AGREEMENT FOR PURCHASE & SALE OF DENTISTRY PRACTICE This sale contract (the “Agreement”) is entered into on September ______, 2009, by and between ________________________________ (“Seller”), and _____________________________ (“Purchaser”), ________________________________ (“Guarantor”), (collectively, the “Parties” or singularly, a “Party”). RECITALS WHEREAS, Seller desires to sell his dentistry practice located at _________________________ Vancouver, Washington (the “Practice”); WHEREAS, Purchaser desires to purchase the Practice and to carry on the practice of dentistry at the office location now occupied by Seller; NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: AGREEMENT 1. Sale of Practice. Effective at Closing, Seller shall sell the Practice to Purchaser, including the goodwill thereof, together with all dental equipment (except for surgical implant equipment), and including instruments, apparatuses, furniture, fixtures, patient records, x-rays, files, drugs, medicines, supplies, and all other items in the Practice office that are useful or necessary to carrying on the business of the Practice, but excluding Seller’s personal items, which may be removed from the Practice office by Seller at any time prior to or on the date of Closing. 2. Representations & Warranties. Seller represents and warrants as follows: 2.1. Seller has delivered to Purchaser’s lender true, accurate, and complete copies of the two (2) most recent years’ tax returns and financial statements for the Practice. Seller further warrants that there has been no material adverse change in the financial condition or operation of the Practice since the date of the last tax return provided to Purchaser, other than changes that have been disclosed to Purchaser during the course of negotiations for this Agreement. 2.2. Seller is the owner of, and has good and marketable title to, the Practice and Practice assets to be sold hereunder, and that he holds such title free and clear of all encumbrances, liens, and security interests. 2.3. There are no complaints, investigations, audits, proceedings, or claims pending or threatened against Seller, to the best of Seller’s knowledge. Seller reasonably believes that no such complaint, investigation, audit, proceeding, or claim will commence or be threatened against Seller in the future, regarding Practice operations. 2.4. Seller has not billed any Practice patients, insurers, or government agencies for goods or services for which Seller is not entitled to compensation, nor has Seller waived any copayments or deductibles required by insurers. 2.5. Seller does not warrant the condition of any Practice assets sold hereunder, and Purchaser shall purchase such assets on an “as-is” basis. Purchaser acknowledges that she has had the opportunity to inspect Practice assets prior to Closing. 2.6. Seller has no employment contracts with current Practice employees, and the employment of current Practice employees may be terminated at will. Seller will pay to current Practice
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employees all compensation and benefits, including any vacation, personal, and sick days, accrued through the date of Closing. To the best of Seller’s knowledge, Seller has complied with all applicable federal, state, and local laws, ordinances, and regulations regarding employeremployee relations. Seller shall not, in anticipation of Closing, raise the salary or wage of any Practice employee (other than regularly scheduled raises), nor will Seller promise any Practice employee that the employee’s compensation or benefits will be maintained or increased after Closing. Seller cannot guarantee that any employee will accept continued employment at the Practice after Closing, but Seller subjectively believes that the dental hygienists and dental assistants intend to continue their employment at the Practice after Closing. 2.7. Seller has filed all federal, state, and local tax returns required to be filed for the Practice, and the information contained on such returns is true and accurate. Seller has paid, or has made arrangements to pay, all taxes and interest, penalties, assessments, and deficiencies due, if any, under said returns. Seller has paid in full, or has arranged to pay in full, all federal and state employee income tax withholdings, federal social security tax (FICA) withholding, unemployment insurance tax, sale and use taxes, business or license fees, and any other business-related taxes or fees relating to operation of the Practice, up to and including the date of Closing. After the date of Closing, all such taxes and fees are the sole responsibility of Purchaser. Purchaser represents and warrants as follows: 2.8. Purchaser represents and warrants that Guarantor is duly licensed to practice dentistry in the State of Washington. Purchaser further represents and warrants that no disciplinary action adversely affecting Guarantor’s license to practice dentistry is pending or in effect against Guarantor. 2.9. Purchaser acknowledges that it has conducted an independent investigation of the benefits of purchasing the Practice under this Agreement, and that it understands that operation of the Practice involves business risks, and that financial success of the Practice depends largely on Guarantor’s own independent ability to conduct and manage the Practice business and patient relationships, in addition to the general economic climate. Purchaser further acknowledges that Seller has not made, and Purchaser is not relying upon, any warranty or guarantee as to the profitability or potential success of the Practice after its sale to Purchaser, including without limitation, any guarantee that patients will continue as patients of the Practice after the Closing. Guarantor represents and warrants as follows: 2.10. Guarantor hereby agrees to personally guaranty performance of all obligations of Purchaser under this Agreement. 3. Purchase Price. Purchaser shall pay to Seller on the date of Closing a purchase price of ________________________ Dollars ($__________) (the “Purchase Price”). The Purchase Price shall be allocated pursuant to the allocation schedule attached hereto as Exhibit A and incorporated herein by this reference. This allocation is intended to comply with Treas. Reg. 1.1060-IT. The Parties agree to submit any required notices and returns to the Internal Revenue Service or other taxing authorities in conformity with this allocation. The Parties further agree that the remainder of this Agreement shall remain in full force and effect in the event the allocation hereunder is challenged and/or set aside by the Internal Revenue Service or other taxing authority. 4. Covenant Not to Compete. For a period of five (5) years from the date of Closing: (a) Seller will not practice dentistry within twenty-five (25) miles of the Practice’s current location; (b) Seller will not
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solicit any patients of record of the Practice except to collect outstanding accounts receivable or as authorized by Purchaser; and (c) Seller will not solicit or hire any current Practice employee. 5. Accounts Receivable. Notwithstanding Section 1 of this Agreement, the sale contemplated hereunder shall not include any accounts receivable of the Practice accrued through the date of Closing. If Purchaser receives any payments for services rendered by Seller, Purchaser shall deliver such payments to Seller in full within two (2) weeks of receipt, whether such payments are made by patients or by insurers. 6. Lease. The Parties acknowledge that Seller operates the Practice at its current location under a month-to-month tenancy. Purchaser acknowledges that it is Purchaser’s responsibility to negotiate a new lease with the landlord of that location. Seller has paid the lease payment for the month of September 2009, and Purchaser shall reimburse Seller at Closing in an amount equal to the number of days in September 2009 (including the date of Closing) that Seller owned the Practice, multiplied by the daily lease rate, which shall be computed as the monthly lease rate divided by thirty (30). 7. Notice of Sale to Patients. The Parties acknowledge that Seller mailed a letter on Seller’s letterhead to all Practice patients in contemplation of this sale (“Notice Letter”), that Purchaser reviewed and approved the Notice Letter before it was mailed, and that Purchaser has a copy of the Notice Letter in its possession. 8. Consultation after Closing. After the Closing, for a period of one (1) year, Seller shall make himself reasonably available to Purchaser for consultation on all aspects of Practice operations, including discussion with Purchaser about particular patient circumstances and treatments. Nothing in this Section 8 shall be construed as requiring Seller to practice dentistry, or to be in violation of the restrictive covenants in Section 4. 9. Termination Prior to Closing. In the event that Purchaser is unable to negotiate a new lease with the landlord of the premises on which the Practice is currently located, prior to Closing, Purchaser may terminate this Agreement by written notice to Seller received by Seller no later than the business day immediately preceding the date of Closing.
10. Indemnification. Each Party agrees to indemnify and hold the other Party harmless against any claim, loss, or damage substantially arising out of the indemnifying Party’s breach of any of the warranties and representations made by the indemnifying Party hereunder, including without limitation, attorney’s fees and costs incurred in defending against such claim. Seller agrees to indemnify and hold Purchaser harmless against any claim, loss, or damage arising from Practice operations up to and including the date of Closing, including without limitation, attorney’s fees and costs incurred in defending against such claim. Purchaser agrees to indemnify and hold Seller harmless against any claim, loss, or damage arising from Practice operations after the date of Closing, including without limitation, attorney’s fees and costs incurred in defending against such claim. 11. Closing. Closing shall occur on September 14, 2009, no later than 5:00p.m., at a location mutually agreed upon by the Parties. At Closing, Purchaser shall tender to Seller the Purchase Price, as well as the reimbursement provided for in Section 6. At Closing, Seller shall take all actions and deliver all documents reasonably necessary to transfer title and possession to Purchaser of the assets specified in this Agreement. 12. General Provisions.
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12.1. Costs. Each Party hereto shall bear its own costs and expenses incurred in preparing and negotiating this Agreement, including without limitation, any attorney’s fees incurred by any Party. 12.2. Construction of Contract. This Agreement has been reviewed and approved by each Party after consultation with independent counsel. In no event shall this Agreement be interpreted for or against any Party, but rather this Agreement shall in all events be interpreted according to its fair meaning. 12.3. Prevailing Party Fees. In the event of any legal action or proceeding arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable costs and attorney’s fees incurred in that action or proceeding. 12.4. Amendments. This Agreement constitutes the full terms of the agreement between the Parties on its subject matter, and can be amended, modified, revised, or changed only by a writing signed by all Parties. 12.5. Documents Reasonably Necessary. Each Party shall perform all acts, and execute and deliver all documents, as may be necessary and proper under the circumstances to accomplish the goal, intent, and purpose of the transaction contemplated by this Agreement. 12.6. Specific Performance. Seller acknowledges that it would be difficult to measure the resulting damages from a breach of the restrictive covenants in Section 4 of this Agreement, and accordingly, Seller agrees that in addition to any other remedies allowed by law, Purchaser shall be entitled to restraint by injunction for a violation or threatened violation of the restrictive covenants set forth in Section 4 of this Agreement. 12.7. Governing Law. This Agreement shall be construed in accordance with, and shall be governed by, the laws of the State of Washington. 12.8. Assignability. No Party may assign or transfer its obligations under this Agreement to any third party without the express written consent of the other Party hereto. This Agreement shall be binding on, and shall inure to the benefit of, the Parties, their successors, executors, administrators, representatives, and assigns. 12.9. Time of the Essence. Time is of the essence in the Closing of the transaction contemplated under this Agreement. 12.10. Severability. In the event that a court of competent jurisdiction should find any portion of this Agreement to be invalid and unenforceable, the remainder of this Agreement shall remain in full force and effect. 12.11. Headings. The headings in this Agreement are for convenience only and shall not be interpreted as part of the Agreement. 12.12. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall have the same legal effect as, and shall be considered, original agreements. 12.13. Facsimile or Scanned Signatures. A faxed or scanned copy of the signature page(s) of this Agreement shall be considered as an original for all purposes. ACCEPTED AND AGREED to on the date first above written. FOR PURCHASER: __________________________________________ FOR SELLER: ________________________________ ________________________________ Spouse of Seller (to signify consent and bind the marital community) FOR GUARANTOR: Agreed to and personally guaranteed by:_____________________________________
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EXHIBIT A
PURCHASE PRICE ALLOCATION: Office Equipment and Furnishings Sterilization Equipment: Lab Equipment: Dental Stations: Dental Supplies: Goodwill and Patient List Covenant not to Compete Total: $ $ $ $ $ $ $__________ $
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