if such
action, demand or claim ultimately proves to be untrue or unfounded.
10.4 LIMITATIONS ON LIABILITY. None of the parties hereby shall have
any liability pursuant to this Article 10 for any claim under Section 10.2 until
such claims in the aggregate shall equal or exceed $50,000.
10.5 PROCEDURE FOR CLAIMS AND DEMANDS.
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(a) If a party shall be presented with or have actual notice
of an action, claim or demand which gives or may give rise to an Indemnified
Liability, such party or parties (together the "Indemnified Party") shall,
within sixty (60) business days thereafter, notify the indemnifying party or
parties (together, the "Indemnifying Party") in writing thereof, it being
understood and agreed that any failure or delay to so notify shall not relieve
the Indemnifying Party from liability hereunder except and solely to the extent
that such failure or delay shall have increased such liability or materially and
adversely affected the ability of the Indemnifying Party to defend against,
settle, satisfy or mitigate any such action, claim or demand. Following actual
receipt of such notice, the Indemnifying Party as applicable shall have the
right, at its sole cost and expense, to contest or defend such action, claim or
demand through attorneys, accountants and others of its own choosing and in the
event it elects to do so shall promptly notify the Indemnified Party of such
intent to contest or defend such action, claim or demand. If, within thirty (30)
days following receipt of such notice, the Indemnifying Party has not notified
the Indemnified Party that such action, claim or demand will be contested or
defended by it, the Indemnified Party shall have the right to (i) authorize
attorneys satisfactory to it to represent it in connection therewith, and (ii)
at any time settle, compromise or pay such action, claim or demand, in either of
which events the Indemnified Party shall be entitled to such rights of
indemnification as are provided herein.
(b) In the event and so long as the Indemnifying Party is
actively contesting or defending against an action, claim or demand as
hereinabove provided, the Indemnified Party shall cooperate in such contest or
defense and shall provide such access to the books and records as shall be
necessary in connection with such defense or contest subject to reimbursement of
any out-of-pocket expenses incurred in doing so. In the event and as long as the
Indemnifying Party is actively conducting such defense or contest, such actions,
claims or demands shall not be settled, compromised or paid by the Indemnified
Party without the prior written consent of the Indemnifying Party, unless such
claim or demand has been adjudicated by a final and unappealable order of a
court of competent jurisdiction.
10.6 LIMITATIONS ON LIABILITY. The parties agree that the provisions
of this Article 10 were bargained for by the parties and that the parties'
liability under this Agreement shall be only for those matters covered by the
indemnification provisions of this Article 10.
11. BROKERS
-------
Seller and Shareholder, jointly and severally, shall indemnify and
hold the Buyer harmless and Buyer shall indemnify and hold Seller and
Shareholder harmless from any claim by any broker or other person for
commissions or other compensation for bringing about the transactions
contemplated hereby, where such claim is based on the purported employment or
authorization of such broker or other person by the Indemnifying Party.
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12. MISCELLANEOUS PROVISIONS
------------------------
12.1 DEFINITION OF AFFILIATE. As used herein, the term "Affiliate"
shall mean and include:
(a) With respect to Seller only, Shareholder; or
(b) Any corporation, partnership, trust, person or other
entity directly or indirectly controlling, controlled by, or under common
control with, such persons (including the members of such persons immediate
family) or entity or beneficial owner thereof; or
(c) Any officer, director or holder or beneficial owner of
five percent (5%) or more of the outstanding securities of Seller.
For the purposes of clause (b), the term "beneficial owner" shall
include any group of individuals acting in concert. A party shall be deemed the
beneficial owner of any securities held by any person whose ownership would be
attributed to such party under Section 318 of the Code.
Notwithstanding the foregoing, for the purposes of Section 3.16 above,
"Affiliate" shall have the meaning set forth in paragraph 3.16(a).
12.2 NON-COMPETITION; NON SOLICITATION.
(a) NON-COMPETITION. For the term of the Services Agreement and
for a period of two (2) years thereafter, unless otherwise agreed to in writing
by Buyer, Seller and Shareholder will not, directly or indirectly, own, manage,
operate, join, control, be employed by or participate in, the ownership,
management, operation or control of, or be connected in any manner with any
business engaged in providing practice management services to orthodontic
practices in the same geographic areas in which Orthodontix, Buyer or any
affiliate thereof is then conducting such business. It is agreed that each of
the cities, counties and other political subdivisions constituting the
geographic areas in which Buyer shall be conducting such business shall be
considered a separate geographic area and a separate covenant from Seller and
Shareholder to Buyer and the invalidity of any of such covenants shall not
affect this Agreement or any other covenant made hereunder.
(b) NON-SOLICITATION. For the term of the Services Agreement and
for a period of two years thereafter, Seller and Shareholder agree that they
shall refrain from soliciting and shall not, directly or indirectly, as sole
proprietor, independent contractor, employee, consultant, agent, partner, or
joint venturer, or as an officer, director, stockholder, agent or employee of
any firm, person, entity, partnership or corporation, or otherwise: (i) solicit
the employees of Buyer to leave the service of Buyer; or (ii) solicit the
business of any person, firm, partnership, joint venture, sole proprietorship or
other entity to whom or which Buyer is rendering services at the date of
Closing.
(c) ENFORCEMENT. In the event of an actual or threatened breach
by Seller or Shareholder of paragraph (a) or (b) of this Section 12.2, Buyer
shall be entitled to an injunction restraining Seller from his prohibited
conduct. If the court should hold that the duration and/or scope (geographic or
otherwise), is not reasonable the parties agree to accept such determination,
subject
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to their rights of appeal. Nothing contained herein shall be construed as
prohibiting Buyer or any third party from pursuing any of the remedies available
to it for such breach or threatened breach, including recovery of damages from
Seller and Shareholder. In any action or proceeding to enforce the provisions of
this Section 12.2, the prevailing party shall be reimbursed by the other party
for all costs incurred in such action or proceeding including, without
limitation, all court costs and filing fees and all attorney's fees, incurred
either at the trial level or at the appellate level. If Seller or Shareholder
shall be in violation of any of the restrictive covenants contained in this
Agreement, then the time limitation otherwise applicable to such restrictive
covenant shall be extended for a period of time equal to the period of time
during which such breach or breaches occur. If Buyer seeks injunctive relief
from such breach in any court, then the covenant shall be extended for a period
of time equal to the pendency of such proceedings, including all appeals. The
existence of any claim or cause of action by Seller or Shareholder against
Buyer, whether predicated upon this Agreement or otherwise, shall not constitute
a defense to the enforcement by Buyer of the foregoing restrictive covenant, but
shall be litigated separately.
(d) In the event the non-competition clause or any other
restrictive covenant of this Agreement shall be deemed unenforceable, invalid or
overbroad in whole or in part for any reason, then any court of competent
jurisdiction is hereby authorized, requested and instructed to reform such
provision(s) to provide for the maximum competitive restraints upon Seller's and
Shareholder's activities (in time and geographic area), which may then be legal
and valid.
12.3 NOTICES. All notices, requests, demands or other communications
hereunder (including notices of all asserted claims or liabilities) shall be in
writing and shall be either delivered personally, by messenger service, by
guaranteed over night delivery service or mailed by U.S. mail, certified or
registered, return receipt requested, with appropriate postage prepaid to the
addressees and addresses herein designated or such other address as may be
designated in writing by notice given in the manner provided herein and shall be
effective upon personal delivery thereof, if delivered personally or by
messenger service, one (1) business day after delivery to the overnight delivery
service, if delivered by overnight delivery service, or on delivery, if sent by
mail:
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If to Seller:
--------------------
--------------------
--------------------
Attn:
--------------
If to Shareholder:
--------------------
--------------------
--------------------
If to Buyer: Orthodontix, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
12.4 ASSIGNABILITY; BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Seller hereby expressly consents to the assignment by
Buyer to a corporation affiliated with Buyer of the rights and obligations of
Buyer hereunder.
12.5 GOVERNING LAW; VENUE. This Agreement shall be construed and
governed in accordance with the internal laws of the State of Florida. Buyer,
Seller and Shareholder hereby consent to service of process and to the
jurisdiction of any appropriate court located in Dade County, Florida in any
action to enforce the provision of this Agreement.
12.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
12.7 ENTIRE AGREEMENT. Except as otherwise specifically provided
herein, this Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and supersedes all prior
communications, writings and other documents with regard thereto. No
modification, amendment or waiver of any provision hereof shall be binding upon
any party hereto unless it is in writing and executed by all of the parties
hereto or, in the case of a waiver, by the party waiving compliance.
12.8 WAIVER. The waiver by any party hereto of any breach, default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall not be deemed to extend to any prior or subsequent
breach, default, misrepresentation or breach of warranty or covenant hereunder
and shall not affect in any way any rights arising by virtue of any such prior
or subsequent occurrence.
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12.9 INCORPORATION BY REFERENCE. All schedules and exhibits hereto are
incorporated herein by this reference.
12.10 NO JOINT VENTURE. Nothing contained in this Agreement shall be
deemed or construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or of joint venture or of
any association between the parties. None of the provisions contained in this
Agreement nor any acts of the parties hereto shall be deemed to create any
relationship between the parties other than the relationship specified in this
Agreement.
12.11 CONFIDENTIALITY. Seller and Buyer hereby agree that the terms and
conditions of this Agreement and the transactions contemplated herein shall
remain confidential and not be disclosed by either party, except to employees
and agents and otherwise to the extent necessary to perform due diligence and
obligations hereunder until the date of Closing. Buyer agrees to remain bound by
its confidentiality agreement with Seller through the Closing. Notwithstanding
the foregoing, Buyer shall have the right to make public disclosures as may be
necessary or advisable to satisfy applicable laws, rules and regulations
applicable to public companies.
12.12 NUMBER/GENDER. All words and personal pronouns relating thereto
shall be read and construed as the number and gender of the party or parties
referred to in each case requires and the verb shall be construed as agreeing
with the required word and/or pronoun.
12.13 CAPTIONS. The division of this Agreement into articles, sections,
subsections, Schedules and exhibits is for convenience of reference only and
shall not affect the interpretation or construction of this Agreement.
12.14 ALLOCATION OF FEES AND EXPENSES. Except as otherwise provided
herein, Buyer and Seller each shall be responsible for their own legal and audit
fees and other charges incurred in connection with the purchase and sale of the
Assets, the completion of the transactions contemplated herein and any
post-Closing matters in connection with the transactions contemplated herein.
12.15 TIME OF THE ESSENCE. Time shall be of the essence of this
Agreement and of every part hereof.
12.16 SEVERABILITY. In the event that one or more of the provisions,
warranties, representations or covenants or any portion of them contained in
this Agreement are unenforceable or are declared invalid for any reason
whatsoever, such unenforceability or invalidity shall not affect the
enforceability or the validity of the remaining terms or portions of this
Agreement, and each such unenforceable or invalid provision, warranty,
representation or covenant or portion thereof shall be severable from the
remainder of this Agreement.
12.17 ATTORNEYS' FEES. In the event of any dispute arising out of the
subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its reasonable attorneys' fees and other
costs and expenses incurred in litigating or otherwise settling or resolving
such dispute.
12.18 REMEDIES CUMULATIVE. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
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12.19 CONSTRUCTION. The parties acknowledge that Buyer and Seller and
their counsel each have reviewed and revised this Agreement and that the rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party, shall not be employed in the interpretation of this Agreement or
any documents executed in connection herewith.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, HAVE HAD THE OPPORTUNITY
TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE, AND UNDERSTAND EACH OF
THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
"SELLER"
By:
-------------------------------
"SHAREHOLDER"
----------------------------------
, D.D.S.
"BUYER"
ORTHODONTIX, INC.
BY:
-------------------------------
Authorized Representative