EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
APOLLO DIAMOND, INC.
AND
DENTAL RESOURCES, INC.
August 10, 2001
TABLE OF CONTENTS
ARTICLE 1. THE MERGER; CONVERSION OF SHARES....................................1
1.1 The Merger.........................................................1
1.2 Effective Time.....................................................1
1.3 Conversion of Shares...............................................1
1.4 Apollo Dissenters' Rights..........................................1
1.5 Dental Dissenters' Rights..........................................2
1.6 Exchange of Apollo Common Stock....................................2
1.7 Stock Options and Warrants.........................................3
1.8 Capitalization Changes.............................................3
1.9 Articles of Incorporation of the Surviving Corporation.............4
1.10 Bylaws of the Surviving Corporation................................4
1.11 Directors and Officers of the Surviving Corporation................4
ARTICLE 2. CLOSING.............................................................4
2.1 Time and Place.....................................................4
2.2 Filings at the Closing.............................................4
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF DENTAL............................4
3.1 Organization.......................................................4
3.2 Authorization......................................................5
3.3 Capitalization.....................................................5
3.4 Reports and Financial Statements...................................5
3.5 Absence of Undisclosed Liabilities.................................6
3.6 Consents and Approvals.............................................6
3.7 Compliance with Laws...............................................6
3.8 Litigation.........................................................6
3.9 Absence of Material Adverse Changes................................6
3.10 Officers, Directors and Employees..................................7
3.11 Taxes..............................................................7
3.12 Contracts..........................................................7
3.13 Intellectual Property Rights.......................................7
3.14 Benefit Plans......................................................8
3.15 Minute Books.......................................................9
3.16 No Finders.........................................................9
3.17 Proxy Statement....................................................9
3.18 State Takeover Laws................................................9
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF APOLLO............................9
4.1 Organization.......................................................9
4.2 Authorization.....................................................10
4.3 Capitalization....................................................10
4.4 Financial Statements..............................................10
4.5 Absence of Undisclosed Liabilities................................11
4.6 Consents and Approvals............................................11
4.7 Compliance with Laws..............................................11
4.8 Litigation........................................................11
4.9 Absence of Material Adverse Changes...............................11
4.10 Officers, Directors and Employees.................................11
4.11 Taxes.............................................................12
4.12 Contracts.........................................................12
4.13 Intellectual Property Rights......................................12
4.14 Benefit Plans.....................................................13
4.15 Minute Books......................................................14
4.16 No Finders........................................................14
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ARTICLE 5. COVENANTS..........................................................14
5.1 Conduct of Business of Dental.....................................14
5.2 Conduct of Business of Apollo.....................................14
5.3 No Solicitation...................................................15
5.4 Access and Information............................................16
5.5 Approval of Dental and Apollo Shareholders........................17
5.6 Consents..........................................................18
5.7 Further Actions...................................................18
5.8 Regulatory Approvals..............................................18
5.9 Certain Notifications.............................................18
5.10 Securities Laws...................................................18
5.11 Disposition of Dental Operating Assets............................18
5.12 Resignations and Elections of Directors...........................19
5.13 Plan of Reorganization............................................19
5.14 Directors and Officers Liability..................................19
5.15 Shareholder Acknowledgments.......................................19
ARTICLE 6. CLOSING CONDITIONS.................................................19
6.1 Conditions to Obligations of Apollo and Dental....................19
6.2 Conditions to Obligations of Apollo...............................20
6.3 Conditions to Obligations of Dental...............................20
ARTICLE 7. TERMINATION AND ABANDONMENT........................................20
7.1 Termination.......................................................20
7.2 Effect of Termination.............................................22
ARTICLE 8. MISCELLANEOUS......................................................23
8.1 Amendment and Modification........................................23
8.2 Waiver of Compliance; Consents....................................23
8.3 Investigation; Survival of Representations and Warranties.........23
8.4 Notices...........................................................23
8.5 Assignment........................................................24
8.6 Governing Law.....................................................24
8.7 Counterparts......................................................24
8.8 Knowledge.........................................................24
8.9 Interpretation....................................................24
8.10 Publicity.........................................................24
8.11 Entire Agreement..................................................25
8.12 Severability......................................................25
8.13 Specific Performance..............................................25
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EXHIBITS:
Exhibit A:........Plan of Merger
Exhibit B:........Form of Articles of Incorporation
Exhibit C:........Form of Bylaws
Exhibit D:........Form of Limited Recourse Note
Exhibit E: .......Form of Shareholder Acknowledgment
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is dated
as of August 10, 2001, by and among Apollo Diamond, Inc., a Massachusetts
corporation ("Apollo") and Dental Resources, Inc., a Minnesota corporation
("Dental").
WHEREAS, the Boards of Directors of Apollo and Dental have approved the
merger of Apollo with and into Dental (the "Merger") upon the terms and subject
to the conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto desire to make certain representations,
warranties, and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants, and agreements contained herein,
the parties hereto agree as follows:
ARTICLE 1.
THE MERGER; CONVERSION OF SHARES
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), Apollo shall be merged
with and into Dental in accordance with the provisions of the Minnesota Business
Corporation Act (the "MBCA"), whereupon the separate corporate existence of
Apollo shall cease, and Dental shall continue as the surviving corporation (the
"Surviving Corporation"). From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers, and franchises and
be subject to all the restrictions, disabilities, and duties of Apollo and
Dental, all as more fully described in the MBCA.
1.2 Effective Time. As soon as practicable after each of the conditions
set forth in Article 6 has been satisfied or, to the extent permitted hereunder,
waived on the Closing Date (as defined in Section 2.1), Dental will file, or
cause to be filed, with the Secretary of State of the State of Minnesota,
articles of merger for the Merger, which articles of merger shall include the
Plan of Merger attached hereto as Exhibit A and be in the form required by and
executed in accordance with the applicable provisions of the MBCA. The Merger
shall become effective at the time such filing is made or, if agreed to by
Apollo and Dental, such later time or date set forth in the Articles of Merger
(the "Effective Time").
1.3 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of Apollo or Dental or any holder of
any share of capital stock of Apollo or Dental:
(a) Each share of common stock of Apollo, $.01 par value per share
("Apollo Common Stock"), issued and outstanding immediately prior thereto
(except for shares as to which the holders thereof have asserted dissenters'
rights pursuant to the Business Corporation Law of Massachusetts ("BCLM"), and
pursuant to Section 1.4 below) shall be converted into, the right to receive ten
thousand (10,000) (the "Conversion Ratio") shares of common stock of Dental, par
value $.01 per share (the "Dental Common Stock").
(b) Each share of Dental Common Stock issued and outstanding
immediately prior to the Effective Time shall (except for shares as to which the
holders thereof have asserted dissenters' rights pursuant to Sections 302A.471
and 302A.473 of the MBCA and pursuant to Section 1.5 below) remain issued and
outstanding and unaffected by the Merger.
1.4 Apollo Dissenters' Rights.
(a) Notwithstanding any provision of this Agreement to the contrary,
any shares of Apollo Common Stock held by a holder who has properly asserted
dissenters' rights pursuant to the BCLM with respect to such shares and who, as
of the Effective Time, has not effectively withdrawn or lost such rights shall
not be converted into or represent a right
to receive shares of Dental Common Stock pursuant to Section 1.3(a), but the
holder thereof shall only be entitled to such rights as are granted by the BCLM.
(b) Notwithstanding the provisions of subsection (a) of this Section,
if any holder of Apollo Common Stock who asserts dissenters' rights with respect
to such Apollo Common Stock under the BCLM effectively withdraws or loses
(through failure to perfect or otherwise) such dissenters' rights then, as of
the later of the Effective Time or the occurrence of such event, such holder's
Apollo Common Stock shall automatically be converted into and represent only the
right to receive the shares of Dental Common Stock as provided in Section
1.3(a), without interest thereon, upon surrender of the certificate or
certificates representing such Apollo Common Stock.
(c) Apollo shall give Dental (i) prompt notice of any written objection
pursuant to Section 86 of the BCLM which it received from any Apollo shareholder
with respect to that shareholder's Apollo Common Stock, withdrawals of such
objections, and any other instruments served pursuant to the BCLM and received
by Apollo and (ii) the opportunity to participate in all negotiations and
proceedings with respect to assertion of dissenter's rights with respect to
Apollo Common Stock under the BCLM. Apollo shall not, except with the prior
written consent of Dental, voluntarily make any payment with respect to any
assertion of dissenter's rights with respect to Apollo Common Stock or offer to
settle or settle any such demands.
1.5 Dental Dissenters' Rights
(a) Notwithstanding any provision of this Agreement to the contrary,
any shares of Dental Common Stock held by a holder who has properly asserted
dissenters' rights pursuant to Sections 302A.471 and 302A.473 of the MBCA with
respect to such shares and not otherwise withdrawn or lost such rights with
respect thereto shall not represent shares of Common Stock of the Surviving
Corporation, but the holder thereof shall only be entitled to such rights as are
granted by the MBCA.
(b) Dental shall give Apollo (i) prompt notice of any notice of intent
to assert dissenters' rights with respect to any Dental Common Stock,
withdrawals of such notices, and any other instruments served pursuant to the
MBCA and received by Dental and (ii) the opportunity to participate in all
negotiations and proceedings with respect to assertion of dissenters' rights
with respect to Dental Common Stock under the MBCA.
1.6 Exchange of Apollo Common Stock.
(a) Upon surrender of a stock certificate representing shares of Apollo
Common Stock issued and outstanding immediately prior to the Effective Time
("Apollo Certificate"), Dental will cause its transfer agent to issue to the
holder(s) of record of such Apollo Certificate the shares of Dental Common Stock
into which shares of Apollo Common Stock have been converted pursuant to Section
1.3(a).
(b) Holders of Apollo Common Stock will be entitled to any dividends or
other distributions pertaining to the Dental Common Stock received in exchange
therefor that become payable to persons who are holders of record of Dental
Common Stock as of a record date that follows the Effective Time, but only after
they have surrendered their Apollo Certificates for exchange.
(c) All certificates evidencing shares of Dental Common Stock that are
issued upon the surrender for exchange of Apollo Certificates in accordance with
the terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to the shares of Apollo Common Stock represented by the
surrendered Apollo Certificates. All certificates evidencing shares of Dental
Common Stock that are issued in accordance with the terms hereof shall bear a
legend with substantially the following language:
"The securities represented by this certificate have not been
registered under the federal Securities Act of 1933, as amended, or
applicable state securities laws and may not be sold, transferred,
assigned, pledged, offered or otherwise disposed in the absence of an
effective registration statement under applicable securities laws or an
opinion of counsel reasonably satisfactory to the issuer that such
registration is not required."
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(d) After the Effective Time, there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the shares
of Apollo Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Apollo Certificates representing such shares
are presented to the Surviving Corporation, they shall be canceled and exchanged
as provided in this Article 1. As of the Effective Time, the holders of Apollo
Certificates representing shares of Apollo Common Stock shall cease to have any
rights as stockholders of Apollo, except such rights, if any, as they may have
pursuant to the BCLM or this Agreement. Except as provided above, until such
Apollo Certificates are surrendered for exchange, each such Apollo Certificate
shall, after the Effective Time, represent for all purposes only the right to
receive a certificate or certificates evidencing an equal number of shares of
Dental Common Stock into which the shares of Apollo Common Stock shall have been
converted pursuant to the Merger as provided in Section 1.3(a) hereof and the
right to receive any dividends or distributions as provided in Section 1.6(b).
(e) In the event any Apollo Certificates shall have been lost, stolen,
or destroyed, the holder(s) of such Apollo Certificates shall give an affidavit
of lost certificate, in form and contents reasonably satisfactory to legal
counsel of Dental, instead of surrendering such Apollo Certificates.
1.7 Stock Options and Warrants.
(a) Each option or warrant to purchase shares of Apollo Common Stock
that is outstanding at the Effective Time, whether or not exercisable and
whether or not vested (a "Apollo Option"), shall, without any action on the part
of Apollo or the holder thereof, be assumed by Dental in such manner that Dental
(i) is a corporation "assuming a stock option in a transaction to which Section
424(a) applies" within the meaning of Section 424 of the Code and the
regulations thereunder, or (ii) to the extent that Section 424 of the Code does
not apply to any such Apollo Option, would be such a corporation if Section 424
of the Code were applicable to such Apollo Option. From and after the Effective
Time, all references to Apollo in the Apollo Options shall be deemed to refer to
the Surviving Corporation. The Apollo Options assumed by Dental shall be
exercisable upon the same terms and conditions as provided in the Apollo Options
(including provisions regarding vesting and the acceleration thereof) except
that (i) such Apollo Options shall entitle the holder to purchase from the
Surviving Corporation the number of shares of Dental Common Stock that equals
the product of the Conversion Ratio multiplied by the number of shares of Apollo
Common Stock subject to such Apollo Option immediately prior to the Effective
Time, (ii) the option exercise price per share of Dental Common Stock shall be
an amount equal to the exercise price per share of Apollo Common Stock in effect
immediately prior to the Effective Time divided by the Conversion Ratio, and
(iii) the Apollo Options shall vest to the extent required pursuant to the
current terms of such Apollo Options or other agreements as described in Section
4.3 of the Apollo Disclosure Schedule (as defined below). Except to the extent
required pursuant to the current terms of such Apollo Options or other
agreements as described in Section 1.7 of the Apollo Disclosure Schedule, Apollo
shall not take any action to accelerate the vesting of any Apollo Options. As
promptly as practicable after the Effective Time, the Surviving Corporation
shall issue to each holder of an Apollo Option a written instrument informing
such holder of the assumption by Dental of such Apollo Option. Dental shall take
all corporate action necessary to reserve for issuance a sufficient number of
shares of Dental Common Stock for delivery upon exercise of Apollo Options
pursuant to the terms set forth in this Section 1.7. Dental shall use its
commercially reasonable efforts to cause those Apollo Options that qualified as
incentive stock options prior to the Effective Time to continue to qualify as
incentive stock options immediately after the Effective Time.
(b) Each option or warrant to purchase shares of Dental Common Stock
that is outstanding at the Effective Time, whether or not exercisable and
whether or not vested, shall remain issued and outstanding and unaffected by the
Merger.
1.8 Capitalization Changes. If, between the date of this Agreement and
the Effective Time, the outstanding shares of Dental Common Stock or Apollo
Common Stock shall have been changed into or exchanged in accordance with the
terms of Sections 5.1 or 5.2, respectively, for a different number of shares or
a different class by reason of any reorganization, reclassification,
subdivision, recapitalization, split-up, combination, exchange of shares, stock
dividend or other similar transaction, the calculations set forth in this
Agreement shall be appropriately adjusted to reflect such reorganization,
reclassification, subdivision, recapitalization, split-up, combination, exchange
of shares, stock dividend or other similar transaction. This section shall not
constitute either party's consent to the other party effecting such
reorganization, reclassification, subdivision, recapitalization, split-up,
combination, exchange of shares, stock dividend or other similar transaction.
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1.9 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of Dental, as in effect immediately prior to the
Effective Time, shall be amended as of the Effective Time to read as set forth
on Exhibit B to this Agreement.
1.10 Bylaws of the Surviving Corporation. The Bylaws of Dental, as in
effect immediately prior to the Effective Time, shall be amended as of the
Effective Time to read as set forth on Exhibit C to this Agreement.
1.11 Directors and Officers of the Surviving Corporation. As of the
Effective Time, the officers and directors of Dental shall resign and be
replaced by such persons as are designated by Apollo; provided that Apollo
agrees to designate an uneven number of members of the Surviving Corporation's
Board of Directors with a majority being outside directors.
ARTICLE 2.
CLOSING
2.1 Time and Place. Subject to the satisfaction or waiver of the
provisions of Article 6, the closing of the Merger (the "Closing") shall take
place at 1 p.m., local time, on the date that the Required Dental Shareholder
Vote (as defined in Section 3.2) and the Required Apollo Shareholder Vote (as
defined in Section 4.2) is obtained, or as soon thereafter as is reasonably
practicable, and in any event no later than the second business day after, all
conditions to Closing have been satisfied or waived, or on such other date
and/or at such other time as Apollo and Dental may mutually agree. The date on
which the Closing actually occurs is herein referred to as the "Closing Date."
The Closing shall take place by telecopy exchange of signature pages with
originals to follow by overnight delivery, or in such other manner or at such
place as the parties hereto may agree.
2.2 Filings at the Closing. At the Closing, subject to the provisions
of Article 6, Apollo and Dental shall cause the Articles of Merger to be filed
in accordance with the provisions of Section 302A.615 of the MBCA, and take any
and all other lawful actions and do any and all other lawful things necessary to
cause the Merger to become effective.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF DENTAL
Except as set forth in a document of even date herewith and
concurrently delivered herewith, referring specifically to the representations
and warranties in this Agreement that identifies by section number to which such
disclosure relates (the "Dental Disclosure Schedule"), Dental hereby makes the
following representations and warranties to Apollo:
3.1 Organization. Dental is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Minnesota and has
all requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted, except where the
failure to be so organized, existing or in good standing or to have such
corporate power and authority would not, individually or in the aggregate, have
a Dental Material Adverse Effect (as defined below). Dental is duly qualified
and in good standing to do business in each jurisdiction in which the property
owned, leased, or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified
or in good standing would not, individually or in the aggregate, reasonably be
expected to have a Dental Material Adverse Effect (as defined below). "Dental
Material Adverse Effect" means an effect that is or would reasonably at the time
of such effect be expected to be materially adverse: (i) to the business,
results of operation, or financial condition of Dental; or (ii) to Dental's
ability to perform any of its material obligations under this Agreement or to
consummate the Merger; or (iii) to the ability of the Surviving Corporation to
continue to conduct the business of Apollo as presently conducted, following the
Effective Time, except in each case for (x) any occurrence or condition
affecting Dental's industry generally, or (y) any changes in general economic,
regulatory or political conditions. Dental has heretofore delivered or made
available to Apollo or its advisers complete and accurate copies of the Articles
of Incorporation, Bylaws and other governing instruments of Dental, as currently
in effect, and of the organizational documents and agreements defining the
rights of Dental with respect to any material joint ventures, partnerships or
other business in which Dental owns a less-than-100% interest. Dental does not,
directly or indirectly, own or control or have any equity, partnership, or other
ownership interest in any corporation, partnership, joint venture, or other
business association or entity.
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3.2 Authorization. Dental has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to obtaining the
necessary approval of its shareholders, to consummate the transactions
contemplated hereby. The execution and delivery by Dental of this Agreement and
the other agreements contemplated hereby to which Dental is a party, and the
consummation by Dental of the transactions contemplated hereby and thereby, have
been duly and validly authorized and approved by Dental's Board of Directors
and/or its Special Committee, no other action of Dental's Board of Directors
and/or its Special Committee or corporate proceeding on the part of Dental or
any Subsidiary are necessary to authorize this Agreement, and, subject to
obtaining the approval and adoption of this Agreement and approval of the Merger
by the holders of a majority of the shares of Dental Common Stock outstanding as
of the record date of Dental's shareholder meeting (the "Required Dental
Shareholder Vote"), no other action of Dental's Board of Directors and/or its
Special Committee or corporate action on the part of Dental is necessary to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Dental and, assuming due execution and
delivery by the other parties hereto, constitutes the valid and binding
obligation of Dental, enforceable against Dental in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency, and
the relief of debtors and rules of law governing specific performance,
injunctive relief, or other equitable remedies.
3.3 Capitalization. As of the date hereof, the authorized capital stock
of Dental consists of 8,510,638 shares of Dental Common Stock, par value $.01
per share, of which 813,565.shares are issued and outstanding. All issued and
outstanding shares of capital stock of each Dental Subsidiary, if any, are
owned, beneficially and of record, by Dental, free and clear of any mortgage,
pledge, security interest, encumbrance, lien or other charge of any kind
("Lien"). All issued and outstanding shares of Dental Common Stock have been,
and the shares of Dental Common Stock to be issued pursuant to Article 1 will
be, when issued, duly authorized, validly issued, fully paid and nonassessable.
All issued and outstanding shares of Dental Common Stock have been, and the
shares of Dental Common Stock to be issued pursuant to Article 1 will be, when
issued, issued in compliance with (and not subject to) any preemptive rights,
and in compliance with all applicable state, federal and foreign securities
laws. Except for options and warrants to purchase an aggregate 86,634 shares of
Common Stock listed in the Dental Disclosure Schedule, as of the date of this
Agreement there are not any outstanding or authorized subscriptions, options,
warrants, calls, rights, convertible securities, commitments, restrictions,
arrangements, or any other agreements of any character to which Dental is a
party that, directly or indirectly, (i) obligate Dental to issue any shares of
capital stock or any securities convertible into, or exercisable or exchangeable
for, or evidencing the right to subscribe for, any shares of capital stock, (ii)
call for or relate to the sale, pledge, transfer, or other disposition or
encumbrance by Dental of any shares of its capital stock, or (iii) to the
knowledge of Dental, relate to the voting or control of such capital stock. The
Dental Disclosure Schedule sets forth a complete and accurate list of all stock
options, warrants, and other rights to acquire Dental Common Stock, including
the name of the holder, the date of grant, acquisition price, number of shares,
exercisability schedule, and, in the case of options, the type of option under
the Code. None of such options, warrants or other rights shall be subject to
adjustment or modification as a result of the Merger.
3.4 Reports and Financial Statements. Dental's Form 10-SB, any
amendments thereto, and any other reports or forms filed with the SEC since the
date of such Form 10-SB (collectively the "Dental SEC Filings"), as of their
respective dates, (i) complied in all material respects with the applicable
requirements of the Securities Act of 1933 and the rules and regulations
thereunder (the "1933 Act") and the Securities Exchange Act of 1934 and the
rules and regulations thereunder (the "1934 Act"), as the case may be, and (ii)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. The audited financial statements and unaudited interim financial
statements included or incorporated by reference in Dental SEC Filings, (i) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-QSB of the SEC), (ii) complied as of their respective dates
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, and (iii)
fairly present in all material respects the consolidated financial position of
Dental as of the dates thereof and the income, cash flows, and changes in
shareholders' equity for the periods involved (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments that were not and are
not, individually or in the aggregate, expected to have a Dental Material
Adverse Effect). The statements of earnings included in the audited or unaudited
interim financial statements in the Dental SEC Filings do not contain any items
of special or nonrecurring income or any other income not earned in the ordinary
course of business required to be disclosed separately in accordance with GAAP,
except as expressly specified in the applicable statement of operations or notes
thereto.
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3.5 Absence of Undisclosed Liabilities. To the best of Dental's
knowledge, Dental has no liabilities or obligations of any nature (whether
absolute, accrued, contingent, or otherwise) except (a) liabilities or
obligations that are accrued or reserved against in the unaudited balance sheet
of Dental as of February 28, 2001 contained in Dental's Form 10-QSB filed on
April 13, 2001 (the "Dental Unaudited Balance Sheet") or in the notes thereto,
(b) liabilities incurred since February 28, 2001 in the ordinary course of
business and of a type and in an amount consistent with past practice, and (c)
liabilities or obligations that would not, individually or in the aggregate,
reasonably be expected to have a Dental Material Adverse Effect.
3.6 Consents and Approvals. Except for (i) any applicable requirements
of the 1933 Act, the 1934 Act, and state securities laws, (ii) obtaining the
Required Dental Shareholder Vote, and (iii) the filing and recordation of
appropriate merger documents as required by the MBCA and the BCLM, the
authorization and approval by Dental's Board of Directors and the execution and
delivery by Dental of this Agreement and the other agreements contemplated
hereby to which Dental is a party and the consummation by Dental of the
transactions contemplated hereby and thereby will not: (a) violate any provision
of the Articles of Incorporation or Bylaws of Dental; (b) violate any statute,
law, rule, regulation, order, or decree of any federal, state, local, or foreign
governmental or regulatory body or authority (a "Governmental Body") or any
nongovernmental self-regulatory agency by which Dental or any of its properties
or assets may be bound; (c) require any filing with or permit, consent, or
approval to be obtained from any Governmental Body or any nongovernmental
self-regulatory agency; or (d) result in any violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
under, result in the loss of any material benefit under, or give rise to any
right of termination, cancellation, increased payments, or acceleration under,
or result in the creation of any Lien (as defined in Section 3.3) on any of the
properties or assets of Dental under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
authorization, agreement, or other instrument or obligation to which Dental is a
party, or by which it or any of its properties or assets may be bound, except,
in the case of clauses (b), (c) and (d), for any such filings, permits, consents
or approvals or violations, breaches, defaults, or other occurrences that would
not, individually or in the aggregate, reasonably be expected to prevent or
delay consummation of any of the transactions contemplated hereby in any
material respect, or otherwise prevent Dental from performing its obligations
under this Agreement in any material respect, and would not, individually or in
the aggregate, reasonably be expected to have a Dental Material Adverse Effect.
Section 3.6 of the Dental Disclosure Schedule lists each note, bond, mortgage,
indenture, license, franchise, permit, authorization, agreement, or other
instrument or obligation to which Dental is a party, or by which it or any of
its properties or assets may be bound, under or with respect to which the
transactions contemplated by this Agreement will result in any violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default under, result in the loss of any benefit under, or give rise to any
right of termination, cancellation, increased payments, or acceleration under,
or result in the creation of any Lien on any of the properties or assets of
Dental, except for violations, defaults, losses, rights and Liens that would
not, individually or in the aggregate, reasonably be expected to have a Dental
Material Adverse Effect.
3.7 Compliance with Laws. To the best of Dental's knowledge, Dental is
not in default or violation of any applicable federal, state, local, or foreign
laws, ordinances, regulations, interpretations, judgments, decrees, injunctions,
permits, licenses, certificates, governmental requirements, orders, or other
similar items of any court or other Governmental Body (and including those of
any nongovernmental self-regulatory agency and including environmental laws or
regulations), except for such defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Dental
Material Adverse Effect.
3.8 Litigation. There are no claims, actions, suits, proceedings or, to
the best of Dental's knowledge, investigations or reviews of any kind, pending
or, to the knowledge of Dental, threatened in writing, against Dental or any
asset or property of Dental, except for such claims, actions, suits,
proceedings, investigations or reviews that would not, individually or in the
aggregate, reasonably be expected to have a Dental Material Adverse Effect.
3.9 Absence of Material Adverse Changes. Since February 28, 2001 there
has not been any (a) Dental Material Adverse Effect; (b) damage, destruction, or
loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have a Dental Material Adverse Effect; or (c) material
change by Dental in accounting methods or principles used for financial
reporting purposes, except as required by a change in applicable law or
generally accepted accounting principles and concurred with by Dental's
independent public accountants.
6
3.10 Officers, Directors and Employees. The Dental Disclosure Schedule
completely and accurately sets forth (i) the names of all former officers of
Dental whose employment with Dental has terminated either voluntarily or
involuntarily during the preceding 12-month period; and (ii) the names of the
officers (with all positions and titles indicated) and directors of Dental.
Except as would not, individually or in the aggregate, reasonably be expected to
have a Dental Material Adverse Effect: (i) no unfair labor practice complaint
against Dental is pending before the National Labor Relations Board, and there
is no labor strike, slowdown or stoppage pending or, to the knowledge of Dental,
threatened in writing against or involving Dental; (ii) no unionizing efforts
have, to the knowledge of Dental, been made by employees of Dental, Dental is
not a party to or subject to any collective bargaining agreement, and no
collective bargaining agreement is currently being negotiated by Dental; and
(iii) there is no labor dispute pending or, to the knowledge of Dental,
threatened in writing between Dental and its employees.
3.11 Taxes. Except for such matters that, individually or in the
aggregate, would not have a Dental Material Adverse Effect, (i) Dental has
filed, or has obtained extensions to file (which extensions have not expired
without filing), all state, local, United States, foreign, or other tax reports
and returns required to be filed by Dental; (ii) Dental has duly paid, or
accrued on its books of account, all taxes (including estimated taxes) shown as
due on such reports and returns (or such extension requests), or assessed
against them, other than taxes being contested in good faith in proper
proceedings; and (iii) the liabilities and reserves for taxes reflected on the
Dental Unaudited Balance Sheet are adequate to cover all taxes payable by Dental
for all taxable periods and portions thereof ending on or before the dates
thereof. To the best of Dental's knowledge, no tax audits are pending against
and no claims for taxes have been received in writing by Dental, other than
audits and claims that, individually and in the aggregate, are not reasonably
expected to have a Dental Material Adverse Effect. Dental has not, with regard
to any assets or property held, acquired or to be acquired by Dental, filed a
consent to the application of Section 341(f)(2) of the Code. Dental has not
taken or agreed to take any action (other than actions contemplated by this
Agreement) that would prevent the Merger from constituting a reorganization
qualifying under Section 368(a) of the Code. Dental is not aware of any
agreement, plan or other circumstance that would prevent the Merger from so
qualifying under Section 368(a) of the Code.
For the purposes of this Agreement, "tax" shall mean and include taxes,
duties, withholdings, assessments, and charges assessed or imposed by any
governmental authority (together with any interest, penalties and additions to
tax imposed with respect thereto), including but not limited to all federal,
state, county, local, and foreign income, profits, gross receipts, import, ad
valorem, real and personal property, franchise, license, sales, use, value
added, stamp, transfer, withholding, payroll, employment, excise, custom, duty,
and any other taxes, obligations and assessments of any kind whatsoever; "tax"
shall also include any liability for taxes arising as a result of being (or
ceasing to be) a member of any affiliated, consolidated, combined, or unitary
group as well as any liability for taxes under any tax allocation, tax sharing,
tax indemnity, or similar agreement.
3.12 Contracts. The Dental Disclosure Schedule lists, and Dental has
heretofore furnished to Apollo complete and accurate copies of (or, if oral, the
Dental Disclosure Schedule states all material provisions of), (a) every
employment, material consulting, severance or change of control agreement or
arrangement for the benefit of any director, officer, employee, other person or
shareholder of Dental or any affiliate thereof in effect as of the date of this
Agreement to which Dental is a party or by which Dental or any of its properties
or assets is bound, and (b) every contract, agreement, or understanding to which
Dental is a party that would reasonably be expected to involve payments by or to
Dental in excess of $25,000 during Dental's current 2002 fiscal year or in
excess of $50,000 in the aggregate during Dental's 2000 and 2001 fiscal years,
or would have a Dental Material Adverse Effect, or that is material and was not
made in the ordinary course of business. Dental is not in material violation of
or in default under any contract, plan, agreement, understanding, arrangement or
obligation that is material to Dental, except for such violations or defaults
that would not, individually or in the aggregate, reasonably be expected to have
a Dental Material Adverse Effect. As of the date of this Agreement, Dental is
not a party to any contract, plan, agreement, understanding, arrangement or
obligation (i) that restricts Dental's, or after the Merger would restrict the
Surviving Corporation's, ability to conduct any line of business, (ii) that
imposes on Dental material obligations not reflected in the Dental SEC Filings,
or (iii) that would be required to be filed with the SEC in a filing to which
paragraph (b)(10) of Item 601 of Regulation S-B of the Rules and Regulations of
the SEC is applicable, which has not been so filed.
3.13 Intellectual Property Rights. The Dental Disclosure Schedule
contains a complete and accurate list of all material patents, trademarks, trade
names, service marks, copyrights, and all applications for or registrations of
any of the foregoing as to which Dental is the owner or a licensee (the "Dental
Intellectual Property"). Dental owns, free and clear of any Lien (as defined in
Section 3.3), other than Liens that would not be reasonably expected to have a
Dental
7
Material Adverse Effect, or is licensed to use, all patents, trademarks, trade
names, service marks, copyrights, applications for or registrations of any of
the foregoing comprising Dental Intellectual Property. No claim has been
asserted or, to the knowledge of Dental, threatened in writing by any person,
with respect to the use of Dental Intellectual Property or challenging or
questioning the validity or effectiveness of any license or agreement with
respect thereto, except for such claims that, individually or in the aggregate,
would not reasonably be expected to have a Dental Material Adverse Effect. To
the knowledge of Dental, neither the use of Dental Intellectual Property by
Dental in the present conduct of its business nor any product or service of
Dental infringes on the valid intellectual property rights of any person in a
manner that, individually or in the aggregate, would reasonably be expected to
have a Dental Material Adverse Effect. Except as would not, individually or in
the aggregate, reasonably be expected to have a Dental Material Adverse Effect,
(i) all Dental Intellectual Property listed in the Dental Disclosure Schedule
has the status indicated therein and, unless provided otherwise, all
applications are still pending in good standing and have not been abandoned, and
(ii) to the knowledge of Dental, the Dental Intellectual Property is valid and
has not been challenged in any judicial or administrative proceeding. To the
knowledge of Dental, no person or entity nor such person's or entity's business
or products has infringed, or misappropriated any Dental Intellectual Property,
or currently is infringing, or misappropriating any Dental Intellectual
Property, except as would not, individually or in the aggregate, reasonably be
expected to have a Dental Material Adverse Effect.
3.14 Benefit Plans.
(a) Dental does not sponsor, maintain, contribute to, or has not,
within the past five years, sponsored, maintained, or contributed to or been
required to contribute to, any "employee pension benefit plan" ("Pension Plan"),
as such term is defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(b)(5) of ERISA. Each
such Pension Plan presently maintained by Dental is, in all material respects,
in compliance with applicable provisions of ERISA, the Code, and other
applicable law and Dental has performed all of its obligations under such
Pension Plan except for such obligations that would not, individually or in the
aggregate, reasonably be expected to have a Dental Material Adverse Effect.
(b) Dental does not sponsor, maintain, contribute to, or has not,
within the past five years, sponsored, maintained, or contributed to or been
required to contribute to, any Pension Plan that is subject to Title IV of
ERISA.
(c) Dental does not sponsor, maintain, or contribute to any "employee
welfare benefit plan" ("Welfare Plan"), as such term is defined in Section 3(1)
of ERISA, whether insured or otherwise, and any such Welfare Plan presently
maintained by Dental is, in all material respects, in compliance with the
provisions of ERISA, the Code, and all other applicable laws, including, but not
limited to, Section 4980B of the Code and the regulations thereunder, and Part 6
of Title I of ERISA. Dental has not established or contributed to any "voluntary
employees' beneficiary association" within the meaning of Section 501(c)(9) of
the Code.
(d) Dental does not currently maintain or contribute to any oral or
written bonus, profit-sharing, compensation (incentive or otherwise),
commission, stock option, or other stock-based compensation, retirement,
severance, change of control, vacation, sick or parental leave, dependent care,
deferred compensation, cafeteria, disability, hospitalization, medical, death,
retiree, insurance, or other benefit or welfare or other similar plan, policy,
agreement, trust, fund, or arrangement providing for the remuneration or benefit
of all or any Dental employees, directors or any other person, that is neither a
Pension Plan nor a Welfare Plan (collectively, the "Dental Compensation Plans").
(e) With respect to the Pension Plans, Welfare Plans or Dental
Compensation Plans, no event has occurred and, to the knowledge of Dental, there
exists no condition or set of circumstances, in connection with which Dental
would be subject to any liability under the terms of such Plans (other than the
payment of benefits thereunder), ERISA, the Code or any other applicable law
that would, individually or in the aggregate, reasonably be expected to have a
Dental Material Adverse Effect.
(f) The IRS has issued favorable determination letters with respect to
all Dental Pension Plans that are intended to be qualified under Section 401(a)
of the Code. Dental has provided or made available to Apollo summaries of all
Pension Plans, Welfare Plans, Compensation Plans, and related agreements, and
complete and accurate copies of all annual reports (Form 5500), favorable
determination letters, current summary plan descriptions, and all employee
handbooks or manuals. Dental has provided or made available to Apollo (i) copies
of all employment agreements with
8
officers of any of Dental (or copies of forms of agreements setting forth
representative employment terms and conditions); (ii) copies of all severance,
bonus or incentive agreements, programs and policies of Dental with or relating
to any of its employees; and (iii) copies of all plans, programs, agreements and
other arrangements of Dental with or relating to any of its employees that
contain change in control provisions.
(g) The execution of, and performance of the transactions contemplated
in, this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Dental Pension
Plan, Welfare Plan, Compensation Plan, or other arrangement that will or may
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits, or
obligation to fund benefits.
3.15 Minute Books. Dental has previously made available to Apollo or
its representatives all of the minutes of meetings of and corporate actions or
written consents by the shareholders, Boards of Directors, and committees of the
Board of Directors of Dental.
3.16 No Finders. No act of Dental has given or will give rise to any
claim against any of the parties hereto for a brokerage commission, finder's
fee, or other like payment in connection with the transactions contemplated
herein, except payments in the amounts specified in the Dental Disclosure
Schedule to those parties identified thereon who have acted as a finder for
Dental or have been retained by Dental as financial advisors pursuant to the
agreements or other documents described in the Dental Disclosure Schedule,
copies of which have been provided or made available to Apollo or its advisors
prior to the date of this Agreement.
3.17 Proxy Statement. The Dental Proxy Statement (as defined in Section
5.5 hereof) and any amendments or supplements thereto (i) will comply in all
material respects with all applicable laws, and (ii) not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made by Dental with respect to information
relating to Apollo or any affiliate of Apollo supplied by Apollo specifically
for inclusion in the Proxy Statement.
3.18 State Takeover Laws. The Board of Directors of Dental has approved
the transactions contemplated by this Agreement, such that the provisions of
Section 302A.673 (entitled "Business Combinations") of the MBCA will not apply
to this Agreement or any of the transactions contemplated hereby.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF APOLLO
Except as set forth in a document of even date herewith and
concurrently delivered herewith, referring specifically to the representations
and warranties in this Agreement that identifies by section number to which such
disclosure relates (the "Apollo Disclosure Schedule"), Apollo hereby makes the
following representations and warranties to Dental:
4.1 Organization. Apollo is a corporation duly organized, validly
existing, and in good standing under the laws of the Commonwealth of
Massachusetts and has all requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing or in good standing or to
have such corporate power and authority would not, individually or in the
aggregate, have an Apollo Material Adverse Effect (as defined below). Apollo and
each Apollo Subsidiary is duly qualified and in good standing to do business in
each jurisdiction in which the property owned, leased, or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have an Apollo
Material Adverse Effect (as defined below). "Apollo Material Adverse Effect"
means an effect that is or would reasonably at the time of such effect be
expected to be materially adverse: (i) to the business, results of operation, or
financial condition of Apollo; or (ii) to Apollo's ability to perform any of its
material obligations under this Agreement or to consummate the Merger; or (iii)
to the ability of the Surviving Corporation to continue to conduct the business
of Apollo as presently conducted, following the Effective Time, except in each
case for (x) any occurrence or condition affecting Apollo's industry generally,
or (y) any changes in general economic, regulatory or political conditions.
Apollo has heretofore delivered or made available to Dental or its advisers
complete and accurate copies of the Articles of Organization, Bylaws and other
9
governing instruments of Apollo, as currently in effect, and of the
organizational documents and agreements defining the rights of Apollo with
respect to any material joint ventures, partnerships or other business in which
Apollo owns a less-than-100% interest. Apollo does not, directly or indirectly,
own or control or has no equity, partnership, or other ownership interest in any
corporation, partnership, joint venture, or other business association or entity
that is material to Apollo.
4.2 Authorization. Apollo has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to obtaining the
necessary approval of its shareholders, to consummate the transactions
contemplated hereby. The execution and delivery by Apollo of this Agreement and
the other agreements contemplated hereby to which Apollo is a party, and the
consummation by Apollo of the transactions contemplated hereby and thereby, have
been duly and validly authorized and approved by Apollo's Board of Directors, no
other action of Apollo's Board of Directors or corporate proceeding on the part
of Apollo are necessary to authorize this Agreement, and, subject to obtaining
the approval and adoption of this Agreement and approval of the Merger by the
holders of a majority of the shares of Apollo Common Stock outstanding as of the
record date of Apollo's shareholder meeting (the "Required Apollo Shareholder
Vote"), no other action of Apollo's Board of Directors or corporate action on
the part of Apollo is necessary to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Apollo and, assuming due execution and delivery by the other parties hereto,
constitutes the valid and binding obligation of Apollo , enforceable against
Apollo in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency, and the relief of debtors and rules of law
governing specific performance, injunctive relief, or other equitable remedies.
4.3 Capitalization. As of the date hereof, the authorized capital stock
of Apollo consists of 200,000 shares of Apollo Common Stock, par value $.01 per
share, of which 600 shares are issued and outstanding. All issued and
outstanding shares of capital stock of each Apollo Subsidiary are owned,
beneficially and of record, by Apollo, free and clear of any Lien. All issued
and outstanding shares of Apollo Common Stock have been validly issued, are
fully paid and nonassessable, and have not been issued in violation of and are
not currently subject to any preemptive rights. All issued and outstanding
shares of Apollo Common Stock have been issued and sold in compliance with all
applicable state, federal and foreign securities laws. Outstanding convertible
securities issued pursuant to a bridge financing can be converted at any time
into a maximum amount of 60 shares of Apollo Common Stock and additional
warrants to purchase an aggregate of 30 shares of Apollo Common Stock. In a
private placement, Apollo will attempt to sell up to 200 shares of Apollo Common
Stock, together with warrants to purchase an aggregate of 200 shares of Apollo
Common Stock. There are additional warrants issued and outstanding to purchase
an aggregate amount of 35 shares of Apollo Common Stock all of which are listed
in the Apollo Disclosure Schedule. As of the date of this Agreement there are no
other outstanding or authorized subscriptions, options, warrants, calls, rights,
convertible securities, commitments, restrictions, arrangements, or any other
agreements of any character to which Apollo or any Apollo Subsidiary is a party
that, directly or indirectly, (i) obligate Apollo or any Apollo Subsidiary to
issue any shares of capital stock or any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for, any
shares of capital stock, (ii) call for or relate to the sale, pledge, transfer,
or other disposition or encumbrance by Apollo of any shares of its capital
stock, or (iii) to the knowledge of Apollo, relate to the voting or control of
such capital stock. The Apollo Disclosure Schedule sets forth a complete and
accurate list of all stock options, warrants, and other rights to acquire Apollo
Common Stock, including the name of the holder, the date of grant, acquisition
price, number of shares, exercisability schedule, and, in the case of options,
the type of option under the Code. No consent of holders of Apollo Options is
required to carry out the provisions of Section 1.7.
4.4 Financial Statements. Apollo's audited financial statements at and
for the year ended December 31, 2000 and unaudited financial statements at and
for the quarter ended March 31, 2001 (collectively the "Apollo 2001
Financials"), (i) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated therein or in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-QSB of the SEC), and (ii) fairly present in
all material respects the consolidated financial position of Apollo as of the
dates thereof and the income, cash flows, and changes in shareholders' equity
for the periods involved (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments that were not and are not,
individually or in the aggregate, expected to have an Apollo Material Adverse
Effect). The statements of earnings included in the Apollo 2001 Financials do
not contain any items of special or nonrecurring income or any other income not
earned in the ordinary course of business required to be disclosed separately in
accordance with GAAP, except as expressly specified in the applicable statement
of operations or notes thereto.
10
4.5 Absence of Undisclosed Liabilities. To the best of Apollo's
knowledge, Apollo has no liabilities or obligations of any nature (whether
absolute, accrued, contingent, or otherwise) except (a) liabilities or
obligations that are accrued or reserved against in the audited balance sheet of
Apollo as of December 31, 2000 contained in the Apollo 2001 Financials or in the
notes thereto, (b) liabilities or obligations that are accrued or reserved
against in the unaudited balance sheet of Apollo as of March 31, 2001, (c)
liabilities incurred since April 1, 2001 in the ordinary course of business and
of a type and in an amount consistent with past practice, and (d) liabilities or
obligations that would not, individually or in the aggregate, reasonably be
expected to have an Apollo Material Adverse Effect.
4.6 Consents and Approvals. Except for (i) any applicable requirements
of the 1933 Act and state securities laws, (ii) obtaining the Required Apollo
Shareholder Vote, and (iii) the filing and recordation of appropriate merger
documents as required by the MBCA and the BCLM, the authorization and approval
by Apollo's Board of Directors and the execution and delivery by Apollo of this
Agreement and the other agreements contemplated hereby to which Apollo is a
party and the consummation by Apollo of the transactions contemplated hereby and
thereby will not: (a) violate any provision of the Articles of Organization or
Bylaws of Apollo; (b) violate any statute, law, rule, regulation, order, or
decree of any federal, state, local, or foreign governmental or regulatory body
or authority (a "Governmental Body") or any nongovernmental self-regulatory
agency) by which Apollo or any Apollo Subsidiary or any of their respective
properties or assets may be bound; (c) require any filing with or permit,
consent, or approval to be obtained from any Governmental Body or any
nongovernmental self-regulatory agency; or (d) result in any violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default under, result in the loss of any material benefit under, or give rise to
any right of termination, cancellation, increased payments, or acceleration
under, or result in the creation of any Lien (as defined in Section 4.3) on any
of the properties or assets of Apollo or any Apollo Subsidiary under, any of the
terms, conditions, or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, authorization, agreement, or other instrument or
obligation to which Apollo is a party, or by which it or any of its properties
or assets may be bound, except, in the case of clauses (b), (c) and (d), for any
such filings, permits, consents or approvals or violations, breaches, defaults,
or other occurrences that would not, individually or in the aggregate,
reasonably be expected to prevent or delay consummation of any of the
transactions contemplated hereby in any material respect, or otherwise prevent
Apollo from performing its obligations under this Agreement in any material
respect, and would not, individually or in the aggregate, reasonably be expected
to have an Apollo Material Adverse Effect. Section 4.6 of Apollo Disclosure
Schedule lists each note, bond, mortgage, indenture, license, franchise, permit,
authorization, agreement, or other instrument or obligation to which Apollo is a
party, or by which it or any of its properties or assets may be bound, under or
with respect to which the transactions contemplated by this Agreement will
result in any violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default under, result in the loss of any benefit
under, or give rise to any right of termination, cancellation, increased
payments, or acceleration under, or result in the creation of any Lien on any of
the properties or assets of Apollo, except for violations, defaults, losses,
rights and Liens that would not, individually or in the aggregate, reasonably be
expected to have an Apollo Material Adverse Effect.
4.7 Compliance with Laws. To the best of Apollo's knowledge, Apollo is
not in default or violation of any applicable federal, state, local, or foreign
laws, ordinances, regulations, interpretations, judgments, decrees, injunctions,
permits, licenses, certificates, governmental requirements, orders, or other
similar items of any court or other Governmental Body (and including those of
any nongovernmental self-regulatory agency and including environmental laws or
regulations), except for such defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have an Apollo
Material Adverse Effect.
4.8 Litigation. There are no claims, actions, suits, proceedings or, to
the knowledge of Apollo, investigations or reviews of any kind, pending or, to
the knowledge of Apollo, threatened in writing, against Apollo or any asset or
property of Apollo, except for such claims, actions, suits, proceedings,
investigations or reviews that would not, individually or in the aggregate,
reasonably be expected to have an Apollo Material Adverse Effect.
4.9 Absence of Material Adverse Changes. Since April 1, 2001 there has
not been any (a) Apollo Material Adverse Effect; (b) damage, destruction, or
loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have an Apollo Material Adverse Effect; or (c)
material change by Apollo in accounting methods or principles used for financial
reporting purposes, except as required by a change in applicable law or
generally accepted accounting principles and concurred with by Apollo's
independent public accountants.
4.10 Officers, Directors and Employees. Prior to the date hereof,
Apollo has provided to Dental a list that completely and accurately sets forth
the name and current annual salary rate of each officer of Apollo or any Apollo
11
Subsidiary whose total remuneration for the last fiscal year was, or for the
current fiscal year is expected to be, in excess of $75,000, together with a
summary of the bonuses, commissions, additional compensation, and other like
cash benefits, if any, paid or payable to such persons for the last fiscal year
and proposed for the current fiscal year. The Apollo Disclosure Schedule
completely and accurately sets forth (i) the names of all former officers of
Apollo whose employment with Apollo has terminated either voluntarily or
involuntarily during the preceding 12-month period; and (ii) the names of the
officers (with all positions and titles indicated) and directors of Apollo.
Except as would not, individually or in the aggregate, reasonably be expected to
have an Apollo Material Adverse Effect: (i) no unfair labor practice complaint
against Apollo is pending before the National Labor Relations Board, and there
is no labor strike, slowdown or stoppage pending or, to the knowledge of Apollo,
threatened in writing against or involving Apollo; (ii) no unionizing efforts
have, to the knowledge of Apollo, been made by employees of Apollo, Apollo is
not a party to or subject to any collective bargaining agreement, and no
collective bargaining agreement is currently being negotiated by Apollo; and
(iii) there is no labor dispute pending or, to the knowledge of Apollo,
threatened in writing between Apollo and its employees.
4.11 Taxes. Except for such matters that, individually or in the
aggregate, would not have an Apollo Material Adverse Effect, (i) Apollo has
filed, or has obtained extensions to file (which extensions have not expired
without filing), all state, local, United States, foreign, or other tax reports
and returns required to be filed by Apollo; (ii) Apollo has duly paid, or
accrued on its books of account, all taxes (including estimated taxes) shown as
due on such reports and returns (or such extension requests), or assessed
against them, other than taxes being contested in good faith in proper
proceedings and (iii) the liabilities and reserves for taxes reflected on Apollo
Audited Balance Sheet are adequate to cover all taxes payable by Apollo for all
taxable periods and portions thereof ending on or before the dates thereof. To
Apollo's knowledge, no tax audits are pending against and no claims for taxes
have been received in writing by Apollo, other than audits and claims that,
individually and in the aggregate, are not reasonably expected to have an Apollo
Material Adverse Effect. Apollo has not, with regard to any assets or property
held, acquired or to be acquired by any of them, filed a consent to the
application of Section 341(f)(2) of the Code. Apollo has not taken or agreed to
take any action (other than actions contemplated by this Agreement) that would
prevent the Merger from constituting a reorganization qualifying under Section
368(a) of the Code. Apollo is not aware of any agreement, plan or other
circumstance that would prevent the Merger from so qualifying under Section
368(a) of the Code.
4.12 Contracts. The Apollo Disclosure Schedule lists, and Apollo has
heretofore furnished to Dental complete and accurate copies of (or, if oral, the
Apollo Disclosure Schedule states all material provisions of), (a) every
employment, material consulting, severance or change of control agreement or
arrangement for the benefit of any director, officer, employee, other person or
shareholder of Apollo or any affiliate thereof in effect as of the date of this
Agreement to which Apollo is a party or by which Apollo or any of its properties
or assets is bound, and (b) every contract, agreement, or understanding to which
Apollo is a party that would reasonably be expected to involve payments by or to
Apollo in excess of $25,000 during Apollo's current 2002 fiscal year or in
excess of $50,000 in the aggregate during Apollo's 2000 and 2001 fiscal years,
or would have an Apollo Material Adverse Effect, or that is material and was not
made in the ordinary course of business. Apollo is not in material violation of
or in default under any contract, plan, agreement, understanding, arrangement or
obligation that is material to Apollo, except for such violations or defaults
that would not, individually or in the aggregate, reasonably be expected to have
an Apollo Material Adverse Effect. As of the date of this Agreement, Apollo is
not a party to any contract, plan, agreement, understanding, arrangement or
obligation (i) that restricts Apollo's, or after the Merger would restrict the
Surviving Corporation's, ability to conduct any line of business, (ii) that
imposes on Apollo material obligations not reflected in the Apollo 2001
Financials, or (iii) that would be required to be filed with the SEC in a filing
to which paragraph (b)(10) of Item 601 of Regulation S-B of the Rules and
Regulations of the SEC would be applicable if Apollo were subject to the 1934
Act.
4.13 Intellectual Property Rights. The Apollo Disclosure Schedule
contains a complete and accurate list of all material patents, trademarks, trade
names, service marks, copyrights, and all applications for or registrations of
any of the foregoing as to which Apollo is the owner or a licensee (the "Apollo
Intellectual Property"). Apollo owns, free and clear of any Lien (as defined in
Section 4.3), other than Liens that would not be reasonably expected to have an
Apollo Material Adverse Effect, or is licensed to use, all patents, trademarks,
trade names, service marks, copyrights, applications for or registrations of any
of the foregoing comprising Apollo Intellectual Property. No claim has been
asserted or, to the knowledge of Apollo, threatened in writing by any person,
with respect to the use of Apollo Intellectual Property or challenging or
questioning the validity or effectiveness of any license or agreement with
respect thereto, except for such claims that, individually or in the aggregate,
would not reasonably be expected to have an Apollo Material Adverse Effect. To
the knowledge of Apollo, neither the use of Apollo Intellectual Property by
Apollo in the
12
present conduct of its business nor any product or service of Apollo infringes
on the valid intellectual property rights of any person in a manner that,
individually or in the aggregate, would reasonably be expected to have an Apollo
Material Adverse Effect. Except as would not, individually or in the aggregate,
reasonably be expected to have an Apollo Material Adverse Effect, (i) all Apollo
Intellectual Property listed in the Apollo Disclosure Schedule has the status
indicated therein and, unless provided otherwise, all applications are still
pending in good standing and have not been abandoned, and (ii) to the knowledge
of Apollo, the Apollo Intellectual Property is valid and has not been challenged
in any judicial or administrative proceeding. To the knowledge of Apollo, no
person or entity nor such person's or entity's business or products has
infringed, or misappropriated any Apollo Intellectual Property, or currently is
infringing, or misappropriating any Apollo Intellectual Property, except as
would not, individually or in the aggregate, reasonably be expected to have an
Apollo Material Adverse Effect.
4.14 Benefit Plans.
(a) Apollo does not sponsor, maintain, contribute to, or has not,
within the past five years, sponsored, maintained, or contributed to or been
required to contribute to, any "employee pension benefit plan" ("Pension Plan"),
as such term is defined in Section 3(2) of ERISA, including, solely for the
purpose of this subsection, a plan excluded from coverage by Section 4(b)(5) of
ERISA. Each such Pension Plan presently maintained by Apollo is, in all material
respects, in compliance with applicable provisions of ERISA, the Code, and other
applicable law and Apollo has performed all of its obligations under such
Pension Plan except for such obligations that would not, individually or in the
aggregate, reasonably be expected to have an Apollo Material Adverse Effect.
(b) Apollo does not sponsor, maintain, contribute to, or has not,
within the past five years, sponsored, maintained, or contributed to or been
required to contribute to, any Pension Plan that is subject to Title IV of
ERISA.
(c) Apollo does not sponsor, maintain, or contribute to any "employee
welfare benefit plan" ("Welfare Plan"), as such term is defined in Section 3(1)
of ERISA, whether insured or otherwise, and any such Welfare Plan presently
maintained by Apollo is, in all material respects, in compliance with the
provisions of ERISA, the Code, and all other applicable laws, including, but not
limited to, Section 4980B of the Code and the regulations thereunder, and Part 6
of Title I of ERISA. Apollo has not established or contributed to any "voluntary
employees' beneficiary association" within the meaning of Section 501(c)(9) of
the Code.
(d) Except as disclosed on the Apollo Disclosure Schedule, Apollo does
not currently maintain or contribute to any oral or written bonus,
profit-sharing, compensation (incentive or otherwise), commission, stock option,
or other stock-based compensation, retirement, severance, change of control,
vacation, sick or parental leave, dependent care, deferred compensation,
cafeteria, disability, hospitalization, medical, death, retiree, insurance, or
other benefit or welfare or other similar plan, policy, agreement, trust, fund,
or arrangement providing for the remuneration or benefit of all or any Apollo
employees, directors or any other person, that is neither a Pension Plan nor a
Welfare Plan (collectively, the "Apollo Compensation Plans").
(e) With respect to the Pension Plans, Welfare Plans or Apollo
Compensation Plans, no event has occurred and, to the knowledge of Apollo, there
exists no condition or set of circumstances, in connection with which Apollo
would be subject to any liability under the terms of such Plans (other than the
payment of benefits thereunder), ERISA, the Code or any other applicable law
that would, individually or in the aggregate, reasonably be expected to have an
Apollo Material Adverse Effect.
(f) The IRS has issued favorable determination letters with respect to
all Apollo Pension Plans that are intended to be qualified under Section 401(a)
of the Code. Apollo has provided or made available to Dental summaries of all
Pension Plans, Welfare Plans, Compensation Plans, and related agreements, and
complete and accurate copies of all annual reports (Form 5500), favorable
determination letters, current summary plan descriptions, and all employee
handbooks or manuals. Apollo has provided or made available to Dental (i) copies
of all employment agreements with officers of Apollo (or copies of forms of
agreements setting forth representative employment terms and conditions); (ii)
copies of all severance, bonus or incentive agreements, programs and policies of
Apollo with or relating to any of its employees; and (iii) copies of all plans,
programs, agreements and other arrangements of Apollo with or relating to any of
its employees that contain change in control provisions.
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(g) The execution of, and performance of the transactions contemplated
in, this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Apollo Pension
Plan, Welfare Plan, Compensation Plan, or other arrangement that will or may
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits, or
obligation to fund benefits.
4.15 Minute Books. Apollo has previously made available to Dental or
its representatives all of the minutes of meetings of and corporate actions or
written consents by the stockholders, Board of Directors, and committees of the
Board of Directors of Apollo.
4.16 No Finders. No act of Apollo has given or will give rise to any
claim against any of the parties hereto for a brokerage commission, finder's
fee, or other like payment in connection with the transactions contemplated
herein, except payments in the amounts specified in the Apollo Disclosure
Schedule to those parties identified thereon who have acted as a finder for
Apollo or have been retained by Apollo as financial advisors pursuant to the
agreements or other documents described in the Apollo Disclosure Schedule,
copies of which have been provided or made available to Dental or its advisors
prior to the date of this Agreement.
ARTICLE 5.
COVENANTS
5.1 Conduct of Business of Dental. From the date of this Agreement to
the Effective Date, unless Apollo shall otherwise agree in writing or as
otherwise expressly contemplated or permitted by this Agreement, Dental shall
not, directly or indirectly: (a) amend or propose to amend its Articles of
Incorporation or Bylaws; (b) issue, sell or grant any shares of Dental Common
Stock, or securities convertible into or exchangeable for Dental Common Stock,
other than (i) the grant of Dental Common Stock and/or warrants to purchase
shares of Dental Common Stock under any agreement described in Section 3.16 of
the Dental Disclosure Schedule, and (ii) issuances of shares of Dental Common
Stock pursuant to the exercise or conversion of stock options or warrants
outstanding on the date of this Agreement or granted pursuant to clause (i)
above; (c) reclassify, subdivide or otherwise change outstanding shares of
capital stock of Dental whether by stock dividend, reverse stock split,
distribution of securities convertible into Dental capital stock or otherwise;
(d) acquire (by merger, exchange, consolidation, acquisition of stock or assets
or otherwise) any corporation, partnership, joint venture or other business
organization or division or assets thereof; (e) default in its obligations under
any material debt, contract or commitment which default results in the
acceleration of obligations due thereunder; (f) enter into or propose to enter
into, or modify or propose to modify, any agreement, arrangement, or
understanding with respect to any of the foregoing matters; (g) declare or pay
any dividend or distribution; or (h) conduct its business other than in the
ordinary course on an arm's length basis and in accordance in all material
respects with all applicable laws, rules and regulations and Dental's past
custom and practice.
5.2 Conduct of Business of Apollo. From the date of this Agreement to
the Effective Date, unless Dental shall otherwise agree in writing or as
otherwise expressly contemplated or permitted by this Agreement, Apollo shall
not, directly or indirectly:
(a) amend or propose to amend its Articles of Organization or Bylaws;
(b) issue, sell or grant any shares of Apollo Common Stock, or
securities convertible into or exchangeable for Apollo Common Stock, other than
the (i) sale of up to an aggregate of 200 shares of Apollo Common Stock at not
less than Ten Thousand Dollar ($10,000) per share, (ii) the grant of Apollo
Common Stock and/or warrants to purchase shares of Apollo Common Stock under any
agreement as described in Section 4.16 of the Apollo Disclosure Schedule, (iii)
conversion of the notes issued in the bridge financing described in Section 4.3
of the Apollo Disclosure Schedule, and (iv) issuances of shares of Apollo Common
Stock pursuant to the exercise of stock options or warrants outstanding on the
date of this Agreement or granted pursuant to clause (ii) above; with the prior
consent of Dental, Apollo may issue additional Apollo securities for an
aggregate value of $20,000,000.
(c) reclassify, subdivide or otherwise change outstanding shares of
capital stock of Apollo whether by stock dividend, reverse stock split,
distribution of securities convertible into Apollo capital stock or otherwise;
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(d) acquire (by merger, exchange, consolidation, acquisition of stock
or assets or otherwise) any corporation, partnership, joint venture or other
business organization or division or assets thereof;
(e) default in its obligations under any material debt, contract or
commitment which default results in the acceleration of obligations due
thereunder;
(f) enter into or propose to enter into, or modify or propose to
modify, any agreement, arrangement, or understanding with respect to any of the
foregoing matters;
(g) declare or pay any dividend or distribution; or
(h) conduct its business other than in the ordinary course on an arm's
length basis and in accordance in all material respects with all applicable
laws, rules and regulations and Apollo's past custom and practice.
5.3 No Solicitation. Dental and Apollo shall not, and shall cause their
respective officers, directors, employees, representatives, agents, or
affiliates (including, but not limited to any investment banker, attorney, or
accountant), not to, directly or indirectly, solicit, knowingly encourage,
initiate, or participate in any way in discussions or negotiations with, or
knowingly provide any nonpublic information to, any corporation, partnership,
person, or other entity or group (other than a party to this Agreement)
concerning any proposed Alternative Transaction, or otherwise knowingly
facilitate any effort or attempt to make or implement an Alternative
Transaction. For purposes of this Agreement, "Alternative Transaction" shall
mean any of the following involving Dental or Apollo, respectively: (i) any
tender offer, exchange offer, merger, consolidation, share exchange, business
combination or similar transaction involving capital stock of Dental or Apollo,
respectively; (ii) any transaction or series of related transactions pursuant to
which any person or entity (or its shareholders), other than Dental or Apollo or
their respective affiliates, (a "Third Party") acquires shares (or securities
exercisable for or convertible into shares) representing more than 50% of the
outstanding shares of any class of capital stock of Dental or Apollo,
respectively; or (iii) any sale, lease, exchange, licensing, transfer or other
disposition pursuant to which a Third Party acquires control of more than 50% of
the assets (including, but not limited to, intellectual property assets) of
Dental or Apollo, respectively (determined by reference to the fair market value
of such assets), in a single transaction or series of related transactions.
Dental and Apollo will immediately cease and terminate all discussions, if any,
that have taken place prior to the date hereof with Third Parties concerning any
proposed Alternative Transaction, and will request that such Third Parties
promptly return any confidential information furnished by Dental or Apollo,
respectively. Dental and Apollo will not waive any provision of any
confidentiality, standstill or similar agreement entered into with any third
party regarding any proposed Alternative Transaction, and prior to the Closing
shall enforce all such agreements in accordance with their terms. Dental and
Apollo will promptly communicate to each other the name of the person or entity
submitting, and the terms and conditions of, any proposal or written inquiry
that it receives after the date hereof in respect of any proposed Alternative
Transaction or a reasonably detailed description of any such information
requested from it after the date hereof or of any such negotiations or
discussions being sought to be initiated or continued with Dental or Apollo,
respectively, after the date hereof in respect of a proposed Alternative
Transaction; provided, however, that this Agreement shall not prohibit the Board
of Directors of Dental or Apollo from:
(i) prior to approval of the Merger by its respective shareholders,
furnishing nonpublic information to or affording access to its properties, books
or records, or entering into discussions or negotiations with, any person or
entity that makes an unsolicited Superior Proposal (as defined below), if, and
only to the extent that,
(a) the Board of Directors of Dental or Apollo, as the case may be,
determines in good faith after consultation with its independent legal counsel,
that such action is so required under applicable law in order for the Board of
Directors or Dental or Apollo, as the case may be, to comply with its applicable
fiduciary duties to its shareholders imposed by law,
(b) prior to first furnishing nonpublic information to, or first
entering into substantive discussions and negotiations with, such person or
entity after the date hereof, Dental or Apollo, as the case may be (x) provides
at least 24 hours prior written notice to the other party to the effect that it
intends to furnish information to, or enter into discussions or negotiations
with, such person or entity, and naming and identifying the person or entity
making the Superior Proposal, and (y) receives from such person or entity an
executed confidentiality agreement to the effect that such Third Party will not
disclose any confidential information of Dental or Apollo, as the case may be;
and
15
(c) Dental or Apollo, as the case may be, concurrently provides the
other party with all non-public information to be provided to such Third Party
that such other party has not previously received, and Dental or Apollo, as the
case may be, keeps the other party informed, on a regular basis, of the status,
terms and conditions and all other material information with respect to any such
discussions or negotiations; or
(ii) to the extent applicable, complying with Rule 14e-2 promulgated
under the 1934 Act with regard to a proposed Alternative Transaction or making
such disclosure to its shareholders as in the reasonable judgment of the Board
of Directors of Dental or Apollo, as the case may be, with the advice of
independent counsel, is required under applicable law.
Nothing in this Section 5.3 shall (x) permit Dental or Apollo to terminate this
Agreement (except as specifically provided in Article 7 hereof), or (y) permit
Dental or Apollo to enter into any agreement providing for an Alternative
Transaction (other than the confidentiality agreement as provided, and in the
circumstances and under the conditions set forth, above) for as long as this
Agreement remains in effect. For purposes of this Agreement, a "Superior
Proposal" shall mean a proposal for an Alternative Transaction that the Board of
Directors of Dental or Apollo, as the case may be, has reasonably and in good
faith determined (with the advice of its financial advisors and taking into
account all legal, financial and regulatory aspects of the likelihood of the
consummation of such Alternative Transaction, including, but not limited to, the
conditions to consummation and the consequences under such Alternative
Transaction proposal of any material adverse effects or changes in Dental or
Apollo, as the case may be) to be more favorable to Dental's or Apollo's,
respectively, shareholders than the transactions contemplated by this Agreement.
5.4 Access and Information.
(a) Except as required pursuant to any confidentiality agreement or
similar agreement or arrangement to which Dental or Apollo is a party (in which
case Dental or Apollo shall use all commercially reasonable efforts to provide
acceptable alternative arrangements, not in violation of such agreement or
arrangement, for disclosure to the other party) or pursuant to applicable law,
Dental and Apollo shall afford to the other party, and to the other party's
accountants, officers, directors, employees, counsel, and other representatives,
reasonable access during normal business hours upon reasonable prior notice,
from the date hereof through the Effective Time, to all of its properties,
books, contracts, commitments, and records, and, during such period, Dental and
Apollo shall each furnish promptly to the other party all information concerning
Dental's or Apollo's businesses, prospects, properties, liabilities, results of
operations, financial condition, officers, employees, investigators,
distributors, customers, and suppliers as the other party may reasonably request
and reasonable opportunity to contact and obtain information from such officers,
employees, investigators, distributors, customers, and suppliers as the other
party may reasonably request. During the period from the date hereof to the
Effective Time, the parties shall in good faith meet and correspond on a regular
basis for mutual consultation concerning the conduct of Dental's and Apollo's
businesses and, in connection therewith, Apollo and Dental shall be entitled,
during normal business hours upon reasonable prior notice and in a manner that
does not unreasonably interfere with the other party's business, to have
employees or other representatives present at the offices of the other party and
its subsidiaries to observe, and be kept informed concerning such other party's
operations and business planning.
(b) Prior to closing and if, for any reason, the transactions
contemplated by this Agreement are not consummated, neither Dental nor Apollo
nor any of their officers, employees, attorneys, accountants and other
representatives, shall disclose to third parties or otherwise use any
confidential information received from the other party in the course of
investigating, negotiating, and performing the transactions contemplated by this
Agreement; provided, however, that nothing shall be deemed to be confidential
information which:
(i) is known to the party receiving the information (the "Recipient")
at the time of disclosure;
(ii) becomes publicly known or available without the disclosure thereof
by the Recipient in violation of this Agreement; or
(iii) is rightfully received by the Recipient from a third party.
This provision shall not prohibit the disclosure of information required under
federal or state securities laws. If any disclosure is so required, the party
making such disclosure shall consult with the other party prior to making such
16
disclosure, and the parties shall use all reasonable efforts, acting in good
faith, to agree upon a text for such disclosure that is satisfactory to both
parties.
In the event that Recipient or anyone to whom Recipient transmits confidential
information become legally compelled to disclose confidential information,
Recipient will provide the other party with prompt written notice thereof so
that the other party may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement. In the event that
such protective order or other remedy is not obtained, or that the other party
waives compliance with this provision, Recipient may disclose confidential
information, but only that portion of the confidential information which
Recipient is advised by written opinion of counsel Recipient is legally required
to disclose.
5.5 Approval of Dental and Apollo Shareholders.
(a) Dental shall promptly take all action necessary in accordance with
the MBCA and Dental's Articles of Incorporation and Bylaws to cause a special
meeting of Dental's shareholders (the "Dental Shareholders Meeting") to be duly
called and held as soon as reasonably practicable following the date hereof for
the purposes of (i) to the extent reasonably practicable and necessary under the
MBCA, approving the sale of all or substantially all of Dental's Operating
Assets (as defined below) pursuant to Section 5.11 as required by the MBCA, and
(ii) voting upon the Merger and the adoption and approval of this Agreement, the
Plan of Merger attached hereto as Exhibit A and the Amended and Restated
Articles of Incorporation of Dental, attached hereto as Exhibit B. "Dental's
Operating Assets" are any tangible and intangible assets owned by Dental at the
time of this Agreement and used by Dental in conducting its current business as
described in Dental's SEC Filings. At such meeting, Dental shall submit the
aforesaid items to the vote of the Dental shareholders and use its reasonable
best efforts to obtain the approval by Dental's shareholders for each of such
three items. As soon as practicable after the date hereof, Dental shall prepare
and mail a proxy statement (such proxy statement, together with notice of
meeting, form of proxy, and any letter or other materials to Dental's
shareholders included therein are referred to in this Agreement as the "Dental
Proxy Statement"). Apollo shall furnish to Dental all information concerning
Apollo, its officers, directors and shareholders, and shall take such other
action and otherwise cooperate, as Dental may reasonably request in connection
with such Dental Proxy Statement. Dental shall cause the Dental Proxy Statement
to comply with all applicable laws and not to contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The Dental Proxy Statement shall
include the recommendation of Dental's Board of Directors in favor of the
Merger, unless the Board of Directors of Dental determines in good faith after
consultation with its independent legal counsel, that to do so would violate its
applicable fiduciary duties to its shareholders imposed by law. Unless and until
this Agreement is validly terminated pursuant to Article 7, nothing herein shall
limit or eliminate in any way Dental's obligation to call, give notice of,
convene and hold the Dental Shareholders Meeting and at such meeting submit this
Agreement and the Merger to a vote of Dental's shareholders and not postpone or
adjourn such meeting or the vote by Dental's shareholders upon this Agreement
and the Merger to another date without Apollo's approval.
(b) Dental shall notify Apollo promptly of the receipt of comments of
the SEC, or of any request by the SEC for amendments or supplements to the
Dental Proxy Statement. If at any time prior to the mailing of the Dental Proxy
Statement, any event or circumstance relating to Dental or Dental's officers or
directors should occur and be discovered by Dental that is required to be
described in an amendment or supplement to the definitive Proxy Statement,
Dental shall promptly inform Apollo. Whenever any event occurs that should be
described in an amendment of, or supplement to, the definitive Proxy Statement,
Dental shall, upon learning of such event, promptly notify Apollo and consult
and cooperate with Apollo in connection with the preparation of a mutually
acceptable amendment or supplement. Dental shall promptly file such amendment
with the SEC and mail such amendment as soon as practicable after it is cleared
by the SEC. No amendment or supplement to the Proxy Statement will be made by
Dental without the approval of Apollo, such approval not to be unreasonably
withheld or delayed.
(c) Apollo shall promptly take all action necessary in accordance with
the BCLM and Apollo's Articles of Organization and Bylaws to cause a special
meeting of Apollo's shareholders (the "Apollo Shareholders Meeting") to be duly
called and held as soon as reasonably practicable following the date hereof for
the purposes of voting upon the Merger and the adoption and approval of this
Agreement. At such meeting, Apollo shall submit such item to the vote of the
Apollo shareholders and use its best efforts to obtain the approval by Apollo's
shareholders of each of such items. As soon as practicable after the date
hereof, Apollo shall prepare and mail a proxy statement (such proxy statement,
together with notice of meeting, form of proxy, and any letter or other
materials to Apollo's shareholders included therein are referred to in this
Agreement as the "Apollo Proxy Statement"). Dental shall furnish to Apollo all
information concerning
17
Dental and its subsidiaries, officers, directors and shareholders, and shall
take such other action and otherwise cooperate, as Apollo may reasonably request
in connection with such Apollo Proxy Statement. Apollo shall cause the Apollo
Proxy Statement to comply with all applicable laws and not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Apollo Proxy
Statement shall include the recommendation of Apollo's Board of Directors in
favor of the Merger, unless the Board of Directors of Apollo determines in good
faith after consultation with its independent legal counsel, that to do so would
violate its applicable fiduciary duties to its shareholders imposed by law.
Unless and until this Agreement is validly terminated pursuant to Article 7,
nothing herein shall limit or eliminate in any way Apollo's obligation to call,
give notice of, convene and hold the Apollo Shareholders Meeting and at such
meeting submit this Agreement and the Merger to a vote of Apollo's shareholders
and not postpone or adjourn such meeting or the vote by Apollo's shareholders
upon this Agreement and the Merger to another date without Dental's approval. No
amendment or supplement to the Apollo Proxy Statement will be made by Apollo
without the approval of Dental, such approval not to be unreasonably withheld or
delayed.
5.6 Consents. Dental will, at its cost and expense, use all reasonable
efforts to obtain all approvals and consents of all third parties necessary on
the part of Dental to consummate the transactions contemplated hereby. Apollo
agrees to cooperate with Dental in connection with obtaining such approvals and
consents. Apollo will, at its cost and expense, use all reasonable efforts to
obtain all approvals and consents of all third parties necessary on the part of
Apollo or any Apollo Subsidiary to consummate the transactions contemplated
hereby. Dental agrees to cooperate with Apollo in connection with obtaining such
approvals and consents.
5.7 Further Actions. Subject to the terms and conditions herein
provided and without being required to waive any conditions herein (whether
absolute, discretionary, or otherwise), each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
5.8 Regulatory Approvals. Dental and Apollo each agree to use
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things as may be necessary under
applicable laws or regulations for the consummation of the Merger or any of the
other transactions contemplated hereby, and each party shall give the other
information reasonably requested by such other party pertaining to it and its
subsidiaries and affiliates to enable such other party to take such actions.
5.9 Certain Notifications. Dental shall promptly notify Apollo in
writing of the occurrence of any event that will or could reasonably be expected
to result in the failure by Dental or its affiliates to satisfy any of the
conditions specified in Section 6.1 or 6.2. Apollo shall promptly notify Dental
in writing of the occurrence of any event that will or could reasonably be
expected to result in the failure by Apollo or its affiliates to satisfy any of
the conditions specified in Section 6.1 or 6.3.
5.10 Securities Laws. Dental shall take any action required to be taken
under the 1933 Act, the 1934 Act or state blue sky or securities laws in
connection with the issuance of Dental Common Stock pursuant to the Merger.
5.11 Disposition of Dental's Operating Assets. Prior to the Effective
Time, Dental will sell, transfer or otherwise dispose of substantially all of
its Operating Assets; the proceeds from the sale shall remain in the Surviving
Corporation. The purchaser of the Operating Assets shall (i) assume all
liabilities of Dental existing immediately prior to the Effective Date,
provided, that the purchaser shall not assume any unpaid expenses, fees and/or
amounts arising from or related to the Merger and incurred by Dental prior to
and including the Effective Time, including, but not limited to, expenses and
fees arising from or related to the Merger and due and owing by Dental to its
legal counsel, its accountants and auditors, and its financial printer, (ii) pay
to Dental Five Hundred Thousand Dollars ($500,000) in cash at the time the sale
of the Operating Assets is consummated, and (iii) deliver at the time the sale
of the Operating Assets is consummated a promissory note for the remaining
purchase price in substantially the form attached as Exhibit D, provided, that
the principal amount of such promissory note may not exceed Five Hundred Seven
Thousand Four Hundred Fifty Dollars ($507,450).
18
5.12 Resignations and Elections of Directors. At the Effective Time,
Dental will deliver the voluntary resignations of each officer of Dental and
each director of Dental who is not designated by Apollo to be a director of the
Surviving Corporation in accordance with Section 1.11. The continuing Dental
directors shall appoint the other persons designated by Apollo to be directors
of the Surviving Corporation upon the consummation of the Merger.
5.13 Plan of Reorganization. This Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date of this
Agreement, each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not, without the prior written consent of the other
parties hereto, knowingly take any actions or cause any actions to be taken that
could prevent the Merger from qualifying as a reorganization under the
provisions of Section 368(a) of the Code.
5.14 Directors and Officer Liability.
(a) The Articles of Incorporation and the bylaws of the Surviving
Corporation shall contain the provisions with respect to indemnification,
payment of fees and expenses and exculpation from liability set forth in
Dental's Articles of Incorporation and bylaws on the date of this Agreement,
which provisions shall not be amended, repealed or otherwise modified for a
period of six years from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who on or at any time prior to the
Effective Time were directors, officers, employees or agents of Dental or
Apollo, unless such modification is required by law.
(b) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provisions shall be made so
that the successors and assigns of the Surviving Corporation shall assume the
obligations set forth in this Section 5.14.
(c) This Section 5.14 shall survive the consummation of the Merger at
the Effective Time, is intended to benefit Dental, Apollo, the Surviving
Corporation and the officers and directors thereof, and all other individuals
who on or at any time prior to the Effective Time were directors, officers,
employees or agents of Dental or Apollo, and shall be binding on all successors
and assigns of the Surviving Corporation.
5.15 Shareholder Acknowledgments. Apollo shall use its best efforts to
cause all of its shareholders to sign and deliver to Dental a Shareholder
Acknowledgement in the form of Exhibit E as attached hereto at the time of
execution of this Agreement or as soon thereafter as practicable.
ARTICLE 6.
CLOSING CONDITIONS
6.1 Conditions to Obligations of Apollo and Dental. The respective
obligations of each party to consummate the Merger shall be subject to the
fulfillment at or prior to the Closing of the following conditions, any or all
of which may be waived in writing, in whole or in part, to the extent permitted
by applicable law:
(a) No Injunction. Neither Apollo nor Dental shall be subject to any
final order, decree, or injunction of a court of competent jurisdiction within
the United States that is then in effect and (i) has the effect of making the
Merger illegal or otherwise prohibiting the consummation of the Merger, or (ii)
would impose any material limitation on the ability of the Surviving Corporation
to effectively operate the Apollo business.
(b) Shareholder Approval. The approval of the shareholders of Dental
and Apollo referred to in Section 5.5 hereof shall have been obtained, in
accordance with the MBCA and the BCLM, respectively, and Dental's and Apollo's
Articles of Incorporation and Organization, respectively, and Bylaws.
(c) Exemption From Registration. The issuance of the Merger Shares
shall be exempt from registration under the 1933 Act and applicable state
securities laws.
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6.2 Conditions to Obligations of Apollo. The obligations of Apollo to
consummate the Merger shall be subject to the fulfillment at or prior to the
Closing of the following additional conditions, any or all of which may be
waived by Apollo in writing, in whole or in part, to the extent permitted by
applicable law:
(a) Representations and Warranties True. The representations and
warranties of Dental contained in this Agreement, without regard to any
qualification or reference to "Dental Material Adverse Effect," shall be true
and correct on the Closing Date as though such representations and warranties
were made on such date, except that those representations and warranties that
address matters only as of the date hereof or another particular date shall
remain true and correct as of such date, and except in any case for any
inaccuracies of representations and warranties that, individually or in the
aggregate, have not had, or would not reasonably be expected to have, a Dental
Material Adverse Effect. Apollo shall have received a certificate to the
foregoing effect signed by the Chief Executive Officer of Dental.
(b) Performance. Dental shall have performed and complied in all
material respects with all material covenants required by this Agreement to be
performed or complied with by it on or prior to the Closing, and Apollo shall
have received a certificate to such effect signed by the Chief Executive Officer
of Dental.
(c) Tax Opinion. Apollo shall have received an opinion of Xxxxxxxxxx &
Xxxxx, P.A., counsel to Apollo, addressed to Apollo, based upon representations
of Apollo and Dental and normal assumptions, and dated the Closing, to the
effect that, subject to customary conditions and representations, the Merger
will be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, and that Apollo and Dental will be
considered a party to such reorganization. Apollo and Dental hereby agree to
provide to such counsel certificates acceptable to such counsel setting forth
the customary representations which may be relied upon by such counsel in
rendering such opinion.
(d) Dental Dissenting Shares. The percentage of outstanding shares of
Dental Common Stock held by Dental shareholders who have (i) asserted
dissenters' rights pursuant to Sections 302A.471 and 302A.473 of the MBCA and
(ii) as of the Effective Time, have not effectively withdrawn or lost such
rights, shall not exceed five percent (5%) of the issued and outstanding shares
of Dental Common Stock.
6.3 Conditions to Obligations of Dental. The obligation of Dental to
consummate the Merger shall be subject to the fulfillment at or prior to the
Closing of the following additional conditions, any or all of which may be
waived by Dental in writing, in whole or in part, to the extent permitted by
applicable law:
(a) Representations and Warranties True. The representations and
warranties of Apollo contained in this Agreement, without regard to any
qualification or reference to "Apollo Material Adverse Effect," shall be true
and correct on the Closing Date as though such representations and warranties
were made on such date, except that those representations and warranties that
address matters only as of a particular date shall remain true and correct as of
such date, and except in any case for any inaccuracies of representations and
warranties that, individually or in the aggregate, have not had, or would not
reasonably be expected to have, an Apollo Material Adverse Effect. Dental shall
have received a certificate to the foregoing effect signed by the Chief
Executive Officer of Apollo.
(b) Performance. Apollo shall have performed and complied in all
material respects with all material covenants required by this Agreement to be
performed or complied with by it on or prior to the Closing, and Dental shall
have received a certificate to such effect signed by the Chief Executive Officer
of Apollo.
(c) Apollo Dissenting Shares. The percentage of outstanding shares of
Apollo Common Stock held by Apollo shareholders who have (i) asserted
dissenters' rights pursuant to Sections 85 seq. of the BCLM and (ii) as of the
Effective Time, have not effectively withdrawn or lost such rights, shall not
exceed five percent (5%) of the issued and outstanding shares of Apollo Common
Stock.
ARTICLE 7.
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the shareholders of
Dental and/or Apollo, only:
20
(a) by mutual written consent duly authorized by the Board of Directors
of Apollo and the Board of Directors of Dental;
(b) by either Apollo or Dental if the Merger shall not have been
consummated on or before January 31, 2002; provided, however, that the
terminating party shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have been the
proximate cause of, or resulted in, the failure to consummate the Merger by such
date;
(c) by either Apollo or Dental if a court of competent jurisdiction or
an administrative, governmental, or regulatory authority has issued a final
nonappealable order, decree, or ruling, or taken any other action, having the
effect of permanently restraining, enjoining, or otherwise prohibiting the
Merger;
(d) by either Dental or Apollo if at the Dental Shareholders Meeting,
the requisite vote of the shareholders of Dental for approval and adoption of
this Agreement and the Merger is not obtained; provided that the right to
terminate this Agreement under this Section 7.1(d) will not be available to any
party whose failure to perform any material obligation under this Agreement has
been the proximate cause of, or resulted in, the failure to obtain the requisite
vote of the shareholders of Dental;
(e) by either Dental or Apollo if at the Apollo Shareholders Meeting,
the requisite vote of the shareholders of Apollo for approval and adoption of
this Agreement and the Merger is not obtained; provided that the right to
terminate this Agreement under this Section 7.1(e) will not be available to any
party whose failure to perform any material obligation under this Agreement has
been the proximate cause of, or resulted in, the failure to obtain the requisite
vote of the shareholders of Apollo;
(f) by Apollo if either (i) Dental has breached its obligations under
Section 5.3 in any material respect (provided that for the purposes of this
clause (i), actions of representatives or agents of Dental who are not officers,
directors or employees of Dental which do not result in a proposal for an
Alternative Transaction shall not be deemed to be a breach of Section 5.3 so
long as Dental has used commercially reasonable efforts to cause such
representatives and agents to comply with Section 5.3), (ii) the Board of
Directors of Dental has recommended, approved, or authorized Dental's acceptance
or execution of a definitive agreement providing for, an Alternative
Transaction, as defined in Section 5.3, (iii) the Board of Directors of Dental
has modified in a manner materially adverse to Apollo or withdrawn its approval
or recommendation of this Agreement and the Merger or its recommendation that
shareholders of Dental adopt and approve this Agreement and the Merger, (iv)
Dental has failed to call the Dental Shareholders Meeting or failed to mail the
Dental Proxy Statement to its shareholders within 30 days after the date of this
Agreement or failed to include in such statement the recommendation referred to
above, or (v) a tender offer or exchange offer for any outstanding shares of
Dental Common Stock is commenced, and the Board of Directors of Dental either
(A) recommends in favor of acceptance of such tender offer or exchange offer by
its shareholders, or (B) takes no position with respect to the acceptance of
such tender offer or exchange offer by its shareholders;
(g) by Dental if either (i) Apollo has breached its obligations under
Section 5.3 in any material respect (provided that for purposes of this clause
(i), actions of representatives or agents of Apollo who are not officers,
directors or employees of Apollo which do not result in a proposal for an
Alternative Transaction shall not be deemed to be a breach of Section 5.3 so
long as Apollo has used commercially reasonable efforts to cause such
representatives and agents to comply with Section 5.3), (ii) the Board of
Directors of Apollo has recommended, approved, or authorized Apollo's acceptance
or execution of a definitive agreement providing for, an Alternative
Transaction, as defined in Section 5.3, (iii) the Board of Directors of Apollo
has modified in a manner materially adverse to Dental or withdrawn its approval
or recommendation of this Agreement and the Merger or its recommendation that
shareholders of Apollo adopt and approve this Agreement and the Merger, (iv)
Apollo has failed to call the Apollo Shareholders Meeting or failed to mail the
Apollo Proxy Statement to its shareholders within 30 days after the date of this
Agreement or failed to include in such statement the recommendation referred to
above, or (v) a tender offer or exchange offer for any outstanding shares of
Apollo Common Stock is commenced, and the Board of Directors of Apollo either
(A) recommends in favor of acceptance of such tender offer or exchange offer by
its shareholders, or (B) takes no position with respect to the acceptance of
such tender offer or exchange offer by its shareholders;
(h) by Dental prior to approval of the Merger at the Dental Shareholder
Meeting if (i) it is not in material breach of its obligations under this
Agreement and has complied with, and continues to comply with, all requirements
and
21
procedures of Section 5.3 in all material respects, (ii) the Board of Directors
of Dental has complied with, and continues to comply with, all requirements and
procedures of Section 5.3 in all material respects and has authorized, subject
to complying with the terms of this Agreement, Dental to enter into a binding
written agreement concerning a transaction that constitutes a Superior Proposal
and Dental notifies Apollo in writing that it intends to enter into such
agreement, attaching the most current version of such agreement to such notice,
(iii) Apollo does not make, within five business days after receipt of Dental's
written notice of its intention to enter into a binding agreement for a Superior
Proposal, any offer that the Board of Directors of Dental reasonably and in good
faith determines, after consultation with its financial and legal advisors, is
at least as favorable to the shareholders of Dental as the Superior Proposal and
during such five business-day period Dental reasonably considers and discusses
in good faith all proposals submitted by Apollo and, without limiting the
foregoing, meets with, and causes its financial advisors and legal advisors to
meet with, Apollo and its advisors from time to time as requested by Apollo to
reasonably consider and discuss in good faith Apollo's proposals, and (iv)
Dental pays to Apollo the fee required by Section 7.2(a) to be paid to Apollo in
the manner therein provided. Dental agrees (x) that it will not enter into a
binding agreement referred to in clause (ii) above until at least the sixth
business day after Apollo has received the notice required by clause (ii) above,
and (y) to notify Apollo promptly if its intention to enter into a binding
agreement referred to in its notice to Apollo shall change at any time after
giving such notice;
(i) by Apollo prior to approval of the Merger at the Apollo Shareholder
Meeting if (i) it is not in material breach of its obligations under this
Agreement and has complied with, and continues to comply with, all requirements
and procedures of Section 5.3 in all material respects, (ii) the Board of
Directors of Apollo has complied with, and continues to comply with, all
requirements and procedures of Section 5.3 in all material respects and has
authorized, subject to complying with the terms of this Agreement, Apollo
proposes to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal and Apollo notifies Dental in writing that it
intends to enter into such agreement, attaching the most current version of such
agreement to such notice, (iii) Dental does not make, within five business days
after receipt of Apollo's written notice of its intention to enter into a
binding agreement for a Superior Proposal, any offer that the Board of Directors
of Apollo reasonably and in good faith determines, after consultation with its
financial and legal advisors, is at least as favorable to the shareholders of
Apollo as the Superior Proposal and during such five business-day period Apollo
reasonably considers and discusses in good faith all proposals submitted by
Dental and, without limiting the foregoing, meets with, and causes its financial
advisors and legal advisors to meet with, Dental and its advisors from time to
time as requested by Dental to reasonably consider and discuss in good faith
Dental's proposals, and (iv) Apollo pays to Dental the fee required by Section
7.2(b) to be paid to Dental in the manner therein provided. Apollo agrees (x)
that it will not enter into a binding agreement referred to in clause (ii) above
until at least the sixth business day after Dental has received the notice
required by clause (ii) above, and (y) to notify Dental promptly if its
intention to enter into a binding agreement referred to in its notice to Dental
shall change at any time after giving such notice;
(j) by Apollo, if (i) Apollo is not in material breach of its
obligations under this Agreement and (ii) there has been a material breach by
Dental of any of its representations, warranties, or obligations under this
Agreement such that the conditions in Section 6.2 will not be satisfied
("Terminating Dental Breach"); provided, however, that, if such Terminating
Dental Breach is curable by Dental through the exercise of reasonable best
efforts and such cure is reasonably likely to be completed prior to the
applicable date specified in Section 7.1(b), then for so long as Dental
continues to exercise reasonable best efforts, Apollo may not terminate this
Agreement under this Section 7.1(j); or
(k) by Dental, if (i) Dental is not in material breach of its
obligations under this Agreement and (ii) there has been a material breach by
Apollo of any of its representations, warranties, or obligations under this
Agreement such that the conditions in Section 6.3 will not be satisfied
("Terminating Apollo Breach"); provided, however, that, if such Terminating
Apollo Breach is curable by Apollo through the exercise of reasonable best
efforts and such cure is reasonably likely to be completed prior to the
applicable date specified in Section 7.1(b), then for so long as Apollo
continues to exercise reasonable best efforts, Dental may not terminate this
Agreement under this Section 7.1(k).
7.2 Effect of Termination.
(a) In recognition of the time, efforts, and expenses expended and
incurred by Dental with respect to Apollo and the opportunity that the Merger
presents to Dental, if this Agreement is terminated pursuant to Section 7.1(e)
and within 12 months thereafter Apollo enters into an agreement for an
Alternative Transaction, or is terminated pursuant
22
to Sections 7.1(g) or 7.1(i) then, in any such event, Apollo will pay to Dental,
upon the termination date, by wire transfer of immediately available funds to an
account designated by Dental for such purpose, a fee equal to $100,000.
(b) In recognition of the time, efforts, and expenses expended and
incurred by Apollo with respect to Dental and the opportunity that the Merger
presents to Apollo, if this Agreement is terminated pursuant to Section 7.1(d)
and within 12 months thereafter Dental enters into an agreement for an
Alternative Transaction, or is terminated pursuant to Sections 7.1(f) or 7.1(h)
then, in any such event, Dental will pay to Apollo, upon the termination date,
by wire transfer of immediately available funds to an account designated by
Apollo for such purpose, a fee equal to $100,000.
(c) Dental and Apollo each acknowledges that the agreements contained
in this Section 7.2 are an integral part of the transactions contemplated by
this Agreement and are not a penalty, and that, without these agreements,
neither Dental nor Apollo would enter into this Agreement. If either party fails
to pay promptly the fee due pursuant to this Section 7.2, such party shall also
pay to the other party such other party's costs and expenses (including legal
fees and expenses) in connection with any action, including the filing of any
lawsuit or other legal action, taken to collect payment, together with interest
on the amount of the unpaid fee under this section, accruing from its due date,
at an interest rate per annum equal to two percentage points in excess of the
prime commercial lending rate quoted by Xxxxx Fargo Bank Minnesota, N.A. Any
change in the interest rate hereunder resulting from a change in such prime rate
shall be effective at the beginning of the day of such change in such prime
rate.
(d) In the event of the termination of this Agreement pursuant to any
paragraph of Section 7.1, the obligations of the parties to consummate the
Merger will expire, and none of the parties will have any further obligations
under this Agreement except pursuant to Sections 5.4, 7.2, 8.10 and 8.13;
provided that nothing herein shall relieve any party from liability for the
breach of any of its representations, warranties, covenants or agreements set
forth herein occurring prior to the date of termination.
ARTICLE 8.
MISCELLANEOUS
8.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by written agreement of
Apollo, and Dental at any time prior to the Effective Time with respect to any
of the terms contained herein; provided, however, that, after the approval of
this Agreement by the shareholders of Apollo or Dental, respectively, no
amendment may be made that would reduce the amount or change the type of
consideration into which each share of Apollo Common Stock shall be converted
upon consummation of the Merger or which would otherwise require shareholder
approval under applicable law unless such shareholder approval shall have been
obtained. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
8.2 Waiver of Compliance; Consents. Any failure of Apollo on the one
hand, or Dental on the other hand, to comply with any obligation, covenant,
agreement, or condition herein may be waived by Dental or Apollo, respectively,
only by a written instrument signed by an officer of the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing.
8.3 Investigation; Survival of Representations and Warranties. The
respective representations and warranties of Apollo and Dental contained herein
or in any certificates or other documents delivered prior to or at the Closing
shall not be deemed waived or otherwise affected by any investigation made by
any party hereto. The representations and warranties set forth in Articles 3 and
4 and in any certificate delivered pursuant thereto shall terminate at the
Effective Time.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally by commercial
courier service or otherwise, or by telecopier, or three days after such notice
is mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Dental, to it at:
23
Dental Resources, Inc.
Attention: Xxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000 0000
with a copy to
Xxxxxxxxxx & Xxxxx, P.A.
Attention: Xxxx X. Xxxxx
1100 International Centre
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
(b) If to Apollo, to it at:
Apollo Diamond, Inc.
Attention: Xxxxxx Xxxxxxx
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000 0000
with a copy to:
Xxxxxx Xxxxx, Esq.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000 0000
8.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
Except for the provisions of Article 1 (the "Third Party Provisions"), this
Agreement is not intended to confer upon any other person, except the parties
hereto, any rights or remedies hereunder, and no third person shall be a third
party beneficiary of this Agreement. The Third Party Provisions may be enforced
by the beneficiaries thereof.
8.6 Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota (regardless of the laws that might otherwise govern under
applicable Minnesota principles of conflicts of law).
8.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
8.8 Knowledge. As used in this Agreement or the instruments,
certificates or other documents required hereunder, the term "knowledge" of a
party hereto shall mean actual knowledge of the directors or executive officers
of such party.
8.9 Interpretation. The Table of Contents, article and section headings
contained in this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement. This Agreement shall
be construed without regard to any presumption or other rule requiring the
resolution of any ambiguity regarding the interpretation or construction hereof
against the party causing this Agreement to be drafted.
8.10 Publicity. Upon execution of this Agreement by Apollo and Dental,
the parties shall jointly issue a press release, as agreed upon by them. The
parties intend that all future statements or communications to the public or
24
press regarding this Agreement or the Merger will be mutually agreed upon by
them, except as provided in the following sentence. Neither party shall, without
such mutual agreement or the prior consent of the other, file any documents or
issue any statement or communication to the public or to the press regarding
this Agreement, or any of the terms, conditions, or other matters with respect
to this Agreement, except as required by law and then only (a) upon the advice
of such party's legal counsel; (b) to the extent required by law; and (c)
following prior notice to, and consultation with, the other party (which notice
shall include a copy of the proposed statement or communication to be issued to
the press or public). The foregoing shall not restrict Apollo's or Dental's
communications with their employees or customers in the ordinary course of
business.
8.11 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and the understandings between the parties with
respect to such subject matter.
8.12 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
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 a mutually acceptable
manner in order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the fullest extent possible.
8.13 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Reorganization as of the date first above written.
APOLLO DIAMOND, INC.
By: /s/
---------------------------------
Xxxxxx Xxxxxxx, President and CEO
DENTAL RESOURCES, INC.
By: /s/
---------------------------------
Xxxx Xxxxxx, President and CEO
25
Exhibit A
PLAN OF MERGER
MERGER OF APOLLO DIAMOND, INC. WITH AND INTO
DENTAL RESOURCES, INC.
Article 1
Constituent Corporations; Surviving Corporation
The names of the organizations participating in the merger are Dental
Resources, Inc., a corporation organized under the laws of the State of
Minnesota ("Dental"), and Apollo Diamond, Inc., a corporation organized under
the laws of the Commonwealth of Massachusetts ("Apollo"). Dental will be the
corporation surviving the merger. The purpose of the surviving corporation will
be the continuation of Apollo's business operations.
Article 2
Effective Time
The merger shall become effective upon the filing of articles of merger
which shall include this plan of merger with the Secretary of the State of
Minnesota ("Effective Time").
Article 3
Conversion of Securities
By virtue of the merger and without any action on the part of Apollo or
Dental or any holder of any share of capital stock of Apollo or Dental:
(a) Each share of common stock of Apollo, $.01 par value per share ("Apollo
Common Stock"), issued and outstanding immediately prior to the Effective Time
(except for shares as to which the holders thereof have asserted dissenters'
rights pursuant to the Business Corporation Law of Massachusetts ("BCLM")) shall
be converted into the right to receive ten thousand (10,000) (the "Conversion
Ratio") shares of common stock of Dental, par value $.01 per share (the "Dental
Common Stock").
(b) Each option or warrant to purchase shares of Apollo Common Stock that is
outstanding at the Effective Time, whether or not exercisable and whether or not
vested (a "Apollo Option"), shall, without any action on the part of Apollo or
the holder thereof, be assumed by Dental. From and after the merger, all
references to Apollo in the Apollo Options shall be deemed to refer to Dental.
The Apollo Options assumed by Dental shall be exercisable upon the same terms
and conditions as provided in the Apollo Options (including provisions regarding
vesting and the acceleration thereof) except that (i) such Apollo Options shall
entitle the holder to purchase from Dental the number of shares of Dental Common
Stock that equals the product of the Conversion Ratio multiplied by the number
of shares of Apollo Common Stock subject to such Apollo Option immediately prior
to the Effective Time, and (ii) the option exercise price per share of Dental
Common Stock shall be an amount equal to the exercise price per share of Apollo
Common Stock in effect immediately prior to the Effective Time divided by the
Conversion Ratio. As promptly as practicable after the Effective Time, Dental
shall issue to each holder of an Apollo Option a written instrument informing
such holder of the assumption by Dental of such Apollo Option. Dental shall take
all corporate action necessary to reserve for issuance a sufficient number of
shares of Dental Common Stock for delivery upon exercise of Apollo Options.
Dental shall use its commercially reasonable efforts to cause those Apollo
Options that qualified as incentive stock options prior to the Effective Time to
continue to qualify as incentive stock options immediately after the Effective
Time.
(c) Each share of Dental Common Stock issued and outstanding immediately prior
to the Effective Time shall (except for shares as to which the holders thereof
have asserted dissenters' rights pursuant to Sections 302A.471 and 302A.473 of
the MBCA) remain issued and outstanding and unaffected by the merger.
(d) Each option or warrant to purchase shares of Dental Common Stock that is
outstanding at the Effective Time, whether or not exercisable and whether or not
vested, shall remain issued and outstanding and unaffected by the Merger.
Article 4
Articles of Incorporation of the Surviving Corporation
The Articles of Incorporation of the surviving corporation, as in
effect immediately prior to the Effective Time, shall be amended and restated as
of the Effective Time to read as set forth on Appendix A hereto.
2
Exhibit B
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
DENTAL RESOURCES, INC.
ARTICLE 1 - NAME
1.1) The name of the corporation shall be Apollo Diamond, Inc.
ARTICLE 2 - REGISTERED OFFICE AND AGENT
2.1) The registered office of the limited liability company is located
at 000 Xxxx Xx., Xxxxx 0, Xxxxx Xxxx, XX 00000, and the name of the registered
agent at that address is National Registered Agents, Inc.
ARTICLE 3 - CAPITAL STOCK
3.1) Authorized Shares; Establishment of Classes and Series. The
aggregate number of shares the corporation has authority to issue shall be
100,000,000 shares, which shall have a par value of $.01 per share solely for
the purpose of a statute or regulation imposing a tax or fee based upon the
capitalization of the corporation, and which shall consist of 50,000,000 common
shares and 50,000,000 undesignated shares. The Board of Directors of the
corporation is authorized to establish from the undesignated shares, by
resolution adopted and filed in the manner provided by law, one or more classes
or series of shares, to designate each such class or series (which may include
but is not limited to designation as additional common shares), and to fix the
relative rights and preferences of each such class or series.
3.2) Issuance of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscriptions for, issue, sell and
deliver shares of any class or series of the corporation to such persons, at
such times and upon such terms and conditions as the Board shall determine,
establishing a price in money or other consideration, or a minimum price, or a
general formula or method by which the price will be determined.
3.3) Issuance of Rights to Purchase Shares. The Board of Directors is
further authorized from time to time to grant and issue rights to subscribe for,
purchase, exchange securities for, or convert securities into, shares of the
corporation of any class or series, and to fix the terms, provisions and
conditions of such rights, including the exchange or conversion basis or the
price at which such shares may be purchased or subscribed for.
3.4) Issuance of Shares to Holders of Another Class or Series. The
Board is further authorized to issue shares of one class or series to holders of
that class or series or to holders of another class or series to effectuate
share dividends or splits.
ARTICLE 4 - RIGHTS OF SHAREHOLDERS
4.1) No Preemptive Rights. No shares of any class or series of the
corporation shall entitle the holders to any preemptive rights to subscribe for
or purchase additional shares of that class or series or any other class or
series of the corporation now or hereafter authorized or issued.
4.2) No Cumulative Voting Rights. There shall be no cumulative voting
by the shareholders of the corporation.
ARTICLE 5 - DIRECTORS
5.1) Written Action by Directors. Any action required or permitted to
be taken at a Board meeting may be taken by written action signed by all of the
directors or, in cases where the action need not be approved by the
shareholders, by written action signed by the number of directors that would be
required to take the same action at a meeting of the Board at which all
directors were present.
ARTICLE 6 - MERGER, EXCHANGE, SALE OF ASSETS AND DISSOLUTION
6.1) Where approval of shareholders is required by law, the affirmative
vote of the holders of at least a majority of the voting power of all shares
entitled to vote shall be required to authorize the corporation (i) to merge
into or with one or more other corporations, (ii) to exchange its shares for
shares of one or more other corporations, (iii) to sell, lease, transfer or
otherwise dispose of all or substantially all of its property and assets,
including its good will, or (iv) to commence voluntary dissolution.
ARTICLE 7 - AMENDMENT OF ARTICLES OF INCORPORATION
7.1) After the issuance of shares by the corporation, any provision
contained in these Articles of Incorporation may be amended, altered, changed or
repealed by the affirmative vote of the holders of at least a majority of the
voting power of all shares entitled to vote or such greater percentage as may be
otherwise prescribed by the laws of the State of Minnesota.
ARTICLE 8 - AMENDMENT OF BYLAWS
8.1) After the initial Bylaws of the corporation are adopted by the
incorporators or first Board in the manner provided by law, no bylaw may be
adopted, amended or repealed unless approved by the affirmative vote of the
holders of at least a majority of the voting power of all shares entitled to
vote.
ARTICLE 9 - LIMITATION OF DIRECTOR LIABILITY
9.1) To the fullest extent permitted by Chapter 302A, Minnesota
Statutes, as the same exists or may hereafter be amended, a director of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director.
2
Exhibit C
AMENDED AND RESTATED BYLAWS
OF
DENTAL RESOURCES, INC.
ARTICLE 1.
OFFICES
1.1) Offices. The address of the registered office of the corporation
shall be designated in the Articles of Incorporation, as amended from time to
time. The principal executive office of the corporation shall initially be
located at ________________________, and the corporation may have offices at
such other places within or without the State of Minnesota as the Board of
Directors shall from time to time determine or the business of the corporation
requires.
ARTICLE 2.
MEETINGS OF SHAREHOLDERS
2.1) Regular Meetings. Regular meetings of the shareholders of the
corporation entitled to vote shall be held on an annual or other less frequent
basis as shall be determined by the Board of Directors or by the chief executive
officer; provided, that if a regular meeting has not been held during the
immediately preceding 15 months, a shareholder or shareholders holding three
percent (3%) or more of the voting power of all shares entitled to vote may
demand a regular meeting of shareholders by written notice of demand given to
the chief executive officer or chief financial officer of the corporation. At
each regular meeting, the shareholders, voting as provided in the Articles of
Incorporation and these Bylaws, shall elect qualified successors for directors
who serve for an indefinite term or for directors whose terms have expired or
are due to expire within six months after the date of the meeting, and shall
transact such other business as shall come before the meeting. No meeting shall
be considered a regular meeting unless specifically designated as such in the
notice of meeting or unless all the shareholders entitled to vote are present in
person or by proxy and none of them objects to such designation.
2.2) Special Meetings. Special meetings of the shareholders entitled to
vote may be called at any time by the Chairman of the Board, the chief executive
officer, the chief financial officer, two or more directors, or a shareholder or
shareholders holding ten percent (10%) or more of the voting power of all shares
entitled to vote who shall demand such special meeting by giving written notice
of demand to the chief executive officer or the chief financial officer
specifying the purposes of the meeting.
2.3) Meetings Held Upon Shareholder Demand. Within thirty (30) days
after receipt by the chief executive officer or the chief financial officer of a
demand from any shareholder or shareholders entitled to call a regular or
special meeting of shareholders, the Board of Directors shall cause such meeting
to be called and held on notice no later than ninety (90) days after receipt of
such demand. If the Board of Directors fails to cause such a meeting to be
called and held, the shareholder or shareholders making the demand may call the
meeting by giving notice as provided in Section 2.5 hereof at the expense of the
corporation.
2.4) Place of Meetings. Meetings of the shareholders shall be held at
the principal executive office of the corporation or at such other place, within
or without the State of Minnesota, as is designated by the Board of Directors,
except that a regular or special meeting called by or at the demand of a
shareholder shall be held in the county where the principal executive office of
the corporation is located.
2.5) Notice of Meetings. Except as otherwise specified in Section 2.6
or required by law, a written notice setting out the place, date and hour of any
regular or special meeting shall be given to each holder of shares entitled to
vote not less than _______ days nor more than sixty (60) days prior to the date
of the meeting; provided, that notice of a meeting at which there is to be
considered a proposal (i) to dispose of all, or substantially all, of the
property and assets of the corporation or (ii) to dissolve the corporation shall
be given to all shareholders of record, whether or not entitled to vote; and
provided further, that notice of a meeting at which there is to be considered a
proposal to adopt a plan of merger or exchange shall be given to all
shareholders of record, whether or not entitled to vote, at least fourteen (14)
days prior thereto. Notice of any special meeting shall state the purpose or
purposes of the proposed meeting, and the business transacted at all special
meetings shall be confined to the purposes stated in the notice.
2.6) Waiver of Notice. A shareholder may waive notice of any meeting
before, at or after the meeting, in writing, orally or by attendance. Attendance
at a meeting by a shareholder is a waiver of notice of that meeting unless the
shareholder objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened, or objects
before a vote on an item of business because the item may not be lawfully
considered at such meeting and does not participate in the consideration of the
item at such meeting.
2.7) Quorum and Adjourned Meeting. The holders of {[______]%} {a
majority} of the voting power of the shares entitled to vote at a meeting,
represented either in person or by proxy, shall constitute a quorum for the
transaction of business at any regular or special meeting of shareholders. If a
quorum is present when a duly called or held meeting is convened, the
shareholders present may continue to transact business until adjournment, even
though the withdrawal of a number of shareholders originally present leaves less
than the proportion or number otherwise required for a quorum. In case a quorum
is not present at any meeting, those present shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until the requisite number of shares entitled to vote shall be
represented. At such adjourned meeting at which the required amount of shares
entitled to vote shall be represented, any business may be transacted which
might have been transacted at the original meeting.
2.8) Voting. At each meeting of the shareholders, every shareholder
having the right to vote shall be entitled to vote in person or by proxy duly
appointed by an instrument in writing subscribed by such shareholder. Each
shareholder shall have one (1) vote for each share having voting power standing
in each shareholder's name on the books of the corporation except as may be
otherwise provided in the terms of the share { or as may be required to provide
for cumulative voting (if not denied by the Articles)} . Upon the demand of any
shareholder, the vote for directors or the vote upon any question before the
meeting shall be by ballot. All elections shall be determined and all questions
decided by a majority vote of the number of shares entitled to vote and
represented at any meeting at which there is a quorum except in such cases as
shall otherwise be required by statute or the Articles of Incorporation.
2.9) Order of Business. The suggested order of business at any regular
meeting and, to the extent appropriate, at all other meetings of the
shareholders shall, unless modified by the presiding chairman, be:
1. Call of roll
2. Proof of due notice of meeting or waiver of notice
3. Determination of existence of quorum
4. Reading and disposal of any unapproved minutes
5. Reports of officers and committees
6. Election of directors
7. Unfinished business
8. New business
9. Adjournment.
ARTICLE 3.
DIRECTORS
3.1) General Powers. { Except as authorized by the shareholders
pursuant to a shareholder control agreement or unanimous affirmative vote, the}
The business and affairs of the corporation shall be managed by or under the
direction of a Board of Directors.
3.2) Number, Term and Qualifications. The Board of Directors shall
consist of one or more members. { The number of members of the first Board (if
not named in the Articles of Incorporation) shall be determined by the
incorporators or shareholders. Thereafter, } At each regular meeting, the
shareholders shall determine the number of directors; provided, that between
regular meetings the authorized number of directors may be increased or
decreased by the shareholders or increased by the Board of Directors. Each
director shall serve for an indefinite term that expires at the next regular
meeting of shareholders, and until such director's successor is elected and
qualified, or until such director's earlier death, resignation,
disqualification, or removal as provided by statute.
3.3) Vacancies. Vacancies on the Board of Directors may be filled by
the affirmative vote of a majority of the remaining members of the Board, though
less than a quorum; provided, that newly created directorships resulting
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from an increase in the authorized number of directors shall be filled by the
affirmative vote of a majority of the directors serving at the time of such
increase. Persons so elected shall be directors until their successors are
elected by the shareholders, who may make such election at the next regular or
special meeting of the shareholders.
3.4) Quorum and Voting. A majority of the directors currently holding
office shall constitute a quorum for the transaction of business. In the absence
of a quorum, a majority of the directors present may adjourn a meeting from time
to time until a quorum is present. If a quorum is present when a duly called or
held meeting is convened, the directors present may continue to transact
business until adjournment even though the withdrawal of a number of directors
originally present leaves less than the proportion or number otherwise required
for a quorum. Except as otherwise required by law or the Articles of
Incorporation, the acts of a majority of the directors present at a meeting at
which a quorum is present shall be the acts of the Board of Directors.
3.5) Board Meetings; Place and Notice. Meetings of the Board of
Directors may be held from time to time at any place within or without the State
of Minnesota that the Board of Directors may designate. In the absence of
designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation, except as may be otherwise
unanimously agreed orally, or in writing, or by attendance. Any director may
call a Board meeting by giving {[__] days} {[__] hours} notice to all directors
of the date and time of the meeting. The notice need not state the purpose of
the meeting, and may be given by mail, telephone, telegram, or in person. If a
meeting schedule is adopted by the Board, or if the date and time of a Board
meeting has been announced at a previous meeting, no notice is required.
3.6) Waiver of Notice. A director may waive notice of any meeting
before, at or after the meeting, in writing, orally or by attendance. Attendance
at a meeting by a director is a waiver of notice of that meeting unless the
director objects at the beginning of the meeting to the transaction of business
because the meeting is not lawfully called or convened and does not participate
thereafter in the meeting.
3.7) Absent Directors. A director may give advance written consent or
opposition to a proposal to be acted on at a Board meeting. If the director is
not present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum, but
consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes of the meeting, if the proposal
acted on at the meeting is substantially the same or has substantially the same
effect as the proposal to which the director has consented or objected.
3.8) Compensation. Directors who are not salaried officers of the
corporation shall receive such fixed sum and expenses per meeting attended or
such fixed annual sum or both as shall be determined from time to time by
resolution of the Board of Directors. Nothing herein contained shall be
construed to preclude any director from serving this corporation in any other
capacity and receiving proper compensation therefor.
3.9) Committees. The Board of Directors may, by resolution approved by
affirmative vote of a majority of the Board, establish committees having the
authority of the Board in the management of the business of the corporation only
to the extent provided in the resolution. Committees may include a special
litigation committee consisting of one or more independent directors or other
independent persons to consider legal rights or remedies of the corporation and
whether those rights and remedies should be pursued. Each such committee shall
consist of one or more natural persons (who need not be directors) appointed by
the affirmative vote of a majority of the directors present, and shall, other
than special litigation committees, be subject at all times to the direction and
control of the Board. A majority of the members of a committee present at a
meeting shall constitute a quorum for the transaction of business.
3.10) Order of Business. The suggested order of business at any meeting
of the Board of Directors shall, to the extent appropriate and unless modified
by the presiding chairman, be:
1. Roll call
2. Proof of due notice of meeting or waiver of notice, or unanimous
presence and declaration by presiding chairman
3. Determination of existence of quorum
4. Reading and disposal of any unapproved minutes
5. Reports of officers and committees
6. Election of officers
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7. Unfinished business
8. New business
9. Adjournment.
ARTICLE 4.
OFFICERS
4.1) Number and Designation. The corporation shall have one or more
natural persons exercising the functions of the offices of chief executive
officer and chief financial officer. The Board of Directors may elect or appoint
such other officers or agents as it deems necessary for the operation and
management of the corporation including, but not limited to, a Chairman of the
Board, a President, one or more Vice Presidents, a Secretary and a Treasurer,
each of whom shall have the powers, rights, duties and responsibilities set
forth in these Bylaws unless otherwise determined by the Board. Any of the
offices or functions of those offices may be held by the same person.
4.2) Election, Term of Office and Qualification. At the first meeting
of the Board following each election of directors, the Board shall elect
officers, who shall hold office until the next election of officers or until
their successors are elected or appointed and qualify; provided, however, that
any officer may be removed with or without cause by the affirmative vote of a
majority of the Board of Directors present (without prejudice, however, to any
contract rights of such officer).
4.3) Resignation. Any officer may resign at any time by giving written
notice to the corporation. The resignation is effective when notice is given to
the corporation, unless a later date is specified in the notice, and acceptance
of the resignation shall not be necessary to make it effective.
4.4) Vacancies in Office. If there be a vacancy in any office of the
corporation, by reason of death, resignation, removal or otherwise, such vacancy
may, or in the case of a vacancy in the office of chief executive officer or
chief financial officer shall, be filled for the unexpired term by the Board of
Directors.
4.5) Chief Executive Officer. Unless provided otherwise by a resolution
adopted by the Board of Directors, the chief executive officer (a) shall have
general active management of the business of the corporation; (b) shall, when
present and in the absence of the Chairman of the Board, preside at all meetings
of the shareholders and Board of Directors; (c) shall see that all orders and
resolutions of the Board are carried into effect; (d) shall sign and deliver in
the name of the corporation any deeds, mortgages, bonds, contracts or other
instruments pertaining to the business of the corporation, except in cases in
which the authority to sign and deliver is required by law to be exercised by
another person or is expressly delegated by the Articles, these Bylaws or the
Board to some other officer or agent of the corporation; (e) may maintain
records of and certify proceedings of the Board and shareholders; and (f) shall
perform such other duties as may from time to time be assigned to the chief
executive officer by the Board.
4.6) Chief Financial Officer. Unless provided otherwise by a resolution
adopted by the Board of Directors, the chief financial officer (a) shall keep
accurate financial records for the corporation; (b) shall deposit all monies,
drafts and checks in the name of and to the credit of the corporation in such
banks and depositories as the Board of Directors shall designate from time to
time; (c) shall endorse for deposit all notes, checks and drafts received by the
corporation as ordered by the Board, making proper vouchers therefor; (d) shall
disburse corporate funds and issue checks and drafts in the name of the
corporation, as ordered by the Board; (e) shall render to the chief executive
officer and the Board of Directors, whenever requested, an account of all
transactions undertaken as chief financial officer and of the financial
condition of the corporation; and (f) shall perform such other duties as may be
prescribed by the Board of Directors or the chief executive officer from time to
time.
4.7) Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the shareholders and of the Board and shall exercise general
supervision and direction over the more significant matters of policy affecting
the affairs of the corporation, including particularly its financial and fiscal
affairs.
4.8) President. Unless otherwise determined by the Board, the President
shall be the chief executive officer. If an officer other than the President is
designated chief executive officer, the President shall perform such duties as
may from time to time be assigned to the President by the Board. If the office
of Chairman of the Board is not filled, the President shall also perform the
duties set forth in Section 4.7.
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4.9) Vice President. Each Vice President shall have such powers and
shall perform such duties as may be specified in these Bylaws or prescribed by
the Board of Directors. In the event of absence or disability of the President,
the Board of Directors may designate a Vice President or Vice Presidents to
succeed to the power and duties of the President.
4.10) Secretary. The Secretary shall, unless otherwise determined by
the Board, be secretary of and attend all meetings of the shareholders and Board
of Directors, and may record the proceedings of such meetings in the minute book
of the corporation and, whenever necessary, certify such proceedings. The
Secretary shall give proper notice of meetings of shareholders and shall perform
such other duties as may be prescribed by the Board of Directors or the chief
executive officer from time to time.
4.11) Treasurer. Unless otherwise determined by the Board, the
Treasurer shall be the chief financial officer of the corporation. If an officer
other than the Treasurer is designated chief financial officer, the Treasurer
shall perform such duties as may be prescribed by the Board of Directors or the
chief executive officer from time to time.
4.12) Delegation. Unless prohibited by a resolution approved by the
affirmative vote of a majority of the directors present, an officer elected or
appointed by the Board may delegate in writing some or all of the duties and
powers of such officer to other persons.
ARTICLE 5.
INDEMNIFICATION
5.1) Indemnification. The corporation shall indemnify such persons, for
such expenses and liabilities, in such manner, under such circumstances, and to
such extent, as permitted by Minnesota Statutes, Section 302A.521, as now
enacted or hereafter amended.
ARTICLE 6.
SHARES AND THEIR TRANSFER
6.1) Certificate of Stock. Every owner of stock of the corporation
shall be entitled to a certificate, in such form as the Board of Directors may
prescribe, certifying the number of shares of stock of the corporation owned by
such shareholder. The certificates for such stock shall be numbered (separately
for each class) in the order in which they are issued and shall, unless
otherwise determined by the Board, be signed by the chief executive officer, the
chief financial officer, or any other officer of the corporation. A signature
upon a certificate may be a facsimile. Certificates on which a facsimile
signature of a former officer, transfer agent or registrar appears may be issued
with the same effect as if such person were such officer, transfer agent or
registrar on the date of issue.
6.2) Stock Record. As used in these Bylaws, the term "shareholder"
shall mean the person, firm or corporation in whose name outstanding shares of
capital stock of the corporation are currently registered on the stock record
books of the corporation. The corporation shall keep, at its principal executive
office or at another place or places within the United States determined by the
Board, a share register not more than one year old containing the names and
addresses of the shareholders and the number and classes of shares held by each
shareholder. The corporation shall also keep at its principal executive office
or at another place or places within the United States determined by the Board,
a record of the dates on which certificates representing shares were issued.
Every certificate surrendered to the corporation for exchange or transfer shall
be cancelled and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled (except as provided for in Section 6.4 of this Article 6).
6.3) Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate
(or the shareholder's legal representative or duly authorized attorney-in-fact)
and upon surrender for cancellation of the certificate or certificates for such
shares. The shareholder in whose name shares of stock stand on the books of the
corporation shall be deemed the owner thereof for all purposes as regards the
corporation; provided, that when any transfer of shares shall be made as
collateral security and not absolutely, such fact, if known to
5
the corporation or to the transfer agent, shall be so expressed in the entry of
transfer; and provided, further, that the Board of Directors may establish a
procedure whereby a shareholder may certify that all or a portion of the shares
registered in the name of the shareholder are held for the account of one or
more beneficial owners.
6.4) Lost Certificate. Any shareholder claiming a certificate of stock
to be lost or destroyed shall make an affidavit or affirmation of that fact in
such form as the Board of Directors may require, and shall, if the directors so
require, give the corporation a bond of indemnity in form and with one or more
sureties satisfactory to the Board of at least double the value, as determined
by the Board, of the stock represented by such certificate in order to indemnify
the corporation against any claim that may be made against it on account of the
alleged loss or destruction of such certificate, whereupon a new certificate may
be issued in the same tenor and for the same number of shares as the one alleged
to have been destroyed or lost.
ARTICLE 7.
RESTRICTIONS ON OWNERSHIP AND TRANSFER OF SHARES
7.1) Disposition of Shares; Notice. No shareholder shall sell, assign,
give or otherwise voluntarily transfer or dispose of shares of the corporation
during the shareholder's lifetime {(except to or in trust for his or her spouse,
children or grandchildren)}, nor shall any shareholder pledge, mortgage or
otherwise encumber such shares, unless notice shall first have been given to the
corporation, as hereinafter provided, for the purpose of commencing the period
within which the corporation may purchase such shares in accordance with this
Article 7. Such notice to the corporation shall be in writing, shall specify the
stock involved, shall identify the proposed transferee, and shall be delivered
personally or by being deposited in the United States mail in a sealed envelope
with first class mail postage prepaid thereon, addressed to an officer of the
corporation at the principal office of the corporation. The corporation shall
have the first option to purchase such shares, in whole but not in part, at any
time within ninety (90) days after the date of receipt of such notice, at the
price provided in Section 7.5 hereof.
7.2) Renewal of Notice. Any transfer to be made after the expiration of
said ninety (90) day period must be made within an additional period of six (6)
months; otherwise, requisite notice to the corporation must be given anew.
7.3) Death, Insolvency or Bankruptcy of Shareholder { or Termination of
Employment}. In the event of the death of a shareholder, or in the event that a
shareholder is adjudicated a bankrupt or that judgment is entered against the
shareholder and execution is levied thereon, or in the event that shares of
stock which have been pledged, mortgaged or hypothecated by a shareholder (in
compliance with 7.1 hereof) are foreclosed upon or sold pursuant to the
collateral agreement, { or in the event that a shareholder's employment by the
corporation is terminated for any reason, voluntary or involuntary,} the
corporation shall have the first option to purchase all but not part of the
shares of stock of the corporation owned by such shareholder on the date of any
such event { (except shares transferred to or in trust for his or her spouse,
children or grandchildren)}. Such option shall be exercisable at any time for a
period of ninety (90) days after the occurrence of any such event, at the price
provided in Section 7.5 hereof.
7.4) Exercise of Option. The options granted to the corporation by
Sections 7.1 and 7.3 hereof shall be exercised by delivery of written notice of
the exercise, signed by an officer of the corporation, to the shareholder or the
shareholder's personal representative or successor, as the case may be. The
question of whether or not the corporation shall exercise such options shall be
determined by a vote of a majority of the entire Board of Directors; provided
that if the offering shareholder is a director, such person shall not vote on
the question.
7.5) Purchase Price of Stock. The price per share to be paid a
shareholder for the shareholder's shares of stock of the corporation upon
exercise of the corporation's rights to purchase such stock hereunder shall be
an amount equal to the value per share last established by the unanimous vote of
the entire Board of Directors applicable to all outstanding shares of the
corporation. If the Board has failed to establish any such value and price for
more than fourteen (14) months, then the value per share shall be determined as
of the last day of the month immediately preceding the date of the event giving
rise to the purchase, by appraisal of three qualified appraisers selected, one
by the offering shareholder (or the offering shareholder's legal
representative), one by the corporation, and one by the other two (or if they
are unable to agree within ten (10) days after their selection, by the Chief
Judge of the District Court for the County in which the corporation then has its
registered office); such appraisers shall determine such value as that price
which a willing buyer, being under no compulsion to buy, would pay for a share
of stock of the corporation and which a willing seller, being under no
compulsion to sell, would accept for a share of stock. Such appraisal shall be
accomplished under
6
such rules as the appraisers may reasonably establish or otherwise in accordance
with the Uniform Arbitration Act (Sections 572.08?572.30 of the Minnesota
Statutes). The decision of the appraisers shall be rendered in writing by a
majority vote, within sixty (60) days after the selection of the third
appraiser, which decision shall be final and binding on all parties. The
corporation shall pay the entire purchase price in cash within thirty (30) days
after the date of the exercise of its option to purchase or the date of the
decision of the appraisers, whichever is later, and upon surrender of the
certificates representing the shares so purchased, duly endorsed for transfer.
7.6) Endorsement on Stock Certificates. An endorsement in language
substantially as follows shall be placed on each certificate representing shares
of stock of the corporation:
"The shares of stock represented by this certificate are subject to certain
purchase options in the corporation as set forth in Article 7 of the Bylaws,
which Bylaws are available for inspection at the principal office of the
corporation."
7.7) Private Agreement. The provisions of this Article 7 may be
modified or expanded as between any shareholder and the corporation pursuant to
a written agreement duly authorized by the shareholders holding at least
{sixty-six and two-thirds percent (66-2/3%) } of the total voting power of the
shareholders, in which case the provisions of such agreement shall govern to the
extent inconsistent with this Article 7.
ARTICLE 8.
GENERAL PROVISIONS
8.1) Record Dates. In order to determine the shareholders entitled to
notice of and to vote at a meeting, or entitled to receive payment of a dividend
or other distribution, the Board of Directors may fix a record date which shall
not be more than sixty (60) days preceding the date of such meeting or
distribution. In the absence of action by the Board, the record date for
determining shareholders entitled to notice of and to vote at a meeting shall be
at the close of business on the day preceding the day on which notice is given,
and the record date for determining shareholders entitled to receive a
distribution shall be at the close of business on the day on which the Board of
Directors authorizes such distribution.
8.2) Distributions; Acquisitions of Shares. Subject to the provisions
of law, the Board of Directors may authorize the acquisition of the
corporation's shares and may authorize distributions whenever and in such
amounts as, in its opinion, the condition of the affairs of the corporation
shall render it advisable.
8.3) Fiscal Year. The fiscal year of the corporation shall be
established by the Board of Directors.
8.4) Seal. The corporation shall have such corporate seal or no
corporate seal as the Board of Directors shall from time to time determine.
8.5) Securities of Other Corporations.
(a) Voting Securities Held by the Corporation. Unless otherwise ordered
by the Board of Directors, the chief executive officer shall have full power and
authority on behalf of the corporation (i) to attend and to vote at any meeting
of security holders of other companies in which the corporation may hold
securities; (ii) to execute any proxy for such meeting on behalf of the
corporation; and (iii) to execute a written action in lieu of a meeting of such
other company on behalf of this corporation. At such meeting, by such proxy or
by such writing in lieu of meeting, the chief executive officer shall possess
and may exercise any and all rights and powers incident to the ownership of such
securities that the corporation might have possessed and exercised if it had
been present. The Board of Directors may from time to time confer like powers
upon any other person or persons.
(b) Purchase and Sale of Securities. Unless otherwise ordered by the
Board of Directors, the chief executive officer shall have full power and
authority on behalf of the corporation to purchase, sell, transfer or encumber
securities of any other company owned by the corporation which represent not
more than 10% of the outstanding securities of such issue, and may execute and
deliver such documents as may be necessary to effectuate such purchase, sale,
transfer or encumbrance. The Board of Directors may from time to time confer
like powers upon any other person or persons.
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8.6) Shareholder Agreements. In the event of any conflict or
inconsistency between these Bylaws, or any amendment thereto, and any
shareholder control agreement as defined in Minnesota Statutes, Section
302A.457, whenever adopted, such shareholder control agreement shall govern.
ARTICLE 9.
MEETINGS
9.1) Telephone Meetings and Participation.
A conference among directors by any means of communication through
which the directors may simultaneously hear each other during the conference
constitutes a Board meeting, if the same notice is given of the conference as
would be required for a meeting, and if the number of directors participating in
the conference would be sufficient to constitute a quorum at a meeting.
Participation in a meeting by that means constitutes presence in person at the
meeting. A director may participate in a Board meeting not heretofore described
in this paragraph, by any means of communication through which the director,
other directors so participating, and all directors physically present at the
meeting may simultaneously hear each other during the meeting. Participation in
a meeting by that means constitutes presence in person at the meeting. The
provisions of this section shall apply to committees and members of committees
to the same extent as they apply to the Board and directors.
{Closely-Held Language A conference among shareholders or directors or
committee members by any means of communication through which the participants
may simultaneously hear each other during the conference constitutes a
shareholder, Board or Committee meeting, respectively, if the same notice is
given of the conference as would be required for such meeting, and if the number
of participants in the conference would be sufficient to constitute a quorum at
such meeting. Participation in a meeting by that means constitutes presence in
person at the meeting. A shareholder, director or committee member may
participate in a meeting not heretofore described in this paragraph, by any
means of communication through which such shareholder, director or committee
member and others participating by similar means of communication, and all
participants physically present at the meeting, may simultaneously hear each
other during the meeting. Participation in a meeting by that means constitutes
presence in person at the meeting.}
9.2) Authorization Without Meeting. Any action of the shareholders, the
Board of Directors, or any committee of the corporation which may be taken at a
meeting thereof, may be taken without a meeting if authorized by a writing
signed by all of the holders of shares who would be entitled to vote on such
action, by all of the directors (unless less than unanimous action is permitted
by the Articles of Incorporation), or by all of the members of such committee,
as the case may be.
ARTICLE 10.
AMENDMENTS OF BYLAWS
10.1) Amendments. Unless the Articles of Incorporation provide
otherwise, these Bylaws may be altered, amended, added to or repealed by the
affirmative vote of {[__]%} {a majority} of the members of the Board of
Directors. Such authority in the Board of Directors is subject to the power of
the shareholders to change or repeal such Bylaws, and the Board of Directors
shall not make or alter any Bylaws fixing a quorum for meetings of shareholders,
prescribing procedures for removing directors or filling vacancies on the Board,
or fixing the number of directors or their classifications, qualifications or
terms of office, but the Board may adopt or amend a Bylaw to increase the number
of directors.
The undersigned, ____________________________, Secretary of
___________________, hereby certifies that the foregoing Bylaws were duly
adopted as the Bylaws of the corporation by its {first Board of Directors}
{incorporator} {incorporators} on ____________________.
{The undersigned, _______________________, Secretary of
___________________, hereby certifies that the foregoing Restated Bylaws were
duly adopted as the Bylaws of the corporation by its shareholders on
-----------------.}
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_________________________________
Secretary
Attest:
_________________________________
President
9
Exhibit D
$507,450 ___________, 2001 ("Issuance Date")
Minneapolis, Minnesota
LIMITED RECOURSE NOTE
For good and valuable consideration, the receipt of which is hereby
acknowledged, the undersigned, Dental Assets Acquisition, Inc., a Minnesota
corporation ("DAA"), agrees to pay to the order of Dental Resource, Inc.
("Dental"), or its registered assign ("Holder") at 000 X Xxxxx Xxxxxx, Xxxxxx,
XX 00000 or such other address provided to DAA by written notice from Holder,
the principal amount of up to Five Hundred Seven Thousand Four Hundred Fifty
Dollars ($507,450) (the "Principal Amount"), with interest accruing at an
interest rate of Five and One Half percent (5.5%) per annum from the date hereof
until this Note is paid in full, upon the terms and conditions specified below.
This Note is made in connection with that certain Asset Purchase Agreement dated
August 10, 2001, between Dental, DAA and Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
and Xxxxx X. Xxxxxxx (collectively referred to herein as the "Shareholders").
Payment of this Note is secured by limited personal guarantees of each of the
Shareholders, dated , 200 and attached hereto as Exhibit A.
1. Payment / Limited Recourse. On each anniversary of the Issuance Date
(or, if such anniversary is a holiday, Saturday or Sunday, on the following
business day) (the "Anniversary"), commencing on the first (1st) Anniversary and
ending on the fifth (5th) Anniversary, this Note shall be repaid in cash in five
(5) equal installments (the "Installments"), each Installment being equal and
limited to the lesser of (a) one fifth of the Principal Amount, plus all
interest accrued on the outstanding Principal Amount as of the time of payment
(the "Maximum Installment"), or (b) the value of the Sales Proceeds (as defined
in Section 4 below) from a sale of Twenty Nine Thousand Seven Hundred Forty Five
(29,745) shares of Dental common stock (the "Shares"), such amount being subject
to adjustment for stock splits or similar adjustments.
2. Prepayment. This Note may be prepaid at any time by paying to Dental
all Maximum Installments still outstanding.
3. Event of Default. All Installments outstanding shall, at the option
of Dental, become immediately due and payable upon the occurrence of any of the
following events (whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of law or otherwise) (individually an
"Event of Default"):
(a) if any creditor of DAA commences any foreclosure, levy, attachment
or other action or proceeding to enforce or collect a judgment owed by DAA which
is not contested in good faith, and such action or proceeding is not terminated
by DAA within fifteen (15) days through the satisfaction of the underlying
judgment; or
(b) if DAA makes an assignment for the benefit of creditors; or
(c) if any order, judgment, or decree is entered adjudicating DAA
bankrupt or insolvent; or
(d) if DAA petitions or applies to any tribunal for the appointment of
a trustee, receiver, or liquidator of DAA, or commences any proceedings relating
to DAA under any bankruptcy, reorganization, insolvency, dissolution, or
liquidation law of any jurisdiction, whether now or hereafter in effect; or
(e) if an order, judgment, or decree is entered appointing any such
trustee, receiver, or liquidator, or approving the petition in any such
proceedings, and such order, judgment, or decree remains unstayed and in effect
for more than 30 days; or
(f) if any order, judgment, or decree is entered in any proceedings
against DAA decreeing the dissolution of DAA and such order, judgment, or decree
remains unstayed and in effect for more than 30 days; or
(g) if DAA fails to pay any amount due under this Note within thirty
(30) calendar days and one or all of the Guarantors do not fulfill their
obligations under the limited personal guarantees with regard to such amount
due.
DAA shall immediately notify Dental or Holder of the occurrence of any
Event of Default of the Note described in subparagraphs (a) to (f). Upon the
occurrence of any Event of Default, DAA's liability shall be limited to the
value of the Sales Proceeds for the Shares for each Installment still
outstanding.
4. Sales Proceeds. "Sales Proceeds" mean:
(a) if the Shares are offered and sold to the public in the open market
through broker(s) and/or market maker(s): the fair market value of the Shares.
The fair market value of the Shares shall be its "market price", calculated for
purposes of Section 1 as of the date fifteen (15) calendar days prior to the
Anniversary and for purposes of Section 3 as of the date of the occurrence of
the Event of Default, respectively (the "Sale Date"), as follows:
(i) if Dental's common stock is listed on the Nasdaq National Market, Nasdaq
SmallCap Market, or an established stock exchange, then the average of the
prices of such stock at the close of the regular trading session of such market
or exchange for the ten (10) business days immediately preceding the Sale Date,
or
(ii) if Dental's common stock is not so listed on the Nasdaq National Market,
Nasdaq SmallCap Market, or an established stock exchange, then the average of
the closing "bid" prices quoted by the OTC Bulletin Board, the National
Quotation Bureau, or any comparable reporting service for the ten (10) business
days immediately preceding the Sale Date; or
(b) if the Shares are sold in a private placement, the proceeds from such sale.
The Shares may be sold in a private placement only with the prior written
consent of Dental, based upon a per share value determined by the board of
directors of Dental.
5. Waiver of Notices. DAA hereby waives presentment, demand for
payment, notice of dishonor, and all other notices or demands in connection with
the delivery, acceptance, performance, default or endorsement of this Note. No
delay or failure on the part of Dental or Holder, its agents or representatives,
to collect this Note or to exercise any power or right in connection with its
collection shall operate as a waiver thereof and such rights and powers shall be
deemed continuous.
6. Amendment. No amendment, modification or waiver of any provision of
this Note shall be effective unless the same shall be in writing and signed by
Dental or Holder.
7. Governing Law. This Note shall be governed by, and interpreted and
construed in accordance with, the laws of the State of Minnesota, without
reference to the choice of law principles thereof.
IN WITNESS WHEREOF, DAA has caused this Promissory Note to be signed by
its authorized officer and dated as of the date stated above.
DENTAL ASSETS ACQUISITION, INC.
By:
Its:
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Exhibit A
LIMITED PERSONAL GUARANTEE
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Exhibit E
SHAREHOLDER ACKNOWLEDGMENT
DATE: August , 2001
PARTIES:
Dental Resources, Inc.,
a Minnesota corporation ("Dental")
and
________________________________,
a shareholder of
Apollo Diamonds, Inc. ("Apollo"),
A Massachusetts corporation (hereinafter "Shareholder")
RECITALS:
A. Shareholder is the beneficial owner of ______________ (____________)
outstanding shares of Apollo Common Stock, and/or the holder of options,
warrants or other rights to acquire _________________ (_______) shares of Apollo
Common Stock.
B. Dental and Apollo are entering, or have entered, into an Agreement
and Plan of Reorganization (the "Merger Agreement") pursuant to which Apollo
will merge with and into Dental (the "Merger") and as a result of which
outstanding shares of Apollo Stock shall be converted into the right to receive
a certain amount of Dental Common Stock as provided in the Merger Agreement.
C. Pursuant to the Merger Agreement, Apollo agrees to obtain
Shareholder's acknowledgment pursuant to the terms and provisions hereof.
D. Shareholder deems it to be in his/her/its best interests and in the
best interests of Apollo and all other shareholders of Apollo that the Merger
Agreement be approved, ratified and confirmed by the shareholders of Apollo.
E. It is understood by the Shareholders that Dental's execution of the
Merger Agreement was, or is being, done in reliance upon the contemporaneous, or
prompt subsequent, execution and delivery of this Agreement and that Dental will
incur substantial expenses proceeding toward consummation of the Merger as
contemplated by the Merger Agreement and that such expenses will be undertaken
in reliance upon and as a result of the agreements and undertakings of
Shareholder set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and in order to
induce Dental to execute the Merger Agreement and to proceed as contemplated by
the Merger Agreement toward the consummation of the Merger, and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
AGREEMENTS:
1. Vote in Favor of Merger. Shareholder, in Shareholder's capacity as a
shareholder of Apollo or as a representative with the authority to vote shares
of Apollo Stock, acknowledges and agrees that he, she or it hereby does duly
vote all shares of Apollo Stock with respect to which Shareholder presently owns
or controls voting power (the "Shareholder's Stock") in favor of the approval of
the Merger Agreement and the transactions contemplated thereby, and Shareholder
agrees that Shareholder shall not take any action contrary thereto.
2. Representations and Warranties of Shareholder. Shareholder
represents and warrants to and agrees with Dental as follows.
(a) Shareholder has the legal capacity, and all legal and
equitable right, power, and authority (without the consent or approval of any
other person), to enter into and perform all of his, her or its obligations
under this Agreement. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid, and binding agreement of
Shareholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by laws affecting creditors rights generally or by
judicial limitations on the right to specific performance, injunctive relief or
other equitable remedies.
(b) Shareholder has valid and unencumbered title to all of the
Shareholder's Stock, free and clear of any Liens or other encumbrances. Upon
completion of the Merger, Shareholder will, upon request, execute and deliver
any additional documents deemed by Dental to be reasonably necessary or
desirable to complete the conversion of Shareholder's Stock into shares of
Dental Common Stock and the assumption by Dental of any Apollo Options of
Shareholder as provided for in the Merger Agreement.
(c) The execution, delivery, and performance of this Agreement by
Shareholder and the consummation of the Merger does not and will not (i) violate
any other agreement to which Shareholder is a party or by which Shareholder or
any of Shareholder's assets is bound or affected, including, without limitation,
any voting agreement, shareholders agreement, or voting trust; (ii) give any
party with rights under any such agreement the right to terminate, modify or
otherwise change the rights or obligations of Shareholder thereunder or
hereunder; or (iii) except as provided in the Merger Agreement, require any
affirmative approval, consent, authorization or other order or action of any
court, governmental authority, regulatory body, creditor or any other person
with respect to Shareholder or Shareholder's Stock.
(d) The following applies to Shareholder [please check all boxes
applicable]:
[ ] Shareholder is an experienced and knowledgeable
investor and acknowledges that he/she/it is able to fend for
himself/herself/itself, can bear the economic risk of an
investment in Dental Common Stock and is capable of evaluating the
merits and risks of such investment. Shareholder (if entity) has
not been organized for the purpose of acquiring the Dental Common
Stock.
[ ] Shareholder is an accredited investor because
Shareholder is
[ ] (1) An individual with a net worth, or a joint
net worth together with his or her spouse, in excess
of $1,000,000. (In calculating net worth, you may
include equity in personal property and real estate,
including your principal residence, cash, short term
investments, stock and securities. Equity in
personal property and real estate should be based on
the fair market value of such property minus debt
secured by such property.)
[ ] (2) An individual that had an individual income
in excess of $200,000 in each of the prior two years
and reasonably expects an income in excess of
$200,000 in the current year.
[ ] (3) An individual that had with his/her spouse
joint income in excess of $300,000 in each of the
prior two years and reasonably expects joint income
in excess of $300,000 in the current year.
[ ] (4) An entity all of whose equity owners meet
one of the tests set forth in (1) through (3) above.
Please identify each person included in such entity
and the test each qualifies under:
____________________________________________________
____________________________________________________
____________________________________________________
[ ] (5) An entity, and is an "Accredited Investor"
as defined in Rule 501(a) of Regulation D under the
Act. This representation is based on the following
(check one or more, as applicable):
(i) The Subscriber (or, in the case of a trust, the
Subscriber trustee) is a bank or savings and loan
association as defined in Sections 3(a)(2) and
3(a)(5)(A), respectively, of the Act acting either
in its individual or fiduciary capacity.
(ii) The Subscriber is an insurance company as
defined in Section 2(13) of the Act.
(iii) The Subscriber is an investment company
registered under the Investment Company Act of 1940
or a business development company as defined in
Section 2(a) (48) of that Act.
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(iv) The Subscriber is a Small Business Investment
Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
(v) The Subscriber is a private business development
company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
(vi) The Subscriber has total assets in excess of
$5,000,000, was not formed for the specific purpose
of acquiring shares of the Partnership and is one
or more of the following (check one or more, as
appropriate):
[ ] an organization described in Section
501(c)(3) of the Internal Revenue Code; or
[ ] a corporation; or
[ ] a Massachusetts or similar business
trust; or
[ ] a partnership.
[ ] (6) The Subscriber is a trust with total assets
exceeding $5,000,000, which was not formed for the
specific purpose of acquiring a Unit and whose
purchase is directed by a person who has such
knowledge and experience in financial and business
matters that he is capable of evaluating the merits
and risks of the investment in the Securities.
(e) Shareholder's domicile (if Shareholder is an individual) or
principal location (if Shareholder is an entity) is in (State).
Shareholder understands and acknowledges that Dental, Apollo and their
respective counsel will be acting in material reliance upon the truth and
accuracy of all representations of Shareholder set forth in this Agreement.
3. Investment Purpose in Acquiring the Merger Shares. Shareholder is
acquiring the shares of Dental Common Stock to be issued to Shareholder in the
Merger (the "Merger Shares") for Shareholder's own account for investment
purposes only and not with a view to their resale or distribution except in
accordance with registration under applicable securities laws or exemptions
therefrom. Shareholder does not have any present intention to divide his, her or
its participation with others or to resell or otherwise dispose of (and does not
have any short position in or agreement to sell) all or any part of the Merger
Shares except in accordance with registration under applicable securities laws
or exemptions therefrom.
4. Information About Dental. Shareholder acknowledges receipt of
business information about Dental, including Dental's proxy statement to
Dental's shareholders for the special meeting of Dental's shareholders on
September 18, 2001. Shareholder further acknowledges that Shareholder has had
the opportunity to discuss the business and affairs of Dental with an officer of
Dental and has received such information concerning Dental as Shareholder
considers necessary or advisable in order to form a decision concerning
acquisition of the Merger Shares.
5. Restriction on Transfer; Compliance with 1933 Act. Shareholder
understands that the Merger Shares are not freely transferable and that, other
than pursuant to a registration statement or availability of an exemption from
registration for the sale of such Merger Shares, Shareholder may in fact be
prohibited by applicable securities laws and regulations from selling the Merger
Shares for an extended period of time. If Shareholder sells or distributes any
Merger Shares in the future, Shareholder shall sell or distribute them pursuant
to the requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "1933 Act") and other applicable
securities laws. Shareholder will not transfer any part of the Merger Shares
without (i) effective registration under the 1933 Act and other applicable
securities laws, or (ii) obtaining an opinion of counsel satisfactory in form
and substance to counsel for Dental stating that the proposed transaction, if
effected without such registration, will not result in a violation of the 1933
Act and other applicable securities laws.
6. Restrictive Legend. Dental may place a restrictive legend on all
certificates representing Merger Shares containing substantially the following
language:
"The securities represented by this certificate have not been registered under
the federal Securities Act of 1933, as amended, or applicable state securities
laws and may not be sold, transferred, assigned, pledged, offered or otherwise
disposed in the absence of an effective registration statement under applicable
securities laws or an opinion of counsel reasonably satisfactory to the issuer
that such registration is not required."
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7. Successors and Assigns. This Agreement shall be binding upon any
purchasers, donees, pledgees, and other transferees of Apollo Stock legally or
beneficially owned by Shareholder. Shareholder agrees not to make any transfers
of such Apollo Stock without first making any such transferee fully aware of the
obligations hereunder and obtaining such transferee's written agreement to
comply with the terms hereof.
8. Injunctive Relief. Shareholder agrees that in the event of
Shareholder's breach of any provision of this Agreement, Dental may be without
an adequate remedy at law. Shareholder therefore agrees that in the event of
Shareholder's breach of any provision of this Agreement, Dental may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision, as well as to obtain damages for breach of this Agreement. By seeking
or obtaining any such relief, Dental will not be precluded from seeking or
obtaining any other relief to which it may be entitled.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
10. Further Assurances. Shareholder shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
11. Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
12. Certain Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meaning set forth in the Merger Agreement.
IN WITNESS WHEREOF, Dental has caused this Shareholder Acknowledgment
to be executed by its duly authorized officer, and Shareholder has executed this
Shareholder Acknowledgment, as of the date and year first above written.
DENTAL RESOURCES, INC.
By:
---------------------------
Its:
---------------------------
SHAREHOLDER:
--------------------------------
(Please print name)
Nevada
If a Shareholder is a married individual and residing in Nevada, the
consent below must be completed and signed by the spouse of the Shareholder.
By virtue of such signature of the spouse (if any) of the holder of
each outstanding share of Apollo Stock or each outstanding Apollo Option, such
spouse hereby appoints such holder as his or her attorney-in-fact in respect to
the exercise of any rights or discharge of any obligations under the Merger
Agreement and this Agreement, and agrees to be bound by the provisions of this
Agreement and the Merger Agreement insofar as such spouse may have any rights
under this Agreement and the Merger Agreement under the laws of the State of
Nevada or other laws relating to community, separate or marital property in
effect in Nevada or in the state of such spouse's residence as of the date of
this Agreement.
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(Print Name of Spouse - If Married)
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(Signature of Spouse - If Married)
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