THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND WILL BE OFFERED AND SOLD BY THE COMPANY IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE
LAW BY VIRTUE OF THE COMPANY'S INTENDED COMPLIANCE WITH THE PROVISIONS OF
SECTION 4(2) AND/OR REGULATION S PROMULGATED UNDER THE ACT. THE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY ANY REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK PURCHASE AGREEMENT
BriteSmile, Inc. December 7, 0000
Xxxxxxx Xxxxxxxx Xxxxxx
000 Xxxxxxxx Xxxxx, Xxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, President
Gentlemen:
In connection with the offer and proposed issuance (the "Offering") of
$10,000,000 in Common Stock of BriteSmile, Inc., a Utah corporation
("BriteSmile" or the "Company"), in reliance on exemptions from the registration
requirements of the U.S. Securities Act of 1933, as amended (the "Act"), LCO
Investments Limited ("Purchaser") and the Company hereby agree as follows:
1. Purchase of Securities. Subject to the terms and conditions of this
----------------------
Agreement, Purchaser hereby agrees to acquire, and the Company agrees to issue
and sell, Nine Million Three Hundred Two Thousand Three Hundred Twenty-six
(9,302,326) shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock"). The shares of Common Stock acquired by Purchaser hereunder
shall be referred to in this Agreement as the "Shares." The total purchase
price (the "Purchase Price") for the Shares shall be Ten Million Dollars
($10,000,000), the Purchase Price per Share being the higher of the Company's
book value per share and the average closing sale price per share of the Common
Stock on the American Stock Exchange ("AMEX") during the period of fifteen (15)
trading days immediately preceding the date hereof. The Purchaser shall pay the
Purchase Price in full at Closing, as hereinafter defined, via wire transfer to
an account of the Company identified by the Purchaser and under the control of
persons designated by or acceptable to the Purchaser on or before the Closing
Date. Wire instructions shall be provided prior to the Closing.
2. Delivery of Share Certificates. At the Closing, the Company shall
------------------------------
deliver to Purchaser certificates representing the Shares, which shall be fully
paid and nonassessable upon issuance.
3. Registration Rights and Exchange Filings. The Shares shall be subject
----------------------------------------
to certain registration rights, as provided in that certain Registration Rights
Agreement, dated as of May 5, 1998 (the "Registration Rights Agreement"),
between Purchaser and the Company and by this reference made a part hereof. The
Registration Rights Agreement shall be amended prior to the Closing to include
the Shares as registrable securities under Sections 1 and 2 thereof. (Such
Registration Rights Agreement, as amended, together with this Agreement,
constitute the "Transaction Documents"). In addition, BriteSmile has made or
shall make appropriate filings under the rules of AMEX in order that the Shares
will be authorized for listing on AMEX, subject to notice of issuance.
4. Closing. Payment of the Purchase Price by the Purchaser and delivery
-------
of the Shares by BriteSmile shall be deemed to be the completion of the
transactions contemplated by this Agreement ("Closing"). Closing shall occur
concurrently with the execution of this Agreement, or such later date as the
Shares shall have been authorized for listing on AMEX, subject to notice of
issuance, or on such later date as the parties may hereafter agree in writing
(the "Closing Date").
5. Use and Disposition of Proceeds. The gross proceeds of this
-------------------------------
transaction will be Ten Million Dollars ($10,000,000). The Company agrees to
use the proceeds in a manner consistent with the Business Plan of the Company,
as delivered to Purchaser on November 15, 1998, as shall be determined or
directed by its Board of Directors or as shall be determined or directed
pursuant to authority delegated by such Board.
6. Representations and Warranties of Purchaser. To induce the Company's
-------------------------------------------
acceptance of this Agreement, Purchaser hereby represents and warrants to the
Company and its agents and attorneys as follows:
6.1 Investor Status. Purchaser is an "accredited investor" within
---------------
the meaning of Section 501(a) of Regulation D under the Act or is not a
"U.S. Person" as that term is defined under Rule 902(o)(1) of Regulation S
under the Act.
6.2 Liquidity. Purchaser presently has sufficient liquid assets to
---------
pay the Purchase Price. Purchaser has adequate means of providing for its
current needs and contingencies and has no need for liquidity in its
investment in the Company or for a source of income from the Company.
Purchaser is capable of bearing the economic risk and the burden of the
investment contemplated by this Agreement, including, but not limited to,
the possibility of the complete loss of the value of the Shares and the
limited transferability of the Shares, which may make the liquidation of
the Shares impossible in the near future.
2
6.3 Organization, Standing, Authorization. Purchaser is duly
-------------------------------------
organized, validly existing, and in good standing under the laws of the
Guernsey, Channel Islands and has the requisite power and authority to
enter into this Agreement, acquire the Shares, and execute and deliver any
documents or instruments in connection with this Agreement. The execution
and delivery of this Agreement, and all other documents and instruments
executed by Purchaser in connection with any of the transactions
contemplated by this Agreement, have been duly authorized by all required
action of Purchaser's members or managers. The person executing, on
Purchaser's behalf, this Agreement and any other documents or instruments
executed by Purchaser in connection with this Agreement is duly authorized
to do so.
6.4 Absence of Conflicts. Purchaser represents and warrants that the
--------------------
execution and delivery of this Agreement and any other document or
instrument executed in connection with this Agreement, and the consummation
of the transactions contemplated thereby, and compliance with the
requirements thereof, will not violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on Purchaser, or the
provision of any indenture, instrument or agreement to which Purchaser is
a party or is subject, or by which Purchaser or any of its properties is
bound, or conflict with or constitute a material default thereunder, or
result in the creation or imposition of any lien pursuant to the terms of
any such indenture, instrument or agreement, or constitute a breach of any
fiduciary duty owed by such Purchaser to any third party, or require the
approval of any third-party pursuant to any material contract, agreement,
instrument, relationship or legal obligation to which Purchaser are subject
or to which any of their properties, operations or management may be
subject.
7. Sole Party in Interest. Purchaser represents that it is the sole and
----------------------
true party in interest, and no other person or entity has or will have upon the
issuance of the Shares beneficial ownership interest in the Shares or any
portion thereof, whether direct or indirect (excluding any contractual right to
payments based on the value of such Shares), other than the equity holders or
beneficiaries of Purchaser or as set forth on Purchaser's Report on Schedule 13D
with respect to the Shares.
7.1 Investment Purpose. Purchaser represents that it is acquiring
------------------
the Shares for its own account and for investment purposes and not for the
account or benefit of any U.S. person or other person or entity or for or
with a view to resale or distribution.
7.2 Knowledge and Experience. Purchaser is experienced in evaluating
------------------------
and making speculative investments, and has the capacity to protect
Purchaser's interests in connection with the acquisition of the Shares.
Purchaser has such knowledge and experience in financial and business
matters in general, and investments in the laser industry in particular,
that Purchaser is capable of evaluating the merits and risks of Purchaser's
investment in the Company. Purchaser has been informed that an investment
in the Company is speculative and has concluded that Purchaser's proposed
investment is appropriate in light of its overall investment objectives and
financial situation.
3
7.3 Disclosure, Access to Information. Purchaser confirms that it
---------------------------------
has received and thoroughly read and is familiar with and understands this
Agreement, and that all documents, records, books and other information
pertaining to Purchaser's investment in the Company requested by Purchaser
have been made available for inspection and copying and that there are no
additional materials or documents that have been requested by Purchaser
that have not been made available by the Company. Purchaser further
acknowledges that since August 1997, Xx. Xxxxxxx Xxxxxx, a director of the
Purchaser, has served as a member of the Board of Directors of the Company.
Purchaser further acknowledges that the Company is subject to the periodic
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Purchaser has reviewed or received copies of any
such reports that have been requested by it. Without limiting the
generality of the foregoing, Purchaser acknowledges that it has received
and has reviewed copies of the following documents and materials, all of
which are incorporated herein by reference:
(1) Articles of Amendment Adopting Revised Articles of
Incorporation of the Company, filed on August 11, 1998 with
the Utah Division of Corporations and Commercial Code;
(2) Bylaws of the Company, as amended;
(3) Annual Report on Form 10-KSB for the fiscal years ended March
31, 1997 and 1998;
(4) Quarterly Reports on Form 10-QSB for the quarters ended June
30, September 30, and December 31, 1997 and for the quarters
ended June 30 and September 30, 1998;
(5) Business Plan of the Company, as delivered to Purchaser on
November 15, 1998 (the "Business Plan").
7.4 Exclusive Reliance on this Agreement. In making the decision to
------------------------------------
purchase the Shares, Purchaser has relied exclusively upon information
included in this Agreement or incorporated herein by reference pursuant to
Section 7.4, and not on any other representations, promises or information,
whether written or verbal, by any person.
7.5 Advice of Counsel. Purchaser understands the terms and
-----------------
conditions of this Agreement, has investigated all issues to Purchaser's
satisfaction, has consulted with such of Purchaser's own legal counsel or
other advisors as Purchaser deems necessary, and is not relying, and has
not relied on the Company for an explanation of the terms or conditions of
this Agreement or any document or instrument related to the transactions
contemplated thereby. Purchaser further acknowledges, understands and
agrees that, in arranging for the preparation of this Agreement and all
other documents and materials related thereto, the Company has not
attempted to procure, and has not procured, legal representation for
Purchaser.
4
7.6 Accuracy of Representations and Information. All representations
-------------------------------------------
made by Purchaser in this Agreement and all documents and instruments
related to this Agreement, and all information provided by Purchaser to the
Company concerning Purchaser and its financial position is correct and
complete in all material respects as of the date hereof. If there is any
material change in such information before the actual issuance of the
Shares, Purchaser immediately will provide such information to the Company.
7.7 No Representations. None of the following have ever been
------------------
represented, guaranteed, or warranted to Purchaser by the Company or any of
its employees, agents, representatives or affiliates, or any broker or any
other person, expressly or by implication:
(1) The approximate or exact length of time that Purchaser will
be required to remain as owner of the Shares;
(2) The percentage of profit or amount of or type of considera
tion, profit or loss (including tax write-offs or other tax benefits)
to be realized, if any, as a result of an investment in the Shares; or
(3) Except as may be expressly provided in Section 12, the past
performance or experience on the part of the Company or any affiliate
or their associates, agents or employees, or of any other person as
being indicative of future results of an investment in the Shares.
7.8 Federal Tax Matters. Purchaser has reviewed and understands the
-------------------
federal income tax aspects of its purchase of the Shares, and has received
such advice in this regard as Purchaser deems necessary from qualified
sources such as attorneys, tax advisors or accountants, and is not relying
on any representative or employee of the Company for such advice.
7.9 No Brokers or Finders. Purchaser represents that no third person
---------------------
has in any way brought the parties together or been instrumental in the
negotiation, execution, or consummation of this Agreement or any
instrument, document or agreement related to this Agreement, other than any
financial advisor to the Purchaser whose fee or compensation in connection
with the matters covered by this Agreement is solely the obligation of the
Purchaser. Purchaser agrees to indemnify the Company against any claim by
any third person for any commission, brokerage fee, finders fee, or other
payment with respect to this Agreement or the transactions contemplated
hereby based upon any alleged agreement or understanding between such party
and such third person, whether expressed or implied, arising from the
actions of such party. The covenants set forth in this Section shall
survive the Closing Date and the consummation of the transactions
contemplated by this Agreement.
5
8. Certain Risk Factors. Purchaser has been informed about and fully
--------------------
understands that there are risks associated with an investment in the Company,
including those disclosed in documents incorporated herein by reference pursuant
to Section 7.4 of this Agreement.
9. Manner of Sale. At no time was Purchaser presented with or solicited
--------------
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.
10. Restricted Shares. Purchaser understands and acknowledges that the
-----------------
Shares have not been registered under the Act, or any state securities laws, and
that they will be issued in reliance upon certain exemptions from the
registration requirements of those laws, and thus cannot be resold unless they
are registered under the Act or unless the Company has first received an opinion
of competent securities counsel that registration is not required for such
resale. Purchaser agrees that it will not resell any Shares unless such resale
transaction is in accordance with Regulation S and/or Rule 144 under the Act,
pursuant to registration under the Act, or pursuant to an available exemption
from registration. With regard to the restrictions on resales of the Shares or
any security underlying or into which the Shares are or may be convertible,
Purchaser is aware (i) of the limitations and applicability of Securities and
Exchange Commission Rule 144, (ii) that the Company will issue stop transfer
orders to its stock transfer agent in the event of attempts to improperly
transfer any such securities; and (iii) that a restrictive legend will be placed
on certificates representing the Shares and any security underlying or into
which any of the Shares are or will be convertible, which legend will read
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO
A CLAIM OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION PROVISIONS OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND STATE SECURITIES
LAWS AND THEREFORE HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH THE PROVISIONS
OF REGULATION S OR, IF APPLICABLE, RULE 144 UNDER THE ACT, COMPLIANCE WITH
THE REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT OR APPLICABLE STATE
LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS. THE COMPANY WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO
RECOGNIZE ANY SALE OF THESE SECURITIES UNLESS SUCH SALE IS MADE PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR THE COMPANY HAS FIRST
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
SECURITIES COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
6
11. Indemnification. The Company agrees to indemnify the Purchaser, its
---------------
officers, employees and agents, and any persons controlling the Purchaser and
hold them harmless from and against any and all liability, damage, cost or
expense, including attorney's fees, incurred on account or arising out of any
inaccuracy or omission in or breach of the declarations, covenants, agreements,
representations, and warranties by the Company set forth or incorporated by
reference herein.
12. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to Purchaser as follows:
12.1 Organization, Standing, Etc. The Company is duly organized,
----------------------------
validly existing, and in good standing under the laws of the State of Utah,
and has the requisite power and authority to enter into and perform this
Agreement and to execute and perform under the documents, instruments and
agreements related to this Agreement.
12.2 Authorization. The execution and delivery of this Agreement and
-------------
the consummation of the transactions contemplated herein have been duly
authorized by all required action of the Company, including any necessary
approval by its Board of Directors or shareholders, and each of the
Transaction Documents and all instruments and agreements to be delivered in
connection therewith constitute its legal, valid and binding obligation,
enforceable against the Company in accordance with their respective terms,
subject to laws of general application relating to the rights of creditors
generally. The qualified directors of the Company have authorized this
Agreement and the consummation of the transactions contemplated hereby in
accordance with the provisions of Section 16-10a-852 of the Utah Business
Corporation Act. The approval of the shareholders of the Company is not
required for the execution or performance of this Agreement under any
applicable law or regulation, the rules and policies of the American Stock
Exchange, or the Company's Articles of Incorporation or Bylaws.
12.3 Absence of Conflicts. Neither the execution and delivery of the
--------------------
Transaction Documents or any other agreement or instrument to be delivered
to the Purchaser in connection therewith, nor the consummation of the
transactions contemplated thereby, by the Company, shall (i) conflict with
or result in a breach of or constitute a violation or default under (A) any
provision of the Articles of Incorporation or By-laws, each as amended to
date, of the Company, or (B) the provision of any indenture, instrument or
agreement to which the Company is a party or by which it or any of its
properties is bound, or (C) any order, writ, judgment, award, injunction,
decree, law, statute, rule or regulation, license or permit applicable to
the Company; (ii) result in the creation or imposition of any lien pursuant
to the terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owned by the Company to any third party, or
(iii) require the approval of any third party pursuant to any material
contract, agreement, instrument, relationship or legal obligation to which
the Company is subject or to which it or any of its properties, operations
or management may be subject.
7
12.4 Capitalization. The authorized capital stock of the Company
--------------
consists of 50,000,000 shares of Common Stock par value $.001 per share.
As of December 7, 1998, 7,697,273 shares of Common Stock were issued and
outstanding, and no shares were held in the Company's treasury. All of the
outstanding shares of Common Stock are, and the Shares will be, when paid
for and issued, duly authorized, validly issued, fully paid and non-
assessable and free of any preemptive rights.
12.5 Financial Statements. The Company's annual reports on Form 10-
--------------------
KSB for the fiscal years ended March 31, 1997 and 1998 (the "10-K's"), and
its quarterly reports on Form 10-QSB for the periods ended June 30,
September 30, and December 31, 1997 and June 30 and September 30, 1998 (the
"10-Qs"), and all 8-K's filed by the Company since March 31, 1997 (the "8-
K's) and its 1997 and 1998 Annual Proxy Statements, copies of which have
been filed with or furnished to the Securities and Exchange Commission,
were when filed or furnished, accurate in all material respects and did not
include any untrue statement of material fact or omit to state any material
fact necessary to make the statements therein not misleading. The
financial statements included in the 10-K's and the 10-Qs (the "Financial
Statements") present fairly the financial position of the Company at such
dates and the results of its operations and cash flows for the periods then
ended, in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods covered by such statements.
12.6 Business Plan. The Business Plan is in all material respects an
-------------
accurate presentation of the current plans and projections of the
management of the Company for the fiscal years ending 1999 through 2003.
Subject to the assumptions and other qualifications stated therein, the
financial information contained in the Business Plan does not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements contained therein not misleading, and was
prepared on a basis consistent with the accounting principles employed in
the preparation of the Financial Statements. All financial assumptions and
projections contained in the Business Plan are based on the reasonable
belief of management of the Company as of the date of the Business Plan and
as of the date hereof.
12.7 Litigation, Etc. Except as disclosed in the 10-K's, the 10-Q's,
----------------
the 8-K's, or in the Business Plan, there are no (a) suits, actions or
legal, administrative, arbitration or other proceedings or governmental
investigations or other controversies pending, or to the knowledge of the
Company threatened, or as to which the Company has received any notice,
claim or assertion, or (b) obligations or liabilities (other than
obligations and liabilities arising in the ordinary course of business
subsequent to September 30, 1998), whether accrued, contingent or
otherwise, which, in either case (a) or (b) involve a potential cost or
liability to the Company which would singly or in the aggregate, materially
or adversely affect the financial condition, results of operations,
business or prospects of the Company. The Company is not in default with
respect to any order, writ, injunction or decree of any court or before any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality,
8
domestic or foreign affecting or relating to it which is material to the
financial condition, results of operations or business of the Company.
12.8 Brokers and Finders. Neither the Company nor any person acting
-------------------
on behalf of the Company has employed any broker, agent or finder, or
incurred any liability for any brokerage fees, agents' commissions or
finders' fees, in connection with the transactions contemplated herein.
The Company agrees to indemnify Purchaser, its directors, officers and
controlling persons, against any claim by any third person for any
commission, brokerage fee, finders fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based upon any
alleged agreement or understanding between such party and such third
person, whether expressed or implied, arising from the actions of such
party. The covenants set forth in this Section shall survive the Closing
Date and the consummation of the transactions contemplated by this
Agreement.
12.9 Regulatory Compliance. To the best knowledge of the Company, it
---------------------
has operated and is currently operating in compliance in all material
respects with all laws, rules, regulations, orders, decrees, licenses or
permits applicable to it or to its business. The Company has not received
any notice from the FDA or any other governmental agency or authority of
any noncompliance by the Company with any law, rule, regulation, order,
decree, license or permit applicable to it or its business or properties.
12.10 Articles of Incorporation and By-laws. The Company has delivered
-------------------------------------
to the Purchaser copies of its Articles of Incorporation and all amendments
thereto, which copies are complete and correct. The Company is not in
default under or in violation of any provisions of its Articles of
Incorporation. The Company's Articles of Incorporation have not been
amended since the date of certification thereof and no action has been
taken for the purpose of effecting any amendment thereto. The Company has
delivered to the Purchaser copies of its By-laws and all amendments
thereto, which copies are complete and correct. The Company is not in
default under or in violation of any provision of its By-laws.
12.11 Product Liability. Except as disclosed in the 10-Ks, 10-Qs, 8-Ks
-----------------
or Business Plan, the Company has not received any notice, claim or
assertion regarding an actual or alleged liability of the Company with
respect to any of its products.
12.12 OEM Relationships. Except as disclosed to Purchaser prior to
-----------------
Closing, the Company has not received any notice, claim or assertion from
or with respect to any OEM counterparty of the Company regarding intention
of such OEM party to either discontinue its relationship with the Company
or develop or market products in competition with the Company.
12.13 Patents and Proprietary Rights. Except as disclosed to Purchaser
------------------------------
prior to Closing, the Company has no reason to believe that any of its
patents or proprietary rights infringes upon or otherwise violates the
patents or proprietary rights of any other party.
9
Except as disclosed to Purchaser prior to Closing, the Company has not
received any notice, claim or assertion that its patents or proprietary
rights or products or proposed products infringe upon or otherwise violate
the patents or proprietary rights of any other party.
12.14 Unincorporated Documents or Materials. With respect to any
-------------------------------------
document or other materials received by the Purchaser from the Company or
its representatives which are incorporated herein by reference herein, (i)
the Company has no reason to believe any of such documents and materials or
any projections contained therein contain errors or misstatements or do not
adequately describe the transactions contemplated by this Agreement or the
status of the development of the Company's technology and products, and
(ii) such documents, materials and projections were prepared by the Company
and its management in good faith.
12.15 Information. To the best knowledge of the Company, the
-----------
information concerning the Company set forth in or incorporated by
reference in this Agreement is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or
omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
12.16 The Stock Purchase. The Board of Directors of the Company has
------------------
made its own determination of the advisability of the Company's entering
into this Agreement and has considered all financial and regulatory effects
on the Company, including federal tax implications, of the consummation of
the transactions contemplated hereby as they deemed necessary or advisable.
The Company has not relied on any representations or warranties of
Purchaser in connection with such determination other than the
representations and warranties of Purchaser contained herein.
13. Nondisclosure. Except as required by applicable securities laws,
-------------
rules and regulations, prior to the Closing Date, no press release or other
announcement concerning the proposed transactions will be issued except by
mutual consent of the parties. This Agreement and all negotiations and
discussions between the parties in connection with this Agreement shall be
strictly confidential and will not be disclosed in any manner prior to the
Closing Date, except to employees and agents of the parties on a need-to-know
basis, as required by applicable law or regulations or as otherwise agreed by
the parties. After Closing, disclosure shall be at the sole discretion of the
Company, provided that Purchaser shall have the opportunity to review such
disclosure prior to publication.
14. Conditions to Closing. Closing of the transactions contemplated by
---------------------
this Agreement shall be contingent upon the satisfaction of the following
conditions precedent:
14.1 Approvals, Waivers, Etc. BriteSmile shall have delivered to
------------------------
Purchaser evidence of all approvals, including waivers and consents, of its
board of directors, government or third-parties which may be required for
the sale of the Shares, in full force and effect as of the Closing Date.
10
14.2 Absence of Litigation. No litigation shall have been threatened
---------------------
or shall be pending challenging the purchase of the Shares contemplated by
this Agreement or which could have a material adverse effect on BriteSmile.
14.3 No Bankruptcy. BriteSmile shall not have filed for bankruptcy
-------------
protection, the appointment of a trustee or receiver, assignment for the
benefit of creditors, nor have taken any other action designed to protect
the Company, its property or assets from the rights of creditors; and no
other person shall have made any such filing or taken any such action in
respect of BriteSmile.
14.4 No Breach of Agreements. 1Neither the execution and delivery of
-----------------------
the Transactions Documents or any other agreement or instrument to be
delivered to the Purchaser in connection therewith, nor the consummation of
the transactions contemplated thereby, by the Company, shall have
conflicted with or resulted in a breach of or constituted a violation or
default under (A) any provision of the Articles of Incorporation or By-
laws, each as amended to date, of the Company, or (B) the provision of any
indenture, instrument or agreement to which the Company is a party or by
which it or any of its properties is bound, or (C) any order, writ,
judgment, award, injunction, decree, law, statute, rule or regulation,
license or permit applicable to the Company.
14.5 Representations and Warranties. The representations and
------------------------------
warranties of the Company and Purchaser set forth in this Agreement shall
be true and correct in all material respects (disregarding, for purposes of
such determination of materiality, all qualifications in such
representations and warranties regarding "material") as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be
true and correct only as of such date).
14.6 AMEX Additional Listing Application. BriteSmile shall have made
-----------------------------------
all appropriate filings under the rules of the American Stock Exchange and
shall have received notification from the AMEX that the Shares have been
approved for listing, subject to notice of issuance.
14.7 BriteSmile Board Approval. The "qualified directors" of
-------------------------
BriteSmile (within the meaning of Section 16-10a-850 of the Utah Business
Corporation Act) shall have authorized and approved the transactions
contemplated by this Agreement pursuant to the laws of the state of Utah.
14.8 No Shareholder Approval Required. Counsel to BriteSmile shall be
--------------------------------
satisfied that no approval or authorization of the transactions
contemplated by this Agreement by the shareholders of BriteSmile shall be
required under or pursuant to the laws of the state of Utah, or the rules
and regulations promulgated by the AMEX.
14.9 Opinions. The Company shall have delivered to the Purchaser an
--------
opinion of counsel to the Company that the Shares, when paid for and
issued, will be validly
11
issued, fully paid and non-assessable, that the Transaction Documents have
been duly authorized and constitute legal and binding obligations of the
Company enforceable according to their terms, and that no approval or
authorization by the shareholders of BriteSmile shall be required under or
pursuant to the laws of the state of Utah.
15. General Provisions.
------------------
15.1 Attorneys' Fees. In the event of a default in the performance of
---------------
this Agreement or any document or instrument executed in connection with
this Agreement, the defaulting party, in addition to all other obligations
of performance hereunder, shall pay reasonable attorneys' fees and costs
incurred by the non-defaulting party to enforce performance of this
Agreement.
15.2 Choice of Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Utah, including choice of law
rules.
15.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when so signed shall be deemed to be an
original, and such counterparts together shall constitute one and the same
instrument.
15.4 Entire Agreement. This Agreement, the Registration Rights
----------------
Agreement, and the Exhibits, Schedules and other attachments referred to
herein (all of which are incorporated in this Agreement by reference)
collectively set forth the entire agreement between the parties as to the
subject matter hereof, supersede any and all prior or contemporaneous
agreements or understandings of the parties relating to the subject matter
of this Agreement, and may not be amended except by an instrument in
writing signed by all of the parties to this Agreement.
15.5 Expenses. The parties shall be responsible for and shall pay
--------
their own costs and expenses, including without limitation attorneys' fees
and accountants' fees and expenses, in connection with the conduct of the
due diligence inquiry, negotiation, execution and delivery of this
Agreement and the instruments, documents and agreements executed in
connection with this Agreement. The Company shall bear all expenses in
connection with the listing of the Shares on AMEX. Notwithstanding the
foregoing, the Company shall pay any stock transfer taxes payable in
connection with the issue and sale of the Shares to the Purchaser, and
expenses which the Company is obligated to pay under the Registration
Rights Agreement with respect to the Shares.
15.6 Headings. The headings of the sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
15.7 Notices. All notices or other communications provided for under
-------
this Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by
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overnight courier service, to the parties at their respective addresses as
indicated below or at such other address as the parties may designate in
writing:
(1) If to Purchaser:
LCO Investments Limited
0, Xxx Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxx
With copies to:
Xxxxxxx Xxxx
Cap Advisers Limited
00 Xxxxxxxxxxx Xxxxx
Xxxxxx 0, Xxxxxxx
(Tel. 000-000-0-000-0000)
(Fax 000-000-0-000-0000)
Craigh Xxxxxxx
Xxxxxxxx & O'Neil, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
(Tel. 000-000-0000)
(Fax 000-000-0000)
Xxxxxx X. Xxxxx, Xx.
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
(Tel. 000-000-0000)
(Fax 000-000-0000)
(2) If to the Company:
BriteSmile, Inc.
Airport Business Center
000 Xxxxxxxx Xxxxx, Xxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
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DURHAM, EVANS, XXXXX & XXXXXXX, P.C.
Key Bank Tower, Suite 850
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
All notices and communications shall be effective as follows: When mailed,
upon three (3) business days after deposit in the mail (postage prepaid);
when telecopied, upon confirmed transmission of the telecopied notice; when
hand delivered, upon delivery; and when sent by overnight courier, the next
business day after deposit of the notice with the overnight courier.
15.8 Severability. Should any one or more of the provisions of this
------------
Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall
not be affected thereby.
15.9 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors, but shall not be
assignable by Purchaser without the prior written consent of the Company;
provided that Purchaser may assign its rights hereunder and in the
Registration Rights Agreement relating to the Shares to one or more
affiliates of Purchaser or to one or more charitable foundations in
circumstances where such assignees assume all obligations of Purchaser
thereunder and any such assignment does not violate the Securities Act of
1933, and provided further that Purchaser may sell or assign any or all of
the Shares in accordance with this Agreement and such Registration Rights
Agreement.
15.10 Survival of Representations, Warranties and Covenants Closing.
-------------------------------------------------------------
All warranties, representations, indemnities and agreements made in this
Agreement by a party hereto shall survive the date of this Agreement, the
Closing Date, the consummation of the transactions contemplated by this
Agreement, and the issuance by the Company of the Shares.
IN WITNESS WHEREOF, the parties named below have caused this Agreement to
be executed, as of the date first above written.
LCO INVESTMENTS LIMITED
BY: /s/ Xxxxxxx Xxxx
------------------------------------------
Xxxxxxx Xxxx
TITLE: Director
-------------------------------------------
14
DATE: December 7, 1998
ACCEPTED AND AGREED:
BRITESMILE, INC.
BY: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx
President
DATE: December 7, 1998
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