EXHIBIT 10.29
ASSET PURCHASE AGREEMENT
Dated as of April 29, 1996
By and Among
Castle Dental Centers of Tennessee, Inc.
as Purchaser,
Mid-South Dental Center, P.C.
as Seller
and
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, D.D.S.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................................................1
1.1 Definitions......................................................1
ARTICLE II
THE TRANSACTION........................................................6
2.1 Purchase and Sale of Assets......................................6
2.2 Excluded Assets..................................................7
2.3 Assumption of Obligations........................................8
2.4 Nonassignable Contracts and Leases...............................8
2.5 Closing..........................................................8
ARTICLE III
PAYMENT OF PURCHASE PRICE..............................................9
3.1 Amount; Allocation; Delivery.....................................9
3.2 Purchase Price Adjustment.......................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
AND ▇▇. ▇▇▇▇▇▇........................................................11
4.1 Representations and Warranties of Seller and ▇▇. ▇▇▇▇▇▇.........11
4.2 Existence and Good Standing.....................................11
4.3 Authorization and Validity of Agreement.........................11
4.4 Consents and Approvals; No Violations...........................12
4.5 No Subsidiaries.................................................12
4.6 Financial Statements; No Material Adverse Change................12
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4.7 Books and Records...............................................13
4.8 Title to Properties; Encumbrances; Condition....................13
4.9 Real Property...................................................13
4.10 Leases..........................................................14
4.11 Material Contracts..............................................14
4.12 Permits.........................................................14
4.13 Litigation......................................................15
4.14 Taxes...........................................................15
4.15 Insurance.......................................................16
4.16 Intellectual Properties.........................................16
4.17 Compliance with Laws............................................16
4.18 Employment Relations............................................16
4.19 Employee Benefit Plans..........................................17
4.20 Environmental Laws and Regulations..............................17
4.21 Interests in Customers, Suppliers, Etc..........................18
4.22 Compensation of Employees.......................................18
4.23 Payors. ......................................................18
4.24 Accounts Receivable; Accounts Payable...........................18
4.25 Solvency........................................................18
4.26 Disclosure......................................................18
4.27 Broker's or Finder's Fees.......................................19
4.28 Copies of Documents.............................................19
4.29 Investment Representations......................................19
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER..........................................................20
5.1 Representations and Warranties of Purchaser.....................20
5.2 Existence and Good Standing of Purchaser; Power and Authority...20
5.3 Consents and Approvals; No Violations...........................20
5.4 Capital Stock...................................................21
5.5 Litigation......................................................21
5.6 Compliance with Laws............................................21
5.7 Financial Statements............................................22
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5.8 Broker's or Finder's Fees.......................................22
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS....................................22
6.1 Truth of Representations and Warranties.........................22
6.2 Performance of Agreements.......................................22
6.3 No Litigation Threatened........................................22
6.4 Governmental Approvals..........................................23
6.5 Proceedings.....................................................23
6.6 Employment Agreements...........................................23
6.7 Registration Rights Agreement...................................23
6.8 Consents........................................................23
6.9 Due Diligence...................................................23
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS.................................24
7.1 Truth of Representations and Warranties.........................24
7.2 Performance of Agreements.......................................24
7.3 Documents of Conveyance.........................................24
7.4 No Litigation Threatened........................................24
7.5 Governmental Approvals..........................................24
7.6 Consents........................................................25
7.7 Legal Opinion...................................................25
7.8 Proceedings.....................................................25
7.9 New PC..........................................................25
7.10 Execution of Management Services Agreement......................25
7.11 Stockholders Agreement..........................................25
7.12 Subordination Agreement. ......................................25
ARTICLE VIII
COVENANTS OF SELLER AND ▇▇. ▇▇▇▇▇▇....................................25
8.1 Cooperation by Seller...........................................26
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8.2 Conduct of Business.............................................26
8.3 Exclusive Dealing...............................................26
8.4 Review of the Assets............................................26
8.5 Further Assurances..............................................27
ARTICLE IX
COVENANTS OF PURCHASER................................................27
9.1 Cooperation by Purchaser........................................27
9.2 Books and Records; Personnel....................................27
9.3 Further Assurances..............................................28
9.4 Due Diligence Investigation.....................................28
ARTICLE X
TERMINATION...........................................................29
10.1 Termination.....................................................29
10.2 Effect on Obligations...........................................29
ARTICLE XI
SURVIVAL AND INDEMNIFICATION..........................................30
11.1 Indemnification of the Seller...................................30
11.2 Indemnification of the Purchaser................................30
11.3 Demands.........................................................31
11.4 Right to Contest and Defend.....................................31
11.5 Cooperation.....................................................32
11.6 Right to Participate............................................32
11.7 Payment of Damages..............................................32
11.8 Limitation on Indemnification...................................32
ARTICLE XII
MISCELLANEOUS.........................................................33
12.1 Entire Agreement................................................33
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12.2 Successors and Assigns..........................................33
12.3 Counterparts....................................................33
12.4 Headings........................................................33
12.5 Modification and Waiver.........................................33
12.6 No Third Party Beneficiary Rights...............................34
12.7 Sales and Transfer Taxes........................................34
12.8 Expenses........................................................34
12.9 Notice..........................................................34
12.10 Governing Law...................................................35
12.11 Confidentiality; Publicity......................................35
12.12 Severability....................................................36
12.13 Enforcement.....................................................36
SCHEDULES
Schedule 2.2 Excluded Contracts
Schedule 2.3 Assigned Contracts
Schedule 3.1 Allocation of Purchase Price
Schedule 3.2 Unaudited Balance Sheet
Schedule 4.4 Consents
Schedule 4.6 Material Adverse Change
Schedule 4.8 Encumbrances
Schedule 4.9 Real Property
Schedule 4.10 Leased Personal Property
Schedule 4.11 Material Contracts and Proposals
Schedule 4.12 Permits
Schedule 4.13 Litigation
Schedule 4.14 Taxes
Schedule 4.15 Insurance Policies
Schedule 4.16 Intellectual Property
Schedule 4.20 Environmental Matters
Schedule 4.22 Employee Compensation
Schedule 4.23 Payors
Schedule 4.25 Solvency
Schedule 5.3 Required Notices
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Schedule 5.7 Castle Financial Statements
EXHIBITS
Exhibit A Form of Promissory Note
Exhibit B-1 ▇▇▇▇▇▇ Employment Agreement
Exhibit B-2 ▇▇▇▇▇▇ Employment Agreement
Exhibit B-3 North Employment Agreement
Exhibit C Legal Opinion
Exhibit D Stockholders Agreement
Exhibit E Registration Rights Agreement
Exhibit F Management Services Agreement
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of April 29, 1996 by and among Castle
Dental Centers of Tennessee, Inc., a Tennessee corporation ("Purchaser"),
Mid-South Dental Center, P.C., a Tennessee professional corporation ("Seller"),
and ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, D.D.S., the sole shareholder of Seller ("▇▇. ▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase,
substantially all of the property and assets of Seller, all upon the terms and
subject to the conditions set forth below.
NOW, THEREFORE, for the mutual covenants and other consideration described
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant and
agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms have the meanings set
forth below (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"ACCOUNTS RECEIVABLE": all notes and accounts receivable of Seller.
"ACCOUNTS PAYABLE": the payables of Seller to trade account and other
creditors as of the Closing Date as shown on Schedule 2.3.
"AFFILIATE": with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person.
"AGREEMENT": this Asset Purchase Agreement, as amended from time to time
as provided herein.
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"ASSETS": as defined in Section 2.1 hereof.
"ASSIGNED CONTRACTS": as defined in Section 2.3 hereof.
"ASSUMED OBLIGATIONS": as defined in Section 2.3 hereof.
"BALANCE SHEET DATE": as defined in Section 3.2 hereof.
"BASE DATE NET ASSET VALUE": as defined in Section 3.2 hereof
"BOOKS AND RECORDS": all books, records, books of account, files and data
(including customer and supplier lists), certificates and other documents
related to the conduct of the business or the ownership of the Assets, including
personnel records and files, except that the Books and Records shall not include
any books, records, files and other data of any Seller which relate exclusively
to organizational and corporate governance proceedings of Seller, or patient
records which Seller may not lawfully transfer.
"BUSINESS": the practice of dentistry, including orthodontics and
periodontics and all other activities currently conducted by Seller.
"CLOSING": as defined in Section 2.6 hereof.
"CLOSING DATE": as defined in Section 2.6 hereof.
"CLOSING DATE BALANCE SHEET": as defined in Section 3.2 hereof.
"CLOSING DATE NET ASSET VALUE": as defined in Section 3.2 hereof.
"CODE": the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
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"EMPLOYMENT AGREEMENT": each agreement executed pursuant hereto
substantially in the form of Exhibit B attached hereto.
"ENCUMBRANCES": liens, security interests, options, rights of first
refusal, easements, mortgages, charges, debentures, indentures, deeds of trust,
rights-of-way, restrictions, agreements, encroachments, licenses, leases,
permits, security agreements, or any other encumbrances and other restrictions
or limitations on use of real or personal property or irregularities in title
thereto that would have a Material Adverse Effect.
"ENVIRONMENTAL CLAIM": any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violations, investigations or proceedings relating in any way to any
Environmental Law (for purposes of this definition, "Claims") or any permit
issued under any such Environmental Law, including without limitation (i) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, remedial or other actions of damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW": any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law now in effect and in
each case as amended and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to Hazardous Materials, the environment or health relating to or
arising from environmental conditions, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended 42 U.S.C. ss. 9601 ET SEQ.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. ss. 1801 ET SEQ.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss. 6901 ET SEQ.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. ss. 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 ET SEQ.; the Clean Air Act, 42 U.S.C.
ss. 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. ss. 3808 ET SEQ.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 ET SEQ.; and relevant state and
local laws.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA
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are to ERISA as in effect at the date of this Agreement and any subsequent
provisions of ERISA amendatory thereof, supplemental thereto or substituted
therefor.
"EXCLUDED ASSETS": as defined in Section 2.2 hereof.
"EXCLUDED CONTRACTS": as defined in Section 2.2(b) hereof.
"EXCLUDED LIABILITIES": as defined in Section 2.4 hereof.
"FINANCIAL STATEMENTS": as defined in Section 4.6 hereof.
"GAAP": generally accepted accounting principles consistently applied.
"HAZARDOUS MATERIALS": (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "contaminants" or "pollutants," or words of similar import
under any applicable Environmental Law; and (iii) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by an
governmental authority.
"INTELLECTUAL PROPERTY": domestic and foreign patents, patent
applications, registered and unregistered trademarks, service marks, trade names
and logos, registered and unregistered copyrights, computer programs, data
bases, trade secrets and proprietary information relating to the conduct of the
Business.
"MATERIAL ADVERSE EFFECT": material adverse effect on the assets,
liabilities, Business, condition (financial or otherwise), results or operations
or prospects of the Seller.
"NEW PC": Castle Mid-South Dental Center, P.C., a newly organized
Tennessee professional corporation organized for the purpose of entering into a
Management Services Agreement with Purchaser.
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"PERMITS": as defined in Section 4.12 hereof.
"PERMITTED ENCUMBRANCES": as defined in Section 4.8 hereof.
"PERSON": any individual, partnership, joint venture, corporation, trust,
unincorporated organization, government or other department or agency thereof or
other entity.
"PLANS": as defined in Section 4.19 hereof.
"PRE-CLOSING PERIODS": as defined in Section 4.14(a) hereof.
"PRICE ALLOCATION": as defined in Section 3.1 hereof.
"PURCHASE PRICE": as defined in Section 3.1 hereof.
"PURCHASER": as defined in the preamble of this Agreement.
"RETURNS": as defined in Section 4.14(a) hereof.
"RELEASE": disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying, seeping, placing and the like, into or
upon any land or water or air, or otherwise entering into the environment.
"SELLER" as defined in the preamble of this Agreement.
"SELLER PROPERTY": any real property and improvements thereon leased,
operated or occupied by Seller.
"TAX": any net income, alternative or add-on minimum tax, advance,
corporation, gross income, gross receipts, sales, use, AD VALOREM, franchise,
profits, license, value added, withholding, payroll, employment, excise, stamp
or occupation tax, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or any penalty imposed by any
governmental authority with respect thereto, and any liability for such amounts
as a result either of being a member of an affiliated group or of a contractual
obligation to indemnify any other entity.
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ARTICLE II
THE TRANSACTION
2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, Purchaser agrees to purchase from the Seller, and Seller agrees
to sell, convey, transfer, assign and deliver, and cause to be sold, conveyed,
transferred, assigned and delivered, to Purchaser, on the Closing Date, against
the receipt by the Seller of the consideration specified in Section 3.1 hereof,
the Assets, free and clear of any Encumbrances except Permitted Encumbrances.
The term "Assets" shall mean all of the rights, title and interests of Seller in
and to the assets used in or relating to the conduct of the Business, tangible
and intangible, real, personal and mixed, wheresoever situated and whether or
not specifically referred to herein or in any instrument of conveyance delivered
pursuant hereto. The Assets shall include but are not limited to the following
categories of assets:
(a) Seller's title to, interest in or rights under the leases of
real property described in Schedule 4.9 attached hereto together with all
buildings, facilities, fixtures and other improvements thereon and all
easements, rights-of-way, transferable licenses and permits and other
appurtenances thereof;
(b) plant, machinery, equipment, tools, supplies, inventories,
furniture, fixtures, furnishings, vehicles and other fixed assets owned or
leased by Seller and used or held for use in the conduct of the Business;
(c) cash, cash equivalents, deposits, advance payments, securities,
letters of credit naming Seller as account party, certificates of deposit,
notes, drafts, checks and similar instruments;
(d) contracts, documents, instruments and general intangibles of
Seller, including the name "Mid-South Dental Centers, Inc.", other than
the Excluded Contracts;
(e) Accounts Receivable as of the Closing Date;
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(f) all licenses, permits, registrations and authorizations,
proprietary information, methods, designs, processes, procedures, and all
rights held by Seller to other Intellectual Property;
(g) Books and Records;
(h) any rights of Seller pertaining to any counterclaims, set-offs
or defenses it may have with respect to any Assumed Obligations;
(i) all prepaid claims, prepaid taxes, prepaid insurance premiums
and other prepaid expense items; and
(j) third-party indemnities, policies of insurance identified by
Purchaser, fidelity, surety or similar bonds and the coverages afforded
thereby relating to the Assets.
2.2 EXCLUDED ASSETS. The Assets shall not include any of the following
(the "Excluded Assets"):
(a) each contract set forth on Schedule 2.2(a) (the "Excluded
Contracts");
(b) tax refunds related to the Business or the Assets received or
receivable by Seller or ▇▇. ▇▇▇▇▇▇ relating to taxes paid by Seller or ▇▇.
▇▇▇▇▇▇ for all periods prior to the Closing Date;
(c) minute books and governance documents of the Seller;
(d) dentist employment contracts;
(e) reimbursement contracts with third party insurance companies,
managed care contracts and other reimbursement contracts;
(f) office furnishings, described on Schedule 2.2(f); and
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(g) key man life insurance policies currently maintained on the
lives of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇.
2.3 ASSUMPTION OF OBLIGATIONS. Upon the sale of the Assets by Seller,
Purchaser shall assume and agree to pay, perform and discharge, in a timely
manner and in accordance with the terms thereof, only such of the obligations of
Seller in respect of (a) the licenses, leases, permits, contracts, notes and
other debts set forth in Schedule 2.3 (the "Assigned Contracts") which are being
assigned to Purchaser hereunder, (b) the obligations of Seller with respect to
the deposits, advance payments and similar prepayments transferred to Purchaser
pursuant to Section 2.1 hereof, and (c) Accounts Payable set forth prior to the
Closing on Schedule 2.3 (collectively, "Assumed Obligations"). Without limiting
the generality of the foregoing, Purchaser expressly shall not assume or be
deemed to have assumed, without limitation, any liability or obligation relating
to or arising out of any employee benefit plan or arrangement of Seller or any
liabilities or obligations thereunder, including but not limited to accrued
401(k) withholdings with the exception of the self insured portion of health
insurance claims to the maximum extent of the insurance fund maintained by
Seller and acquired by Purchaser (collectively, the "Excluded Liabilities").
2.4 NONASSIGNABLE CONTRACTS AND LEASES. In the case of any Assigned
Contracts which are not by their terms assignable, Seller agrees to use its best
efforts to obtain, or cause to be obtained, prior to the Closing Date, any
written consents necessary to convey to Purchaser the benefit thereof. Purchaser
shall cooperate with Seller, in such manner as may be reasonably requested, in
connection therewith, including without limitation, active participation in
visits to and meetings, discussions and negotiations with all Persons with the
authority to grant or withhold consent. If Seller is unable to obtain such
necessary written consents for the remaining term of such Assigned Contract,
Purchaser shall act as such Seller's agent in the performance of all obligations
and liabilities under such Assigned Contract and such Seller shall act as
Purchaser's agent in the receipt of any benefits, rights or interests which
inure to such Seller under such Assigned Contract.
2.5 CLOSING. Subject to the satisfaction of the conditions to closing set
forth herein, the closing (the "Closing") of the transactions contemplated
hereby shall be held at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on or before May 31, 1996, or
such other place, date and time as may be mutually agreed upon by the parties
hereto. Such time and date are referred to herein as the "Closing Date."
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ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1 AMOUNT; ALLOCATION; DELIVERY. At the Closing, in addition to
Purchaser's assumption of the Assumed Obligations, Purchaser shall pay to Seller
the sum of $5,500,000 (the "Purchase Price"), subject to adjustment as provided
in Section 3.2 hereof, which Purchase Price shall be remitted by Purchaser to
Seller in the following manner:
(a) $4,000,000 in cash on the Closing Date, which shall be paid by
wire transfer of immediately available funds to an account or accounts of
Seller; and
(b) a five year subordinated promissory note payable in equal
quarterly installments of principal and interest to Seller in the original
principal amount of $750,000, with interest on the unpaid balance at the
rate of 10% per annum, substantially in the form of Exhibit A attached
hereto; and
(c) 150,000 shares of common stock, $.001 par value ("Common
Stock"), of Castle Dental Centers, Inc., a Delaware corporation
("Castle"), issued in the name of MidSouth Dental Center, P.C.
Purchaser and Seller hereby agree to allocate the Purchase Price in
accordance with Section 1060 of the Code among the Assets in accordance with
Schedule 3.1 to be attached hereto prior to the Closing Date (the "Price
Allocation"). The parties hereby undertake and agree to file timely any
information that may be required to be filed pursuant to regulations promulgated
under Section 1060(b) of the Code. The parties further agree that they will
report the federal, state, municipal, foreign and local and other tax
consequences of the purchase and sale hereunder in a manner consistent with the
Price Allocation, as so adjusted, and that they will not take any position
inconsistent therewith.
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3.2 PURCHASE PRICE ADJUSTMENT.
(a) Seller previously has delivered to Purchaser unaudited balance
sheet of the Seller as of December 31, 1995 (the "Balance Sheet Date"), which is
attached hereto as Schedule 3.2(a) (the book value of the Assets included in
such balance sheet less the book value of the Assumed Obligations included in
such balance sheet is hereinafter referred to as the "Base Date Net Asset
Value").
(b) Within 45 days following the Closing Date, Seller shall prepare
and deliver to Purchaser a balance sheet of the Seller as of the Closing Date
(the "Closing Date Balance Sheet"), together with a calculation of the book
value of the Assets and Assumed Obligations determined on the same basis as the
December 31, 1995 balance sheet (such book value of such Assets less such book
value of such Assumed Obligations is hereinafter referred to as the "Closing
Date Net Asset Value"). Purchaser and its representatives shall have the right
to review all work papers and procedures used to prepare the December 31, 1995,
balance sheet and the Closing Date Balance Sheet and the calculation of the Base
Date Net Asset Value and Closing Date Net Asset Value and shall have the right
to perform any other reasonable procedures necessary to verify the accuracy
thereof. Unless Purchaser, within 20 days after delivery to Purchaser of the
Closing Date Balance Sheet, notifies Seller in writing that it objects to either
the December 31, 1995, balance sheet or the Closing Date Balance Sheet or the
calculation of Base Date Net Asset Value or the Closing Date Net Asset Value,
and specifies the basis for such objection, the December 31, 1995, balance sheet
and Closing Date Balance Sheet and calculation of the Base Date Net Asset Value
and Closing Date Net Asset Value shall become final and binding upon the parties
for purposes of this Agreement. If Purchaser and Seller are unable to resolve
such objections within 10 days after any such notification has been given, the
dispute shall be submitted to a nationally recognized public accounting firm
mutually agreed upon by Purchaser and Seller). Such accounting firm shall make a
final and binding determination as to the matter or matters in dispute.
Purchaser and Seller agree to cooperate with each other and with each other's
authorized representatives in order to resolve any and all matters in dispute as
soon as practicable.
(c) For the purposes of the comparison of the Base Date Net Asset
Value to the Closing Date Net Asset Value, no effect shall be given to changes
during such period to amounts of depreciation or amortization.
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(d) Within 10 days after the Closing Date Net Asset Value has been
finally determined, to the extent the difference, if any, between the Base Date
Net Asset Value and the Closing Date Net Asset Value exceeds $10,000, such
difference shall be paid by Purchaser to Seller (if the Closing Date Net Asset
Value exceeds the Base Date Net Asset Value) or by Seller to Purchaser (if the
Base Date Net Asset Value exceeds the Closing Date Net Asset Value). Such
payment shall be by certified or bank check, and shall include simple interest
on such amount at a rate per annum equal to 10% commencing on the Closing Date
and continuing until the date of full payment hereunder.
(e) Purchaser and Seller, in the aggregate, each shall bear one-half
of the fees, costs and expenses of the accounting firm retained under subsection
(d) to resolve any dispute.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
AND ▇▇. ▇▇▇▇▇▇
4.1 REPRESENTATIONS AND WARRANTIES OF SELLER AND ▇▇. ▇▇▇▇▇▇. Seller and
▇▇. ▇▇▇▇▇▇, jointly and severally, hereby represent and warrant to Purchaser as
follows:
4.2 EXISTENCE AND GOOD STANDING. Seller is a professional corporation duly
organized and validly existing under the laws of the State of Tennessee. Seller
has the full corporate power and authority to own, lease and operate its
property and to carry on the Business as now being conducted and to own or lease
the Assets owned or leased by it. Seller is duly qualified or licensed to do
business in each jurisdiction in which the character or location of the
properties owned or leased by Seller or the nature of the business conducted by
Seller makes such qualification necessary and the absence of which would have a
Material Adverse Effect.
4.3 AUTHORIZATION AND VALIDITY OF AGREEMENT. Seller has full corporate
power and authority, and ▇▇. ▇▇▇▇▇▇ has full power and authority, to execute and
deliver this Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Seller and the consummation by it of the
transactions contemplated hereby, have been or as of the Closing Date will be
duly authorized and approved by the Board of Directors and ▇▇. ▇▇▇▇▇▇ as the
sole shareholder of Seller,
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and no other action on the part of Seller or its shareholder is necessary to
authorize the execution, delivery and performance of this Agreement by Seller
and the consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Seller and ▇▇. ▇▇▇▇▇▇ and is a valid and
binding obligation of Seller and ▇▇. ▇▇▇▇▇▇ enforceable against each in
accordance with its terms, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
4.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth on Schedule
4.4 hereto, the execution, delivery and performance of this Agreement by Seller
and ▇▇. ▇▇▇▇▇▇ and the consummation by Seller and ▇▇. ▇▇▇▇▇▇ of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time or both: (a) violate, conflict with, or result in a breach or default
under, any provision of the organizational documents of Seller; (b) violate any
statute, ordinance, rule, regulation, order, judgment or decree of any court or
of any governmental or regulatory body, agency or authority applicable to Seller
or ▇▇. ▇▇▇▇▇▇ or by which any of Seller's properties or assets may be bound; (c)
require any filing by Seller or ▇▇. ▇▇▇▇▇▇ with, or require Seller or ▇▇. ▇▇▇▇▇▇
to obtain any permit, consent or approval of, or require Seller or ▇▇. ▇▇▇▇▇▇ to
give any notice to, any governmental or regulatory body, agency or authority
other than as set forth in Schedule 4.4 attached hereto; except where the
failure to do so would not have a Material Adverse Effect, or (d) result in a
violation or breach by Seller of, conflict with, constitute (with or without due
notice or lapse of time or both) a default by Seller (or give rise to any right
of termination, cancellation, payment or acceleration) under, or result in the
creation of any Encumbrance upon any of the properties or assets of Seller under
any of the terms, conditions, or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, agreement, lease franchise agreement or
other instrument or obligation to which Seller is a party, or by which Seller or
any of its properties or assets may be bound.
4.5 NO SUBSIDIARIES. Seller has no subsidiaries.
4.6 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. Seller has
heretofore furnished Purchaser with the unaudited balance sheet of Seller as of
December 31, 1995 (the "Balance Sheet Date"), and the unaudited statements of
operations and cash flows for the year then ended (the "Financial Statements").
The Financial Statements except as indicated therein, have been prepared in
accordance with the books and records of Seller and in a manner consistent with
prior periods.
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The Financial Statements fairly present in all material respects the financial
position of Seller at the date thereof and the results of operations of Seller
and its cash flows for the period indicated. Except as set forth in Schedule 4.6
attached hereto, since the Balance Sheet Date there has been no material adverse
change in the assets or liabilities, or in the business or condition, financial
or otherwise, or in the results of operations of Seller.
4.7 BOOKS AND RECORDS. The minute books of Seller, as previously made
available to Purchaser and its representatives, contain accurate records in all
material respects of all meetings of, and corporate action taken by (including
action taken by written consent) Seller and by the respective shareholders and
Board of Directors of Seller.
4.8 TITLE TO PROPERTIES; ENCUMBRANCES; CONDITION. Except as set forth in
Schedule 4.8 or 4.9, and except for properties and assets reflected in the
Financial Statements or acquired since the Balance Sheet Date which have been
sold or otherwise disposed of in the ordinary course of business, Seller has
good and valid title to the Assets, in each case subject to no Encumbrances
except for (i) Encumbrances consisting of easements, permits and other
restrictions or limitations on the use of real property or irregularities in
title thereto that do not materially detract from the value of, or materially
impair the use of, such property by Seller in the operation of the Business,
(ii) Encumbrances for current taxes, assessments or governmental charges or
levies on property not yet due or delinquent, (iii) Encumbrances created by
Purchaser, and (iv) Encumbrances relating to Assumed Obligations (liens of the
type described in clauses (i), (ii), (iii) and (iv) above are hereinafter
sometimes referred to as "Permitted Encumbrances"). Seller has heretofore
furnished Purchaser with a schedule which sets forth all fixed assets owned or
held under a capitalized lease by Seller as of the Balance Sheet Date. Each such
asset used in the ordinary course of the Business is in good operating condition
and repair, subject to ordinary wear and tear, except where such condition or
repair would not have a Material Adverse Effect.
4.9 REAL PROPERTY. Seller owns no real property, in whole or in part.
Schedule 4.9 identifies all leasehold interests of Seller and includes the name
of the lessor thereof and a list of all indebtedness of Seller secured by a
lien, mortgage or deed of trust thereon. Except as set forth on Schedule 4.9,
the premises leased by Seller are in good operating condition, and in a state of
good maintenance and repair, subject to ordinary wear and tear, except where
such condition or maintenance would not have a Material Adverse Effect. To the
knowledge of Seller and ▇▇. ▇▇▇▇▇▇, the real property has adequate rights of
ingress and egress for operation of the Business in the
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ordinary course. To the knowledge of Seller and ▇▇. ▇▇▇▇▇▇, no condemnation or
similar proceeding is pending or threatened, which would preclude or impair the
use of any such property, except where such proceeding would not have a Material
Adverse Effect.
4.10 LEASES. Schedule 4.10 contains an accurate and complete list of all
personal property leases to which Seller is a party (as lessee or lessor).
Except where it would not have a Material Adverse Effect, each lease set forth
in Schedule 4.10 is in full force and effect, and to the knowledge of Seller and
▇▇. ▇▇▇▇▇▇, no event has occurred that with the giving of notice, the passage of
time or both would constitute a default thereunder.
4.11 MATERIAL CONTRACTS. Except as set forth in Schedule 4.11, the
Assigned Contracts do not include (a) any agreement, contract or binding
commitment relating to the employment of any person by Seller, (b) any
agreement, indenture or other instrument which contains restrictions with
respect to payment of profits, dividends or any other distributions, (c) any
agreement, contract or binding commitment relating to capital expenditures in
excess of $5,000 (d) any loan or advance to, or investment in, any Person or any
agreement, contract or binding commitment relating to the making of any such
loan, advance or investment, (e) any guarantee or other contingent liability in
respect of any indebtedness or obligation of any Person, (f) any management
service, consulting or any other similar type contract, (g) any agreement,
contract or binding commitment limiting the freedom of Seller to engage in any
line of business or to compete with any Person, (h) any agreement, contract or
binding commitment which involves $5,000 or more and is not cancelable without
penalty within 30 days, or (i) any other agreement, contract or binding
commitment which is material to the operations of the Business. There are no
proposals which have been submitted by Seller to any third party that, if
accepted by such third party, would require disclosure on Schedule 4.11. Except
where it would not have a Material Adverse Effect, each contract or agreement
set forth in Schedule 4.11 is in full force and effect and to the knowledge of
Seller and ▇▇. ▇▇▇▇▇▇, there exists no default or event of default or event,
occurrence, condition or act (including the purchase of the Assets hereunder)
which, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a default or event of default thereunder.
4.12 PERMITS. Schedule 4.12 attached hereto lists all of the governmental
and other third party permits (including occupancy permits), licenses, consents
and authorizations ("Permits") required, to the knowledge of Seller and ▇▇.
▇▇▇▇▇▇, in connection with the use, operation or ownership of the Assets and the
conduct of the Business as currently conducted. Seller holds all of
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the Permits listed on Schedule 4.12 (other than the dental licenses of dentists
practicing in the Business), and, to the knowledge of Seller and ▇▇. ▇▇▇▇▇▇,
none is presently subject to revocation or challenge.
4.13 LITIGATION. Except as set forth in Schedule 4.13, there is no action,
suit, proceeding at law or in equity, arbitration or administrative or other
proceeding by or before (or any investigation by) any governmental or other
instrumentality or agency (each, a "Proceeding"), pending, or, to the knowledge
of Seller and ▇▇. ▇▇▇▇▇▇, threatened, against or affecting the properties,
rights or goodwill of Seller, ▇▇. ▇▇▇▇▇▇ or employees of Seller, except where
such Proceeding would not have a Material Adverse Effect, and Seller and ▇▇.
▇▇▇▇▇▇ do not know of any valid basis for any such Proceeding. There are no
Proceedings pending or to the knowledge of Seller and ▇▇. ▇▇▇▇▇▇ threatened,
seeking to prevent or challenge the transactions contemplated by this Agreement.
4.14 TAXES. (a) All returns and reports for Taxes for all taxable years or
periods that end on or before the Closing Date and, with respect to any taxable
year or period beginning before and ending after the Closing Date the portion of
such taxable year or period ending on and including the Closing Date
("Pre-Closing Periods"), which are required to be filed by or with respect to
Seller (collectively, the "Returns") have been or will be filed when due in a
timely fashion and such Returns as filed are or will be accurate in all material
respects.
(b) Except as provided in Schedule 4.14, there is no material
action, suit, proceeding, investigation, audit or claim now pending or, to the
knowledge of Seller or ▇▇. ▇▇▇▇▇▇, threatened by any authority regarding any
Taxes relating to Seller for any Pre-Closing Period.
(c) There are no liens or security interests on any of the Assets
that arose in connection with any failure (or alleged failure) to pay any Taxes.
(d) Except as provided in Schedule 4.14, there are no agreements for
the extension or waiver of the time for assessment of any Taxes relating to
Seller for any Pre-Closing Period and Seller has not been requested to enter
into any such agreement or waiver.
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(e) All Taxes relating to Seller which Seller is required by law to
withhold or collect have been duly withheld or collected, and have been timely
paid over to the proper authorities to the extent due and payable.
(f) Seller is not now nor has ever been a party to any Tax
allocation or sharing agreement that could result in any liability to Purchaser.
4.15 INSURANCE. Set forth in Schedule 4.15 is a complete list of insurance
policies that Seller maintains with respect to its Business, properties or
employees that are included in the Assets. Such policies are in full force and
effect and, to the knowledge of Seller and ▇▇. ▇▇▇▇▇▇, there exists no grounds
on the part of the insurance carriers to cancel or reduce any coverage
thereunder. In the judgment of Seller, such policies, with respect to their
amounts and types of coverage, are adequate to insure against risks to which
Seller and its property and assets are normally exposed in the operation of the
Business, subject to customary deductibles and policy limits.
4.16 INTELLECTUAL PROPERTIES. Schedule 4.16 sets forth all material
Intellectual Property used in the Business. The operation of the Business as
conducted by Seller as of the Closing Date requires no material rights under
Intellectual Property other than rights under Intellectual Property listed on
Schedule 4.16 and rights granted to Seller pursuant to agreements listed on
Schedule 4.16. Except as otherwise set forth in Schedule 4.16, Seller owns all
right, title and interest in the Intellectual Property listed in Schedule 4.16.
No litigation is pending or, to the knowledge of Seller or ▇▇. ▇▇▇▇▇▇,
threatened wherein Seller is accused of infringing or otherwise violating the
Intellectual Property rights of another, or of breaching a contract conveying
rights under Intellectual Property.
4.17 COMPLIANCE WITH LAWS. Seller is in compliance with all applicable
laws, regulations, orders, judgments and decrees applicable to the Business,
except where any noncompliance would not have a Material Adverse Effect.
4.18 EMPLOYMENT RELATIONS. (a) To the knowledge of Seller and ▇▇. ▇▇▇▇▇▇,
Seller is not and has not engaged in any unfair labor practice; (b) to the
knowledge of Seller and ▇▇. ▇▇▇▇▇▇, no representation question exists respecting
the employees of Seller; (c) Seller has not been notified of any grievance that
might have a Material Adverse Effect and no arbitration proceeding arising out
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of or under any collective bargaining agreement is pending; and (f) no
collective bargaining agreement is currently being negotiated by Seller.
4.19 EMPLOYEE BENEFIT PLANS. Seller has delivered to Purchaser true and
complete copies of all employee benefit plans, policies, programs and
arrangements and all related contracts, agreements and other descriptions
thereof with respect to the employee benefits provided to the employees of the
Business prior to the Closing Date (the "Plans"). Each of the Plans has, to the
knowledge of Seller and ▇▇. ▇▇▇▇▇▇, been maintained in compliance with its terms
and the requirements of all applicable laws. None of the Plans are subject to
Title IV of ERISA or the minimum funding obligations of Section 412 of the Code,
and Seller and any entity required to be aggregated therewith pursuant to
Section 414(b) or (c) of the Code have no liability under Title IV of ERISA or
under Section 412(f) or 412(n) of the Code.
4.20 ENVIRONMENTAL LAWS AND REGULATIONS. Except as set forth in Schedule
4.20, and except where it would not have a Material Adverse Effect (a) Hazardous
Materials have not been generated, used, treated or stored on, or transported to
or from, any Seller Property by Seller, its authorized agents or its independent
contractors (including suppliers) or any property adjoining any Seller Property,
(b) Hazardous Materials have not been Released or disposed of by Seller, its
authorized agents or its independent contractors (including suppliers) on any
Seller Property or, to the knowledge of Seller or ▇▇. ▇▇▇▇▇▇, any property
adjoining any Seller Property, except such Releases which do not violate any
Environmental Laws, (c) to the knowledge of Seller and ▇▇. ▇▇▇▇▇▇, Seller is in
compliance with all applicable Environmental Laws and the requirements of any
Permits issued under such Environmental Laws with respect to any Seller
Property, (d) to the knowledge of Seller and ▇▇. ▇▇▇▇▇▇, there are no pending or
threatened Environmental Claims against Seller or any Seller Property, (e) to
the knowledge of Seller and ▇▇. ▇▇▇▇▇▇, there are no facts or circumstances,
conditions, pre-existing conditions or occurrences on any Seller Property that
could reasonably be anticipated (A) to form the basis of an Environmental Claim
against Seller or any Seller Property, or (B) to cause such Seller Property to
be subject to any restrictions on the ownership, occupancy use or
transferability of such Seller Property under any Environmental Law, (f) there
are not now and there never have been any underground storage tanks located on
any Seller Property, and (g) Seller has not in the ordinary course of business
transported or stored Hazardous Materials.
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4.21 INTERESTS IN CUSTOMERS, SUPPLIERS, ETC. Except for relationships with
Affiliates and as set forth on Schedule 4.21 hereto, Seller does not possess,
directly or indirectly, any financial interest in, and ▇▇. ▇▇▇▇▇▇ is not a
director, officer or employee of, any corporation, firm, association or business
organization which is a supplier, customer, lessor, lessee or competitor of
Seller.
4.22 COMPENSATION OF EMPLOYEES. Set forth in Schedule 4.22 is an accurate
and complete list showing the names of all persons whose compensation from
Seller collectively for the fiscal year ended on the Balance Sheet Date exceeded
an annualized rate of $25,000 together with a statement of the full amount paid
or payable to each such person for services rendered during the current fiscal
year to date.
4.23 PAYORS. Schedule 4.23 sets forth the five largest payors of Seller
for the most recently completed fiscal year. The relationship of Seller with
each of such payors as of the date of this Agreement is a good commercial
working relationship, and except as set forth in Schedule 4.23 no significant
payor has canceled or otherwise terminated or, to the knowledge of Seller or ▇▇.
▇▇▇▇▇▇ threatened to cancel or otherwise terminate, its relationship with Seller
within the last three years.
4.24 ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE. Except as set forth on
Schedule 4.24, the Accounts Receivable on the Closing Date Balance Sheet are
collectible in the ordinary course of business, net of the reserves set up with
respect thereto. Except as set forth on Schedule 4.24, there has been no change
since the Balance Sheet Date (other than in the ordinary course of business) in
the amount of the Accounts Receivable or other fees or debts due to Seller or
the allowances with respect thereto, or Accounts Payable by Seller, from that
reflected in the Balance Sheet.
4.25 SOLVENCY. Seller is not entering into this Agreement with actual
intent to hinder, delay or defraud creditors.
4.26 DISCLOSURE. None of this Agreement, the Financial Statements, any
Schedule, Exhibit or certificate attached hereto or delivered in accordance with
the terms hereof contains any untrue statement of a material fact, or omits any
statement of a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made.
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4.27 BROKER'S OR FINDER'S FEES. No agent, broker, Person or firm acting on
behalf of Seller is, or will be, entitled to any commission or broker's or
finder's or similar fees in connection with this Agreement or any of the
transactions contemplated hereby.
4.28 COPIES OF DOCUMENTS. Seller has caused to be made available for
inspection and copying by Purchaser and its advisers, true, complete and correct
copies of all documents referred to in this Article IV or in any Schedule
attached hereto.
4.29 INVESTMENT REPRESENTATIONS.
(a) Seller and ▇▇. ▇▇▇▇▇▇ understand that the Common Stock has not
been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Seller and ▇▇. ▇▇▇▇▇▇ also understand that the Common
Stock is being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon their respective
representations contained in this Agreement.
(b) Seller has, and ▇▇. ▇▇▇▇▇▇, in consultation with his
accountants, attorneys and financial advisors has, substantial experience
in evaluating and investing in private placement transactions of
securities in companies similar to Castle so that he is capable of
evaluating the merits and risks of its investment in Castle and has the
capacity to protect his own interests. Seller and ▇▇. ▇▇▇▇▇▇ each
understand that it or he must bear the economic risk of this investment
indefinitely unless the Common Stock is registered pursuant to the
Securities Act, or an exemption from registration is available. Seller and
▇▇. ▇▇▇▇▇▇ understand that Castle has no present intention of registering
the Common Stock. Seller and ▇▇. ▇▇▇▇▇▇ also understand that there is no
assurance that any exemption from registration under the Securities Act
will be available and that, even if available, such exemption may not
allow either of them to transfer all or any portion of the Common Stock
under the circumstances, in the amounts or at the times he might propose.
(c) Each of Seller and ▇▇. ▇▇▇▇▇▇ is acquiring the Common Stock for
his or its own account for investment only, and not with a view towards
distribution.
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(d) Each of Seller and ▇▇. ▇▇▇▇▇▇ represents that by reason of his
or its business or financial experience, he or it has the capacity to
protect his or its own interests in connection with the transactions
contemplated in this Agreement.
(e) Each of Seller and ▇▇. ▇▇▇▇▇▇ represents that he or it is an
accredited investor within the meaning of Regulation D under the
Securities Act.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
5.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller and ▇▇. ▇▇▇▇▇▇ as follows:
5.2 EXISTENCE AND GOOD STANDING OF PURCHASER; POWER AND AUTHORITY.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Tennessee. Purchaser has full corporate power and
authority to make, execute, deliver and perform this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized and approved by all required corporate
action of Purchaser. This Agreement has been duly executed and delivered by
Purchaser and is a valid and binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
5.3 CONSENTS AND APPROVALS; NO VIOLATIONS. The execution, delivery and
performance of this Agreement by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby will not, with or without the giving of
notice or the lapse of time or both; (a) violate, conflict with, or result in a
breach or default under any provision of the certificate of incorporation or
by-laws of Purchaser; (b) violate any statute, ordinance, rule, regulation,
order, judgment or decree of any court or of any governmental or regulatory
body, agency or authority applicable to Purchaser or Castle or by which any of
their respective properties or assets may be bound; (c) require any filing by
Purchaser with, or require Purchaser to obtain any permit, consent
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or approval of, or require Purchaser to give any notice to, any governmental or
regulatory body, agency or authority or any third party other than as set forth
in Schedule 5.3; or (d) result in a violation or breach by Purchaser of,
conflict with, constitute (with or without due notice or lapse of time or both)
a default by Purchaser (or give rise to any right of termination, cancellation,
payment or acceleration) under, or result in the creation of any Encumbrance
upon any of the properties or assets of Purchaser pursuant to, any of the terms,
conditions or provision of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other instrument or
obligation to which Purchaser is a party, or by which it or any of its
properties or assets may be bound, except in the case of Subsections 5.3(b),
(c), and (d), for such violations, consents, breaches, defaults, terminations
and accelerations which in the aggregate would not have a Material Adverse
Effect.
5.4 CAPITAL STOCK. The authorized capital stock of Castle consists solely
of 18,755,263 shares of Common Stock of which 4,000,000 shares have been issued
as of the date of this Agreement, and 1,244,737 shares of Preferred Stock, $.001
par value per share ("Preferred Stock"), all of which shares have been issued.
All of the shares of Common Stock of Castle delivered pursuant to Section 3.1
hereof shall be duly and validly authorized, and, following the Closing, will be
validly issued, fully paid, nonassessable and free of any liens or encumbrances.
5.5 LITIGATION. Except as set forth in Schedule 5.5 hereto, there is no
action, suit, proceeding at law or in equity, arbitration or administrative or
other proceeding by or before (or any investigation by) any governmental or
other instrumentality or agency, pending, or, to the knowledge of Purchaser,
threatened, against or affecting the properties, rights or goodwill of Castle,
Purchaser or their employees, except where such Proceeding would not have a
material adverse effect on the assets, liabilities, business, condition
(financial or otherwise), results of operations or prospects of Castle or
Purchaser, and Purchaser does not know of any valid basis for any such action,
proceeding or investigation. There are no such Proceedings pending or, to the
knowledge of Purchaser, threatened, seeking to prevent or challenge the
transactions contemplated by this Agreement.
5.6 COMPLIANCE WITH LAWS. To the knowledge of Purchaser, Castle and
Purchaser are in compliance with all applicable laws, regulations, orders,
judgments and decrees applicable to their respective business, except where any
noncompliance would not have a material adverse effect on the assets,
liabilities, business, condition (financial or otherwise), results of operations
or prospects of Castle or Purchaser.
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5.7 FINANCIAL STATEMENTS. The audited financial statements of Castle as of
December 31, 1995, attached hereto as Schedule 5.7 (to be attached prior to the
Closing Date), are complete and correct in all material respects and present
fairly in accordance with generally accepted accounting principles consistently
applied, the financial condition of Castle and the results of operations of
Castle as of the dates thereof and for the periods indicated.
5.8 BROKER'S OR FINDER'S FEES. Except for a fee payable by Purchaser to
the GulfStar Group, no agent, broker, Person or firm acting on behalf of
Purchaser is, or will be, entitled to any fee, commission or broker's or
finder's fee in connection with this Agreement or any of the transactions
contemplated hereby.
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller under this Agreement to sell, or cause to be
sold, the Assets and to consummate the other transactions contemplated hereby
shall be subject to the satisfaction (or waiver by Seller) on or prior to the
Closing Date of all of the following conditions:
6.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date, and Purchaser shall have delivered to Seller on the Closing Date a
certificate of an authorized officer of Purchaser, dated the Closing Date, to
such effect.
6.2 PERFORMANCE OF AGREEMENTS. Each and all of the agreements and
covenants of Purchaser to be performed on or before the Closing Date pursuant to
the terms hereof shall have been duly performed in all material respects, and
Purchaser shall have delivered to Seller a certificate of an authorized officer
of Purchaser, dated the Closing Date, to such effect.
6.3 NO LITIGATION THREATENED. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby, and
Purchaser shall have delivered to Seller a certificate of an
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authorized officer of Purchaser, dated the Closing Date, to such effect to the
best knowledge of such officer.
6.4 GOVERNMENTAL APPROVALS. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
6.5 PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Seller and ▇▇. ▇▇▇▇▇▇
and their counsel, and Seller and ▇▇. ▇▇▇▇▇▇ shall have received copies of all
such documents and other evidence as its or its counsel may reasonably request
in order to establish the consummation of such transactions and the taking of
all proceedings in connection therewith.
6.6 EMPLOYMENT AGREEMENTS. ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ shall
have received Employment Agreements, substantially in the form of Exhibits B-1.
B-2 and B-3, respectively, attached hereto, executed by the Purchaser and
Castle.
6.7 REGISTRATION RIGHTS AGREEMENT. ▇▇. ▇▇▇▇▇▇ shall have received a
Registration Rights Agreement, substantially in the form of Exhibit E hereto,
executed by Castle Dental Centers, Inc.
6.8 CONSENTS. Each of the consents referred to in Schedule 5.3 hereto
shall have been obtained.
6.9 DUE DILIGENCE. ▇▇. ▇▇▇▇▇▇ and Seller shall have satisfactorily
completed their due diligence review of Castle and Buyer, and shall not have
determined, in the exercise of their reasonable discretion, that the information
obtained from such review materially and adversely affects their appraisal of
the business, prospects and financial condition of Castle.
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ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser under this Agreement to purchase the Assets
and to consummate the other transactions contemplated hereby shall be subject to
the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of all
of the following conditions:
7.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller and ▇▇. ▇▇▇▇▇▇ contained herein shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date; and Seller and ▇▇. ▇▇▇▇▇▇ shall have delivered to Purchaser on the
Closing Date a certificate of an authorized representative of Seller and ▇▇.
▇▇▇▇▇▇, dated the Closing Date, to such effect.
7.2 PERFORMANCE OF AGREEMENTS. Each and all of the agreements and
covenants of Seller to be performed on or before the Closing Date pursuant to
the terms hereof shall have been duly performed in all material respects, and
Seller shall have delivered to Purchaser a certificate of an authorized
representative of Seller, dated the Closing Date, to such effect.
7.3 DOCUMENTS OF CONVEYANCE. Purchaser shall have received from Seller
fully executed documents of conveyance vesting in Purchaser good and valid title
to the Assets, free and clear of any Encumbrances except Permitted Encumbrances.
7.4 NO LITIGATION THREATENED. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby, and Seller
shall have delivered to Purchaser a certificate of an authorized representative
of Seller, dated the Closing Date, to such effect to the best knowledge of such
officer.
7.5 GOVERNMENTAL APPROVALS. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
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7.6 CONSENTS. Each of the consents referred to in Schedule 4.4 attached
hereto shall have been obtained.
7.7 LEGAL OPINION. Seller shall have delivered to Purchaser the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, their counsel, substantially in the form of
Exhibit C attached hereto.
7.8 PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Purchaser and its
counsel, and Purchaser shall have received copies of all such documents and
other evidence as it or its counsel may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.
7.9 NEW PC. ▇▇. ▇▇▇▇▇▇ shall have organized New PC and New PC shall have
entered into Employment Agreements with the dentists employed as of the Closing
by Seller and Seller shall have duly and validly assigned to New PC all
reimbursement contracts with third party insurance companies, managed care
companies and other reimbursement sources referred to in Section 2.2(e). Seller
shall have changed its corporate name to a name reasonably acceptable to
Purchaser and New PC shall have changed its corporate name to Castle Mid-South
Dental Center, P.C.
7.10 EXECUTION OF MANAGEMENT SERVICES AGREEMENT. Purchaser and New PC
shall have entered into a Management Services Agreement substantially in the
form of Exhibit F hereto.
7.11 STOCKHOLDERS AGREEMENT. ▇▇. ▇▇▇▇▇▇ shall have entered into a
Stockholders Agreement with Castle and certain of its other Stockholders,
substantially in the form of Exhibit D.
7.12 SUBORDINATION AGREEMENT. Seller shall have executed and delivered a
Subordination Agreement with respect to the promissory note described in Section
3.1(b) in form and substance satisfactory to the senior and senior subordinated
lenders of Castle.
ARTICLE VIII
COVENANTS OF SELLER AND ▇▇. ▇▇▇▇▇▇
Seller and ▇▇. ▇▇▇▇▇▇ hereby covenant and agree with Purchaser as follows:
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8.1 COOPERATION BY SELLER. Seller and ▇▇. ▇▇▇▇▇▇ shall use their
reasonable best efforts to cooperate with Purchaser to secure all necessary
consents, approvals, authorizations, exemptions and waivers from third parties
as shall be required in order to enable Seller and ▇▇. ▇▇▇▇▇▇ to effect the
transactions contemplated on its or his part hereby, and Seller and ▇▇. ▇▇▇▇▇▇
shall otherwise use their reasonable best efforts to cause the consummation of
such transactions in accordance with the terms and conditions hereof and to
cause all conditions contained in this Agreement over which it has control to be
satisfied. Seller and ▇▇. ▇▇▇▇▇▇ further agree to deliver to Purchaser prompt
written notice of any event or condition which if it existed on the date of this
Agreement, would result in any of the representations and warranties of Seller
or ▇▇. ▇▇▇▇▇▇ contained herein being untrue in any material respect.
8.2 CONDUCT OF BUSINESS. Except as Purchaser may otherwise consent to in
writing, between the date hereof and the Closing Date, Seller shall, (a) conduct
the Business only in the ordinary course, (b) use its reasonable efforts to keep
available the services of its employees and maintain satisfactory relationships
with licensors, suppliers, lessors, distributors, customers, clients and others,
(c) maintain, consistent with past practice and good business judgment, all the
Assets in customary repair, order and condition, ordinary wear and tear
excepted, and insurance upon all the Assets used in the conduct of the Business
in such amounts and of such kinds comparable to that in effect on the date
hereof, to the extent available at current premiums, and (d) maintain the Books
and Records in the usual, regular and ordinary manner, on a basis consistent
with past practice.
8.3 EXCLUSIVE DEALING. During the period from the date of this Agreement
to the earlier of the Closing Date or the termination of this Agreement, neither
Seller nor ▇▇. ▇▇▇▇▇▇ shall take any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to, any Person other than Purchaser (other than to accountants,
attorneys, employees and other representatives of Seller and ▇▇. ▇▇▇▇▇▇ engaged
by them in connection with the transactions contemplated by this Agreement),
concerning any sale of the Assets or any material part thereof or a similar
transaction involving Seller or ▇▇. ▇▇▇▇▇▇.
8.4 REVIEW OF THE ASSETS. Purchaser may, prior to the Closing Date,
through its representatives, review (a) the Assets, (b) the complete working
papers of Seller's certified public accountants used in their preparation of
financial statements for Seller and (c) the Books and Records of Seller and to
otherwise review the financial and legal condition of Seller as Purchaser deems
necessary or advisable to familiarize itself with the Business and related
matters; such review shall
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not, however, affect the representations and warranties made by Seller and ▇▇.
▇▇▇▇▇▇ hereunder or the remedies of Purchaser for breaches of those
representations and warranties. Such review shall occur only during normal
business hours upon reasonable notice by Purchaser. Seller and ▇▇. ▇▇▇▇▇▇ shall
permit Purchaser and its representatives to have, after the execution of this
Agreement, full access to employees of Seller who can furnish Purchaser with
financial and operating data and other information with respect to the Business
as Purchaser shall from time to time reasonably request.
8.5 FURTHER ASSURANCES. At any time or from time to time after the Closing
Date, Seller and ▇▇. ▇▇▇▇▇▇ shall, at the reasonable request of Purchaser and at
Purchaser's expense, execute and deliver any further instruments or documents
and take all such further action as Purchaser may reasonably request in order to
consummate and make effective the sale of the Assets and the assumption of the
Assumed Obligations pursuant to this Agreement.
ARTICLE IX
COVENANTS OF PURCHASER
Purchaser hereby covenants and agrees with Seller and ▇▇. ▇▇▇▇▇▇ as
follows:
9.1 COOPERATION BY PURCHASER. Purchaser will use its reasonable best
efforts, and will cooperate with Seller and ▇▇. ▇▇▇▇▇▇, to secure all necessary
consents, approvals, authorizations, exemptions and waivers from third parties
as shall be required in order to enable Purchaser to effect the transactions
contemplated on its part hereby, and Purchaser will otherwise use its reasonable
best efforts to cause the consummation of such transactions in accordance with
the terms and conditions hereof and to cause all conditions contained in this
Agreement over which it has control to be satisfied. Purchaser further agrees to
deliver to Seller and ▇▇. ▇▇▇▇▇▇ prompt written notice of any event or
condition, which if it existed on the date of this Agreement, would result in
any of the representations and warranties of Purchaser contained herein being
untrue in any material respect.
9.2 BOOKS AND RECORDS; PERSONNEL. At all times after the Closing Date,
Purchaser shall allow Seller and any agents of any Seller, upon reasonable
advance notice to Purchaser, access to all Books and Records of Seller which are
transferred to Purchaser in connection herewith, to the extent necessary or
desirable in anticipation of, or preparation for, existing or future litigation,
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employment matters, tax returns or audits, or reports to or filings with
governmental agencies, during normal working hours at Purchaser's principal
places of business or at any location where such Books and Records are stored,
and Seller shall have the right, at Seller's sole cost, to make copies of any
such Books and Records.
9.3 FURTHER ASSURANCES. At any time or from time to time after the Closing
Date, Purchaser shall, at the request of Seller or ▇▇. ▇▇▇▇▇▇ and at such
Seller's expense, execute and deliver any further instruments or documents and
take all such further action as Seller may reasonably request in order to
consummate and make effective the sale of the Assets and the assumption of the
Assumed Obligations pursuant to this Agreement.
9.4 DUE DILIGENCE INVESTIGATION. Prior to the Closing Date, Purchaser and
Castle will make available to Seller and ▇▇. ▇▇▇▇▇▇ and their respective
attorneys, accountants, consultants and agents, any and all information
regarding Purchaser and Castle and their respective businesses, operations,
financial affairs and management, including but not limited to the information
contained on Schedule 9.4 attached hereto, to the extent such information is in
the possession of Purchaser or Castle or can be obtained without unreasonable
burden or expense, to permit Seller and ▇▇. ▇▇▇▇▇▇ to familiarize themselves
with the business of the Purchaser and Castle and to make an informed investment
judgment with respect to the Common Stock of Castle referred to in Section
3.1(c). The Purchaser and Castle agree to make available to Seller and ▇▇.
▇▇▇▇▇▇ and their respective attorneys, accountants, consultants and agents
management members and representatives of Purchaser and Castle to respond to any
questions or inquiries from such parties regarding the Purchaser, Castle and
their respective businesses, operations, financial affairs and management.
The due diligence investigation shall be conducted at the principal offices of
Castle in Houston, Texas, at such time or times during normal business hours as
are reasonably requested by Seller and ▇▇. ▇▇▇▇▇▇, or information will be
delivered, on reasonable request, to the offices of Seller or ▇▇. ▇▇▇▇▇▇ or
their representatives. Seller and ▇▇. ▇▇▇▇▇▇ agree to complete such
investigation on or before May 17, 1996, or such date not later than May 31,
1996 which is 14 days after the date on which all information reasonably
requested by Seller or ▇▇. ▇▇▇▇▇▇ or their representatives within five business
days of the start of the due diligence period is made available to them.
All parties participating in the due diligence review shall be bound by
confidentiality agreements in form and substance satisfactory to the Purchaser
and Castle.
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ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of Purchaser, Dr, ▇▇▇▇▇▇ and
Seller; or
(b) by Purchaser, ▇▇. ▇▇▇▇▇▇, or Seller in writing without liability
on the part of the terminating party on account of such termination
(provided the terminating party is not otherwise in default or in breach
of this Agreement), if the Closing Date shall not have occurred on or
before May 31, 1996; or
(c) by either Purchaser, on the one hand, or ▇▇. ▇▇▇▇▇▇ and Seller,
on the other hand, in writing, without liability on the part of the
terminating party on account of such termination (provided the terminating
party is not otherwise in default or breach of this Agreement), if the
other party shall (i) fail to perform its or their covenants or agreements
contained herein required to be performed prior to the Closing Date, or
(ii) breach or have breached any of its representations or warranties
contained herein.
10.2 EFFECT ON OBLIGATIONS. Termination of this Agreement pursuant to this
Article shall terminate all obligations of the parties hereunder, except for the
obligations under Sections 12.8 and 12.11 hereof and the obligations set forth
in the next succeeding sentence of this Section 10.2. Upon any termination of
this Agreement each party hereto will redeliver all documents, work papers and
other material of any other party relating to the transactions contemplated
hereby, and all copies of such materials, whether so obtained before or after
the execution hereof, to the party furnishing the same.
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ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1 INDEMNIFICATION OF THE SELLER. The Purchaser, from and after the
Closing Date, shall indemnify and hold Seller and ▇▇. ▇▇▇▇▇▇ and their
respective Affiliates (the "Seller Indemnitees") harmless from and against any
and all damages (including exemplary damages and penalties, losses,
deficiencies, costs, expenses, obligations, fines, expenditures, claims and
liabilities, including reasonable counsel fees and reasonable expenses of
investigation, defending and prosecuting litigation (collectively, the
"Damages"), suffered by any Seller Indemnitee prior to the first anniversary of
the Closing Date as a result of, caused by, arising out of, or in any way
relating to (a) any misrepresentation, breach of warranty, or nonfulfillment of
any agreement or covenant on the part of the Purchaser under this Agreement or
any misrepresentation in or omission from any list, schedule, certificate, or
other instrument furnished or to be furnished to the Seller by the Purchaser
pursuant to the terms of this Agreement or (b) any liability or obligation
(other than those for which Purchaser are being indemnified by Seller and ▇▇.
▇▇▇▇▇▇ hereunder) which pertains to the ownership, operation or conduct of the
Business or Assets arising from any acts, omissions, events, conditions or
circumstances occurring on or after the Closing Date.
11.2 INDEMNIFICATION OF THE PURCHASER. Seller and ▇▇. ▇▇▇▇▇▇, jointly and
severally, shall indemnify and hold Purchaser and its Affiliates (the "Purchaser
Indemnitees") harmless from and against any and all Damages suffered by any
Purchaser Indemnitee as a result of, caused by, arising out of, or in any way
relating to (a) any misrepresentation, breach of warranty, or nonfulfillment of
any agreement or covenant on the part of the Seller or ▇▇. ▇▇▇▇▇▇ under this
Agreement or any misrepresentation in or omission from any list, schedule,
certificate, or other instrument furnished or to be furnished to the Purchaser
by the Seller pursuant to the terms of this Agreement, (b) any liability or
obligation (other than those for which Seller and ▇▇. ▇▇▇▇▇▇ are being
indemnified by Purchaser hereunder and other than those relating to or arising
from the Assumed Obligations) which pertains to the ownership, operation or
conduct of the Business or Assets arising from any acts, omissions, events,
conditions or circumstances occurring before the Closing Date, or (c) the
uncollectibility of more than $10,000 of Accounts Receivable (net of applicable
reserve) after nine months. The aggregate amount of indemnification which may be
recovered under this Section 11.2 by Purchaser from ▇▇. ▇▇▇▇▇▇ and Seller, or
either of them, shall not exceed the amount of the Purchase Price.
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11.3 DEMANDS. Each indemnified party hereunder agrees that promptly upon
its discovery of facts giving rise to a claim for indemnity under the provisions
of this Agreement, including receipt by it of notice of any demand, assertion,
claim, action or proceeding, judicial or otherwise, by any third party (such
third party actions being collectively referred to herein as the "Claim"), with
respect to any matter as to which it claims to be entitled to indemnity under
the provisions of this Agreement, it will give prompt notice thereof in writing
to the indemnifying party, together with a statement of such information
respecting any of the foregoing as it shall have. Such notice shall include a
formal demand for indemnification under this Agreement. The indemnifying party
shall not be obligated to indemnify the indemnified party with respect to any
Claim if the indemnified party knowingly failed to notify the indemnifying party
thereof in accordance with the provisions of this Agreement in sufficient time
to permit the indemnifying party or its counsel to defend against such matter
and to make a timely response thereto including, without limitation, any
responsive motion or answer to a complaint, petition, notice or other legal,
equitable or administrative process relating to the Claim, only insofar as such
knowing failure to notify the indemnifying party has actually resulted in
prejudice or damage to the indemnifying party.
11.4 RIGHT TO CONTEST AND DEFEND. The indemnifying party shall be entitled
at its cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to which it is called upon to indemnify the
indemnified party under the provisions of this Agreement; provided, that notice
of the intention so to contest shall be delivered by the indemnifying party to
the indemnified party within 20 days from the date of receipt by the
indemnifying party of notice by the indemnified party of the assertion of the
Claim. Any such contest may be conducted in the name and on behalf of the
indemnifying party or the indemnified party as may be appropriate. Such contest
shall be conducted by reputable counsel employed by the indemnifying party, but
the indemnified party shall have the right but not the obligation to participate
in such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense. The indemnifying party shall have full authority to
determine all action to be taken with respect thereto; provided, however, that
the indemnifying party will not have the authority to subject the indemnified
party to any obligation whatsoever, other than the performance of purely
ministerial tasks or obligations not involving material expense. If the
indemnifying party does not elect to contest any such Claim, the indemnifying
party shall be bound by the result obtained with respect thereto by the
indemnified party. At any time after the commencement of the defense of any
Claim, the indemnifying party may request the indemnified party to agree in
writing to the abandonment of such contest or to the payment or compromise by
the indemnified party of the asserted Claim, whereupon such action shall
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be taken unless the indemnified party determines that the contest should be
continued, and so notifies the indemnifying party in writing within 15 days of
such request from the indemnifying party. If the indemnified party determines
that the contest should be continued, the indemnifying party shall be liable
hereunder only to the extent of the amount that the other party to the contested
Claim had agreed unconditionally to accept in payment or compromise as of the
time the indemnifying party made its request therefor to the indemnified party.
11.5 COOPERATION. If requested by the indemnifying party, the indemnified
party agrees to cooperate with the indemnifying party and its counsel in
contesting any Claim that the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person asserting the Claim,
or any cross-complaint against any person, and the indemnifying party will
reimburse the indemnified party for any expenses incurred by it in so
cooperating. At no cost or expense to the indemnified party, the indemnifying
party shall cooperate with the indemnified party and its counsel in contesting
any Claim.
11.6 RIGHT TO PARTICIPATE. The indemnified party agrees to afford the
indemnifying party and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, asserting any Claim against the indemnified party or conferences
with representatives of or counsel for such persons.
11.7 PAYMENT OF DAMAGES. The indemnifying party shall pay to the
indemnified party in immediately available funds any amounts to which the
indemnified party may become entitled by reason of the provisions of this
Agreement, such payment to be made within five days after any such amounts are
finally determined either by mutual agreement of the parties hereto or pursuant
to the final unappealable judgment of a court of competent jurisdiction.
11.8 LIMITATION ON ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ claim for indemnification under this
Article XI may be made unless and until the party seeking indemnification has
suffered, incurred, sustained or become subject to Damages in excess of $10,000
in the aggregate (except with respect to the Accounts Receivable referred to in
Section 11.2(c) with respect to which no additional threshold in excess of the
$10,000 threshold described in Section 11.2(c) is intended); provided, however,
that (whether or not Damages in excess of $10,000 have been incurred)
indemnification under this Article XI may be claimed for, and full recovery may
be had with respect to, all Damages resulting from any indemnifying party's
intentional, willful or reckless nonfulfillment or breach of any
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covenant or agreement made by such indemnifying party as a part of or contained
in this Agreement. Except as specifically provided in this Section 11.8, all
claims for indemnification under this Article XI for Damages (without regard to
the Accounts Receivable described in Section 11.2(c)) will accumulate until such
time as such claims for indemnification exceed $10,000 in the aggregate, at
which time, all amounts may be recovered as provided herein.
ARTICLE XII
MISCELLANEOUS
12.1 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules) set forth the entire understanding of the parties with respect to the
subject matter hereof. Any previous agreements or understandings (whether oral
or written) between the parties regarding the subject matter hereof are merged
into and superseded by this Agreement.
12.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors of
the parties hereto; provided that this Agreement, including the representations
and warranties herein, may not be assigned by Seller or ▇▇. ▇▇▇▇▇▇ without the
prior written consent of Purchaser or by Purchaser to any Person without the
prior written consent of Seller and ▇▇. ▇▇▇▇▇▇.
12.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
12.4 HEADINGS. The headings of the Articles, Sections and paragraphs of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
12.5 MODIFICATION AND WAIVER. No amendment, modification or alteration of
the terms or provisions of this Agreement shall be binding unless the same shall
be in writing and duly executed by the parties hereto, except that any of the
terms or provisions of this Agreement may be waived in writing at any time by
the party which is entitled to the benefits of such waived terms or
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provisions. No waiver of any of the provisions of this Agreement shall be deemed
to or shall constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
12.6 NO THIRD PARTY BENEFICIARY RIGHTS. This Agreement is not intended to
and shall not be construed to give any Person (other than the parties signatory
hereto any interest or rights (including, without limitation, any third party
beneficiary rights) with respect to or in connection with any agreement or
provision contained herein or contemplated hereby.
12.7 SALES AND TRANSFER TAXES. Purchaser shall be responsible for and pay
all applicable sales, stamp, transfer, documentary, use, registration, filing
and other taxes and fees (including any penalties and interest) that may become
due or payable in connection with this Agreement and the transactions
contemplated hereby.
12.8 EXPENSES. Except as otherwise provided in this Agreement, Seller, ▇▇.
▇▇▇▇▇▇ and Purchaser shall each pay all costs and expenses incurred by them or
on their behalf in connection with this Agreement and the transactions
contemplated hereby.
12.9 NOTICE. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be sufficiently
given if delivered in person or sent by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
if to Purchaser, to:
Castle Dental Centers of Tennessee, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P.
South Tower Pennzoil Place
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
if to Seller or ▇▇. ▇▇▇▇▇▇, to:
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, D.D.S.
MidSouth Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice, and
such notice or communication shall be deemed to have been duly given as of the
date so delivered, mailed or sent by telecopier.
12.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee without regards to conflict
of law rules thereof.
12.11 CONFIDENTIALITY; PUBLICITY. The terms and conditions of this
Agreement shall not be disclosed by any party hereto without the prior written
consent of the other parties; provided, however, that Purchaser may disclose
such information as is required to comply with the
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requirements of its lenders and investors and to comply with applicable
securities laws. No party hereto shall issue any press release or make any other
public statement, in each case relating to or connected with or arising out of
this Agreement or the matters contained herein, without obtaining the prior
approval of the other party hereto to the contents and the manner of
presentation and publication thereof.
12.12 SEVERABILITY. If any provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled.
12.13 ENFORCEMENT. The parties hereto agree that the remedy at law for any
breach of this Agreement is inadequate and that should any dispute arise
concerning the sale of the Assets or any other matter hereunder, this Agreement
shall be enforceable in a court of equity by an injunction or a decree of
specific performance. Such remedies shall, however, be cumulative and
nonexclusive, and shall be in addition to any other remedies which the parties
hereto may have.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the date first above written.
CASTLE DENTAL CENTERS OF TENNESSEE, INC.
By:_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: President
-▇▇-
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
By:_____________________________
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, D.D.S.
Title: President
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, D.D.S.
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