STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of the
Execution date set forth on the signature page hereof, by and among TOTAL DENTAL
ADMINISTRATORS INC., a Utah corporation ("Buyer"), and SAFEGUARD HEALTH
ENTERPRISES, INC., a Delaware corporation ("Seller" or the "Shareholder") the
beneficial and record owner of all of the outstanding capital stock of SAFEGUARD
HEALTH PLANS, INC., a Utah Corporation ("SafeGuard").
A. The Shareholder owns all of the issued and outstanding shares of capital
stock (the "Shares") of SafeGuard.
B. The Shareholder desires to sell to Buyer, and Buyer desires to purchase
from the Shareholder, the Shares of SafeGuard owned by Seller on the terms and
conditions set forth herein.
IN CONSIDERATION of the recitals, covenants, conditions and promises herein
contained, and for other valuable consideration, the receipt and sufficiency of
which the parties hereby acknowledge, Buyer and Seller hereby agree as follows:
1. Transfer Of Shares.
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1.1 Sale of Shares. Subject to the terms and conditions set forth
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herein, at the Closing (as defined herein), the Seller shall sell, transfer and
deliver to Buyer, and Buyer shall purchase and acquire from the Seller, one
thousand (1,000) shares of common stock of SafeGuard which represent all of the
Shares of SafeGuard outstanding, free and clear of any claims, liens, pledges,
options, encumbrances, security interests, trusts or other rights or interests
of any person. Seller shall also deliver to Buyer executed blank stock power
documents so as to allow Buyer to transfer the Shares to it.
1.1.1 Purchase Price and Supplemental Consideration. The aggregate purchase
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price to be paid by Buyer for the Shares of SafeGuard is twenty-nine thousand
dollars ($29,000.00), payable to Seller at Closing nine thousand dollars
($9,000.00) by check, execution of a promissory note in the principal amount of
twenty thousand dollars payable by Buyer to Seller in four (4) equal
installments of five thousand dollars ($5,000) each due on the ninetieth day
following the Closing, and each ninety (90) days thereafter until paid in full,
plus all marketable securities, deposits, plus accrued interest maintained in
SafeGuard as set forth on Exhibit 1.2 (the "Purchase Price"), payable in cash at
closing.
1.2 Seller to Deliver Title and Possession. At the Closing Date, the
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Seller shall deliver to Buyer endorsed share certificates or executed stock
powers and other good and sufficient instruments of transfer as Buyer may
reasonably require to vest effectively in Buyer good and valid title to the
Shares of SafeGuard, free and clear of any claims, liens, pledges, options,
security interests, trusts, encumbrances or other rights or interests of any
person, in accordance with the terms hereof.
1.3 Closing Date. The consummation of the transactions contemplated by
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this Agreement (the "Closing Date") shall take place on or before one hundred
twenty (120) days after the execution of this Agreement. All proceedings to
take place at the Closing Date shall take place simultaneously, and no delivery
shall be considered to have been made until all such proceedings have been
completed.
2. Representations And Warranties Of Seller. Seller represents and warrants
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to Buyer as follows:
2.1 Organization and Qualification. SafeGuard is a corporation duly
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organized, validly existing and in good standing in the state of Utah. Seller
has the requisite corporate power and authority to carry on its business as it
is now being conducted and as it is now proposed to be conducted. Seller has
made available to Buyer a complete and correct copy of SafeGuard's Articles of
Incorporation and Bylaws, each as amended to date, and such Articles of
Incorporation and Bylaws as so delivered are in full force and effect.
SafeGuard is not in default in any material respect in the performance,
observation or fulfillment of any provision of its Articles of Incorporation or
Bylaws. For purposes of this Agreement, a "Material Adverse Change" shall mean
any event, circumstance, condition, development or occurrence causing, resulting
in or having a material adverse effect on the financial condition, business,
properties, prospects or results of operations of SafeGuard.
2.2 Capitalization. The authorized and outstanding capital stock of
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SafeGuard is set forth on Exhibit 2.2. All of the Shares of SafeGuard as set
forth on Exhibit 2.2 are owned beneficially and of record by the Shareholder,
free and clear of any claims, liens, pledges, options, security interests,
trusts, encumbrances or other rights or interests of any person. No agreement
or other document grants or imposes on any of the Shares of SafeGuard any right,
preference, privilege or restriction with respect to the transaction
contemplated hereby (including, without limitation, any rights of first
refusal). All of the Shares of SafeGuard have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights created
by any agreement to which Seller is bound. The Shares have been issued in full
compliance with all federal and state securities laws. There are no options,
warrants or other rights, commitments or agreements of any character that call
for the issuance of shares of capital stock or other securities of SafeGuard or
any securities, instruments or rights convertible into or exchangeable for
shares of capital stock or other securities of SafeGuard. The Shareholder has
the absolute and unrestricted right, power, authority and capacity to transfer
the Shares of SafeGuard to Buyer and upon the Closing, without exception, Buyer
will acquire from the Shareholder, the legal and beneficial ownership of, good
and valid title to, and all rights to vote, the Shares of SafeGuard, free from
any charge, lien, encumbrance or adverse claim of any kind whatsoever other than
those that may arise by virtue of any actions (other than the purchase of shares
contemplated hereby), taken by or on behalf of Buyer or its affiliates.
2.3 Voting Agreements. Neither Seller nor the SafeGuard is a party to
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or subject to any proxy, agreement or understanding, nor is there, to the
knowledge of Seller and SafeGuard, any agreement or understanding between any
other persons, that affects or relates to the voting or giving of written
consents with respect to any security of SafeGuard or the voting by a director
of Seller.
2.4 Authority Relative to this Agreement. Seller has all requisite
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corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby on
the part of Seller have been duly and validly authorized by its Board of
Directors, and no other corporate proceedings on the part of Seller is
necessary, as a matter of law or otherwise, to authorize this Agreement or to
consummate the transactions so contemplated.
2.5 No Subsidiaries. SafeGuard does not control, directly or
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indirectly, nor does it have any direct or indirect equity participation or
other interest in, any corporation, partnership, trust or other business entity.
2.6 Absence of Certain Changes. Since January 1, 2000, Seller has
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conducted the business of SafeGuard only in, and has not engaged in any
transaction other than according to, the ordinary and usual course of its
business and, since such date, there has not been (a) any Material Adverse
Change; (b) any declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of SafeGuard; (c) any material
change by SafeGuard in accounting principles, practices or methods; (d) any
issuance, transfer, sale or pledge by Seller of any shares of SafeGuard stock or
other securities or of any commitments, options, rights or privileges under
which Seller is or may become obligated to issue any shares of stock or other
securities; (e) any indebtedness incurred by SafeGuard, except such as may have
been incurred in the ordinary course of business and consistent with past
practice; (f) any loan made or agreed to be made by SafeGuard, nor has SafeGuard
become liable or agreed to become liable as a guarantor with respect to any
loan; (g) any waiver or release by SafeGuard of any right of material value or
any payment, direct or indirect, of any material debt, liability or other
obligation; (h) any change in or amendment to the Articles of Incorporation or
Bylaws of SafeGuard; or (i) any other event or condition that has or might
reasonably result in a Material Adverse Change.
2.7 Absence of Undisclosed Liabilities. Except to the extent reserved
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against or reflected in the balance sheet of SafeGuard included in the Financial
Statements dated as of December 31, 2000 attached hereto marked Exhibit 2.7,
SafeGuard does not have any material liabilities or obligations (contingent or
otherwise) that are required by GAAP to be reflected therein, and since that
date SafeGuard has not incurred any material liabilities or obligations that,
had they been incurred prior to December 31, 2000, would have been required by
GAAP to have been reflected in such balance sheets (except as may be noted
therein), except such liabilities or obligations incurred in the ordinary and
usual course of business and consistent with past practice.
2.8 Consents and Approvals; No Violation. The execution and delivery
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of this Agreement by Seller, the consummation of the transactions contemplated
hereby and the performance by Seller of their obligations hereunder will not:
(a) conflict with any provision of the Articles of Incorporation
or Bylaws (or other similar charter documents) of SafeGuard or Seller;
(b) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority, except
(i) compliance with any applicable state securities laws; (ii) the approval of
the Utah Department of Insurance; and (iii) where the failure to obtain such
consents, approvals, authorizations or permits or the failure to make such
filings or notifications would not result in a Material Adverse Change;
(c) conflict with, result in the breach of or constitute a default
(or give rise to any right of termination, cancellation or acceleration or
guaranteed payments) under any of the terms, conditions or provisions of any
note, lease, mortgage, license, agreement or other instrument or obligation to
which SafeGuard is a party or by which SafeGuard, or any of its assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not result in a Material Adverse Change;
(d) conflict with or violate the provisions of any order, writ,
injunction, judgment, decree, statute, rule or regulation applicable to
SafeGuard; or
(e) result in the creation of any lien, charge or encumbrance upon
any shares of capital stock or assets of SafeGuard under any agreement or
instrument to which SafeGuard or Seller is a party or by which SafeGuard or
Seller is bound.
2.9 Broker's Commissions or Finder's Fees. No person or entity has
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acted for Seller in connection with the transactions provided for in this
Agreement in any way that would entitle such person to, and no person or entity
is entitled to, receive from SafeGuard or the Shareholder any broker's
commissions or finder's fees, or other similar fees or commissions, in
connection with this Agreement.
2.10 Litigation. There is no claim, action or proceeding pending or,
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to the knowledge of SafeGuard or the Shareholder, threatened against or relating
to SafeGuard before any court or other competent governmental or regulatory
authority or body acting in an adjudicative capacity. To the knowledge of
SafeGuard and the Shareholder, there is no reasonable basis for a claim, action
or proceeding against or relating to SafeGuard which, if adversely determined,
could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change with respect to SafeGuard.
2.11 Taxes.
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(a) Definitions. For purposes of this Agreement, the following
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definitions shall apply:
(i) The term "SafeGuard" shall mean, collectively, SafeGuard
and any corporation, partnership or other entity as to which SafeGuard is
liable for Taxes incurred by such entity as a transferee, or pursuant to
Treasury Regulations Sections 1.1502-6, or pursuant to any other provision
of federal, state, local or foreign law or regulations.
(ii) The term "Tax" or "Taxes" shall mean all taxes, however,
denominated, including any interest, penalties or other additions to tax
that may become payable in respect thereof, imposed by any federal, state,
local or foreign government or any agency or political subdivision of any
such government, which taxes shall include, without limiting the generality
of the foregoing, all income or profits taxes (including, but not limited
to, federal income taxes and state income taxes), real property gains
taxes, payroll and employee withholding taxes, unemployment insurance
taxes, social security taxes, sales and use taxes, ad valorem taxes,
occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation and any and all
other governmental charges, and any and all other obligations of the same
or of a similar nature to any of the foregoing, which SafeGuard is required
to pay, withhold or collect.
(b) Tax Returns Filed and Taxes Paid. All Tax Returns required to
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be filed by or on behalf of SafeGuard have been duly filed on a timely basis and
such Tax Returns correctly, accurately and completely reflected the facts
regarding the income, business, assets, operations, activities, status or other
matters of SafeGuard or any other information required to be shown thereon; (i)
all Taxes shown to be payable on such Tax Returns or on subsequent assessments
with respect thereto have been paid in full on a timely basis and no other Taxes
are payable by SafeGuard with respect to items or periods covered by such Tax
Returns (whether or not shown on or reportable on such Tax Returns); (ii) all
other Taxes required to be paid by SafeGuard on or before the date hereof have
been paid prior to the delinquency thereof; (iii) SafeGuard has withheld and
paid over all Taxes required to have been withheld and paid over, and complied
with all information reporting and backup withholding requirements, including
maintenance of required records with respect thereto, in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party; (iv) there are no liens on any of the assets of SafeGuard with respect to
Taxes, other than liens for Taxes not yet due and payable or for Taxes that
SafeGuard is contesting in good faith through appropriate proceedings and for
which appropriate reserves have been established and are fully reflected in the
Financial Statements; and (v) SafeGuard has not requested or been granted any
extension of the time within which it is required to file any Tax Return that
has not been filed.
(c) Tax Sharing Agreements. SafeGuard is a party to a tax-sharing
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agreement with Seller for which SafeGuard's participation in such agreement will
be terminated in connection with this Transaction, and has not otherwise assumed
the Tax liability of any other person under such agreement.
2.12 ERISA Plans. Set forth on Exhibit 2.12 is a true, accurate and
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complete list of each employee pension benefit plan; program, agreement or
arrangement ("Plan"), if any, maintained or contributed to by SafeGuard which is
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Plan, if any, conforms in all material respects to, and their
administration is in conformity in all material respects with, all applicable
federal laws. There are no threatened or pending claims by or on behalf of any
Plan, by or on behalf of any employees covered under any Plan, or otherwise
involving any Plan, that allege a breach of fiduciary duties or violation of
other applicable state or federal law, nor is there, to the knowledge of
SafeGuard and the Shareholder, any basis for such a claim. (This Exhibit will
reflect "None".)
2.13 Contracts. Set forth on Exhibit 2.13 a true, accurate and
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complete list of (a) each customer contract, whether written or oral, between
each of SafeGuard and any party to whom SafeGuard provides goods or services;
and (b) each contract, whether written or oral, between each of SafeGuard and
any party to whom SafeGuard is obligated to make any payments. The contracts
and agreements that are required to be identified in Exhibit 2.13 are
hereinafter referred to as the "Contracts." SafeGuard has delivered to Buyer
(i) with respect to the provider and group contracts, provider contracts and
agent contracts of SafeGuard, a standard form of each; and (ii) true, accurate
and complete written summaries of each oral Contract. SafeGuard has made
available to Buyer true and complete copies of each written Contract.
(a) Each of the Contracts is a valid, binding and enforceable
agreement of SafeGuard and, to the, knowledge of SafeGuard and the Shareholder,
will, subject to the satisfaction of the conditions in Section 6, continue to be
valid, binding and enforceable immediately after the Closing;
(b) As of the date hereof, SafeGuard and the Shareholder have no
reason to believe that SafeGuard will not be able to fulfill in all material
respects all of its obligations under the Contracts that remain to be performed
after the date hereof;
(c) To the knowledge of SafeGuard and the Shareholder, there has
not occurred any material default (or event which upon provision of notice or
lapse of time or both would become such a default) under any of the material
Contracts on the part of SafeGuard.
2.14 Customer List. SafeGuard has taken such reasonable security
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measures to protect the secrecy, confidentiality and value of its customer
lists, if any, which may be subject to this Agreement.
2.15 Interests in Competitors. To the knowledge of SafeGuard and the
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Shareholder, neither SafeGuard or the Shareholder has any direct or indirect
interest in any competitor, supplier or customer of SafeGuard or in any person
or firm from whom or to whom SafeGuard leases any real or personal property, or
in any other person with whom SafeGuard is doing business.
2.16 Trademarks and Tradenames. Except for the name of SafeGuard,
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SafeGuard Health Plans, and the name "SAFEGUARD HEALTH PLANS, INC.", there are
no trademarks, trade names, service marks or copyrights owned by SafeGuard. To
the best knowledge of SafeGuard and the Shareholder, SafeGuard has not
infringed, nor is it now infringing, on any trade name, trademark, service xxxx,
or copyright belonging to any other person, firm or business. Except as may be
set forth in the Contracts, SafeGuard is not a party to any license, agreement
or arrangement, with respect to any trademarks, service marks, trade names, or
applications for them, or any copyrights. The right to the exclusive use of the
name "SafeGuard" and "SafeGuard Health Plans" is not transferred as a result of
this Agreement and the Shareholder hereby retains the exclusive right in
perpetuity to use the name of SafeGuard and "SafeGuard Health Plans" and all
derivations thereof. The Shareholder and SafeGuard covenant that they have not
granted and will not grant to any other person, firm or corporation the right to
use, and that the Shareholder will not grant the use such names as part of the
corporate or firm name of any other firm, entity, corporation or business.
Buyer shall within sixty days of the Closing, change the name of SafeGuard to a
name that does not interfere with Seller's exclusive use of such name or
derivations thereof.
2.17 Transactions with Related Parties. Except for an Administrative
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Services Agreement between SafeGuard and SafeGuard Health Plans, Inc., a
California Corporation, a Management Services Agreement between SafeGuard and
the Shareholder and a Tax Sharing Agreement with Seller, all three of which will
be terminated prior to the Closing, there are no loans, leases or other
continuing transactions between SafeGuard and any present or former stockholder,
director or officer of SafeGuard, or any member of such officer's, director's or
stockholder's immediate family, or any business organization controlled by such
officer, director or stockholder or his or her immediate family. No
stockholder, director or officer of SafeGuard, or any of the respective spouses
or immediate family members, owns directly or indirectly on an individual or
joint basis any material interest in, or serves as an officer or director or in
another similar capacity of, any competitor or supplier of SafeGuard.
2.18 Compliance with Insurance Laws of the State of Utah.
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(a) SafeGuard has since January 1, 2000, made all reports required
under applicable insurance statutes and will continue to do so until closing.
(b) The dental plan products offered and sold by SafeGuard have
been and are offered and sold in compliance with the requirements of all
relevant laws and regulations, in each case, and SafeGuard has not received any
notification from the Utah Department of Insurance to the effect that any
additional Permit, or any further regulatory matter is needed to be obtained by
it. SafeGuard has not since January 1, 2000, entered into or been subject to
any judgment, consent decree, compliance order or administrative order other
than any issued in the ordinary course of business with respect to any insurance
or other similar law or, other than in the ordinary course of business, received
any request for information, notice, demand letter', administrative inquiry or
formal or informal complaint or claim with respect to any insurance or other
similar law or the enforcement of any such law.
(c) Except as may be disclosed in Exhibit 2.18(c), since January
1, 2000, SafeGuard has not failed to comply with any applicable material
statute, ordinance, order, rule or regulation, or failed to obtain any material
Permit in the applicable state of incorporation, or, to the best knowledge of
SafeGuard, in any jurisdiction other than the applicable state of-incorporation
in which SafeGuard is conducting or has prior to the date hereof conducted any
activities including without limitation activities relating to the offer and
sale of dental care products, plans or services, the recruitment of dentists or
dental offices in connection with the offer and sale of such products, plans or
services, the marketing of any such products plans or services to potential
purchasers thereof or subscribers thereto, lobbying efforts or similar
activities, or any joint venture with any other party relating to the foregoing,
except in each case where the failure to comply or obtain any Permit
(individually or in the aggregate) could not reasonably be expected to result in
a Material Adverse Change.
2.19 Full Disclosure. None of the representations and warranties made
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by SafeGuard or the Shareholder, or made in any certificate or memorandum
furnished or to be furnished by any of them or on their behalf, contains or will
contain any untrue statement of a material fact, or omits to state any material
fact necessary to make the statements made, in the light of the circumstances
under which they were made, not misleading.
2.20 Representations and Warranties True. All representations and
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warranties of SafeGuard and the Shareholder set forth in this Agreement and in
any written statements delivered to Buyer by SafeGuard or the Shareholder will
also be true and correct as of the Closing Date as if made on that date (except
to the extent such representations or warranties speak to a particular date).
3. Representations And Warranties of Buyer. Buyer represents and warrants
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to SafeGuard and the Shareholder as follows:
3.1 Organization. Buyer is a corporation duly organized, validly
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existing and in good standing in the State of Utah. Buyer has the requisite
corporate power to own, use or lease its properties and to carry on its business
as it is now being conducted. Buyer will make available to Seller upon request,
a complete and correct copy of its Certificate of Incorporation and Bylaws, each
as amended to date, and Buyer's Certificate of Incorporation and Bylaws as so
delivered are in full force and effect. Buyer is not in default in any material
respect in the performance, observation or fulfillment of any provision of its
Certificate of Incorporation or Bylaws.
3.2 Authority Relative to this Agreement. Buyer has all requisite
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corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby on
the part of Buyer have been duly and validly authorized by the Board of
Directors of Buyer, and no other corporate proceedings on the part of Buyer are
necessary, as a matter of law or otherwise, to authorize this agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Buyer and, assuming this Agreement constitutes
a valid and binding obligation of Seller, disagreement constitutes a valid and
binding agreement of Buyer, enforceable against it in accordance with its terms,
except (a) as such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, and (b) as the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
3.3 Consent and Approvals; No Violation. The execution and delivery of
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this Agreement by Buyer, the consummation of the transactions contemplated
hereby and the performance by Buyer of its obligations hereunder, will not:
(a) conflict with any provision of the Certificate of
Incorporation or Bylaws of Buyer;
(b) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority, except
(i) the filing of the Governmental Filings (as defined in Section 5.4) and (ii)
where the failure to obtain such consents, approvals, authorizations or permits
or the failure to make such filings or notifications would not have a material
adverse effect on the financial condition, business, properties or results of
operations of Buyer; or
(c) conflict with or violate the provisions of any order, writ,
injunction, judgment, decree, statute, rule or regulation applicable to Buyer,
in such a manner as to result in a material adverse effect on the financial
condition, business, properties or results of operations of Buyer.
3.4 Broker's Commissions or Finder's Fees. No person or entity has
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acted for Buyer in connection with the transactions provided for in this
Agreement in any way that would entitle such person to, and no person or entity
is entitled to, receive from Buyer any broker's commissions or finder's fees, or
other similar fees or commissions, in connection with this Agreement.
3.5 Investment Intent. Buyer is acquiring the Shares for its own
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account for investment and not with a view to, or for sale or other disposition
in connection with, any distribution of all or any part thereof, except in
compliance with applicable federal and state securities laws.
3.6 Legal Proceedings. There are no legal proceedings pending or, to
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the best knowledge of Buyer, threatened seeking to restrain, prohibit, or obtain
damages or other relief in connection with this Agreement or the transactions
contemplated hereby.
4. Conduct Of Business By Safeguard Prior To Closing.From the date of this
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Agreement and until the Closing Date or the earlier termination of this
Agreement, SafeGuard and Shareholder agree (except as expressly contemplated by
this Agreement or to the extent that Buyer shall otherwise consent in writing)
as follows:
4.1 Ordinary Course. SafeGuard shall carry on its business in the
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usual, regular and ordinary course, in substantially the same manner as
heretofore conducted, and shall use all reasonable efforts consistent with past
practice and policies to preserve intact its present business organization, keep
available the services of its present officers, and preserve its relationships
with customers, suppliers, lessors, lessees and others having business dealings
with it to the end that its goodwill and ongoing business shall be unimpaired at
the Closing Date, as may be applicable. SafeGuard will not adopt any method of
accounting that is inconsistent with generally accepted accounting principles.
4.2 Dividends; Changes in Stock. SafeGuard shall not (a) declare or
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pay any dividends on or make other distributions in respect of any Shares, or
(b) split, combine or reclassify any Shares or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for any
Shares.
4.3 Issuance or Repurchase of Securities. Except as otherwise
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expressly contemplated by this Agreement, SafeGuard shall not issue, pledge,
deliver, sell, or repurchase any shares of its capital stock of any class, or
any options, warrants or other rights exercisable for or securities convertible
into or exchangeable for, any such shares.
4.4 Governing Documents. SafeGuard shall not adopt any amendment to
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its Articles of Incorporation (or charter documents) or Bylaws.
4.5 No Acquisitions. SafeGuard shall not acquire or agree to acquire
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by merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any capital or other assets which are material,
individually or in the aggregate, to SafeGuard.
4.6 No Dispositions. Except in the ordinary course of business and
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other than pursuant to the requirements of existing Contracts, SafeGuard shall
not sell, lease or otherwise dispose of any assets that are material,
individually or in the aggregate, to SafeGuard.
4.7 Indebtedness. SafeGuard shall not incur, become subject to, or
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agree to incur or become subject to, any obligation or liability (absolute or
contingent), except current liabilities incurred, and obligations under
contracts entered into, in the ordinary course of business and consistent with
prior practice, and provided specifically that SafeGuard shall not enter into
any material lease or extension of any material lease with respect to any real
or personal property or issue or sell, or guaranty the repayment of; any debt
securities.
4.8 Additional Matters. SafeGuard shall not:
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(a) enter into, amend or terminate any agreements, commitments or
contracts which, individually or in the aggregate, are material to the financial
condition or results of operations of SafeGuard;
(b) discharge or satisfy any lien or encumbrance or payment of any
obligation or liability (absolute or contingent) other than current liabilities
in the ordinary course of business;
(c) cancel or agree to cancel any material debts or claims, except
in each case in the ordinary course of business;
(d) waive any rights of substantial value;
(e) otherwise make any material change in the conduct of the
business or operations of SafeGuard;
(f) settle any tax assessment, litigation or other claims,
relinquish any material contract right or make any equity investments in third
parties; or
(g) agree in writing or otherwise to take any of the foregoing
actions or any action which would constitute a Material Adverse Change or make
any of the representations and warranties of SafeGuard set forth in this
Agreement untrue or incorrect in any material respect.
5. Additional Covenants.
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5.1 Non-Competition Agreement. SafeGuard shall not engage in the
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business of operating a prepaid dental plan organization in the state of Utah
from the date of Closing through a period of three (3) years after the date of
Closing.
5.2 Consents and Approvals.
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(a) Department of Insurance Approval. As soon as practicable
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after the execution of this Agreement, Buyer shall file its completed
application for transfer of control of SafeGuard with the Utah Department of
Insurance, together with all documents and information of or concerning itself
or any of its affiliates as may be required to be filed in connection therewith
under such form or applicable statutes and regulations, and shall thereafter
promptly provide such additional information such Department shall request from
time to time, and otherwise shall prosecute such application diligently and use
commercially reasonable efforts to obtain such approval as promptly as
reasonably practicable. SafeGuard and the Shareholder will assist in the
preparation of the required filings with the Utah Department of Insurance and
will assist Buyer in satisfying the obligations of Buyer set forth in this
Section 5.2(a). The parties agree that this Agreement may be terminated by
either party upon thirty (30) advance written notice in the event the Utah
Department of Insurance does not approve the transaction contemplated by this
Agreement.
(b) Other Consents and Approvals. SafeGuard and the Shareholder
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will obtain or cause to be obtained prior to the Closing Date the consents and
approvals of all required regulatory agencies, that may be required of them, if
any.
(c) Information. The parties hereto shall, unless prohibited by
-----------
law, (i) furnish to other party copies of all filings and such necessary
information as may be requested by either in connection with any party's
preparation of any required filings or submissions to any governmental agency,
and (ii) will keep the other party informed of the status of any inquiries made
with respect to this transaction by any federal, state or local governmental
agency or authority with respect to this Agreement or the transaction
contemplated hereby. The parties shall furnish to the other, if applicable, a
list of any materials that it is prohibited by law from providing to the other,
together with a reference to the source of the prohibition and, if permitted, a
brief summary of the content of such materials and the parties thereto.
5.3 Confidential Information.
-------------------------
(a) Nondisclosure by Shareholder after Closing. The Shareholder
--------------------------------------------
recognizes and acknowledges that it has in the past, currently has, and in the
future may possibly have, access to certain confidential information of
SafeGuard, such as customer lists, specific information relating to the special
needs of particular customers (including knowledge of what products they are
using and are likely to use in the future), sales and financial records and
related data (including pricing information), information and specifications
relating to products proposed by SafeGuard, knowledge of SafeGuard's sales and
marketing techniques, and information regarding vendors and suppliers of
SafeGuard. The Shareholder agrees that from and after the Closing Date it will
not use such confidential information or disclose such confidential information
about SafeGuard to any person or entity for any purpose or reason whatsoever,
except to authorized representatives of Buyer, unless such information becomes
known to the public generally, or unless the Shareholder is required by law to
disclose such information. If the Shareholder is requested to provide such
information pursuant to requirements of applicable law, he shall notify Buyer as
promptly as possible and shall allow Buyer the opportunity to oppose such
request.
(b) Remedies. The Shareholder acknowledges and agrees that,
--------
because the legal remedies of Buyer may be inadequate in the event of a breach
of any of the covenants set forth in this Section, Buyer may, in its discretion
and in addition to obtaining any other remedy or relief available to it
(including, without limitation, damages at law), enforce the provisions of this
Section by injunction and any and all other equitable relief.
(c) Non-Disclosure Pre-Closing. Each party agrees that, unless
---------------------------
and until the Closing has been consummated, all Confidential Information (as
defined below) shall be kept confidential by such party as required by this
Section 5.3(c); provided, however, that (i) any of such Confidential Information
may be disclosed to such directors, officers, employees, and authorized
representatives of such party, (collectively, for purposes of this Section,
"Representatives") as need to know such information for the purpose of
evaluating the transactions contemplated hereby (it being understood that such
party's Representatives shall be informed by such party of the confidential
nature of such information and shall be required to treat such information
confidentially), (ii) any disclosure of Confidential Information may be made to
the extent to which the non-disclosing party consents in writing, (iii)
Confidential Information may be disclosed by a party or its Representative, to
the extent that, in the opinion of counsel, such party or its Representative is
legally compelled to do so, provided that, prior to making such disclosure and
if there is time to do so, the disclosing party advises and consults with the
non-disclosing party regarding such disclosure and provided further that the
disclosing party discloses only that portion of the Confidential Information as
is legally required. Each party agrees that none of the Confidential
Information will be used for any purpose other than in connection with the
transactions contemplated hereby. The term "Confidential Information", as used
herein, means all information obtained by or on behalf of Buyer from the
Shareholder or SafeGuard pursuant to this Section and all similar information
obtained from SafeGuard or the Shareholder by or on behalf of Buyer in
connection with the transactions contemplated hereby, other than information
which (i) was or becomes generally available to the public other than as a
result of disclosure by the disclosing party, (ii) was or becomes available to a
party on a non-confidential basis prior to disclosure to the party by the other
party hereto or its respective representatives, or (iii) was or becomes
available to a party from a source other than the other party and its respective
representatives, provided that such source is not known by the party to be bound
by a confidentiality agreement with respect to such information. The agreement
contained in this Section 5.3(c) shall terminate upon the Closing Date.
(d) Return of Information. If this Agreement is terminated, Buyer
---------------------
shall promptly return or destroy, and shall use its reasonable best efforts to
cause all Buyer Representatives to promptly return or destroy, all Confidential
Information to SafeGuard without retaining any copies thereof, provided that
such portion of the Confidential Information as consists of notes, compilations,
analyses, reports, or other documents prepared by Buyer or Buyer Representatives
shall be destroyed.
5.4 Governmental Filings. Each of Buyer, SafeGuard and the Shareholder
--------------------
agrees to make as promptly as practicable all filings necessary under any
applicable federal, state, local and foreign laws and to obtain any required
regulatory approvals, clearances or expirations of waiting periods in connection
with the transactions contemplated by this Agreement (all such filings required
to be made as provided herein are referred to herein collectively as the
"Governmental Filings"). Each party shall use its best efforts, and cause its
counsel to use their best efforts, to cooperate with the other parties in
preparing their respective Governmental Filings and in obtaining all required
regulatory approvals, clearances and expirations of waiting periods.
5.5 Legal Conditions. Each of Buyer, SafeGuard and the Shareholder
-----------------
will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect to the consummation
of the transactions contemplated by this Agreement and will promptly cooperate
with and furnish information to such other party or parties in connection with
any such requirements as may be imposed upon such other party or parties in
connection with the consummation of the transactions contemplated by this
Agreement.
5.6 Certain Defaults. SafeGuard and/or Shareholder will give prompt
-----------------
notice to Buyer of (a) any notice of default received by it subsequent to the
date of this Agreement and prior to the Closing Date under any material
instrument or material agreement to which it is a party or by which it is bound,
which default would, if not remedied, result in a Material Adverse Change or
which would render materially incomplete or untrue any representation made
herein, and (b) any suit, action or proceeding instituted or, to the knowledge
of it, threatened against or affecting it subsequent to the date of this
Agreement and prior to the Closing Date which, if adversely determined, would
result in a Material Adverse Change or which would render materially incorrect
any representation made herein.
5.7 Expenses. All costs and expenses incurred in connection with this
--------
Agreement and the transactions contemplated hereby, shall be paid by the party
incurring such expense.
(a) Transfer Taxes. As used herein the term "Transfer Taxes"
---------------
shall mean any Taxes imposed on or with respect to the sale of stock as
contemplated by this Agreement. Buyer shall pay all such Transfer Taxes.
(b) Cooperation and Records Retention. Shareholder and Buyer
------------------------------------
shall (i) each provide the other, and Buyer shall cause SafeGuard to provide
Shareholder, with such assistance as may reasonably be requested by any of them
in connection with the preparation of any Tax Return or the conduct of any Tax
Proceeding, (ii) each retain and provide the other, and Buyer shall cause
SafeGuard to retain and provide Shareholder, with any records or other
information that may be relevant to any such Tax Return or Tax Proceeding, and
(iii) each provide the other with any final determination of any such Tax
Proceeding that affects any amount required to be shown on any Tax Return of the
other for any period. Without limiting the generality of the foregoing, Buyer
shall retain, and shall cause SafeGuard to retain, and Shareholder shall retain,
until the applicable statutes of limitations (including any extensions) have
expired, copies of all Tax Returns, supporting work schedules, and other records
or information that may be relevant to such returns for all tax periods or
portions thereof ending before or including the Closing Date and shall not
destroy or otherwise dispose of any such records without first providing the
other party with a reasonable opportunity to review and copy the same.
(c) Tax Elections. No new elections with respect to Taxes or any
--------------
changes in current elections with respect to Taxes affecting SafeGuard shall be
made after the date of this Agreement without prior written consent of Buyer.
(d) Survival. Notwithstanding any other provision of this
--------
Agreement, the covenants set forth in this Section shall survive until the
expiration of the respective statutes of limitations applicable to the periods
to which the Taxes relate.
5.8 Further Conveyances, Assurances and Cooperation. After the
---------------------------------------------------
Closing, the Shareholder will, without further consideration of any nature from
Buyer, other than reimbursement of expenses reasonably incurred at the request
of Buyer, execute and deliver, or cause to be executed and delivered, to Buyer,
such additional documentation and instruments as Buyer may reasonably request,
to (i) sell, transfer and assign to and fully vest in Buyer ownership of the
Shares (ii) allow Buyer to operate the business of SafeGuard, however without
the use of the name SafeGuard, SafeGuard Health Plans, or any derivations
thereof, (iii) obtain any consent or approval which was not obtained on or prior
to the Closing, (iv) comply with any Tax investigation, audit or inquiry, (v)
otherwise provide information, books, records, evidence, testimony and other
reasonable assistance to Buyer in connection with its ownership of the business
of SafeGuard.
6. Conditions Precedent To Obligations Of The Parties.
---------------------------------------------------------
6.1 Conditions to the Obligations of Buyer, SafeGuard and the
-----------------------------------------------------------------
Shareholder. The respective obligations of Buyer, SafeGuard and the Shareholder
--
set forth in this Agreement shall be subject to the satisfaction on or prior to
the Closing Date of the following conditions, unless waived by each such party:
(a) Governmental Approvals. All material authorizations,
-----------------------
consents, orders or approvals of, or declarations or filings with, or expiration
of waiting periods imposed by, any federal, state, local or foreign governmental
or regulatory authority (including, without limitation, the Utah Department of
Insurance) necessary for the consummation of the transactions contemplated by
this Agreement shall have been filed, occurred or been obtained, including any
and. all necessary permits, licenses and certificates.
(b) Board Approval. The Board of Directors of Buyer and Seller
---------------
shall have approved the form of the definitive purchase agreement and all
related agreements and documents and the each party shall provide the other with
a copy of such resolutions at the Closing.
(c) Documents from Seller. All evidence and documents as the
-----------------------
attorneys for Buyer may reasonably require as to Seller's compliance with its
agreements hereunder and the fulfillment of the conditions to Buyer's obligation
to consummate the transaction contemplated hereby.
(d) Documents from Buyer. All evidence and documents as the
----------------------
attorneys for Seller may reasonably require as to Buyer's compliance with its
agreements hereunder and the fulfillment of the conditions to Seller's
obligations to consummate the transaction contemplated hereby.
(e) Certificate of Seller. A certificate by the Seller, executed
----------------------
by its duly authorized officer, confirming the truthfulness in all material
respects of the representations, warranties and covenants made herein as of the
Closing.
(f) Certificate of Buyer. A certificate by Buyer, executed by any
--------------------
of its authorized officers, confirming the truthfulness in all material respects
of the representations, warranties and covenants made herein as of the Closing.
(g) Consideration. Buyer's wire transfer of the Purchase Price to
-------------
Seller and the execution and delivery of that certain promissory note all of
which is referred to in Section 1.1.1.
6.2 Further Conditions to the Obligations of Buyer. The obligations of
----------------------------------------------
Buyer set forth in this Agreement are subject to the satisfaction on or prior to
the Closing Date of the following conditions, unless waived by Buyer:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of SafeGuard and the Shareholder set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made at and as of the Closing Date (except to
the extent such representations or warranties speak to a particular date), and
Buyer shall have received a certificate signed by the Shareholder and authorized
officers of SafeGuard to such effect.
(b) Performance of Obligations of Other Parties. SafeGuard and
----------------------------------------------
the Shareholder shall have performed in all material respects all obligations
required to be performed by them under this Agreement prior to the Closing Date
and Buyer shall have received a certificate signed by the Shareholder and
authorized officers of SafeGuard to such effect.
(c) No Litigation. Since the date hereof, there shall not have
--------------
been instituted and be continuing or threatened against SafeGuard any claim,
action or proceeding the result of which could reasonably be expected to result
in a Material Adverse Change in the financial condition, operations or
prospects.
(d) Third-Party Approvals. Any and all consents required from
----------------------
third parties relating to contracts, licenses, leases and other agreements and
instruments material to the financial condition or results of operations of
SafeGuard shall have been obtained by SafeGuard and provided to Buyer.
(e) Resignations. SafeGuard shall have delivered to Buyer all
------------
resignations of the officers and directors of SafeGuard as requested by Buyer,
effective as of the Closing Date.
(f) Employees. There shall be no employees of SafeGuard employed
---------
by SafeGuard as of the Closing Date.
(g) Retention of Revenues. The Shareholder shall cause all
-----------------------
premiums received by SafeGuard in the month of the Closing to be removed from
SafeGuard and shall be responsible for the payment of the related expenses for
the operation of SafeGuard during such month in which the Closing occurs.
SafeGuard shall retain any accounts receivable in existence as of the date of
Closing.
(h) Due Diligence Review. Buyer shall have completed a thorough
----------------------
due diligence investigation of SafeGuard, its businesses and facilities,
financial condition and prospects, and any other matters it deems necessary and
shall have performed, without limitation, all necessary audits and reviews, with
the results of such due diligence investigation being satisfactory to Buyer in
its sole discretion. Buyer shall not assert any claims nor take any action
against Shareholder for any issues disclosed in the various Schedules attached
hereto. Such due diligence review shall be completed by Buyer not later than
thirty (30) days following the execution of this Agreement.
6.3 Further Conditions to the Obligations of SafeGuard and the
-------------------------------------------------------------------
Shareholder. The obligations of SafeGuard and the Shareholder set forth in this
Agreement are subject to the satisfaction on or prior to the Closing Date of
the following conditions, unless waived by SafeGuard and the Shareholder:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of Buyer set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date (except to the extent such
representations or warranties speak to a particular date), and SafeGuard and the
Shareholder shall have received a certificate signed by authorized officers of
Buyer to such effect.
(b) Performance of Obligations of Other Parties. Buyer shall have
-------------------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing Date, and SafeGuard and the
Shareholder shall have received a certificate signed by authorized officers of
Buyer to such effect.
7. Termination, Extension And Waiver.
------------------------------------
7.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing Date as follows:
(a) By Mutual Consent. By mutual written consent of the
-------------------
Shareholder and Buyer.
(b) By Any Party. By any party to this Agreement if the
--------------
transactions contemplated by this Agreement shall not have been consummated on
or before one hundred twenty days (120) after the execution of this Agreement,
provided that the failure of the transactions to be consummated by such date is
not caused by any breach of this Agreement by the party seeking such
termination.
8. Indemnification.
---------------
8.1 Indemnification.
---------------
(a) Indemnification by Shareholder. Shareholder shall indemnify
--------------------------------
and hold harmless Buyer and its affiliates from and against any and all Losses
(as defined in Section 8.1(c) incurred by any of such indemnified party in any
way relating to, arising out of or resulting from:
(i) The breach of any of the material representations or
warranties, made by SafeGuard or Shareholder in this Agreement;
(ii) The breach or the failure of performance by SafeGuard or
Shareholder of any of the material covenants, promises or agreements that
any of them is to perform under this Agreement;
(iii) Taxes (including interest, penalties and other
additions to tax that may become payable in respect thereof) which are
assessed or imposed on or otherwise become payable by SafeGuard or Buyer in
respect of SafeGuard's income, business, property or operations in any
period ending prior to or on the Closing Date.
(b) Indemnification by Buyer. Buyer shall indemnify and hold
--------------------------
harmless Shareholder and its affiliates from and against any and all Losses (as
defined in Section 8.1(c)) incurred by such indemnified party in any way
relating to, arising out of or resulting from:
(i) The breach of any of the material representations or
warranties made by Buyer in this Agreement;
(ii) The breach or the failure of performance by Buyer of any
of the material covenants, promises or agreements that it is to perform
under this Agreement;
(iii) Taxes (including interest, penalties and other
additions to tax that may become payable in respect thereof) which are
assessed or imposed on or otherwise become payable by Shareholder in
respect of SafeGuard's income, business, property or operations in any
period following the Closing Date.
(c) Definition of Losses. For purposes of this Article, "Losses"
---------------------
shall mean any and all liabilities, obligations, losses, damages, claims,
deficiencies, penalties, taxes, levies, actions, judgments, settlements, suits,
costs, legal fees, accountants' fees, disbursements or expenses. Losses shall
exclude any amount that any party actually receives under any insurance policy
that provides coverage for the liability in question.
8.2 Third Party Claims, Notice and Opportunity to Settle.
-----------------------------------------------------------
(a) Within thirty (30) days after the receipt by the party
entitled to indemnity hereunder (the "Indemnified Party") of any claim or demand
(including but not limited to, notice of any action, suit or proceeding) by any
third party (a "Third Party Claim") against an Indemnified Party which gives
rise to a right to indemnification for a Loss hereunder (or, in the case of the
receipt of any notice of any examination, claim, adjustment or other proceeding
with respect to Taxes for any period for which Shareholder is liable under
Section 8.1(a)(iii) or for which Buyer is liable under Section 8.1(b)(iii) ("Tax
Proceeding"), promptly after the receipt of such notice), the Indemnified Party
shall give each party who may be obligated to provide indemnity hereunder (the
"Indemnifying Party") written notice of such claim or demand; provided, however,
that the failure to give such notice shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent that such failure is materially
prejudicial to the Indemnifying Party.
(b) The Indemnifying Party shall have the right (without prejudice
to the right of any Indemnified Party to participate at its own expense through
counsel of its own choosing), to defend against such claim or demand (for
purposes of this Section, any Tax proceeding shall be considered a "claim or
demand") at its expense and through counsel of its own choosing (the choice of
such counsel to be subject to the reasonable consent of the affected Indemnified
Parties) and to control such defense if it gives written notice of its intention
to do so within ten (10) days of the receipt of the notice referred to in
Section 8.2(a). If the Indemnifying Party shall decline to assume the defense
of such claim or demand, the affected Indemnified Parties shall have the right
to assume control of such defense at the expense of the Indemnifying Party. The
Indemnified Parties shall cooperate fully in the defense of such claim or demand
and shall make available to the Indemnifying Party or its counsel all pertinent
information under their control relating thereto. The Indemnifying Party agrees
to cooperate with the Indemnified Parties in order to enable their counsel to
participate in the defense and to deliver to the Indemnified Parties copies of
all pleadings and other information within the Indemnifying Party's knowledge or
possession reasonably requested by the Indemnified Parties that is relevant to
the defense of any such claim or demand. The Indemnified Parties and their
counsel shall maintain confidentiality with respect to all such information
consistent with the conduct of a defense hereunder.
8.3 Non-Third Party Claims. In the event any Indemnified Party should
-----------------------
have a claim against any Indemnifying Party hereunder which does not involve a
Third Party Claim, the Indemnified Party shall transmit to the Indemnifying
Party a written notice (the "Indemnity Notice") describing in reasonable detail
the nature of the claim, an estimate of the amount of damages attributable to
such claim and the basis of the Indemnified Party's request for indemnification
under this Agreement. If the Indemnifying Party does not notify the Indemnified
Party within thirty (30) days from the Indemnifying Party's receipt of the
Indemnity Notice that the Indemnifying Party disputes such claim, the claim
specified by the Indemnified Party in the Indemnity Notice shall be deemed a
liability of the Indemnifying Party hereunder; provided, however, that, if Buyer
asserts a claim that is not a Third Party Claim and the Indemnifying Party does
not dispute such claim in a timely manner in accordance with this Section 8.3,
Buyer shall have offset and recoup its Losses as provided in Section 8.4.
8.4 Payments. Any timely, disputed non-Third Party Claim shall be
--------
submitted to arbitration in accordance with the provisions of Section 9 hereof.
Payments of all amounts owing by an Indemnifying Party pursuant to this Section
8 relating to a Third Party Claim shall be made within thirty (30) days after
the latest of (a) the settlement of such Third Party Claim, (b) the expiration
of the period for appeal of a final adjudication of such Third Party Claim or
(c) the expiration of the period for appeal of a final adjudication of the
Indemnifying Party's liability to the Indemnified Party under this Agreement.
Subject to Section 8.3, payments of all amounts owing by an Indemnifying Party
pursuant to Section 8.4 shall be made within thirty (30) days after the later of
(i) the expiration of the thirty (30) day Indemnity Notice period or (ii) the
expiration of the period for appeal of a final adjudication of the Indemnifying
Party's liability to the Indemnified Party under this Agreement.
9. Dispute Resolution. All controversies, claims and disputes arising under
------------------
this Agreement or the construction, interpretation, breach, termination,
enforceability or validity thereof, shall be resolved by submission to binding
arbitration.
9.1 Notice. The party desiring to initiate arbitration can do so by
------
sending written notice of an intention to arbitrate by registered or certified
mail to the other parties and to American Arbitration Association ("AAA"). The
notice must contain a description of the dispute, the amount of money involved,
and the remedies sought.
9.2 Arbitrator. The parties shall attempt to agree on a retired judge
----------
from the AAA panel to act as the arbitrator hereunder. If the parties are
unable to agree, AAA shall provide a list of three available judges to each
party and each party may strike one. If the parties strike the same individual,
then AAA shall be entitled to select the final arbitrator. If they strike
different individuals, the remaining judge shall serve as the arbitrator. The
parties agree the arbitration must be initiated within one (1) year after the
claimed breach occurred and that the failure to initiate arbitration within the
one (1) year period constitutes an absolute bar to the institution of any
arbitration or any judicial proceeding on any dispute set forth in the notice of
intent to arbitrate. It is agreed that by all parties that any legal
proceedings under this agreement shall remain sealed and not open to the public.
9.3 Costs. Each party to the arbitration must pay its own witness
-----
fees. Each party must pay its pro-rata share of the arbitrator's fees. The
arbitrator must award to the prevailing party attorneys' fees and costs actually
and reasonably incurred.
10. General Provisions.
-------------------
10.1 Survival of Representations and Warranties. The representations
--------------------------------------------
and warranties contained herein shall survive the Closing and will expire on the
first anniversary of the Closing Date (the "Survival Date"); unless prior to the
Survival Date, a claim specifying a breach of any of the representations or
warranties described above is submitted in writing to the indemnifying party and
identified as a claim for indemnification pursuant to this Agreement. From and
after the Survival Date, no party hereto nor any shareholder, director, officer,
employee, or affiliate of such party shall have any indemnity obligation
pursuant to Section 8, except with respect to matters as to which notice has
been received in accordance with this Section 10.1.
10.2 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given upon facsimile transmission (with written
or facsimile confirmation of receipt), or delivery by a reputable overnight
commercial delivery service (delivery, postage or freight charges prepaid), or
on the third day following deposit in the United States mail (if sent by
registered or certified mail, return receipt requested, delivery, postage or
freight charges prepaid), addressed to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
Seller: Buyer:
Safeguard Health Enterprises, Inc. Total Dental Administrators, Inc.
95 Enterprise 000 Xxxx Xxxxxx Xxxxxxxx Xxxx, #0X
Xxxxx Xxxxx, XX 00000 Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Attn: Xxxx Xxx Xxxxxxxx, President and
Senior Vice President and General Counsel Chief Executive Officer
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
10.3 Interpretation. The table of contents and headings contained in
--------------
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
10.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be an original and all of which together shall
be one and the same instrument.
10.5 Integration. This Agreement and the Exhibits, Schedules,
-----------
documents, instruments and other agreements among the parties hereto that are
referred to herein, constitute the entire agreement of the parties with respect
to the subject matter set forth herein or therein and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof or thereof.
10.6 Governing Law. This Agreement and the rights of the parties
--------------
hereunder shall be governed by and construed and enforced in accordance with the
internal laws, and not the laws pertaining to choice or conflicts of laws, of
the State of Utah, and venue for any Arbitration concerning this Agreement shall
be in Irvine, California.
10.7 Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed on behalf of each of the parties hereto.
10.8 Assignment. No party hereto shall assign or transfer or permit
----------
the assignment or transfer of this Agreement without the prior written consent
of the other parties, except that the Buyer may assign its rights and
obligations hereunder to any wholly-owned subsidiary, however if assigned, Buyer
must guarantee all payments to SafeGuard and/or its Shareholder called for in
this Agreement.
10.9 Severability. If any paragraph, section, sentence, clause or
------------
phrase contained in this Agreement will become illegal, null or void or against
public policy, for any reason, or will be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null or void
or against public policy, the remaining paragraphs, sections, sentences, clauses
or phrases contained in this Agreement will not be affected thereby.
10.10 Fees. If any party to this Agreement shall bring any arbitration
----
or any other action, suit, counterclaim or appeal for any relief against any
other party, declaratory or otherwise, to enforce the terms hereof or to declare
rights hereunder (collectively, an "Action"), the prevailing party shall be
entitled to recover as part of any such Action its reasonable attorneys' fees
and costs, including any fees and costs incurred in bringing and prosecuting
such Action and/or enforcing any order, judgment, ruling or award granted as
part of such Action. "Prevailing party" within the meaning of this section
includes, without limitation, a party who agrees to dismiss an Action upon the
other party's payment of all or a portion of the sums allegedly due or
performance of the covenants allegedly breached, or who obtains substantially
the relief sought.
10.11 Transfer Taxes. The Buyer shall bear all transfer, sales, use,
---------------
income or other taxes, if any, payable in connection with the transfer of Stock
contemplated by this Agreement or as a result of the transactions contemplated
hereby, and shall be responsible for the payment of any individual taxes levied
against him personally as a result of selling the Shares to Buyer.
IN WITNESS WHEREOF, the parties have executed this Agreement the date set forth
below.
"Buyer" "Seller"
TOTAL DENTAL ADMINISTRATORS, INC., SAFEGUARD HEALTH ENTERPRISES, INC.,
a Utah Corporation a Delaware corporation
By: /s/ Xxxx Xxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------- --------------------------------------------
Name: XXXX XXX XXXXXXXX Name: XXXXX X. XXXXXXX
Title: President and Chief Executive Officer Title: President and Chief Executive Officer
Dated: February 20, 2001
--------------------------------------------
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Name: XXXXXX X. XXXXXXXX
Title: Senior Vice President and Secretary
Dated: February 26, 2001
--------------------------------------------
EXHIBIT 1.2
PURCHASE PRICE
MARKETABLE SECURITIES, DEPOSITS AND ACCRUED INTEREST
EXHIBIT 2.2
AUTHORIZED AND OUTSTANDING CAPITAL STOCK OF SAFEGUARD
EXHIBIT 2.7
FINANCIAL STATEMENTS DATED AS OF DECEMBER 31, 2000
EXHIBIT 2.12
LIST OF EACH EMPLOYEE PENSION BENEFIT PLAN,
PROGRAM, AGREEMENT OR ARRANGEMENT
NONE
EXHIBIT 2.13
CONTRACTS
EXHIBIT 2.18(C)
COMPLIANCE MATTERS
NONE
