EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is made and entered into
as of the 29th day of September, 1999 by and between Dental/Medical Diagnostic
Systems, Inc., a Delaware corporation, ("DMD" or the "COMPANY"), Chrysalis
Dental, Inc. ("CHRYSALIS" ), and the several designated purchasers whose name
and signature appears on the signature page to this Agreement (each a
"PURCHASER" and collectively the "PURCHASERS").
R E C I T A L S
WHEREAS, the Company and Chrysalis have entered into an Exclusive License
Agreement, dated as of September 29, 1999, pursuant to which the Company has
acquired from Chrysalis exclusive world-wide rights to market, sell and
distribute certain teeth whitening products (the "LICENSE");
WHEREAS, as consideration for the granting of rights pursuant to the
License, the Company has agreed to issue to Chrysalis an aggregate of 100,000
shares of the Company's common stock, par value $0.01 per share (the "SHARES");
and
WHEREAS, Chrysalis desires that the Company issue and deliver the Shares to
the Purchasers, in the amounts set forth opposite each Purchaser's name on the
signature page hereto.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement and the License, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF STOCK. On the terms and subject to the conditions
set forth in this Agreement, the Company agrees to sell and deliver to the
Purchasers, and each Purchaser agrees to purchase and acquire from the Company,
that number of Shares set forth below such Purchaser's signature on the
signature page(s) of this Agreement, free and clear of any and all liens, claims
and encumbrances of any kind.
2. CONSIDERATION. The consideration for the Shares (the "PURCHASE PRICE")
consists of an exclusive world wide license to a tooth whitening formula
designed and developed by Chrysalis, as provided for in License. Chrysalis
hereby represents and warrants to the
Company that each of the Purchasers is affiliated with Chrysalis, and,
notwithstanding anything to the contrary provided therein, that the issuance to
the Purchasers of the Shares pursuant to this Agreement shall constitute full
and complete performance of the Company's obligations as set forth in Section II
of the License.
3. THE CLOSING. The closing (the "CLOSING") of the purchase and sale of the
Shares shall take place on October 18, 199 at the offices of Troop Xxxxxxx
Xxxxxx Xxxxxxx & Xxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000. All documents and other deliveries at the Closing may be
exchanged by mail. The date of the Closing is referred to herein as the Closing
Date.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each
Purchaser represents and warrants to the Company as follows:
4.1 It understands an investment in the Shares involves a high degree
of risk, and it is able to bear the risk of an entire loss of the investment; it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Shares.
4.2 It understands that the Shares have not been registered under the
Securities Act or under any state securities laws. It is familiar with the
provisions of the Securities Act and Rule 144 thereunder and understands that
the restrictions on transfer placed on the Shares may result in it being
required to hold the Shares for a certain period of time.
4.3 It is acquiring the Shares for the its own account, and not as a
nominee or agent for others, and not with a view to resale or distribution of
any part thereof, and it has no present intention of selling or distributing the
Shares.
4.4 It is, and each of its shareholders is, an "accredited" investor
for purposes of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act of 1933.
4.5 It believes that it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Shares, and it has
had an opportunity to ask questions and receive answers from the Company and its
officers and directors regarding the business, prospects and financial condition
of the Company.
4.6 It agrees not to sell, assign, transfer or otherwise dispose of
(collectively, "TRANSFER") any of the Shares except pursuant to an effective
registration statement under the Securities Act or an exemption from
registration. As a further condition to any such Transfer, except in the event
that such Transfer is made pursuant to an effective registration statement under
the Securities Act, if in the reasonable opinion of counsel to the Company any
Transfer of the Shares by the contemplated transferee thereof would not be
exempt from the
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registration and prospectus delivery requirements of the Securities Act, the
Company may require the contemplated transferee to furnish the Company with an
investment letter setting forth such information and agreements as may be
reasonably requested by the Company to ensure compliance by such transferee with
the Securities Act.
4.7 Each certificate evidencing the Shares will bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR STATE SECURITIES LAWS AND NO TRANSFER
OF THESE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR (B) PURSUANT TO AN EXEMPTION THEREFROM WITH RESPECT
TO WHICH THE COMPANY MAY, UPON REQUEST, REQUIRE A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE
ACT."
5. REGISTRATION RIGHTS
5.1 REGISTRATION PROCEDURES AND EXPENSES. The Company shall use
commercially reasonable efforts to effect the registration for resale by the
Purchasers of the Shares on Form S-3 under the Securities Act within six months
of the date hereof by performing the following:
5.1.1 The Company shall use all best efforts to cause to be
prepared and filed with the Commission a registration statement with respect to
the Shares, and use all reasonable efforts to cause such registration statement
to become and remain effective for a period of not less than twelve months
following the effective date of such registration statement or, if shorter,
until all of the Shares have been sold.
5.1.2 The Company shall cause to be prepared and filed with
the Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to update
and keep such registration statement effective for the period set forth in
Section 5.1.1. above and to comply with the provisions of the Securities Act
with respect to the sale of all securities covered by such registration
statement. Notwithstanding anything else to the contrary contained herein,
neither the Company or any of its affiliates shall be required to disclose any
confidential information concerning pending acquisitions not otherwise required
to be disclosed.
5.1.3 The Company shall cause to be furnished to the
Purchasers such number of copies of the final prospectus as the Purchasers may
reasonably request in writing to the Company in order to facilitate the sale of
the Shares. Each Purchaser shall comply with all prospectus delivery
requirements under the Securities Act. It shall be a condition to the Company's
obligations to effect registration of the Shares that Chrysalis, each Purchaser
and others participating in such registration provide the Company and any
underwriter identified
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by a majority-in-interest of the Purchasers, with all material facts including,
without limitation, furnishing such certificates, questionnaires and legal
opinions as may be required by the Company or such underwriter concerning such
participating sellers and the Shares to be registered which are reasonably
required to be stated in the registration statement or in the prospectus or are
otherwise required in connection with the offering.
5.1.4 ALLOCATION OF EXPENSES. All expenses incurred by the
Company or its affiliates in complying with this Section, including, without
limitation, all registration and filing fees, printing expenses, and fees and
disbursements of counsel for the Company and its affiliates, are herein called
Registration Expenses. All selling commissions applicable to the sales of the
Shares and all fees and disbursements of counsel for Chrysalis and the
Purchasers are herein called Selling Expenses. The Company will pay all
Registration Expenses in connection with registration pursuant to this Section
5.1. All Selling Expenses in connection with such registration shall be borne by
Chrysalis.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
6.1 ORGANIZATION, STANDING AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. The Company has the
corporate power to enter into, execute and deliver this Agreement and the
agreements referred to herein and to consummate the transactions contemplated
hereby and thereby.
6.2 EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and
performance of this Agreement and the other agreements referred to herein and
the consummation of the transactions contemplated hereby and thereby have been
or will prior to the Closing be duly authorized by the Board of Directors of the
Company, and the Company has taken all other actions required by law, its
Certificate of Incorporation and its Bylaws in order to consummate the
transactions contemplated by this Agreement and the other agreements referred to
herein. This Agreement and the other agreements referred to herein constitute
the valid and binding obligations of the Company and are enforceable in
accordance with their respective terms, except as enforceability may be subject
to or limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally.
6.3 AUTHORIZED AND OUTSTANDING STOCK. The Shares, when issued in
accordance with the provisions of this Agreement, will be duly authorized and
validly issued and fully paid and nonassessable and, assuming the accuracy of
the Purchaser's and Chrysalis' representations and warranties contained
elsewhere herein, will be issued in compliance with federal securities laws.
7. MISCELLANEOUS.
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7.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. No party other than the Company may assign any of its rights, or
delegate any of its duties or obligation, under this Agreement without the prior
written consent of the other parties, and any such purported assignment or
delegation shall be void AB INITIO. Notwithstanding the foregoing, the Company,
its affiliates, and its successors and assigns, may assign its rights and
delegate its duties to any successor entity resulting from any liquidation,
merger, consolidation, reorganization, or transfer of all or substantially all
of the assets or stock of the Company.
7.2 NOTICES. All notices, demands and other communications
(collectively, "Notices") given or made pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered or
certified mail, return receipt requested, postage and fees prepaid, by overnight
service with a nationally recognized "next day delivery company such as Federal
Express or United Parcel Service, by facsimile transmission, or otherwise
actually delivered to the following addresses:
(a) if to the Company:
Dental/Medical Diagnostic Systems, Inc.
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
(b) if to Chrysalis:
Chrysalis Dental, Inc.
00000 Xxxxx X'Xxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
(c) if to the Purchasers, with respect to each Purchaser, to
the address set forth opposite its name on the signature page(s) to this
Agreement.
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed to
have been duly given two business days from the date of deposit in the United
States mails, unless sooner received and any notice sent by overnight service as
provided above shall be deemed to have been duly given the next business day
from the date of deposit with the service. Any of the parties to this Agreement
may from time to time change its address for receiving notices by giving written
notice thereof in the manner set forth above.
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7.3 AMENDMENT; WAIVER. No provision of this Agreement may be waived
unless in writing signed by all of the parties to this Agreement, and the waiver
of any one provision of this Agreement shall not be deemed to be a waiver of any
other provision. This Agreement may be amended only by a written agreement
executed by all of the parties to this Agreement.
7.4 DISPUTE RESOLUTION. Any dispute or claim arising hereunder shall
be settled by arbitration. Any party may commence arbitration by sending a
written notice of arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be commenced thirty
(30) days following the date of delivery of notice of arbitration by one party
to the other, by the American Arbitration Association ("AAA") as arbitrator. The
arbitration shall be conducted in Los Angeles, California in accordance with the
commercial arbitration rules promulgated by AAA, and each party shall retain the
right to cross- examine the opposing party's witnesses, either through legal
counsel, expert witnesses or both. The decision of the arbitrator shall be
final, binding and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part of his decision,
the arbitrator may allocate the cost of arbitration, including fees of attorneys
and experts, as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator may be entered
in any court of competent jurisdiction.
7.5 GOVERNING LAW. This Agreement shall be governed by and construed
both as to validity and performance and enforced in accordance with the laws of
the State of California without giving effect to the choice of law principles
thereof.
7.6 REMEDIES CUMULATIVE. Each of the various rights, powers and
remedies shall be deemed to be cumulative with, and in addition to, all the
rights, powers and remedies which the Company may have hereunder or under
applicable law relating hereto or to the subject matter hereof, and the exercise
or partial exercise of any such right, power or remedy shall constitute neither
an exclusive election thereof nor a waiver of any other such right, power or
remedy.
7.7 HEADINGS. The section and subsection headings contained in this
Agreement are included for convenience only and form no part of the agreement
between the parties.
7.8 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
7.9 EXPENSES. Each party shall pay its own costs, expenses, including
without limitation, the fees and expenses of their respective counsel and
financial advisors.
7.10 ENTIRE AGREEMENT. Except as set forth in the License, this
Agreement constitutes and embodies the entire understanding and agreement of the
parties hereto
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relating to the subject matter hereof and there are no other agreements or
understandings, written or oral, in effect between the parties relating to such
subject matter except as expressly referred to herein. Notwithstanding anything
in the License to the contrary, this Agreement constitutes and embodies the
entire understanding and agreement of the parties hereto relating to the
issuance and sale of the Shares.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Stock Purchase Agreement has been executed as of
the date first set forth above.
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
By: /S/ XXXXXXX X. XXXX
--------------------------------------
Its: Chief Financial Officer
CHRYSALIS DENTAL, INC.
00000 Xxxxx X'Xxxxx Xxxx
Xxxxx, Xxxx 00000
By: /S/ [ILLEGIBLE]
--------------------------------------
Its: Secretary/Treasurer
PURCHASERS:
/S/ XXXX XXXXXXXX Name: Xxxx Xxxxxxxx
----------------------- Address: 0000 Xxxxxx Xxxxxxxx Xxxx
Xxxx Xxxxxxxx Xxxxxxxx, XX 00000
No. of Shares: 25,000
/S/ XXXXX XXXXXX Name: Xxxxx XxXxxx
----------------------- Address: 0000 Xxxxxx Xxxxx Xxxxx
Xxxxx XxXxxx Xxxxx, XX 00000
No. of Shares: 25,000
/S/ XXXX XXXXXXX Name: Xxxx Xxxxxxx
----------------------- Address: 0000 Xxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxx Xxxxx, XX 00000
No. of Shares: 25,000
[Additional Signatures Follow]
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/S/ XXXXX XXXXXXXXX Name: Xxxxx XxXxxxxxx
----------------------- Address: 00000 X. X'Xxxxx Xxxx
Xxxxx XxXxxxxxx Xxxxx, XX 00000
No. of Shares: 20,000
TECHNOLOGY & PROPERTY RESOURCES
By: /S/ XXXX XXXXXX Address: 0000 X. Xxxxxxxxx Xxx.
----------------------- Xxxx Xxxx Xxxx, XX 00000
Xxxx Xxxxxx
Manager
No. of Shares: 5,000
