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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of the 1st day of April, 1997, by and
among COAST FLORIDA P.A., a Florida professional association ("P.A."), COAST
DENTAL SERVICES, INC., a Delaware corporation ("Coast") (P.A. and Coast are
sometimes collectively referred to herein as "Buyer"), WEST COAST DENTAL, P.A.,
a Florida professional association ("Seller"), and XXXXXXXX X. XXXXXXXX,
D.M.D., an individual ("Fendrich").
W I T N E S S E T H:
WHEREAS, Seller is a professional dental practitioner which owns and
operates two (2) dental practices located at 0000 00xx Xxxxxx Xxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000 and at 0000 X.X. Xxxxxxx 00, Xxxx Xxxxxx, Xxxxxxx
00000 (the "Practice");
WHEREAS, Fendrich is an individual residing at 00000 Xxxxxx xx Xxxxx,
Xxxxx, Xxxxxxx 00000 who is licensed to practice dentistry in the State of
Florida and owns all of the issued and outstanding shares of capital stock of
Seller;
WHEREAS, Coast offers comprehensive facilities, management assistance, a
uniform operational system and other services to professional dental
practitioners with its principal place of business at 0000 Xxxxxxxx Xxxxxxxx
Xxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000;
WHEREAS, P.A. is a professional dental practitioner with its principal
place of business at 0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx
00000; and
WHEREAS, Buyer desires to acquire from Seller and Seller desires to sell
to Buyer substantially all of the assets of the Practice upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the respective covenants,
representations, warranties and agreements herein contained, and intending to
be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I - PURCHASE AND SALE
1.1 Sale of Assets. At the Closing (as defined in Section 2.1 hereof)
Seller shall (a) grant, sell, convey, assign, transfer and deliver to Coast,
upon and subject to the terms and conditions of this Agreement, all right,
title and interest of Seller in and to substantially all of the assets,
properties and rights of Seller constituting the Practice or used therein
(except for Excluded Assets (as defined in Section 1.1.2), patient lists,
patient records and rights under employment contracts with dentists) as set
forth on SCHEDULE 1.1 annexed hereto and made a part
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hereof (which assets are sometimes referred to herein as the "Non-Professional
Assets"); and (b) grant, sell, convey, assign, transfer and deliver to P.A.,
upon and subject to the terms and conditions of this Agreement, all right,
title and interest of Seller in and to Seller's complete patient lists,
including names, addresses and telephone numbers, patient records and Seller's
right, title and interest in and to all employment contracts with dentists
employed primarily at the Practice (which assets are sometimes referred to
herein as the "Professional Assets" and, together with the Non-Professional
Assets, are collectively referred to as the "Assets"). All Assets shall be free
and clear of all mortgages, liens, pledges, security interests, charges,
claims, restrictions and encumbrances of any nature whatsoever.
1.1.1 Included Assets. The Assets shall include, without limitation, the
following assets, properties and rights of Seller used directly or indirectly
in the conduct of, generated by or constituting the Practice, except as
otherwise expressly set forth in Section 1.1.2 hereof:
(a) all machinery, equipment, tools, furniture, furnishings,
improvements, goods, and other tangible personal property;
(b) all inventory;
(c) all supplies;
(d) all leases (including rights to any security deposits with
respect to such leases), leasehold improvements and fixtures;
(e) all prepaid items, notes and unbilled fees;
(f) to the extent permitted by applicable law, all rights under any
written or oral contract, agreement, plan, instrument, registration,
license, certificate of occupancy, other permit or approval of any
nature, or other document, commitment, arrangement, undertaking, practice
or authorization;
(g) all rights under any patents, trademarks, servicemarks,
tradenames or copyrights, whether registered or unregistered, and any
applications therefor;
(h) all data bases used in the Practice or under development owned
by Seller and to the extent assignable if under license from third
parties;
(i) all rights arising before or after the Closing, including
without limitation all rights under express or implied warranties
relating to the Assets;
(j) the name "West Coast Dental"; and
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(k) all information, files, records, data, plans, contracts and
recorded knowledge, including patient and supplier lists, employee
records and patient records related to the foregoing and the operation of
the Practice.
1.1.2 Excluded Assets. Notwithstanding the foregoing, the Assets shall
not include any of the following:
(a) cash on hand or on account and cash equivalents;
(b) the corporate seals, certificates of incorporation, minute
books, stock books, tax returns, books of account or other records having
to do with the organization of Seller as a professional association;
(c) any employee loans or advances;
(d) the rights to any of Seller's claims for any federal, state,
local or foreign tax refunds or worker's compensation refunds;
(e) all accounts receivable; and
(f) the rights which accrue or will accrue to Seller under this
Agreement.
1.2 The Purchase Price.
1.2.1 Purchase Price. The total purchase price to be paid by Buyer
to Seller for the Assets and the execution by Fendrich of the Covenant Not to
Compete described in Section 2.2(b)(i) hereof, is One Million One Hundred Forty
Thousand Dollars ($1,140,000.00) (the "Purchase Price"). The Purchase Price
shall be payable as follows:
(a) Coast shall deliver to Seller at the Closing the sum of Seven
Hundred Fifty Thousand Dollars ($750,000) by certified check for the
purchase of a portion of the Non-Professional Assets; and
(b) Coast shall deliver to Seller at the Closing one (1) promissory
note in the principal amount of One Hundred Thirty Thousand Dollars
($130,000) in the form annexed hereto and made a part hereof as SCHEDULE
1.2.1(B) for the purchase of the remainder of the Non-Professional Assets
and as partial consideration for the entry by Fendrich into the Covenant
Not to Compete (the "Coast Note"); and
(c) P.A. shall deliver to Seller at the Closing one (1) promissory
note in the principal amount of Two Hundred Sixty Thousand Dollars
($260,000) in the form
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annexed hereto and made a part hereof as SCHEDULE 1.2.1(C) for the
purchase of the Professional Assets and as partial consideration for the
entry by Fendrich into the Covenant Not to Compete (the "P.A. Note") (the
Coast Note and the P.A. Note are together referred to as the "Notes").
1.2.2 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets as set forth on SCHEDULE 1.2.2 annexed hereto and made a part
hereof. Each of Seller, Coast and P.A. hereby covenants and agrees that he or
it will not take a position that is in any way inconsistent with the terms of
this Section 1.2.2 on any income tax return, before any governmental agency
charged with the collection of any income tax or in any judicial proceeding.
1.3 Assumption of Certain Liabilities and Contracts. From and after the
Closing Date, Buyer agrees to assume responsibility for the performance of the
contracts which are listed on SCHEDULE 1.3 attached hereto and made a part
hereof, required to be performed after the Closing Date; provided, however,
that Buyer shall have no responsibility to perform under any contracts to the
extent not disclosed hereunder. Buyer shall not assume any other responsibility
or liability of any kind for any of the debts, obligations, liabilities,
expenses, taxes, contracts or commitments of Seller, whether accrued or
unaccrued, absolute or contingent, mature or unmature or otherwise.
ARTICLE II - CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
2.1 Closing. The closing (the "Closing") of the sale and purchase of the
Assets shall take place as of April 1, 1997 on April 4, 1997, at the offices of
Xxxxxxxx, Loop & Xxxxxxxx, 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx,
Xxxxxxx or at such other location as the parties shall mutually agree. The date
of the Closing is sometimes herein referred to as the "Closing Date."
2.2 Items to be Delivered at Closing. At the Closing and subject to the
terms and conditions herein contained:
(a) Seller shall deliver to Buyer the following:
(i) such bills of sale with warranties as to title,
assignments, endorsements and other good and sufficient instruments
and documents of conveyance and transfer as shall be necessary and
effective to transfer and assign to and vest in Buyer all of
Seller's right, title and interest in and to the Assets, including
without limitation (A) good and valid title in and to all of the
Assets owned by Seller, (B) good and valid leasehold interests in
and to all of the Assets
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leased by Seller as lessee, and (C) all of Seller's rights under
all agreements, contracts, commitments, instruments and other
documents included in the Assets to which Seller is a party or by
which he has rights on the Closing Date including those Bills of
Sale in the forms annexed hereto and made a part hereof as SCHEDULE
2.2(A);
(ii) original instruments of consent or waiver duly executed
by third parties with respect to any contracts, agreements, leases
or other rights or obligations being transferred to Buyer hereunder
and requiring a consent or waiver therefore;
(iii) duly executed UCC-3 termination statements evidencing
the release of any and all liens upon any of the Assets held by any
person or entity;
(iv) a duly executed Assignment of Lease in the form annexed
hereto and made a part hereof as SCHEDULE 2.2(B) for each location
of the Practice (the "Assignments of Leases"); and
(v) such other certificates and documents as Buyer or its
counsel may reasonably request.
(b) Fendrich shall deliver to Buyer the following:
(i) a duly executed Covenant Not to Compete in the form
annexed hereto and made a part hereof as SCHEDULE 2.2(C) (the
"Non-Compete Agreement"); and
(ii) such other certificates and documents as Buyer or its
counsel may reasonably request.
Simultaneously with delivery of the items set forth in subsections (a) and (b)
of this Section 2.2, Seller shall take all such steps as may be required to put
Buyer in actual possession and operating control of the Assets.
(c) Buyer shall deliver to Fendrich the following:
(i) the portion of the Purchase Price due at Closing;
(ii) the Notes;
(iii) a duly executed Non-Compete Agreement;
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(iv) duly executed Assignments of Leases; and
(v) such other certificates and documents as Seller, Fendrich
or their counsel may reasonably request.
2.3 Assignment of Assets. Notwithstanding anything to the contrary
contained in this Agreement, to the extent that the sale or assignment of an
Asset requires the consent of a third party and such consent shall not have
been obtained prior to the Closing, Seller shall (i) use its reasonable best
efforts to obtain such consent as promptly as practicable after the Closing and
(ii) cooperate with Buyer in any mutually agreeable arrangement to provide to
Buyer the benefit of the use of such Asset pending such consent.
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2.4 Further Assurances. Seller and Fendrich, from time to time after the
Closing and at Buyer's request, will execute, acknowledge and deliver to Buyer
such other instruments of conveyance and transfer and will take such other
actions as Buyer may reasonably require in order to vest more effectively in
Buyer, or to put Buyer more fully in possession of, any of the Assets. Each of
the parties hereto will cooperate with the other and execute and deliver to the
other parties hereto such other instruments and documents and take such other
actions as may be reasonably requested from time to time by any other party
hereto as necessary to carry out, evidence and confirm the intended purposes of
this Agreement.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller . Seller and Fendrich hereby
jointly and severally represent and warrant to Buyer that, except as set forth
on the Schedules attached hereto and made a part hereof, each of which
exceptions shall specifically identify and be limited to the relevant
subsection hereof to which it relates and shall be deemed to be a
representation and warranty as if made hereunder:
(a) Legal Power and Enforceable Obligations. Seller is a
professional association duly organized, validly existing and in good
standing under the laws of the State of Florida. Seller has the power,
authority and legal right to own, lease and operate the Assets, to
conduct the Practice as currently conducted, and to execute, deliver and
perform this Agreement. This Agreement and all the other documents and
instruments required to be delivered by Seller and Fendrich in accordance
with the provisions hereof have been, or upon their execution and
delivery will have been, duly executed and delivered on behalf of Seller
and Fendrich and constitute, or will constitute, the legal, valid and
binding obligation of Seller and Fendrich, enforceable against Seller and
Fendrich in accordance with their respective terms.
(b) Validity of Contemplated Transactions. To the best of Seller's
and Fendrich's knowledge after reasonable investigation, the execution,
delivery and performance of this Agreement by Seller and Fendrich do not
and will not violate, conflict with or result in the breach of any
material term, condition or provision of, or require the consent of any
other person under (i) any existing law, ordinance, or governmental rule
or regulation to which Seller is subject, (ii) any judgment, order, writ,
injunction, decree or award of any court, arbitrator or governmental or
regulatory official, body or authority which is applicable to Seller,
(iii) the Articles of Incorporation or By-laws of Seller or (iv) any
mortgage, indenture, agreement, contract, commitment, lease (except for
the lease described in SECTION 3.1(P) hereof, the assignment of which
requires the consent of the lessor thereunder), plan or other instrument,
document or understanding, oral or written, to which Seller or Fendrich
is a party, by which Seller or Fendrich may have rights or by which any
of the Assets may be bound or affected, or
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give any party with rights thereunder the right to terminate, modify,
accelerate or otherwise change the existing rights or obligations of
Seller thereunder. No authorization, approval or consent of, and no
filing with, any governmental or regulatory official, body or authority
is required in connection with the execution, delivery or performance of
this Agreement by Seller or Fendrich or the sale to Buyer of the Assets.
(c) No Third Party Options. There are no existing agreements with,
options or commitments to or rights of any person to acquire any of the
Assets or any interest therein.
(d) Condition of Tangible Assets. All facilities, equipment and
other material items of tangible property and assets included in the
Assets are in good operating condition and repair, subject to normal wear
and maintenance, are usable in the regular and ordinary course of
business and, to the best of Seller's and Fendrich's knowledge after
reasonable investigation, conform to all applicable laws, ordinances,
codes, rules and regulations relating to their construction, use and
operation.
(e) Absence of Undisclosed Liabilities. Neither Seller nor Fendrich
have any liabilities or obligations with respect to the Practice, either
direct or indirect, matured or unmatured or absolute, contingent or
otherwise, except those liabilities incurred, consistently with past
business practice, in or as a result of the normal and ordinary course of
business or except for those liabilities disclosed in SCHEDULE 1.3
hereof. For purposes of this Agreement, the term "liabilities" shall
include, without limitation, any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated,
secured or unsecured.
(f) Title to Assets; Required Approvals. Seller has and shall
transfer to Buyer at the Closing good, valid and marketable title to all
of the Assets being sold and transferred hereunder, free and clear of all
mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances and defects of title of any nature
whatsoever. No consent, approval, waiver or authorization is required to
be obtained by Seller from any third party with respect to the assignment
to Buyer of any contract, agreement, lease, or other right or obligation
of Seller other than the HMO and PPO contracts and those leases the
failure of which to obtain would not, individually or in the aggregate,
have a material adverse effect upon the conduct of the Practice. Seller
and Fendrich shall use their reasonable best efforts to obtain all such
consents, approvals, waivers and authorizations.
(g) Taxes. Seller has filed all tax returns and forms required to be
filed, and has paid in full all taxes, estimated taxes, interest,
penalties, assessments and deficiencies
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which have become due, or will do so prior to the Closing Date. Such
returns and forms are true and correct in all material respects, and
Seller is not required to pay any other tax except as shown on such
returns. Seller is not a party to any pending action or proceeding and,
to Seller's knowledge, there is no action or proceeding threatened by any
government or authority against Seller for the assessment or collection
of any tax and no resolved claim for assessment or collection of any tax
has been asserted against Seller. There is no pending proceeding to
reduce the assessed valuation of any portion of the Assets. Seller has
delivered to Buyer a true and complete copy of his tax return for the
years ended December 31, 1995 and 1996 together with all notes and
schedules filed therewith. Such tax returns fairly present the revenues
and expenses of Seller for the periods covered thereby.
(h) Absence of Changes. Since December 31, 1996, neither Seller nor
Fendrich with respect to the Practice has:
(i) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice,
or discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business
consistent with past practice, or failed to pay or discharge when
due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss
to Seller or any of his assets or properties;
(ii) sold, encumbered, assigned or transferred any assets or
properties;
(iii) created, incurred, assumed or guaranteed any
indebtedness for money borrowed, or mortgaged, pledged or subjected
any of the Assets to any mortgage, lien, pledge, security interest,
conditional sales contract or other encumbrance of any nature
whatsoever;
(iv) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which he
is a party or by which he is bound, or canceled, modified or waived
any substantial debts or claims held by him or waived any rights of
substantial value, whether or not in the ordinary course of
business;
(v) suffered any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the
Practice and its related operations, assets, properties, prospects
or condition (financial or otherwise) or suffered any repeated,
recurring or prolonged shortage, cessation or interruption of
supplies or utility or other services required to conduct the
Practice;
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(vi) suffered any material adverse change in the Practice and
its related operations, assets, properties, prospects or condition
(financial or otherwise);
(vii) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or
condition of any similar character which has had or might have an
adverse effect on the Practice or its related operations, assets,
properties, prospects or condition (financial or otherwise) other
than the resignation of Dr. Xxxxxx Rafieiank;
(viii) increased or decreased the salaries or other
compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of his
employees or made any increase in, or any addition to, other
benefits to which any of his employees may be entitled other than
in the ordinary course of business consistent with past practice;
(ix) changed any of the accounting principles followed by him
or the methods of applying such principles; or
(x) entered into any transaction other than in the ordinary
course of business consistent with past practice.
(i) Financial Statements. Seller has delivered to Buyer unaudited
statements of revenues and expenses and statements of assets, liabilities
and equity for each of the fiscal years ended December 31, 1995 and 1996
(collectively, the "Unaudited Financial Statements"). The Unaudited
Financial Statements, including the notes thereto, have been prepared on
an income tax basis consistently applied by Seller in accordance with
past practice throughout the periods indicated. The Unaudited Financial
Statements fairly present the financial condition and results of
operation, revenues, expenses, retained earnings, assets, liabilities and
equity of Seller as at the respective dates and for the periods
indicated.
(j) Compliance with Law; Authorizations. To the best of Seller's and
Fendrich's knowledge after reasonable investigation, Seller and Fendrich
have complied in all material respects with, and are not in any material
violation of, any law, ordinance or governmental or regulatory rules or
regulations, whether federal, state, local or foreign, to which Seller
and the Practice and its related operations, assets or properties are
subject ("Regulations"). Seller and Fendrich own, hold, possess or
lawfully use in the operation of the Practice all franchises, licenses,
permits, easements, rights, applications, filings, registrations and
other authorizations ("Authorizations") which are material for them to
conduct the Practice as currently conducted or for the ownership and use
of the assets owned or used by Seller in the conduct of the Practice,
free and clear of all liens, charges, restrictions and encumbrances and
in compliance with all Regulations.
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All such Authorizations are listed and described in SCHEDULE 3.1(J).
Neither Seller nor Fendrich are in default, nor have they received any
notice of any claim of default, with respect to any such Authorization.
All such Authorizations are renewable by the party to whom issued by
their terms or in the ordinary course of business without the need to
comply with any special qualification procedures or to pay any amounts
other than routine filing fees. None of such Authorizations will be
adversely affected by the consummation of the transactions contemplated
hereby.
(k) Litigation. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to
the best knowledge of Seller and Fendrich, threatened against Seller,
Fendrich or relates to the Assets or the transactions contemplated by
this Agreement, or the Collateral Agreement, nor does Seller or Fendrich
know of any reasonably likely basis for any such litigation, arbitration,
investigation or proceeding, the result of which could adversely affect
Seller, Fendrich, the Assets or the transactions contemplated hereby or
thereby. Neither Seller nor Fendrich are a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of
any court, arbitrator or governmental or regulatory official, body or
authority which may adversely affect Seller, Fendrich, the Assets or the
transactions contemplated hereby.
(l) Labor Matters. Seller has not suffered any strike, slowdown,
picketing or work stoppage by any union or other group of employees
affecting the Practice. Seller is not a party to any collective
bargaining agreement, no such agreement determines the terms and
conditions of employment of any employee of Seller, no collective
bargaining agent has been certified as a representative of any of the
employees of Seller, and no representation campaign or election is now in
progress with respect to any of the employees of Seller. To the best of
Seller's and Fendrich's knowledge after reasonable investigation, Seller
has complied and is in compliance in all material respects with all laws
and regulations relating to the employment of labor, including, without
limitation, provisions relating to wages, hours, collective bargaining,
occupational safety and health, equal employment opportunity and the
withholding of income taxes and social security contributions. Seller has
paid his employees all wages, commissions and accruals for earned
vacation, personal days and sick leave owing through the Closing Date.
The consummation of the transactions contemplated hereby will not cause
Buyer to incur or suffer any liability relating to, or obligation to pay,
any severance, termination or other payment to any person or entity and
any such claim made against Buyer for reason of any termination or
separation of any employee on or before Closing, or otherwise resulting
from the sale of the Assets pursuant to this Agreement, shall be the sole
responsibility of Seller. No employee of Seller has any contractual right
to continued employment by Seller following the consummation of the sale
of the Assets pursuant to this Agreement and Buyer shall be free to offer
employment to such employees of Seller as Buyer may
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determine and on such terms and conditions as Buyer may determine. Set
forth in SCHEDULE 3.1(L) is an accurate and complete list of all
employees employed by Seller in the Practice showing as to each the
nature of the employee's job, years of service, the amount or rate of
compensation, all accruals of vacation, personal days, sick leave, and
any other benefits due the employee and other matters which may be
reasonably required by Buyer.
(m) Necessary Assets. The Assets include all rights and property
necessary to the conduct of the Practice by Buyer in the manner it is
presently conducted by Seller and no property excluded from the Assets
hereof constitutes property or rights material to the Practice.
(n) Availability of Documents. Seller has made available to Buyer
copies of all documents including, without limitation, all agreements,
contracts, commitments, insurance policies, leases, plans, instruments,
undertakings, authorizations, permits, licenses, trademarks, tradenames,
service marks and applications therefor listed in this Agreement or in
the Schedules to this Agreement. Such copies are true and complete and
include all amendments, supplements and modifications thereto or waivers
currently in effect thereunder.
(o) Conditions Affecting Seller. There is no fact, development or
threatened development with respect to the markets, products, services,
clients, patients, facilities, personnel, vendors, suppliers, operations,
assets or prospects of the Practice which are known to Seller or Fendrich
which would materially adversely affect the Practice or the operations,
prospects or condition (financial or otherwise) of Seller considered as a
whole, other than such conditions as may affect as a whole the economy
generally. Seller and Fendrich have used their best efforts to keep
available for Buyer the services of the employees, agents, patients and
suppliers of Seller active in the conduct of the Practice. Except as
disclosed in SECTION 3.1(H)(VII), neither Seller nor Fendrich have any
reason to believe that any loss of any employee, agent, patient or
supplier or other advantageous arrangement will result because of the
consummation of the transactions contemplated hereby.
(p) Real Property. All real property (including, without limitation,
all interests in and rights to real property) and improvements located
thereon which are owned or leased by Seller and used in connection with
the Practice or included in the Assets (the "Real Property") is listed on
SCHEDULE 3.1(P). The use and operation of the Real Property is in
compliance in all material respects with all applicable building code,
environmental, zoning and land use laws, and other applicable local,
state and federal laws and regulations. No portion of the Real Property
is the subject of, or affected by, any condemnation or eminent domain
proceeding or any covenant or other restriction
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preventing or limiting Seller's right to convey right, title and interest
in the Real Property or to use the Real Property for the various purposes
for which the Real Property is currently being used. Each lease with
respect to the Real Property is in full force and effect and has not been
assigned, modified, supplemented or amended. Neither Seller nor the
landlord under any lease is in material default of the terms of any such
lease and, to Seller's knowledge, no circumstances or state of facts
currently exist which, with the giving of notice or the passage of time
or both would permit the landlord under any lease to terminate such
lease.
(q) Completeness of Disclosure. Neither this Agreement, nor any
Schedule, Exhibit, list, certificate or other instrument or document
furnished by Seller to Buyer pursuant to this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
required to be stated herein or therein or necessary to make the
statements and information contained herein or therein not misleading.
Seller has not failed to disclose to Buyer any event, condition or fact
which Seller knows, or has reasonable grounds to know, may materially
adversely affect the Assets or the operations, prospects or condition
(financial or otherwise) of the Practice.
3.2 Representations and Warranties of Buyer. P.A. and Coast hereby
jointly and severally represent and warrant to Seller as follows:
(a) Corporate Existence.
(i) P.A. is a professional association duly organized, validly
existing and in good standing under the laws of the State of
Florida.
(ii) Coast is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) Corporate Power and Authorization. Each of P.A. and Coast have
the power, authority and legal right to execute, deliver and perform this
Agreement and this Agreement constitutes the legal, valid and binding
obligations of P.A. and Coast enforceable against P.A. and Coast in
accordance with its terms. Coast has the power, authority and legal
right to execute, deliver and perform the Coast Note and the Coast Note
constitutes the legal, valid and binding obligation of Coast enforceable
against it in accordance with its terms. P.A. has the power, authority
and legal right to execute, deliver and perform the P.A. Note and the
P.A. Note constitutes a legal, valid and binding obligation of P.A.
enforceable against P.A. in accordance with its terms.
(c) Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement by Buyer and the Note by Coast, do not
and will not violate, conflict with or result in the breach of any term,
condition or provision of, or
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require the consent of any other party under (i) any existing law,
ordinance, or governmental rule or regulation to which Buyer is subject,
(ii) any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority
which is applicable to Buyer, (iii) the Certificate of Incorporation or
By-Laws of Coast, (iv) the Articles of Incorporation or By-Laws of P.A.,
or (v) any mortgage, indenture, agreement, contract, commitment, lease,
plan or other instrument, document or understanding, oral or written, to
which Buyer is a party or by which Buyer is otherwise bound. No
authorization, approval or consent of, and no registration or filing
with, any governmental or regulatory official, body or authority is
required in connection with the execution, delivery and performance of
this Agreement by Buyer.
(d) Completeness of Disclosure. Neither this Agreement, nor any
Schedule, Exhibit, list, certificate or other instrument or document
furnished by Buyer to Seller pursuant to this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
required to be stated herein or therein or necessary to make the
statements and information contained herein or therein not misleading.
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ARTICLE IV - CONDITIONS PRECEDENT TO THE CLOSING
4.1 Conditions Precedent to Buyer's Obligations. All obligations of Buyer
under this Agreement are subject to the fulfillment or satisfaction, prior to
or at the Closing, of each of the following conditions precedent:
(a) Compliance with this Agreement. Seller shall have performed and
complied with all agreements and conditions required by this Agreement to
be performed or complied with by him prior to the Closing.
(b) Due Diligence. Buyer shall have completed to its satisfaction a
due diligence review of Seller, the Practice and the Assets, which shall
include verification that the Practice has been run in the ordinary
course since December 31, 1996, and that the Assets, liabilities,
obligations, revenues, vendor relations and patient relations of Seller
are as represented to and anticipated by Buyer. Seller agrees to
cooperate and make available to Buyer and Buyer's employees and
accountants, all of Seller's books and records and to make available
Seller's officers, employees and agents in assisting Buyer to complete
its due diligence investigations. Buyer may conduct its due diligence
investigations from the date first above written to, and including, the
Closing Date.
(c) No Adverse Changes. No change other than as contemplated or
permitted by this Agreement, or other than in the ordinary course, shall
have occurred with respect to the business, operations, prospects or
condition (financial or otherwise) of the Practice or any of the Assets,
which shall have been material and adverse to Seller.
(d) Consents and Approvals. Buyer shall have received those written
consents and approvals necessary or desirable for the transfer of the
Assets to Buyer.
(e) Removal of Liens. Seller shall have obtained valid, binding and
enforceable releases, satisfactions and discharges of all liens, charges
and encumbrances affecting the Assets.
(f) Non-Compete Agreement. Fendrich shall have entered into the
Non-Compete Agreement.
(g) Assignments of Leases. Seller and each landlord leasing office
space used for the Practice shall have entered into a duly executed
Assignment of Lease.
4.2 Conditions Precedent to Seller's and Fendrich's Obligations. All
obligations of Seller and Fendrich under this Agreement are subject to the
fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent:
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(a) Compliance with this Agreement. Buyer shall have performed and
complied with all agreements and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing.
(b) The Notes. Buyer shall have entered into the Notes.
(c) Assignments of Leases. Buyer shall have entered into the
Assignments of Leases.
4.3 Risk of Loss Prior to Closing. The risk of any loss, destruction or
other damage to the Assets, other than ordinary wear and tear, prior to the
completion of the Closing, shall be solely that of Seller.
ARTICLE V - INDEMNIFICATION
5.1 Indemnification Obligation of Seller. From and after the Closing,
Seller and Fendrich will reimburse, indemnify and hold harmless Buyer and its
successors and assigns (an "Indemnified Buyer Party") against and in respect
of:
(a) any and all damages, losses, deficiencies, liabilities, costs
and expenses incurred or suffered by any Indemnified Buyer Party that
result from, relate to or arise out of:
(i) any and all liabilities and obligations of Seller or
Fendrich of any nature whatsoever not disclosed in this Agreement
and expressly assumed by Buyer;
(ii) any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Buyer Party that relate to
Seller or the Practice in which the principal event giving rise
thereto occurred prior to the Closing Date or which result from or
arise out of any action or inaction of Seller or any employee,
agent, representative or subcontractor of Seller prior to the
Closing Date; or
(iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller
or Fendrich under this Agreement or from any misrepresentation in
or omission from any certificate, schedule, statement, document or
instrument furnished to Buyer pursuant hereto or in connection with
the negotiation, execution or performance hereof; and
(b) any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs and other expenses
(including, without
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limitation, reasonable legal fees and expenses and court costs) incident
to any of the foregoing or to the enforcement of this Section 5.1.
5.2 Indemnification Obligation Of Buyer. From and after the Closing, Buyer
will reimburse, indemnify and hold harmless Seller, Fendrich and their
respective successors or assigns (an "Indemnified Seller Party") against and in
respect of:
(a) any and all damages, losses, deficiencies, liabilities, costs
and expenses incurred or suffered by any Indemnified Seller Party that
result from, relate to or arise out of (i) any misrepresentation, breach
of warranty or non-fulfillment of any agreement or covenant on the part
of Buyer under this Agreement or from any misrepresentation in or
omission from any certificate, schedule, statement, document or
instrument furnished to Seller pursuant hereto or in connection with the
negotiation, execution or performance hereof or (ii) any and all actions,
suits, claims, or legal, administrative, arbitration, governmental or
other proceedings or investigations against any Indemnified Seller Party
that relate to Buyer or the Practice in which the principal event giving
rise thereto occurred after the Closing Date or which result from or
arise out of any action or inaction of Buyer or any employee, agent,
representative or subcontractor of Buyer after the Closing Date; and
(b) any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs and other expenses
(including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section
5.2.
5.3 Procedure for Indemnification Claims. If at any time a claim shall be
made or threatened, or an action or proceeding shall be commenced or
threatened, against a party hereto (the "Aggrieved Party") which could result
in liability of the other party (the "Indemnifying Party") under its
indemnification obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding. Such
notice shall state the basis for the claim, action or proceeding and the amount
thereof (to the extent such amount is determinable at the time when such notice
is given) and shall permit the Indemnifying Party to assume the defense of any
such claim, action or proceeding (including any action or proceeding resulting
from any such claim). Failure by the Indemnifying Party to notify the Aggrieved
Party of its election to defend any such claim, action or proceeding within 15
days of receipt of such notice shall be deemed a waiver by the Indemnifying
Party of its right to defend such claim, action or proceeding; provided,
however, that the Indemnifying Party shall not be deemed to have waived its
right to contest and defend against any claim of the Aggrieved Party for
indemnification hereunder based upon or arising out of such claim, action or
proceeding.
If the Indemnifying Party assumes the defense of any such claim, action or
proceeding, the obligation of the Indemnifying Party as to such claim, action
or proceeding shall be limited to
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taking all steps necessary in the defense or settlement thereof and, to the
extent the Indemnifying Party is liable for indemnification hereunder, to
holding the Aggrieved Party harmless from and against any and all losses,
damages and liabilities caused by or arising out of any settlement approved by
the Indemnifying Party or any judgment or award rendered in connection with
such claim, action or proceeding. The Aggrieved Party agrees to cooperate and
make available to the Indemnifying Party all books and records and such
officers, employees and agents as are reasonably necessary and useful in
connection with the defense. The Aggrieved Party may participate, at its
expense, in the defense of such claim, action or proceeding provided that the
Indemnifying Party shall direct and control the defense of such claim, action
or proceeding; provided, however, if in the reasonable opinion of the Aggrieved
Party any such claim, action or proceeding involves an issue or matter which,
if adversely determined, would have a materially adverse effect on the
Aggrieved Party, then the Aggrieved Party shall have the right to control the
defense or settlement of any such claim, action or proceeding and the
additional costs and expenses so incurred by the Aggrieved Party shall be borne
by the Aggrieved Party. The Indemnifying Party shall not, with respect to any
such claim, action or proceeding, consent to the entry of any judgment or
award, or enter into any settlement, except with the prior written consent of
the Aggrieved Party, which consent shall not be unreasonably withheld;
provided, however, in the case of any such judgment, award or settlement for
money, it shall be a condition thereto that the Indemnifying Party shall
acknowledge its obligation to indemnify the Aggrieved Party pursuant to this
Article IV; and provided, further, that any such judgment, award or settlement
include, as an unconditional term thereof, the release of the Aggrieved Party
from all liability by the third party claimant or plaintiff.
5.4 Payment. Upon the determination of the liability under Section 5.3
hereof, the appropriate party shall pay to the other, as the case may be,
within ten (10) days after such determination, the amount of any claim for
indemnification made hereunder. The indemnification obligations hereunder shall
survive the consummation of the transactions described herein and shall not be
limited by any amount payable by Buyer to Seller hereunder and are subject to
set-off against any other amounts owing between the parties hereunder.
5.5 Other Rights and Remedies Not Affected. The indemnification rights of
the parties under this Article V are independent of and in addition to such
rights and remedies as the parties may have at law or in equity or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any
agreement or covenant hereunder on the part of any party hereto, including,
without limitation the right to seek specific performance, recision or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
ARTICLE VI - POST CLOSING MATTERS
6.1 Survival of Representations and Warranties. All representations,
warranties, agreements and obligations made by the parties in this Agreement or
in any certificate, schedule, document or instrument furnished hereunder or in
connection with the negotiation, execution and
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performance of this Agreement shall survive the Closing for a period of two
years from the Closing; provided, however, the representations and warranties
contained in SECTIONS 3.1(G) and (K) shall survive for the applicable statute
of limitations periods. Notwithstanding any investigation or audit conducted
before or after the Closing Date or the decision of any party to complete the
Closing, each party shall be entitled to rely upon the representations and
warranties set forth herein and therein and each such representation and
warranty shall be deemed to be material.
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6.2 Maintenance of Books and Records. Each of Seller and Buyer shall
preserve until the fifth anniversary of the Closing Date all records possessed
or to be possessed by such party relating to any of the assets, liabilities or
business of the Practice prior to the Closing Date. After the Closing Date,
Seller shall provide Buyer with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to (i) Seller and
the employees of Seller and (ii) the books of account and records of Seller,
but, in each case, only to the extent relating to the assets, liabilities or
business of the Practice prior to the Closing, and Buyer and its
representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable
in such a manner as to interfere unreasonably with the normal operations and
business of Seller; and further, provided, that, as to so much of such
information as constitutes trade secrets or confidential business information
of Seller, Buyer and its officers, directors and representatives will use due
care to not disclose such information except (i) as required by law, (ii) with
the prior written consent of Seller, which consent shall not be unreasonably
withheld or delayed, or (iii) where such information becomes available to the
public generally, or becomes generally known to competitors of such party,
through sources other than the requesting party, its affiliates or its
officers, directors or representatives.
6.3 Discharge of Business Obligations. From and after the Closing Date,
Seller shall pay and discharge, in accordance with past practice but not less
than on a timely basis, all obligations and liabilities incurred prior to the
Closing Date in respect of the Practice.
6.4 Payments Received. Seller and Buyer each agree that after the Closing
they will hold and will promptly transfer and deliver to the other, from time
to time as and when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into cash) or
other property that they may receive on or after the Closing which properly
belongs to the other party, and will account to the other for all such
receipts. From and after the Closing, Coast shall have the right and authority
to endorse without recourse the name of Seller on any check or any other
evidences of indebtedness received by Coast on account of the Practice and the
Assets transferred to Coast hereunder.
6.5 Audit. Buyer may cause an audit of the Unaudited Financial Statements
to be conducted by Deloitte & Touche or such other auditor of Buyer's
selection, the cost of which shall be borne by Buyer. Seller represents and
warrants to Buyer that his books and records are accurate and complete, that
the preparation of audited financial statements will not take an unreasonable
amount of time or be of unreasonable cost and that the audited financial
statements will not materially differ from the Unaudited Financial Statements.
Seller agrees to fully cooperate with any such audit.
6.6 Additional Actions and Documents. From and after the Closing Date,
Seller will take or cause to be taken such further actions, and execute,
deliver and file such further documents and instruments as Buyer may reasonably
request from time to time to evidence the
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transfer of the Assets to Buyer and to fully effectuate the purposes and terms
of this Agreement.
ARTICLE VII - MISCELLANEOUS
7.1 Taxes. Seller shall pay all federal, state and local sales,
documentary and other transfer taxes, if any, due as a result of the purchase,
sale or transfer of the Assets in accordance therewith whether imposed by law
on Seller or Buyer and Seller shall indemnify, reimburse and hold harmless
Buyer in respect of the liability for payment of or failure to pay any such
taxes or the filing of or failure to file any reports required in connection
therewith.
7.2 Expenses. Except as otherwise provided in this Agreement, each party
hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions hereof and the consummation of
the transactions contemplated hereby.
7.3 Contents of Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof.
It shall not be amended or modified, and no provision hereof shall be waived,
except by written instrument duly executed by each of the parties hereto. Any
and all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
7.4 Assignment and Binding Effect. This Agreement may not be assigned by
any party hereto without the prior written consent of the other parties.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
permitted successors and assigns of the parties.
7.5 Waiver. No delay or failure on the part of either party in exercising
any right hereunder, and no partial or single exercise hereof, will constitute
a waiver of such right or of any other right hereunder.
7.6 Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
overnight, registered or certified mail, postage prepaid, as follows:
If to Coast or P.A., to:
Coast Dental Services, Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
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With a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx, Xxxx & Xxxxxxxx
Xxxxx 0000, Xxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
If to Seller to:
Xxxxxxxx X. Xxxxxxxx
00000 Xxxxxx xx Xxxxx
Xxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxxx, Esquire
Xxxxxx and Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so personally delivered or three (3) business days after being
deposited in the U.S. mail.
7.7 Governing Law This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Florida.
7.8 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and, in the case of Article V hereof, the other Indemnified Parties, and
their heirs, executors, administrators, legal representatives, successors and
assigns, and they shall not be construed as conferring any rights on any other
persons.
7.9 Headings, Gender and "Person". All section headings contained in this
Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated
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organization or any other entity.
7.10 Schedules and Exhibits. All Schedules and Exhibits referred to herein
are intended to be and hereby are specifically made a part of this Agreement.
7.11 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
7.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original and all of which counterparts when taken together shall constitute
but one and the same instrument.
7.13 Rules of Construction. The rules of construction which require the
terms of an agreement to be construed most strictly against the drafter of such
an agreement are hereby waived and relinquished by each party.
7.14 Brokerage. Each of the parties hereto represents and warrants to the
others that no broker is entitled to any commission or similar fee in
connection with the making and carrying out of this Agreement, except for Aftco
Associates, the payment of fees of which are the sole responsibility of Seller.
7.15 Confidentiality of Agreement. The parties agree not to make any
public announcement with regard to the transaction contemplated by this
Agreement without the prior written consent of the other party until after the
Closing Date.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
"SELLER"
WEST COAST DENTAL, P.A.
By: /s/ XXXXXXXX X. XXXXXXXX, D.M.D.
----------------------------------
Xxxxxxxx X. Xxxxxxxx, D.M.D.
"FENDRICH"
By: /s/ XXXXXXXX X. XXXXXXXX, D.M.D.
----------------------------------
Xxxxxxxx X. Xxxxxxxx, D.M.D.
"COAST"
COAST DENTAL SERVICES, INC.
By: /s/ XXXXX XXXXXX
----------------------------------
Xxxxx Xxxxxx, President
"P.A."
COAST FLORIDA P.A.
By: /s/ XXXX XXXXXX
----------------------------------
Xxxx Xxxxxx, President
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LIST OF SCHEDULES
SCHEDULE 1.1 ASSETS
SCHEDULE 1.2.1 PROMISSORY NOTE
SCHEDULE 1.2.2 ALLOCATION OF PURCHASE PRICE
SCHEDULE 1.3 ASSUMED CONTRACTS
SCHEDULE 2.2(A) BILLS OF SALE
SCHEDULE 2.2(B) ASSIGNMENTS OF LEASES
SCHEDULE 2.2(C) COVENANT NOT TO COMPETE
SCHEDULE 3.1(L) EMPLOYEES
SCHEDULE 3.1(P) REAL PROPERTY
