Exhibit 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is executed on March 25, 1997 between
Sunrise Technologies International, Inc., a Delaware corporation ("seller"),
having its principal place of business at 00000 Xxxxxxx Xxxx., Xxxxxxx,
Xxxxxxxxxx 00000, and Xxxxx Research, a California corporation ("buyer"), having
its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Seller is engaged in the business of developing, manufacturing,
distributing and selling high-technology dental lasers, abrasive tooth cutting
systems, and composite curing systems (the "Dental Business"). Seller is also
engaged in an ophthalmic business, and intends to continue to conduct its
ophthalmic business.
B. Seller and buyer have entered into a Letter of Intent dated November
14, 1996, which was agreed to by seller on November 18, 1996, and amended by
letter dated February 24, 1997, stating the intent of seller to sell the Dental
Business and the intent of buyer to purchase the Dental Business, subject to the
negotiation and execution of a definitive agreement between the parties.
C. Seller and buyer desire to enter into this agreement to set forth
the definitive agreement of seller and buyer for the sale of the Dental Business
to buyer.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Agreement for Purchase and Sale.
Subject to the terms and conditions of this Agreement, seller hereby
agrees to sell, assign, transfer and deliver to buyer, and buyer agrees to
purchase from seller free and clear of all liens or encumbrances, all of the
assets, properties, and business of seller, whether tangible, intangible, real,
personal or mixed, and wherever located, that are held for use in the operation
of and are a part of seller's Dental Business, excluding only the assets
described in section 1.2, below (the "assets"), which assets include but are not
necessarily limited to the following:
A. All of the seller's supplies, materials, equipment, machinery,
tools, instruments, furniture, fixtures, and other tangible personal property
(the "tangible property") held for use by seller in the Dental Business. A
listing of the items of tangible property having an original cost greater than
$1,000.00 shall be prepared, approved by buyer and signed by the parties, and
attached to this agreement as Exhibit 1.1A prior to the closing.
B. All of seller's inventories (the "inventory") of parts, work in
process, and finished goods used and produced in the business of the Dental
Business. Seller and buyer agree that a physical inventory
will be taken jointly immediately prior to the closing and the actual inventory
purchased by the buyer shall be based thereon. A listing of the inventory being
purchased shall be prepared, approved by buyer and signed by the parties, and
attached to this agreement as Exhibit 1.1B prior to the closing.
C. All outstanding inventory purchase and product sales orders,
together with any deposits or prepayments received by seller on account thereof.
A listing of the inventory purchase and product sales orders, deposits and
prepayments shall be prepared by seller, approved by buyer and signed by the
parties, and attached to this agreement as Exhibit 1.1C prior to the closing.
D. All of seller's claims and rights under leases, contracts, trade
secrets, patents, patent applications, trademarks, service marks, trade names,
copyrights, inventions, formulas, knowhow, confidential proprietary technical
information, licenses, royalty rights, deposits, rights and claims to refunds
and adjustments of any kind, computer programs, software or firmware, data
processing information, and any other intellectual property, that are held for
use by seller in the Dental Business. Included in the foregoing shall be all
information, documents, design files, files, notes, and records of every kind
and nature prepared or maintained in connection with the research and
development activities of seller's Dental Business, including but not limited to
those concerning the original development of existing products, enhancements or
changes made to products of the Dental Business (whenever made), enhancements or
changes proposed to be made or being considered to be made to existing products,
or the development of new products. A partial listing of these claims and rights
shall be prepared by seller, approved by buyer and signed by the parties, and
attached to this agreement as Exhibit 1.1D signed by the parties prior to the
closing.
E. Contact information, including address and telephone numbers, for
vendors, customers, and others used by seller in the Dental Business, and any
yellow pages and trade journal advertising, web site files and web site links,
and all other advertising relating to the Dental Business.
F. All of seller's goodwill in the Dental Business, including all of
the seller's files (in any format, including paper and electronic), documents,
lists and records relating to the customers of and vendors to the Dental
Business (the "customer lists").
G. A Covenant Not to Compete pursuant to paragraph 4.1 of this
agreement.
1.2 Excluded Assets.
There shall be excluded from the assets sold hereunder:
A. Except for the deposits and prepayments described in paragraph 1.1C
of this agreement, all cash, cash items, accounts receivable, investments, stock
and other securities of seller;
B. All of seller's general financial records, provided that buyer shall
have the right to obtain copies of the financial records which buyer shall
reasonably require with respect to the continuing conduct of the business of the
Dental Business and with respect to filings with governmental and taxing
authorities concerning the assets;
C. All of seller's property, files and records used in connection with
seller's ophthalmic business or not relating to the Dental Business. Buyer
acknowledges that certain of seller's trade secrets, inventions, formulas,
knowhow and confidential proprietary technical information have applications to
and are used by seller in seller's ophthalmic business (collectively referred to
as "proprietary ophthalmic
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information"), and seller retains such proprietary ophthalmic information for
all uses, other than in Dental Business applications, including, without
limitation, such rights and proprietary information as it may have with respect
to the neodymium yag and other lasers;
D. The real property used in the business of the Dental Business,
subject to the provisions of paragraphs 4.7 and 9.9, hereof; and
E. The assets and rights described on Exhibit 1.2 to this agreement.
ARTICLE 2
CONSIDERATION FOR ASSETS
As full consideration for the transfer of the assets to buyer, buyer
agrees to pay and deliver to seller at the closing the following:
2.1 Cash Portion. The sum of Four Million Dollars ($4,000,000) in cash
(the "cash portion"). Upon execution of this agreement, buyer agrees to deposit
the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "deposit") with
Mid Valley Title & Escrow Company, 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000 (the
"escrow company") which sum, together with the remaining cash portion, will be
paid to Seller at the closing. The deposit shall be refunded to buyer in the
event the purchase and sale of the assets does not close as a result of failure
of any of the conditions precedent to the obligations of buyer contained in
Sections 9.1 through 9.6, Section 9.7B, and Section 9.8, hereof. Seller and
buyer agree to execute such instructions as shall be required by the escrow
company as a condition to receipt and holding of the deposit.
2.2 Promissory Note. Buyer's promissory note, dated as of the closing
date, in the principal amount of One Million Five Hundred Thousand Dollars
($1,500,000) in the form of Exhibit 2.2A attached hereto and incorporated herein
by this reference. The promissory note shall be secured by a Security Agreement
in substantially the form of Exhibit 2.2B attached hereto and incorporated
herein by this reference and a Deed of Trust in standard form. Seller agrees to
execute a subordination agreement in favor of Bank of America NT&SA (the "bank")
subordinating seller's rights under the Security Agreement and Deed of Trust to
rights conferred upon the bank under its financing documents with buyer. Prior
to the closing, Buyer agrees to enter into such revisions to the form of
promissory note, security agreement and deed of trust as may be reasonably
requested by seller as a result of restrictions which may be placed upon seller
under the terms of the subordination agreement requested by the bank to the
extent that the restrictions are substantially different from those contained in
the bank's standard "Business Loan Subordination Agreement", or upon buyer under
the bank's financing agreements with buyer.
2.3 Allocation of Purchase Price. The purchase price shall be allocated
as follows:
A. $2,750,000 to the laser products portion of the Dental Business.
B. $2,200,000 to the air abrasive products portion of the Dental
Business.
C. $550,000 to the CureStar composite curing lamp portion of the Dental
Business.
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ARTICLE 3
LIABILITIES
3.1 No Assumption of Liabilities.
Except as stated in paragraphs 3.3 and 5.3, it is expressly agreed and
understood that buyer shall not assume and in no event shall buyer be deemed to
have assumed or agreed to pay or perform, and seller shall at all times remain
solely responsible for, any debts, contracts, commitments, obligations or
liabilities of seller of any kind or nature whatsoever, including but not
limited to those of the Dental Business or connected in any way to the assets
arising or accruing prior to the closing , and specifically including those
arising out of or connected in any way to claims based on products liability
theories of recovery.
3.2 Payment of Seller's Liabilities.
Prior to or at the close of escrow, all of Seller's liabilities
incurred in Seller's operation of the Dental Business shall be adequately
provided for to buyer's reasonable satisfaction.
3.3 Assumption of Contracts.
Buyer agrees to assume all of seller's obligations on those contracts,
licenses, or other agreements listed on Exhibit 3.3 attached hereto and
incorporated herein by this reference, including, without limitation, all
outstanding inventory purchase and product sales orders, as described in Exhibit
1.1C, but only to the extent of obligations that are executory or arise and
accrue thereunder from and after the closing date, and all unsatisfied warranty
obligations of seller related to Dental Business products.
ARTICLE 4
OTHER AGREEMENTS
4.1 Covenant Not to Compete and Non-Disclosure Agreement.
A. During the period commencing on the closing date and ending on the
date which is five (5) years after the closing date, except as otherwise
approved in advance and in writing by buyer, seller agrees not to, directly or
indirectly, for seller's own account, or through, on behalf of, or in
conjunction with any person, firm, corporation, business or other legal entity,
(i) own, maintain, operate, control, have any interest in, perform consulting
services for or otherwise engage in any business or enterprise which sells or
leases products or provides services in competition with or similar to or the
same as the products sold or leased by or services provided by the seller as
part of the Dental Business as of the closing date within any territory or
geographic area throughout the world in which seller through its Dental Business
may be doing business, or (ii) induce or attempt to persuade any employee, agent
or customer of the Dental Business to terminate his or her employment, agency or
business relationship with buyer in order to enter into any such relationship on
behalf of any competing business. Nothing herein shall be construed to restrict
Seller's use of its proprietary ophthalmic information and laser products in
ophthalmic or any other applications other than in the Dental Business.
B. Seller further agrees not to divulge, communicate, use to the
detriment of the buyer or for the benefit of any other person or persons, or
misuse in any way, any confidential information or trade secrets of the seller
that is part of the assets being purchased hereby, including personnel
information,
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secret processes, know-how, customer lists, formulas or other technical data,
except as may be required by law, provided however, that this prohibition,
subject to the agreement of seller contained in paragraph 4.1A, shall not apply
to any information which, through no improper action of seller, is publicly
available or generally known in the industry.
C. To the extent necessary to satisfy the laws of any state, including
the state of California, seller agrees that any geographical, temporal or other
restriction set forth in this paragraph 4.1 can and should, if necessary, be
judicially modified to the extent necessary to make it enforceable and enforced
as modified.
D. It is agreed between the parties that buyer would be irreparably
damaged by reason of any violation of the provisions of this paragraph 4.1, and
that any remedy at law for a breach of such provision would be inadequate. Buyer
shall therefore be entitled to seek and obtain injunctive or other equitable
relief (including, but not limited to, a temporary restraining order, a
temporary injunction or a permanent injunction) against seller, seller's agents,
assigns or successors of a breach or threatened breach of such provisions and
without the necessity of proving actual monetary loss. It is expressly
understood among the parties that this injunctive or other equitable relief
shall not be the buyer's exclusive remedy for any breach of this paragraph 4.1
and subject to the provisions of Section 11, the buyer shall be entitled to seek
any other relief or remedy which it may have by contract, statute, law or
otherwise for any breach hereof, and it is agreed the buyer shall also be
entitled to recover its attorneys' fees and costs in any successful action or
suit against seller relating to any such breach.
E. Seller warrants and represents that it: (i) is familiar with
covenants not to compete; (ii) has discussed the provisions of the covenant not
to compete contained herein with its attorney and has concluded that such
provisions (including, without limitation, the right to equitable relief and the
length of time and size of area provided for herein) are fair, reasonable, and
just under the circumstances; and (iii) is fully aware of the obligations,
limitations and liabilities included in the covenant not to compete contained in
this agreement.
4.2 Employees.
A. Prior to the closing, buyer agrees to coordinate in advance with
seller's chief executive officer as to all communications or contacts for any
purpose with seller's employees. Buyer wishes to have the opportunity to have
certain employees of buyer observe seller's manufacturing processes prior to the
closing. Seller will allow buyer's employee's to have such access if so
requested by buyer at such times and with such frequency, subject to such
conditions and with regard to such operations and processes as seller and its
employees may determine; provided, that the presence of buyer's employees do
not, in the sole judgment and discretion of seller's chief executive officer,
interfere with seller's employees or seller's normal business operations.
B. Immediately preceding the closing, seller shall, at its sole expense
and responsibility, terminate, effective as of the closing, employment of any
employees of seller providing services in connection with the Dental Business
upon receipt of written notice from buyer that buyer has made an offer of
employment to such employees, which offer has been accepted. Seller shall have
no obligation to terminate the employment of any other of Seller's employees.
Buyer shall have no responsibility for any wages, benefits and other payments or
obligations due or becoming due (including any benefits which have accrued, but
which have not been paid) employees of seller or former employees arising out of
their employment prior to the closing or the termination of their employment by
seller including, without limitation, any liability for any injuries of such
employees relating to any period prior to closing.
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Employment of the same persons by buyer shall not cause nor be deemed
to cause buyer to assume or be responsible for any of such obligations or
liabilities of seller. It is the intent of this paragraph to define the duties
and obligations only as between the parties hereto. Accordingly, nothing
contained herein shall be deemed to create any third party beneficiary rights to
others.
C. With respect to any person who accepts regular employment with buyer
prior to the closing, during the five (5) year period following the closing
Seller agrees not to directly or indirectly solicit the personal services of any
such person, and during the one (1) year period following the closing Seller
agrees not to hire, or otherwise directly or indirectly make use of the personal
services of, any such person.
D. Seller agrees to make available to buyer at seller's business
premises those employees who worked in the Dental Business prior to the closing
but remain as employees of seller, upon written request from buyer, on up to a
full time basis for a six (6) month transition period after the closing. In
addition, after the transition period, seller shall make available to buyer at
either seller's premises or such other locations may be requested by buyer such
employees of seller for one (1) year after the Closing Date, if reasonably
requested by buyer from time to time in connection with buyer's conduct of the
Dental Business; provided that such services to buyer shall not unreasonably
interfere with seller's normal business operations. In the event of a conflict,
the requirements of seller shall have priority over those of buyer.
E. For any services rendered by seller's employees during the
transition period or in the one year period after the closing, seller shall be
reimbursed for all travel, lodging and other out-of-pocket expenses incurred by
seller or its employees, and shall be paid for each of its employees providing
services to buyer the product of the following: (number of hours spent by
employee on services to buyer) x (employee's hourly rate of pay from seller) x
(1.25) within thirty (30) days after the services have been provided. If any
affected employees are compensated on a basis other than hourly, seller shall
calculate an equivalent hourly rate of pay, assuming a 40-hour work week and a
52-week work year. Buyer acknowledges that seller is providing the services of
its employees as an accommodation and agrees that seller and its employees shall
have no liability with respect to any services rendered, and buyer further
agrees to indemnify and hold harmless seller and its employees from any damages,
costs, losses, liability or expense arising as a result of such accommodation.
4.3 Risk of Loss.
The risk of loss to any of the assets being purchased shall remain with
seller until the closing. Buyer shall have the option to either cancel this
Agreement without further obligation or to negotiate a pro rata reduction in the
purchase price of the assets in the event of any material loss, destruction, or
damage to the assets by reason of fire, other casualty, or other cause prior to
such time.
4.4 Time.
Time is of the essence in connection with the performance of the
covenants, agreements and obligations arising under this agreement.
4.5 Use of Sunrise Name.
Seller hereby grants buyer the right to use the name "Sunrise
Technologies" and "Sunrise" (the "Sunrise names") as follows:
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A. Buyer may distribute any and all supplies of brochures and other
marketing and promotional materials concerning the Dental Business, sell any
item or items of inventory, containing the Sunrise names, and use any packaging
materials containing the Sunrise names that exist as of the closing in the
ordinary course of business, provided that buyer agrees to place a notice on the
materials to the effect that buyer is now the owner of the Dental Business and
will be selling, distributing, and warranting the products. The form of notice
shall be approved in advance by Sunrise, which approval shall not be
unreasonably withheld, and seller agrees to promptly review and respond to
buyer's notice proposal.
B. Buyer may use the "Sunrise" name for a period of one (1) year after
the Closing Date in new marketing materials and advertising to indicate that the
Dental Business products being sold by buyer were formerly manufactured,
marketed and sold by seller. The form of use of the "Sunrise" name shall be
approved in advance by Sunrise, which approval shall not be unreasonably
withheld, and seller agrees to promptly review and respond to buyer's proposals
for use.
C. Buyer agrees to indemnify and hold harmless seller and seller's
successors and assigns from and against any and all loss and expense (as those
terms are defined in paragraph 11.1, below) in connection with or arising from
any claim relating to the use of the Sunrise names.
4.6 Access to Records.
Subject to Section 1.2B, Buyer acknowledges that buyer will receive,
and seller agrees to deliver to buyer at the closing all documents, books,
papers, files and other records or data relating to the operation of the Dental
Business, and Seller shall not be obligated to retain any of such materials
except as required by law or as is reasonably prudent for tax and SEC
requirements. For a period of six (6) years following the closing date seller
shall make available to buyer or buyer's representatives and official designees,
during normal business hours for any proper purpose, such books, papers, files
or other records or data of or relating to the operation of the business of the
Dental Business of seller prior to the closing date as seller may have in its
possession or under its control, if any, and permit buyer to make copies and
extracts therefrom at buyer's expense. For a period of six (6) years after the
closing date, seller agrees not to dispose of all or part of such records or
data in its possession without giving buyer less than forty-five (45) days'
advance written notice of seller's intention to make such disposal.
4.7 Lease of Premises.
Seller holds a lease for the premises from which seller operates (the
"premises") through January 31, 1998 for approximately 25,000 sq. ft. From the
Closing Date, through such period of time as buyer may have equipment or
materials located at the premises, or any employees working for buyer from the
premises, the base rent and the additional rent payable to the landlord under
the lease shall be allocated as follows: seller shall be responsible for base
rent and additional rent for 8,000 sq. ft., buyer shall be responsible for base
rent and additional rent for 12,000 sq. ft., and seller and buyer shall share
equally base rent and additional rent for the remaining portion of the premises.
As of the first day of the month following buyer's vacation of the premises,
seller shall be responsible for base rent and additional rent for 8,000 sq. ft.,
and seller and buyer shall share equally base rent and additional rent for the
remaining portion of the premises until such time as the lease is terminated or
assigned, provided that buyer shall not be responsible for any share of the cost
of utilities paid directly by the tenant provided to the premises after buyer
has vacated the premises. Seller and buyer shall use their respective best
efforts (without the expenditure of money) to find a new tenant for the premises
for any time period after buyer has given seller notice that it intends to
vacate the premises. Any amount received from any subtenant(s) shall be applied
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on a pro-rata basis to reduce the obligations of the parties under this
paragraph. Seller has obtained the consent of the landlord to buyer's use of the
premises as described in this Section.
4.8 Insurance Coverage After Closing. Seller agrees to maintain, for a
period of five (5) years after the closing, the products liability insurance
coverage in existence at the time of execution of this agreement, or
substantially similar coverage, and to name buyer as an additional insured under
said insurance coverage. Seller agrees to give buyer at least 60 days' advance
notice of a decision to terminate said insurance coverage, and shall instruct
the insurance carrier to provide buyer at least 30 days' advance notice of a
cancellation or lapse of said coverage. Said insurance coverage shall provide
for the option to purchase at least 5 years of extended reporting ("tail
coverage"). As additional insured, buyer shall be entitled to purchase, and
seller hereby expressly authorizes buyer to so acquire if seller does not
purchase, the tail coverage at any time said tail coverage may be purchased. If
buyer exercises the option to purchase the tail coverage, buyer shall be
responsible for the premium cost of the tail coverage for any period beyond the
above-referenced 5 year period, and seller agrees to pay the premium cost of the
tail coverage for the portion of the tail coverage that applies to said 5 year
period.
ARTICLE 5
THE CLOSING
5.1 Closing Date.
The closing of the purchase and sale of the assets (the "closing")
shall be consummated at 10:00 A.M., local time, at the seller's principal place
of business, on or before the later of (i) thirty (30) days after the effective
date of this agreement or (ii) three (3) business days after receipt of approval
of the sale by seller's shareholders as required by paragraph 10.4, hereof, or
at such other time and place or on such other date as may be agreed upon by
seller and buyer in writing (the "closing date"), but in no event later than May
15, 1997. Possession of the assets shall be transferred to buyer as of 12:01
a.m. on the date of closing.
5.2 Closing Date Deliveries.
A. Subject to satisfaction or waiver of the conditions set forth
herein, on the closing date seller shall deliver to buyer (i) duly executed
instruments of transfer and assignment in form and substance reasonably
satisfactory to buyer sufficient to vest in buyer good and valid title to all of
seller's right, title and interest in and to the assets, (ii) such other
documents as reasonably may be necessary to enable buyer to deal with, utilize,
sell and/or collect on the assets which are the subject of this Agreement, (iii)
originals or copies, as appropriate, of the materials reviewed by buyer in
buyer's due diligence inspections, and (iv) each of the other instruments and
documents required to be delivered by seller hereunder.
B. Subject to satisfaction or waiver of the conditions set forth
herein, on the closing date buyer shall deliver to seller (i) the $250,000
deposit held in escrow by certified check or by wire transfer of immediately
available funds from the escrow company and $3,750,000 by wire transfer of
immediately available funds, together constituting the cash portion, (ii)
buyer's duly executed promissory note as described in paragraph 2.2, (iii)
buyer's duly executed Security Agreement and Deed of Trust as described in
paragraph 2.2, and (iv) each of the other instruments and documents required to
be delivered by buyer hereunder.
5.3 Prorations. All state and local real and personal property taxes,
rent, utilities and
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telephone services, and any other ongoing services utilized by the seller in the
Dental Business and specifically assumed in writing by buyer, if any, shall be
prorated between seller and buyer as of the date of closing. Buyer will not be
responsible for any business, occupation, withholding, or similar tax, or for
any taxes of any kind related to any period before the closing date. Any and all
sales taxes arising because of the sale of tangible property pursuant to this
Agreement shall be paid by the seller. Seller shall pay all fees associated with
the transfer of the ADL licenses to use patents.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to buyer to enter into this agreement and to
consummate the transactions contemplated hereby, seller hereby represents and
warrants to buyer and agrees as follows:
6.1 Organization of Seller.
Seller is a corporation duly organized, validly existing, and in good
standing under the laws of the state of Delaware, is qualified to do business in
and in good standing under the laws of the state of California, and neither the
nature of its properties nor the conduct of its business requires seller to be
qualified to transact business as a foreign corporation in any other state or
jurisdiction in which the failure to be so qualified and in good standing would
be materially adverse to the seller.
6.2 Corporate Power.
The seller has full power and authority to own or lease and operate its
properties and to conduct its business as now being conducted.
6.3 Authority of the Seller.
A. The seller has full power and authority to execute and deliver this
agreement and each of the agreements and instruments contemplated hereby to be
executed and delivered by seller and to perform all acts which are necessary or
desirable to be performed by it to carry out the terms, conditions and
provisions thereof.
B. Subject to obtaining the consent described in Section 10.4C, the
execution, delivery and performance of this agreement and each of the agreements
and instruments contemplated hereby to be executed and delivered by seller have
been duly authorized and approved by all necessary corporate action of the
seller and no further corporate action on the part of the seller is necessary to
authorize such execution, delivery and performance. Subject to obtaining the
consent described in Section 10.4C, this agreement has been duly executed and
delivered by seller and constitutes, and each of the agreements and instruments
contemplated hereby to be executed and delivered by the seller will when duly
executed and delivered constitute, the legal, valid and binding obligation of
the seller, enforceable against the seller in accordance with its terms, subject
only (i) to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and (ii) to general principles of
equity.
C. Upon acquiring the consents identified herein, neither the execution
and delivery by seller of this agreement nor the execution and delivery by
seller of any of the other agreements or instruments contemplated hereby to be
executed and delivered by the seller nor the consummation of any of the
transactions contemplated hereby or thereby nor compliance by seller with or
fulfillment of the terms,
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conditions and provisions hereof or thereof will (i) conflict with, result in a
breach of the terms, conditions or provisions of, or constitute a default under,
the charter or bylaws of seller, any note, agreement, conditional sales
contract, indenture, mortgage, deed of trust, guarantee, lease, license, permit,
judgment, order, or other material agreement, commitment or arrangement to which
seller is a party or to which seller or seller's assets or any real property
owned or leased by seller are bound or affected and which is material to the
business and properties of the Dental Business, or any law, statute, rule or
regulation to which seller is subject, or (ii) require the approval, consent,
authorization of exemption by, or filing with any person not a party to this
Agreement or any court, governmental authority or regulatory or self-regulatory
body.
6.4 Financial Statements.
Schedule 6.4 hereto contains the audited statement of financial
condition of the seller as of December 31, 1996 (such statement of financial
condition being herein called the "Seller's Audited Balance Sheet") and the
related statements of retained earnings, operations and cash flows for the
twelve month period then ended, together with appropriate notes to such
financial statements, certified by Ernst & Young, Certified Public Accountants.
Such statements of financial condition, retained earnings, operation and cash
flows (and the Closing Unaudited Financial Statement described in paragraph 8.5
and its related statements of retained earnings, operations and cash flows) have
been prepared in conformity with generally accepted accounting principles
consistently applied (including, without limitation, provision for deferred tax
liability, and except for the absence of notes to the Closing Unaudited
Financial Statements and subject to normal year-end adjustments which are not
material) and present fairly the financial position of the company and the
Dental Business, respectively, and the results of operations as of their
respective dates and for the respective periods covered thereby.
6.5 Absence of Changes.
Except as disclosed in Schedule 6.5, since December 31, 1996:
A. There has not been any material adverse change in the assets,
properties, liabilities, business or condition (financial or otherwise) of the
Dental Business and no fact or condition exists or is contemplated or threatened
which might reasonably be expected to cause such a change in the future.
B. The seller has conducted the business of the Dental Business only in
the usual, regular and ordinary course and consistent with past practice.
Without limiting the generality of the foregoing, since December 31, 1996,
except as contemplated by this agreement the seller has not (i) sold, leased,
transferred or otherwise disposed of or mortgaged, pledged, or imposed or
suffered to be imposed any lien on any of the assets of the Dental Business
reflected on the Seller's Audited Balance Sheet or any assets of the Dental
Business acquired by the seller after December 31, 1996, other than property
sold or otherwise disposed of for fair value in the ordinary course of the
seller's business consistent with past practice; (ii) canceled or agreed to
cancel any debts owed to or claims held by the seller associated with the
business of the Dental Business other than in the ordinary course of the
seller's business consistent with past practice; (iii) entered into any material
contract or other agreement or any amendment or termination thereof with respect
to the Dental Business; (iv) made any change in the accounting policies, methods
or practices followed by the seller with respect to the Dental Business; or (v)
entered into or become committed to enter into any other transaction concerning
the business of the Dental Business except in the ordinary course of business.
6.6 Absence of Undisclosed Liabilities.
The seller is not subject to any liability with respect to or in any
manner affecting the Dental
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Business whether absolute, contingent, accrued or otherwise, which is not shown
or which is in excess of the amount shown or reserved for in the Seller's
Audited Balance Sheet, other than liabilities of the same nature and scope as
those which are set forth or reserved for in the Seller's Audited Balance Sheet
and the notes thereto incurred in the ordinary course of business after the date
of the Seller's Audited Balance.
6.7 Tax Returns.
Except as disclosed in Schedule 6.7, seller has filed all federal,
state and local income, excise, withholding, payroll, property, sales, use,
franchise and other tax returns required to be prepared or filed by or on behalf
of the seller in accordance with applicable law, and has paid all taxes,
interest, assessments, deficiencies and penalties due and payable to any taxing
authority. Except as disclosed in Schedule 6.7, there are no current audits
pending and no current disputes as to seller's liability for taxes of any
nature. All federal, state and local income, excise, withholding, payroll,
property, sales, use, franchise and other tax returns required to be filed by or
on behalf of the seller on or prior to the closing date will be true, correct
and complete and duly and timely filed in accordance with applicable law.
6.8 Assets.
The listing of assets in paragraph 1.1 and in the exhibits described
therein is a complete and accurate list of seller's assets being sold hereunder.
The assets constitute all the assets necessary or appropriate to conduct the
Dental Business as conducted by seller as of the date of execution of this
agreement and are, to the best knowledge of seller, in good condition and repair
(subject to normal wear and tear) and are suitable for the uses for which
intended. To the best knowledge of seller, all such assets and their uses
conform in all material respects to all applicable laws, regulations, rules,
ordinances, codes, licenses, franchises and permits (including, without
limitation, building, zoning, environmental and occupational safety and health
requirements), and no written notice of any violation of any of such matters
relating to such assets and their use has been received by the seller.
6.9 Title to Assets; Condition.
A. Seller has, and will have at the closing, good, valid and
indefeasible title to all the assets. All the assets are free and clear of
restrictions on or conditions to transfer or assignment and are free and clear,
or will be free and clear at the closing, of mortgages, liens, pledges, charges,
encumbrances, claims and other covenants, conditions or restrictions. Seller is
not a party to, and the assets are not bound by, any agreement that is
materially adverse to the assets. There are no liabilities or obligations with
respect to the assets, either accrued, absolute, direct, contingent or
otherwise, which would affect the value of the assets. Except for the licenses
described on Exhibit 1.1D, none of the assets is leased or subject to any other
agreement or right inconsistent with full ownership of the assets.
B. Except as described on Schedule 6.9B, to the knowledge of seller,
subject to the reserve for obsolescence shown on seller's Audited Balance Sheet,
the inventories of the seller consist of merchandise of a quality and quantity
usable and saleable in the ordinary course of the conduct of the Dental Business
and are valued at the lower of cost (on a FIFO basis) or market in accordance
with generally accepted accounting principles consistently applied. The term
"saleable" shall include use of inventory to perform warranty or non-warranty
service or repair of products sold by seller in the conduct of the Dental
Business, whether or not seller receives additional consideration for the
service or repair.
C. The customer accounts receivable of the seller have arisen from bona
fide transactions in the ordinary course of business of the Dental Business.
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D. EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE ARE NO OTHER WARRANTIES
OF SELLER, EXPRESS OR IMPLIED, WITH RESPECT TO THE ASSETS OR INVENTORIES.
6.10 Litigation.
A. The seller has complied in all material respects with all laws,
regulations, rules or ordinances of, and with all judgments, writs, decrees,
injunctions or orders of, any foreign, federal, state, county, municipal or
other government or governmental department, commission, board, bureau, agency
or instrumentality which are applicable to the Dental Business or the assets,
except for such failures to comply as in the aggregate would not have a material
adverse effect on the seller.
B. Except for workers compensation claims, there are no lawsuits,
actions, claims, suits, proceedings or investigations, legal, equitable,
administrative, through arbitration or otherwise, pending or, to the best
knowledge of seller, threatened against seller, its officers or directors or
affecting the assets or operations of seller's Dental Business, and (ii) there
is no action, suit or proceeding pending or, to the best knowledge of seller,
threatened against seller which questions the legality or propriety of the
transactions contemplated by this agreement or the agreements contemplated
hereby.
6.11 Permits.
A. The seller owns, holds or possesses all material governmental,
regulatory, and/or private licenses, registrations, franchises, permits,
privileges, immunities, approvals and other authorizations which are necessary
to entitle it to own or lease, operate and use its properties and assets related
to the Dental Business and to carry on and conduct its Dental Business as
currently conducted (herein collectively called "Permits"). Schedule 6.11 hereto
sets forth a list and brief description of each Permit owned, held or possessed
by the seller and used in the Dental Business. Seller is not aware of any
non-material licenses, permits, or other authorizations that are needed to carry
on and conduct the Dental Business.
B. Seller has delivered, or will deliver prior to closing, to buyer
complete and correct copies of all Permits owned, held or possessed by the
seller and used in the Dental Business. The seller has fulfilled and performed
its obligations under each of the Permits which, if failed to be performed,
could have a material adverse effect on the seller. No written notice of
cancellation, of default or of any dispute concerning, any such Permit has been
received by the seller, or is known to seller. Except as set forth on Schedule
6.11, each of the Permits owned, held or possessed by the seller will continue
in full force and effect after the consummation of the transactions contemplated
by this agreement and will accrue to the benefit of and be owned, held or
possessed by buyer without (i) the occurrence of any breach, default or
forfeiture of rights thereunder, (ii) the consent, approval, or act of, or the
making of any filing with, any governmental body, regulatory commission or other
party, or (iii) the payment of any transfer or consent fee.
6.12 Environmental Matters.
A. The seller does not own any real property. Schedule 6.12A sets forth
a list and brief description of each lease or other agreement (including a
description of premises and its rental term and location) under which the seller
is lessee of, or holds or operates or has an interest in, any real property not
owned by the seller that is used in the operation of the Dental Business. The
seller has the right to quiet enjoyment of all such real property described in
such Schedule for the full term of each such lease or
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similar agreement (and any related renewal option relating thereto). To the best
knowledge of seller, neither the whole nor any part of any real property owned,
leased, used or occupied by the seller is subject to any suit for condemnation
or other taking by any public authority, and no such condemnation or other
taking is threatened or, to the best knowledge of seller, contemplated.
B. The seller is operating in material compliance with all
environmental Permits and seller has not received any notice from any
governmental or regulatory authority of violation of any environmental, health
or safety laws or environmental Permits.
C. To the best knowledge of seller, neither the real property
identified on Schedule 6.12A nor any other real property now or previously
owned, leased, used or occupied by seller is the subject of any investigation by
any governmental or regulatory authority evaluating whether any remedial action
is needed to respond to a release of any hazardous or toxic substance or waste,
including but not limited to medical or biological wastes, petroleum or
petroleum-based substance or waste, onto, at or beneath the real property.
D. Schedule 6.12D lists any materials known to seller that are located
at the seller's premises that might be considered, under applicable law, a
hazardous or toxic substance or waste. Except as disclosed on Schedule 6.12D,
there is not now, nor was there at any time during the seller's tenure on any
real property owned or leased by the seller:
1. Any treatment, storage, recycling or disposal of any
hazardous waste requiring a permit under 40 C.F.R. Part 264 or 256, or any state
equivalent;
2. Any underground storage tanks used for the seller's
operations or liability for which is assumed under the applicable lease executed
by the seller;
3. Any asbestos-containing building or insulating materials;
or
4. Any seller-owned or operated electrical transformers or
other equipment containing polychlorinated biphenyls.
6.13 Employees and Related Agreements; ERISA.
A. Except as set forth in Schedule 6.13A, with respect to the Dental
Business, the seller is not a party to or subject to or bound by any written or,
to the best knowledge of seller, oral: (i) employee collective bargaining
agreement, employment agreement, consulting, advisory, agency, or service
agreement, deferred compensation agreement, confidentiality agreement or
covenant not to compete; (ii) employees, pension, profit-sharing, stock option,
bonus, incentive, stock purchase, welfare, life insurance, hospital or medical
benefit plan or any other employee benefit agreement or plan; or (iii) any
contract or agreement with any officer, director or employee of the seller
(other than employment agreements).
B. Seller has heretofore delivered to buyer a list of all employees and
commissioned salespersons of the seller providing any services in connection
with the business of the Dental Business, which is current as of March 1, 1997,
setting forth the total annual compensation (salary and other benefits) payable
as of such date to each of such employees or commissioned salespersons.
6.14 Contracts.
A. Except as set forth in Schedule 6.14, the seller, in connection with
the operation of the
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Dental Business, is not a party to or bound by, and the assets are not subject
to: (i) any sales, agency, royalty, commission or franchise agreement; (ii) any
letter of credit or guarantee of the obligations of others; (iii) any loan
agreement or other instrument relating to indebtedness of the seller or any
instrument or arrangement creating liens on any property of the seller; (iv) any
contract, agreement, commitment, arrangement or understanding not elsewhere
specifically disclosed pursuant to this agreement involving the payment or
receipt by the seller of more than $10,000 per year or $25,000 over the term
thereof; other than purchase orders or agreements for the purchase of inventory,
supplies or equipment entered into in the ordinary course of business described
on Exhibit 1.1C or (v) any other contract, agreement or commitment, written or,
to the best knowledge of seller, oral, which is material to the seller or the
business of the Dental Business that is not terminable on no more than 30 days
notice and involves at least $2,000, whether or not made in the ordinary course
of business.
B. Except as set forth in Schedule 6.14, each of the contracts,
agreements and commitments listed in any schedule hereto to which the seller is
a party and which buyer has agreed to assume as set forth on Exhibit 3.3 hereto
(collectively the "Contracts") constitutes a valid and binding obligation of the
seller and, to the best knowledge of seller, the other parties thereto and is in
full force and effect and will continue in full force and effect to the
exclusive benefit of buyer following the consummation of the transactions
contemplated by this agreement and the agreements contemplated hereby, and in
each case without (i) breaching the terms thereof or resulting in the forfeiture
or impairment of any material rights thereunder, or (ii) the approval, consent
or act of any other party, or any foreign, federal, state or local court,
governmental authority or regulatory body. The seller has performed in all
material respects its obligations under each of the Contracts which, if failed
to be performed, could have a material adverse effect on the seller, and, to the
best knowledge of seller, no other party to any of the Contracts has materially
breached or defaulted thereunder. Complete and correct copies of each of the
Contracts have heretofore been delivered to buyer by seller.
C. Seller has disclosed to buyer all material contracts, agreements,
arrangements or understandings known to seller that are necessary to the
operation of the Dental Business in the manner in which it has been conducted by
seller.
6.15 Insurance and Claims.
A. Schedule 6.15A sets forth a list and brief description (including
nature of coverage, deductibles, premiums) of all policies of insurance
maintained, owned or held by the seller on the date hereof with respect to its
properties, operations, assets, business, employees or otherwise related to the
Dental Business. Seller shall keep such insurance or comparable insurance in
full force and effect through the closing date. The seller has complied with
each of such insurance policies in all material respects and has not failed to
give any notice or present any claim thereunder in a due and timely manner which
failure could have a material adverse effect on the Dental Business.
B. There have been no claims for products liability damages or injuries
made with respect to products sold by the Dental Business since October 12, 1994
and, to the best knowledge of seller, from its inception through October 12,
1994. For purposes of this paragraph, the term "claim" shall include claims that
have been made to seller or seller's agents or insurance carriers either in
writing or, to the best knowledge of seller, orally, as well as claims that
seller is aware might or could be made.
6.16 Trademarks, Patents, Etc.
Seller does not hold any patents nor has it filed any patent
applications in connection with the
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operation of the Dental Business except as described in Exhibit 1.1D. All
trademarks, trade names, service marks, copyrights, inventions, patent
applications, software, firmware, formulas, knowhow, confidential proprietary
technical information and trade secrets (the "intellectual property") owned by
the seller and used in the Dental Business, all registered names under which the
seller is doing business in the Dental Business, and all licenses, agreements or
arrangements, undertakings or commitments, written or, to the best knowledge of
seller, oral, under which the seller has the right to use any of the foregoing,
and any patents or patent rights used, in connection with the operation of the
Dental Business are briefly described in Exhibit 1.1D, and are valid, binding
and enforceable in accordance with their terms. Except for the settled
litigation with ADL, no claims have been made or, to the best knowledge of
seller, threatened, and no proceedings have been instituted or are pending or,
to the best knowledge of seller, threatened against seller which challenge the
validity of the ownership or use by the seller as part of the business of the
Dental Business of any such intellectual property or rights. Except as described
in Exhibit 1.1D, Seller has not licensed anyone to use any of the foregoing or
any other of its proprietary rights or intellectual property that are used in
the business of the Dental Business, seller has no knowledge of the infringing
use of any of such trademarks, trade names, service marks, copyrights, patents
or patent rights, or other proprietary rights by any other person, and seller
has no knowledge that seller's use of seller's proprietary rights and
intellectual property or sale of Dental Division products either violates any
patent, trademark or other rights of any other person or infringes upon the
intellectual rights of any other person.
6.17 Disclosure.
None of the representations or warranties made by seller in this
Agreement, none of the information relating to seller contained in the schedules
hereto, and none of the other information provided by seller's president or
documents, certificates, schedules or memoranda furnished by seller or any of
its representatives to buyer or any of its representatives in connection with
this Agreement or with the transaction herein contemplated is false or
misleading in any material respect, contains any untrue statement of material
fact or omits any material facts required to be stated to make the statement
therein, taken as a whole, not misleading. To the best knowledge of seller,
there is no material fact which adversely affects the properties, business or
prospects of the Dental Business of seller in any material respect which has not
been set forth or referred to in this agreement or the schedules to this
agreement.
6.18 Finder.
Seller has not paid or become obligated to pay any fee or commission to
any broker, finder or intermediary for or on account of the transactions
contemplated by this agreement.
6.19 Knowledge.
When used in this Article 6, "knowledge" or "known" means information
actually known by any of the following: Xxxxx X. Light, Xxxxx Xxxxxxx, Xxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxx and C. Xxxxxxx Xxxxxxx.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to seller to enter into this agreement and to
consummate the transactions contemplated hereby, buyer hereby represents and
warrants to seller and agrees as follows:
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7.1 Organization of Buyer.
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the state of California and neither the nature of its
properties nor the conduct of its business requires buyer to be qualified to
transact business as a foreign corporation in any other state or jurisdiction in
which the failure to be so qualified and in good standing would be materially
adverse to the buyer.
7.2 Corporate Power.
The buyer has full power and authority to own or lease and operate its
properties and to conduct its business as now being conducted.
7.3 Authority of the Buyer.
A. The buyer has full power and authority to execute and deliver this
agreement and each of the agreements and instruments contemplated hereby to be
executed and delivered by buyer and to perform all acts which are necessary or
desirable to be performed by it to carry out the terms, conditions and
provisions thereof.
B. The execution, delivery and performance of this agreement and each
of the agreements and instruments contemplated hereby to be executed and
delivered by buyer have been duly authorized and approved by all necessary
corporate action of the buyer and no further corporate action on the part of the
buyer is necessary to authorize such execution, delivery and performance. This
agreement has been duly executed and delivered by buyer and constitutes, and
each of the agreements and instruments contemplated hereby to be executed and
delivered by the buyer will when duly executed and delivered constitute, the
legal, valid and binding obligation of the buyer, enforceable against the buyer
in accordance with its terms, subject only (i) to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally and (ii) to general principles of equity.
C. Upon acquiring the consents identified herein, neither the execution
and delivery of this agreement nor the execution and delivery by buyer of any of
the other agreements or instruments contemplated hereby to be executed and
delivered by the buyer nor the consummation of any of the transactions
contemplated hereby or thereby nor compliance by buyer with or fulfillment of
the terms, conditions and provisions hereof or thereof will, (i) conflict with,
result in a breach of the terms, conditions or provisions of, or constitute a
default under, the charter or bylaws of buyer, any note, agreement, conditional
sales contract, indenture, mortgage, deed of trust, guarantee, lease, license,
permit, judgment, order, or other material agreement, commitment or arrangement
to which buyer is a party or to which buyer or buyer's assets or any real
property owned or leased by buyer are bound or affected and which is material to
the business and properties of the buyer, or any law, statute, rule or
regulation to which buyer is subject, or (ii) require the approval, consent,
authorization of exemption by, or filing with any person not a party to this
Agreement or any court, governmental authority or regulatory or self-regulatory
body.
7.4 Financial Statements.
Schedule 7.4 hereto contains the unaudited statement of financial
condition of the buyer as of October 31, 1996 (such statement of financial
condition being herein called the "Buyer's 1996 Balance Sheet") and the related
statements of retained earnings, operations and cash flows for the twelve month
period then ended, together with appropriate notes to such financial statements,
reviewed by Xxxxxx & Xxxx Accountancy Corporation, Certified Public Accountants.
Schedule 7.4 also contains the internally
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generated unaudited statement of financial condition of buyer as of December 31,
1996 (such statement of financial condition being herein called the "Buyer's
Unaudited Balance Sheet") and the related statements of retained earnings,
operations and cash flows for the two month period then ended. Such statements
of financial condition, retained earnings, operation and cash flows have been
prepared in conformity with generally accepted accounting principles
consistently applied (except for the absence of notes thereto and subject to
normal year-end adjustments which are not material) and present fairly the
financial position of the buyer, and the results of operations as of their
respective dates and for the respective periods covered thereby.
7.5 Absence of Changes.
Since the date of the Buyer's Unaudited Balance Sheet:
A. There has not been any material adverse change in the assets,
properties, liabilities, business or condition (financial or otherwise) of buyer
and no fact or condition exists or is contemplated or threatened which might
reasonably be expected to cause such a change in the future.
B. The buyer has conducted buyer's business only in the usual, regular
and ordinary course and consistent with past practice. Without limiting the
generality of the foregoing, since the date of the Buyer's Unaudited Balance
Sheet, except as contemplated by this agreement the buyer has not (i) sold,
leased, transferred or otherwise disposed of or mortgaged, pledged, or imposed
or suffered to be imposed any lien on any of the assets reflected on the Buyer's
Unaudited Balance Sheet or any of buyer's assets after the date of the Buyer's
Unaudited Balance Sheet, other than property sold or otherwise disposed of for
fair value in the ordinary course of the buyer's business consistent with past
practice; (ii) canceled or agreed to cancel any debts owed to or claims held by
the buyer associated with buyer's business other than in the ordinary course of
the buyer's business consistent with past practice; (iii) entered into any
material contract or other agreement or any amendment or termination thereof;
(iv) made any change in the accounting policies, methods or practices followed
by the buyer; or (v) entered into or become committed to enter into any other
transaction concerning buyer's business except in the ordinary course of
business.
7.6 Absence of Undisclosed Liabilities.
The buyer is not subject to any liability, whether absolute,
contingent, accrued or otherwise, which is not shown or which is in excess of
the amount shown or reserved for in the Buyer's 1996 Balance Sheet or the
Buyer's Unaudited Balance Sheet, other than liabilities of the same nature and
scope as those which are set forth or reserved for in the Buyer's 1996 Balance
Sheet and the notes thereto or the Buyer's Unaudited Balance Sheet incurred in
the ordinary course of business after the dates of the Buyer's 1996 Balance
Sheet and the Buyer's Unaudited Balance Sheet, respectively.
7.7 Litigation.
A. The buyer has compiled in all material respects with all laws,
regulations, rules or ordinances of, and with all judgments, writs, decrees,
injunctions or orders of, any foreign, federal, state, county, municipal or
other government or governmental department, commission, board, bureau, agency
or instrumentality which are applicable to it or its properties, operations or
business except for such failures to comply as in the aggregate would not have a
material adverse effect on the buyer.
B. Except as set forth on Schedule 7.7, (i) there are no lawsuits,
actions, claims, suits, proceedings or investigations, legal, equitable,
administrative, through arbitration or otherwise, pending or,
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to the best knowledge of buyer, threatened against buyer, its officers or
directors or affecting the properties, operations or business of the buyer, and
(ii) there is no action, suit or proceeding pending or, to the best knowledge of
buyer, threatened against buyer which questions the legality or propriety of the
transactions contemplated by this agreement or the agreements contemplated
hereby.
7.8 Finder.
Except for a letter agreement with Xxxxxx Xxxxxx, buyer has not paid or
become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
agreement.
7.9 Disclosure.
None of the representations or warranties made by buyer in this
Agreement, none of the information relating to buyer contained in the schedules
hereto, and none of the other information provided by buyer's president or
documents, certificates, schedules or memoranda furnished by buyer or any if its
representatives to seller or any if its representatives in connection with this
Agreement or with the transaction herein contemplated is false or misleading in
any material respect, contains any untrue statement of material fact or omits
any material facts required to be stated to make the statement therein, taken as
a whole, not misleading. To the best knowledge of buyer, there is no material
fact which adversely affects the properties, business or prospects of the
business of buyer in any material respect which has not been set forth or
referred to in this agreement or the schedules to this agreement.
7.10 Knowledge.
When used in this Article 7, "knowledge" or "known" means information
actually known by Xxxxx Xxxxx.
ARTICLE 8
ACTIONS PRIOR TO THE CLOSING DATE
The parties hereto hereby covenant and agree to take the following
actions between the date hereof and the closing date:
8.1 Access to the Seller and Buyer.
Seller agrees to cooperate with the buyer and buyer agrees to cooperate
with seller in the performance of a legal, business and financial due diligence
audit. The parties agree to grant to each other and their authorized
representatives (including without limitation its independent public
accountants, attorneys and bank representatives) access during normal business
hours to and the right to inspect and copy the books and records of the parties
and to consult with the directors, officers, employees, attorneys, auditors and
accountants of the parties concerning customary due diligence matters. Such
inspections may include, for example, review of books and records of account,
tax records, records of corporation proceedings, contracts, trademarks,
governmental consents, and other business activities and matters relating to the
transactions contemplated by this agreement. The parties agree to provide such
information and copies of documents as may be reasonably requested by the
parties in connection with the audit. All confidential information acquired by
the other party pursuant to this paragraph shall be held in the strictest of
confidence by the other party and shall not be revealed or disclosed to any
third party or parties except
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as may be required by law. Any such investigation shall be conducted in such a
manner as not to interfere unduly with the business or operations of the other
party.
8.2 Preserve Accuracy of Representations and Warranties.
Each of the seller and the buyer shall refrain from taking any action
which would render any representation or warranty contained in Article 6 or 7 of
this agreement inaccurate as of the closing date. Seller and buyer agree to
promptly notify the other of such representation or warranty becoming untrue.
8.3 Operations Prior to the Closing Date.
Except as contemplated by this agreement, seller and buyer shall
operate and carry on their respective businesses in the usual, regular and
ordinary manner, substantially as presently operated and with a view to the
maintenance and preservation of the assets and going concern value existing as
of the date hereof. Consistent with the foregoing, except as contemplated by
this agreement or with the prior written consent of the other party, each party
(as to seller, with respect to the Dental Business) agrees not to: (i) change,
alter or make any employment contracts or arrangements with any management
personnel; (ii) create, assume, or acquire property subject to any lien,
mortgage or other encumbrance except in the ordinary course of business; (iii)
compromise any debt or claim except for adjustments made with respect to
contracts for the purchase of supplies and materials or for the sale of products
in the ordinary course of business, which in the aggregate are not material;
(iv) other than in the ordinary course of business, enter into any transaction,
incur any indebtedness or other obligation, or, without the prior written
consent of the other party, sell any assets; (v) alter, amend or enter into any
licensing or other contractual arrangement with respect to intellectual
property; (vi) make any material changes in its existing business practices
affecting the amount of inventory in the Dental Business, including but not
limited to changes, whether or not material, to historical terms of sales of
inventory; or (vii) make any other material change in the business or operation
of the Dental Business or enter into any material agreement. Buyer agrees not to
unreasonably withhold approval of non-cancelable agreements with a term less
than one year, and normal purchase orders for materials, supplies, etc., shall
not require buyer's approval. Seller shall be entitled to continue to distribute
and sell inventory in the ordinary course of business, subject to the provisions
of paragraph 9.5, below, concerning the book value of seller's inventory on the
closing date. Seller agrees to replace, consistent with past practice, any
products consigned to its sales personnel that are sold by said sales personnel
in the ordinary course of business. Seller agrees that segregation of inventory
to seller's ophthalmic business has been completed, and no additional inventory
will be transferred to the seller's ophthalmic business.
8.4 Satisfaction of Conditions.
Seller shall use its best efforts to cause the conditions set forth in
paragraphs 9.3, 9.4, 9.5, 9.6, 9.8, and 9.10 to be satisfied as soon as possible
and buyer agrees to use its best efforts to cause the conditions set forth in
paragraphs 10.3, 10.4, 10.5, 10.6, and 10.7 to be satisfied as soon as possible.
8.5 Subsequent Financial Statements.
Prior to the closing, seller (with respect to the Dental Business) and
buyer shall deliver to each other, not later than twenty-five (25) days after
the end of each monthly period and in the form customarily prepared by each
party, each party's internally generated statement of financial condition as of
the last day of the previous month and the related statement of retained
earnings, operations and cash flows for the monthly period then ended and for
the period from the beginning of the fiscal year to the end of such
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monthly period (the "additional unaudited financial statements"). Seller agrees
to deliver to buyer prior to the closing an additional unaudited financial
statement (the "Closing Unaudited Financial Statement") as of a date not more
than thirty (30) days prior to the closing date, which statement shall also be
certified as to its accuracy and completeness by the chief executive officer and
the chief financial officer of seller.
8.6 Maintenance of Insurance.
Seller agrees to continue to carry all existing insurance on the
business and operations of the Dental Business, and the assets and properties
covered by this Agreement to the date of closing, subject to variations in
amounts resulting from the ordinary operations of the Dental Business.
8.7 Consents to Assignments of Agreements.
Seller agrees to use seller's best efforts (without the payment of
money unless required by the terms of the Contract) to obtain promptly the
consent to the transfer of the assets to buyer under any Contract listed in
Exhibit 3.3 requiring the consent of any party to effectuate such transfer.
8.8 Regulatory Consents.
Seller shall use seller's best efforts (without the payment of any
transfer or consent fee) to obtain promptly the consent to the transfer of the
assets to buyer under each material permit held by seller requiring the consent
of the issuer of the permit to effectuate such transfer.
8.9 Acquisition Financing.
Buyer shall use its best efforts to finalize financing in the amount of
not more than $4,000,000 from Bank of America NT&SA (the "bank") and Xxxxxx X.
Xxxxx on terms and conditions acceptable to buyer, which financing is necessary
for buyer to close the purchase, as soon as possible after the execution of this
agreement, and agrees to use its best efforts to finalize the financing from the
bank and Xxxxxx X. Xxxxx on or before April 4, 1997, in order to facilitate
seller's plan to hold its shareholders meeting on April 30, 1997, but without
any adverse consequences whatsoever should said April 4 date not be
accomplished.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER
The obligations of buyer to be performed under this agreement on the
closing date shall, at the sole option of buyer, be subject to the satisfaction,
on or prior to the closing date, of the following conditions in all material
respects:
9.1 No Misrepresentation or Breach of Covenants, Representations and
Warranties.
There shall have been no breach by seller in the performance of any of
seller's covenants and agreements contained in this agreement and seller shall
have performed all obligations required to be performed by seller under this
agreement prior to or on the closing date; each of the representations and
warranties of seller contained in this agreement, other than the representations
contained in paragraphs 6.1, 6.5A, 6.8, 6.9, 6.10A, 6.11, 6.12, 6.14, 6.15, and
6.17, shall be true and correct in all material respects on the closing date as
though made on the closing date, and each of the representations and warranties
of seller
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contained in paragraphs 6.1, 6.5A, 6.8, 6.9, 6.10A, 6.11, 6.12, 6.14, 6.15, and
6.17 shall be true and correct in all respects on the closing date as though
made on the closing date; and there shall have been delivered to buyer a
certificate to such effect, dated the closing date, signed by the chief
executive officer of seller.
9.2 Opinion of Counsel for Seller.
Buyer shall have received from Thelen, Marrin, Xxxxxxx & Xxxxxxx LLP,
as counsel for seller, an opinion, dated the closing date, in form and substance
reasonably satisfactory to buyer and its counsel.
9.3 Corporate Action.
Seller shall have taken all corporate action necessary to execute and
deliver all papers and documents and to do and perform all acts which are
necessary or desirable to carry out the terms, conditions and provisions of this
agreement and the agreements contemplated hereby, including the requisite
approval of the Board of Directors of seller, and the approval of a majority of
the shareholders of seller, and seller shall furnish buyer with certified copies
of resolutions adopted by the Board of Directors of seller, in form and
substance reasonably satisfactory to counsel for buyer, in connection with such
action.
9.4 Approvals.
A. All governmental, regulatory and self-regulatory approvals, actions,
consents, authorizations, declarations, filings, registrations and waiting
periods which are necessary to consummate the transactions contemplated by this
agreement, including those which are specified in any schedule hereto, and those
which are referred to in paragraph 8.8, shall have been made, obtained or
satisfied and be in full force and effect, and any such approvals, actions,
consents and authorizations, declarations, filings and registrations shall be in
form and substance reasonably satisfactory to buyer and its counsel.
B. All consents, authorizations and approvals to the transactions
contemplated by this agreement that are required by the terms of those Contracts
referred to in Exhibit 3.3, shall have been obtained and be in full force and
effect, and such consents, authorizations and approvals shall be in form and
substance reasonably satisfactory to buyer and its counsel.
C. Buyer shall, using its best efforts, have negotiated a new
representation agreement with Xxxxxxx Xxxxx which supersedes the existing
Consulting Agreement with seller on terms and conditions satisfactory to buyer
and seller.
9.5 No Change in Business.
Between the date hereof and the closing date, there shall have been (i)
no material adverse change in the properties, the business or the operations,
liabilities, profits, prospects or condition (financial or otherwise) of the
Dental Business of seller ; (ii) no material adverse foreign, federal or state
legislative or regulatory change affecting the business of the Dental Business
or its products; (iii) no material damage to the assets regardless of insurance
coverage for such damage; or (iv) no lawsuits, claims or proceedings filed or,
to the best knowledge of seller, threatened against or affecting the seller or
any of its properties or business which, if adversely determined, might have a
material adverse effect on the assets, the business of the Dental Business, or
the operations, liabilities, profits, prospects or condition (financial or
otherwise) of the Dental Business of the seller; and there shall have been
delivered to buyer a certificate or certificates to such effect, dated the
closing date and signed by the chief executive officer of seller. On the date of
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closing, the book value of seller's inventory (as defined in paragraph 1.1B, net
of seller's reserve for obsolete inventory) shall not be less than eighty
percent (80%) of the book value of seller's inventory, net of seller's reserve
for obsolete inventory, as of December 31, 1996.
9.6 No Restraint or Litigation.
No order, decree or ruling of any court shall have been entered, and no
action or proceeding before any court or governmental or regulatory authority or
agency shall be pending, to restrain, prohibit, challenge, invalidate or
otherwise adversely affect any of the transactions contemplated by this
agreement or the agreements contemplated hereby.
9.7 Buyer's Financing.
A. Buyer shall have obtained the financing described in paragraph 8.9,
above, and bank shall have approved this agreement.
B. Seller shall have executed a subordination agreement in such form as
shall be required by Bank of America NT & SA.
9.8 Products Liability Coverage.
Buyer shall have been named as an additional insured on the products
liability insurance policies of seller covering claims arising from the sale of
products by seller prior to the date of closing.
9.9 Lease of Business Premises.
If buyer desires to make use of the business premises currently used by
seller for the Dental Business, buyer shall have entered into a sublease of the
premises based on the terms of the existing lease agreement for a portion of the
business premises currently used by seller for the Dental Business. In any
event, buyer shall be responsible for the payments described in Section 4.7,
hereof. Seller agrees to cooperate with buyer in facilitating buyer's lease of
the premises and obtaining the consent of the landlord to buyer's sublease.
9.10 Approval of Counsel.
All matters, proceedings, instruments and documents required to carry
out this agreement or the agreements contemplated hereby or incidental thereto
and all other relevant legal matters shall be reasonably satisfactory to counsel
for buyer.
ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of seller to be performed under this agreement on the
closing date shall, at the sole option of seller, be subject to the
satisfaction, on or prior to the closing date, of the following conditions in
all material respects:
10.1 No Misrepresentation or Breach of Covenants, Representations and
Warranties.
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There shall have been no breach by buyer in the performance of any of
buyer's covenants and agreements contained in this agreement and buyer shall
have performed all obligations required to be performed by buyer under this
agreement prior to or on the closing date; each of the representations and
warranties of buyer contained in this agreement, other than the representations
contained in paragraphs 7.1, 7.5A, 7.7A, and 7.9 shall be true and correct in
all material respects on the closing date as though made on the closing date,
and each of the representations and warranties of buyer contained in paragraphs
7.1, 7.5A, 7.7A, and 7.9 shall be true and correct in all respects on the
closing date as though made on the closing date; and there shall have been
delivered to seller a certificate to such effect, dated the closing date, signed
by the chief executive officer of buyer.
10.2 Opinion of Counsel for Buyer.
Seller shall have received from Xxxxxxx X. Xxxxxx, attorney at law, as
counsel for buyer, an opinion, dated the closing date, in form and substance
reasonably satisfactory to seller and its counsel.
10.3 Corporate Action.
Buyer shall have taken all corporate action necessary to execute and
deliver all papers and documents and to do and perform all acts which are
necessary or desirable to carry out the terms, conditions and provisions of this
agreement and the agreements contemplated hereby, including the requisite
approval of the Board of Directors of buyer, and buyer shall furnish seller with
certified copies of resolutions adopted by the Board of Directors of buyer, in
form and substance reasonably satisfactory to counsel for buyer, in connection
with such action.
10.4 Approvals.
A. All governmental, regulatory and self-regulatory approvals, actions,
consents, authorizations, declarations, filings, registrations and waiting
periods which are necessary to consummate the transactions contemplated by this
agreement, including those which are specified in any schedule hereto, shall
have been made, obtained or satisfied and be in full force and effect, and any
such approvals, actions, consents and authorizations, declarations, filings and
registrations shall be in form and substance reasonably satisfactory to seller
and its counsel.
B. All consents, authorizations and approvals to the transactions
contemplated by this agreement that are required by the terms of any contracts
or otherwise from third shall have been obtained and be in full force and
effect, and such consents, authorizations and approvals shall be in form and
substance reasonably satisfactory to seller and its counsel.
C. At least a majority of the holders of the issued and outstanding
shares of seller shall have voted to approve the sale of the assets of the
Dental Business on terms no less favorable to seller than those set forth
herein.
D. Buyer shall, using its best efforts, have negotiated a new
representation agreement with Xxxxxxx Xxxxx which supersedes the existing
Consulting Agreement with seller on terms and conditions satisfactory to buyer
and seller.
10.5 No Restraint or Litigation.
No order, decree or ruling of any court shall have been entered, and no
action or proceeding before
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any court or governmental or regulatory authority or agency shall be pending, to
restrain, prohibit, challenge, invalidate or otherwise adversely affect any of
the transactions contemplated by this agreement or the agreements contemplated
hereby.
10.6 Approval of Counsel.
All matters, proceedings, instruments and documents required to carry
out this agreement or the agreements contemplated hereby or incidental thereto
and all other relevant legal matters shall be reasonably satisfactory to counsel
for seller.
10.7 No Change in Business.
Between the date hereof and the closing date, there shall have been (i)
no material adverse change in the properties, the business or the operations,
liabilities, profits, prospects or condition (financial or otherwise) of the
buyer's business; (ii) no material adverse foreign, federal or state legislative
or regulatory change affecting the business of the buyer or its products; (iii)
no material damage to the assets regardless of insurance coverage for such
damage; or (iv) no lawsuits, claims or proceedings filed or, to the best
knowledge of buyer, threatened against or affecting the buyer or any of its
properties or business which, if adversely determined, might have a material
adverse effect on the assets, the buyer's business, or the operations,
liabilities, profits, prospects or condition (financial or otherwise) of the
buyer's business; and there shall have been delivered to buyer a certificate or
certificates to such effect, dated the closing date and signed by the chief
executive officer of buyer.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification of Buyer.
A. Seller agrees to indemnify and hold harmless buyer and buyer's
successors and assigns from and against any and all (i) liabilities, losses,
claims, taxes, fines, penalties, damages and expenses, direct or indirect
("losses") and (ii) reasonable attorneys' and accountants' fees and expenses,
court costs and all other reasonable out-of-pocket expenses ("expenses")
incurred by buyer in connection with or arising from:
1. any damage or deficiency resulting from the non-performance
of any agreement to be performed by seller under this Agreement or from any
material misrepresentation in or omission from any certificate or other
instrument furnished to buyer under this Agreement;
2. any breach of any of the representations, warranties,
covenants or agreements made by seller in this Agreement or in any ancillary
document;
3. any attempt (whether or not successful) by any person to
cause or require buyer to pay or discharge any debt, obligation, liability or
commitment of seller the existence of which would constitute a breach of any
representation, warranty, covenant or agreement made by seller in this Agreement
or in any ancillary documents;
4. any action, suit, proceeding, compromise, settlement,
assessment or judgment (including reasonable attorneys' fees) arising out of or
incident to any of the matters indemnified against in
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this paragraph 11.1; or
5. the operation of the Dental Business and/or the ownership
or use of the assets prior to the closing, including but not limited to the
liabilities described in paragraph 3.1, above.
B. If buyer believes that any person indemnified under paragraph 11.1A
has suffered or incurred any loss or incurred any expense as to which it is
entitled to indemnification under paragraph 11.1A, buyer shall so notify seller
promptly in writing, describing such loss or expense, the amount thereof, if
known, and the method of computation of such loss or expense, all with
reasonable particularity and containing a reference to the provisions of this
agreement, or any agreement or instrument contemplated hereby, or any
certificate delivered pursuant hereto or thereto, in respect of which such loss
or expense shall have occurred; and if any action at law or suit in equity is
instituted by or against a third party with respect to which any such
indemnified person intends to claim any loss or expense under paragraph 11.1A,
such indemnified person shall promptly notify the indemnifying party of such
action or suit; provided that failure to give such notice shall not abrogate or
diminish any of seller's obligations under paragraph 11.1A if seller has or
receives timely actual knowledge of the existence of any such claim by any other
means or except to the extent such failure prejudices seller's ability to defend
such claim.
C. If, by reason of the claims of any third party relating to any of
the matters subject to indemnification under this paragraph 11.1, a lien,
attachment, garnishment or execution is placed on any of the property or assets
of buyer, seller will take whatever action is necessary to obtain the prompt
release of such lien, attachment, garnishment or execution.
D. The foregoing indemnities shall be in addition to any equitable
relief which the buyer might otherwise be entitled to obtain against the
indemnifying party.
E. Notwithstanding any other provision of this agreement, the
indemnification obligations of seller under this agreement, and with respect to
the transactions contemplated by this agreement, shall not apply to the first
Fifty Thousand Dollars ($50,000.00) of losses or expenses incurred by buyer, in
the aggregate, but this limitation shall not apply to the seller's indemnity
obligations for losses or expenses described in subparagraph A(3) of this
paragraph, and the indemnity obligations under subparagraph A(4) of this
paragraph to the extent related to losses or expenses described in subparagraph
A(3) of this paragraph.
F. Seller may, by written notice given to buyer within fifteen (15)
days of the final determination of the amount of any indemnity obligation to
buyer under this paragraph, satisfy all or a portion of its indemnity obligation
to Buyer by an offset against the accrued but unpaid interest, if any, and then
against the unpaid principal balance, if any, then due under the promissory note
described in paragraph 2.2, above. Any amount of the indemnity obligation not
satisfied by this offset shall be promptly paid in cash.
11.2 Indemnification of Seller.
A. Buyer agrees to indemnify and hold harmless seller and seller's
successors and assigns from and against any and all (i) liabilities, losses,
claims, taxes, liabilities, fines, penalties, damages and expenses, direct or
indirect ("losses") and (ii) reasonable attorneys' and accountants' fees and
expenses, court costs and all other reasonable out-of-pocket expenses
("expenses") incurred by seller in connection with or arising from:
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1. any damage or deficiency resulting from the non-performance
of any agreement to be performed by buyer under this Agreement or from any
material misrepresentation in or omission from any certificate or other
instrument furnished to seller under this Agreement;
2. any breach of any of the representations, warranties,
covenants or agreements made by buyer in this Agreement or in any ancillary
document;
3. any attempt (whether or not successful) by any person to
cause or require seller to pay or discharge any debt, obligation, liability or
commitment of buyer the existence of which would constitute a breach of any
representation, warranty, covenant or agreement made by buyer in this Agreement
or in any ancillary documents;
4. any action, suit, proceeding, compromise, settlement,
assessment or judgment (including reasonable attorneys' fees) arising out of or
incident to any of the matters indemnified against in this paragraph 11.2; or
5. the operation of the Dental Business and/or the ownership
or use of the assets after the closing, including but not limited to the
obligations assumed by buyer pursuant to paragraph 3.3.
B. If seller believes that any person indemnified under paragraph 11.2A
has suffered or incurred any loss or incurred any expense as to which it is
entitled to indemnification under paragraph 11.2A, seller shall so notify buyer
promptly in writing, describing such loss or expense, the amount thereof, if
known, and the method of computation of such loss or expense, all with
reasonable particularity and containing a reference to the provisions of this
agreement, or any agreement or instrument contemplated hereby, or any
certificate delivered pursuant hereto or thereto, in respect of which such loss
or expense shall have occurred; and if any action at law or suit in equity is
instituted by or against a third party with respect to which any such
indemnified person intends to claim any loss or expense under paragraph 11.2A,
such indemnified person shall promptly notify the indemnifying party of such
action or suit; provided that failure to give such notice shall not abrogate or
diminish any of buyer's obligations under paragraph 11.2A if buyer has or
receives timely actual knowledge of the existence of any such claim by any other
means or except to the extent such failure prejudices buyer's ability to defend
such claim.
C. If, by reason of the claims of any third party relating to any of
the matters subject to indemnification under this paragraph 11.2, a lien,
attachment, garnishment or execution is placed on any of the property or assets
of seller, buyer will take whatever action is necessary to obtain the prompt
release of such lien, attachment, garnishment or execution.
D. The foregoing indemnities shall be in addition to any equitable
relief which the seller might otherwise be entitled to obtain against the
indemnifying party.
E. Notwithstanding any other provision of this agreement, the
indemnification obligations of buyer under this agreement, and with respect to
the transactions contemplated by this agreement, shall not apply to the first
Fifty Thousand Dollars ($50,000.00) of losses or expenses incurred by seller, in
the aggregate, but this limitation shall not apply to the buyer's indemnity
obligations for losses or expenses described in subparagraph A(3) of this
paragraph, and the indemnity obligations under subparagraph A(4) of this
paragraph to the extent related to losses or expenses described in subparagraph
A(3) of this paragraph.
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11.3 Third Party Claims
The indemnifying party under this Article 11 shall have the right to
conduct and control, through counsel of its choosing, any third party claim,
action or suit and may compromise or settle the same. So long as the
indemnifying party is contesting any such action or suit in good faith, the
indemnified persons shall not pay or settle any such action or suit.
Notwithstanding the foregoing, the indemnified persons shall have the right to
pay or settle any such action or suit, provided that (i) in such event the
indemnified persons shall waive any right to indemnity therefor and no amount in
respect thereof shall be claimed as loss or expense under this Article 11 and
(b) the terms of any such settlement do not involve any agreement by the
indemnified persons that affects the indemnifying party.
ARTICLE 12
TERMINATION
12.1 Termination.
Anything contained in this agreement to the contrary notwithstanding,
this agreement may be terminated and the transactions contemplated herein
abandoned at any time prior to the closing: (a) by the mutual consent of the
buyer and the seller; (b) by buyer in the event of any material breach by seller
of any of seller's agreements, representations, or warranties contained herein;
(c) by seller in the event of any material breach by buyer of any of buyer's
agreements, representations, or warranties contained herein; (d) by seller or
buyer if the transactions contemplated herein have not closed by the date
specified in paragraph 5.1 except if the closing has not occurred as a result of
the fault of the party desiring to terminate this agreement.
12.2 Effect of Termination.
In the event that this agreement shall be terminated pursuant to
paragraph 12.1, all further obligations of the parties under this agreement
shall be terminated without further liability of any party to any other party
except for paragraphs 8.1, 13.3, and 13.13 hereof which shall continue after
such termination, provided that nothing herein shall relieve any party from
liability for its willful breach of this agreement.
ARTICLE 13
GENERAL PROVISIONS
13.1 Survival of Representations, etc.
All representations, warranties, and other agreements contained in this
agreement shall survive the consummation of the transactions contemplated by
this agreement; provided, however, that the representations and warranties
contained in Articles 6 and 7 shall terminate on the last day of the thirtieth
(30th) month after the closing date. Except as otherwise provided herein and
except for claims for indemnification for the breach or inaccuracy of any
representation or warranty asserted in accordance with Article 11, hereof, prior
to such last day of the thirtieth (30th) month but not concluded prior thereto,
no claim shall be made for the breach or the inaccuracy of any representation or
warranty contained in Articles 6 and 7 or under any certificate delivered with
respect thereto under this agreement after the date on which such representation
and warranty terminates as set forth in this paragraph.
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13.2 Waivers.
No delay or omission by any party hereto in exercising any right, power
or privilege hereunder shall impair such right, power or privilege, nor shall
any single or partial exercise of any such right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or
privilege. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
13.3 Expenses
All costs and expenses incurred by the respective parties in connection
with the negotiation, execution and delivery of this agreement and related
agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
13.4 Notices.
All notices, requests, claims, demands and other communications which
are required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person, by cable,
telegram, telex, facsimile or by registered or certified first-class mail,
return receipt requested, postage prepaid, to the party to which the same is so
given or made.
A. If to seller, to:
Xxxxx X. Light, Chief Executive Officer
Sunrise Technologies, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Thelen, Marrin, Xxxxxxx & Xxxxxxx LLP
0 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
B. If to buyer:
Xxxxx X. Xxxxx, President
Xxxxx Research
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
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with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxx Law Xxxxxx
X. X. Xxx 0000
Xxxxx, XX 00000-0000
Any party may by notice given in accordance with this paragraph to the other
parties designate another address or person for receipt of notices hereunder.
13.5 Entire Agreement.
This Agreement (including the Exhibits and Schedules hereto)
constitutes the entire agreement among the parties and supersedes all prior oral
and written agreements and understandings among the parties hereto with respect
to the subject matter hereof, including specifically, but not by way of
limitation, a "Letter of Intent" dated November 14, 1996, and a letter dated
February 24, 1997. The parties hereto acknowledge and agree that no agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this agreement.
13.6 Headings and Gender.
The paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretations of
this Agreement. Reference to any one gender shall be deemed to include the
other.
13.7 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall, when executed, be deemed to be an original and all of which shall
be deemed to be one and the same instrument.
13.8 Severability.
Any provision in this agreement or any agreement or instrument
delivered pursuant hereto which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. The parties shall endeavor in good faith negotiations to
replace any prohibited or unenforceable provision with a valid provision or
provisions, the effect of which shall reflect the bargain manifested in the
prohibited or unenforceable provision.
13.9 Governing Law.
This Agreement shall be construed as to both validity and performance
and enforced in accordance with and governed by the laws of the State of
California applicable to agreements made and to be performed in California.
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13.10 Assignment; Parties in Interest.
This Agreement may not be assigned by any party hereto without the
prior written consent of all the other parties, provided that buyer may assign
its rights and duties under this agreement to an entity formed or to be formed
for the purpose of operating the Dental Business. Subject to the foregoing, this
agreement shall inure to the benefit of and be binding upon permitted successors
and assigns of seller and buyer.
13.11 Modification.
The provisions of this Agreement may be amended, modified, changed or
waived only by a writing signed by all the parties hereto.
13.12 Further Assurances.
Each party hereto agrees to do such further acts and things, and to
execute and deliver such additional agreements and instruments, as any party may
reasonably request in connection with the performance, administration or
enforcement of this agreement or the agreements related hereto.
13.13 Publicity.
Except for disclosure (if any) required by law to which any party is
subject, the timing and content of any announcements, press releases and public
statement concerning the acquisition contemplated hereby shall be by mutual
agreement of the parties.
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EXECUTION
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER: BUYER:
Sunrise Technologies International, Inc., Xxxxx Research,
a Delaware corporation a California corporation
By: By:
----------------------------------- --------------------------
Xxxxx X. Light, Chief Executive Officer Xxxxx X. Xxxxx, President
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