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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), is entered into as of
the 12th day of November, 1997, by and among Monarch Dental (Press) Associates,
L.P., a Texas limited partnership ("Purchaser"), VP Interests, L.P., a Delaware
limited partnership (the "Partnership"), ▇▇▇▇▇▇ Press, B.D.S., P.C., a Texas
professional corporation (the "General Partner"), VP Investments, Inc., a
Delaware corporation (the "Limited Partner"), and ▇▇▇▇▇▇ Press, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇, all individuals residing in Texas
(collectively, the "Shareholders"). Monarch Dental Corporation ("Monarch") is
made a party to this Agreement for the purposes expressly stated herein.
R e c i t a l s
The Partnership is the owner of all the assets comprising, and
presently conducts, the Partnership business known as the Press Family Dental
Health Centers (the "Company dental business"). The General Partner is the
sole general partner of the Partnership and owns a one percent (1%) interest in
the Partnership's capital and profits. The Limited Partner is the sole limited
partner in the Partnership and owns a ninety-nine percent (99%) interest in the
Partnership's capital and profits (the Partnership, the General Partner and the
Limited Partner are collectively referred to herein as the "Company"). The
Shareholders own all of the issued and outstanding capital stock of the General
Partner. The General Partner owns all of the issued and outstanding capital
stock of the Limited Partner.
The Company desires to sell to Purchaser, and Purchaser desires to buy
from the Company, substantially all of the assets of the Company, consisting of
all of the assets owned by the Company used in the Company dental business and
to assume certain specified liabilities and obligations of the Company, for the
consideration and on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the above premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, the parties hereto do hereby agree as follows:
ARTICLE 1. PURCHASE OF ASSETS AND ASSUMPTION OF CERTAIN LIABILITIES.
1.1 Purchase of Assets.
(a) Included Assets. Subject to the terms and conditions
hereof and in reliance upon the representations, warranties, covenants and
agreements contained herein, at the Closing (as defined in Article 2 below),
the Company does hereby sell, transfer, convey and deliver to Purchaser, and
Purchaser does hereby purchase and accept from the Company, all of the assets
described herein:
(i) all of the Company's tangible personal
property, furniture, fixtures, equipment, machines,
inventories, raw materials, tools and supplies used in the
Company dental business, as described on Section 1.1(a)(i) of
the Disclosure Schedule attached to this Agreement;
(ii) all of the Company's supplier and vendor
lists, copies of which are attached to this Agreement as
Section 1.1(a)(ii) of the Disclosure Schedule, and all
records, including all records, documents, written
information, computer tapes, programs
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and files concerning past, present and future dealings and
arrangements with suppliers and vendors relating to the
Company dental business;
(iii) all of the Company's computer hardware,
cabling and peripherals, tools and supplies relating to the
Company dental business to the extent of the Company's
interest therein;
(iv) all of the Company's rights to use all of the
trademarks, service marks, trade names, copyrights, patents
and patent applications and interests thereunder, inventions,
processes and know-how, restrictive covenants, licenses and
all other intangible rights relating to the Company dental
business;
(v) copies of all books, records and other data
relating to the assets, business, ownership, employees and
operations of the Company dental business, including, but not
limited to, correspondence, employment records, tax and
accounting records, property records, mailing lists,
regulatory files (including master files), provided that the
Company shall retain originals of the tax and accounting
records of such business as heretofore conducted and the
Company shall provide true and accurate copies of the same to
Purchaser at the Closing;
(vi) all rights of the Company under the
contracts, agreements and powers of attorney relating to the
Company dental business including without limitation those
referred to in this Section 1.1(a) and those referred to in
Section 4.13 and the Disclosure Schedules thereto, except as
set forth in Section 1.1(a)(vi) of the Disclosure Schedule;
(vii) all of the Company's title and interest in
and to any and all of the databases used in the Company dental
business and all software, source code, documentation, manual
and computer processes (collectively, the "Software"), whether
owned or licensed, including without limitation, all
proprietary software used in the Company dental business;
(viii) all of the Company's right, title and
interest in accounts receivable and payments for services
rendered prior to the Closing relating to the Company dental
business (collectively, the "Accounts Receivable"), Section
1.1(a)(viii) of the Disclosure Schedule hereto setting forth
the aggregate amount thereof with aging data, and including
any and all trade installment notes;
(ix) all of the Company's right, title interest in
and to the real property leases listed in Section 1.1(a)(ix)
of the Disclosure Schedule attached hereto relating to the
Company dental business together with the Company's right,
title and interest in all leasehold improvements;
(x) all of the Company's right, title and
interest to the leased personal property as described in
Section 1.1(a)(x) of the Disclosure Schedule (including,
without limitation, all of the Company's right, title and
interest under capital leases), and including all options to
purchase leased personal property relating to the Company
dental business, as set forth in Section 1.1(a)(x) of the
Disclosure Schedule;
(xi) all of the Company's right, title and
interest in and to the non-professional goodwill and going
concern value related to the Company dental business
including, but
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not limited to, the exclusive right to use the name "Press
Family Dental" in the San Antonio area and all associated
logos as all or part of a trade or corporate name or
otherwise, telephone numbers and any other intangible assets;
(xii) all prepaid expenses, advances and deposits
of the Company;
(xiii) cash and cash equivalents in the aggregate
amount of $135,000.00 (the "Required Cash Amount"); and
(xiv) all of the Company's other assets and
property rights of every kind and nature, tangible or
intangible, owned or leased, relating to the Company dental
business, including without limitation all assets shown on the
Base Balance Sheet (as defined in Section 4.6(a)), other than
any such assets disposed of in the ordinary course of the
Company's business and in a manner consistent with the terms
of this Agreement since the date of the Base Balance Sheet and
also not including the Excluded Assets (as defined below).
The assets, property and business to be acquired by Purchaser under
this Agreement, subject to Section 1.1(b), are hereinafter referred to
collectively as the "Acquired Assets."
(b) Excluded Assets. Notwithstanding anything herein to
the contrary, there shall be excluded from such purchase and sale and from the
definition of "Acquired Assets" the following property.
(i) the Company's minute books, charter
documents, corporate stock record books, Partnership agreement
and Partnership record books, original tax and accounting
records, and such other records as have to do exclusively with
the Company's organization or capitalization (collectively,
the "Corporate Records");
(ii) cash and cash equivalents of the Company in
excess of the Required Cash Amount;
(iii) those personally owned, non-operating assets
of the Shareholders listed on Section 1.1(b) of the Disclosure
Schedule;
(iv) any rights of the Company under this
Agreement or any other agreement between Purchaser and the
Company entered into on or after the date hereof;
(v) securities of the Company;
(vi) any refund claims with taxing authorities;
and
(vii) the patient records, permits and provider
agreements of the Company assigned to Modern Dental
Professionals, P.C., pursuant to that certain Assignment
Agreement of even date.
The assets, property and business of the Company which are excluded
from the Acquired Assets are hereinafter sometimes referred to as the "Excluded
Assets."
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1.2 Assumption of Liabilities. Upon the sale and purchase of the
Acquired Assets, Purchaser shall assume and agree to pay or discharge when due
in accordance with their respective terms all obligations (a) under all leases
of real property set forth on Section 4.5(b)(i) of the Disclosure Schedule, (b)
under all contracts, including but not limited to, the Commerce Street and
Stone Oak dental office construction contracts, set forth in Section 4.13(a) of
the Disclosure Schedule, (c) under the capital and operating equipment leases
set forth in Section 4.29(c) of the Disclosure Schedule, excluding any
liability for breach or non-performance by the Company of any of the foregoing
described in clauses (a), (b) or (c) existing on or prior to the Closing, (d)
those liabilities specifically described on Section 1.2 of the Disclosure
Schedule, (e) current trade payables (as defined in Section 4.29(d) below), and
(f) approximately $59,000.00 owed to the International Bank of Commerce. The
liabilities to be assumed by Purchaser under this Agreement are hereinafter
sometimes referred to as the "Liabilities." Except as specifically provided in
the first sentence of this Section 1.2, Purchaser shall not assume or be bound
by any obligations or liabilities of the Company or its affiliates or
predecessors, of any kind or nature, known, unknown, accrued, absolute,
contingent or otherwise, whatsoever.
Purchaser's assumption of the construction contract reflected in
Section 4.5(b)(i) of the Disclosure Schedule for the Stone Oak dental office
(the "Construction Contract") is limited to a maximum amount of $455,122.00
(the "Maximum Amount"). If the cost of the Stone Oak office construction
exceeds such Maximum Amount (the "Excess Amount"), then ▇▇▇▇▇▇ Press,
personally or through his affiliate, will pay any amount due under the
Construction Contract in excess of the Maximum Amount unless the Excess Amount
was caused by change orders to the Construction Contract specifically requested
by Purchaser.
Purchaser's assumption of the construction contract reflected in
Section 4.5(b)(i) of the Disclosure Schedule for the Commerce Street dental
office (the "Commerce Contract") is limited to a maximum amount of $64,167.00
(the "Commerce Maximum Amount"). If the cost of the Commerce Street office
construction exceeds such Commerce Maximum Amount (the "Commerce Excess
Amount"), then the Company will pay any amount due under the Commerce Contract
in excess of the Commerce Maximum Amount unless the Commerce Excess Amount was
caused by change orders to the Commerce Contract specifically requested by
Purchaser.
The liabilities which are not assumed by Purchaser under this
Agreement are hereinafter sometimes referred to as the "Excluded Liabilities."
The assumption of the Liabilities by Purchaser hereunder shall not enlarge any
rights of third parties and nothing herein shall prevent Purchaser from
contesting in good faith with any third party any of such Liabilities.
1.3 Prorated Expenses.
(a) Accrued Vacation and Sick Pay. The Company shall
compensate the current employees of the Company for all accrued vacation time,
sick pay and maternity leave (if applicable), and any bonuses due such
employees through the date of Closing. For purposes of this Section 1.3(a),
bonuses shall include any Christmas, year-end or similar bonuses that the
Company customarily has paid to such employees.
(b) Certain Taxes. Ad valorem taxes for the year in
which the Closing occurs shall be prorated between the Company and Purchaser.
All taxes due and payable through the date of Closing shall be borne and paid
solely by the Company.
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ARTICLE 2. CLOSING.
Subject to the terms hereof, the purchase of the Acquired Assets and
the assumption of the Liabilities shall be consummated at a closing (the
"Closing"), to take place on November 12, 1997, at 10:00 a.m., at the offices
of ▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P. at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, but such Closing shall be effective as if, for economic purposes, the
Closing occurred as of the first business day of November 1997 (i.e., the
income from the Company dental business will be deemed to accrue for the
benefit of the Purchaser and the expenses from the Company dental business will
be deemed to accrue as an obligation to the Purchaser from and after such
date).
ARTICLE 3. CLOSING EXCHANGE.
3.1 Purchase Price for Acquired Assets. The Purchase Price to be
paid by Purchaser to the Company for the purchase of the Acquired Assets and
the assumption of the Liabilities at the Closing shall be $10,289,000.00 (the
"Closing Purchase Price"), which shall be paid as follows: (i) $6,618,993.70 in
immediately available funds by wire transfer pursuant to the wire transfer
instructions provided to Purchaser by the Company and attached hereto as
Exhibit A; (ii) 179,736 shares of the common stock, par value $.01 per share,
of Monarch Dental Corporation ("Monarch") (the "Common Stock"); and (iii)
Purchaser's delivery of a promissory note in the original principal amount of
$100,000.00, containing such terms and conditions as is set forth therein.
3.2 Certain Closing Deliveries.
(a) Consideration Price. At the Closing, Purchaser shall
deliver the consideration specified in Section 3.1 hereof to the Company.
(b) Transfer of Acquired Assets. At the Closing, the
Company shall deliver or cause to be delivered to Purchaser good and sufficient
instruments of transfer transferring to Purchaser good and valid title to all
the Acquired Assets, free and clear of all liens, restrictions, encumbrances
and other claims (except for the Liabilities) (collectively the "Liens") not
shown or reflected on the Base Balance Sheet, and shall cause the Required Cash
Amount to be transferred to the account of Purchaser immediately following the
Closing.
(c) Delivery of Records and Contracts. At the Closing,
the Company shall deliver or cause to be delivered to Purchaser all the leases,
contracts, commitments, agreements and rights constituting Acquired Assets,
with such assignments thereof and consents to assignments as are necessary to
assure Purchaser of the full benefit of the same, subject to Section 3.6 with
respect to agreements not freely assignable at the date hereof. The Company
shall also deliver to Purchaser at the Closing all business records, tax
returns, books and other data relating to the Company dental business (or true
and complete copies in the case of tax and accounting records), except the
Corporate Records and other Excluded Assets, and the Company shall take all
requisite steps to put Purchaser in actual possession and operating control of
the Acquired Assets as of the Closing. After the Closing, Purchaser shall
afford to the Company and its accountants and attorneys, for the purpose of
preparing such tax returns of the Company as may be required after the Closing,
reasonable access to the books and records of the Company delivered to
Purchaser under this Agreement and shall permit the Company at the Company's
expense, to make extracts and copies therefrom, provided that all such
information shall be held in confidence except as Purchaser deems necessary to
prepare or complete tax returns or to respond to inquiries from taxing
authorities or pursuant to court order.
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(d) Delivery of Assumption Agreement. At the Closing,
Purchaser shall deliver or cause to be delivered to the Company an Assumption
Agreement relating to the Liabilities to be assumed by Purchaser from the
Company.
(e) Other Deliveries. Purchaser, the Company and the
Shareholders shall also deliver at the Closing such other documents and
instruments as are customary for transactions of the type contemplated hereby
and as shall be reasonably requested in advance of the Closing by any of them.
3.3 Intentionally Omitted.
3.4 Further Assurances. The Company and the Shareholders from
time to time after the Closing at the request of Purchaser and without further
consideration shall execute and deliver such further instruments of transfer
and assignment and take such other action (at no unreimbursed cost to the
Company or Shareholders) as Purchaser may reasonably require to more
effectively transfer and assign to, and vest in, Purchaser the Acquired Assets.
The Company and the Shareholders shall cooperate with Purchaser to assist
Purchaser in obtaining the Company's rating and benefits under the ▇▇▇▇▇▇▇'▇
compensation laws and unemployment compensation laws of applicable
jurisdictions, to the extent permitted by such laws. Nothing herein shall be
deemed a waiver by Purchaser of its right to receive at the Closing an
effective assignment of each of the leases, contracts, commitments or rights of
the Company as otherwise set forth in this Agreement.
3.5 Allocation of Purchase Price. Purchaser and the Company shall
agree upon the allocation of the consideration paid by Purchaser to the Company
(including the assumption of the Liabilities) among the Acquired Assets and
shall set forth the allocation of such consideration and the tax basis of the
Acquired Assets for federal income tax purposes in writing (which is attached
hereto as Exhibit B). Such allocation will be made in accordance with the
applicable rules under Section 1060 of the Internal Revenue Code of 1986, as
amended, and when completed shall be binding upon Purchaser and the Company for
all purposes (including financial accounting purposes, financial and regulatory
reporting purposes and tax purposes). Purchaser and the Company also each
agree to file appropriate documents with the IRS under Treasury Regulation
Section 1.1060-T(h)(3) reflecting the foregoing.
3.6 Procedures for Assets not Transferable. If any of the
contracts or agreements or any other property or rights included in the
Acquired Assets are not assignable or transferable either by virtue of the
provisions thereof or under applicable law without the consent of some party or
parties and any such consent cannot be obtained prior to the Closing, the
Company shall use its best efforts to obtain any such consent as soon as
possible after the Closing or otherwise obtain for Purchaser the practical
benefit of such property or rights (but at no substantial cost to the Company
or the Shareholders except for reasonable costs, such as for attorneys fees)
and Purchaser shall use all commercially reasonable efforts to assist in that
endeavor.
3.7 Non-Competition Agreement. As a material inducement to and a
condition precedent of Purchaser's acquisition of the Acquired Assets and
assumption of the Liabilities, the Company and each Shareholder is executing
and delivering at the Closing a Non-Competition Agreement (collectively, the
"Non-Competition Agreement").
3.8 Collateral Agreements. In connection and simultaneously with
the Closing, Purchaser, the Company, the Shareholders and Modern Dental
Professionals, P.C., as the case may be, will enter into the following
agreements with terms and conditions as are set forth in such agreements: (i)
Employment Agreements, (ii) Assignment Agreement (regarding patient records,
provider agreements and permits), (iii) Assumption Agreement, (iv)
Non-Competition Agreements, (v) Investment Representation Letter, (vi)
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Promissory Note, (vii) Office Lease Agreements, (viii) Lock-Up Agreement, and
(ix) ▇▇▇▇ of Sale. (All of the agreements described in this Section 3.8 are
referred to collectively as the "Collateral Agreements.")
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDERS.
4.1 Making of Representations and Warranties. As a material
inducement to Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereby, the Company and the Shareholders, jointly and
severally, hereby make to Purchaser the representations and warranties
contained in this Article 4.
For the purposes of this Agreement, references to "knowledge" or "best
knowledge" of the Company or the Shareholders or "known" by the Company or the
Shareholders or words of similar import, shall be deemed to include such
knowledge as the Shareholders or, as to the Company, any executive officers or
managers of the Company listed in Section 4.1 of the Disclosure Schedule (as
hereinafter defined) actually has or reasonably ought to have in the ordinary
course of performing their duties. For purposes of this Agreement, references
to the "Disclosure Schedule" shall mean the Disclosure Schedule delivered by
the Company and the Shareholders to Purchaser on the date hereof. For the
purposes of this Article 4, the Company and the Shareholders are deemed to have
knowledge of each of the documents entered into in connection with the
transactions contemplated hereby.
4.2 Organization and Qualification; Capital Stock; Equity
Interests.
(a) General Partner. The General Partner is a
professional corporation duly organized, validly existing and in good standing
under the laws of the state of Texas with full corporate power and authority to
own or lease its properties and to conduct its business in the manner and in
the places (including qualifications to do business) where such properties are
owned or leased or such business is currently conducted. The copies of the
charter documents of the General Partner as amended to date and certified by
the Secretary of State of each relevant jurisdiction, and of the by-laws of the
General Partner, as amended to date, certified by its Secretary, and heretofore
delivered to Purchaser, have been duly adopted and are current, complete and
correct, no amendments thereto are pending, and the General Partner is not in
violation thereof. The General Partner is duly qualified to do business as a
professional corporation in the state of Texas and in such other jurisdictions
as are set forth on Section 4.2 of the Disclosure Schedule. The General
Partner is not required to be licensed or qualified to conduct its business or
own its properties in any other jurisdiction in which the failure to be so
qualified would have a material adverse effect on the business or operations of
the General Partner. All of the issued and outstanding capital stock or other
equity interests of the General Partner is owned beneficially and of record as
set forth in Section 4.2 of the Disclosure Schedule. The total authorized
capital stock of the General Partner is set forth on Section 4.2 of the
Disclosure Schedule.
(b) Limited Partner. The Limited Partner is a
corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware with full corporate power and authority to own or
lease its properties and to conduct its business in the manner and in the
places (including qualifications to do business) where such properties are
owned or leased or such business is currently conducted. The copies of the
charter documents of the Limited Partner as amended to date and certified by
the Secretary of State of each relevant jurisdiction, and of the by- laws of
the Limited Partner, as amended to date, certified by its Secretary, and
heretofore delivered to Purchaser, have been duly adopted and are current,
complete and correct, no amendments thereto are pending, and the Limited
Partner is not in violation thereof. The Limited Partner is duly qualified to
do business as a corporation in the state of Delaware and in such other
jurisdictions as are set forth on Section 4.2 of the Disclosure
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Schedule. The Limited Partner is not required to be licensed or qualified to
conduct its business or own its properties in any other jurisdiction in which
the failure to be so qualified would have a material adverse effect on the
business or operations of the Limited Partner. All of the issued and
outstanding capital stock or other equity interests of the Limited Partner is
owned beneficially and of record as set forth in Section 4.2 of the Disclosure
Schedule. The total authorized capital stock of the Limited Partner is set
forth on Section 4.2 of the Disclosure Schedule.
(c) Partnership. The Partnership is a partnership duly
organized and validly existing under the laws of the state of Delaware with
full partnership power and authority to own or lease its properties and to
conduct its business in the manner and in the places (including qualifications
to do business) where such properties are owned or leased or such business is
currently conducted. The copies of the certificate of limited partnership of
the Partnership as amended to date and certified by the Secretary of State of
each relevant jurisdiction, and of the Partnership agreement as amended to
date, certified by its Secretary, and heretofore delivered to Purchaser, have
been duly adopted and are current, complete and correct, no amendments thereto
are pending, and the Partnership is not in violation thereof. The Partnership
is not required to be licensed or qualified to conduct its business or own its
properties in any other jurisdiction in which the failure to be so qualified
would have a material adverse effect on the business or operations of the
Partnership. All of the issued and outstanding equity interests of the
Partnership is owned beneficially and of record as set forth in Section 4.2 of
the Disclosure Schedule.
4.3 Subsidiaries. The Company has no subsidiaries (as defined in
Section 9.12 hereof), owns no securities issued by any other business
organization or governmental authority, and has no direct or indirect interest
in or control over any corporation, partnership, joint venture or entity of any
kind except as listed in Section 4.3 of the Disclosure Schedule.
4.4 Authority; Noncontravention. The Partnership, General
Partner, Limited Partner and the Shareholders have full individual, partnership
and/or corporate power and authority or capacity, as applicable, (i) to enter
into (a) this Agreement and (b) each agreement, document and instrument to be
executed and delivered by him, it or them pursuant to or contemplated by this
Agreement, including, but not limited to, the Collateral Agreements, and (ii)
to carry out the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Partnership, General Partner, Limited Partner
and the Shareholders of this Agreement, the Collateral Agreements and each
such other agreement, document and instrument have been duly authorized by all
necessary action of the Partnership, General Partner and Limited Partner
including any required action of its respective owners, and no other action on
the part of the Partnership, General Partner, Limited Partner or its owners is
required in connection therewith. This Agreement, the Collateral Agreements
and each such agreement, document and instrument executed and delivered by the
Partnership, General Partner, Limited Partner and the Shareholders pursuant to
or in connection with this Agreement constitute valid and binding obligations
of the Partnership, General Partner, Limited Partner and the Shareholders
enforceable in accordance with their respective terms, subject to bankruptcy,
reorganization, insolvency and other similar laws affecting the enforcement of
creditors' rights in general and to general principles of equity (regardless of
whether considered in a proceeding in equity or an action at law).
The execution, delivery and performance by the Partnership, General
Partner, Limited Partner and the Shareholders of this Agreement, the Collateral
Agreements and each such agreement, document and instrument pursuant to or in
connection with this Agreement to which he or it is a party:
(a) do not and will not violate any provision of the
charter, by-laws or equivalent constituent documents of the Partnership,
General Partner or Limited Partner;
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(b) do not and will not violate in any respect any laws
of the United States or any state or other jurisdiction applicable to the
Partnership, General Partner, Limited Partner or the Shareholders or require
the Partnership, General Partner, Limited Partner or the Shareholders, except
as set forth in Section 4.4 of the Disclosure Schedule, to obtain any approval,
consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(c) do not and will not (a) result in a breach of, (b)
constitute a default under, (c) accelerate any obligation under, (d) give rise
to a right of termination of any indenture, loan or credit agreement or any
other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award, whether written or oral, to which the Partnership, General
Partner, Limited Partner or the Shareholders is a party or by which the
property of the Partnership, General Partner, Limited Partner or the
Shareholders is bound or affected, or (e) result in the creation or imposition
of any mortgage, pledge, lien, security interest or other charge or encumbrance
on any of the Acquired Assets, except to the extent that any of the foregoing:
(i) would not have an adverse effect on the business, operations, results of
operations, assets, condition (financial or other) or prospects of the
Partnership, General Partner or Limited Partner, or (ii) is subject to Section
3.6 hereof.
4.5 Status of Property.
(a) Real Property. The Acquired Assets do not include
any owned real estate.
(b) Leased Real Property. All of the real property
leased in connection with the Company dental business is identified in Section
4.5(b)(i) of the Disclosure Schedule (collectively referred to herein as the
"Leased Real Property"). Further:
(i) Leases. All of the leases of any of the
Leased Real Property (collectively, the "Leases") are listed
in Section 4.5(b)(i) of the Disclosure Schedule. The copies
of the Leases heretofore delivered or furnished to Purchaser
are complete, accurate, true and correct copies of each of the
Leases, including any amendments to such leases. With respect
to each of the Leases:
(A) each of the Leases is in full force
and effect on the terms set forth therein and has not
been modified, amended, or altered, in writing or
otherwise;
(B) to the Company's and Shareholders'
knowledge, all obligations of the landlord or lessor
under the Leases which have accrued have been
performed, no landlord or lessor is in default under
or in arrears in the payment of any sum or in the
performance of any obligation required of it under
any Lease, and no circumstance presently exists
which, with notice or the passage of time, or both,
would give rise to a default by the landlord or
lessor under any Lease, except for any default which
would not have a material adverse effect on the
business, operations, results of operations, assets,
condition (financial or other) or prospects of the
Company dental business;
(C) all obligations of the tenant or
lessee under the Leases which have accrued have been
performed, and the Company is not in default under or
in arrears in the payment of any sum or in the
performance of any material obligation required of it
under any Lease, and no circumstance presently exists
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which, with notice or the passage of time, or both,
would give rise to a default by the Company; and
(D) the Company and the Shareholders
have obtained the consent of each landlord or lessor
under any Lease whose consent is required in
connection with the transactions contemplated by this
Agreement and each other transaction referred to
herein or the collateral assignment of any Lease by
the Company or the Shareholders or its or their
assignees, except as set forth in Section
4.5(b)(i)(D) of the Disclosure Schedule.
(ii) Title and Description. The Company holds a
good, clear, marketable (if applicable), valid and enforceable
leasehold interest in the Leased Real Property leased by it
pursuant to the Leases, subject only to the right of reversion
of the landlords or lessors under such Leases, in all cases,
except as might otherwise be provided in the Leases, free and
clear of all other prior or subordinate interests, including,
without limitation, mortgages, deeds of trust, ground leases,
leases, subleases, security interests or similar encumbrances,
liens, assessments, tenancies, licenses, claims, rights of
first refusal, options, covenants, conditions, restrictions,
rights of way, easements, judgments or other encumbrances or
matters affecting title, and free of encroachments onto or off
of the Leased Real Property.
(iii) Compliance with Law; Government Approvals.
Neither the Company nor the Shareholders have received notice
from any municipal, state, federal or other governmental
authority of any violation of any zoning, building, fire,
water, use, health, or other law, ordinance, code, regulation,
license, permit or authorization issued in respect of any of
the Leased Real Property. Improvements located on or
constituting a part of the Leased Real Property and the
construction, installation, use and operation thereof
(including, without limitation, the construction,
installation, use and operation of any signs located thereon)
were completed and installed and are now in compliance with
all applicable municipal, state, federal or other governmental
laws, ordinances, codes, regulations, licenses, permits and
authorizations, including, without limitation, applicable
zoning, building, fire, water, use or health laws, ordinances,
codes, regulations, licenses, permits and authorizations, and
there are presently in effect all certificates of occupancy,
licenses, permits and authorizations required by law,
ordinance, code or regulation or by any governmental or
private authority having jurisdiction over any of the Leased
Real Property or any portion thereof, or the occupancy thereof
or any present use thereof (collectively, "Governmental
Approvals"), which are necessary or otherwise material to the
conduct of the Company dental business. The Leased Real
Property has at least the minimum access required by
applicable subdivision or similar law.
(iv) Real Property Taxes. Neither the Company nor
the Shareholders have received notice of any pending or
threatened reassessment of all or any portion of any of the
Leased Real Property, and the consummation of the transactions
contemplated by this Agreement or referred to herein will not
result in any such reassessment.
(c) Personal Property. Except as specifically disclosed
in Section 4.5(c) of the Disclosure Schedule, the Company represents and
warrants that the Partnership owns and has good, valid and (if applicable)
marketable title to all of the personal property used in connection with the
conduct of the Company dental business, and none of such personal property or
assets is subject to any mortgage, pledge, lien, conditional sale agreement,
restriction on transfer, stockholder or similar agreement, security
11
title, encumbrance or other charge except as specifically disclosed in said
schedule. The Base Balance Sheet reflects all personal property used in
connection with the conduct of the Company dental business, subject to
dispositions and additions in the ordinary course of business and consistent
with this Agreement. All of the tangible personal property of the Partnership
is in generally good operating condition and repair, normal wear and tear
excepted, has been well maintained, and conforms in all material respects with
all applicable ordinances, regulations and other laws.
(d) Transfer of Title. At the Closing, Purchaser will
receive good, valid and (if applicable) marketable title to the Acquired
Assets, free and clear of all liens, encumbrances, charges, restrictions on
transfer, stockholder or similar agreements, equities and other claims of every
kind except for the Liabilities.
4.6 Financial Statements; Undisclosed Liabilities.
(a) The Company and the Shareholders have previously
delivered to Purchaser the following financial statements, copies of which are
attached hereto as Section 4.6(a) of the Disclosure Schedule:
(i) Statements of assets and liabilities for the
General Partner for the fiscal years ended December 31, 1996
(herein the "Base Balance Sheet"), and December 31, 1995 and
statements of income, retained earnings and cash flows for the
years then ended based on the cash method of accounting,
certified by the General Partner;
(ii) Statement of assets and liabilities for the
General Partner for the fiscal quarter ended September 30,
1997, and a statement of income, retained earnings and cash
flows for the nine- month period then ended based on the cash
method of accounting, certified by the General Partner.
Said financial statements have been prepared by the General Partner from its
books and records, and present fairly in all respects the financial condition
of the General Partner at the dates of said statements and the results of its
operations for the periods covered thereby in accordance with the cash method
of accounting in the United States.
(b) As of the date of the Base Balance Sheet, there were
no liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown, relating to
the Company dental business, except liabilities (i) stated on the Base Balance
Sheet or the notes thereto, (ii) specifically disclosed in Section 4.6(b) of
the Disclosure Schedule furnished to Purchaser hereunder on the date hereof and
attached hereto, or (iii) incurred in the ordinary course of business
consistent with the terms of this Agreement subsequent to the date of the Base
Balance Sheet.
(c) As of the date hereof, there are no liabilities or
obligations of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown, relating to the Company dental
business, except liabilities (i) stated on the Base Balance Sheet or the notes
thereto, (ii) specifically disclosed in Section 4.6(c) of the Disclosure
Schedule furnished to Purchaser hereunder on the date hereof and attached
hereto, or (iii) incurred in the ordinary course of business consistent with
the terms of this Agreement subsequent to the date of the Base Balance Sheet.
12
4.7 Taxes.
(a) The Company and their predecessors have paid or
caused to be paid all federal, state, local, foreign, and other taxes,
including, without limitation, income taxes, estimated taxes, alternative
minimum taxes, excise taxes, sales taxes, use taxes, value-added taxes, gross
receipts taxes, franchise taxes, capital stock taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes, transfer taxes, windfall
profit taxes, environmental taxes and property taxes, whether or not measured
in whole or in part by net income and all deficiencies, and other additions to
tax, interest, fines, charges and penalties owed by it (collectively, "Taxes")
shown to be due on all tax returns required to be filed through the date
hereof, whether disputed or not.
(b) The Company and their predecessors have in accordance
with applicable law timely filed all federal, state, local and foreign tax
returns, information returns and reports required to be filed through the date
hereof, and all such returns and reports are true, correct and complete.
Complete and correct copies of all federal, state, local and foreign income tax
returns filed with respect to the Company and its predecessors for taxable
periods ended on or after December 31, 1992, have been previously provided to
Purchaser, together with any Internal Revenue Service or other governmental
examination reports and statements of deficiencies assessed or agreed to with
respect to said returns.
(c) Neither the Internal Revenue Service nor any other
governmental authority is now asserting (in a suit, action, proceeding,
investigation, claim or otherwise) or threatening to assert against the Company
or their predecessors any deficiency or claim for additional Taxes. No claim
has ever been made by an authority in a jurisdiction where the Company and its
predecessors do not file reports and returns that the Company or their
predecessors are or may be subject to taxation by that jurisdiction. There are
no security interests or liens on any of the assets of the Company that arose
in connection with any failure (or alleged failure) to pay any Tax. Neither
the Company nor their predecessors have entered into a closing agreement
pursuant to Section 7121 of the Internal Revenue Code of 1986, as amended, or
any predecessor statutes (the "Code").
(d) Except as set forth in Section 4.7(d) of the
Disclosure Schedule, there has not been during the past five years any audit of
any tax return filed by the Company or its predecessors, no audit of any tax
return of the Company or their predecessors in progress, and neither the
Company nor their predecessors have been notified by any tax authority that any
such audit is contemplated or pending. Except as set forth in Section 4.7(d)
of the Disclosure Schedule, no extension of time with respect to any date on
which a tax return was or is to be filed by the Company or their predecessors
is in force, and no waiver or agreement by any of the Company or their
predecessors is in force for the extension of time for the assessment or
collection of any Taxes.
(e) The Company and their predecessors have never been
(and have never had any liability for unpaid Taxes because they once were) a
member of an "affiliated group" (as defined in Section 1504(a) of the Code).
Neither the Company nor their predecessors have ever filed, or have ever been
required to file, a consolidated, combined or unitary tax return with any other
entity. Neither the Company nor their predecessors own or have ever owned a
direct or indirect interest in any trust, partnership, corporation or other
entity except as set forth in Section 4.7(e) of the Disclosure Schedule, and no
assets of the Company include an interest in any such entity. Neither the
Company nor their predecessors are parties to any tax sharing or similar
agreement.
(f) Except as set forth in Section 4.7(f) of the
Disclosure Schedule, the Company and their predecessors have treated all of
their workers as employees for purposes of federal, state, local and foreign
employment, social security, withholding, unemployment and all other pay-roll
related taxes
13
("Employment Taxes"). With respect to the persons shown on Section 4.7(f) of
the Disclosure Schedule, the classification of such workers as non-employees
for purposes of Employment Taxes is correct and no amount of Employment Taxes
or other additions to tax, interest, fines or penalties are or may be owed by
the Company with respect to such non-employee workers.
(g) Except as provided in Section 4.7(g) of the
Disclosure Schedule, the Base Balance Sheet reflects and includes adequate
charges for the payment in full of all Taxes relating to the Company dental
business for any and all periods (i) ending on or before the date the Base
Balance Sheet and (ii) ending subsequent to the date of the Base Balance Sheet
and through and including the Closing Date.
(h) Neither the Company nor their predecessor(s) is a
"foreign person" within the meaning of Section 1445 of the Code and Treasury
Regulations Section 1.1445-2.
(i) For purposes of this Agreement, all references to
sections of the Code shall include any predecessor provisions to such sections
and any similar provisions of federal, state, local or foreign law.
4.8 Collectibility of Accounts Receivable. To the Company's and
the Shareholders' knowledge, all of the accounts receivable of the Company
dental business (subject to contractual allowances consistent with the past
practices of the Company dental business) as described in Section 4.8 of the
Disclosure Schedule are reflected properly in the Company's books and records
and are valid and enforceable claims, are current and collectible and are not
subject to set off or counterclaim, provided that the foregoing representation
is not a guarantee of collectibility. Section 4.8 of the Disclosure Schedule
contains a complete and accurate summary of the amount of accounts receivable.
The Company does not have any accounts receivable or loans receivable from any
person, firm or corporation which is affiliated with the Company or from any
stockholder, director, officer or employee of the Company or any affiliate
thereof.
4.9 Absence of Certain Changes. Except as disclosed in Section
4.9 of the Disclosure Schedule, since the date of the Base Balance Sheet,
there has not been:
(a) Any adverse change in the properties, assets,
liabilities, business, operations, condition (financial or other), personnel,
or prospects of the Company dental business which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has been material;
(b) Any contingent liability relating to the Company
dental business as guarantor or otherwise with respect to the obligations of
others or any cancellation of any material debt or claim owing to, or waiver of
any material right of, the Company dental business;
(c) Any mortgage, encumbrance or lien placed on any of
the properties of the Company dental business which remains in effect on the
date hereof except for the Liabilities;
(d) Any material obligations or liability of any nature,
whether accrued, absolute, contingent or otherwise, known to be incurred by the
Company dental business other than obligations and liabilities incurred in the
ordinary course of business and otherwise consistent with the terms of this
Agreement;
14
(e) Any purchase, sale or other disposition, or any
agreement or other arrangements for the purchase, sale or other disposition, of
any of the properties or assets of the Company dental business other than in
the ordinary course of business;
(f) Any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting any of the properties,
assets or business of the Company dental business;
(g) Any declaration, setting aside or payment of any
dividend or distribution by the Company or the making of any other distribution
in respect of the capital stock or other equity interest of the Company or any
direct or indirect redemption, purchase or other acquisition by the Company of
its own capital stock or other equity interest except: (i) as described in
Section 4.9(g) of the Disclosure Schedule; and (ii) cash in excess of the
Required Cash Amount;
(h) Any labor trouble or claim of unfair labor practices
involving the Company dental business;
(i) Any change in the compensation (in the form of
salaries, wages, incentive arrangements or otherwise) or benefits payable by
the Company dental business to any officers, employees, agents, independent
contractors, dentists or dental professional corporations other than normal
merit increases in accordance with its usual practices, or any bonus payment or
arrangement made to or with any such person or entity; or any entering into any
employment, deferred compensation or other similar agreement (or any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement)) with any such person or entity;
(j) Any material change, or the obtaining of information
concerning a prospective change, with respect to any officers, management
employees or dentists (including professional corporations) of the Company or
involved in the Company dental business, any grant of any severance or
termination pay to any officer, employee, agent, independent contractor,
dentist or dental professional corporation of the Company or involved in the
Company dental business or any increase in benefits payable under any existing
severance or termination pay policies or employment agreement or relationship;
(k) Any payment or discharge of a material lien or
liability relating to the Company dental business which was not shown on the
Base Balance Sheet or incurred in the ordinary course of business thereafter;
(l) Any payment made or obligation or liability incurred
by the Company to, or any other transaction by the Company with, any of its
respective officers, directors, partners, stockholders, employees or
independent contractors (including dentists and dental professional
corporations), or any loans or advances made by the Company to any of its
respective officers, directors, partners, stockholders, employees or
independent contractors (including dentists and dental professional
corporations), except normal compensation and expense allowances consistent
with past practice;
(m) Any change in accounting methods or practices, credit
practices, collection policies or payment policies used by the Company
including, without limitation, any change in the discharge or recording of
accounts payable relative to past practices;
(n) Any material cancellation or loss of any material
right or asset, or waiver of any right, of the Company;
15
(o) Any material change in the Company's relationships
with suppliers, distributors, licensees, licensors, customers or others with
whom the Company or the Company dental business has business relationships
which would have an adverse effect on the Company or the Company dental
business, and neither the Company nor the Shareholders have knowledge of any
fact or contemplated event which may cause any such adverse change;
(p) Any alteration or change in the methods of operation
employed by the Company dental business other than in the ordinary course of
business;
(q) Any other material transaction relating to the
Company or the Company dental business other than transactions in the ordinary
course of business and consistent with past practices;
(r) Any amendment or termination of any material contract
with respect to the Company dental business to which the Company is a party;
(s) Any changes in the amount or scope of coverage of
insurance now carried by the Company; or
(t) Any agreement or understanding, whether in writing or
otherwise, by the Company or any other person that would result in any of the
transactions or events or require the Company to take any of the actions
specified in paragraphs (a) through (s) above.
4.10 Ordinary Course. Since the date of the Base Balance Sheet,
the Company has conducted the Company dental business only in the ordinary
course and in a manner consistent with prior practices.
4.11 INTENTIONALLY OMITTED.
4.12 Intellectual Property.
(a) The Company has exclusive ownership of trade secrets
(including, without limitation, customer lists, production processes and
inventions), and other proprietary rights, and a license to use all computer
software (collectively, "Intellectual Property"), used in the Company dental
business as presently conducted. The Company's rights in all of such
Intellectual Property are freely transferable. No representation or warranty
is made as to licensed software which is generally commercially available and
used in the ordinary course of business or with respect to Intellectual
Property which is not freely assignable at the date hereof. No proceedings
have been instituted, or are pending or threatened, which challenge the rights
of the Company in respect of any Intellectual Property, and to the best
knowledge of the Company and the Shareholders, no other person has or alleges
any rights in or to the Intellectual Property.
(b) All trademarks, service marks, trademark and service
▇▇▇▇ applications and registrations and registered copyrights related to the
conduct of the Company dental business as presently conducted or contemplated
to be conducted, are listed in Section 4.12(b) of the Disclosure Schedule.
(c) All licenses or other agreements under which the
Company is granted rights in Intellectual Property are listed in Section
4.12(c) of the Disclosure Schedule. All said licenses or other agreements are
in full force and effect, there is no default by the Company or the
Shareholders, or any other party thereto, and as provided in Section 4.12(a)
above, all rights thereunder are freely assignable.
16
(d) To the Company's and the Shareholders' knowledge, the
conduct of the Company dental business has not and does not infringe any
Intellectual Property of any other person. No proceeding charging either the
Company or the Shareholders with infringement of any adversely held
Intellectual Property has been filed or is threatened to be filed. There
exists no unexpired patent or patent application which includes claims that
would be infringed by or otherwise adversely affect the services, activities or
business of the Company dental business. The conduct of the Company dental
business does not involve the unauthorized use of any confidential information
or trade secrets of any person including, without limitation, any former
employer of any past or present employee. Neither the Company nor the
Shareholders, nor any of the Company's employees, has any agreements or
arrangements with any persons other than the Company related to confidential
information or trade secrets of such persons or restricting any such employee's
engagement in business activities of any nature, other than those relating to
patient confidentiality as required by law.
(e) As of the Closing, the Company will possess the valid
right to use the name "Press Family Dental Health Centers" and all similar
names and derivations thereof, and all related trademarks, trade names and
service marks used in its business. The Company's use of such names does not
infringe upon the rights of any other person or persons in Bexar County, Texas
and contiguous counties thereto.
4.13 Contracts.
(a) Except for contracts, commitments, plans, agreements
and licenses described in Section 4.13(a) of the Disclosure Schedule (true and
complete copies of which have been delivered to Purchaser), the Company is not
a party to or subject to:
(i) any plan or contract providing for bonuses,
pensions, options, stock purchases, deferred compensation,
retirement payments, profit sharing, collective bargaining or
the like, or any contract or agreement with any labor union;
(ii) any employment contract, or any contract for
services which requires the payment of more than $100,000
annually or which is not terminable within 30 days without
liability for any penalty or severance payment;
(iii) any contract or agreement for the purchase of
any commodity, material, equipment or service except purchase
orders in the ordinary course of business for less than $5,000
each, such orders not exceeding $50,000 in the aggregate;
(iv) any other contracts or agreements creating an
obligation or receivable of $50,000 or more with respect to
any such contract;
(v) any contract or agreement providing for the
purchase of all or substantially all of its requirements of a
particular product from a supplier;
(vi) any contract or agreement which by its terms
does not terminate or is not terminable without penalty within
one year after the date hereof;
(vii) any contract or agreement for the sale or
lease of its products not made in the ordinary course of
business;
(viii) any contract with any sales agent or
distributor;
17
(ix) any contract containing covenants limiting
the Company's or the Shareholders' freedom to compete in any
line of business or with any person or entity;
(x) any contract or agreement for the purchase of
any fixed asset for a price in excess of $50,000, whether or
not such purchase is in the ordinary course of business;
(xi) any license agreement (as licensor or
licensee) for a total consideration exceeding $50,000 for any
one such license;
(xii) any agreement involving a lease or license of
real property or personal property or any "capitalized" or
"financing" lease;
(xiii) any indenture, mortgage, promissory note,
loan agreement, guaranty or other agreement or commitment for
the borrowing of money and any related security agreement;
(xiv) any contract or agreement with any officer,
employee, director, or stockholder or with any persons or
organizations controlled by or affiliated with any of them;
(xv) any contract or agreement with any
governmental authority, insurance company, third- party fiscal
intermediary or carrier administering any Medicaid program of
any state, the Medicare program, any clinic or other
in-patient health care facility, dental or health maintenance
organization, preferred provider organization, self-insured
employer or other third-party payor of any kind or nature; or
(xvi) any power of attorney.
(b) All contracts, agreements, leases and instruments to
which the Company is a party and as are set forth in Section 4.13(a) of the
Disclosure Schedule are valid and are in full force and effect, and constitute
legal, valid and binding obligations of the Company and the other parties
thereto, enforceable in accordance with their respective terms, subject to
bankruptcy, reorganization, insolvency and other similar laws affecting the
enforcement of creditors' rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law). Neither the Company nor, to the Company's or the Shareholders'
knowledge, any other party to any contract, agreement, lease or instrument to
which either the Company is a party or any judgment, decree or order applicable
to either the Company or the Company dental business is in default in complying
with any provisions thereof, and no condition, event or facts exist which, with
notice, lapse of time or both, would constitute a default thereof on the part
of the Company or on the part of any other party thereto in any such case that
could have an adverse effect on the business or operations of the Company
dental business. Neither the Company nor the Shareholders is subject to or
bound by any agreement, judgment, decree or order which adversely affects the
business or operations of the Company dental business.
(c) Except as disclosed in Section 4.13(c) of the
Disclosure Schedule, there are no contracts, agreements, arrangements or
understandings (each, an "HCP Agreement"), with any dentist, dental assistant,
nurse, technician, or other health care provider (each a "Health Care
Provider"), in connection with the Company dental business or pursuant to which
the Company or the Shareholders receives revenues or compensation regarding the
provision of dental services to patients in connection with such business.
18
4.14 Litigation. Section 4.14 of the Disclosure Schedule sets
forth a detailed listing of all currently pending litigation and governmental
or administrative proceedings or investigations to which the Company or the
Shareholders is a party. Except for matters described in Section 4.14 of the
Disclosure Schedule, there are no claims, actions, suits or proceedings and
there is no litigation or governmental or administrative proceeding or
investigation pending or, to the Company's or the Shareholders' knowledge,
threatened against the Company, the Shareholders or the Company dental business
which may have an adverse effect on the business or operations of the Company
dental business or which could prevent or hinder the consummation of the
transactions contemplated by this Agreement or any other transaction
contemplated by or referred to herein. With respect to each matter set forth
therein, Section 4.14 of the Disclosure Schedule sets forth a description of
the forums for the matter, the parties thereto and the type and amount of
relief sought. Neither the Company, the Company dental business nor the
Shareholders is presently subject to any injunction, judgment, order or other
decree of any court.
Since January 1, 1994, neither the Company nor the Shareholders have
entered into or been subject to any judgment, consent decree, compliance order
or administrative order with respect to any insurance, consumer protection,
environmental or health and safety law, or received any request for
information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any such law.
Without limitation of the foregoing, except as set forth in Section
4.14 of the Disclosure Schedule, there are no pending or threatened malpractice
claims, Texas Regulatory Board investigations, suits, notices of intent to
institute arbitrations or proceedings, either administrative or judicial,
involving the Company, the Shareholders or the Company dental business
including, without limitation, any of the Health Care Providers.
4.15 Permits; Compliance with Laws; Licensing and Credentialing;
Health Care Providers.
(a) General Compliance. Except as set forth in Section
4.15(a) of the Disclosure Schedule, the Company dental business has all
franchises, authorizations, approvals, orders, consents, licenses,
certificates, permits, registrations, qualifications or other rights and
privileges (collectively "Permits") necessary to permit the ownership of
respective properties involved therein and the conduct of such business as the
same is presently conducted. A listing of such Permits is set forth in Section
4.15(a) of the Disclosure Schedule, and all such Permits are valid and in full
force and effect except to the extent the absence of any such Permit would not
have a material adverse effect on the business or operations of the Company
dental business. To the Company's and the Shareholders' knowledge, with
respect to Permits that are otherwise transferable, no such Permit is subject
to termination as a result of the performance of the Agreement or consummation
of the transactions contemplated hereby or referred to herein.
To the knowledge of the Company and the Shareholders, the
Company and the Company dental business is now and has heretofore been in
compliance with all applicable statutes, ordinances, orders, rules and
regulations (including, without limitation, OSHA and regulations thereunder and
all applicable environmental laws and regulations) promulgated by any federal,
state, municipal or other governmental authority which apply to the conduct of
the Company dental business, except for any such non-compliance or violation
that, individually or in the aggregate, would not have an adverse effect on the
business or operations of the Company dental business.
(b) Licensing and Credential Information. Each Health
Care Provider is duly licensed under the laws of the State of Texas, and, to
the Company's and the Shareholders' knowledge, each Health Care Provider has
complied in all respects with all laws, rules and regulations relating to the
rendering
19
of services including without limitation OSHA. Except as set forth in Section
4.15(b) of the Disclosure Schedule, to the Company's and the Shareholders'
knowledge, no Health Care Provider since January 1, 1992: (i) has had his or
her professional license, Drug Enforcement Agency number, Medicare or Medicaid
provider status, or staff privileges at any hospital or dental facility
suspended, relinquished, terminated or revoked, (ii) has been reprimanded,
sanctioned or disciplined by any licensing board or any federal, state or local
society, agency, regulatory body, governmental authority, hospital, third-party
payor or specialty board; or (iii) has had a final judgment or settlement
entered against him or her in connection with a malpractice or similar action.
The names of the Health Care Providers who provide services in
connection with the Company dental business are set forth in Section 4.15(b) of
the Disclosure Schedule. To the best of the Company's and the Shareholders'
knowledge, all of the employed and engaged Health Care Providers are in good
physical and mental health and do not suffer from any illnesses or disabilities
which could prevent any of them from fulfilling their responsibilities under
the respective contracts, agreements or understandings with the Company.
Except as set forth in Section 4.15(b) of the Disclosure Schedule, to the best
of the Company's and the Shareholders' knowledge, none of the employed and
engaged Health Care Providers uses or abuses any controlled substances at any
time or is under the influence of alcohol or is affected by the use of alcohol
during the time period required to perform his or her duties and obligations
under any contracts, agreements or understandings with the Company.
(c) Medicare. The Company dental business does not
involve and has never involved patients covered by or arrangements with
Medicare.
(d) Other. To the Company's and the Shareholders'
knowledge, the Company dental business is not required to make filings under
any insurance holding company or similar state statute, or to be licensed or
authorized as an insurance holding company in any jurisdiction in order to
conduct its business as presently conducted. The dental plan services and
related products offered and provided by the Company dental business have been
and are offered and provided in compliance with the requirements of all
relevant laws and regulations, in each case, with such exceptions, individually
or in the aggregate, as would not have an adverse effect on the business,
operations, assets, condition (financial or other) or prospects of such
business, and neither the Company nor the Shareholders has received any
notification from any governmental regulatory authority to the effect that any
Permit from such regulatory authority is needed to be obtained by it in order
to conducts its business.
4.16 Insurance. The physical properties and assets comprising the
Acquired Assets are insured to the extent disclosed in Section 4.16 of the
Disclosure Schedule, and all insurance policies, binders and arrangements
relating to the Company dental business are disclosed in said schedule. Said
insurance policies and arrangements are in full force and effect, all premiums
with respect thereto are currently paid, and the Company is in compliance in
all respects with the terms thereof. Except as disclosed in Section 4.16 of
the Disclosure Schedule, (i) there is no default with respect to any such
policy or binder, nor has there been any failure to give any notice or present
any claim under any such policy or binder in a timely fashion or in the manner
or detail required by the policy or binder, except for any of the foregoing
that would not, individually or in the aggregate, have an adverse effect on the
Company dental business and (ii) all said insurance policies will be in full
force and effect after giving effect to the transactions contemplated by this
Agreement and the transactions referred to herein.
4.17 Finder's Fees. Neither the Company nor the Shareholders have
incurred or become liable for any broker's commission, or finder's fee or
investment banker's fee relating to or in connection with the transactions
contemplated by this Agreement or the transactions referred to herein.
20
4.18 Transactions with Interested Persons. Except as set forth in
Section 4.18 of the Disclosure Schedule, no present or former supervisory
employee, officer, director, stockholder or independent contractor (including
any dentist or professional corporation) and no affiliate (as defined in
Section 9.12(a)) of any such person, is currently a party to any transaction
with either the Company or the Shareholders, including, without limitation, any
contract, agreement or other arrangement providing for the employment of, loan
to or from, furnishing of services by or to, rental of real or personal
property to or from, or otherwise requiring payments to any such person, and to
the best knowledge of the Company and the Shareholders, no such person 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 the Company dental business, or any organization
which has a contract or arrangement with the Company dental business, provided
that no representation shall be deemed made with respect to the provision of
dental services by any former employee or independent contractor. There are no
obligations or commitments to, and no income reflected in the financial
statements referred to in Section 4.6 has been derived from, any affiliate of
the Company or the Shareholders, and, following the Closing, Purchaser shall
not have any obligation of any kind or description to any such affiliate unless
such obligation is a Liability as described in Section 1.2 above.
4.19 Employee Benefit Programs.
Section 4.19 of the Disclosure Schedule sets forth all employee
benefit plans as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained by the Company under
which the Company has any present or future obligations or liability (the
"Benefit Plans"). The Company does not sponsor nor participate in any "defined
benefit plan" as defined in section 3(35) of ERISA or any "multiemployer plan"
as defined in Section 3(37) of ERISA or any "multiemployer plan" as defined in
Section 3(37) of ERISA.
To the best knowledge of the Company and the Shareholders: (i) each
Benefit Plan which is an "employee pension benefit plan" as defined in Section
3(2) of ERISA has received a favorable determination letter from the Internal
Revenue Service; (ii) all of the Benefit Plans have been maintained and
administered, in all material respects, in accordance with their terms and the
applicable provisions of ERISA and the Code; (iii) no facts exist which would
adversely affect the qualified status of any of the Benefit Plans; (iv) no
prohibited transaction under ERISA has occurred under any of the Benefit Plans
for which there exists neither a statutory nor a regulatory exception and which
would result in any material liability to the Buyer; (v) all contributions
required under the Benefit Plans have been made, and all contributions made to
or accrued with respect to all Benefit Plans are deductible under Section 404
or 162 of the Code; (vi) no facts exist which could result in a material
increase in premium costs of the Benefit Plans for which benefits are insured
or a material increase in benefit costs of Benefit Plans which provide
self-insured benefits; and (vii) no Benefit Plan provides (or has any
obligation or commitment to provide) health, medical, disability, life or other
similar benefits with respect to any current or former employees (or any
beneficiary thereof) of the Company beyond their retirement or other
termination of service (other than coverage mandated by Title I, Subtitle B,
Part 6 of ERISA, which coverage is fully paid by the former employee or his
dependents). Other than claims for benefits submitted by participants or
beneficiaries or appeals from denial thereof, there is no litigation, legal
action, suit, investigation, claim, counterclaim or proceeding pending or, to
the best knowledge of the Company or the Shareholders, threatened against any
Benefit Plan.
4.20 Environmental Matters. To the Company's and the Shareholders'
knowledge, (i) the Company has no liability under, and has never violated in
any material respect, any Environmental Law (as defined below); (ii) the
Company and each property owned, operated, leased, or used in connection with
the Company dental business, and any facilities and operations thereon are
presently in compliance
21
in all material respects with all applicable Environmental Laws; (iii) the
Company has never entered into or been subject to any judgment, consent decree,
compliance order, or administrative order with respect to any environmental or
health and safety matter or received any request for information, notice,
demand letter, administrative inquiry, or formal or informal complaint or claim
with respect to any environmental or health and safety matter or the
enforcement of any Environmental Law; and (iv) none of the items enumerated in
clause (iii) of this paragraph will be forthcoming. For purposes of this
Section 4.20, "Environmental Law" shall mean any environmental or
health-and-safety-related law, regulation, rule, ordinance, or by-law at the
federal, state, or local level, whether existing as of the date hereof, or
subsequently enacted.
4.21 List of Certain Employees and Suppliers. Section 4.21 of the
Disclosure Schedule lists all managers, employees, consultants and independent
contractors (including dentists and related professional corporations) of the
Company dental business who, individually, have received for the fiscal year
ended December 31, 1996, or are scheduled to receive for the fiscal year ended
December 31, 1997, compensation or payments in excess of $100,000. In each
case, such schedule includes the current job title and aggregate annual
compensation of each such individual. Section 4.21 of the Disclosure Schedule
also lists all suppliers to whom the Company dental business made payments
aggregating $100,000 or more during the fiscal year ended December 31, 1996,
showing, with respect to each such supplier, the name, address and dollar
volume involved. To the knowledge of the Company and the Shareholders, no
supplier has any plan or intention to terminate or reduce its business with the
Company dental business or to materially and adversely modify its relationship
therewith.
4.22 Employees; Labor Matters. The Company dental business (i)
employs approximately 78 full-time non- dentist employees and 3 part-time
non-dentist employees, (ii) employs approximately 13_ dentists (all dentists
are employed pursuant to a written agreement between the Company and the
dentist) and (iii) generally enjoys a good employer-employee relationship. The
Company is not delinquent in payments to any of its employees or dentists for
any wages, salaries, commissions, bonuses or other direct compensation for any
services performed for it to the date hereof or amounts required to be
reimbursed to such employees. Upon termination of the employment of any of
said employees or dentists, no severance or other payments (including without
limitation payments required by the Workers' Adjustment, Retraining, and
Notification Act) will become due.
Except as set forth in Section 4.22 of the Disclosure
Schedule, the Company dental business has no policy, practice, plan or program
of paying severance pay or any form of severance compensation in connection
with the termination of employment or services. The Company is in compliance
in all material respects with all applicable laws and regulations respecting
labor, employment, fair employment practices, terms and conditions of
employment, and wages and hours. Except as set forth in Section 4.22 of the
Disclosure Schedule, there are no, and within the last three years there have
not been, any written or otherwise alleged charges of employment discrimination
or unfair labor practices. The Company is, and at all times since November 6,
1986 has been, in compliance in all material respects with the requirements of
the Immigration Reform Control Act of 1986.
Except as set forth in Section 4.22 of the Disclosure
Schedule, there are no changes pending or, of which the Company and the
Shareholders have knowledge, threatened with respect to (including, without
limitation, resignation of) the senior management, key supervisory personnel or
dentists of the Company dental business, nor has the Company or the
Shareholders received any notice or information concerning any prospective
change with respect to such senior management or key supervisory personnel.
22
4.23 Material Relationships and Government Contracts.
(a) Except as set forth in Section 4.23(a) of the
Disclosure Schedule, to the best knowledge of the Company and the Shareholders,
the relationships of the Company dental business with its customers, Health
Care Providers and the parties to the contracts referred to in Section
4.13(a)(xv) are good commercial working relationships. To the best knowledge
of the Company and the Shareholders, no Health Care Provider or dental health
maintenance organization ("DHMO") with which the Company dental business does
business has any plan or intention to terminate, to cancel or otherwise
materially and adversely modify its relationship with such business or to
decrease materially or limit its purchase of the services of such business.
Except as set forth in Section 4.23(a) of the Disclosure Schedule, no DHMO
relationship or material contract or other material business relationship of
the Company dental business has been terminated in the past year.
(b) The Company has no contracts or subcontracts with any
government (including any municipal government) or governmental agency or
activity, and the Company is eligible to submit bids to any DHMO.
4.24 Disclosure. The representations, warranties and statements
contained in this Agreement and in the certificates, exhibits and schedules
delivered by the Company and the Shareholders pursuant to this Agreement,
together with all materials provided by the Company and the Shareholders or
their agents with respect to the Company dental business, do not contain any
untrue statement of a material fact and, when taken together, do not omit to
state a material fact required to be stated therein or necessary in order to
make such representations, warranties or statements not misleading in light of
the circumstances under which they were made. To the Company's and the
Shareholders' knowledge, there are no facts known to the Company or the
Shareholders which presently or may in the future have a material adverse
effect on the business or operations of the Company dental business which has
not been specifically disclosed herein or in a Schedule furnished herewith.
4.25 Company Records. The record books of the Company accurately
record all action taken by its respective stockholders, board of directors,
equity owners, governing bodies and committees. The copies of the records of
the Company provided to Purchaser for review, are true and complete copies of
the originals of such documents.
4.26 List of Directors and Officers. Section 4.26 of the
Disclosure Schedule contains a true and complete list of all current directors
and officers of the Company.
4.27 Transfer of Equity Interests. No holder of stock or other
equity interest of the Company has at any time transferred any of such
instruments to any employee or professional independent contractor of the
Company, which transfer constituted or could be viewed as compensation for
services rendered to the Company by said employee or professional independent
contractor.
4.28 Entire Business Assets. The Company and the Shareholders
hereby represent and warrant that the Acquired Assets comprise all of the
assets, including all personal property, used in the conduct of the Company
dental business as heretofore conducted by the Company except as contemplated
by Sections 1.1(b) and 3.6 and comprise all of the assets necessary for
Purchaser to operate such business following the date hereof.
4.29 Additional Financial Representations.
(a) Cash on Hand. As of and immediately prior to the
Closing, the Company has cash on hand of not less than the Required Cash
Amount.
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(b) Equipment Leases. As of the Closing, amounts due or
that may become due under all equipment leases of the Company, as set forth in
Section 4.29(b) of the Disclosure Schedule, together with the amount of
equipment lease obligations the payment of which has been guaranteed by the
Company, shall be no more than $49,000.00.
(c) Company's Accounts Receivable. As of the Closing,
the Company's aggregate accounts receivable shall be at least equal to the
average of the Company's accounts receivable as of the last day of July 1997,
August 1997 and September 1997, all of which have been calculated by the
Company in accordance with the cash method of accounting, consistently applied.
(d) Company's Trade Payable. As of the Closing, none of
the trade payables of the Company are past due unless such trade payables are
being contested in good faith. For purposes of this representation, a payable
shall not be deemed to be past due if the date of the invoice is not more than
thirty (30) days old as of the Closing.
(e) International Bank of Commerce Indebtedness. As of
the Closing, the Company's total liability to International Bank of Commerce,
San Antonio, Texas, shall be no more than $59,000.00.
4.30 Investment Representations. The Partnership, in connection
with its acquisition of the Monarch Common Stock, represents that it is an
"accredited investor" as such term is defined in Rule 501 under the Securities
Act of 1933, as amended (the "Securities Act"). The Partnership represents to
the Purchaser that it is acquiring the Monarch Common Stock for its own
account, for investment purposes only and not with a view to, or any present
intention of, effecting a distribution of such securities or any part thereof,
except pursuant to a registration statement or an exemption available under
applicable securities laws or in connection with the dissolution of the
Partnership or a distribution paid to its partners. In the event of the
transfer of the Monarch Common Stock in connection with such dissolution or
distribution, the Partnership agrees that it shall be a condition to such
transfer that each partner as to itself shall have made representations and
warranties to Purchaser substantially similar to those made by the Partnership
in this Section 4.30 or such other representations and warranties as are
reasonably satisfactory to Monarch and its counsel.
The Partnership acknowledges that the Monarch Common Stock has not
been registered under the Securities Act or the securities laws of any state or
other jurisdiction and cannot be disposed of unless it is subsequently
registered under the Securities Act and any applicable state laws or exemption
from such registration is available. The Partnership represents and warrants
that it has such knowledge and experience in financial and business matters,
that it is capable of evaluating the merits and risks of the investment
contemplated by this Agreement and the transactions contemplated hereby and the
transactions referred to herein and making an informed investment decision with
respect thereto. The Partnership further represents and warrants that it has
received or had access to all information that it considers necessary or
advisable to enable it to make an informed decision to acquire the Monarch
Common Stock, and the Partnership has had an opportunity to ask questions of
and receive answers from Monarch concerning the terms and conditions of this
investment, and all such questions, if any, have been answered to the full
satisfaction of the Partnership.
The Partnership and the General Partner and Limited Partner
acknowledge and agree that a legend substantially in accordance with the
following shall be typed on each certificate evidencing shares of the Monarch
Common Stock issued hereunder:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE
24
SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT
TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2) PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES AND (3) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS.
4.31 Disclaimer of Warranties; Limitation of Liability. EXCEPT FOR
THE EXPRESS WARRANTIES GIVEN BY THE COMPANY AND THE SHAREHOLDERS IN THIS
AGREEMENT OR IN ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT EXECUTED BY THE
COMPANY OR THE SHAREHOLDERS PURSUANT TO THIS AGREEMENT, THE COMPANY AND THE
SHAREHOLDERS HEREBY DISCLAIM ANY AND ALL EXPRESS AND IMPLIED REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COMPANY OR THE COMPANY DENTAL BUSINESS.
Notwithstanding any provision of this Agreement to the contrary, neither the
Company nor the Shareholders shall incur any liability to the Purchaser for any
representation or warranty contained in this Agreement, including the
documents, instruments and agreements to be executed and/or delivered pursuant
hereto, which is false, misleading or untrue as of the date hereof or as of the
closing date, if the Purchaser or Monarch had actual knowledge of such false,
misleading or untrue representation or warranty, and failed to notify the
Company in writing that it had such actual knowledge on or before the Closing
date.
ARTICLE 5. COVENANTS OF THE COMPANY.
5.1 Making of Covenants and Agreements. The Company and the
Shareholders hereby make the covenants and agreements as set forth in this
Article 5 for the period from and after the Closing.
5.2 Cooperation. The Company and the Shareholders shall cooperate
with all reasonable requests of Purchaser and any of its representatives and
agents to more effectively consummate the transactions contemplated hereby and
the transactions referred to herein.
5.3 Consents. The Company and the Shareholders shall use their
respective best efforts, respectively obtain any and all consents,
authorizations and approvals necessary in connection with the consummation of
the transactions contemplated hereby or referred to herein.
5.4 INTENTIONALLY OMITTED.
5.5 Net Worth. The Company and the Shareholders shall maintain a
consolidated net worth of not less than $1 million through October 31, 2000;
provided, however, that in the event any claim for indemnification is held over
thereafter in accordance with Article 8, then such net worth shall be
maintained after such date in an amount equal to the lesser of $1 million or
the amount of such claim.
5.6. No Successor Liability. At all times from and after the
Closing, the Company and the Shareholders, and all of their respective agents,
representatives and employees shall (a) not in any way represent that Purchaser
is the successor partnership of the Company and (b) take all actions necessary
to affirm to inquiring third parties that Purchaser is an independent entity
not associated in any way with the Company.
5.7 Payment of Obligations. Subsequent to the Closing, the
Company, the Shareholders and their affiliates shall pay all of the Excluded
Liabilities in the ordinary course of business as they become due.
25
5.8 Collection of Assets. Subsequent to the Closing, Purchaser
and its assignees shall have the right and authority to collect all receivables
and other items transferred and assigned by the Company hereunder and to
endorse with the name of the Company or any of its affiliates any checks
received on account of such receivables or other items, and the Company agrees
that it will promptly transfer or deliver to Purchaser and its assignees from
time to time, any cash or other property that it may receive on or after
November 12, 1997 with respect to any claims, contracts, licenses, leases,
commitments, sales orders, purchase orders, receivables of any character or any
other items included in the assets transferred to Purchaser pursuant to this
Agreement.
5.9 Availability of Records. After the Closing, the Company and
the Shareholders shall make available to Purchaser as reasonably requested by
Purchaser in connection with its business purposes or by any taxing authority,
and at Purchaser's expense, any and all information, records or documents
relating to the Company dental business conducted prior to the Closing and
related personnel retained by it, in respect of periods prior to Closing and
shall also make available to Purchaser and its assignees, as reasonably
requested by Purchaser, personnel responsible for preparing or maintaining
information, records and documents, both in connection with tax matters as well
as litigation. The Company and the Shareholders shall preserve all such
information, records and documents until the later of six (6) years after the
Closing or the expiration of all statutes of limitations or extensions thereof.
Prior to destroying any records related to the Company dental business
conducted prior to the Closing, the Company and the Shareholders shall notify
Purchaser of its intent to destroy such records and will permit Purchaser to
retain any such records if it desires to do so. The Company and the
Shareholders agree to hold all information relating to the Company dental
business in strict confidence from and after the Closing unless disclosure is
required by law, court order or other governmental authority.
5.10 Use of Name. On or promptly following the date of the
Closing, the Company shall file any documents required to withdraw its use of
the name "Press Family Dental" or any variant thereof or related acronym and
thereafter the Company shall refrain from any use of such trade names or any
associated logos.
5.11 Payment of Certain Liabilities. The Company and the
Shareholders covenant and agree to promptly reimburse Purchaser for any
payments Purchaser may be required to make for any liabilities not specifically
assumed by Purchaser under this Agreement.
5.12 Certificate of No Tax Due. Within thirty (30) days following
the Closing date, the Company shall obtain from the Texas Comptroller and
deliver to Purchaser a "Certificate of No Tax Due" issued by the Texas
Comptroller stating that the Company has no outstanding state tax liabilities
or obligations as of the Closing date.
ARTICLE 6. COVENANTS OF PURCHASER.
6.1 Making of Covenants and Agreements. Purchaser hereby makes
the covenants and agreements set forth in this Article 6.
6.2 Cooperation. Purchaser shall cooperate with all reasonable
requests of the Company and its representatives and agents to more effectively
consummate the transactions contemplated hereby or the transactions referred to
herein.
6.3 Consents. Purchaser shall assist the Company and the
Shareholders in obtaining any and all consents, authorizations and approvals
necessary in connection with the consummation of the transactions contemplated
hereby or referred to herein.
26
6.4 INTENTIONALLY OMITTED.
ARTICLE 7. SURVIVAL OF REPRESENTATIONS, WARRANTIES, ARRANGEMENTS,
COVENANTS AND OBLIGATIONS.
All representations, warranties, agreements, covenants and obligations
herein or in any schedule, exhibit or certificate delivered by any party to the
other party incident to the transactions contemplated hereby are material,
shall be deemed to have been relied upon by the other party and shall survive
the Closing regardless of any investigation and shall not merge in the
performance of any obligation by either party hereto, subject to the provisions
of Article 8 hereof.
ARTICLE 8. INDEMNIFICATION.
8.1 Indemnification by the Company and the Shareholders. The
Company and the Shareholders, jointly and severally, on behalf of their
successors, executors, administrators, estate, heirs and assigns (collectively,
for purposes of this Article 8, the "Companies"), agree to defend, indemnify
and hold Purchaser, all subsidiaries and affiliates of any of the foregoing
(including without limitation stockholders of any of the foregoing (other than
the Companies) and persons serving as officers, directors, partners, employees
or agents of Purchaser, or such subsidiaries or affiliates thereof (in each
case, other than the Companies)) (individually a "Purchaser Indemnified Party"
and collectively the "Purchaser Indemnified Parties"), harmless from and
against any and all damages, liabilities, losses, taxes, fines, penalties,
costs, and expenses (including, without limitation, reasonable fees of counsel)
of any kind or nature whatsoever ("Claims") (whether or not arising out of
third-party claims and including all amounts paid in investigation, defense or
settlement of the foregoing) which may be sustained or suffered by any such
Purchaser Indemnified Party (a "Loss" or "Losses"), based upon, arising out of,
by reason of or otherwise in respect of or in connection with:
(a) any inaccuracy in or breach of any representation or
warranty made by the Company or the Shareholders in this Agreement, or in any
schedule, exhibit or certificate delivered by or on behalf of the Company or
the Shareholders as part of or pursuant to this Agreement, or any claim, action
or proceeding asserted, instituted or arising out of any matter or thing
covered by such representations or warranties (collectively, "Warranty
Claims");
(b) any breach of any covenant or agreement made by or on
behalf of the Company or the Shareholders in this Agreement, or in any
Schedule, Exhibit or certificate delivered by or on behalf of the Company or
the Shareholders as part of or pursuant to this Agreement;
(c) any liability of the Company for Taxes arising from
an event or transaction prior to the Closing or as a result of the Closing; or
(d) any claim arising out of or relating to the Company's
or the Shareholders' ownership, control or management of the Company's assets
prior to the Closing, whether any such claims are asserted prior to or after
the Closing other than claims relating to the Liabilities.
The rights of Purchaser Indemnified Parties to recover indemnification
in respect of any occurrence referred to in either of clauses (b), (c) or (d)
of this Section 8.1 shall not be limited by the fact that such occurrence may
not constitute an inaccuracy in or breach of any representation or warranty
referred to in clause (a) of this Section 8.1.
27
8.2 Limitations on Indemnification by the Company and the
Shareholders.
(a) The right of Purchaser Indemnified Parties to
indemnification under Section 8.1 shall be subject to the following provisions:
(i) Indemnification with respect to Warranty Claims
(other than any such claims arising under Section 4.29 hereof)
shall expire twenty-four (24) months after the Closing;
provided, however, that the limitation of this clause (i)
shall not apply to Warranty Claims involving fraud,
intentional misrepresentation, title to the Acquired Assets or
Taxes, for which the period for making such claims shall
expire on the date which is six (6) months after the
termination of the applicable statute of limitations relating
thereto. If prior to the relevant date of expiration, a
specific set of facts shall have become known which may
constitute or give rise to any Warranty Claim as to which
indemnity may be payable and a Purchaser Indemnified Party
shall have given notice of such facts to the Company or the
Shareholders, then the right to indemnification with respect
thereto shall remain in effect without regard to when such
matter shall have been finally determined and disposed of,
according to the date on which notice of the applicable claim
is given.
(ii) No indemnification shall be payable with respect
to Warranty Claims (but expressly excluding any such claims
involving fraud, intentional misrepresentation, title to the
Acquired Assets or Taxes or any other Warranty Claim arising
under Section 4.29 hereof) to Purchaser Indemnified Parties
unless the total of all Warranty Claims shall exceed TWENTY
THOUSAND DOLLARS ($20,000) in the aggregate, whereupon the
full amount of such claims shall be recoverable in accordance
with the terms hereof.
(iii) The Company and the Shareholders shall not be
obligated to indemnify Purchaser Indemnified Parties for
Warranty Claims (but expressly excluding any such claims
arising under Section 4.29 hereof and other claims involving
fraud, intentional misrepresentations, title to the Acquired
Assets or Taxes) after the cumulative amount of all amounts
paid by the Company and the Shareholders to Purchaser
Indemnified Parties with respect thereto exceeds ONE MILLION
DOLLARS ($1,000,000).
(vi) The limitations herein with respect to certain
Warranty Claims shall not limit the rights of any Purchaser
Indemnified Party with respect to any other claims arising
under provisions of Section 8.1.
(b) In the event any claim for Indemnification hereunder
arises under more than one provision of Section 8.1, and as such may be subject
to limitations pursuant to this Section 8.2 if deemed to arise under a
particular provision but not if deemed to arise under a different provision
(e.g., a matter constituting both a breach of a representation and a breach of
a covenant), then the claim shall be deemed to arise under the provision to
which no restrictions or the least restrictive provisions apply.
(c) Indemnification pursuant to Section 8.1 is the exclusive
remedy of Purchaser Indemnified Parties against the Company and the
Shareholders for matters arising out of the representations and warranties of
the Company and the Shareholders set forth in this Agreement and the Disclosure
Schedule hereto and certificates delivered in connection herewith after the
Closing.
(d) The amount of any Losses suffered, sustained or incurred
by Purchaser Indemnified Parties or required to be paid by the Company and the
Shareholders shall be reduced by the amount of
28
any insurance proceeds and other amounts paid to such Purchaser Indemnified
Parties by any Person (and the Shareholders) not a party to this Agreement.
8.3 Indemnification by Purchaser. Purchaser agrees to defend,
indemnify and hold the Company and the Shareholders and the Shareholders' heirs
(individually a "Seller Indemnified Party" and collectively the "Seller
Indemnified Parties") harmless from and against any and all Claims, whether or
not arising out of third-party claims, and including all amounts paid in
respect of Losses (as defined in Section 8.1 hereof) based upon, arising out
of, by reason of or otherwise in respect of or in connection with (a) any
inaccuracy in or breach of any representation or warranty made by Purchaser in
this Agreement or in any schedule, exhibit or certificate delivered by
Purchaser as part of or pursuant to this Agreement, or any claim, action or
proceeding asserted, instituted or arising out of any matter or thing covered
by such representations or warranties (collectively "Seller Warranty Claims");
(b) any breach of any covenant or agreement made by Purchaser in this
Agreement, or in any schedule, exhibit or certificate, delivered by Purchaser
as part of or pursuant to this Agreement; or (c) any claim based on a Liability
or a guaranty of a Liability (such claims under clauses (a), (b) and (c) being
hereinafter collectively referred to as "Seller Indemnifiable Claims"). The
rights of Seller Indemnified Parties to recover indemnification in respect of
any occurrence referred to in clause (b) of this Section 8.3 shall not be
limited by the fact that such occurrence may not constitute an inaccuracy in or
breach of any representation or warranty referred to in clause (a) of this
Section 8.3.
8.4 Limitations on Indemnification by Purchaser.
(a) The right of Seller Indemnified Parties to
indemnification under Section 8.3 shall be subject to the following provisions:
(i) Indemnification with respect to Seller
Warranty Claims shall expire twenty-four (24) months after the
Closing; provided, however, that the limitation of this clause
(i) shall not apply to Seller Warranty Claims involving fraud
or intentional misrepresentation, for which the period for
making such claims shall expire on the date which is six (6)
months after the termination of the applicable statute of
limitations relating thereto. If prior to the relevant date
of expiration a specific state of facts shall have become
known which may constitute or give rise to any Seller Warranty
Claim as to which indemnity may be payable and a Seller
Indemnified Party shall have given notice of such facts to
Purchaser, then the right to indemnification with respect
thereto shall remain in effect without regard to when such
matter shall have been finally determined and disposed of,
according to the date on which notice of the applicable claim
is given.
(ii) No indemnification shall be payable with
respect to Seller Warranty Claims (but expressly excluding any
such claims involving fraud or intentional misrepresentation
or Liabilities) to Seller Indemnified Parties unless the total
of all Seller Warranty Claims shall exceed TWENTY THOUSAND
DOLLARS ($20,000) in the aggregate, whereupon the full amount
of such claims in excess of such amount shall be recoverable
in accordance with the terms hereof.
(iii) Purchaser shall not be obligated to indemnify
Seller Indemnified Parties for Seller Warranty Claims (but
expressly excluding any such claims involving fraud or
intentional misrepresentation) after the cumulative amount of
all amounts paid by Purchaser to Seller Indemnified Parties
with respect thereto exceeds ONE MILLION DOLLARS ($1,000,000).
29
(iv) The limitations herein with respect to
certain Seller Warranty Claims shall not limit the rights of
any Seller Indemnified Party with respect to any other claims
arising under clause (b) of Section 8.4.
(b) In the event any claim for Indemnification hereunder
arises under more than one provision of Section 8.3, and as such may be subject
to limitations pursuant to this Section 8.4 if deemed to arise under a
particular provision but not if deemed to arise under a different provision
(e.g., a matter constituting both a breach of a representation and a breach of
a covenant), then the claim shall be deemed to arise under the provision to
which no restrictions or the least restrictive provisions apply.
(c) Indemnification pursuant to Section 8.3 is the sole
and exclusive remedy of Seller Indemnified Parties against Purchaser for
matters arising out of the representations and warranties of Purchaser set
forth in this Agreement and the Disclosure Schedule hereto and certificates
delivered in connection herewith after the Closing.
(d) The amount of any Losses suffered, sustained or
incurred by Seller Indemnified Parties or required to be paid by Purchaser
shall be reduced by the amount of any insurance proceeds and other amounts paid
to such Seller Indemnified Parties by any Person not a party to this Agreement.
8.5 Notice: Defense of Claims.
(a) Promptly after receipt by an indemnified party of
notice of any third-party or other claim, liability or expense to which the
indemnification obligations hereunder would apply, including in connection with
any governmental, employer or malpractice related proceeding, the indemnified
party shall give notice thereof in writing to the indemnifying party or
parties, but the omission to so notify the indemnifying party or parties
promptly will not relieve the indemnifying party or parties from any liability
except to the extent that the indemnifying party or parties shall have been
materially prejudiced as a result of the failure or delay in giving such
notice. Such notice shall state the information then available regarding the
amount and nature of such claim, liability or expense and shall specify the
provision or provisions of this Agreement under which the liability or
obligation is asserted.
(b) In the case of any third-party claim, if, within
twenty (20) days after receiving the notice described in the preceding
paragraph, the indemnifying party or parties (i) give written notice to the
indemnified party or parties stating that they intend to defend in good faith
against such claim, liability or expense at their own cost and expense and (ii)
provide assurance and security reasonably acceptable to such indemnified party
or parties that such indemnification will be paid fully and promptly if
required and such indemnified party or parties will not incur cost or expense
during the proceeding, then counsel for the defense shall be selected by the
indemnifying party or parties (subject to the consent of such indemnified party
or parties, which consent shall not be unreasonably withheld) and such
indemnified party or parties shall not be required to make any payment with
respect to such claim, liability or expense as long as the indemnifying party
or parties are conducting a good faith and diligent defense at their own
expense; provided, however, that the assumption of defense of any such matters
by the indemnifying party or parties shall relate solely to the claim,
liability or expense that is subject or potentially subject to indemnification.
If the indemnifying party or parties assume such defense in accordance with the
preceding sentence, they shall have the right, with the consent of such
indemnified party or parties, which consent shall not be unreasonably withheld,
to settle all indemnifiable matters related to claims by third parties which
are susceptible to being settled provided the indemnifying party's or parties'
obligation to indemnify such indemnified party or parties therefor will be
fully satisfied and the settlement includes a complete release of such
indemnified party or parties.
30
(c) The indemnifying party or parties shall keep such
indemnified party or parties apprised of the status of the claim, liability or
expense and any resulting suit, proceeding or enforcement action, shall furnish
such indemnified party or parties with all documents and information that such
indemnified party or parties shall reasonably request and shall consult with
such indemnified party or parties prior to acting on major matters, including
settlement discussions.
(d) Notwithstanding anything herein stated, such
indemnified party or parties shall at all times have the right fully to
participate in such defense at its own expense directly or through counsel;
provided, however, if the named parties to the action or proceeding include
both the indemnifying party or parties and the indemnified party or parties and
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the expense of separate counsel
for such indemnified party or parties shall be paid by the indemnifying party
or parties. If no such notice of intent to dispute and defend is given by the
indemnifying party or parties, or if such diligent good faith defense is not
being or ceases to be conducted, such indemnified party or parties shall, at
the expense of the indemnifying party or parties, undertake the defense of
(with counsel selected by such indemnified party or parties), and shall have
the right to compromise or settle, such claim, liability or expense. If such
claim, liability or expense is one that by its nature cannot be defended solely
by the indemnifying party or parties, then such indemnified party or parties
shall make available all information and assistance that the indemnifying party
or parties may reasonably request and shall cooperate with the indemnifying
party or parties in such defense.
8.6 Satisfaction of Indemnification Obligations. Any indemnity
payable pursuant to this Article 8 shall be paid within the later of (a) ten
(10) days after the indemnified party's request therefor or (b) ten (10) days
prior to the date on which the Loss upon which the indemnity is based is
required to be satisfied by the indemnified party.
ARTICLE 9. MISCELLANEOUS.
9.1 Certain Fees and Expenses. Except as provided herein, each
party to this Agreement will pay its fees and expenses in connection with this
Agreement and the transactions contemplated hereby and thereby. In the event a
party to this Agreement seeks to enforce any of its rights hereunder in a court
of competent jurisdiction, and if such action results in a judgment for either
party (a dismissal with prejudice by the party commencing such action shall be
deemed to be a judgment in favor of the other party for purposes of this
section), the prevailing party shall be entitled to recover from the other
party, in addition to the relief awarded to the prevailing party in or by
judgment, all court costs, reasonable investigation expenses, and reasonable
attorneys' fees, including appellate proceedings and proceedings in bankruptcy,
incurred by the prevailing party in such action.
9.2 Governing Law. This Agreement shall be construed under and
governed by the internal laws of the State of Texas without regard to its
conflict of laws provisions.
9.3 Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered, upon confirmation of receipt, or if sent by registered
or certified mail, upon the sooner of the expiration of three days after
deposit in United States post office facilities properly addressed with postage
prepaid or acknowledgment of receipt. All notices and payments to a party will
be sent to the addresses set forth below or to such other address or person as
such party may designate by notice to each other party hereunder:
31
TO PURCHASER: Monarch Dental (Press) Associates, L.P.
c/o Monarch Dental Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With a copy to: ▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TO PARTNERSHIP: VP Interests, L.P.
c/o ▇▇▇▇▇▇ Press, B.D.S., P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Press
TO GENERAL PARTNER: ▇▇▇▇▇▇ Press, B.D.S., P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Press
TO LIMITED PARTNER: VP Investments, Inc.
c/o ▇▇▇▇▇▇ Press, B.D.S., P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Press
With a copy to (for the ▇▇▇▇▇▇▇▇▇▇▇, Blend, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
Partnership, General Partner, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
and Limited Partner): ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Blend
TO THE SHAREHOLDERS: At the addresses shown opposite their names
on the signature pages hereto.
Any notice given hereunder may be given on behalf of any party by his or its
counsel or other authorized representatives.
9.4 Entire Agreement. This Agreement, including the Disclosure
Schedule referred to herein and the other writings specifically identified
herein or contemplated hereby or delivered in connection with the transactions
contemplated hereby, is complete, reflects the entire agreement of the parties
with respect to its subject matter, and supersedes all previous written or oral
negotiations, commitments and writings, including, without limitation, the term
sheets dated September 24, 1997 and October 30, 1996, and any and all
confidentiality or similar agreements.
9.5 Assignability; Binding Effect. This Agreement and any rights
hereunder shall be assignable by Purchaser to one or more corporations or
partnerships controlling, controlled by or under common control with Purchaser,
directly or indirectly, provided Purchaser shall remain liable for its
32
obligations hereunder in connection with any such assignment, or to any
successor or acquiror of Purchaser or its affiliates provided such entity
assumes or agrees to be bound by Purchaser's obligations hereunder, or to any
entity providing financing in connection with the transactions contemplated
hereby or to any successor or assign or such an entity (including without
limitation any such successor or assign in connection with any refinancing,
renewal or extension of such refinancing), upon written notice to the Company.
This Agreement may not be assigned by the Company without the prior written
consent of Purchaser. This Agreement shall be binding upon and enforceable by,
and shall inure to the benefit of, the parties hereto and their respective
successors, heirs and permitted assigns (including without limitation the
estate and heirs of the Shareholders in the event of a Shareholder's death).
9.6 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun
in reference to a party hereto shall be deemed to include the feminine or
neuter pronoun, as the context may require.
9.7 Execution in Counterparts. For the convenience of the parties
and to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
9.8 Amendments. This Agreement may not be amended or modified,
nor may compliance with any condition or covenant set forth herein be waived,
except by a writing duly and validly executed by each of the parties hereto or
in the case of a waiver, the party or parties waiving compliance.
9.9 Consent to Jurisdiction Certain Remedies. Solely for the
purpose of allowing a party to enforce its indemnification and other rights
hereunder, each of the parties hereby consents to personal jurisdiction,
service of process and venue in the federal or state courts of Texas or in the
court in which any claim for which indemnification may be sought hereunder is
brought against an indemnified party. If any party should default in the
performance of its obligations hereunder, the other party or parties, as
applicable, shall, in addition to any other of its rights and remedies
hereunder or otherwise, be entitled to the remedy of specific performance, and
each of the parties hereto expressly waives the defense that a remedy in
damages will be adequate.
9.10 Severability. In the event any section or part of this
Agreement or any of the attached exhibits or parts thereof should be adjudged
invalid, such adjudication shall in no manner affect the other sections or
exhibits, which shall remain in full force and effect as if the section or
exhibit so declared or adjudged invalid were not originally a part hereof.
9.11 Waiver of Breach or Violation Not Deemed Continuing. The
waiver by either party of a breach or violation of any provision of this
Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach or violation of any provision thereof. No breach or
violation of any provision hereof may be waived except by an agreement in
writing signed by the waiving party.
9.12 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a person shall mean (i) with respect
to a person, any member of such person's family (including any child,
step-child, parent, step-parent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law); (ii) with
respect to an entity, any officer, director, stockholder, partner or investor
in such entity or of or in any affiliate of such entity; and (iii) with respect
to a person or entity, any person or entity which directly or indirectly
controls, is controlled by, or is under common control with such person or
entity.
33
(b) "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise;
(c) "person" means an individual, corporation,
partnership, association, trust or any unincorporated organization; and
(d) "subsidiary" of a person means any corporation more
than 50 percent of whose outstanding voting securities, or any partnership,
joint venture or other entity more than 50 percent of whose total equity
interest, is directly or indirectly owned by such person.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
10.1 Making of Representations and Warranties. As a material
inducement to the Company and the Shareholders to enter into this Agreement and
to consummate the transactions contemplated hereby, Purchaser hereby makes the
representations and warranties to the Company and the Shareholders contained in
this Article 10.
For the purposes of this Agreement, references to "knowledge" or "best
knowledge" of Purchaser or "known" by Purchaser or words of similar import,
shall be deemed to include such knowledge as Purchaser or any executive officer
of Monarch (i.e., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇)
actually has or reasonably ought to have in the ordinary course of performing
their duties. For the purposes of this Article 10, Purchaser is deemed to have
knowledge of each of the documents entered into in connection with the
transactions contemplated hereby.
10.2 Organization of Purchaser. Purchaser is a limited partnership
duly organized, validly existing and in good standing under the laws of Texas
with full partnership power and authority to own or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is currently conducted by it.
10.3 Authority of Purchaser. Purchaser has full partnership power
and authority (i) to enter into (a) this Agreement and (b) each agreement,
document and instrument to be executed and delivered by Purchaser pursuant to
or contemplated by this Agreement, including, but not limited to, the
Collateral Agreements, and (ii) to carry out the transactions contemplated
hereby and thereby. The execution, delivery and performance by Purchaser of
this Agreement and the Collateral Agreements have been duly authorized by all
necessary action of Purchaser, and no other action on the part of Purchaser is
required in connection therewith. This Agreement, the Collateral Agreements
and each such agreement, document and instrument executed and delivered by
Purchaser pursuant to this Agreement constitute valid and binding obligations
of Purchaser enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, reorganization, fraudulent conveyance, insolvency
or similar laws of general application relating to or affecting the rights of
creditors, and subject to general principles of equity.
The execution, delivery and performance by Purchaser of this
Agreement, the Collateral Agreements and each such agreement, document and
instrument pursuant to or in connection with this Agreement to which it is a
party:
(i) do not and will not violate any provision of the
partnership agreement, as amended, of Purchaser;
34
(ii) do not and will not violate in any material respect
any laws of the United States or any state or any
other jurisdiction applicable to Purchaser or require
Purchaser to obtain any approval, consent or waiver
of, or make any filing with, any person or entity
(governmental or otherwise) which has not been
obtained or made; and
(iii) do not and will not (a) result in a breach of, (b)
constitute a default under, (c) accelerate any
obligation under or (d) give rise to a right of
termination of any indenture, loan or credit
agreement, or other agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order,
writ, judgment, injunction, decree, determination or
arbitration award, whether written or oral, to which
Purchaser is a party or by which the property of
Purchaser is bound or affected.
10.4 Litigation. There is no litigation pending or, to the best
knowledge of Purchaser, threatened against Purchaser or Monarch which would
prevent or hinder the consummation of the transactions contemplated by this
Agreement.
10.5 Finder's Fees. Purchaser has not incurred or become liable
for any broker's commission or finder's fee or investment banker's fee relating
to or in connection with the transactions contemplated by this Agreement.
10.6 Warranties and Representations Concerning the Company's
Business. Purchaser acknowledges that no warranties or representations
concerning the Company's dental business or the Company have been made by the
Company or its agents, or from any other party in this transaction, and that no
understanding has been had or agreement has been made between the parties,
except as set forth in this Agreement.
10.7 Disclosure. To Purchaser's knowledge, no statement contained
in any certificate, schedule, financial statement, exhibit or other instrument
furnished by Purchaser pursuant to this Agreement or in any exhibit hereto
contains any material untrue statement of fact or omits to state a fact
necessary in order to make the statements contained herein not materially
misleading in light of the circumstances under which they were made.
10.8 SEC Reports. All reports and other filings required to be
made by Monarch with the Securities and Exchange Commission pursuant to the
Securities and Exchange Act of 1934 have been timely filed, and none of such
reports or filings as of the date thereof, contained any untrue statement of
material fact or omitted to state a material fact required to be stated
therein, or necessary to make the statements therein not misleading.
* * * * *
35
IN WITNESS WHEREOF the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the date set forth above by their
duly authorized representatives.
PURCHASER:
MONARCH DENTAL (PRESS) ASSOCIATES, L.P.,
a Texas limited partnership
By: Monarch Dental Management, Inc.,
its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Vice President
PARTNERSHIP:
VP INTERESTS, L.P.
a Delaware limited partnership
By: ▇▇▇▇▇▇ Press, B.D.S., P.C.,
its general partner
By: /s/ ▇▇▇▇▇▇ PRESS
------------------------------------
▇▇▇▇▇▇ Press, B.D.S., President
GENERAL PARTNER:
▇▇▇▇▇▇ PRESS, B.D.S., P.C.,
a Texas professional corporation
By: /s/ ▇▇▇▇▇▇ PRESS
------------------------------------
▇▇▇▇▇▇ Press, B.D.S., President
LIMITED PARTNER:
VP INVESTMENTS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ PRESS
------------------------------------
▇▇▇▇▇▇ Press, B.D.S., President
36
SHAREHOLDERS: ADDRESS:
/s/ ▇▇▇▇▇▇ PRESS
---------------------------------- -----------------------------------
▇▇▇▇▇▇ Press ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------- -----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
37
MONARCH:
Monarch is executing this Agreement
solely for the purpose of making the
representation and warranty set forth
in Section 10.8 of this Agreement.
MONARCH DENTAL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer
