EXHIBIT 10.45
PAGES WHERE CONFIDEENTIAL TREATMENT
HAS BEEN REQUESTED ARE STAMPED
"CONFIDENTIAL TREATMENT REQUESTED.
THE REDACTED MATERIAL HES BEEN
SEPERATELY FILED WITH THE COMISSION."
THE APPROPRIATE SECTION HAS BEEN MARKED
AT THE APPROPRIATE PLACE.
ASSET PURCHASE AGREEMENT
Dated as of August 30, 1996
By and Among
Castle Dental Centers of New York, Inc.
as Purchaser,
Castle Dental Centers, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. d/b/a American Dental Centers,
▇.▇. ▇▇▇▇ Professional Corporation d/b/a American Dental Centers,
Lisadent Corp.
as Seller
and
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................................................1
1.1 Definitions......................................................1
ARTICLE II
THE TRANSACTION........................................................6
2.1 Purchase and Sale of Assets......................................6
2.2 Excluded Assets..................................................8
2.3 Assumption of Obligations........................................9
2.4 Nonassignable Contracts and Leases...............................9
2.5 Closing.........................................................10
2.6 Pre-Closing.....................................................10
2.7 Preparation of Schedules........................................10
ARTICLE III
PAYMENT OF PURCHASE PRICE.............................................11
3.1 Amount; Allocation; Delivery....................................11
3.2 Purchase Price Adjustment.......................................12
3.3 Apportionments..................................................12
3.4 Agency Relationship.............................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
AND THE SHAREHOLDER...................................................13
4.1 Representations and Warranties of Seller and the Shareholders. 13
4.2 Existence and Good Standing.....................................13
4.3 Authorization and Validity of Agreement.........................13
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4.4 Capital Stock. ................................................14
4.5 Consents and Approvals; No Violations...........................14
4.6 Subsidiaries and Affiliates.....................................15
4.7 Financial Statements; No Material Adverse Change................15
4.8 Books and Records...............................................16
4.9 Title to Properties; Encumbrances; Condition....................16
4.10 Real Property Leases............................................16
4.11 Personal Property Leases........................................17
4.12 Material Contracts..............................................17
4.13 Permits.........................................................18
4.14 Litigation......................................................18
4.15 Taxes...........................................................18
4.16 Insurance.......................................................19
4.17 Intellectual Properties.........................................19
4.18 Compliance with Laws............................................20
4.19 Employment Relations............................................20
4.20 Employee Benefit Plans..........................................20
4.21 Environmental Laws and Regulations..............................20
4.22 Interests in Customers, Suppliers, Etc..........................21
4.23 Compensation of Employees and Independent Contractors...........21
4.24 Payors. ......................................................21
4.25 Accounts Receivable.............................................21
4.26 Solvency........................................................21
4.27 Union Contracts.................................................22
4.28 Disclosure......................................................22
4.29 Investments.....................................................23
4.30 Broker's or Finder's Fees.......................................23
4.31 Copies of Documents.............................................23
4.32 Investment Representations......................................23
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND CASTLE...............................................24
5.1 Existence and Good Standing.....................................24
5.2 Authorization and Validity of Agreement.........................25
5.3 Consents and Approvals; No Violations...........................25
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5.4 Compliance with Laws............................................26
5.5 Broker's or Finder's Fees.......................................27
5.6 Capital Stock...................................................27
5.7 Litigation......................................................27
5.8 Financial Statement; No Material Adverse Change.................27
5.9 Books and Records...............................................28
5.10 Capitalization Table............................................28
ARTICLE VI
CONDITIONS TO SELLER'S AND THE SHAREHOLDERS' OBLIGATIONS..............28
6.1 Truth of Representations and Warranties.........................28
6.2 Performance of Agreements.......................................28
6.3 No Litigation Threatened........................................29
6.4 Consideration...................................................29
6.5 Governmental Approvals..........................................29
6.6 Proceedings.....................................................29
6.7 Good Standing Certificates......................................29
6.8 Employment Agreement............................................29
6.9 Registration Rights Agreement...................................29
6.10 Lease Agreements. .............................................29
6.11 Ancillary Agreement.............................................30
6.12 Legal Opinion...................................................30
6.13 Initial Public Offering.........................................30
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS.................................30
7.1 Truth of Representations and Warranties.........................30
7.2 Performance of Agreements.......................................30
7.3 No Material Adverse Change......................................30
7.4 Documents of Conveyance.........................................31
7.5 No Litigation Threatened........................................31
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7.6 Governmental Approvals..........................................31
7.7 Consents........................................................31
7.8 Legal Opinion...................................................31
7.9 Proceedings.....................................................31
7.10 Execution of Management Services Agreement......................32
7.11 Lease Agreement.................................................32
7.12 Agreement with American Medical and Life Insurance Company......32
7.13 Employment Agreement............................................32
7.14 Due Diligence...................................................32
7.15 Tradename and Trademark License Agreements......................32
7.16 Accounts Receivable Purchase Agreement..........................32
7.17 Option Agreement................................................33
7.18 Ancillary Agreement.............................................33
7.19 Good Standing Certificates......................................33
7.20 Releases of Liens...............................................33
7.21 Termination of S Corp Status....................................33
7.22 Execution of Lock-Up Agreement..................................33
7.23 Initial Public Offering.........................................33
ARTICLE VIII
COVENANTS OF SELLER AND THE SHAREHOLDERS..............................33
8.1 Cooperation by Seller...........................................33
8.2 Conduct of Business.............................................34
8.3 Exclusive Dealing...............................................35
8.4 Review of the Assets............................................35
8.5 Further Assurances..............................................35
ARTICLE IX
COVENANTS OF PURCHASER AND CASTLE.....................................36
9.1 Cooperation by Purchaser........................................36
9.2 Books and Records; Personnel....................................36
9.3 Further Assurances..............................................36
9.4 Castle Board of Directors.......................................37
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ARTICLE X
TERMINATION...........................................................37
10.1 Termination.....................................................37
10.2 Effect on Obligations...........................................38
ARTICLE XI
SURVIVAL AND INDEMNIFICATION..........................................38
11.1 Indemnification of the Seller and the Shareholders..............38
11.2 Indemnification of the Purchaser and Castle.....................39
11.3 Demands.........................................................39
11.4 Right to Contest and Defend.....................................40
11.5 Cooperation.....................................................40
11.6 Right to Participate............................................41
11.7 Payment of Damages..............................................41
ARTICLE XII
MISCELLANEOUS.........................................................41
12.1 Entire Agreement................................................41
12.2 Successors and Assigns..........................................41
12.3 Counterparts....................................................41
12.4 Headings........................................................42
12.5 Modification and Waiver.........................................42
12.6 No Third Party Beneficiary Rights...............................42
12.7 Sales and Transfer Taxes........................................42
12.8 Expenses........................................................42
12.9 Notice..........................................................42
12.10 Governing Law...................................................44
12.11 Confidentiality; Publicity......................................44
12.12 Consent to Jurisdiction.........................................45
12.13 Severability....................................................45
12.14 ▇▇▇▇▇▇▇▇▇▇▇.....................................................▇▇
-▇▇-
▇▇.▇▇ ▇▇▇▇▇▇▇▇ of Obligations.........................................45
12.16 Consent to Disclosure...........................................45
SCHEDULES
Schedule 2.2(b) Excluded Contracts
Schedule 2.2(g) Excluded Assets
Schedule 2.3 Assumed Obligations
Schedule 4.5 Consents
Schedule 4.6 Assets Used in Business Not Owned by Seller
Schedule 4.7 Material Adverse Change
Schedule 4.9 Encumbrances
Schedule 4.10 Leased Real Property
Schedule 4.11 Leased Personal Property
Schedule 4.12 Material Contracts and Proposals
Schedule 4.13 Permits
Schedule 4.14 Litigation
Schedule 4.15 Taxes
Schedule 4.16 Insurance Policies
Schedule 4.17 Intellectual Property
Schedule 4.21 Environmental Matters
Schedule 4.22 Interest in Customers
Schedule 4.23 Employee Compensation
Schedule 4.24 Payors
Schedule 4.27 Union Contracts
Schedule 5.10 Capitalization Table
EXHIBITS
Exhibit A Employment Agreement
Exhibit B [RESERVED]
Exhibit C Registration Rights Agreement
Exhibit D Management Services Agreement
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Exhibit E Ancillary Agreement
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of August 30, 1996 by and among Castle
Dental Centers of New York, Inc., a New York corporation ("Purchaser"), Castle
Dental Centers, Inc., a Delaware corporation ("Castle"), ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
d/b/a American Dental Centers, ▇.▇. ▇▇▇▇ Professional Corporation, a New York
professional corporation d/b/a American Dental Centers ("Lane PC"), Lisadent
Corp. ("Lisadent") (collectively "Seller") and ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. the sole
shareholder of Lane PC and one of the shareholders of Lisadent ("▇▇. ▇▇▇▇"), and
▇▇▇▇▇ ▇▇▇▇, the other shareholder of Lisadent (▇▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ are
referred to collectively as the "Shareholders").
WITNESSETH:
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase,
substantially all of the property, assets and business of Seller, all upon the
terms and subject to the conditions set forth below.
NOW, THEREFORE, for the mutual covenants and other consideration described
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant and
agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms have the meanings set
forth below (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"ACCOUNTS RECEIVABLE": all notes and accounts receivable of Seller
relating to the Business.
"ACCOUNTS PAYABLE": the payables of Seller to vendors and other trade
creditors as of the Closing Date, but excluding intercompany accounts.
"AFFILIATE": with respect to any Person, any other Person directly or
indirectly controlling (including, but not limited to, all directors and
officers of such Person), controlled by, or under direct or indirect common
control with such Person.
"AGREEMENT": this Asset Purchase Agreement, as amended from time to time
as provided herein.
"ANCILLARY AGREEMENT": the Ancillary Agreement dated as of the Closing
Date by and among the parties hereto, substantially in the form of Exhibit E
hereto.
"AMLI": American Medical and Life Insurance Company, a New York insurance
company owned by ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
"ASSETS": as defined in Section 2.1 hereof.
"ASSIGNED CONTRACTS": as defined in Section 2.3 hereof.
"ASSUMED OBLIGATIONS": as defined in Section 2.3 hereof.
"BOOKS AND RECORDS": all books, records, books of account, files and data
(including customer and supplier lists), certificates and other documents
related to the conduct of the business or the ownership of the Assets, including
personnel records and files, except that the Books and Records shall not include
(i) any books, records, files and other data of Seller which relate exclusively
to organizational and corporate governance proceedings of Seller, or (ii) any
patient records.
"BUSINESS": the practice of dentistry, including orthodontics and
periodontics, the operation of a dental laboratory and dental supply business
and all related management activities currently conducted by Seller.
Notwithstanding anything contained herein to the contrary, the Business shall
not include AMLI, its business, assets or liabilities, or its methods of
conducting its business, including, but not limited to, its dental managed care
and indemnity business, which includes, without limitation, a dual choice
option.
"CLOSING": as defined in Section 2.5 hereof.
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"CLOSING DATE": as defined in Section 2.5 hereof.
"CODE": the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"EMPLOYMENT AGREEMENT": the employment agreement executed pursuant hereto
substantially in the form of Exhibit A attached hereto.
"ENCUMBRANCES": liens, security interests, options, rights of first
refusal, easements, mortgages, charges, debentures, indentures, deeds of trust,
rights-of-way, restrictions, agreements, encroachments, licenses, leases,
permits, security agreements, or any other encumbrances and other restrictions
or limitations on use of real or personal property or irregularities in title
thereto that would have a material adverse effect.
"ENVIRONMENTAL CLAIM": any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violations, investigations or proceedings relating in any way to any
Environmental Law (for purposes of this definition, "Claims") or any permit
issued under any such Environmental Law, including without limitation (i) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, remedial or other actions of damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW": any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law now in effect and in
each case as amended and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to Hazardous Materials, the environment or health relating to or
arising from environmental conditions, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended 42 U.S.C. ss. 9601 ET SEQ.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. ss. 1801 ET SEQ.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss. 6901 ET SEQ.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. ss. 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 ET SEQ.; the
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Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ.; the Safe Drinking Water Act, 42
U.S.C. ss. 3808 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 ET
SEQ.; and relevant state and local laws.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA as in effect at the date of
this Agreement and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.
"EXCLUDED ASSETS": as defined in Section 2.2 hereof.
"EXCLUDED CONTRACTS": as defined in Section 2.2(b) hereof.
"EXCLUDED LIABILITIES": as defined in Section 2.4 hereof.
"FINANCIAL STATEMENTS": as defined in Section 4.6 hereof.
"GAAP": generally accepted accounting principles consistently applied.
"HAZARDOUS MATERIALS": (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "contaminants" or "pollutants," or words of similar import
under any applicable Environmental Law; and (iii) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by an
governmental authority.
"INITIAL PUBLIC OFFERING": the sale by Castle in an underwritten public
offering of its Common Stock registered under the Securities Act of 1933, as
amended, in which the proceeds to Castle (before underwriter's discounts and
selling commissions) are greater than or equal to $50,000,000, and the terms and
conditions and other attributes of which are substantially as described in the
Registration Statement.
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"INTELLECTUAL PROPERTY": domestic and foreign patents, patent
applications, registered and unregistered trademarks, service marks, trade names
and logos, registered and unregistered copyrights, computer programs, data
bases, trade secrets and proprietary information relating to the conduct of the
Business.
"PERMITS": as defined in Section 4.12 hereof.
"PERMITTED ENCUMBRANCES": as defined in Section 4.9 hereof.
"PERSON": any individual, partnership, joint venture, corporation, trust,
unincorporated organization, government or other department or agency thereof or
other entity.
"PLANS": as defined in Section 4.19 hereof.
"PRE-CLOSING PERIODS": as defined in Section 4.14(a) hereof.
"PRICE ALLOCATION": as defined in Section 3.1 hereof.
"PURCHASE PRICE": as defined in Section 3.1 hereof.
"PURCHASER": as defined in the preamble of this Agreement.
"REGISTRATION STATEMENT": Registration Statement on Form S-1 relating to
the Common Stock of Castle, filed with the Securities and Exchange Commission on
or about September 3,1996, as amended from time to time.
"RETURNS": as defined in Section 4.14(a) hereof.
"RELEASE": disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying, seeping, placing and the like, into or
upon any land or water or air, or otherwise entering into the environment.
"SELLER" as defined in the preamble of this Agreement.
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"SELLER PROPERTY": the Business' interest as tenant in real property
leases and tenants' interest in the improvements thereon.
"▇▇▇▇▇ ▇▇▇▇▇▇": ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., the managing underwriter of Castle's
Initial Public Offering
"TAX": any net income, alternative or add-on minimum tax, advance,
corporation, gross income, gross receipts, sales, use, AD VALOREM, franchise,
profits, license, value added, withholding, payroll, employment, excise, stamp
or occupation tax, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or any penalty imposed by any
governmental authority with respect thereto, and any liability for such amounts
as a result either of being a member of an affiliated group or of a contractual
obligation to indemnify any other entity.
"UNDERWRITING AGREEMENT": the Underwriting Agreement between the Company
and the underwriters for which ▇▇▇▇▇ ▇▇▇▇▇▇ is the representative, pertaining to
Castle's Initial Public Offering.
"UNION CONTRACTS": any verbal or written Preferred Provider Agreement,
Participating Dentist Agreement, Ancillary Services Provider Agreement, Primary
Care Dentist Agreement or similar instrument or agreement pursuant to which
Seller agrees to provide dental care services directly to members of labor
unions, or health maintenance organizations or group insurance plans or other
arrangements established for the benefit of members of labor unions.
ARTICLE II
THE TRANSACTION
2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, Purchaser agrees to purchase from the Seller, and the Seller
agrees to sell, convey, transfer, assign and deliver, and cause to be sold,
conveyed, transferred, assigned and delivered, to Purchaser, on the Closing
Date, against the receipt by the Seller of the consideration specified in
Section 3.1 hereof, the Assets, free and clear of any Encumbrances except
Permitted Encumbrances. The term "Assets" shall mean all of the rights, title
and interests of Seller in and to the assets used in or relating to the conduct
of the Business on the Closing Date, tangible and intangible, wheresoever
situated and
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whether or not specifically referred to herein or in any instrument of
conveyance delivered pursuant hereto. The Assets shall include but are not
limited to the following categories of assets:
(a) all leasehold interests described in Schedule 4.10 attached
hereto;
(b) plant, machinery, equipment, operating equipment, tools,
supplies, inventories, furniture, fixtures, furnishings, vehicles and
other fixed assets owned or leased and used or held for use in the conduct
of the Business (other than the Excluded Assets);
(c) contracts, documents, instruments, insurance and indemnity
policies and general intangibles of Seller, including Seller's rights to
the name "American Dental Centers" and derivatives thereof, and goodwill
associated therewith, other than the Excluded Contracts;
(d) cash and Accounts Receivable as of the Closing Date in an
aggregate amount of $1,000,000; provided, however, that not less than
$675,000 (and at Seller's option, all) of such amount shall be in cash or
cash equivalents;
(e) all licenses, permits, registrations and authorizations,
proprietary information, methods, know-how, designs, processes,
procedures, goodwill and all rights to other Intellectual Property used in
the Business, other than professional and other similar licenses required
to be held by Lane PC to permit it to continue to provide professional
dental services and employ dentists;
(f) Books and Records relating to the Business;
(g) any rights pertaining to any counterclaims, set-offs or defenses
it may have with respect to any Assumed Obligations;
(h) all prepaid claims, prepaid taxes, prepaid insurance premiums
and other prepaid expense items (other than Excluded Assets) which shall
be credited against the cash and Accounts Receivable described in Section
2.1(d); and
(i) third-party indemnities, policies of insurance identified by
Purchaser, fidelity, surety or similar bonds and the coverages afforded
thereby relating to the Assets; and
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2.2 EXCLUDED ASSETS. The Assets shall not include any of the following
(the "Excluded Assets"):
(a) cash, cash equivalents, Accounts Receivable, deposits, advance
payments, securities, letters of credit naming Seller as account party,
certificates of deposit, notes, drafts, checks and similar instruments to
the extent such items in the aggregate exceed $1,000,000;
(b) each dentist employment contract, dentist independent contractor
agreement, managed care contract, insurance or third party reimbursement
agreement, the Union Contracts and other contracts set forth on Schedule
2.2(b) (the "Excluded Contracts");
(c) tax refunds related to the Business or the Assets received or
receivable by Seller or the Shareholders relating to taxes paid by Seller
or the Shareholders for all periods prior to the Closing Date;
(d) minute books and governance documents of the Seller;
(e) any asset requiring a valid license to practice dentistry for
its practical utilization;
(f) patient records;
(g) any Asset listed on Schedule 2.2(g); and
(h) any real property and improvements owned by a Seller.
Notwithstanding anything contained in this Agreement to the contrary, the
term "Assets" shall not include, and the term "Excluded Assets" shall be deemed
to include, (i)AMLI, its assets, its business and the way in which it conducts
its business, including but not limited to its dental managed care and indemnity
business, which includes, without limitation, a dual choice option, (ii)
any personal property owned by ▇▇. ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇ exclusively for personal
use, whether or not reflected on Schedule 2.2(f), and (iii) the owners' interest
in any real property owned directly or indirectly by any one or both of the
Shareholders or their family and any improvements thereon owned by any one or
both of the Shareholders.
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2.3 ASSUMPTION OF OBLIGATIONS. Upon the sale of the Assets by Seller,
Purchaser shall assume and agree to pay, perform and discharge, in a timely
manner and in accordance with the terms thereof, only such of the obligations of
Seller in respect of (a) the licenses, leases, permits, contracts, notes and
other debts set forth in Schedule 2.3 (the "Assigned Contracts") which are being
assigned to Purchaser hereunder and (b) Accounts Payable on the Closing Date
Balance Sheet ("Assumed Obligations"). Additionally, Purchaser and Castle have
made certain future undertakings and commitments pursuant to the Ancillary
Agreement. Notwithstanding anything contained herein to the contrary, Purchaser
does not assume, and hereby expressly disclaims responsibility for, (i) any
obligation or liability of Seller or the Shareholders not described on Schedule
2.3, (ii) any obligation with respect to federal or state taxes of Seller for
any period prior to the Closing Date; and (iii) any Taxes of Seller arising as
the result of the consummation of the transactions contemplated hereby.
Seller hereby agrees that all liabilities of Lane PC, whether known or
unknown, liquidated or unliquidated or fixed or contingent which exist as of the
Closing Date, or which arise after the Closing Date but are based on facts or
circumstances affecting Lane PC as of the Closing Date, shall be for the account
of Seller, other than the Accounts Payable assumed by Purchaser pursuant to this
Section, it being the intent of the parties that the as of the Closing Date,
Lane PC shall have no liabilities of any kind whatsoever attributable to periods
prior to the Closing Date.
2.4 NONASSIGNABLE CONTRACTS AND LEASES. In the case of any Assigned
Contracts which are not by their terms assignable or with respect to which a
consent to assignment is not obtained by the Closing Date, Seller and the
Shareholders agree to use their best efforts to obtain, or cause to be obtained,
prior to the Closing Date, any written consents necessary to convey to Purchaser
the benefit thereof. Purchaser shall cooperate with Seller and the Shareholders,
in such manner as may be reasonably requested, in connection therewith,
including without limitation, active participation in visits to and meetings,
discussions and negotiations with all Persons with the authority to grant or
withhold consent. If Seller and the Shareholders are unable to obtain such
necessary written consents for the remaining term of such Assigned Contract,
Purchaser shall act as such Seller's and the Shareholders' agent in the
performance of all obligations and liabilities under such Assigned Contract and
such Seller and the Shareholders shall act as Purchaser's agents in the receipt
of any benefits, rights or interests which inure to such Seller or the
Shareholders under such Assigned Contract.
2.5 CLOSING. Subject to the satisfaction of the conditions to closing set
forth herein, the closing (the "Closing") of the transactions contemplated
hereby shall be held at the offices of
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Kaufmann, Feiner, Yamin, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, on or before the closing of the
Initial Public Offering. Such time and date are referred to herein as the
"Closing Date."
2.6 PRE-CLOSING. At such time as Castle files a request with the
Securities and Exchange Commission that the Registration Statement be declared
effective, the parties hereto shall deliver to each other a written certificate
confirming that all of the conditions to the obligations of such party to
perform its obligations under this Agreement and the transactions contemplated
hereby have been met or waived, with the exception of the timely closing of the
Initial Public Offering, timely delivery of the consideration described in
Section 3.1, and the timely delivery of opinions of counsel. Such certificate
shall also state that each party has delivered to its respective counsel all
instruments required to be executed by such party, along with irrevocable
written instructions to such counsel to deliver such instruments at such time as
the unmet conditions to closing described above have been met or waived in
writing by the party to whom performance is required; provided, however, that
the Closing must occur on or before December 31, 1996.
2.7 PREPARATION OF SCHEDULES. The parties hereto acknowledge that every
reasonable effort has been made to prepare and attach to this Agreement
Schedules that contain all of the information required to be disclosed therein
(i) prior to the execution of this Agreement. The parties hereto further
acknowledge that (ii) due to the accelerated timetable of this transaction, and
(iii) the length of time that is expected to elapse between the date of this
Agreement and the Closing Date, it is anticipated that changes to the Schedules
may be required. At such time as a party hereto becomes aware of a required
change to a Schedule, to make it correct and complete in all material respects,
that party shall give all other parties prompt written notice thereof, along
with a revised Schedule indicating the revision.
If any party receiving a revised Schedule considers, in the exercise of
its reasonable judgment, the revised information contained in such Schedule to
materially and adversely affect the transactions contemplated hereby, the party
receiving the Schedule shall give all other parties hereto
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CONFIDENTIAL TREATMENT REQUESTED.
THE REDACTED MATERIAL HES BEEN
SEPERATELY FILED WITH THE COMISSION.
notice thereof within 15 days of the receipt of such revised Schedule specifying
the material and adverse effect. Any objections must be made and resolved prior
to the Closing. The submitting party shall have five days thereafter within
which to remedy the situation giving rise to the material adverse effect on the
transactions contemplated hereby and deliver a revised Schedule which does not
contain information materially and adversely affecting the transactions
contemplated hereby. If the party delivering the Schedule is, in the reasonable
judgment of the party receiving the Schedule, unable to remedy the situation and
deliver an acceptable revised Schedule within such five day period, the
recipient of the Schedule may terminate this Agreement by written notice thereof
to all other parties in accordance with the provisions of Article X hereto.
ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1 AMOUNT; ALLOCATION; DELIVERY. At the Closing, Purchaser shall pay to
Seller the following (the "Purchase Price"):
(a) $REDACTED in cash on the Closing Date, which shall be paid by
wire transfer of immediately available funds to an account or accounts of
Seller identified by Seller; and
(b) the number of shares of Common Stock, $.001 par value, of Castle
determined by dividing 5,000,000 by the price per share of Castle Common
Stock in the Initial Public Offering, issued in the name of ▇▇▇▇▇ ▇. ▇▇▇▇
D.D.S.
On the Closing Date, Purchaser and Seller shall agree to allocate the
Purchase Price in accordance with Section 1060 of the Code among the Assets (the
"Price Allocation"). The parties hereby undertake and agree to file timely any
information that may be required to be filed pursuant to regulations promulgated
under Section 1060(b) of the Code. The parties further agree that they will
report the federal, state, municipal, foreign and local and other tax
consequences of the purchase and sale hereunder in a manner consistent with the
Price Allocation, as so adjusted, and that they will not take any position
inconsistent therewith. The Price Allocation provided for herein shall include
an allocation of goodwill of not less than $REDACTED.
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3.2 PURCHASE PRICE ADJUSTMENT. Purchaser and Seller agree that the monthly
average accounts payable attributable to the Business for the preceding 12
months is $210,000 ("Average Accounts Payable"). To the extent that the accounts
payable of Seller assumed by Purchaser as of the Closing Date is 35% or more
greater or lesser than the Average Accounts Payable, the amount of such excess
or shortfall shall be added to or deducted from, respectively, the amount of
cash and Accounts Receivable included in the Assets and described in Section
2.1(d).
3.3 APPORTIONMENTS. The following items shall be apportioned as of 11:59
p.m., on the day preceding the Closing Date: (a) personal property taxes, sewer
rents and charges and other state, county, metropolitan and municipal taxes and
assessments and charges affecting the Assets; (b) rents and other payments under
any of the Assigned Contracts; (c) charges for water, electricity, gas, oil,
steam and all other utilities (except to the extent disposed of by final billing
to Seller); and (d) such other items as are customarily apportioned in
connection with the sale or lease assignment of similar property, all such items
prior to such time being for the account of Seller and all such times after such
time being the account of Purchaser. Any adjustments required by the
apportionments described herein shall be made as a part of the Purchase Price
Adjustment described in Section 3.2.
3.4 AGENCY RELATIONSHIP. In the event that, following the Closing Date,
Seller or the Shareholders receive any funds, documents or instruments which
constitute or are delivered in respect of Assets transferred to Purchaser
pursuant to this Agreement, Seller and the Shareholders agree to hold such
funds, documents or instruments in trust for Purchaser and as Purchaser's agent
therefor. Without limiting the generality of the foregoing, Purchaser agrees to
collect and hold such funds in trust for the account of Seller and as Seller's
agent the Accounts Receivable included in the Excluded Assets, and to use its
best efforts to collect such Accounts Receivable in a responsible manner and
without disruption to the relationship with the account party. Except with
respect to those Accounts Receivable about which a dispute exists with the
account party, amounts collected on Accounts Receivable will be credited first
against the oldest outstanding invoice, and then against succeeding invoices in
decreasing order of age. The Seller and the Shareholders and the Purchaser each
shall make a weekly accounting and payment to the other of all amounts received
for the account of the other, and each party hereto shall have the right to
review the records of the other on delivery of reasonable notice.
3.5 SALES TAX. In addition to, and apart from the Purchase Price,
Purchaser and the Sellers acknowledge and agree that the sales tax charged by
the State of New York attributable to the purchase of the Assets shall be paid
by the Purchaser and collected and remitted to the proper taxing authorities by
the Seller. Seller agrees to remit all such funds collected as sales tax
promptly to the appropriate taxing authority and to provide Purchaser with
reasonable written evidence that all such taxes have been paid.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
AND THE SHAREHOLDERS
4.1 REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDERS. As an
inducement to the Purchaser to enter into and perform this Agreement, Seller and
the Shareholders, jointly and severally, hereby represent and warrant to
Purchaser as follows:
4.2 EXISTENCE AND GOOD STANDING. Each of Lane PC and Lisadent is a
corporation duly organized and validly existing under the laws of the State of
New York. Each of Lane PC and Lisadent has the full corporate power and
authority to own, lease and operate its property and to carry on the Business as
now being conducted and to own or lease the Assets owned or leased by it. Each
of Lane PC and Lisadent is duly qualified or licensed to do business in each
jurisdiction in which the character or location of the properties owned or
leased by it or the nature of the business conducted by it makes such
qualification necessary and the absence of which would have a material adverse
effect.
4.3 AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of Lane PC and Lisadent
has full corporate power and authority, and the Shareholders have full power and
authority to execute and deliver this Agreement, to perform their respective
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by each of Lane PC and
Lisadent and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by the Board of Directors and the
Shareholders of each of Lane PC and Lisadent, and no other action on the part of
Lane PC or Lisadent or the Shareholders is necessary to authorize the execution,
delivery and performance of this Agreement by each of Lane PC and Lisadent and
the consummation of the transactions contemplated hereby. This Agreement (but
excluding the Exhibits) has been duly executed and delivered by Seller and the
Shareholders and is a valid and binding obligation of Seller and the
Shareholders enforceable against each in
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accordance with their respective terms, except to the extent that the
enforceability thereof may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles. On the Closing
Date, the Employment Agreement, the Registration Rights Agreement, the
Management Services Agreement and the Ancillary Agreement, substantially in the
forms attached hereto as Exhibits A, C, D and E, respectively, will have been
duly executed and delivered by Seller and the Shareholders and will, subject to
compliance with the regulatory requirements of the State of New York with
respect to dental matters, constitute valid and binding obligations of Seller
and the Shareholders enforceable against each in accordance with their
respective terms, except to the extent that the enforceability thereof may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles. Seller shall not be deemed to be in breach of this
Agreement in the event the regulatory authorities of the State of New York
regulating dental matters object to the transactions contemplated by this
Agreement and/or initiate enforcement proceedings against ▇▇. ▇▇▇▇'▇ dental
license as a result of the transactions contemplated by this Agreement.
4.4 CAPITAL STOCK.
(a) The authorized capital stock of Lane PC consists solely of
200 shares of common stock of which 100 shares have been issued, and are
outstanding, all of which are owned by ▇▇. ▇▇▇▇. All of the shares of common
stock of Lane PC have been duly and validly authorized and issued, and are fully
paid and nonassessable and free of any liens or encumbrances, other than those
imposed by statute.
(b) The authorized capital stock of Lisadent consists solely
of 200 shares of common stock of which 200 shares have been issued, and are
outstanding, all of which are owned by the Shareholders. All of the shares of
common stock of Lisadent have been duly and validly authorized and issued, and
are fully paid and nonassessable and free of any liens or encumbrances.
4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth on Schedule
4.5, the execution, delivery and performance of this Agreement by Seller and the
Shareholders and the consummation by Seller and the Shareholders of the
transactions contemplated hereby will not, with or without the giving of notice
or the lapse of time or both: (a) violate, conflict with, or result in a breach
or default under any provision of the organizational documents of Lane PC or
Lisadent; (b)
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to the best knowledge of the Seller and Shareholders after due inquiry, violate
any statute, ordinance, rule, regulation, order, judgment or decree of any court
or of any governmental or regulatory body, agency or authority applicable to
Seller or the Shareholders or by which any of Seller's properties or assets may
be bound; (c) to the best of the Sellers' and Shareholders' knowledge after due
inquiry, require any filing by Seller or the Shareholders with, or require
Seller or the Shareholders to obtain any permit, consent or approval of, or
require Seller or the Shareholders to give any notice to, any governmental or
regulatory body, agency or authority other than as set forth in Schedule 4.5
attached hereto; or (d) to the best of the Sellers' and Shareholders' knowledge
after due inquiry, result in a violation or breach by Seller or the Shareholders
of, conflict with, constitute (with or without due notice or lapse of time or
both) a default by Seller or the Shareholders (or give rise to any right of
termination, cancellation, payment or acceleration) under or result in the
creation of any Encumbrance upon any of the properties or assets of Seller or
the Shareholders under any of the terms, conditions, or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease
franchise agreement or other instrument or obligation to which Seller or the
Shareholders is a party, or by which Seller or any of its properties or assets
may be bound; provided, however, that no representation or warranty is made or
given regarding regulatory compliance with the rules and regulations of the
State of New York governing the practice of dentistry from and after the Closing
Date.
4.6 SUBSIDIARIES AND AFFILIATES. Neither Lane PC nor Lisadent has any
subsidiaries. Except as set forth on Schedule 4.6 or Schedule 2.2(g), all of the
Assets used in the Business are owned by Seller, and on consummation of the
transactions contemplated hereby Purchaser will have acquired all of the Assets
used in the Business.
4.7 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. Attached as Schedule
4.7 are the audited combined balance sheet of Seller as of December 31, 1995
(the "Balance Sheet Date"), the audited combined statement of operations and
audited combined statement of cash flows for the year ended December 31, 1995,
and the unaudited combined balance sheet as of June 30, 1996 and the unaudited
combined statement of operations for the six month period ended June 30,1996,
which June 30, 1996 balance sheet and statement of operations are subject to the
same intercompany adjustments as referred to in the audited balance sheet,
including footnotes, as of December 31, 1995 (the "Financial Statements"). The
audited Financial Statements fairly present in all material respects the
financial position of Seller at the date thereof and the results of operations
of Seller and its cash flows for the period indicated. The unaudited Financial
Statements were prepared in accordance with Note 1 of the Notes to Condensed
Combined Financial Statements of American Dental Centers as of June 30, 1996.
Except as set forth in Schedule 4.7 attached hereto, since the Balance Sheet
Date there has been no material adverse change in the assets or liabilities, or
in the business or condition, financial or otherwise, or in the results of
operations of Seller.
Other than as (i) disclosed on the Financial Statements, (ii) incurred
since the Balance Sheet Date in the ordinary course of business or (iii)
disclosed on Schedule 4.7 or another Schedule hereto, to the knowledge of the
Seller, there is no material direct or indirect indebtedness, liability, claim,
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deficiency, obligation or responsibility, fixed or contingent, liquidated or
unliquidated, accrued, absolute or otherwise.
4.8 BOOKS AND RECORDS. The Seller has previously made available to
Purchaser true, correct and complete copies of its articles of incorporation and
bylaws, and all amendments to each. The minute books of Seller, as previously
made available to Purchaser and its representatives, contain accurate records in
all material respects of the meetings of, the Shareholders and Board of
Directors of Seller.
4.9 TITLE TO PROPERTIES; ENCUMBRANCES; CONDITION. Except as set forth in
Schedule 4.9, and except for properties and assets reflected in the Financial
Statements or acquired since the Balance Sheet Date which have been sold or
otherwise disposed of in the ordinary course of business, Seller has good and
valid title to the Assets, in each case subject to no Encumbrances except for
(i) Encumbrances for current taxes, assessments or governmental charges or
levies on property not yet due or delinquent, (ii) Encumbrances created by
Purchaser, (iii) Encumbrances relating to Assumed Obligations and (iv)
landlord's rights to improvements under certain real property leases (liens of
the type described in clauses (i), (ii) (iii) and (iv) above are hereinafter
sometimes referred to as "Permitted Encumbrances"). Seller has heretofore
furnished Purchaser with a fixed asset ledger which sets forth all fixed assets
owned by Seller as of the Balance Sheet Date. Seller and the Shareholders are
not aware of any defects in such assets that would have a material adverse
effect on the ability of Purchaser to use such assets in the Business, ordinary
wear and tear excepted.
4.10 REAL PROPERTY LEASES. Schedule 4.10 identifies all leases of real
property used by the Seller in the Business, and includes the name of the record
title holder thereof. To the best of Seller's knowledge, all of the buildings,
structures and appurtenances situated on the real property leased by Seller are
in good operating condition, and in a state of good maintenance and repair,
subject to ordinary wear and tear. The leased real property has adequate rights
of ingress and egress for operation of the Business as presently conducted. No
condemnation or similar proceeding is pending or, to the best knowledge of
Seller and the Shareholders, threatened, which would preclude or impair the use
of any such property, except where such proceeding would not have a material
adverse effect. Schedule 4.10 also contains a list of all real property to be
leased by Purchaser following the Closing Date, the amount of rental associated
with each property, and the method of calculating increases in rental rates.
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4.11 PERSONAL PROPERTY LEASES. To the best of the Sellers' and
Shareholders' knowledge after due inquiry, Schedule 4.11 contains an accurate
and complete list of all personal property leases to which Seller is a party (as
lessee or lessor) and a description of all such leases to which Seller is a
party as lessee. Each lease set forth in Schedule 4.11 is in full force and
effect, and no event has occurred that with the giving of notice, the passage of
time or both would constitute a default thereunder.
4.12 MATERIAL CONTRACTS. To the best of the Sellers' and Shareholders'
knowledge after due inquiry, except as set forth in Schedule 4.12, the Assigned
Contracts do not include (a) any agreement, contract or commitment relating to
the employment or other retention of any person by Seller, (b) any agreement,
indenture or other instrument which contains restrictions with respect to
payment of profits, dividends or any other distributions, (c) any agreement,
contract or commitment relating to capital expenditures in excess of $5,000
(other than replacements in the ordinary course of business), (d) any loan or
advance to, or investment in, any Person or any agreement, contract or
commitment relating to the making of any such loan, advance or investment, (e)
any guarantee or other contingent liability in respect of any indebtedness or
obligation of any Person, (f) any management service, consulting independent
contractor or any other similar type contract, (g) any agreement, contract or
commitment limiting the freedom of Seller to engage in any line of business or
to compete with any Person, (h) any agreement, contract or commitment which
involves $5,000 or more and is not cancelable without penalty within 30 days, or
(i) any other agreement, contract or commitment the compliance with which would
have a material adverse effect. Also set forth in Schedule 4.12 is a list of all
proposals submitted by Seller to any third party that, if accepted by such third
party, would require disclosure on Schedule 4.12. Except where it would not have
a material adverse effect, each contract or agreement set forth in Schedule 4.12
is in full force and effect and there exists no default or event of default or
event, occurrence, condition or act (including the purchase of the Assets
hereunder) which, with the giving of notice, the lapse of time or the happening
of any other event or condition, would become a default or event of default
thereunder.
4.13 PERMITS. Schedule 4.13 attached hereto lists all of the governmental
and other third party permits (including occupancy permits), licenses, consents
and authorizations ("Permits") required, to the knowledge of Seller and the
Shareholders, in connection with the use, operation or ownership of the Assets,
occupancy under lease of real property and the conduct of the Business as
currently conducted. Seller holds all of the Permits listed on Schedule 4.13,
and none is presently subject to revocation or challenge.
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4.14 LITIGATION. Except as set forth in Schedule 4.14, to the best of
Sellers' and Shareholders' knowledge after due inquiry, there is no action,
suit, proceeding at law or in equity, arbitration or administrative or other
proceeding by or before (or any investigation by) any governmental or other
instrumentality or agency, pending, or threatened, against or affecting the
properties, rights or goodwill of Seller, the Shareholders, or employees of
Seller, and Seller and the Shareholders do not know of any valid basis for any
such action, proceeding or investigation. To the best of Sellers' and
Shareholders' knowledge after due inquiry, there are no such suits, actions,
claims, proceedings or investigations pending or threatened, seeking to prevent
or challenge the transactions contemplated by this Agreement. Purchaser will
assume no liability whatsoever with respect to any matter described on Schedule
4.14. Schedule 4.14 also describes any actions, suits, disciplinary proceedings
and investigations undertaken by the Dental Board of the State of New York, or
other body regulating the activities of dentists, against ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
in the last ten years.
4.15 TAXES. (a) All returns and reports for Taxes for all taxable years or
periods that end on or before the Closing Date and, with respect to any taxable
year or period beginning before and ending after the Closing Date the portion of
such taxable year or period ending on and including the Closing Date
("Pre-Closing Periods"), which are required to be filed by or with respect to
Seller (collectively, the "Returns") have been or will be filed when due in a
timely fashion and such Returns as filed are or will be accurate in all material
respects; provided, however that Purchaser's remedy for a breach hereof shall be
payment thereof by Seller or Shareholder.
(b) Except as provided in Schedule 4.15 there is no material action,
suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of Seller or the Shareholders, threatened by any authority regarding
any Taxes relating to Seller for any Pre-Closing Period.
(c) There are no liens or security interests on any of the assets of
Seller that arose in connection with any failure (or alleged failure) to pay any
Taxes.
(d) Except as provided in Schedule 4.15, there are no agreements for
the extension or waiver of the time for assessment of any Taxes relating to
Seller for any Pre-Closing Period and Seller has not been requested to enter
into any such agreement or waiver.
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(e) All Taxes relating to Seller which Seller is required by law to
withhold or collect have been duly withheld or collected, and have been timely
paid over to the proper authorities to the extent due and payable.
(f) Seller is not now nor has ever been a party to any Tax
allocation or sharing agreement that could result in any liability to Purchaser.
4.16 INSURANCE. To the best of Sellers' and the Shareholders' knowledge
after due inquiry, set forth in Schedule 4.16 is a complete list of insurance
policies that Seller maintains with respect to its Business and properties that
are included in the Assets or on its employees. Except as set forth on Schedule
4.16, such policies are in full force and effect and are free from any right of
termination on the part of the insurance carriers. In the judgment of Seller,
such policies, with respect to their amounts and types of coverage, are adequate
to insure against risks to which Seller and its property and assets are normally
exposed in the operation of the Business, subject to customary deductibles and
policy limits.
4.17 INTELLECTUAL PROPERTIES. To the best of Sellers' and the
Shareholders' knowledge after due inquiry, Schedule 4.17 sets forth all material
Intellectual Property used in the Business, including the tradename "American
Dental Centers", and the owner of such Intellectual Property. The operation of
the Business as conducted by Seller as of the Closing Date requires no rights
under Intellectual Property other than rights under Intellectual Property listed
on Schedule 4.17 and rights granted to Seller pursuant to agreements listed on
Schedule 4.17. Except as otherwise set forth in Schedule 4.17, Seller owns all
right, title and interest in the Intellectual Property listed in Schedule 4.17.
No litigation is pending or, to the knowledge of Seller or the Shareholder,
threatened wherein Seller is accused of infringing or otherwise violating the
Intellectual Property rights of another, or of breaching a contract conveying
rights under Intellectual Property.
4.18 COMPLIANCE WITH LAWS. To the best of Sellers' and the Shareholders'
knowledge after due inquiry, Seller is in compliance in all material respects
with all applicable laws, regulations, orders, judgments and decrees applicable
to the Business.
4.19 EMPLOYMENT RELATIONS. Except as set forth on Schedule 4.14, (a)
Seller has not knowingly engaged in any unfair labor practice; (b) to the
knowledge of Seller and the Shareholders, no representation question exists
respecting the employees of Seller; (c) Seller has not been notified of any
grievance that might have a material adverse effect and no arbitration
proceeding arising out of or under any collective bargaining agreement is
pending; and (d) no collective bargaining agreement is currently being
negotiated by Seller.
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4.20 EMPLOYEE BENEFIT PLANS. Purchaser has examined true and complete
copies of all employee benefit plans, policies, programs and arrangements and
all related contracts, agreements and other descriptions thereof with respect to
the employee benefits provided to the employees of the Business prior to the
Closing Date (the "Plans"). Each of the Plans has, to the knowledge of Seller
and the Shareholders, been maintained in compliance with its terms and the
requirements of all applicable laws. None of the Plans are subject to Title IV
of ERISA or the minimum funding obligations of Section 412 of the Code, and
Seller and any entity required to be aggregated therewith pursuant to Section
414(b) or (c) of the Code have no liability under Title IV of ERISA or under
Section 412(f) or 412(n) of the Code.
4.21 ENVIRONMENTAL LAWS AND REGULATIONS. Except as set forth in
Schedule 4.21, and except where it would not have a material adverse effect (a)
to the knowledge of Seller and the Shareholders, Hazardous Materials have not
been generated, used, treated or stored on, or transported to or from, any
Seller Property by Seller, its authorized agents or its independent contractors
(including suppliers) or any property adjoining any Seller Property, (b) to the
knowledge of Seller and Shareholders, Hazardous Materials have not been released
or disposed of by Seller, its authorized agents or its independent contractors
(including suppliers) on any Seller Property or any property adjoining any
Seller Property except such Releases which do not violate any Environmental
Laws, (c) Seller is, to its and the Shareholders' knowledge, in compliance with
all applicable Environmental Laws and the requirements of any Permits issued
under such Environmental Laws with respect to any Seller Property, (d) there are
no pending or, to the knowledge of Seller and the Shareholders, threatened
Environmental Claims against Seller or any Seller Property, (e) there are no
facts or circumstances, conditions, pre-existing conditions or occurrences on
any Seller Property known to Seller or the Shareholders that could reasonably be
anticipated (A) to form the basis of an Environmental Claim against Seller or
any Seller Property, or (B) to cause such Seller Property to be subject to any
restrictions on the ownership, occupancy use or transferability of such Seller
Property under any Environmental Law, (f) to the knowledge of Seller and
Shareholders there are not now and there never have been any underground storage
tanks located on any Seller Property, and (g) Seller has not in the ordinary
course of business transported or stored Hazardous Materials.
4.22 INTERESTS IN CUSTOMERS, SUPPLIERS, ETC. Except as set forth on
Schedule 4.22, except for relationships with Affiliates, Seller does not
possess, directly or indirectly, any financial interest
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in, and no Shareholder serves as a director, officer or employee of, any
corporation, firm, association or business organization which is a supplier,
customer, lessor, lessee, or competitor of Seller.
4.23 COMPENSATION OF EMPLOYEES AND INDEPENDENT CONTRACTORS. Set forth in
Schedule 4.23 is an accurate and complete list showing the names of all persons
other than Jules and ▇▇▇▇▇ ▇▇▇▇ whose compensation from Seller collectively for
the fiscal year ended on the Balance Sheet Date exceeded an annualized rate of
$20,000, together with a statement of the full amount paid or payable to each
such person for services rendered during the current fiscal year to date.
4.24 PAYORS. Schedule 4.24 sets forth the ten largest payors of Seller for
the most recently completed fiscal year. The relationship of Seller with each of
such payors as of the date of this Agreement is a good commercial working
relationship, and except as set forth in Schedule 4.24 no payor representing
more than 3% of the gross patient service revenues of Seller has canceled or
otherwise terminated or, to the knowledge of Seller or the Shareholders
threatened to cancel or otherwise terminate its relationship with Seller within
the last three years.
4.25 ACCOUNTS RECEIVABLE. The Accounts Receivable included in the Assets
(or other Accounts Receivable substituted therefor) being acquired by Purchaser
pursuant to Section 2.1(d) are collectible in the ordinary course of business.
4.26 SOLVENCY. Seller is not entering into this Agreement with actual
intent to hinder, delay or defraud creditors. Immediately prior to and
immediately subsequent to the Closing Date:
(a) the present fair salable value of the Assets of Seller (on a
going concern basis) will exceed the liability of Seller on its debts
(including its contingent obligations of which Seller has knowledge net of
insurance coverage therefor);
(b) Seller has not incurred, nor does it intend to or believe that
it will incur, debts (including contingent obligations) beyond its ability
to pay such debts as such debts mature (taking into account the timing and
amounts of cash to be received from any source, and of amounts to be
payable on or in respect of debts); and the amount of cash available to
Seller after taking into account all other anticipated uses of funds is
anticipated to be sufficient to pay all such amounts on or in respect of
debts, when such amounts are required to be paid; and
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For purposes of this Section 4.26 "debt" means any liability or a (i)
right to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable secured, or unsecured; or (ii) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such a right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured.
4.27 UNION CONTRACTS. Schedule 4.27 contains a true and correct list of
all written, and to the best of Sellers' and Shareholders' knowledge, verbal
Union Contracts to which the Seller is a party as of the date of this Agreement.
Except as set forth on Schedule 4.27, each of the Union Contracts is in full
force and effect, and there exists no default or event of default or event,
occurrence, condition or act (including the purchase of the Assets hereunder)
which, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a default or event of default thereunder.
Seller has not been given any notice of termination or notice of intent to
terminate any of the Union Contracts. Between the date hereof and the Closing
Date, Seller agrees to give Purchaser prompt notice of any termination, notice
of termination or notice of intent to terminate or not renew any of the Union
Contracts.
4.28 DISCLOSURE. To the knowledge of the Seller and the Shareholders, None
of this Agreement, the Financial Statements, any Schedule, Exhibit or
certificate attached hereto or delivered in accordance with the terms hereof
contains any untrue statement of a material fact, or omits any statement of a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
4.29 INVESTMENTS.The Assets do not include any capital stock or other
equity ownership or proprietary interest in any other corporation, partnership,
association, trust, joint venture or other entity.
4.30 BROKER'S OR FINDER'S FEES. Except as set forth on Schedule 4.30, no
agent, broker, Person or firm acting on behalf of Seller or the Shareholders is,
or will be, entitled to any fee, commission or broker's or finder's fees in
connection with this Agreement or any of the transactions contemplated hereby.
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4.31 COPIES OF DOCUMENTS. Seller has caused to be made available for
inspection and copying by Purchaser and its advisers, true, complete and correct
copies of all documents referred to in this Article IV or in any Schedule
attached hereto.
4.32 INVESTMENT REPRESENTATIONS.
(a) ▇▇. ▇▇▇▇ understands that the Common Stock has not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"). ▇▇. ▇▇▇▇ also understands that the Common Stock is being offered
and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon its representations contained in this
Agreement.
(b) ▇▇. ▇▇▇▇, in consultation with his accountants, attorneys and
financial advisors has, the requisite experience in evaluating and
investing in private placement transactions of securities so that he is
capable of evaluating the merits and risks of his investment in Castle
Dental and has the capacity to protect his own interests. ▇▇. ▇▇▇▇
understands that he must bear the economic risk of this investment
indefinitely unless the Common Stock is registered pursuant to the
Securities Act, or an exemption from registration is available. ▇▇. ▇▇▇▇
also understands that there is no assurance that any exemption from
registration under the Securities Act will be available to ▇▇. ▇▇▇▇ for
his resale and that, even if available, such exemption may not allow him
to transfer all or any portion of the Common Stock under the
circumstances, in the amounts or at the times he might propose.
(c) ▇▇. ▇▇▇▇ is acquiring the Common Stock for his own account for
investment only, and not with a view towards distribution.
(d) ▇▇. ▇▇▇▇ represents that by reason of his business or financial
experience, he has the capacity to protect his own interests in connection
with the transactions contemplated in this Agreement.
(e) ▇▇. ▇▇▇▇ represents that he is an accredited investor within the
meaning of Regulation D under the Securities Act.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND CASTLE
REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser and Castle jointly
and severally represent and warrant to Seller and the Shareholders as follows:
5.1 EXISTENCE AND GOOD STANDING. Purchaser is a corporation duly organized
and validly existing under the laws of the State of New York with full corporate
power and authority to own, lease and operate its property and to carry on its
business as now being conducted and to own or lease the assets owned or leased
by it. Purchaser is duly qualified or licensed to do business in each
jurisdiction in which the character or location of the properties owned or
leased by it or the nature of the business conducted by it makes such
qualification necessary and the absence of which would have a material adverse
effect. Castle is a corporation duly organized and validly existing under the
laws of the State of Delaware with full corporate power and authority to own,
lease and operate its property and to carry on its business as now being
conducted and to own or lease the assets owned or leased by it. Castle is duly
qualified or licensed to do business in each jurisdiction in which the character
or location of the properties owned or leased by Castle or the nature of the
business conducted by Castle makes such qualification necessary and the absence
of which would have a material adverse effect.
5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. Purchaser has full corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by Purchaser and the
consummation by it of the transactions contemplated hereby, have been duly
authorized and approved by the Board of Directors of Purchaser, and no other
action on the part of Purchaser is necessary to authorize the execution,
delivery and performance of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Purchaser and is a valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles. Castle has full
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by Castle and
the consummation by it of the transactions contemplated hereby, have been duly
authorized and approved by the Board of Directors of Castle, and no other action
on the part of Castle is necessary to authorize the execution, delivery and
performance of this Agreement by Castle and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Castle and is a valid and binding obligation of Castle enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
5.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth on Schedule
5.3, the execution, delivery and performance of this Agreement by Purchaser and
the consummation by Purchaser of the transactions contemplated hereby will not,
with or without the giving of notice or the lapse of time or both: (a) violate,
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conflict with, or result in a breach or default under any provision of the
organizational documents of Purchaser; (b) violate any statute, ordinance, rule,
regulation, order, judgment or decree of any court or of any governmental or
regulatory body, agency or authority applicable to Purchaser or by which any of
Purchaser's properties or assets may be bound; (c) require any filing by
Purchaser with, or require Purchaser to obtain any permit, consent
or approval of, or require Purchaser to give any notice to, any governmental or
regulatory body, agency or authority; or (d) result in a violation or breach by
Purchaser of, conflict with, constitute (with or without due notice or lapse of
time or both) a default by Purchaser (or give rise to any right of termination,
cancellation, payment or acceleration) under or result in the creation of any
Encumbrance upon any of the properties or assets of Purchaser under any of the
terms, conditions, or provision of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease franchise agreement or other instrument or
obligation to which Purchaser is a party, or by which Purchaser or any of its
properties or assets may be bound, except for such violations, consents,
breaches, defaults, termination and accelerations which would not have a
material adverse effect. The execution, delivery and performance of this
Agreement by Castle and the consummation by Castle of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time or both: (a) violate, conflict with, or result in a breach or default
under any provision of the organizational documents of Castle; (b) violate any
statute, ordinance, rule, regulation, order, judgment or decree of any court or
of any governmental or regulatory body, agency or authority applicable to Castle
or by which any of Castle's properties or assets may be bound; (c) require any
filing by Castle with, or require Castle to obtain any permit, consent or
approval of, or require Castle to give any notice to, any governmental or
regulatory body, agency or authority; or (d) result in a violation or breach by
-25-
Castle of, conflict with, constitute (with or without due notice or lapse of
time or both) a default by Castle (or give rise to any right of termination,
cancellation, payment or acceleration) under or result in the creation of any
Encumbrance upon any of the properties or assets of Castle under any of the
terms, conditions, or provision of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease franchise agreement or other instrument or
obligation to which Castle is a party, or by which Castle or any of its
properties or assets may be bound, except for such violations, consents,
breaches, defaults, termination and accelerations which would not have a
material adverse effect. Castle has submitted certain information to NationsBank
of Texas, N.A. ("NationsBank") and has held informal discussions with
NationsBank regarding the transactions contemplated hereby. Based on such
discussions, Castle believes that NationsBank will consent to the transactions
contemplated by this Agreement.
5.4 COMPLIANCE WITH LAWS. To the knowledge of Purchaser, Purchaser is in
compliance with all applicable laws, regulations, orders, judgments and decrees
applicable to their respective business, except where any noncompliance would
not have a material adverse effect on the assets, liabilities, business,
condition (financial or otherwise), results of operations or prospects of
Purchaser. To the knowledge of Castle, Castle is in compliance with all
applicable laws, regulations, orders, judgments and decrees applicable to their
respective business, except where any noncompliance would not have a material
adverse effect on the assets, liabilities, business, condition (financial or
otherwise), results of operations or prospects of Castle.
5.5 BROKER'S OR FINDER'S FEES. No agent, broker, Person or firm acting on
behalf of Purchaser or Castle is, or will be, entitled to any fee, commission or
broker's or finder's fee in connection with this Agreement or any of the
transactions contemplated hereby.
5.6 CAPITAL STOCK. The authorized capital stock of Purchaser consists
solely of 100 shares of Common Stock, $.01 par value per share. All of the
shares of Common Stock of Purchaser have been validly issued, fully paid,
nonassessable and free of any liens or encumbrances and are owned by Castle. The
authorized capital stock of Castle consists solely of 45,000,000 shares of
Common Stock and 5,000,000 shares of Preferred Stock, $.001 par value per share
("Preferred Stock"). All of the shares of Common Stock of Castle delivered
pursuant to Section 3.1 hereof shall be duly and validly authorized, and,
following the Closing, will be validly issued, fully paid, nonassessable and
free of any liens or encumbrances.
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5.7 LITIGATION. There is no action, suit, proceeding at law or in equity,
arbitration or administrative or other proceeding by or before (or any
investigation by) any governmental or other instrumentality or agency, pending,
or, to the knowledge of Purchaser, threatened, against or affecting the
properties, rights or goodwill of Purchaser or Castle or their respective
employees, except where such Proceeding would not have a material adverse effect
on the assets, liabilities, business, condition (financial or otherwise),
results of operations or prospects of Purchaser or Castle, and Purchaser and
Castle do not know of any valid basis for any such action, proceeding or
investigation. There are no such Proceedings pending or, to the knowledge of
Purchaser or Castle, threatened, seeking to prevent or challenge the
transactions contemplated by this Agreement.
5.8 FINANCIAL STATEMENT; NO MATERIAL ADVERSE CHANGE. Castle has heretofore
furnished Purchaser with its audited financial statements for the year ended
December 31, 1995 and the unaudited statements of operations and cash flows for
the interim period ended June 30, 1996 (the "Castle Financial Statements"). The
Castle Financial Statements fairly present in all material respects the
financial position of Castle at the dates thereof and the results of operations
of Castle and its cash flows for the period indicated. Since June 30, 1996,
there has been no material adverse change in the assets or liabilities, or in
the business or condition, financial or otherwise, or in the results of
operations of Castle.
5.9 BOOKS AND RECORDS. Castle has previously made available to Seller
true, correct and complete copies of its certificate of incorporation and
bylaws, and all amendments to each.
5.10 CAPITALIZATION TABLE. Attached hereto as Schedule 5.10 is a true and
correct listing of the stockholders of Castle and their ownership interest in
Castle as of the date hereof. Castle agrees to provide ▇▇. ▇▇▇▇ and his counsel
copies of the Registration Statement and all amendments thereto as filed with
the Securities and Exchange Commission.
ARTICLE VI
CONDITIONS TO SELLER'S AND THE SHAREHOLDERS' OBLIGATIONS
The obligations of Seller and the Shareholders under this Agreement to
sell, or cause to be sold, the Assets and to consummate the other transactions
contemplated hereby shall be subject to the satisfaction (or waiver by the party
entitled to performance) on or prior to the Closing Date of all of the following
conditions:
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6.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser and Castle contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date, subject only to such changes thereto as have occurred in the
ordinary course of business, and Purchaser and Castle shall have delivered to
Seller on the Closing Date a certificate of an authorized officer of Purchaser
and Castle, dated the Closing Date, to such effect.
6.2 PERFORMANCE OF AGREEMENTS. Each and all of the agreements and
covenants of Purchaser and Castle to be performed on or before the Closing Date
pursuant to the terms hereof shall have been duly performed in all material
respects, and Purchaser and Castle shall have delivered to Seller a certificate
of an authorized officer of Purchaser and Castle, dated the Closing Date, to
such effect.
6.3 NO LITIGATION THREATENED. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby, and
Purchaser shall have delivered to Seller a certificate of an authorized officer
of Purchaser and Castle, dated the Closing Date, to such effect to the best
knowledge of such officer.
6.4 CONSIDERATION. The Seller shall have received the consideration
described in Section 3.1, and Purchaser shall have assumed the obligations set
forth in Section 2.3.
6.5 GOVERNMENTAL APPROVALS. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
6.6 PROCEEDINGS. All proceedings to be taken by Purchaser and Castle in
connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Seller and the Shareholders and their counsel, and Seller and the
Shareholders shall have received copies of all such documents and other evidence
as its or its counsel may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
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6.7 GOOD STANDING CERTIFICATES. Seller shall have received good standing
and corporate existence certificates respecting Purchaser and Castle.
6.8 EMPLOYMENT AGREEMENT. ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. shall have received an
Employment Agreement, substantially in the form of Exhibit A, executed by the
Purchaser.
6.9 REGISTRATION RIGHTS AGREEMENT. ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. shall have
received a Registration Rights Agreement, substantially in the form of Exhibit C
hereto, executed by Castle.
6.10 LEASE AGREEMENTS. Purchaser and the Property Owners shall have
entered into Lease Agreements respecting each parcel of real property owned by
the Shareholders and used in the Business. Each of such Lease Agreements shall
contain the terms set forth on Schedule 4.10 and other commercially reasonable
terms and conditions.
6.11 ANCILLARY AGREEMENT. The parties hereto shall have executed and
delivered the Ancillary Agreement, substantially in the form attached hereto as
Exhibit E.
6.12 LEGAL OPINION. Purchaser shall have delivered to Seller and the
Shareholders the opinion of their counsel, in form and substance reasonably
satisfactory to the addressees.
6.13 INITIAL PUBLIC OFFERING. Castle shall have consummated the Initial
Public Offering and shall have provided Seller and the Shareholders with a
certificate to that effect.
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser under this Agreement to purchase the Assets
and to consummate the other transactions contemplated hereby shall be subject to
the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of all
of the following conditions:
7.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller and the Shareholders contained herein shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date, subject only to such changes thereto as have occurred in the
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ordinary course of business, and Seller and the Shareholders shall have
delivered to Purchaser on the Closing Date a certificate of an authorized
representative of Seller and the Shareholders, dated the Closing Date, to such
effect.
7.2 PERFORMANCE OF AGREEMENTS. Each and all of the agreements and
covenants of Seller to be performed on or before the Closing Date pursuant to
the terms hereof shall have been duly performed in all material respects, and
Seller shall have delivered to Purchaser a certificate of an authorized
representative of Seller, dated the Closing Date, to such effect.
7.3 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the financial condition of the Seller or the financial results of its
operations in the period commencing with the date of this Agreement and ending
on the Closing Date. Without limiting the generality of the foregoing, Seller
shall not have been given notice of termination or notice of intent
to terminate or not renew Union Contracts representing more than 10% of the
revenues attributable to all Union Contracts, unless new Union Contracts in
compensating amounts have been substituted therefor.
7.4 DOCUMENTS OF CONVEYANCE. Purchaser shall have received from Seller
fully executed documents of conveyance, in form and substance satisfactory to
Purchaser and its counsel, vesting in Purchaser good and valid title to the
Assets, free and clear of any Encumbrances except Permitted Encumbrances.
7.5 NO LITIGATION THREATENED. No action or proceedings shall have been
instituted before a court or other governmental body or by any public authority
to restrain or prohibit any of the transactions contemplated hereby, and Seller
shall have delivered to Purchaser a certificate of an authorized representative
of Seller, dated the Closing Date, to such effect to the best knowledge of such
officer.
7.6 GOVERNMENTAL APPROVALS. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
7.7 CONSENTS. Each of the consents referred to in Schedule 5.3 attached
hereto shall have been obtained, and Purchaser shall have also received the
consent of all other parties, including its senior lender, whose consent is
required to permit Purchaser to perform its obligations hereunder.
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7.8 LEGAL OPINION. Seller shall have delivered to Purchaser the opinion of
their counsel, in form and substance reasonably satisfactory to the addressees.
7.9 PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Purchaser and its
counsel, and Purchaser shall have received copies of all such documents and
other evidence as it or its counsel may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.
7.10 EXECUTION OF MANAGEMENT SERVICES AGREEMENT. Purchaser and Lane PC
shall have entered into a Management Services Agreement substantially in the
form of Exhibit D attached hereto.
7.11 LEASE AGREEMENT. Purchaser shall have entered into Lease Agreements
with the owners of such real property respecting each parcel of real property
owned by the Shareholders or their Affiliates and used in the Business. Each of
such Lease Agreements shall contain the terms set forth on Schedule 4.10 and
other commercially reasonable terms and conditions.
7.12 AGREEMENT WITH AMERICAN MEDICAL AND LIFE INSURANCE COMPANY. Lane PC
shall have entered into a mutually acceptable agreement with AMLI defining the
relationship between Lane PC and AMLI for periods following the Closing Date.
7.13 EMPLOYMENT AGREEMENT. The Purchaser shall have received an Employment
Agreement, substantially in the form of Exhibit A, executed by ▇▇▇▇▇ ▇. ▇▇▇▇
D.D.S., and Lane PC shall have received an Employment Agreement from ▇▇▇▇▇ ▇.
▇▇▇▇ D.D.S. in form and substance reasonably satisfactory to the parties.
7.14 DUE DILIGENCE.Purchaser shall have satisfactorily completed a due
diligence review of Seller and the Business and shall not have determined, in
the exercise of its reasonable discretion, that the information obtained from
such review materially and adversely affects its appraisal of the business,
prospects and financial condition of the Seller or the Business.
7.15 TRADENAME AND TRADEMARK LICENSE AGREEMENTS. Purchaser and Lane PC
shall have entered into a Tradename License Agreement and a Trademark License
Agreement in form and substance reasonably satisfactory to Purchaser and its
counsel pursuant to which Lane PC licenses the tradename "American Dental
Centers" and associated trademarks.
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7.16 ACCOUNTS RECEIVABLE PURCHASE AGREEMENT. Purchaser and Lane PC shall
have entered into an Accounts Receivable Purchase Agreement in form and
substance satisfactory to Purchaser and its counsel. Purchaser and Lane PC also
shall have sent to the appropriate parties the letters and notifications
attached as exhibits thereto, and filed in the appropriate offices the UCC
Financing Statement attached thereto.
7.17 OPTION AGREEMENT. Purchaser and ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. shall have
entered into an Option Agreement regarding ▇▇▇▇▇ ▇. ▇▇▇▇'▇ ownership of stock in
Lane PC, in form and substance satisfactory to Purchaser and its counsel, and
the certificates shares of stock in Lane PC owned by ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. shall
be inscribed with an appropriate legend referencing the Option Agreement.
7.18 ANCILLARY AGREEMENT. The parties hereto shall have executed and
delivered the Ancillary Agreement, substantially in the form attached hereto as
Exhibit E.
7.19 GOOD STANDING CERTIFICATES.Purchaser shall have received good
standing and corporate existence certificates respecting the Seller.
7.20 RELEASES OF LIENS.Purchaser shall have received evidence satisfactory
to Purchaser and its counsel to the effect that all liens and other encumbrances
on the Assets being transferred either to Purchaser or Lane PC (other than
Permitted Encumbrances) have been released.
7.21 TERMINATION OF S CORP STATUS. Lane PC shall have revoked its election
to be taxed under Subchapter S of the Code effective as of the Closing.
7.22 EXECUTION OF LOCK-UP AGREEMENT. ▇▇. ▇▇▇▇ shall have executed a
lock-up agreement in customary form not to exceed 180 days and any other
documentation reasonably requested by Castle or ▇▇▇▇▇ ▇▇▇▇▇▇ necessary to permit
Castle to perform it obligations under the Underwriting Agreement or required by
▇▇▇▇▇ ▇▇▇▇▇▇ as a condition to closing the Initial Public Offering.
7.23 INITIAL PUBLIC OFFERING. Castle shall have consummated the Initial
Public Offering.
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ARTICLE VIII
COVENANTS OF SELLER AND THE SHAREHOLDERS
Seller and the Shareholders hereby covenant and agree with Purchaser as
follows:
8.1 COOPERATION BY SELLER. Seller and the Shareholders shall use their
reasonable best efforts to cooperate with Purchaser to secure all necessary
consents, approvals, authorizations, exemptions and waivers from third parties
as shall be required in order to enable Seller and the Shareholders to effect
the transactions contemplated on its or his part hereby, and Seller and the
Shareholders shall otherwise use their reasonable best efforts to cause the
consummation of such transactions in accordance with the terms and conditions
hereof and to cause all conditions contained in this Agreement over which it has
control to be satisfied in a timely manner. Without limiting the generality of
the foregoing, the Property Owners agree to negotiate in good faith the Lease
Agreements described in Section 4.10 hereof. Seller and the Shareholders further
agree to deliver to Purchaser prompt written notice of any event or condition
which if it existed on the date of this Agreement, would result in any of the
representations and warranties of Seller or the Shareholders contained herein
being untrue in any material respect.
Immediately following the execution and delivery of this Agreement, Seller
agrees to permit the Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇ one contact with the parties
other than Seller to those of the five largest Union Contracts identified by
Purchaser to describe to such parties the substance of the transactions
contemplated by this Agreement in a manner calculated not to interfere with or
disrupt the contractual relationship. Such parties to the Union Contracts shall
be contacted sequentially, and ▇▇. ▇▇▇▇ shall be notified promptly following
each contact. Seller, Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇ shall agree in advance as to
the characterization of the transactions contemplated by this Agreement, and
shall agree as to a script to be used in connection with such discussion.
Purchaser and Seller shall mutually agree as to the person having the
discussion. Except for the parties to the Union Contracts described herein,
Purchaser shall not contact any other parties to Union Contracts. The parties to
the Union Contracts to be contacted are: Building Services Local 32B-J;
Transportation Workers Local 100; Local 144-Hospital Employees; 1199 National
Benefits Fund (already contacted); and Local 144-Nursing Home Employees.
8.2 CONDUCT OF BUSINESS. Except as Purchaser may otherwise consent to in
writing, between the date hereof and the Closing Date, Seller shall, (a) conduct
the Business only in the
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ordinary course, (b) use its reasonable efforts to keep available the services
of its employees and independent contractors and maintain satisfactory
relationships with licensors, suppliers, lessors, distributors, customers,
clients and others, (c) use its best efforts to maintain the Union Contracts in
full force and effect; (d) maintain, consistent with past practice and good
business judgment, all the Assets in customary repair, order and condition,
ordinary wear and tear excepted, and insurance upon all the Assets used in the
conduct of the Business in such amounts and of such kinds comparable to that in
effect on the date hereof, to the extent available at current premiums, (e)
maintain the Books and Records in the usual, regular and ordinary manner, on a
basis consistent with past practice, (f) not incur any indebtedness or permit
any lien to be placed on any of the Assets, and (g) not make any capital
expenditures in excess of $5,000 other than replacements of assets in the
ordinary course of business.
8.3 EXCLUSIVE DEALING. During the period from the date of this Agreement
to the earlier of the Closing Date or the termination of this Agreement, neither
Seller nor the Shareholders shall take any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to, any Person other than Purchaser, concerning any sale of the
Assets or any material part thereof or a similar transaction involving Seller or
the Shareholders.
8.4 REVIEW OF THE ASSETS. Purchaser may at its expense, prior to the
Closing Date, through its representatives, review (a) the Assets, (b) the
complete working papers of Seller's certified public accountants used in their
preparation of financial statements for Seller and (c) the Books and Records of
Seller and to otherwise review the financial and legal condition of Seller as
Purchaser deems necessary or advisable to familiarize itself with the Business
and related matters; such review shall not, however, affect the representations
and warranties made by Seller and the Shareholders hereunder or the remedies of
Purchaser for breaches of those representations and warranties. Such review
shall occur only during normal business hours upon reasonable notice by
Purchaser and in a manner which will not interfere with the day-to-day operation
of the Business, except to the limited extent necessary to comply with due
diligence requests and updates. Seller and the Shareholders shall permit
Purchaser and its representatives to have, after the execution of this
Agreement, reasonable access to employees of any Seller who can furnish
Purchaser with financial and operating data and other information with respect
to the Business as Purchaser shall from time to time reasonably request. Seller
and the Shareholders shall not be required to provide any information requested
by the Purchaser more than once, and shall not be required to provide Purchaser
with any additional information except to the extent reasonably requested by
Purchaser or required by ▇▇▇▇▇ ▇▇▇▇▇▇ to complete their respective due diligence
reviews.
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8.5 FURTHER ASSURANCES. At any time or from time to time after the Closing
Date, Seller and the Shareholders shall, at the reasonable request of Purchaser
and at Purchaser's expense, execute and deliver any further instruments or
documents and take all such further action as Purchaser may reasonably request
in order to consummate and make effective the sale of the Assets and the
assumption of the Assumed Obligations pursuant to this Agreement.
ARTICLE IX
COVENANTS OF PURCHASER AND CASTLE
Purchaser and Castle hereby jointly and severally covenant and agree with
Seller and the Shareholders as follows:
9.1 COOPERATION BY PURCHASER. Purchaser will use its reasonable best
efforts, and will cooperate with Seller and the Shareholders, to secure all
necessary consents, approvals, authorizations, exemptions and waivers from third
parties as shall be required in order to enable Purchaser to effect the
transactions contemplated on its part hereby, and Purchaser will otherwise use
its reasonable best efforts to cause the consummation of such transactions in
accordance with the terms and conditions hereof and to cause all conditions
contained in this Agreement over which it has control to be satisfied in a
timely manner. Purchaser further agrees to deliver to Seller and the
Shareholders prompt written notice of any event or condition, which if it
existed on the date of this Agreement, would result in any of the
representations and warranties of Purchaser contained herein being untrue in any
material respect.
9.2 BOOKS AND RECORDS; PERSONNEL. At all times after the Closing Date,
Purchaser shall allow Seller and any agents of any Seller, upon reasonable
advance notice to Purchaser, access to all Books and Records of Seller (or
copies thereof) which are transferred to Purchaser in connection herewith, to
the extent necessary or desirable in anticipation of, or preparation for,
existing or future litigation, employment matters, tax returns or audits, or
reports to or filings with governmental agencies, during normal working hours at
Purchaser's principal places of business or at any location where such Books and
Records are stored, and Seller shall have the right, at Seller's sole cost, to
make copies of any such Books and Records. Purchaser agrees to maintain either
the original Books and Records or complete and current copies thereof at its
principal place of business in New York for not less than six years.
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9.3 FURTHER ASSURANCES. At any time or from time to time after the Closing
Date, Purchaser shall, at the request of Seller or the Shareholders and at such
Seller's expense, execute and deliver any further instruments or documents and
take all such further action as Seller may reasonably request in order to
consummate and make effective the sale of the Assets and the assumption of the
Assumed Obligations pursuant to this Agreement.
9.4 CASTLE BOARD OF DIRECTORS. At the Closing of the transactions
contemplated by this Agreement, Castle agrees to use its best efforts to
nominate and elect ▇▇. ▇▇▇▇ to the Board of Directors of Castle for the longer
of three years or the period of time that ▇▇. ▇▇▇▇ remains an employee of
Purchaser on substantially the same terms and conditions as contemplated by the
Employment Agreement, and ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. agrees to vote the shares he owns
or controls as trustee in favor of ▇▇. ▇▇▇▇'▇ election to the Board of Directors
of Castle.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of Purchaser, Castle the
Shareholders and Seller; or
(b) by Purchaser, Castle, the Shareholders, or Seller in writing
without liability on the part of the terminating party on account of such
termination (provided the terminating party is not otherwise in material
default or in material breach of this Agreement), (i) if the Initial
Public Offering shall not have occurred by December 31, 1996, (ii) if
Castle shall have been notified in writing by ▇▇▇▇▇ ▇▇▇▇▇▇ that in the
reasonable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ the Initial Public Offering cannot be
consummated by December 31, 1996; (iii) if any party receiving a revised
Schedule to this Agreement pursuant to Section 2.7 elects to terminate
this Agreement pursuant to Section 2.7 hereof, or (iv) if any condition to
the obligations of the terminating party has not been met or waived on or
before December 31, 1996; or
(c) by either Purchaser and Castle, on the one hand, or the
Shareholders and Seller, on the other hand, in writing, without liability
on the part of the terminating party on
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account of such termination (provided the terminating party is not
otherwise in default or breach of this Agreement), if the other party
shall (i) fail to perform its or their material covenants or material
agreements contained herein required to be performed prior to the Closing
Date, or (ii) materially breach or have breached any of its material
representations or warranties contained herein.
10.2 EFFECT ON OBLIGATIONS. Termination of this Agreement pursuant to
Section 10.1(a) (b) or (c) shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 12.8 and 12.11 hereof and
the obligations set forth in the last sentence of this Section 10.2. On
termination of this Agreement pursuant to Section 10.1(d) the terminating party
shall have all remedies for such failure to perform or material breach as are
provided by law. Upon any termination of this Agreement each party hereto will
redeliver all documents, work papers and other material of any other party
relating to the transactions contemplated hereby, and all copies of such
materials, whether so obtained before or after the execution hereof, to the
party furnishing the same. Any confidentiality agreements between the parties
hereto shall survive any termination pursuant to this Article X.
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1 INDEMNIFICATION OF THE SELLER AND THE SHAREHOLDERS. The Purchaser and
Castle, from and after the Closing Date, shall indemnify and hold Seller and the
Shareholders and their respective Affiliates (the "Seller Indemnitees") harmless
from and against any and all damages, penalties, losses, deficiencies, costs,
expenses, obligations, fines, expenditures, claims and liabilities, including
reasonable counsel fees and reasonable expenses of investigation, defending and
prosecuting litigation (collectively, the "Damages"), suffered by any Seller
Indemnitee as a result of, caused by, pr arising out of (a) any
misrepresentation, breach of warranty, or nonfulfillment of any agreement or
covenant on the part of the Purchaser and Castle under this Agreement or any
misrepresentation in or omission from any list, Schedule delivered at the
Closing , certificate, or other instrument furnished or to be furnished to the
Seller by the Purchaser and Castle pursuant to the terms of this Agreement (b)
any liability or obligation (other than those for which Purchaser and Castle are
being indemnified by Seller and the Shareholders hereunder) which pertains to
the ownership, operation or conduct of the Business or Assets arising from any
acts, omissions, events, conditions or circumstances occurring on or after the
Closing Date; or (c) any breach or default of Castle or the Purchaser under the
Ancillary Agreement; provided, however that Castle and the
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Purchaser shall have no obligations to indemnify Seller and the Shareholders of
any Damages for which a claim is not made within 23 months of the Closing Date.
11.2 INDEMNIFICATION OF THE PURCHASER AND CASTLE. Seller and the
Shareholders, jointly and severally, shall indemnify and hold Purchaser and
Castle and their respective Affiliates (the "Purchaser Indemnitees") harmless
from and against any and all Damages suffered by any Purchaser Indemnitee as a
result of, caused by or arising out of (a) any misrepresentation, breach of
warranty, or nonfulfillment of any agreement or covenant on the part of the
Seller or the Shareholders under this Agreement or any misrepresentation in or
omission from any list, Schedule delivered at the Closing , certificate, or
other instrument furnished or to be furnished to the Purchaser by the Seller
pursuant to the terms of this Agreement; (b) any liability or obligation (other
than those for which Seller and the Shareholders are being indemnified by
Purchaser and Castle hereunder and other than those relating to or arising from
the Assumed Obligations) which pertains to the ownership, operation or conduct
of the Business or Assets arising from any acts, omissions, events, conditions
or circumstances occurring before the Closing Date; (c) the failure of Seller to
discharge liabilities of Lane PC as described in Section 2.3 hereof; or (d) any
breach or default of the Seller or the Shareholders under the Ancillary
Agreement; provided, however, that with respect to subsection (a) and (b)
hereof, Seller and the Shareholders shall have no obligation to indemnify the
Purchaser and Castle for (i) exemplary or punitive damages, (ii) in excess of
the consideration paid to the Seller pursuant to Section 3.1; or (iii) for any
Damages for which a claim is not made within 23 months of the Closing Date; and
provided further, that no claim shall be made by way of indemnification for any
Damages of less than $10,000, and no claim shall be made for indemnification
until the aggregate of all claims for which indemnification is sought exceed
$150,000.
11.3 DEMANDS. Each indemnified party hereunder agrees that promptly upon
its discovery of facts giving rise to a claim for indemnity under the provisions
of this Agreement, including receipt by it of notice of any demand, assertion,
claim, action or proceeding, judicial or otherwise, by any third party (such
third party actions being collectively referred to herein as the "Claim"), with
respect to any matter as to which it claims to be entitled to indemnity under
the provisions of this Agreement, it will give prompt notice thereof in writing
to the indemnifying party, together with a statement of such information
respecting any of the foregoing as it shall have. Such notice shall include a
formal demand for indemnification under this Agreement. The indemnifying party
shall not be obligated to indemnify the indemnified party with respect to any
Claim if the indemnified party knowingly failed to notify the indemnifying party
thereof within three business days of the
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receipt of the Claim, if such failure to notify prevented the indemnifying party
or its counsel from defending against such matter and making a timely response
thereto including, without limitation, any responsive motion or answer to a
complaint, petition, notice or other legal, equitable or administrative process
relating to the Claim, but only insofar as such knowing failure to notify the
indemnifying party actually resulted in prejudice or damage to the indemnifying
party.
11.4 RIGHT TO CONTEST AND DEFEND. The indemnifying party shall be entitled
at its cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to which it is called upon to indemnify the
indemnified party under the provisions of this Agreement; provided, that notice
of the intention so to contest shall be delivered by the indemnifying party to
the indemnified party within 20 days from the date of receipt by the
indemnifying party of notice by the indemnified party of the assertion of the
Claim. Any such contest may be conducted in the name and on behalf of the
indemnifying party or the indemnified party as may be appropriate. Such contest
shall be conducted by reputable counsel employed by the indemnifying party, but
the indemnified party shall have the right but not the obligation to participate
in such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense. The indemnifying party shall have full authority to
determine all action to be taken with respect thereto; provided, however, that
the indemnifying party will not have the authority to subject the indemnified
party to any obligation whatsoever, other than the performance of purely
ministerial tasks or obligations not involving material expense, and in no event
shall any party be required to admit to professional negligence. If the
indemnifying party does not elect to contest any such Claim, the indemnifying
party shall be bound by the result obtained with respect thereto by the
indemnified party. At any time after the commencement of the defense of any
Claim, the indemnifying party may request the indemnified party to agree in
writing to the abandonment of such contest or to the payment or compromise by
the indemnified party of the asserted Claim, whereupon such action shall be
taken unless the indemnified party determines that the contest should be
continued, and so notifies the indemnifying party in writing within 15 days of
such request from the indemnifying party. If the indemnified party determines
that the contest should be continued, the indemnifying party shall be liable
hereunder only to the extent of the amount that the other party to the contested
Claim had agreed unconditionally to accept in payment or compromise as of the
time the indemnifying party made its request therefor to the indemnified party.
11.5 COOPERATION. If requested by the indemnifying party, the indemnified
party agrees to cooperate with the indemnifying party and its counsel in
contesting any Claim that the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person
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asserting the Claim, or any cross-complaint against any person, and the
indemnifying party will reimburse the indemnified party for any expenses
incurred by it in so cooperating. At no cost or expense to the indemnified
party, the indemnifying party shall cooperate with the indemnified party and its
counsel in contesting any Claim.
11.6 RIGHT TO PARTICIPATE. The indemnified party agrees to afford the
indemnifying party and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, asserting any Claim against the indemnified party or conferences
with representatives of or counsel for such persons.
11.7 PAYMENT OF DAMAGES. The indemnifying party shall pay to the
indemnified party in immediately available funds any amounts to which the
indemnified party may become entitled by reason of the provisions of this
Agreement, such payment to be made within five days after any such amounts are
finally determined either by mutual agreement of the parties hereto or pursuant
to the final unappealable judgment of a court of competent jurisdiction.
ARTICLE XII
MISCELLANEOUS
12.1 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules) set forth the entire understanding of the parties with respect to the
subject matter hereof. Any previous agreements or understandings (whether oral
or written) between the parties regarding the subject matter hereof are merged
into and superseded by this Agreement.
12.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors of
the parties hereto; provided that this Agreement, including the representations
and warranties herein, may not be assigned by Seller or the Shareholders without
the prior written consent of Purchaser and Castle or by Purchaser and Castle to
any Person without the prior written consent of Seller.
12.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
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12.4 HEADINGS. The headings of the Articles, Sections and paragraphs of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
12.5 MODIFICATION AND WAIVER. No amendment, modification or alteration of
the terms or provisions of this Agreement shall be binding unless the same shall
be in writing and duly executed by the parties hereto, except that any of the
terms or provisions of this Agreement may be waived in writing at any time by
the party which is entitled to the benefits of such waived terms or provisions.
No waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar). No
delay on the part of either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof.
12.6 NO THIRD PARTY BENEFICIARY RIGHTS. This Agreement is not intended to
and shall not be construed to give any Person (other than the parties signatory
hereto any interest or rights (including, without limitation, any third party
beneficiary rights) with respect to or in connection with any agreement or
provision contained herein or contemplated hereby.
12.7 SALES AND TRANSFER TAXES. Purchaser shall be responsible for and pay
all applicable sales, stamp, transfer, documentary, use, registration, filing
and other taxes and fees (including any penalties and interest) that may become
due or payable in connection with this Agreement and the transactions
contemplated hereby.
12.8 EXPENSES. Except as otherwise provided in this Agreement, Seller, the
Shareholders and Purchaser shall each pay all costs and expenses incurred by
them or on their behalf in connection with this Agreement and the transactions
contemplated hereby.
12.9 NOTICE. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be sufficiently
given if delivered in person or sent by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
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if to Purchaser, to:
Castle Dental Centers of New York, Inc.
if to Castle, to:
Castle Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Bracewell & ▇▇▇▇▇▇▇▇▇, LLP
South Tower Pennzoil Place
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
if to Seller or the Shareholders to:
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. d/b/a American Dental Centers
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
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▇.▇. ▇▇▇▇ Professional Corporation d/b/a American Dental Centers
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
Lisadent Corp.
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Kaufmann, Feiner, Yamin,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or at such other address for a party as shall be specified by like notice, and
such notice or communication shall be deemed to have been duly given as of the
date so delivered, mailed or sent by telecopier.
12.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regards to conflict of
law rules thereof.
12.11 CONFIDENTIALITY; PUBLICITY. The terms and conditions of this
Agreement shall not be disclosed by any party hereto without the prior written
consent of the other parties; provided, however, that Purchaser may disclose
such information as is required to comply with the requirements of its lenders
and investors and to comply with applicable securities laws. No party hereto
shall issue any press release or make any other public statement, in each case
relating to or connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of the other party hereto
to the contents and the manner of presentation and publication thereof.
- 43 -
12.12 CONSENT TO JURISDICTION. Any judicial proceeding brought against any
of the parties to this Agreement on any dispute arising out of this Agreement or
any matter related hereto shall be brought in any federal or state court located
in New York, and, by execution and delivery of this Agreement, each of the
parties to this Agreement accepts for itself the exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
12.13 SEVERABILITY. If any provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled.
12.14 ENFORCEMENT. The parties hereto agree that the remedy at law for any
breach of this Agreement is inadequate and that should any dispute arise
concerning the sale of the Assets or any other matter hereunder, this Agreement
shall be enforceable in a court of equity by an injunction or a decree of
specific performance. Such remedies shall, however, be cumulative and
nonexclusive, and shall be in addition to any other remedies which the parties
hereto may have.
12.15 GUARANTY OF OBLIGATIONS. Castle hereby unconditionally guarantees
the performance by Purchaser of each of its obligations contained in this
Agreement.
12.16 CONSENT TO DISCLOSURE. Sellers and the Shareholders hereby consent
to the inclusion of the information and the references to them contained in the
Registration Statement as originally filed, but not any amendment thereto.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the date first above written.
CASTLE DENTAL CENTERS OF NEW YORK,
INC.
By:_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer
CASTLE DENTAL CENTERS, INC.
By:______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S. D/B/A AMERICAN
DENTAL CENTERS
By:_____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
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▇.▇. ▇▇▇▇ PROFESSIONAL CORPORATION
D/B/A AMERICAN DENTAL CENTERS
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
Title: President
LISADENT CORP.
By:______________________________
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ D.D.S.
----------------------------------
▇▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., solely for purposes
of Section 9.4 hereof
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