ASSET CONTRIBUTION AGREEMENT
BY AND AMONG
PENTEGRA DENTAL GROUP, INC.,
XXXXX X'XXXXX, D.D.S., INC.
AND
XXXXX X'XXXXX, D.D.S.
TABLE OF CONTENTS
Page
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Section 1. TERMS OF THE CONTRIBUTION
1.2 CONTRIBUTION OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 EXCLUDED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 PURCHASE PRICE; ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . 2
1.5 SUBSEQUENT ACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR AND SHAREHOLDERS.
2.1 CORPORATE EXISTENCE; GOOD STANDING. . . . . . . . . . . . . . . . . . . . 2
2.2 POWER AND AUTHORITY FOR TRANSACTIONS. . . . . . . . . . . . . . . . . . . 3
2.3 PERMITS, LICENSES AND GOVERNMENTAL AUTHORIZATIONS . . . . . . . . . . . . 3
2.4 CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 DISTRIBUTIONS AND REPURCHASES . . . . . . . . . . . . . . . . . . . . . . 3
2.6 CORPORATE RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 CONTRIBUTOR'S FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . 3
2.8 LEASES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.9 CONDITION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 TITLE TO AND ENCUMBRANCES ON PROPERTY . . . . . . . . . . . . . . . . . . 4
2.11 INVENTORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 INTELLECTUAL PROPERTY RIGHTS; NAMES . . . . . . . . . . . . . . . . . . . 4
2.13 DIRECTORS AND OFFICERS; PAYROLL INFORMATION; EMPLOYEES. . . . . . . . . . 4
2.14 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15 CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.16 SUBSEQUENT EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.17 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.18 COMMISSIONS AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.19 LIABILITIES; DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.20 INSURANCE POLICIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.21 EMPLOYEE BENEFIT PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.22 ADVERSE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.23 COMPLIANCE WITH LAWS IN GENERAL . . . . . . . . . . . . . . . . . . . . . 8
2.24 THIRD PARTY PAYORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.25 NO UNTRUE REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . 8
2.26 BANKING RELATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.27 OWNERSHIP INTERESTS OF INTERESTED PERSONS; COMPETITORS. . . . . . . . . . 8
2.28 PAYORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. REPRESENTATIONS AND WARRANTIES OF PENTEGRA
3.1 CORPORATE EXISTENCE: GOOD STANDING. . . . . . . . . . . . . . . . . . . . 9
3.2 POWER AND AUTHORITY; CONSENTS . . . . . . . . . . . . . . . . . . . . . . 9
3.3 PERMITS, LICENSES AND GOVERNMENTAL AUTHORIZATIONS . . . . . . . . . . . . 9
3.4 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 COMMISSIONS AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 NO UNTRUE REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. COVENANTS OF CONTRIBUTOR AND SHAREHOLDERS.
4.1 CONSUMMATION OF AGREEMENT; EXHIBITS . . . . . . . . . . . . . . . . . . . 10
4.2 BUSINESS OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 ACCESS AND NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 APPROVALS OF THIRD PARTIES AND PERMITS AND CONSENTS . . . . . . . . . . . 10
4.5 ACQUISITION PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.6 FUNDING OF ACCRUED EMPLOYEE BENEFITS. . . . . . . . . . . . . . . . . . . 11
4.7 EMPLOYEE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.8 DISTRIBUTIONS AND REPURCHASES . . . . . . . . . . . . . . . . . . . . . . 11
4.9 REQUIREMENTS TO EFFECT ACQUISITION. . . . . . . . . . . . . . . . . . . . 11
4.10 ACCOUNTING AND TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 WAIVER OF BULK TRANSFER COMPLIANCE. . . . . . . . . . . . . . . . . . . . 11
4.12 LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.13 HIRING OF EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.14 EMPLOYEE BENEFIT PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.15 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5. COVENANTS OF PENTEGRA
5.1 CONSUMMATION OF AGREEMENT; EXHIBITS . . . . . . . . . . . . . . . . . . . 12
5.2 APPROVALS OF THIRD PARTIES AND PERMITS AND CONSENTS . . . . . . . . . . . 12
Section 6. COVENANTS OF PENTEGRA AND CONTRIBUTOR AND SHAREHOLDERS
6.1 FILINGS; OTHER ACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. PENTEGRA CONDITIONS PRECEDENT
7.1 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 13
7.2 COVENANTS AND CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 13
7.3 PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 NO MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . . . . . . 13
7.5 DUE DILIGENCE REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.6 APPROVAL BY THE BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . 13
7.7 SERVICE AGREEMENT; GUARANTY AGREEMENT . . . . . . . . . . . . . . . . . . 13
7.8 EMPLOYMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.9 CONSENTS AND APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 CLOSING DELIVERIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.11 DEBT AND RECEIVABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.12 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.13 NO CHANGE IN WORKING CAPITAL. . . . . . . . . . . . . . . . . . . . . . . 13
7.14 SECURITIES APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8. CONTRIBUTOR'S AND SHAREHOLDERS' CONDITIONS PRECEDENT
8.1 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 14
8.2 COVENANTS AND CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 14
8.3 PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.4 CLOSING DELIVERIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.5 SECURITIES APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9. CLOSING DELIVERIES
9.1 DELIVERIES OF CONTRIBUTOR AND SHAREHOLDERS. . . . . . . . . . . . . . . . 14
9.2 DELIVERIES OF PENTEGRA. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 10. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
10.1 NATURE AND SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 INDEMNIFICATION BY PENTEGRA . . . . . . . . . . . . . . . . . . . . . . . 16
10.3 INDEMNIFICATION BY CONTRIBUTOR AND SHAREHOLDERS . . . . . . . . . . . . . 17
10.4 INDEMNIFICATION PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . 18
10.5 RIGHT OF SETOFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11. TERMINATION
Section 12. TRANSFER REPRESENTATIONS
12.1 TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.2 INVESTMENTS; COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . 19
12.3 ECONOMIC RISK; SOPHISTICATION . . . . . . . . . . . . . . . . . . . . . . 20
Section 13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
Section 14. MISCELLANEOUS
14.1 TAX COVENANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
14.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
14.3 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14.4 EACH PARTY TO BEAR COSTS. . . . . . . . . . . . . . . . . . . . . . . . . 21
14.5 PUBLIC DISCLOSURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14.7 CAPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14.8 INTEGRATION OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . 21
14.9 ENTIRE AGREEMENT/AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . 21
14.10 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.11 BINDING EFFECT/ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . 22
14.12 COSTS OF ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.13 PRORATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.14 AMENDMENTS; WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.15 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.16 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ASSET CONTRIBUTION AGREEMENT
This ASSET CONTRIBUTION AGREEMENT (this "Agreement"), made and executed
as of August 20, 1997, is by and among PENTEGRA DENTAL GROUP, INC., a
Delaware corporation ("Pentegra"), Xxxxx X'Xxxxx, D.D.S., Inc.
("Contributor") and Xxxxx X'Xxxxx, D.D.S., shareholders of Contributor
(referred to herein as "Shareholder" or "Shareholders").
WITNESSETH:
WHEREAS, Contributor operates a dental practice ("Business") and Pentegra
is engaged in the business of managing certain non-dentistry aspects of
dental practices;
WHEREAS, Contributor desires to contribute to Pentegra, and Pentegra
desires to receive from Contributor, certain assets of Contributor;
WHEREAS, Pentegra or its affiliated designee has entered into or intends
to enter into Agreements and Plans of Reorganization, Asset Contribution
Agreements and other acquisition agreements (collectively, the "Other
Agreements") with such persons or entities or the stockholders of such
entities listed on EXHIBIT A (together with Contributor, the "Target
Companies");
WHEREAS, it is intended for Federal income tax purposes that the
transfers contemplated by this Agreement, the Other Agreements and Pentegra's
initial public offering ("Initial Public Offering") of shares of its common
stock, par value $.01 per share ("Pentegra Common Stock") shall qualify as an
exchange within the meaning of Section 351 of the Internal Revenue Code of
1986, as amended ("IRC" or "Code");
WHEREAS, the consummation of the transfers to Pentegra pursuant to this
Agreement is intended to occur in connection with, and is conditioned upon,
the simultaneous consummation of the transfers contemplated by the Other
Agreements and the Initial Public Offering.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for other good and valuable consideration, the
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. TERMS OF THE CONTRIBUTION.
1.1 THE CLOSING. The closing of the transactions contemplated hereby
shall take place at 10:00 am local time, at the offices of Xxxxxxx & Xxxxxx,
L.L.P., on the day on which the Initial Public Offering of Pentegra Common Stock
is consummated. The date on which the Closing occurs is hereinafter referred to
as the "Closing Date".
1.2 CONTRIBUTION OF ASSETS. Subject to and upon the terms and conditions
contained herein, on the Closing Date, Contributor shall convey, transfer,
deliver and assign to Pentegra or any affiliate of Pentegra designated by
Pentegra all of Contributor's right, title and interest in and to those certain
assets described on EXHIBIT 1.1 attached hereto (individually, "Asset", and
collectively "Assets"), free and clear of all obligations, security interests,
claims, liens and encumbrances, except as specifically assumed, or taken subject
to, by Pentegra pursuant to SECTION 1.3(b) hereof.
1.3 EXCLUDED ASSETS. There shall be excluded from the Assets to be
transferred and contributed hereunder, and Contributor shall retain all of
its right, title and interest in and to, the assets not specifically
transferred hereunder, including without limitation, the assets described on
EXHIBIT 1.2 (the "Excluded Assets").
1.4 PURCHASE PRICE; ASSUMPTION OF LIABILITIES. As consideration for the
Assets and the representations, warranties and agreements of Contributor
contained herein, Pentegra shall, on the Closing Date:
(a) Cause to be transferred to Contributor the consideration specified in
ANNEX I attached hereto (the "Acquisition Consideration"); and.
(b) Except as otherwise provided herein, assume and perform or discharge
on or after the Closing Date, the contracts, leases, obligations, commitments,
liabilities and indebtedness of Contributor listed on EXHIBIT 1.3(b) attached
hereto to the extent that such obligations, commitments, liabilities and
indebtedness are current and not otherwise in default. (the "Assumed
Liabilities"). Notwithstanding any contrary provision contained herein,
Pentegra shall not be deemed to have assumed, nor shall Pentegra assume: (i)
any liability, commitment or obligation or trade payable or indebtedness not
specifically disclosed on EXHIBIT 1.3(b), (ii) any liability set forth on
EXHIBIT 1.3(b) which may be incurred by reason of any breach of or default under
such contracts, leases, commitments or obligations which occurred on or before
the Closing Date; (iii) any liability for any employee benefits payable to
employees of Contributor, including, but not limited to, liabilities arising
under any Contributor Plan (as defined in SECTION 2.21 hereof); (iv) any
liability based upon or arising out of a violation of any antitrust or similar
restraint-of-trade laws by any Shareholder or Contributor, including, without
limiting the generality of the foregoing, any such antitrust liability which may
arise in connection with agreements, contracts, commitments or orders for the
sale of goods or provision of services by Contributor reflected on the books of
Contributor at or prior to the Closing Date; (v) any liability based upon or
arising out of any tortious or wrongful actions of Contributor, any licensed
professional employee or independent contractor of Contributor or any
Shareholder, (vi) any liability for the payment of any taxes of Contributor or
any Shareholder, including without limitation, sales, use and other transfer
taxes and income taxes arising from or by reason of the transactions
contemplated by this Agreement; (vii) any indebtedness secured by deeds of trust
or mortgages on real property; nor (viii) any liability incurred or to be
incurred pursuant to any malpractice or other suits or actions pending against
Contributor or any Shareholder.
1.5 SUBSEQUENT ACTIONS. If, at any time after the Closing Date, Pentegra
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in Pentegra its right, title or
interest in, to or under any of the Assets or otherwise to carry out this
Agreement, in return for the consideration set forth in this Agreement,
Contributor and Shareholders shall execute and deliver all such deeds, bills of
sale, assignments and assurances and take and do all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under the Assets in Pentegra or otherwise
to carry out this Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR AND SHAREHOLDERS.
Contributor and Shareholders, jointly and severally, hereby represent and
warrant to Pentegra as follows:
2.1 CORPORATE EXISTENCE; GOOD STANDING. Contributor is a professional
corporation or association, as applicable, duly organized, validly existing and
in good standing under the laws of the State of Texas. Contributor has all
necessary corporate powers to own all of its assets and to carry on its business
as such business is now being conducted. Contributor does not own stock in or
control, directly or indirectly,
any other corporation, association or business organization, nor is
Contributor a party to any joint venture or partnership. The Shareholders are
the sole shareholders of Contributor and own all outstanding shares of
capital stock free of all security interests, claims, encumbrances and liens
in the amounts set forth on EXHIBIT 2.1. Each share of Contributor's common
stock has been legally and validly issued and fully paid and nonassessable.
No shares of capital stock of Contributor are owned by Contributor in
treasury. There are no outstanding (a) bonds, debentures, notes or other
obligations the holders of which have the right to vote with the stockholders
of Contributor on any matter, (b) securities of Contributor convertible into
equity interests in Contributor, or (c) commitments, options, rights or
warrants to issue any such equity interests in Contributor, to issue
securities of Contributor convertible into such equity interests, or to
redeem any securities of Contributor. No shares of capital stock of
Contributor have been issued or disposed of in violation of the preemptive
rights, rights of first refusal or similar rights of any of Contributor's
stockholders. Contributor is not required to qualify to do business as a
foreign corporation in any other state or jurisdiction by reason of its
business, properties or activities in or relating to such other state or
jurisdiction. Contributor does not have any assets, employees or offices in
any state other than the state set forth in the first sentence of this
SECTION 2.1.
2.2 POWER AND AUTHORITY FOR TRANSACTIONS. Contributor has the corporate
power to execute, deliver and perform this Agreement and all agreements and
other documents executed and delivered by it pursuant to this Agreement or to be
executed and delivered on the Closing Date, and has taken all action required by
law, its Articles or Certificate of Incorporation, its Bylaws or otherwise, to
authorize the execution, delivery and performance of this Agreement and such
related documents. Each Shareholder has the legal capacity to enter into and
perform this Agreement and the other agreements to be executed and delivered in
connection herewith. Contributor has obtained the approval of its stockholders
necessary to the consummation of the transactions contemplated herein. This
Agreement and all agreements and documents executed and delivered in connection
herewith have been, or will be as of the Closing Date, duly executed and
delivered by Contributor and Shareholders, as appropriate, and constitute or
will constitute the legal, valid and binding obligations of Contributor and
Shareholders, enforceable against Contributor and Shareholders in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. The execution and delivery of this
Agreement, and the agreements executed and delivered pursuant to this Agreement
or to be executed and delivered on the Closing Date, do not, and, subject to the
receipt of consents described on EXHIBIT 2.4, the consummation of the actions
contemplated hereby will not, violate any provision of the Articles or
Certificate of Incorporation or Bylaws of Contributor or any provisions of, or
result in the acceleration of, any obligation under any mortgage, lien, lease,
agreement, rent, instrument, order, arbitration award, judgment or decree to
which Contributor or any Shareholder is a party or by which Contributor or any
Shareholder is bound, or violate any material restrictions of any kind to which
Contributor is subject, or result in any lien or encumbrance on any of
Contributor's assets or the Assets.
2.3 PERMITS, LICENSES AND GOVERNMENTAL AUTHORIZATIONS. All building or
other permits, certificates of occupancy, concessions, grants, franchises,
licenses, certificates of need and other governmental authorizations and
approvals required for the conduct of the Business or the use of the Assets, or
waivers thereof, have been duly obtained and are in full force and effect and
are described on EXHIBIT 2.3. There are no proceedings pending or, to the
knowledge of Contributor and Shareholders, threatened, which may result in the
revocation, cancellation or suspension, or any adverse modification, of any such
licenses or permits.
2.4 CONSENTS. Except as set forth on EXHIBIT 2.4, no consent,
authorization, permit, license or filing with any governmental authority, any
lender, lessor, any manufacturer or supplier or any other person or entity is
required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement and the agreements and documents
contemplated hereby on the part of Contributor or Shareholders.
2.5 DISTRIBUTIONS AND REPURCHASES. No distribution, payment or dividend
of any kind has been
declared or paid by Contributor on any of its capital stock since the Balance
Sheet Date. No repurchase of any of Contributor's capital stock has been
approved, effected or is pending, or is contemplated by Contributor.
2.6 CORPORATE RECORDS. True and correct copies of the Articles or
Certificate of Incorporation, Bylaws and minutes of Contributor and all
amendments thereto have been delivered to Pentegra. The minute books of
Contributor contain accurate minutes of all meetings of and consents to actions
taken without meetings of the Board of Directors and stockholders of Contributor
since its formation. The books of account of Contributor have been kept
accurately in the ordinary course of business and the revenues, expenses, assets
and liabilities of Contributor have been properly recorded in such books.
2.7 CONTRIBUTOR'S FINANCIAL INFORMATION. Contributor has heretofore
furnished Pentegra with copies of its unaudited balance sheet and related
unaudited statements of income, retained earnings and cash flows for its prior
two full fiscal years, as well as copies of its unaudited balance sheet as of
December 31, 1996 and June 30, 1997 (collectively, the "Balance Sheet" and the
latest date thereof shall be referred to as the "Balance Sheet Date") and any
related unaudited statements of income, retained earnings, schedule of accounts
receivable, accounts payable and accrued liabilities, and cash flows for the
twelve months then ended (collectively, with the related notes thereto, the
"Financial Statements"). The Financial Statements fairly present the financial
condition and results of operations of Contributor as of the dates and for the
periods indicated and reflect all fixed and contingent liabilities of
Contributor.
2.8 LEASES. EXHIBIT 2.8 attached hereto sets forth a list of all leases
pursuant to which Contributor or any Shareholder leases, as lessor or lessee,
real or personal property used in operating the Business, related to the Assets
or otherwise. All such leases listed on EXHIBIT 2.8 are valid and enforceable
in accordance with their respective terms, and there is not under any such lease
any existing default by Contributor, as lessor or lessee, or any condition or
event of which any Shareholder or Contributor has knowledge which with notice or
lapse of time, or both, would constitute a default, in respect of which
Contributor or Shareholders have not taken adequate steps to cure such default
or to prevent a default from occurring.
2.9 CONDITION OF ASSETS. All of the Assets are in good condition and
repair subject to normal wear and tear and conform with all applicable
ordinances, regulations and other laws, and Contributor and Shareholders have no
knowledge of any latent defects therein.
2.10 TITLE TO AND ENCUMBRANCES ON PROPERTY. Contributor has good, valid
and marketable title to all of the Assets, free and clear of any liens, claims,
charges, exceptions or encumbrances, except for those, if any, which are set
forth in EXHIBIT 2.10 attached hereto. Contributor shall cause all encumbrances
set forth on EXHIBIT 2.10 (other than those encumbrances indicated on EXHIBIT
1.3(b)) to be released or terminated prior to the Closing Date and evidence of
such releases of liens and claims shall be provided to Pentegra on the Closing
Date and the Assets shall not be used to satisfy such liens, claims or
encumbrances.
2.11 INVENTORIES. All of the Assets constituting inventory are owned or
used by Contributor, are in good, current, standard and merchantable condition
and are not obsolete or defective.
2.12 INTELLECTUAL PROPERTY RIGHTS; NAMES. Except as set forth on EXHIBIT
2.12, Contributor has no right, title or interest in or to patents, patent
rights, corporate names, assumed names, manufacturing processes, trade names,
trademarks, service marks, inventions, specialized treatment protocols,
copyrights, formulas and trade secrets or similar items. Set forth in EXHIBIT
2.12 is a listing of all names of all predecessor companies of Contributor,
including the names of any entities from whom Contributor previously acquired
significant assets. Except for off-the-shelf software licenses and except as
set forth on EXHIBIT 2.12, Contributor is not a licensee in respect of any
patents, trademarks, service marks, trade names, copyrights or
applications therefor, or manufacturing processes, formulas or trade secrets
or similar items and no such licenses are necessary for the conduct of the
Business or the use of the Assets. No claim is pending or has been made to
the effect that the Assets or the present or past operations of Contributor
in connection with the Assets or Business infringe upon or conflict with the
asserted rights of others to any patents, patent rights, manufacturing
processes, trade names, trademarks, service marks, inventions, licenses,
specialized treatment protocols, copyrights, formulas, know-how and trade
secrets. Contributor has the sole and exclusive right to use all Assets
constituting proprietary rights without infringing or violating the rights of
any third parties and no consents of any third parties are required for the
use thereof by Pentegra.
2.13 DIRECTORS AND OFFICERS; PAYROLL INFORMATION; EMPLOYEES. Set forth on
EXHIBIT 2.13 attached hereto is a true and complete list, as of the date of this
Agreement of: (a) the name of each director and officer of Contributor and the
offices held by each, (b) the most recent payroll report of Contributor, showing
all current employees of Contributor and their current levels of compensation,
(c) promised increases in compensation of employees of Contributor that have not
yet been effected, (d) oral or written employment agreements, consulting
agreements or independent contractor agreements (and all amendments thereto) to
which Contributor is a party, copies of which have been delivered to Pentegra,
and (e) all employee manuals, materials, policies, procedures and work-related
rules, copies of which have been delivered to Pentegra. Contributor is in
compliance with all applicable laws, rules, regulations and ordinances
respecting employment and employment practices. Contributor has not engaged in
any unfair labor practice. There are no unfair labor practices charges or
complaints pending or threatened against Contributor, and Contributor has never
been a party to any agreement with any union, labor organization or collective
bargaining unit.
2.14 LEGAL PROCEEDINGS. Neither any Shareholder, Contributor nor the
Business nor any of the Assets is subject to any pending, nor does Contributor
or any Shareholder have knowledge of any threatened, litigation, governmental
investigation, condemnation or other proceeding against or relating to or
affecting Contributor, any Shareholder, the Business, the Assets or the
transactions contemplated by this Agreement, and, to the knowledge of
Contributor and Shareholders, no basis for any such action exists, nor is there
any legal impediment of which Contributor or any Shareholder has knowledge to
the continued operation of its business or the use of the Assets in the ordinary
course, subject to consents set forth on EXHIBIT 2.4.
2.15 CONTRACTS. Contributor has delivered to Pentegra true copies of all
written, and disclosed to Pentegra all oral, outstanding contracts, obligations
and commitments of Contributor ("Contracts"), entered into in connection with
and related to the Assets or the Business, all of which are listed or
incorporated by reference on EXHIBIT 2.8 (in the case of leases), EXHIBIT 2.13
(in the case of employment agreements) and EXHIBIT 2.15 (in the case of
Contracts other than leases) attached hereto. Except as otherwise indicated on
such Exhibits, all of such Contracts are valid, binding and enforceable in
accordance with their terms and are in full force and effect, and no defenses,
offsets or counterclaims have been asserted or may be made by any party thereto.
Except as indicated on such Exhibits, there is not under any such Contract any
existing default by Contributor or any Shareholder, or any condition or event of
which Contributor or any Shareholder has knowledge which with notice or lapse of
time, or both, would constitute a default. Contributor and Shareholders have
no knowledge of any default by any other party to such Contracts. Contributor
and Shareholders have not received notice of the intention of any party to any
Contract to cancel or terminate any Contract and have no reason to believe that
any amendment or change to any Contract is contemplated by any party thereto.
Other than those contracts, obligations and commitments listed on EXHIBIT 2.8,
EXHIBIT 2.13 and EXHIBIT 2.15, Contributor are not a party to any material
written or oral agreement contract, lease or arrangement, including without
limitation, any:
(a) Contract related to the Assets other than this Agreement;
(b) Employment, consulting or compensation agreement or arrangement;
(c) Labor or collective bargaining agreement;
(d) Lease agreement with respect to any property, whether as lessor or
lessee;
(e) Deed, xxxx of sale or other document evidencing an interest in or
agreement to purchase or sell real or personal property;
(f) Contract for the purchase of materials, supplies or equipment (i)
which is in excess of the requirements of the Business now booked or for normal
operating inventories, or (ii) which is not terminable upon notice of thirty
(30) days or less;
(g) Agreement for the purchase from a supplier of all or substantially all
of the requirements of the Business of a particular product or service;
(h) Loan agreement or other contract for money borrowed or lent or to be
borrowed or lent to another;
(i) Contracts containing non-competition covenants;
(j) Financial or similar contracts or agreements with patients of the
Contributor or Shareholders, oral or written, that provide for prepayments or
deferred installment payments; or
(k) Other contracts or agreements that involve either an unperformed
commitment in excess of $1,000 or that terminate or can only be terminated by
Contributor on more than 30 days after the date hereof.
2.16 SUBSEQUENT EVENTS. Other than as set forth on EXHIBIT 2.16,
Contributor has not, since the Balance Sheet Date:
(a) Incurred any material obligation or liability (absolute, accrued,
contingent or otherwise) or entered into any contract, lease, license or
commitment, except in connection with the performance of this Agreement;
(b) Discharged or satisfied any material lien or encumbrance, or paid or
satisfied any material obligation or liability (absolute, accrued, contingent or
otherwise) other than (i) liabilities shown or reflected on the Balance Sheet,
(ii) liabilities incurred since the Balance Sheet Date in the ordinary course of
business;
(c) Formed or acquired or disposed of any interest in any corporation,
partnership, joint venture or other entity;
(d) Made any payments to or loaned any money to any person or entity other
than in the ordinary course of business;
(e) Lost or terminated any employee, patient, customer or supplier that
has or may have, individually or in the aggregate, a material adverse effect on
the Business;
(f) Increased or established any reserve for taxes or any other liability
on its books or otherwise provided therefor, except as may have been required
due to income or operations of Contributor since the Balance Sheet Date;
(g) Mortgaged, pledged or subjected to any lien, charge or other
encumbrance any of the Assets, tangible or intangible;
(h) Sold or contracted to sell or transferred or contracted to transfer
any of the Assets or any other assets used in the conduct of the Business,
canceled any debts or claims or waived any rights, except in the ordinary
course of business;
(i) Except in the ordinary course or business consistent with past
practices, granted any increase in the rates of pay of employees, consultants or
agents, or by means of any bonus or pension plan, contract or other commitment,
increased the compensation of any officer, employee, consultant or agent;
(j) Authorized or incurred any capital expenditures in excess of Five
Thousand and No/100 Dollars ($5,000.00);
(k) Except for this Agreement and any other agreement executed and
delivered pursuant to this Agreement, entered into any material transaction
other than in the ordinary course of business or permitted hereunder;
(l) Redeemed, purchased, sold or issued any stock, bonds or other
securities;
(m) Experienced damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting any of its properties, assets or
business or the Business or the Assets, or experienced any other material
adverse change in its financial condition, assets, prospects, liabilities or
business;
(n) Declared or paid a distribution, payment or dividend of any kind on
the capital stock of Contributor;
(o) Repurchased, approved any repurchase or agreed to repurchase any of
Contributor's capital stock; or
(p) Suffered any material adverse change in the Business or to the Assets.
2.17 TAXES. (a) Contributor has filed all tax returns (including tax
reports and other statements) required to have been filed by it, and has paid
all taxes (including any interest, penalty or additions thereto) required to
have been paid by it. All such tax returns are complete and accurate in all
respects and properly reflect the relevant taxes for the periods covered
thereby. Contributor has not received any notice that any tax deficiency or
delinquency has been or may be asserted against Contributor. There are no
audits relating to taxes of Contributor pending or in process or, to the
knowledge of Contributor, threatened. Contributor is not currently the
beneficiary of any waiver of any statute of limitations in respect of taxes nor
of any extension of time within which to file any tax return or to pay any tax
assessment or deficiency. There are no liens or encumbrances relating to taxes
on or threatened against any of the assets of Contributor. Contributor has
withheld and paid all taxes required by law to have been withheld and paid by
it. Neither Contributor nor any predecessor of Contributor is or has been a
party to any tax allocation or sharing agreement or a member of an affiliated
group of corporations filing a consolidated Federal income tax return.
Contributor has delivered to Pentegra correct and complete copies of
Contributor's three most recently filed annual state, local and Federal income
tax returns, together with all examination reports and statements of
deficiencies assessed against or agreed to by Contributor during the three
calendar year period preceding the date of this Agreement. Contributor has
neither made any payments, is obligated to make any payments, or is a party to
any agreement that under any circumstance could obligate it to make any payments
that will not be deductible under Code section 280G.
(b) Contributor does not intend to dispose of any of the shares of Pentegra
Common Stock to be received hereunder and is not a party to any plan,
arrangement or agreement for the disposition of such shares.
Contributor and Shareholders have no knowledge, after due inquiry, of any
such intent, plan, arrangement or agreement by any Shareholder. Nothing
contained herein shall prohibit Contributor from selling such shares of
Pentegra Common Stock after the designated holding period and in accordance
with SECTION 12.1 hereof.
2.18 COMMISSIONS AND FEES. There are no claims for brokerage commissions
or finder's or similar fees in connection with the transactions contemplated by
this Agreement which may be now or hereafter asserted against Pentegra,
Contributor or Contributor's shareholders resulting from any action taken by
Contributor or any Shareholder or their respective agents or employees, or any
of them.
2.19 LIABILITIES; DEBT. Except to the extent reflected or reserved against
on the Balance Sheet, Contributor did not have, as of the Balance Sheet Date,
and has not incurred since that date and will not have incurred as of the
Closing Date, any liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, other than
those incurred in the ordinary course of business or as set forth on EXHIBIT
2.16. Contributor and Shareholders do not know, or have reasonable grounds to
know, of any basis for the assertion against Contributor or any Shareholder as
of the Balance Sheet Date, of any claim or liability of any nature in any amount
not fully reflected or reserved against on the Balance Sheet, or of any claim or
liability of any nature arising since that date other than those incurred in the
ordinary course of business or contemplated by this Agreement. All indebtedness
of Contributor (including without limitation, indebtedness for borrowed money,
guaranties and capital lease obligations) is described on EXHIBIT 2.19 attached
hereto.
2.20 INSURANCE POLICIES. Contributor, each Shareholder and each licensed
professional of Contributor carries property, liability, malpractice, workers'
compensation and such other types of insurance as is customary in the industry.
Valid and enforceable policies in such amounts are outstanding and duly in force
and will remain duly in force through the Closing Date. All such policies are
described in EXHIBIT 2.20 attached hereto and true and correct copies have been
delivered to Pentegra. Neither Shareholders nor Contributor have not received
notice or other communication from the issuer of any such insurance policy
cancelling or amending such policy or threatening to do so. Neither
Contributor, nor any Shareholder nor any licensed professional employee of
Contributor has any outstanding claims, settlements or premiums owed against any
insurance policy.
2.21 EMPLOYEE BENEFIT PLANS. Except as set forth on EXHIBIT 2.21 attached
hereto, Contributor has neither established, nor maintains, nor is obligated to
make contributions to or under or otherwise participate in, (a) any bonus or
other type of compensation or employment plan, program, agreement, policy,
commitment, contract or arrangement (whether or not set forth in a written
document); (b) any pension, profit-sharing, retirement or other plan, program or
arrangement; or (c) any other employee benefit plan, fund or program, including,
but not limited to, those described in SECTION 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). All such plans listed on
EXHIBIT 2.20 (individually "Contributor Plan," and collectively "Contributor
Plans") have been operated and administered in all material respects in
accordance with all applicable laws, rules and regulations, including without
limitation, ERISA, the Internal Revenue Code of 1986, as amended, Title VII of
the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended,
the Age Discrimination in Employment Act of 1967, as amended, and the related
rules and regulations adopted by those Federal agencies responsible for the
administration of such laws. No act or failure to act by Contributor has
resulted in a "prohibited transaction" (as defined in ERISA) with respect to the
Contributor Plans. No "reportable event" (as defined in ERISA) has occurred
with respect to any of the Contributor Plans. Contributor has not previously
made, is not currently making, and is not obligated in any way to make, any
contributions to any multiemployer plan within the meaning of the Multi-Employer
Pension Plan Amendments Act of 1980. With respect to each Contributor Plan,
either (i) the value of plan assets (including commitments under insurance
contracts) is at least equal to the value of plan liabilities or (ii) the value
of plan liabilities in excess of plan assets is disclosed on the Balance Sheet,
all as of the Closing Date.
2.22 ADVERSE AGREEMENTS. Contributor is not, and will not be as of the
Closing Date, a party to any agreement or instrument or subject to any
charter or other corporate restriction or any judgment, order, writ,
injunction, decree, rule or regulation that materially and adversely affects
the condition (financial or otherwise), operations, assets, liabilities,
business or prospects of Contributor, the Business or the Assets.
2.23 COMPLIANCE WITH LAWS IN GENERAL. Contributor, Shareholders and
Contributor's licensed professional employees, and the conduct of the Business
and use of the Assets, have complied with all applicable laws, rules,
regulations and licensing requirements, including, without limitation, the
Federal Environmental Protection Act, the Occupational Safety and Health Act,
the Americans with Disabilities Act and any environmental laws and medical waste
laws, and there exist no violations by Contributor, any Shareholder or any
licensed professional employee of Contributor of any Federal, state or local law
or regulation. Contributor and Shareholders have not received any notice of a
violation of any Federal, state and local laws, regulations and ordinances
relating to the operations of the Business and Assets and no notice of any
pending inspection or violation of any such law, regulation or ordinance has
been received by Contributor.
2.24 THIRD PARTY PAYORS. Contributor, Shareholders and each licensed
professional employee or independent contractor of Contributor has timely filed
all claims or other reports required to be filed with respect to the purchase of
services by third-party payors, and all such claims or reports are complete and
accurate, and has no liability to any payor with respect thereto. There are no
pending appeals, overpayment determinations, adjustments, challenges, audit,
litigation or notices of intent to open Medicare or Medicaid claim
determinations or other reports required to be filed by Contributor, any
Shareholder and each licensed professional employee of Contributor. Neither
Contributor, nor any Shareholder, nor any licensed professional employee of
Contributor has been convicted of, or pled guilty or nolo contendere to, patient
abuse or negligence, or any other Medicare or Medicaid program related offense
and none has committed any offense which may serve as the basis for suspension
or exclusion from the Medicare and Medicaid programs or any other third party
payor program. With respect to payors, Contributor, Shareholders and
Contributor's licensed professional employees has not (a) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (b) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (c)
failed to disclose knowledge of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, with the intent to fraudulently secure such benefit or
payment; and (d) violated any applicable state anti-remuneration or
self-referral statutes, rules or regulations.
2.25 NO UNTRUE REPRESENTATIONS. No representation or warranty by
Contributor or Shareholders in this Agreement, and no Exhibit or certificate
issued or executed by, or information furnished by, officers or directors of
Contributor or any Shareholder and furnished or to be furnished to Pentegra
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements or facts
contained therein not misleading.
2.26 BANKING RELATIONS. Set forth in EXHIBIT 2.26 is a complete and
accurate list of all arrangements that Contributor has with any bank or other
financial institution, indicating with respect to each relationship the type of
arrangement maintained (such as checking account, borrowing arrangements, safe
deposit box, etc.) and the person or persons authorized in respect thereof.
2.27 OWNERSHIP INTERESTS OF INTERESTED PERSONS; COMPETITORS. No officer,
employee, director or stockholder of Contributor, or their respective spouses,
children or affiliates, owns directly or indirectly, on an individual or joint
basis, any interest in, has a compensation or other financial arrangement with,
or serves as an officer or director of, any customer or supplier or competitor
of Contributor or any organization that has
a material contract or arrangement with Contributor.
2.28 PAYORS. EXHIBIT 2.28 sets forth a true, complete and correct list of
the names and addresses of each payor of Contributor's services which accounted
for more than 10% of revenues of Contributor in the preceding fiscal year.
Contributor has good relations with all such payors and other material payors of
Contributor and none of such payors has notified Contributor that it intends to
discontinue its relationship with Contributor or to deny any claims submitted to
such payor for payment.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PENTEGRA.
Pentegra hereby represents and warrants to Contributor and Shareholders
as follows:
3.1 CORPORATE EXISTENCE: GOOD STANDING. Pentegra is a corporation duly
organized and existing and in good standing under the laws of the State of
Delaware.
3.2 POWER AND AUTHORITY; CONSENTS. Pentegra has corporate power to
execute, deliver and perform this Agreement and all agreements and other
documents executed and delivered by it pursuant to this Agreement or to be
executed and delivered on the Closing Date, and has taken all actions required
by law, its Certificate of Incorporation, its Bylaws or otherwise, to authorize
the execution, delivery and performance of this Agreement and such related
documents. This Agreement and all agreements and documents executed and
delivered in connection herewith have been, or will be as of the Closing Date,
duly executed and delivered by Pentegra and constitute or will constitute the
legal, valid and binding obligations of Pentegra, enforceable against Pentegra
in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. The execution and delivery
of this Agreement, and the agreements executed and delivered pursuant to this
Agreement or to be executed and delivered on the Closing Date, do not, and, the
consummation of the actions contemplated hereby will not, violate any provision
of the Certificate of Incorporation or Bylaws of Pentegra or any provisions of,
or result in the acceleration of, any obligation under any mortgage, lien,
lease, agreement, rent, instrument, order, arbitration award, judgment or decree
to which Pentegra is a party or by which Pentegra is bound, or violate any
material restrictions of any kind to which Pentegra is subject, or result in any
lien or encumbrance on any of Pentegra's assets. Other than as have been
obtained or as would not have a material adverse effect, there are no consents
of any person or entity required for the transaction contemplated hereby on
behalf of Pentegra.
3.3 PERMITS, LICENSES AND GOVERNMENTAL AUTHORIZATIONS. All building or
other permits, certificates of occupancy, concessions, grants, franchises,
licenses, certificates of need and other governmental authorizations and
approvals required for the conduct of the business of Pentegra or waivers
thereof, have been duly obtained and are in full force and effect, except as
would not have a material adverse effect upon Pentegra. Other than as would not
have a material adverse effect, there are no proceedings pending or, to the
knowledge of Pentegra, threatened, which may result in the revocation,
cancellation or suspension, or any adverse modification, of any such licenses or
permits.
3.4 LEGAL PROCEEDINGS. Other than as would not have a material adverse
effect, neither Pentegra nor its business or assets is subject to any pending,
nor does Pentegra have knowledge of any threatened, litigation, governmental
investigation, condemnation or other proceeding against or relating to or
affecting Pentegra, its business, assets or the transactions contemplated by
this Agreement, and, to the knowledge of Pentegra, no basis for any such action
exists, nor is there any legal impediment of which Pentegra has knowledge to the
continued operation of its business or the use of its Assets in the ordinary
course.
3.5 TAXES. Pentegra has filed all tax returns (including tax reports and
other statements) required to have been filed by it, and has paid all taxes
(including any interest, penalty or additions thereto) required to
have been paid by it, other than as would not have a material adverse effect.
Pentegra has not received any notice that any tax deficiency or delinquency
has been or may be asserted against Pentegra. There are no audits relating
to taxes of Pentegra pending or in process or, to the knowledge of Pentegra,
threatened. Pentegra is not currently the beneficiary of any waiver of any
statute of limitations in respect of taxes nor of any extension of time
within which to file any tax return or to pay any tax assessment or
deficiency.
3.6 COMMISSIONS AND FEES. Pentegra has not incurred any obligation for
any finder's, broker's or similar fees in connection with the transactions
contemplated hereby.
3.7 CAPITAL STOCK. The issuance and delivery by Pentegra of shares of
Pentegra Common Stock in connection with the acquisition contemplated hereby
will be as of the Closing Date duly and validly authorized by all necessary
corporate action on the part of Pentegra. The Pentegra Common Stock to be
issued in connection with the acquisition contemplated hereby, when issued in
accordance with the terms of this Agreement, will be validly issued, fully paid
and nonassessable.
3.8 NO UNTRUE REPRESENTATIONS. No representation or warranty by Pentegra
in this Agreement, and no Exhibit or certificate issued by officers or directors
of Pentegra and furnished or to be furnished to Contributor or any Shareholder
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements or facts
contained therein not misleading.
SECTION 4. COVENANTS OF CONTRIBUTOR AND SHAREHOLDERS.
Contributor and Shareholders, jointly and severally, agree that between
the date hereof and the Closing Date:
4.1 CONSUMMATION OF AGREEMENT; EXHIBITS. Contributor and Shareholders
shall use their best efforts to cause the consummation of the transactions
contemplated hereby in accordance with their terms and conditions. Contributor
and Shareholders agree to complete the Exhibits hereto to be provided by them in
form and substance satisfactory to Pentegra.
4.2 BUSINESS OPERATIONS. Contributor and Shareholders shall operate the
Business and use the Assets in the ordinary course. Contributor and
Shareholders shall not enter into any lease, contract, indebtedness, commitment,
purchase or sale or acquire or dispose of any capital asset relating to the
Business or the Assets except in the ordinary course of business. Contributor
and Shareholders shall use their best efforts to preserve the Business and
Assets intact and shall not take any action that would have an adverse effect on
the Business or Assets. Contributor and Shareholders shall use their best
efforts to preserve intact the relationships with payors, customers, suppliers,
patients and others having significant business relations with Contributor.
Contributor and Shareholders shall collect its receivables and pay its trade
payables in the ordinary course of business. Contributor and Shareholders shall
not introduce any new method of management, operations or accounting.
4.3 ACCESS AND NOTICE. Contributor and Shareholders shall permit Pentegra
and its authorized representatives access to, and make available for inspection,
all of the assets and business of Contributor, the Business and the Assets,
including employees, customers and suppliers and permit Pentegra and its
authorized representatives to inspect and make copies of all documents, records
and information with respect to the business or assets of Contributor, the
Business or the Assets as Pentegra or its representatives may request.
Contributor and Shareholders shall promptly notify Pentegra in writing of (a)
any notice or communication relating to a default or event that, with notice or
lapse of time or both, could become a default, under any
contract, commitment or obligation to which Contributor is a party or
relating to the Business or the Assets, and (b) any adverse change in
Contributor's or the Business' financial condition or the Assets.
4.4 APPROVALS OF THIRD PARTIES AND PERMITS AND CONSENTS. Contributor and
Shareholders shall use their best efforts to secure all necessary approvals and
consents of third parties to the consummation of the transactions contemplated
hereby, including consents described on EXHIBIT 2.4. Contributor and
Shareholders shall use their best efforts to obtain all licenses, permits,
approvals or other authorizations required under any law, rule, regulation, or
otherwise to provide the services of Contributor contemplated by the Service
Agreement and to conduct the intended business of Contributor and operate the
Business and use the Assets.
4.5 ACQUISITION PROPOSALS. From the execution of this Agreement until the
earlier of Closing or the termination of this Agreement in accordance with the
provisions hereof, Contributor and Shareholders shall not, and shall use its
best efforts to cause Contributor's employees, agents and representatives not
to, initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer, including without limitation,
any proposal or offer to any Shareholder, with respect to a merger, acquisition,
consolidation or similar transaction involving, or the purchase of all or any
significant portion of the assets or any equity securities of Contributor or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to such proposal
or offer, and Contributor and Shareholders will immediately cease any such
activities, discussions or negotiations heretofore conducted with respect to any
of the foregoing. Contributor and Shareholders shall immediately notify
Pentegra if any such inquiries or proposals are received.
4.6 FUNDING OF ACCRUED EMPLOYEE BENEFITS. Contributor hereby covenants
and agrees that it will take whatever steps are necessary to pay or fund
completely for any accrued benefits, where applicable, or vested accrued
benefits for which Contributor or any entity might have any liability whatsoever
arising from any insurance, pension plan, employment tax or similar liability
of Contributor to any employee or other person or entity (including, without
limitation, any Contributor Plan and any liability under employment contracts
with Contributor) allocable to services performed prior to the Closing Date.
Contributor and Shareholders acknowledge that the purpose and intent of this
covenant is to assure that Pentegra shall have no unfunded liability whatsoever
at any time after the Closing Date with respect to any of Contributor's
employees or similar persons or entities, including, without limitation, any
Contributor Plan for the period prior to the Closing Date.
4.7 EMPLOYEE MATTERS. Contributor shall not, without the prior written
approval of Pentegra, except as required by law, increase the cash compensation
of any Shareholder (other than in the ordinary course of business) or other
employee or an independent contractor of Contributor, adopt, amend or terminate
any compensation plan, employment agreement, independent contractor agreement,
employee policies and procedures or employee benefit plan, take any action that
could deplete the assets of any employee benefit, or fail to pay any premium or
contribution due or file any report with respect to any employee benefit plan,
or take any other actions with respect to its employees or employee matters
which might have an adverse effect upon Contributor, its business, assets or
prospects.
4.8 DISTRIBUTIONS AND REPURCHASES. No distribution, payment or dividend
of any kind will be declared or paid by Contributor, nor will any repurchase of
any of Contributor's capital stock be approved or effected.
4.9 REQUIREMENTS TO EFFECT ACQUISITION. Contributor and Shareholders
shall use their best efforts to take, or cause to be taken, all actions
necessary to effect the acquisition contemplated hereby under applicable law.
4.10 ACCOUNTING AND TAX MATTERS. Contributor and Shareholders will not
change in any material respect the tax or financial accounting methods or
practices followed by Contributor (including any material change in any
assumption underlying, or any method of calculating, any bad debt, contingency
or other reserve), except as may be required by law or generally accepted
accounting principles. Contributor and Shareholders will duly, accurately and
timely (without regard to any extensions of time) file all returns, information
statements and other documents relating to taxes of Contributor required to be
filed by it, and pay all taxes required to be paid by it, on or before the
Closing Date.
4.11 WAIVER OF BULK TRANSFER COMPLIANCE. Pentegra, Shareholders and
Contributor hereby waive any compliance with the applicable state Bulk Transfers
Act, if any. Contributor and Shareholders covenant and agree that all of the
creditors with respect to the Business and the Assets will be paid in full by
Contributor prior to the Closing Date, except to extent that any liability to
such creditors is assumed by Pentegra pursuant to this Agreement. If required
by Pentegra, Contributor and Shareholders shall furnish Pentegra with proof of
payment of all creditors with respect to the Business and the Assets.
Notwithstanding the foregoing, Contributor and Shareholders may dispute the
validity or amount of any such creditor's claim without being deemed to be in
violation of this SECTION 4.11, provided that such dispute is in good faith and
does not unreasonably delay the resolution of the claim and provided, further
that Contributor and Shareholders agree to indemnify and bond Pentegra for such
amounts as is satisfactory to Pentegra.
4.12 LEASE. If Contributor leases any of its premises from any Shareholder
or other affiliate of Contributor or any shareholder of Contributor, Pentegra
shall have entered into a building lease (the "Building Lease") with the owner
of such premises on terms and conditions satisfactory to Pentegra, the terms and
conditions of which shall include, without limitation, (i) a five year initial
term plus three five-year renewal options, (ii) a lease rate equal to the fair
market value lease rate, as agreed to by Pentegra, and (iii) such other
provisions to be acceptable to Pentegra.
4.13 HIRING OF EMPLOYEES. Contributor and Shareholders shall cooperate
with all requests made by Pentegra for the purpose of allowing Pentegra to hire
those non-dental employees of Contributor designated by Pentegra, such
employment to be effective as of the Closing Date. Notwithstanding the above,
Contributor and Shareholders shall remain liable under any Contributor Plans for
any claims incurred by any employees or their spouses or dependents, and for all
compensation, bonuses, benefits and other such items and other liabilities
related to Contributor's employees incurred by Contributor prior to the Closing
Date.
4.14 EMPLOYEE BENEFIT PLANS. Contributor agrees and acknowledges that all
employees of Contributor hired by Pentegra pursuant to SECTION 4.13 above,
shall be treated as "leased employees" (as defined in Code Section 414(n)) of
Contributor and shall be treated as Clinic employees for purposes of eligibility
and participation in Contributor Plans.
4.15 INSURANCE. Contributor shall cause Pentegra and its affiliates to be
named as an additional insured on its liability insurance programs, effective as
of the Closing Date.
SECTION 5. COVENANTS OF PENTEGRA.
Pentegra agrees that between the date hereof and the Closing:
5.1 CONSUMMATION OF AGREEMENT; EXHIBITS. Pentegra shall use its best
efforts to cause the consummation of the transactions contemplated hereby in
accordance with their terms and provisions. Pentegra agrees to complete the
Exhibits hereto to be provided by it.
5.2 APPROVALS OF THIRD PARTIES AND PERMITS AND CONSENTS. Pentegra shall
use its best efforts
to secure all necessary approvals and consents of third parties to the
consummation of the transactions contemplated hereby.
SECTION 6. COVENANTS OF PENTEGRA AND CONTRIBUTOR AND SHAREHOLDERS.
Pentegra, Shareholders and Contributor agree as follows:
6.1 FILINGS; OTHER ACTIONS. Pentegra, Contributor and Shareholders shall
cooperate to promptly prepare and file with the Securities Exchange Commission
("SEC") the Registration Statement on Form S-1 (or other appropriate Form) to
be filed by Pentegra in connection with its Initial Public Offering (including
the prospectus constituting a part thereof, the "Registration Statement").
Pentegra shall obtain all necessary state securities laws or "Blue Sky" permits
and approvals required to carry out the transactions contemplated by this
Agreement and the Contributor and Shareholders shall furnish all information
concerning Contributor and Shareholders as may be reasonable requested in
connection with any such action.
Contributor and Shareholder represent and warrant that none of the
information or documents supplied or to be supplied by it specifically for
inclusion in the Registration Statement, by exhibit or otherwise, will, at the
time the Registration Statement and each amendment or supplement thereto, if
any, becomes effective under the Securities Act of 1933, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Contributor and
Shareholders shall be entitled to review the Registration Statement and each
amendment thereto, if any, prior to the time each becomes effective under the
Securities Act of 1933.
Contributor and Shareholders shall furnish Pentegra will all information
concerning themselves, their subsidiaries, if any, directors, officers and
stockholders and such other matters as may be reasonable requested by Pentegra
in connection with the preparation of the Registration Statement and each
amendment or supplement thereto, or any other statement, filing, notice or
application made by or on behalf of each such party or any of its subsidiaries
to any governmental entity in connection with the transactions contemplated by
the Other Agreements or this Agreement.
SECTION 7. PENTEGRA CONDITIONS PRECEDENT.
The obligations of Pentegra hereunder are subject to the fulfillment at or
prior to the Closing of each of the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Contributor and Shareholders contained herein shall have been true and correct
in all respects when initially made and shall be true and correct in all
respects as of the Closing Date.
7.2 COVENANTS AND CONDITIONS. Contributor and Shareholders shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed and complied with by Contributor and Shareholders
prior to the Closing Date.
7.3 PROCEEDINGS. No action, proceeding or order by any court or
governmental body shall have been threatened orally or in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.
7.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
condition (financial or otherwise), operations, assets, liabilities, business or
prospects of Contributor shall have occurred since the
Balance Sheet Date.
7.5 DUE DILIGENCE REVIEW. By the Closing Date, Pentegra shall have
completed a due diligence review of the business, operations and financial
statements of Contributor, the Business and the Assets, the results of which
shall be satisfactory to Pentegra in its sole discretion.
7.6 APPROVAL BY THE BOARD OF DIRECTORS. This Agreement and the
transactions contemplated hereby shall have been approved by the Board of
Directors of Pentegra or a committee thereof.
7.7 SERVICE AGREEMENT; GUARANTY AGREEMENT. Contributor and Pentegra shall
have executed and delivered a Service Agreement (the "Service Agreement"), in
substantially the form attached hereto as EXHIBIT 7.7, pursuant to which
Pentegra will provide management services to the Contributor. Each Shareholder
shall have executed and delivered a Guaranty Agreement in substantially the form
attached as EXHIBIT 4.10 of the Service Agreement pursuant to which Shareholder
shall, among other things, guaranty the obligations of Contributor under the
Service Agreement.
7.8 EMPLOYMENT ARRANGEMENTS. Contributor shall have terminated, and
caused each shareholder of Contributor that has an existing employment agreement
with Contributor to have terminated his or her employment agreement with
Contributor and shall have executed an employment agreement ("Employment
Agreement") with Contributor in form and substance attached hereto as EXHIBIT
7.8 and otherwise satisfactory to Contributor and Pentegra.
7.9 CONSENTS AND APPROVALS. Contributor and Shareholders shall have
obtained all necessary government and other third-party approvals and consents.
7.10 CLOSING DELIVERIES. Pentegra shall have received all documents, duly
executed in form satisfactory to Pentegra and its counsel, referred to in
SECTION 9.1.
7.11 DEBT AND RECEIVABLES. There shall be no indebtedness, receivables or
payables between Contributor and its shareholders or affiliates and Contributor
shall not have any liabilities, including indebtedness, guaranties and capital
leases, that are not set forth on EXHIBIT 2.19.
7.12 INSURANCE. Contributor and Shareholders shall have named Pentegra as
an additional insured on their liability insurance program in accordance with
SECTION 4.15.
7.13 NO CHANGE IN WORKING CAPITAL. There shall have been no material
change in the working capital of Contributor since the Balance Sheet Date.
7.14 SECURITIES APPROVAL. The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC. At or prior to the date that the Registration Statement is declared
effective by the SEC, Pentegra shall have received all state securities and
"Blue Sky" permits necessary to consummate the transactions contemplated
hereby. The Pentegra Common Stock shall have been approved for listing on
Nasdaq or other exchange selected by Pentegra, subject only to official
notification of issuance.
SECTION 8. CONTRIBUTOR'S AND SHAREHOLDERS' CONDITIONS PRECEDENT.
The obligations of Contributor and Shareholders hereunder are subject to
fulfillment at or prior to the Closing of each of the following conditions:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Pentegra contained herein shall have been true and correct in all respects when
initially made and shall be true and correct in all respects as of the Closing
Date.
8.2 COVENANTS AND CONDITIONS. Pentegra shall have performed and complied
with all covenants and conditions required by this Agreement to be performed and
complied with by Pentegra prior to the Closing Date.
8.3 PROCEEDINGS. No action, proceeding or order by any court or
governmental body shall have been threatened orally or in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.
8.4 CLOSING DELIVERIES. Contributor shall have received all documents,
duly executed in form satisfactory to Contributor and its counsel, referred to
in SECTION 9.2.
8.5 SECURITIES APPROVAL. The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC. At or prior to the date that the Registration Statement is declared
effective by the SEC, Pentegra shall have received all state securities and
"Blue Sky" permits necessary to consummate the transactions contemplated
hereby. The Pentegra Common Stock shall have been approved for listing on
Nasdaq or other exchange selected by Pentegra, subject only to official
notification of issuance.
SECTION 9. CLOSING DELIVERIES.
9.1 DELIVERIES OF CONTRIBUTOR AND SHAREHOLDERS. Within five business
days after requested by Pentegra, Contributor and Shareholders shall deliver
to Pentegra the following, all of which shall be in a form satisfactory to
counsel to Pentegra and shall be held by Xxxxxxx & Xxxxxx, L.L.P. (counsel
for Pentegra) in escrow pending Closing, pursuant to an escrow agreement or
letter agreement in form and substance mutually acceptable to the parties
hereto:
(a) an executed original Service Agreement and executed originals of all
documents required by that agreement, including but not limited to the
Guaranty Agreement and security agreement referred to therein;
(b) executed Employment Agreements;
(c) a copy of the resolutions of the Board of Directors of Contributor
authorizing the execution, delivery and performance of this Agreement, the
Service Agreement, the Employment Agreements and all related documents and
agreements each certified by the Secretary as being true and correct copies
of the original thereof;
(d) a xxxx of sale conveying the Assets to Pentegra;
(e) an assignment of each contract, agreement and lease being assigned
to and assumed by Pentegra;
(f) certificates of the Shareholders and a duly authorized officer of
Contributor dated as of the
Closing Date, (i) as to the truth and correctness of the representations and
warranties of Contributor and Shareholder contained herein; (ii) as to the
performance of and compliance by Contributor and Shareholder with all
covenants contained herein; and (iii) certifying that all conditions
precedent of Contributor and Shareholders to the Closing have been satisfied;
(g) a certificate of the Secretary of Contributor certifying as to the
incumbency of the directors and officers of Contributor and as to the signatures
of such directors and officers who have executed documents delivered at the
Closing on behalf of Contributor;
(h) a certificate, dated within 30 days of the Closing Date, of the
Secretary of the State of incorporation of Contributor and any state of required
foreign qualification of Contributor establishing that Contributor is in
existence and is in good standing to transact business in its state of
incorporation;
(i) an opinion of counsel to Contributor and Shareholder opining as to the
execution and delivery of this Agreement and the other documents and agreements
to be executed pursuant hereto, the good standing and authority of Contributor,
the enforceability of this Agreement and the other agreements and documents to
be executed in connection herewith, and other matters reasonably requested by
Pentegra;
(j) non-foreign affidavits executed by Contributor;
(k) all authorizations, consents, approvals, permits and licenses referred
to in SECTIONS 2.3 and 2.4;
(l) an executed Registration Rights Agreement between Pentegra and
Contributor, in substantially the form attached hereto as EXHIBIT 9.1(l) (the
"Registration Rights Agreement"); and
(m) such other instruments and documents as reasonably requested by
Pentegra to carry out and effect the purpose and intent of this Agreement.
9.2 DELIVERIES OF PENTEGRA. On or before the Closing Date, Pentegra shall
deliver to Contributor and Shareholder, the following, all of which shall be in
a form satisfactory to counsel to Contributor and Shareholders and shall be held
by Xxxxxxx & Xxxxxx, L.L.P. (counsel for Pentegra) in escrow pending Closing,
pursuant to an escrow agreement or letter agreement in form and substance
mutually acceptable to the parties hereto:
(a) the Acquisition Consideration;
(b) an executed Service Agreement;
(c) an assumption of each contract, agreement and lease being assigned to
and assumed by Pentegra;
(d) a copy of the resolutions of the Board of Directors of Pentegra (or a
committee thereof) authorizing the execution, delivery and performance of this
Agreement and all related documents and agreements each certified by the
Secretary as being true and correct copies of the original thereof;
(e) certificates of the President of Pentegra, dated as of the Closing
Date, (i) as to the truth and correctness of the representations and warranties
of Pentegra contained herein; (ii) as to the performance of and compliance by
Pentegra with all covenants contained herein; and (iii) certifying that all
conditions precedent of Pentegra to the Closing have been satisfied;
(f) a certificate of the Secretary of Pentegra certifying as to the
incumbency of the directors and officers of Pentegra and as to the signatures of
such directors and officers who have executed documents delivered at the Closing
on behalf of Pentegra;
(g) certificates, dated within 30 days of the Closing Date, of the
Secretary of the State of Delaware establishing that Pentegra is in existence
and are in good standing to transact business in the State of Delaware and the
State of incorporation of Contributor;
(h) an opinion of counsel to Pentegra opining as to the execution and
delivery of this Agreement and the other documents and agreements to be executed
pursuant hereto, the good standing and authority of Pentegra, the enforceability
of this Agreement and the other agreements and documents to be executed in
connection herewith, and other matters reasonably requested by Contributor;
(i) the executed Registration Rights Agreement; and
(j) such other instruments and documents as reasonably requested by
Contributor to carry out and effect the purpose and intent of this Agreement.
SECTION 10. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.
10.1 NATURE AND SURVIVAL. All statements contained in this Agreement or in
any Exhibit attached hereto, any agreement executed pursuant hereto, and any
certificate executed and delivered by any party pursuant to the terms of this
Agreement, shall constitute representations and warranties of Contributor and
Shareholders, jointly and severally, or of Pentegra, as the case may be. All
such representations and warranties, and all representations and warranties
expressly labeled as such in this Agreement shall survive the date of this
Agreement and the Closing Date for a period of five (5) years following the
Closing Date, except that (i) the representations and warranties with respect to
environmental and medical waste laws and health care laws and matters shall
survive for a period of fifteen (15) years and tax representations shall survive
until one year after the expiration of the applicable statute of limitations.
Each party covenants with the other parties not to make any claim with respect
to such representations and warranties, against any party after the date on
which such survival period shall terminate. No party shall be entitled to claim
indemnity from any other party pursuant to SECTION 10.2 or 10.3 hereof, unless
such party has timely given the notice required in SECTION 10.2, 10.3 or 10.4
hereof, as the case may be. Each party hereby releases, acquits and discharges
the other party from any and all claims and demands, actions and causes of
action, damages, costs, expenses and rights of setoff with respect to which the
notices required by SECTION 10.2, 10.3 or 10.4, as applicable, are not timely
provided.
10.2 INDEMNIFICATION BY PENTEGRA. PENTEGRA (FOR PURPOSES OF THIS SECTION
10.2 AND, TO THE EXTENT APPLICABLE, SECTION 10.4, "INDEMNITOR"), SHALL INDEMNIFY
AND HOLD CONTRIBUTOR AND ITS SHAREHOLDERS, AGENTS AND EMPLOYEES (EACH OF THE
FOREGOING, INCLUDING CONTRIBUTOR AND SHAREHOLDERS, FOR PURPOSES OF THIS SECTION
10.2 AND, TO THE EXTENT APPLICABLE, SECTION 10.4, AN "INDEMNIFIED PERSON"),
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, ACTIONS,
SUITS, COSTS, DEFICIENCIES AND EXPENSES (INCLUDING, BUT NOT LIMITED TO,
REASONABLE FEES AND DISBURSEMENTS OF COUNSEL THROUGH APPEAL) ARISING FROM OR BY
REASON OF OR RESULTING FROM:
(A) ANY BREACH BY INDEMNITOR OF ANY REPRESENTATION, WARRANTY, AGREEMENT
OR COVENANT CONTAINED IN THIS AGREEMENT (INCLUDING THE EXHIBITS HERETO) AND EACH
DOCUMENT, CERTIFICATE OR OTHER INSTRUMENT FURNISHED OR TO
BE FURNISHED BY INDEMNITOR HEREUNDER, AND
(B) AFTER THE CLOSING DATE, INDEMNITOR'S OWNERSHIP OF THE ASSETS, AND
(C) ANY LIABILITY UNDER THE SECURITIES ACT, THE EXCHANGE ACT OR ANY OTHER
FEDERAL OR STATE "BLUE SKY" OR SECURITIES LAWS OR REGULATION, AT COMMON LAW OR
OTHERWISE, ARISING OUT OF OR BASED UPON ANY UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT OF A MATERIAL FACT RELATING TO PENTEGRA CONTAINED IN ANY PRELIMINARY
PROSPECTUS, THE REGISTRATION STATEMENT OR ANY PROSPECTUS FORMING A PART THEREOF,
OR ANY AMENDMENT THEREOF OR SUPPLEMENT THERETO, ARISING OUT OF OR BASED UPON ANY
OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT RELATING TO
PENTEGRA REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING.
IN CONNECTION WITH INDEMNITOR'S OBLIGATION TO INDEMNIFY FOR EXPENSES, INDEMNITOR
SHALL REIMBURSE EACH INDEMNIFIED PERSON FOR ALL SUCH EXPENSES AS THEY ARE
INCURRED BY SUCH INDEMNIFIED PERSON, PROVIDED THAT SUCH INDEMNIFIED PERSON
AGREES IN WRITING TO REFUND ALL SUCH REIMBURSED EXPENSES IF AND TO THE EXTENT
THAT IT IS FINALLY JUDICIALLY DETERMINED THAT SUCH INDEMNIFIED PERSON IS NOT
ENTITLED TO INDEMNIFICATION HEREUNDER.
10.3 INDEMNIFICATION BY CONTRIBUTOR AND SHAREHOLDERS. CONTRIBUTOR AND
SHAREHOLDERS (FOR PURPOSES OF THIS SECTION 10.3 AND, TO THE EXTENT APPLICABLE,
SECTION 10.4, "INDEMNITOR"), JOINTLY AND SEVERALLY, SHALL INDEMNIFY AND HOLD
PENTEGRA AND ITS AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, AGENTS AND
EMPLOYEES (EACH OF THE FOREGOING, INCLUDING PENTEGRA, FOR PURPOSES OF THIS
SECTION 10.3 AND, TO THE EXTENT APPLICABLE, SECTION 10.4, AN "INDEMNIFIED
PERSON") HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, CLAIMS,
DAMAGES, ACTIONS, SUITS, COSTS, DEFICIENCIES AND EXPENSES (INCLUDING, BUT NOT
LIMITED TO, REASONABLE FEES AND DISBURSEMENTS OF COUNSEL THROUGH APPEAL) ARISING
FROM OR BY REASON OF OR RESULTING FROM OR WITH RESPECT TO:
(A) ANY BREACH BY INDEMNITOR OF ANY REPRESENTATION, WARRANTY, AGREEMENT
OR COVENANT CONTAINED IN THIS AGREEMENT (INCLUDING THE EXHIBITS HERETO) AND EACH
DOCUMENT, CERTIFICATE, OR OTHER INSTRUMENT FURNISHED OR TO BE FURNISHED BY
INDEMNITOR HEREUNDER, AND
(B) PRIOR TO AND AFTER THE CLOSING DATE, THE INDEMNITOR'S MANAGEMENT AND
CONDUCT OF THE BUSINESS AND OWNERSHIP OR OPERATION OF THE ASSETS,
(C) ANY ALLEGED ACT OR NEGLIGENCE OF INDEMNITOR OR ITS EMPLOYEES, AGENTS
AND INDEPENDENT CONTRACTORS IN OR ABOUT CONTRIBUTOR'S BUSINESS WHETHER ON OR
AFTER THE CLOSING DATE,
(D) ANY VIOLATION BY CONTRIBUTOR OR ITS SHAREHOLDERS OR THEIR CONSULTANTS,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND AFFILIATES OF STATE OR FEDERAL LAWS
GOVERNING HEALTHCARE FRAUD AND ABUSE, OR ANY OVERPAYMENT OR OBLIGATION ARISING
OUT OF OR RESULTING FROM ACTIONS OF THE CONTRIBUTOR OR SHAREHOLDERS RELATING TO
CLAIMS SUBMITTED TO ANY THIRD
PARTY PAYOR, WHETHER ON OR AFTER THE CLOSING DATE,
(E) TAXES OF CONTRIBUTOR OR ANY SHAREHOLDER OR ANY OTHER PERSON OR ENTITY
RELATED TO OR AFFILIATED WITH THE CONTRIBUTOR OR SHAREHOLDER ARISING FROM OR AS
A RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
(F) ANY LIABILITY OF CONTRIBUTOR OR THE SHAREHOLDERS FOR COSTS AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) INCURRED IN CONNECTION
WITH THE NEGOTIATION, PREPARATION OF CLOSING OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR THE OTHER DOCUMENTS TO BE EXECUTED IN CONNECTION HEREWITH,
(G) ANY ACCRUED UNFUNDED RETIREMENT OR PENSION PLAN LIABILITIES,
(H) ANY LIABILITIES THAT ARE NOT SET FORTH ON EXHIBIT 1.3(b), OR
(I) ANY LIABILITY UNDER THE SECURITIES ACT, THE EXCHANGE ACT OR ANY OTHER
FEDERAL OR STATE "BLUE SKY" OR SECURITIES LAWS OR REGULATION, AT COMMON LAW OR
OTHERWISE, ARISING OUT OF OR BASED UPON ANY UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT OF A MATERIAL FACT RELATING TO CONTRIBUTOR OR ITS SHAREHOLDERS AND
PROVIDED TO PENTEGRA OR ITS COUNSEL BY THE CONTRIBUTOR OR ITS SHAREHOLDERS
SPECIFICALLY FOR INCLUSION IN ANY PRELIMINARY PROSPECTUS, THE REGISTRATION
STATEMENT OR ANY PROSPECTUS FORMING A PART THEREOF, OR ANY AMENDMENT THEREOF OR
SUPPLEMENT THERETO, ARISING OUT OF OR BASED UPON ANY OMISSION OR ALLEGED
OMISSION TO STATE THEREIN A MATERIAL FACT RELATING TO CONTRIBUTOR OR ITS
SHAREHOLDERS REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING.
IN CONNECTION WITH INDEMNITOR'S OBLIGATION TO INDEMNIFY FOR EXPENSES, INDEMNITOR
SHALL REIMBURSE EACH INDEMNIFIED PERSON FOR ALL SUCH EXPENSES AS THEY ARE
INCURRED BY SUCH INDEMNIFIED PERSON, PROVIDED THAT SUCH INDEMNIFIED PERSON
AGREES IN WRITING TO REFUND ALL SUCH REIMBURSED EXPENSES IF AND TO THE EXTENT
THAT IT IS FINALLY JUDICIALLY DETERMINED THAT SUCH INDEMNIFIED PERSON IS NOT
ENTITLED TO INDEMNIFICATION HEREUNDER.
10.4 INDEMNIFICATION PROCEDURE. Within sixty (60) days after Indemnified
Person receives written notice of the commencement of any action or other
proceeding in respect of which indemnification or reimbursement may be sought
hereunder, or within such lesser time as may be provided by law for the defense
of such action or proceeding, such Indemnified Person shall notify Indemnitor
thereof. If any such action or other proceeding shall be brought against any
Indemnified Person, Indemnitor shall, upon written notice given within a
reasonable time following receipt by Indemnitor of such notice from Indemnified
Person, be entitled to assume the defense of such action or proceeding with
counsel chosen by Indemnitor and reasonably satisfactory to Indemnified Person;
provided, however, that any Indemnified Person may at its own expense retain
separate counsel to participate in such defense. Notwithstanding the foregoing,
Indemnified Person shall have the right to employ separate counsel at
Indemnitor's expense and to control its own defense of such action or proceeding
if, in the reasonable opinion of counsel to such Indemnified Person, (a) there
are or may be legal defenses available to such Indemnified Person or to other
Indemnified Persons that are different from or additional to those available to
Indemnitor and which could not be adequately advanced by counsel chosen by
Indemnitor, or (b) a conflict or potential conflict exists between Indemnitor
and such Indemnified Person that would make such separate representation
advisable; provided, however, that in no event shall Indemnitor be required to
pay fees and expenses hereunder for more than one firm of attorneys of
Indemnified Person in any jurisdiction in any one action or proceeding or group
of related actions or proceedings. Indemnitor shall
not, without the prior written consent of any Indemnified Person, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding to which such Indemnified Person is a
party unless such settlement, compromise or consent includes an unconditional
release of such Indemnified Person from all liability arising or potentially
arising from or by reason of such claim, action or proceeding.
10.5 RIGHT OF SETOFF. In the event of any breach of warranty,
representation, covenant or agreement by Contributor or any Shareholder giving
rise to indemnification under SECTION 10.3 or SECTION 10.4 hereof, Pentegra
shall be entitled to offset the amount of damages incurred by it as a result of
such breach of warranty, representation, covenant or agreement against any
amounts payable by Pentegra, including the amounts payable under the Service
Agreement.
SECTION 11. TERMINATION. This Agreement may be terminated:
(a) at any time by mutual agreement of all parties;
(b) at any time by Pentegra if any representation or warranty of
Contributor or Shareholder contained in this Agreement or in any certificate or
other document executed and delivered by Contributor or any Shareholder pursuant
to this Agreement is or becomes untrue or breached in any material respect or if
Contributor or any Shareholder fails to comply in any material respect with any
covenant or agreement contained herein, and any such misrepresentation,
noncompliance or breach is not cured, waived or eliminated within twenty (20)
days after receipt of written notice thereof;
(c) at any time by Contributor or any Shareholder if any representation or
warranty of Pentegra contained in this Agreement or in any certificate or other
document executed and delivered by Pentegra pursuant to this Agreement is or
becomes untrue or breached in any material respect or if Pentegra fails to
comply in any material respect with any covenant or agreement contained herein
and such misrepresentation, noncompliance or breach is not cured, waived or
eliminated within twenty (20) days after receipt of written notice thereof;
(d) by Pentegra, Shareholders or Contributor if the transaction
contemplated hereby shall not have been consummated by December 31, 1997; or
(e) by Pentegra at any time prior to the Closing Date if Pentegra
determines in its sole discretion as the result of its legal, financial and
operational due diligence with respect to Contributor, that such termination is
desirable and in the best interests of Pentegra.
SECTION 12. TRANSFER REPRESENTATIONS.
12.1 TRANSFER RESTRICTIONS. For a period of one year from the Closing Date,
Contributor shall not voluntarily (a) sell, assign, exchange, transfer,
encumber, pledge, distribute, appoint or otherwise dispose of (i) any shares of
Pentegra Common Stock received by such party hereunder, (ii) any interest
(including without limitation, an option to buy or sell) in any shares of
Pentegra Common Stock, in whole or in part, and no such attempted transfer shall
be treated as effective for any purpose or (b) engage in any transaction,
whether or not with respect to any shares of Pentegra Common Stock or any
interest therein, the intent or effect of which is to reduce the risk of owning
shares of Pentegra Common Stock. The certificates evidencing the Pentegra
Common Stock delivered to Contributor pursuant to the terms hereof will bear a
legend substantially in the form set forth below and containing such other
information as Pentegra may deem necessary or appropriate:
The shares represented by this certificate may not be voluntarily sold,
assigned, exchanged,
transferred, encumbered, pledged, distributed, appointed or otherwise
disposed of, and the issuer shall not be required to give effect to any
attempted voluntary sale, assignment, exchange, transfer, encumbrance,
pledge, distribution, appointment or other disposition prior to
_________ [date that is one year from the Closing Date]. Upon the
written request of the holder of this certificate, the issuer agrees
to remove this restrictive legend (and any stop order placed with the
transfer agent) after the date specified above.
12.2 INVESTMENTS; COMPLIANCE WITH LAW. Contributor and Shareholders
acknowledge that the shares of Pentegra Common Stock to be delivered to
Contributor pursuant to this Agreement have not been and will not be registered
under the Securities Act of 1933 and may not be resold without compliance with
the Securities Act of 1933. The Pentegra Common Stock to be acquired by
Contributor pursuant to this Agreement is being acquired solely for its own
account, for investment purposes only and with no present intention of
distributing, selling or otherwise disposing of it in connection with a
distribution. Contributor covenants, warrants and represents that none of the
shares of Pentegra Common Stock issued to it will be offered, sold, assigned,
pledged, hypothecated, transferred or otherwise disposed of except after full
compliance with all of the applicable provisions of the Securities Act, as
amended, and the rules and regulations of the Securities Exchange Commission and
applicable state securities laws and regulations. All certificates evidencing
shares of Pentegra Common Stock shall bear the following legend in addition to
the legend referenced in SECTION 12.1.
The shares represented hereby have not been registered under the
Securities Act of 1933 (the "Act") and may only be sold or otherwise
transferred if the holder hereof complies with the Act and applicable
securities laws.
In addition, certificates evidencing shares of Pentegra Common Stock shall
bear any legend required by the securities or blue sky laws of any state where
Contributor resides.
12.3 ECONOMIC RISK; SOPHISTICATION. Contributor and Shareholders are able
to bear the economic risk of an investment in Pentegra Common Stock acquired
pursuant to this Agreement and can afford to sustain a total loss of such
investment and have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the proposed
investment and therefore have the capacity to protect their own interests in
connection with the acquisition of the Pentegra Common Stock. Contributor,
Shareholders and their representatives have had an adequate opportunity to ask
questions and receive answers from the officers of Pentegra concerning any and
all matters relating to the background and experience of the officers and
directors of Pentegra, the plans for the operations of the business of Pentegra,
and any plans for additional acquisitions and the like. Contributor,
Shareholders and their representatives have asked any and all questions in the
nature described in the preceding sentence and all questions have been answered
to their satisfaction. Contributor and Shareholders are "accredited investors"
as defined in Regulation D of the Securities Act of 1933, as amended.
SECTION 13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Contributor and
Shareholders recognize and acknowledge that they had in the past, currently
have, and in the future may possibly have, access to certain confidential
information of Pentegra that is valuable, special and unique assets of
Pentegra's businesses. Contributor and Shareholders agree that it will not
disclose such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, unless (i)
such information becomes available to or known by the public generally through
no fault of Contributor or Shareholders, (ii) disclosure is required by law or
the order of any governmental authority under color of law, provided, that prior
to disclosing any information pursuant to this clause (ii), Contributor and
Shareholders shall, if possible, give prior written notice thereof to the other
parties hereto, and provide such other parties hereto with the opportunity to
contest such disclosure, (iii) Contributor and Shareholders reasonably believe
that such disclosure is required in connection with the defense of a lawsuit
against the disclosing party, or (iv)
Contributor and Shareholders are the sole and exclusive owner of such
confidential information as a result of the transactions contemplated
hereunder or otherwise. In the event of a breach or threatened breach by
Contributor or Shareholders of the provisions of this SECTION 13, Pentegra
shall be entitled to an injunction restraining Contributor and Shareholders
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting Pentegra from pursuing any other
available remedy for such breach or threatened breach, including the recovery
of damages. The obligations of the parties under this SECTION 13 shall
survive the termination of this Agreement.
SECTION 14. MISCELLANEOUS.
14.1 TAX COVENANT. The parties intend that the transactions contemplated
by this Agreement, together with the transactions contemplated by the Other
Agreement and the Initial Public Offering, will qualify as an exchange meeting
the requirements of Section 351 of the Code. The tax returns (and schedules
thereto) of Shareholders, Contributor and Pentegra shall be filed in a manner
consistent with such intention and Contributor and Pentegra shall each provide
the other with such tax information, reports, returns or schedules as may be
reasonably required to assist the other in so reporting the transactions
contemplated hereby.
14.2 NOTICES. Any communications required or desired to be given hereunder
shall be deemed to have been properly given if sent by hand delivery, or by
facsimile AND overnight courier, to the parties hereto at the following
addresses, or at such other address as either party may advise the other in
writing from time to time:
If to Pentegra:
Pentegra Dental Group, Inc.
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
with a copy of each notice directed to Pentegra to:
Xxxxx X. Xxxx, III, Esquire
Xxxxxxx & Xxxxxx, L.L.P.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
If to Contributor or Shareholders:
To address set forth on EXHIBIT 14.2
with a copy to:
Person and address set forth on EXHIBIT 14.2
All such communications shall be deemed to have been delivered on the date of
hand delivery or on the next business day following the deposit of such
communications, properly addressed and postage prepaid with the
overnight courier.
14.3 FURTHER ASSURANCES. Each party hereby agrees to perform any further
acts and to execute and deliver any documents which may be reasonably necessary
to carry out the provisions of this Agreement.
14.4 EACH PARTY TO BEAR COSTS. Subject to SECTION 14.12, each of the
parties to this Agreement shall pay all of the costs and expenses incurred by
such party in connection with the transactions contemplated by this Agreement,
whether or not such transactions are consummated. Without limiting the
generality of the foregoing and whether or not such liabilities may be deemed to
have been incurred in the ordinary course of business, Pentegra shall not be
liable to or required to pay, either directly or indirectly, any fees and
expenses of legal counsel, accountants, auditors or other persons or entities
retained by Contributor or any Shareholder for services rendered in connection
with negotiating and closing the transactions contemplated by this Agreement or
the documents to be executed in connection herewith, whether or not such costs
or expenses are incurred before or after the Closing Date.
14.5 PUBLIC DISCLOSURES. Each party shall keep this Agreement and its
terms confidential, and shall make no press release or public disclosure, either
written or oral, regarding the transactions contemplated by this Agreement
without the prior written consent of the other party, provided that the
foregoing shall not prohibit any disclosure (a) by press release, filing or
otherwise that Pentegra has determined in good faith judgment to be required by
Federal securities laws or the rules of the National Association of Securities
Dealers, (b) to attorneys, accountants, investment bankers or other agents of
the parties assisting the parties in connection with the transactions
contemplated by this Agreement, and (c) by Pentegra in connection with the
conduct of its Initial Public Offering and conducting an examination of the
operations and assets of Contributor.
14.6 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INCORPORATION OF
CONTRIBUTOR AND APPLIED WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS
PRINCIPLES.
14.7 CAPTIONS. The captions or headings in this Agreement are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Agreement.
14.8 INTEGRATION OF EXHIBITS. All Exhibits attached to this Agreement are
integral parts of this Agreement as if fully set forth herein, and all
statements appearing therein shall be deemed disclosed for all purposes and not
only in connection with the specific representation in which they are explicitly
referenced.
14.9 ENTIRE AGREEMENT/AMENDMENT. THIS INSTRUMENT, INCLUDING ALL EXHIBITS
ATTACHED HERETO, CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDES ANY
AND ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS BETWEEN THE PARTIES, WRITTEN OR
ORAL, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY.
14.10 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which when so executed shall be deemed to be an original, and such
counterparts shall together constitute and be one and the same instrument
14.11 BINDING EFFECT/ASSIGNMENT. This Agreement shall be binding on, and
shall inure to the benefit of, the parties hereto, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No party may assign any right or
obligation hereunder
without the prior written consent of the other parties; provided, however,
that Pentegra may assign its rights and delegate its obligations hereunder to
any entity that is an affiliate of Pentegra. For purposes of this Agreement
an "affiliate" of Pentegra shall include any entity that, through one or more
intermediaries is, controlled, controlled by or under common control with,
Pentegra. Upon any such assignment prior to the Closing, all references
herein to Pentegra (including those to Pentegra Common Stock) shall be deemed
to include references to the assignee and the assignee's common stock.
Notwithstanding any such assignment, Pentegra shall not, absent a written
release from Contributor, be relieved from its obligations to Contributor
under this Agreement.
14.12 COSTS OF ENFORCEMENT. In the event that Pentegra, on the one hand, or
Contributor, on the other hand, file suit in any court against any other party
to enforce the terms of this Agreement against the other party or to obtain
performance by it hereunder, the prevailing party will be entitled to recover
all reasonable costs, including reasonable attorneys' fees, from the other party
as part of any judgment in such suit. The term "prevailing party" shall mean the
party in whose favor final judgment after appeal (if any) is rendered with
respect to the claims asserted in the Complaint. "Reasonable attorneys' fees"
are those reasonable attorneys' fees actually incurred in obtaining a judgment
in favor of the prevailing party.
14.13 PRORATIONS. Contributor agrees to reimburse Pentegra at Closing a pro
rata portion of all taxes levied upon the Assets for the calendar year in which
the Closing occurs. Such taxes shall be estimated, apportioned and pro-rated
among Contributor and Pentegra as of the Closing Date, and the prorated amount
due Pentegra shall be credited to the cash portion of the Purchase
Consideration. Upon payment by Pentegra of such taxes actually assessed and
paid on the Assets, Pentegra shall calculate the apportionment of such taxes and
shall pay Contributor or may demand from Contributor, and Contributor agrees to
pay, the amount necessary to correct the estimate and proration made at Closing.
14.14 AMENDMENTS; WAIVERS. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by all the parties
hereto. Any waiver of the terms and conditions hereof must be in writing, and
signed by the parties hereto. The waiver of any of the terms and conditions of
this Agreement shall not be construed as a waiver of any other terms and
conditions hereof.
14.15 ARBITRATION. Upon the request of either Pentegra or the Contributors
or Shareholders (hereinafter referred to as a "Party"), whether made before or
after the institution of any legal proceeding, any dispute among the parties
hereto in any way arising out of, related to, or in connection with this
Agreement (hereinafter a "Dispute"), shall be resolved by binding arbitration in
accordance with the terms of this Section (hereinafter the "Arbitration
Program").
All Disputes between the Parties shall be resolved by binding arbitration
administered by the American Arbitration Association (the "AAA") in accordance
with the terms of this Arbitration Program, the Commercial Arbitration Rules of
the AAA. In the event of any inconsistency between this Arbitration Program and
those rules or statutes, then the terms of this Arbitration Program shall
control.
The parties hereto agree to adhere to all warranties and covenants (as
described herein) until such time as the arbitration process has been
completed and the arbitrators have determined each party's post-arbitration
obligations and responsibilities as it relates to such warranties and
covenants. No provision of, nor the exercise of any rights under, this
Arbitration Program shall limit the right of any Party at any time to seek or
use ancillary or preliminary judicial or non-judicial self help remedies for
the purposes of obtaining, perfecting, preserving, or foreclosing upon any
personal property in which there has been granted a security interest or lien
by a Party in the Documents. In Disputes involving indebtedness or other
monetary obligations, each Party agrees that the other Party may proceed
against all liable persons, jointly and severally against one or more of
them, without impairing rights against other liable persons. Nor shall a
Party be required to join the principal obligor or any other liable persons
(e.g., sureties or guarantors) in any proceeding against a particular person.
A Party may release or settle with one or more liable persons as the Party
deems fit without releasing or impairing rights to proceed against any
persons not so released.
All statutes of limitation that would otherwise be applicable shall apply to
any arbitration proceeding.
The party seeking arbitration shall notify the other Party, in writing, of
that Party's desire to arbitrate a dispute; and each Party shall, within
twenty (20) days from the date such notification is received, select an
arbitrator, and those two arbitrators shall select a third arbitrator within
ten (10) days thereafter. The issues or claims in dispute shall be committed
to writing, separately stated and numbered, and each party's proposed answers
or contentions shall be signed below the questions. Failure by a party to
select an arbitrator within the prescribed time period shall serve as that
Party's acquiescence and acceptance of the other party's selection of
arbitrator. The arbitrators shall resolve all Disputes in accordance with the
applicable substantive law. Any Dispute shall be decided by a majority vote
of three arbitrators, unless the claim or amount in controversy does not
exceed $100,000.00, in which case a single arbitrator (who shall have
authority to render a maximum award of $100,000.00, including all damages of
any kind, costs and fees) may decide the Dispute. The arbitrators may grant
any remedy or relief that the arbitrators deem just and equitable and within
the scope of this Arbitration Program. The arbitrators may also grant such
ancillary relief as is necessary to make effective the award. In all
arbitration proceedings the arbitrators shall make specific and written
findings of fact and conclusions of law. In all arbitration proceedings in
which the amount in controversy exceeds $100,000.00, in the aggregate, the
Parties shall have in addition to the statutory right to seek vacation or
modification of any award pursuant to applicable law, the right to seek
vacation or modification of any award that is based in whole, or in part, on
an incorrect or erroneous ruling of law by appeal to an appropriate court
having jurisdiction; provided, however, that any such application for
vacation or modification of an award based on an incorrect ruling of law must
be filed in a court having jurisdiction over the Dispute within 15 days from
the date the award in rendered. The arbitrators' findings of fact shall be
binding on all Parties and shall not be subject to further review except as
otherwise allowed by applicable law.
To the maximum extent practicable, an arbitration proceeding hereunder
shall be concluded within 180 days of the filing of the Dispute with AAA.
Arbitration proceedings hereunder shall be conducted where agreed to in
writing by the Parties or, in the absence of such agreement in Phoenix,
Arizona or the headquarters of Pentegra if other than Phoenix, Arizona. The
provisions of this Arbitration Program shall survive any termination,
amendment, or expiration of the Documents, unless the Parties otherwise
expressly agree in writing making specific reference to this Arbitration
Program. To the extent permitted by applicable law, the arbitrator shall
have the power to award recovery of all costs and fees (including attorney's
fees, administrative fees, and arbitrators' fees) to the prevailing Party.
This Arbitration Program may be amended, changed, or modified only by a
writing which specifically refers to this Arbitration Program and which is
signed by all the Parties. If any term, covenant, condition or provision of
the Arbitration Program is found to be unlawful or invalid or unenforceable,
such illegality or invalidity or unenforceable shall not affect the legality,
validity or enforceability of the remaining parts of this Arbitration
Program, and all such remaining parts hereof shall be valid and enforceable
and have full force and effect as if the illegal, invalid or unenforceable
part had not been included. Each Party agrees to keep all Disputes and
arbitration proceedings strictly confidential, except for disclosures of
information required in the ordinary course of business of the Parties or by
applicable law or regulation.
14.16 SEVERABILITY. If any provision of this Agreement shall be found to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable and this Agreement shall be construed and enforced as
if such provision never comprised a part hereof; and the remaining provisions
hereof shall remain in full force and effect. In lieu of such provision, there
shall be added automatically as part of this Agreement, a provision as similar
in its terms to such provision as may be possible and be legal, valid and
enforceable.
[End of Page]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Xxxxx X'Xxxxx, D.D.S., Inc.
By: /s/ Xxxxx X'Xxxxx, D.D.S.
-------------------------------------------
Its:
------------------------------------------
PENTEGRA DENTAL GROUP, INC.
By: /s/ Xxxxx X. Xxxx, Xx.
-------------------------------------------
Its: Senior Vice President
------------------------------------------
/s/ Xxxxx X'Xxxxx, D.D.S.
----------------------------------------------
Xxxxx X'Xxxxx, D.D.S.
INDEX TO EXHIBITS
Exhibit Description
------- -----------
Annex I Acquisition Consideration
A Target Companies
1.1 Assets
1.2(b) Excluded Assets
1.3(b) Assumed Liabilities
2.1 Corporate Existence; Good Standing; Shareholders/Ownership
2.3 Permits and Licenses
2.4 Consents
2.8 Leases
2.10 Real and Personal Property; Encumbrances
2.12 Patents and Trademarks; Names
2.13 Directors and Officers; Payroll Information; Employment
Agreements
2.15 Contracts (other than Leases and Employment Agreements)
2.16 Subsequent Events
2.19 Debt
2.20 Insurance Policies
2.21 Employee Benefit Plans
2.26 Banking Relations
2.28 Payors
7.7 Form of Service Agreement
7.8 Form of Employment Agreement
9.1(l) Form of Registration Rights Agreement
14.2 Addresses for Notice
