Exhibit
10.28


 


 


ASSET PURCHASE
AGREEMENT


 


By and Between


 


MDC SYSTEMS &
SERVICES, INC.


 


AND


 


VANTAGEMED
CORPORATION


 


 


Dated as of
September 19, 2003


 

















 


ASSET PURCHASE
AGREEMENT


 


This ASSET PURCHASE AGREEMENT (together with the
recital, the Schedules and Exhibits attached hereto, this “Agreement”)
is entered into as of the 19th day of September, 2003 by and between MDC
Systems & Services, Inc., a/k/a MDC Services, Inc., a North Carolina
corporation (“Purchaser”), and VANTAGEMED Corporation, a Delaware corporation
and Trend Sierra Corporation, a Delaware corporation, a wholly-owned subsidiary
of VantageMed Corporation (“Seller”).


 


WHEREAS,
the Seller desires to sell to the Purchaser, and the Purchaser wishes to
acquire from the Seller, certain assets and property of the Seller being
certain software, equipment, hardware, contracts and certain intangibles and
contracts used or useful in connection with the Seller’s business currently
operated under the trade names of “DentalMate” and “VantageMed” and located in,
among others, Rancho Cordova, California (the “Business”); and


 


NOW,
THEREFORE, in reliance upon the respective representations
and warranties made herein and in consideration of the mutual promises,
agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:


 


ARTICLE 1



DEFINITIONS AND INTERPRETATION


 


1.1                                 Definitions.  As used in this Agreement, the following
terms have the meaning specified or referred to in this Article 1:


 


“Actions” is defined in Section 5.6.


 


“Affiliate” of a specified Person is a Person
that (i) directly or indirectly, through one or more intermediaries, Controls,
is Controlled by or is under common Control with the Person specified, or (ii)
in the case of a natural person, is a spouse, linear ancestor, linear
descendant or legal representative or trustee of any such specified natural
person, or (iii) is an officer, director, trustee, employee, stockholder,
member, partner, principal or trust for the benefit of any Person referred to
in the preceding clause (i) or (ii).


 


“Agreement” is defined in the preamble to this
Agreement.


 


“Allocation Schedule” is defined in Section
3.2.


 


“Assumed Contracts” is defined in Section
5.7.


 


“Assumed Liabilities” means those Liabilities
of Seller which are: (i) attributable to periods after the Closing under any or
all the Assumed Contracts; or (ii) listed on Schedule 2.3 hereto.


 


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“Bill of Sale” is defined in Section 4.2(a).


 


“Administrative Services Arrangement”
is defined in Section 7.6.


 


“Claims” means, with respect to Seller, all
claims, damages, losses, liabilities, costs, causes of action, choses in
action, rights of recovery and rights of set-off of whatever kind or
description against any Person or arising out of or relating to the VantageMed
Corporation.


 


“Closing” is defined in Section 4.1.


 


“Closing Date” is defined in Section 4.1.


 


“Code” means the Internal Revenue Code of 1986,
as amended from time to time.


 


“Competitive Activity” is defined in Section
7.11.


 


“Contract” means any of the agreements,
arrangements, contracts, leases, notes, loans, evidences of indebtedness,
purchase orders, letters of credit, joint venture agreements, co-branding
agreements, intellectual property agreements, distributor agreements, franchise
agreements, undertakings, confidentiality agreements, covenants not to compete,
employment agreements, licenses, instruments, obligations, commitments,
policies, purchase and sales orders, quotations and other executory
commitments, in each case, related to, used or useful in the DentalMate
Business, to which Seller is a party or to which any of its assets are subject,
whether oral or written, express or implied.


 


“Control” means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through (i) the ownership of voting shares, (ii)
general partnership or limited liability company or membership interests, (iii)
common directors or trustees or (iv) by contract or otherwise.


 


“Damages” is defined in Section 9.1.


 


“Diligence Documents” means all information,
representations, reports, agreements, certificates, instruments and other
documents delivered, or required to be delivered, to Purchaser, MDC Services,
Inc. or their Affiliates or their advisors or legal counsel pursuant to
Purchaser’s due diligence investigation of Seller in connection with the
transactions contemplated hereby.


 


“DentalMate Business” means Seller’s business
of developing, creating, producing, 
distributing and selling products and services relating to the
DentalMate product.


 


“Encumbrances” means any claim, lien, pledge,
option, charge, easement, security interest, encumbrance or other right of
third parties.


 


 “MDC”
means MDC Systems & Services, Inc., a/k/a MDC Services, Inc., a North
Carolina corporation.


 


“Excluded Assets” is defined in Section 2.2.


 


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“Financial Statements” means, collectively, the
Unaudited Financial Statements previously furnished to MDC.


 


“Governmental Authority” means the federal
government, or any state or other political subdivision thereof, or any agency,
court or body of the federal government, any state or political subdivision
thereof, exercising executive, legislative, judicial, regulatory or
administrative functions.


 


“Governmental Permits” is defined in Section
5.13.


 


“Law” means any law, statute, rule, regulation,
ordinance, standard, code, order, judgment, decision, writ, injunction, decree,
award or other governmental restriction including, without limitation, any
policy or procedure issued or enforced by any Governmental Authority.


 


“Liability” of a Person means any direct or
indirect liability, indebtedness, obligation, expense, claim, loss, damage,
deficiency, guaranty or endorsement of or by such Person, absolute or
contingent, accrued or unaccrued, due or to become due, liquidated or
unliquidated.


 


“Material Adverse Effect” means a material
adverse effect on the business, properties, assets, or condition (financial or
otherwise) of a Person, or on the right or ability of a Person to execute,
deliver or perform this Agreement or any Other Document.


 


“Noncompetition Agreements” is defined in Section
4.2(a).


 


“Other Document” means all other agreements,
documents, certificates and instruments contemplated to be delivered or entered
into by this Agreement including, without limitation, the Noncompetition
Agreements.


 


“Permitted Encumbrances” means (i) liens for
taxes and other governmental charges and assessments which are not yet due and
payable, (ii) liens of landlords and liens of carriers, warehousemen, mechanics
and materialmen and other like liens arising in the ordinary course of business
for sums not yet due and payable and (iii) liens which do not interfere with
the use or transfer or detract from the value of the assets so encumbered.


 


“Person” means any natural person, business
trust, corporation, partnership, limited liability company, joint stock
company, proprietorship, association, joint venture, unincorporated association
or other legal entity of whatever nature.


 


“Product on Order” is defined in Section
2.1(b).


 


“Proprietary Rights” is defined in Section 5.9(a).


 


“Purchase Price” is defined in Section
3.1(a).


 


“Purchaser” is defined in the preamble to this
Agreement.


 


“Seller” is defined in the preamble to this
Agreement.


 


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“Tax” means any federal, state, local or
foreign income, gross receipts, property, sales, use, license, franchise,
employment, unemployment, payroll, withholding, required deposits, alternative
or add-on minimum, ad valorem, value added, transfer or excise tax, any
liability for Taxes imposed under Treasury Regulations §1.1502-6 and any
liability as a successor or transferee, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any Governmental Authority.


 


“Tax Return” means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.


 


“Trade Secrets” is defined in Section 5.9(b).


 


“Transferred Assets” is defined in Section
2.1.


 


“Unaudited Financial Statements” is defined in Section
5.8(b).


 


1.2                                 Singular
and Plural; Gender.  Whenever
appropriate in the context, terms used in this Agreement in the singular also
include the plural, and vice versa, and each masculine, feminine or neuter
pronoun shall also include the other genders.


 


1.3                                 Meaning
of “Including”.  As used herein, the
word “including” shall be deemed to mean “including, without limitation” unless
otherwise expressly provided in any instance.


 


1.4                                 Headings.  The article, section and other headings in
this Agreement are used for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any provision of
this Agreement.


 


1.5                                 Drafting.  The parties have participated jointly in the
negotiation and drafting of this Agreement, and they agree that any ambiguity
or question of intent or interpretation that may arise shall be construed as if
drafted jointly by the parties, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.


 


ARTICLE 2



PURCHASE AND SALE OF ASSETS


 


2.1                                 Transferred
Assets.  Upon the terms and subject
to the conditions of this Agreement and of the Other Documents, on the Closing
Date, Seller shall sell, transfer, assign, convey and otherwise deliver to
Purchaser, and Purchaser shall purchase from Seller, all of Seller’s right,
title and interest in, to and under all of the assets of the DentalMate
Business, other than the Excluded Assets, free and clear of any and all
Encumbrances wherever located and


 


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whether or not carried or reflected on the books and records of Seller
(collectively, the “Transferred Assets”), including, without limitation,
the following:


 


(a)                                  all
software, hardware, inventory, software development, tools, supplies and other
personal property constituting fixed assets and tangible personal property, in
each case owned, used or held for use by Seller in operating the DentalMate
Business;


 


(b)                                 all
of Seller’s right, title and interest in and arising out of its ownership of
the Transferred Assets including, without limitation, all utility deposits which
are owned or held by the Seller in connection with the DentalMate Business and
all rights in and to the Assumed Contracts;


 


(c)                                  all
rights in and to the names “DentalMate” including assumed or fictitious names,
product names and logos, all rights to any and all associated logos, artwork or
stylized designs, and to all trademarks, service marks, whether or not
registered and all applications therefor, and whether under any statute or
common law;


 


(d)                                 all
of Seller’s right, title and interest in, to and under all of the following
irrespective of where any of the same were issued, are pending or exist: United
States and foreign trademarks and other marks, trade names, and other trade
rights, whether or not registered and all applications therefor, in each case,
which relate to or are used or useful in connection with the DentalMate
Business; licenses, and other contractual rights with respect to the foregoing
and other such property and intangible rights owned, used or held for use by
Seller in connection with the DentalMate Business, together with all goodwill
of Seller in connection therewith;


 


(e)                                  all
procedures, designs, ideas, research records, inventions, records of
inventions, test information, technical information, marketing know-how,
proprietary statistical techniques, know-how, methodologies, trade secrets,
market analyses, client delivery systems, processes, formulae, whether patented
or patentable or not and other operating systems (and all related manuals,
books, files, journals, plans, design specifications, descriptions, data, art
work, software, computer programs and source code data related thereto
including all current and historical data bases) owned, used or held for use by
Seller in connection with the DentalMate Business;


 


(f)                                    all
books, records, customer lists (past, present and future), customer
information, marketing materials and information, copies of documents
evidencing Intellectual Property Rights, new product development materials,
creative materials, advertising and promotional materials, studies, reports,
manuals and other documents, including, any confidential information which has
been reduced to writing relating to Seller and the DentalMate Business;


 


(g)                                 all
computer hardware and computer software, used, licensed or held for use by
Seller in the conduct of the DentalMate Business;


 


(h)                                 all
right, title and interest of Seller in and to all Assumed Contracts;


 


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(i)                                     all
right, title and interest of Seller in and to the DentalMate Business as a
going concern, including its goodwill and all other tangible and intangible
assets associated therewith;


 


(j)                                     all
franchises, approvals, permits, authorizations, licenses, orders,
registrations, certificates, variances, and other similar permits or rights
obtained from any Governmental Authority relating to the DentalMate Business or
to the Transferred Assets and all pending applications therefor;


 


(k)                                  all
present telephone numbers used or held for use by Seller in the conduct of the
DentalMate Business; and


 


(l)                                     any
and all other personal and intangible property, licenses and permits useful or
necessary to operate the DentalMate Business.


 


2.2                                 Excluded
Assets.  Notwithstanding anything to
the contrary contained herein, including Section 2.1 above, Seller shall retain
all of its right, title and interest in and to, and shall not transfer to the
Purchaser, any asset of Seller set forth below (collectively, the “Excluded
Assets”):


 


(a)                                  the
Purchase Price, cash, on hand and on deposit with banking institutions,
securities and investments;


 


(b)                                 All
accounts,  demand deposits, “cash
collateral” (as defined in 11 U.S.C. Section 363 (a)), notes, bills, drafts,
chattel paper, acceptances, instruments, tax refunds, insurance proceeds,
prepaid expenses (except Products on Order), 
deposits which are owned or held by the Seller in connection with the
DentalMate Business (collectively, the “Accounts”);


 


(c)                                  any
insurance claims or recoveries for claims arising prior to the Closing Date;


 


(d)                                 any
minute books, stock records, tax returns and similar records and any other
documents which Seller is required by law to retain in its possession, and such
writings pertinent to financial or administrative matters to the extent not
germane to the DentalMate Business, the Transferred Assets or the Assumed
Liabilities (including records and documents relating to the Excluded Assets
and Excluded Liabilities);


 


2.3                                 Assumption
of Liabilities.  At the Closing,
subject to the terms and conditions of this Agreement, Purchaser agrees to
assume and become responsible for all of the Assumed Liabilities. Purchaser
agrees to accept all service obligations on products sold by the Seller prior
to the Closing as part of the Business but does not accept or assume any other
obligations or liability in connection thereof. Except for obligations related
to both the Contracts and Assumed Contracts, and assumed by the Purchaser in
accordance with this Agreement, the liability to perform customer support for
prepaid maintenance agreements and certain accrued vacation time set forth
below for employees of the Seller, the Purchaser shall assume no


 


7

















 


liabilities or obligations of the Seller of any kind or nature
whatsoever (whether fixed or contingent, direct or indirect), whether known or
unknown, absolute or otherwise with respect to any debts, liabilities,
contracts, commitments, obligations or otherwise, whether or not relating to
the Seller, the DentalMate Business, or any of the Assets.  Particularly, but without limiting the
foregoing, the Purchaser shall not be liable for, and the Seller shall remain
solely liable for, any and all obligations other than accrued vacation pay not
to exceed $16,527.31 in the aggregate relating to the Seller’s employees
accrued as of the Closing, the deferred revenue amounting to $49,265.09 and any
duties to perform related to those deferred revenues, the payroll (including
taxes) paid by Seller through September 30, 2003 for the days subsequent to the
Closing and the prepayment of benefits by the Seller for Seller’s employees for
the period of paid coverage following the closing date.  Other than said accrued vacation pay,
deferred revenue, subsequent payroll and prepaid benefits, the Purchaser shall
have no obligation to hire any of the Seller’s employees or to honor any of the
Seller’s obligations or commitments to the Seller’s employees including,
without limitation, any amounts due to the Seller’s employees for sick pay or
any other statutory employee entitlements.


 


ARTICLE 3



CONSIDERATION


 


3.1                                 Consideration.  In consideration of the sale, transfer,
assignment, conveyance, and delivery by Seller of the Transferred Assets and
Assumed Liabilities on the Closing Date, and in reliance upon the
representations, warranties, covenants and agreements made herein by Seller,
Purchaser shall pay to Seller (a) cash in the amount of Five Hundred Thousand
Dollars ($500,000.00) by wire transfer or other immediately available funds
(“Initial Purchase Price”), (b) its promissory note and security agreement in
the form of Exhibits A and C attached hereto in the principal amount of Fifty
Thousand Dollars ($50,000.00) and its promissory note and security agreement in
the form of Exhibits B and D attached hereto in the principal amount of Fifty
Thousand Dollars ($50,000.00) (the amounts referenced herein in this Section
3.1(a) and (b) are hereinafter collectively referred to as the “Purchase
Price”); and (c) assume the Assumed Liabilities in accordance with the
terms herein and the Other Documents. The Initial Purchase Price shall be paid
by the Purchaser to the Seller in cash, wire transfer, bank or certified check
or other form of immediately available funds at the Closing As of the day prior
to the Closing Date, the parties conducted, or caused to be conducted, a
physical inventory of all of the inventory of the Seller both on hand and on
order including, but not limited to, raw materials, work-in-progress and
finished goods (the “Inventory”). The seller shall pay for the $2,874.99 for
the pre-payment of October benefits for the current DentalMate employees. The
Seller shall assign any purchase orders for Inventory items as of the Closing
Date to the Purchaser and the cost of such ordered Inventory items is included
in the value of the total Inventory. 
Accordingly, the Seller shall pay the invoice related to such ordered
Inventory items that are included in the Inventory.


 


3.2                                 Tax
Allocations.  Purchaser and Seller
shall endeavor in good faith to determine the allocation for tax purposes of
the Purchase Price among the Transferred Assets and prepare an allocation
schedule (the “Allocation Schedule”) in connection therewith in
accordance with Section 1060 of the Code and the regulations thereunder. Within
thirty (30)


 


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days of the Closing Date, Purchaser and Seller shall each sign the
Allocation Schedule and return an executed copy thereof to the other
party.  Purchaser and Seller each agree
to file IRS Form 8594, and all federal, state, local and foreign (if any) tax
returns in accordance with the Allocation Schedule.  Purchaser and Seller each agree to provide the other promptly
with any other information required to complete IRS Form 8594.  Purchaser and Seller agree they will not take
or cause to be taken any action that would be inconsistent with such
allocation.  Each of the parties to this
Agreement agrees that all tax returns made by such party, or by any Affiliate,
will accurately reflect such allocation.


 


ARTICLE 4



CLOSING


 


4.1                                 Closing.  The closing of the transactions provided for
in this Agreement (the “Closing”) will take place simultaneously with
the execution and delivery of this Agreement at the offices of Seller, at 10
a.m. (P.D.T.) on September 19, 2003, or at such other place or at such other
time as shall be mutually agreed upon by Seller and Purchaser (the “Closing
Date”).  Time shall be of the essence for all purposes under this Agreement.


 


4.2                                 Deliveries
on the Closing Date.


 


(a)                                  At
the Closing, Seller will deliver, or cause to be delivered, to Purchaser the
following:


 


(i)                                     the
Transferred Assets;


 


(ii)                                  a
Bill of Sale in the form attached hereto as Exhibit B, duly executed by
Seller;


 


(iii)                               the
Assignment and Assumption Agreement in the form attached hereto as Exhibit E
(the “Assignment and Assumption Agreement”) duly executed by Seller;


 


(iv)                              a
certificate of an officer of Seller, dated the Closing Date, that attaches (i)
the resolutions of the Board of Directors and the stockholders of Seller
authorizing the execution of this Agreement and the performance of the
contemplated transactions and (ii) an incumbency certification and signatures
of the officers of Seller executing this Agreement in form satisfactory to
Purchaser;


 


(v)                                 various
certificates, instruments, and documents referred to in this Agreement, and
such other certificates, instruments, and documents, as Purchaser shall deem
necessary in its reasonable discretion in order to effectuate the transactions
contemplated herein, in form and substance reasonably satisfactory to
Purchaser.


 


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(b)                                 At
the Closing, the Purchaser shall deliver to the Seller the Purchase Price and
the Assignment and Assumption Agreement duly executed by the Purchaser.


 


4.3                                 Manner
of Payment of Purchase Price.  The
Purchase Price shall be paid to Seller by wire transfer of funds to an account
as specified in writing by Seller prior to the Closing Date.


 


ARTICLE 5



REPRESENTATIONS AND WARRANTIES OF SELLER


 


As an inducement to Purchaser to enter into this
Agreement and to consummate the transactions contemplated hereby, Seller
represents and warrants to Purchaser on the date hereof and as of the Closing
Date:


 


5.1                                 Organization;
Certificate of Incorporation; Bylaws. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own or lease and to
operate and use the Transferred Assets and the DentalMate Business, and is duly
licensed or qualified and in good standing as a foreign corporation in each
jurisdiction set forth on Schedule 5.1 annexed hereto, constituting the
only jurisdictions in which the nature of the DentalMate Business and the
Transferred Assets makes such qualification necessary.  Seller has heretofore delivered to Purchaser
complete and correct copies of the certificate of incorporation and bylaws of
Seller as currently in effect.


 


5.2                                 Authority;
Due Execution.  Seller has all
requisite corporate power and authority to execute, deliver and perform this
Agreement and the Other Documents and to consummate the transactions
contemplated hereby and thereby.  The
execution, delivery and performance of this Agreement and each Other Document
to which Seller is a party, by Seller have been duly authorized and approved by
Seller’s board of directors and stockholders and do not require any further
authorization or consent of Seller or its stockholders. This Agreement and each
Other Document to which such Seller is a party have been duly executed and
delivered by such Seller and (assuming due execution and delivery by Purchaser)
this Agreement and each Other Document when executed and delivered, will
constitute a legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or similar laws affecting creditors’ rights
generally or by general equitable principles.


 


5.3                                 Subsidiaries
and Equity Investments.  Seller has
no subsidiaries and does not own, directly or indirectly, any investments,
capital stock or other equity or ownership interests in any other Person which
relate to the DentalMate Business.


 


5.4                                 No
Violation; No Consents.  Neither the
execution and delivery of this Agreement or of any of the Other Documents by
Seller, nor the consummation of any of the transactions contemplated hereby or
thereby, nor compliance with or fulfillment of the terms, conditions and
provisions hereof or thereof will:


 


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(a)                                  conflict
with, result in a violation, breach of the terms, conditions or provisions of,
or constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under, or result
in the creation or imposition of any Encumbrance (other than a Permitted
Encumbrance and Encumbrances which will be discharged as of the Closing Date)
upon any of the Transferred Assets or the DentalMate Business, under (i) any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws of Seller, (ii) any other note, instrument, agreement, mortgage, lease,
license, franchise, permit or other authorization, right, restriction or
obligation to which Seller is a party or any of the Transferred Assets is
subject or by which Seller is bound or (iii) to Seller’s knowledge any Law
applicable to Seller or to the Transferred Assets; or


 


(b)                                 except
with respect to the contract specified within Section 7.5 (c) of this
Agreement, no contracts require the consent, approval, order, action or
authorization of, or registration, declaration or filing with or notice to, any
Person in connection with the execution and delivery of this Agreement, any of
the Other Documents or the performance by Seller of the transactions
contemplated hereby or thereby to be performed by it.


 


5.5                                 No
Third-Party Options.  There are no
existing agreements with, options or rights of, or commitments to, any Person
to acquire Seller or any portion or all of the Transferred Assets, the
DentalMate Business or any interest therein.


 


5.6                                 Litigation.  Except as disclosed in Schedule 5.6, there
is no charge, complaint, action, order, writ, injunction, judgment or decree
outstanding or claim in writing, suit, litigation, proceeding, labor dispute,
or arbitral action (collectively, “Actions”) pending or to Seller’s
knowledge threatened or anticipated against, relating to or affecting the
transactions contemplated by this Agreement, the Seller, the Transferred
Assets, the Assumed Contracts or the Assumed Liabilities. Seller is not in
default with respect to any judgment, order, writ, injunction or decree of any
Governmental Authority, and there are no unsatisfied judgments against Seller.
No event has occurred, circumstances exist or investigation that, to Seller’s
knowledge, could reasonably be expected to give rise to or serve as a basis for
the commencement of any Action.


 


5.7                                 Contracts.  Each of the Contracts listed on Schedule
5.7 (the “Assumed Contracts”) is a legal, valid, and binding
obligation of Seller and, to Seller’s knowledge, of each other party thereto,
subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium, and similar Laws affecting creditors’ rights and
remedies generally, and general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).  Neither Seller nor any other party to any of
the Assumed Contracts is in breach, violation or default (whether with or
without the giving of notice, lapse of time, or both) thereunder.


 


5.8                                 Financial
Statements and Related Matters.


 


(a)                                  Interim
Financial Statements. Seller has also delivered to Purchaser the unaudited
consolidated balance sheet of the Seller’s DentalMate Business for the months


 


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of June, July and August 2003 and the related
consolidated statements of income for the months then ended (the “Unaudited
Financial Statements”).  The
Unaudited Financial Statements present fairly, in all material respects, the
financial position and results of operations of Seller’s DentalMate Business as
of the dates and periods indicated in each case in accordance with GAAP, subject
to normal recurring year-end adjustments (which would not be material in the
aggregate) and the absence of notes.


 


(b)                                 Accounts
Receivable.  The accounts receivable
reflected on the Financial Statements present fairly, in all material respects,
the financial position with respect to the accounts receivable for all periods
stated.  All accounts receivable
reflected in the Financial Statements and all accounts receivable arising after
the date thereof up to and including the Closing Date arose and will arise from
bona fide transactions in the ordinary course of business except as set forth
in Section 7.14.


 


5.9                                 Intellectual
Property.


 


(a)                                  Proprietary
Rights.


 


(i)                                     Schedule
5.9(a) sets forth (A) all of the federal, state or foreign registrations of
trademarks, service marks and other marks or trade names of owned by Seller and
used or usable in the DentalMate Business and all pending applications for any
such registrations, (B) all of the federal and foreign patent, and
copyright (including proprietary software) registrations and all pending
applications for any such registrations relating to the DentalMate Business and
(C) all other patents, copyrights, trademarks, service marks and other marks,
trade names and other intellectual property, except generally available
off-the-shelf programs, used or licensed by or for Seller in connection with
the DentalMate Business (the items referred to in clauses (A) through (C) above
are collectively referred to herein as “Proprietary Rights”), which are
owned, used or licensed by Seller.  Each
of the registered Proprietary Rights listed on Schedule 5.9(a) has the
registration number and issue date set forth therein and each of the
applications for registration listed Schedule 5.9(a) has the application
number and filing date set forth therein.


 


(ii)                                  Except
as disclosed on Schedule 5.9(a) (ii), Seller is the exclusive owner of
all right, title and interest in and to each of the Proprietary Rights listed
on Schedule 5.9(a), free and clear of any and all Encumbrances, and no
other Person has the right to use any of such Proprietary Rights in commerce
either in the identical form or in such near resemblance thereto as may be
likely to cause confusion or to cause mistake or to deceive within the context
of common law and statutory principles applicable to intellectual property
matters.  All of the registrations for
the Proprietary Rights listed on Schedule 5.9(a) are valid and in force
and all applications for registration listed on Schedule 5.9(a) are
pending and in good standing, all without challenge of any kind.


 


(iii)                               All
licenses pursuant to which Seller licenses or otherwise has the right to use
any Proprietary Rights are listed on Schedule 5.9(a) (iii).  All of such


 


12

















 


licenses are in full force and effect and no breach or
default thereunder (or any event which would constitute a breach or default
with notice or lapse of time or both) have occurred.  Except as disclosed on Schedule 5.9(a) (iii), (A) no
Person has a right to receive any royalty or similar payment in respect of any
Proprietary Rights, whether pursuant to any contractual arrangements entered
into by Seller or otherwise and (B) upon consummation of the transactions
contemplated by this Agreement and the Other Documents, Purchaser will be
entitled to continue to use all Proprietary Rights without the payment of any
additional fees, licenses or other payments as a result of such
transactions.  Seller has delivered to
Purchaser true, complete and correct copies of all of the licenses listed on Schedule 5.9(a)
(iii).


 


(iv)                              All
of the Proprietary Rights of Seller are valid and enforceable rights of Seller
and will not cease to be valid and in full force and effect by reason of the
execution and delivery of this Agreement or the Other Documents or the
consummation of the transactions contemplated hereby or thereby.


 


(v)                                 Schedule
5.9(a) identifies each registered and unregistered trademark, trade name,
service mark, service name and other proprietary mark or fictitious name at any
time owned by Seller or under which Seller has ever conducted business or
marketed any products or services relating to the DentalMate Business.


 


(b)                                 Trade
Secrets.


 


(i)                                     Seller
owns exclusively, and has the exclusive and unrestricted right to use, all
trade secrets, including “know-how,” inventions, designs, customer lists,
processes and technical data and information relating to the DentalMate
Business (collectively, “Trade Secrets”), free and clear of any and all
Encumbrances, including, without limitation, any claim of any present or former
employee of or consultant to Seller.  Schedule
5.9(b) contains a list of the headings or titles and, where appropriate, a
general, non-confidential description of all Trade Secrets.


 


(ii)                                  Seller
has taken reasonable security or other appropriate measures to protect the
secrecy, confidentiality and value of all Trade Secrets.


 


(c)                                  Infringements.  To Seller’s knowledge neither (i) the use of
each of the Proprietary Rights and the Trade Secrets by Seller nor (ii) any of
Seller’s other activities or business operations has infringed upon or
otherwise violated, or is infringing upon or otherwise violating, any
intellectual property rights of any third Person, and no proceeding has been
instituted or threatened against, and Seller has received no notice (and there
is no basis for any claim) alleging that the use of any of the Proprietary
Rights or Trade Secrets by Seller, or any of its other activities or business,
infringes upon or otherwise violates the rights of any third Person or which
otherwise challenges the validity, ownership or use of any of the Proprietary
Rights or Trade Secrets by Seller. 
Seller has not given notice to any Person that it is infringing on any
of the Proprietary


 


13

















 


Rights or Trade Secrets, and to Seller’s knowledge no
Person is infringing on any of the Proprietary Rights or Trade Secrets.


 


(d)                                 Adequacy
of Intellectual Property.  The
Proprietary Rights, the Trade Secrets and the generally available off-the-shelf
programs used in the DentalMate Business constitute all of the intellectual
property used by Seller in, and constitute all of the intellectual property
necessary for, the conduct of the DentalMate Business as presently conducted.


 


5.10                           Taxes
and Tax Returns.


 


(a)                                  Seller
has timely filed in accordance with Applicable Laws, all Tax Returns required
to be filed with respect to the DentalMate Business (other than the Tax Returns
set forth on Schedule 5.10), operations or Transferred Assets, and all
Taxes shown as due on such Tax Returns have been timely paid, except for Taxes
that are being contested in good faith by appropriate proceedings (all of which
are disclosed on Schedule 5.10). 
All Tax Returns filed by Seller were prepared in compliance with all
Applicable Laws and were true, complete and correct as of the date on which
they were filed or as subsequently amended to the date hereof and no facts have
later become known to Seller to the contrary.


 


(b)                                 With
respect to the employees and former employees of Seller’s DentalMate Business,
Seller has complied with all Applicable Laws relating to the withholding of
Taxes and have timely collected or withheld and paid over (and up to but not
including the Closing Date, will have timely collected or withheld and paid
over) to the proper Governmental Authorities all amounts required to be so
collected or withheld and paid over for all periods up to (but not including)
the Closing Date under all Applicable Laws.


 


(c)                                  Except
for waivers and extensions disclosed on Schedule 5.10, there are no
waivers or extensions of any applicable statute of limitations for the
assessment or collection of Taxes with respect to any Tax Return that relates
to or could effect the operations or Transferred Assets, which waivers or
extensions currently are in effect, and no request for any such waiver or
extension is currently pending.


 


(d)                                 There
are no Tax rulings, request for rulings or closing agreements relating to
Seller which could affect the operations or Transferred Assets for any period
after the Closing Date.


 


(e)                                  (A)
Seller is not a party to, bound by or subject to any Tax allocation or Tax
sharing agreement (or similar agreement), by which Purchaser will be bound,
will be subject to, or will owe any amounts under after the Closing, (B) Seller
does not have any current or potential contractual obligation to indemnify any
other person with respect to Taxes under which it will be obligated or will owe
amounts after the Closing which could result in any Liability to Purchaser.


 


(f)                                    Schedule
5.10 sets forth a list of states, territories and jurisdictions in which
Seller is required to file Tax Returns for the DentalMate Business.  No written


 


14

















 


claim has ever been made by a taxing authority in a
jurisdiction where Seller does not file Tax Returns that it is or may be
subject to taxation by such jurisdiction.


 


(g)                                 There
are no Liens for Taxes (other than for Taxes not yet due and payable) upon the
Transferred Assets, except with respect to Taxes that are not yet due and
payable (all of which are disclosed on Schedule 5.10) and for payment of
which Taxes adequate reserves have been disclosed to Purchaser.  No tax liabilities of Seller will adversely
affect Purchaser’s ownership or use of the Transferred Assets.


 


(h)                                 No
power of attorney has been granted by Seller with respect to any matter
relating to Taxes of Seller or the Transferred Assets which power of will
remain in force on or after the Closing Date with respect to any Transferred
Assets.  Any such power of attorney with
respect to periods beginning on or after the Closing Date will be revoked prior
to the Closing.


 


5.11                           Title
to and Adequacy of Transferred Assets. 
(a)  Seller has, and Seller shall
convey to Purchaser at Closing, good, valid, and marketable title to or a valid
leasehold interest in all of the Transferred Assets, whether real or personal,
tangible or intangible, including, without limitation, those reflected on the
Financial Statements free and clear of all Encumbrances.


 


(b)                                 (1)
The Transferred Assets owned, leased or licensed by Seller on the date hereof
constitute all of the assets used by, necessary for, or usable by Seller in,
and constitute all of the assets necessary for, the operation of the Transferred
Assets and the conduct of the DentalMate Business as currently conducted.  (2) To Seller’s knowledge, all of the
tangible Transferred Assets material to the operation of the DentalMate
Business owned, leased or licensed by Seller are (i) structurally sound with no
material defects, (ii) in good operating condition and repair, subject to
ordinary wear and tear and (iii) not in need of maintenance or repair except
for ordinary, routine maintenance and repair.


 


5.12                           Leased
Personal Property.  Schedule 5.12
contains a list as of the Closing Date of all machinery, equipment, computer
hardware and related peripheral equipment, vehicles, furniture and other
tangible personal property leased by Seller and used in the DentalMate
Business.  Schedule 5.12 contains
a list of all leases or other agreements or rights, whether written or oral,
under which Seller is a lessee of, or holds or operates, any such tangible
personal property in connection with the DentalMate Business.  Seller has a valid and existing leasehold
interest in all such leased property, the other parties thereto are not in
breach of or default under (including any circumstances that would result in a
breach or default under such leases with notice or lapse of time or both) any
such leases and all such leases are in full force and effect.  True, complete and correct copies of all
written leases referred to on Schedule 5.12 have been delivered to
Purchaser.  Consummation of the
transaction contemplated by this Agreement and the Other Documents does not
require the consent of any lessor under any such lease.


 


15

















 


5.13                           Governmental
Permits.


 


(a)                                  Seller
owns, holds or possesses all governmental licenses, franchises, permits,
privileges, variances, immunities, approvals, certificates, rights and other
authorizations which are necessary or required to entitle it to own, lease,
operate and use the Transferred Assets and properties and to carry on and
conduct the DentalMate Business as currently conducted or as proposed to be
conducted (collectively, “Governmental Permits”).  Schedule 5.13 sets forth a list of
each Governmental Permit held by Seller as of the date of this Agreement.  True, complete and correct copies of all of
the Governmental Permits listed on Schedule 5.13 have been delivered to
Purchaser.


 


(b)                                 Seller
has fulfilled and performed its obligations under each of its respective
Governmental Permits, and to Seller’s knowledge, no event has occurred or
condition or state of facts exists which constitutes or, after notice or lapse
of time or both, would constitute a breach or default under, or would permit
revocation or termination of, any such Governmental Permit.  Each of the Governmental Permits is valid, subsisting
and in full force and effect.  The
consummation of the transactions contemplated by this Agreement and the Other
Documents (including the transfer or assignment of the Governmental Permits to
Purchaser) will not result in any breach or default (or event which would
constitute a breach or default with notice or lapse of time or both) or
forfeiture of rights under any Governmental Permit.


 


5.14                           Insurance.  Seller’s existing insurance policies and
binders are in full force and effect and all premiums required to be paid
thereunder on or prior to the date hereof have been paid and all such premiums
required to be paid on or prior to the Closing Date shall have been paid on or
prior to such date. Seller has complied with each of such insurance policies
and binders and has not failed to give any notice or present any claim
thereunder in a due and timely manner. 
There are no outstanding unpaid claims under any of such insurance
policies or binders for damages which have not been repaired by Seller.  Other than insurance on the boiler/turbine
generator, Seller has not received any notice of cancellation or nonrenewal of
any such policy or binder, and Seller has no knowledge of any facts or
circumstances that might form the basis for termination of any such policies or
binders.  Such policies and binders are
adequate in accordance with the practices prevailing in the industries in which
Seller conducts the DentalMate Business to insure fully, less standard
deductibles, against all risks to which Seller and its properties or
Transferred Assets are exposed.  At no
time was there a period in which Seller lacked such insurance coverage with
respect to the DentalMate Business as then conducted.  Seller has no knowledge of any facts or circumstances that are
reasonably likely to form the basis for any claim against Seller not fully
covered by such policies or binders.


 


5.15                           Customers
and Suppliers.  Schedule 5.15
sets forth the current customers and clients of Seller’s DentalMate
Business.  No such customer or client
has notified Seller that it is terminating, cancelling, limiting or otherwise
changing its business relationship with the DentalMate Business, and, to
Seller’s knowledge, no such customer or client has threatened to do so,
including as a result of the consummation of the transactions contemplated by
this Agreement and the Other Documents.


 


5.16                           Brokers,
Finders and Agents.  Neither Seller
nor any Person acting on its behalf has paid or become obligated to pay any fee
or commission to any broker, finder, agent,


 


16

















 


intermediary, or Person in any other similar capacity, for or on
account of the transactions contemplated by this Agreement.


 


5.17                           Solvency.
After consummation of the transactions called for by this Agreement and the
Other Documents, Seller is and shall continue as a going concern and has
sufficient capital and assets to pay and satisfy all obligations as they become
due.


 


5.18                           Compliance
with Law. To Seller’s knowledge, Seller has complied in all material
respects with each Law of any Governmental Authority to which it is subject and
is not currently in material violation or in default under any such Law.


 


5.19                           Disclosure.


 


(a)                                  No
Misstatements or Omissions.  No (i)
representation or warranty made by Seller contained in this Agreement or any of
the Other Documents, (ii) written statement attached to this Agreement or any
of the Other Documents as an annex, schedule or Exhibit, (iii) certificate
furnished or to be furnished by Seller to Purchaser or its representatives in
connection with this Agreement or any of the Other Documents or pursuant hereto
or thereto or (iv) Diligence Document, in the case of any of the foregoing
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to make the statements herein or
therein contained not false or misleading taken as a whole as of the date of
this Agreement.


 


(b)                                 Disclosure
of Adverse Facts.  Seller has
disclosed to Purchaser all adverse material facts relating to (i) Seller, the
DentalMate Business, the Transferred Assets, including with respect to its
properties, condition (financial and otherwise), results of operations,
liabilities, customers, suppliers or prospects or (ii) the ability of Seller to
perform under this Agreement and the Other Documents and to carry out the
transactions contemplated herein and therein.


 


(c)                                  Copies.  All documents (including, without
limitation, all agreements, contracts, leases, permits and corporate,
partnership, limited liability company or other organizational documents)
furnished to Purchaser, hereunder or in connection herewith or under or in
connection with the Other Documents are in effect and are true, complete and
correct copies of the originals thereof and any originals delivered are true and
complete.


 


5.20                           Employees.  All of the Seller’s employees are at-will
employees.  The Seller does not have any
employment contracts or other agreements with persons employed or engaged by
the Seller in the operation of the DentalMate Business.


 


ARTICLE 6



REPRESENTATIONS AND WARRANTIES OF PURCHASER


 


Purchaser represents and warrants to Seller that:


 


17

















 


6.1                                 Organization.  Purchaser is a corporation validly existing
and in good standing under the laws of the State of North Carolina.


 


6.2                                 Corporate
Authority; Due Execution.  Purchaser
has full corporate power and authority to enter into this Agreement and each
Other Document to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and of each Other Document to which it is a party
has been duly authorized by all requisite corporate action.  This Agreement has been, and each of the
Other Documents to which Purchaser is a party will be, as of the Closing Date,
duly executed and delivered by Purchaser, and (assuming due execution and
delivery by Seller and the other parties thereto) this Agreement constitutes,
and each of such Other Documents, when executed and delivered, will constitute,
a valid and binding obligation of Purchaser, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar laws affecting
creditors’ rights generally or by general equitable principles.


 


6.3                                 Brokers,
Finders and Agents.  Neither
Purchaser nor any Person acting on its behalf has paid or become obligated to
pay any fee or commission to any broker, finder, agent, intermediary, or Person
in any other similar capacity, for or on account of the transactions
contemplated by this Agreement.  


 


6.4                                 Solvency.
After consummation of the transactions called for by this Agreement and the
Other Documents, Purchaser is and shall continue as a going concern and has
sufficient capital and assets to pay and satisfy all obligations as they become
due.


 


6.5                                 No
Conflicts; No Consents.  Neither the
execution and delivery of this Agreement or of any of the Other Documents by
Purchaser nor the consummation of any of the transactions contemplated hereby
or thereby, nor compliance with or fulfillment of the terms, conditions and
provisions hereof or thereof will:


 


(a)                                  conflict
with, result in a violation, breach of the terms, conditions or provisions of,
or constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under (i) any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws of the Purchaser, (ii) any other note, instrument, agreement, mortgage,
lease, license, franchise, permit or other authorization, right, restriction or
obligation to which Purchaser is a party or by which Purchaser is bound or
(iii) any order, judgment, or decree, law, statute, rule, or regulation
applicable to the Purchaser; or


 


(b)                                 legally
requires the consent, approval, order, action or authorization of, or
registration, declaration or filing with or notice to, any Person in connection
with the execution and delivery of this Agreement, any of the Other Documents
or the performance by the Purchaser of the transactions contemplated hereby or
thereby to be performed by it.


 


18

















 


ARTICLE 7



CERTAIN COVENANTS


 


7.1                                 Retained
Liabilities.  Except for the Assumed
Liabilities, Seller shall timely pay all Liabilities arising or resulting from
or in connection with (i) the Transferred Assets or Seller’s conduct of the
DentalMate Business and (ii) any and all assets of Seller other than the
Transferred Assets.  Purchaser shall pay
each of the Assumed Liabilities in accordance with their respective terms.


 


7.2                                 Tax
Matters.  Except for sales and use
taxes imposed by any taxing authority on Purchaser as a result of Purchaser’s
purchase of the Transferred Assets, all bulk sales, documentary, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by Seller
when due, and Seller will, at its own expense, file all necessary Tax Returns
and other documentation with respect to such transfer, documentary, stamp,
registration and other Taxes and fees, including bulk sales filing
requirements.


 


7.3                                 Change
of Name.  From and after the Closing
Date, neither Seller not its Affiliates shall use the name or any trademark,
service mark, trade name or other symbol or designation confusingly similar to
any trademark service mark, trade name or other symbol or designation used or
usable in or associated with the DentalMate Business for any purpose
whatsoever.


 


7.4                                 Employee
Matters.  Purchaser may, as
Purchaser shall determine in its sole discretion, extend offers of employment
to any employee or employees of Seller necessary to conduct the operations of
the DentalMate Business.  For
clarification and not by reason of limitation, neither Purchaser, nor any of
their Affiliates, shall be under any limitation or restriction whatsoever in
hiring or solicitation of any of DentalMate Business’s employees, customers or
venders, upon or after the Closing. 
Nothing in this Agreement shall be construed to limit Purchaser’s or
Seller’s right to terminate the employment of any employee hired by Purchaser
pursuant to this Section 7.4.


 


7.5                                 Transition
of Business.  Seller shall enter
into an agreement with Purchaser (“ Administrative Services Agreement”)
providing for such services as defined therein in Exhibit 7.5.  Seller shall also provide the following:


 


(a)  Preparation and provision of technical design document which
shall meet the specifications outlined by Purchaser via side letter and the
source code of the Software at Closing;


 


(b)  Customary
notification of Agreement and Assignment of individual contracts via letters to
all clients and vendors specified by Purchaser in the form to be provided by
Purchaser to mutually agreed to by Seller ;


 


(c)  Seller
shall make best efforts to obtain either a signed current copy of the agreement
with WebMD or written acknowledgment of same by WebMD in form and substance
satisfactory to Purchaser.


 


19

















 


7.6                                 Tax
and Financial Reporting.  For tax
and financial reporting purposes, Seller shall report for all results and be
responsible, including with respect to all Taxes attributable to or derived
from the DentalMate Business and income therefrom, for the DentalMate Business
through the Closing Date and Purchaser shall report all results and be
responsible for tax purposes for the DentalMate Business thereafter.


 


7.7                                 Use
of Purchase Price.  Seller agrees to
first use all or up to all of the Purchase Price to repay after the Closing any
and all secured obligations of Seller on the Closing Date in such amounts to
remove all Encumbrances relating to or affecting the DentalMate Business.


 


7.8                                 Corporate
Examinations and Investigations. 
Prior to the Closing Date, Purchaser shall be entitled, through their
employees, advisors, consultants, representatives, contractors, counsel and
independent accountants, to make such investigation of the assets, properties,
business and operations of Seller’s DentalMate Business and such examination of
the books, records and financial condition of Seller’s DentalMate Business as
Purchaser determines appropriate, provided that any such investigation and
examination shall be conducted at reasonable times and under reasonable
circumstances and in a manner so as not to interfere with the normal business
operations of Seller.  Seller shall make
available to such persons during such period all such information and copies of
all such documents concerning its affairs as such persons may reasonably
request, and shall cause its officers, employees, consultants, agents,
accountants and attorneys to cooperate with such persons in connection with
their review and examination.


 


7.9                                 Conduct
of Business Prior to the Closing Date. 
Except as set forth in Section 7.14, Seller agrees that prior to the
Closing Date (a) the DentalMate Business shall be conducted only in the
ordinary course consistent with past practice; (b) it shall not enter into any
material agreement, commitment or instrument, except in the ordinary course of
business, (c) it shall not sell, lease, transfer or otherwise dispose of, or
mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any
of the assets or properties of the Seller relating to the DentalMate Business,
except in the ordinary course of business consistent with past practices.


 


7.10                           Non-Compete.  Seller hereby agrees not to engage in any
Competitive Activity during the period commencing on the Closing Date and
ending on the third (3rd  ) anniversary of the Closing Date.  For these purposes, a “Competitive Activity”
shall mean, directly or indirectly, (i) owning, managing, operating, joining,
controlling, participating in or becoming employed by (including without
limitation, acting as a member of the board of directors of), (ii) rendering
any services to (including without limitation, consulting or management
services), advise or assistance of any nature on behalf of, or (iii) investing
or acquiring any interest in (whether beneficial or not), in the case of any of
the foregoing clauses (i), (ii) or (iii) above, any Person which operates a
business which is competitive with the DentalMate Business as of the Closing
Date anywhere in the world; provided, however, passive investments of no more
than 5% in the aggregate of the equity securities of any such Person, which
equity securities are publicly traded and listed for trading on any
internationally recognized securities exchange (including without limitation,
the National Association of Securities Dealers Automated Quotation system)
shall not constitute Competitive Activities. 
Seller further acknowledges that such restrictions are reasonable and
necessary to protect the


 


20

















 


legitimate interests of Purchaser and its Affiliates and that any
violation would result in irreparable injury to Purchaser and its Affiliates.


 


7.11                           Survival.  The representations, warranties, covenants
and obligations contained in this Agreement, the Other Documents and each other
document delivered in connection with the consummation of the transaction
contemplated by this Agreement will survive the Closing for the time from and
after the Closing Date as set forth in Section 10.4.  The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment
of Damages, or other remedy based on such representations, warranties,
covenants and obligations.


 


7.12                           Access
to Records.  The Purchaser will
permit representatives of the Seller to have full access at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Purchaser, to all books and records of or pertaining to the
Seller’s operation of its business prior to the Closing Date and of or
pertaining to DentalMate, an Affiliate of the Seller.


 


7.13                           Collection
of Accounts Receivable.  For a
period of twelve (12) months commencing on the Closing Date, Purchaser shall
use reasonable efforts to collect all accounts receivable of the Seller (the
“Accounts”) which are specifically identified to Purchaser and set forth in
Schedule 7.13 and sent to the Premises with sufficient detail to identify the
invoice relating to said Account. 
Schedule 7.13 shall be provided by the Seller to the Purchaser at
Closing. Purchaser’s efforts shall include directing its billing staff to continue
to collect and post the Accounts using current procedures and billing software
during this 12-month period including crediting customer payments to invoices
specified with such payments and, in the event that the customer fails to
identify specifically the invoice to be paid, Seller and Purchaser shall
cooperate with each other in good faith to identify whether said payment is
allocable to Seller or Purchaser.  All
monies collected by Purchaser on behalf of Seller shall be disbursed to a bank
account identified by Seller in writing on a monthly basis no later than ten
(10) days from the preceding month. 
Purchaser shall provide monthly accounting statements to Seller together
with other documents pertaining to the Accounts as are reasonably requested by
Seller and as are sufficient to identify the invoice pertaining to such
payments provided such documents were provided to Purchaser at Closing.  At the end of the 12-month period set forth
in this Section, Purchaser shall have no further obligation to collect the
Accounts, shall provide Seller with a final statement of the Accounts.


 


ARTICLE 8



CLOSING CONDITIONS


 


8.1                                 Conditions
to Purchaser’s Consummation of the Acquisition.  The obligation of Purchaser to consummate the Acquisition shall
be subject to the satisfaction, on or


 


21

















 


prior to the Closing Date, of each of the following conditions, each of
which may be waived by Purchaser except as otherwise provided by law:


 


(a)                                  Representations
and Warranties True.  Each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing as through made on the Closing Date.


 


(b)                                 Performance
by Seller.  Each of the covenants
and obligations of Seller to be performed by it on or before the Closing Date
pursuant to the terms of this Agreement, and each of the provisions hereof to
be complied with by Seller on or before such date, shall have been duly
performed and complied with in all material respects.


 


(c)                                  Authorization
of Transaction.  All corporate or
other organizational action required to be taken by or on the part of Seller to
authorize the execution, delivery and performance of this Agreement and the
Other Documents and the consummation of the transactions contemplated hereby
and thereby shall have been duly and validly taken, and Seller shall have full
right and power to consummate transactions contemplated by this Agreement and
the Other Documents on the terms and conditions provided herein and therein.


 


(d)                                 Absence
of Litigation.  No action, suit or
proceeding by or before any Governmental Authority shall have been instituted
or threatened by any Governmental Authority or Person whatsoever which shall
seek to restrain, prohibit or invalidate the transactions contemplated by this
Agreement or the Other Documents or which may affect the right of Purchaser to
own or use the Transferred Assets or operate the DentalMate Business after the
Closing.


 


(e)                                  Assignment
of Transferred Assets. Seller shall have executed and delivered to
Purchaser an Assignment and Assumption Agreement.


 


(f)                                    Termination
of Encumbrances.  Purchaser shall
have received to its satisfaction documentation with respect to the full
cancellation and release of all Encumbrances on the Transferred Assets,
including without limitation, executed UCC-3 Termination Statements or, in the
alternative, a pay-off letter from the secured lenders of Seller stating that
its Encumbrances on the Transferred Assets will be released upon payment to
such lender of a sum certain.


 


(g)                                 Corporate
Name.  Seller shall have executed
and delivered to Purchaser such documents, instruments, certificates and
assignments and taken such other actions as required by Purchaser or any
Governmental Authority to sell, assign, convey and transfer to Purchaser all
right, title and interest in and to the name DentalMate and any and all
variations thereof used by Seller to identify the DentalMate Business as
currently conducted.


 


(h)                                 No
Adverse Change.  There shall have
been no events which have resulted in or are likely to result in a Material
Adverse Effect.


 


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(i)                                     Due
Diligence.  Purchaser shall be
satisfied in its sole discretion as to the results of its due diligence
investigation of the DentalMate Business operations, properties, assets,
liabilities and condition, financial or otherwise.


 


(j)                                     Conduct
of Business Prior to the Closing Date. 
Seller (i) shall have conducted the DentalMate Business only in the
ordinary course consistent with past practice; (ii) shall not have entered into
material agreement, commitment or instrument, except in the ordinary course of
business, (iii) shall not have sold, leased, transferred or otherwise disposed
of, or mortgaged or pledged, or imposed or suffered to be imposed any
Encumbrance on, any of the assets or properties of the Seller relating to the
DentalMate Business, except in the ordinary course of business consistent with
past practices.


 


(k)                                  Certificates
and Other Documents.  Seller shall
have furnished Purchaser with such certificates of Seller as Purchaser may
reasonably request to evidence or certify compliance with the conditions set
forth in this Section 8.1.  The form and
substance of all opinions, certificates and other documents hereunder shall be
satisfactory in all respects to Purchaser and its counsel.


 


8.2                                 Conditions
to Seller’s Consummation of the Acquisition.  The obligations of Seller to consummate the Acquisition shall be
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, each of which may be waived by Seller except as otherwise
provided by law:


 


(a)                                  Representations
and Warranties True.  Each of the
representations and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects as of the Closing Date as though
made on the Closing Date.


 


(b)                                 Purchaser’s
Performance.  Each of the
obligations of Purchaser to be performed by it on or before the Closing Date
pursuant to the terms of this Agreement, and each of the provisions hereof to
be complied with by Purchaser on or before such date, shall have been duly
performed and complied with in all respects.


 


(c)                                  Authorization
of Transaction.  All corporate
action required to be taken by or on the part of Purchaser to authorize the
execution, delivery and performance of this Agreement and the Other Documents
and the consummation of the transactions contemplated hereby and thereby shall
have been duly and validly taken, and Purchaser shall have full right and power
to consummate the Acquisition and the other transactions contemplated by this
Agreement and the Other Documents on the terms and conditions provided herein
and therein.


 


(d)                                 Absence
of Litigation.  No action, suit or
proceeding by or before any Governmental Authority shall have been instituted
or threatened by any Governmental Authority or Person which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement or the Other Documents or which may affect the right of Seller to
transfer the Transferred Assets.


 


23

















 


(e)                                  Assignment
and Assumption Agreement.  Purchaser
shall have executed and delivered to Seller the Assignment and Assumption
Agreement.


 


(f)                                    Certificates
and Other Documents.  Purchaser
shall have furnished Seller with such certificates of Purchaser as Seller may
reasonably request to evidence or certify compliance with the conditions set
forth in this Section 8.2.  The form and
substance of all opinions, certificates and other documents hereunder shall be
satisfactory in all respects to Seller and its counsel.


 


(g)                                 Purchase
Price.  Purchaser shall have
delivered to Seller the Purchase Price in immediately available funds.


 


ARTICLE
9



INDEMNIFICATION


 


9.1                                 Indemnification
by Seller.  Seller shall indemnify,
defend and hold harmless Purchaser, its Affiliates, and the officers,
directors, employees and agents of Purchaser and its Affiliates, and each of
their respective successors and assigns, from and against all Claims
(including, without limitation, Claims by third parties), damages, losses,
Liabilities, Taxes, costs and expenses (including, without limitation,
settlement costs and any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened actions) (collectively, “Damages”)
arising out of or caused by (i) the failure of any representation or warranty
made by Seller in this Agreement or any Other Document to be true and correct
in all material respects when made, (ii) any breach of any covenant, agreement
or obligation of Seller contained in this Agreement or any Other Document (iii)
the ownership or operation of the DentalMate Business prior to the Closing Date
(whether notice of such occurred before, on or after the Closing Date), and
(iv) any liabilities relating to Taxes attributable to any taxable period of
Seller, or relating to the use or ownership of any Transferred Asset, prior to
or including the Closing Date.


 


9.2                                 Indemnification
by Purchaser.  Purchaser shall
indemnify, defend and hold harmless Seller, its Affiliates, and the officers,
directors, employees and agents of Seller and its Affiliates, and their
respective successor and assigns from and against any Damages arising out of or
caused by (i) the failure of any representation or warranty made by Purchaser
in this Agreement or any Other Document to be true and correct in all respects
when made, (ii) any breach of any covenant, agreement or obligation of the
Purchaser contained in this Agreement or the Other Documents, (iii) the
ownership or operation of the DentalMate Business after the Closing Date, or
(iv) any of the Assumed Liabilities.


 


9.3                                 Indemnification
Procedures.


 


(a)                                  Notice
of Claim.  An indemnified party
hereunder shall promptly give notice to the indemnifying party after learning
of the assertion of any third party claim against the indemnified party as to
which recovery may be sought against the indemnifying party pursuant to this
Article 9.  The failure to give or
delay in giving


 


24

















 


notice as required by this Section 9.3(a)
in a timely fashion shall not result in a waiver of any right to
indemnification hereunder except to the extent the indemnifying party is
prejudiced thereby and then only to the extent of such prejudice.


 


(b)                                 Assumption
of Defense by Indemnifying Party. 
With respect to any third party claim for which any party may be
entitled to indemnification pursuant to Sections 9.1 and 9.2, the indemnified
party may assume primary responsibility for the defense of such claim, and may
select legal counsel reasonably acceptable to the indemnifying party to conduct
the defense of such claim.  If the
indemnified party assumes and undertakes a defense of a third party claim or
claims in accordance with the immediately preceding sentence, the indemnifying
party shall be liable to the indemnified party for any reasonable attorneys’
fees and expenses incurred by the indemnified party in connection with such
matter, after receiving notice from the indemnified party to the effect that it
intends to take advantage of the provisions set forth in the immediately
preceding sentence.  In the event the
indemnified party assumes primary responsibility for the defense of any claim,
the indemnifying party shall continue to pay the legal fees and expenses of
counsel for the indemnified party and the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified
party.  The indemnified party shall have
the right, with the consent of the indemnifying party (which consent shall not
be unreasonably withheld, conditioned or delayed) to settle or compromise any
such action on terms satisfactory to it; provided, however, that
in the event the indemnifying party shall have failed to pay any of the
payments required pursuant to Section 9.3(c) within sixty (60) days after
receipt of an invoice therefor, then, in such event, the indemnified party
shall be entitled to settle or compromise any such action without the consent
of the indemnifying party.  The
indemnified party agrees to keep the indemnifying party (or its legal
representative) fully apprised of any such defense until the disposition of the
claim.


 


(c)                                  Payment
by Indemnifying Party.  Without
limiting the generality of this Article 9, the indemnifying party shall
promptly pay or reimburse the indemnified party for (i) the amount of any
judgment rendered or settlement entered into, (ii) all Damages and expenses,
legal or otherwise, incurred by the indemnified party in connection with the
defense against such third party claim or litigation and (iii) all costs
incurred by the indemnified party in the securing of such party’s rights under
this Article 9.


 


9.4                                 INDEMNIFICATION
LIMITATIONS.  In the event the
Seller breaches any of its representations, warranties, and covenants contained
in this Agreement, and, provided that the Purchaser makes a written claim for
indemnification against the Seller pursuant to Section 9 within the requisite
survival period, then the Seller shall indemnify the Purchaser through and
after the date of the claim for indemnification resulting from the breach. All
of the representations and warranties of the Seller and the Purchaser contained
in this Agreement shall survive the Closing and continue in full force and
effect for a period of twenty four (24) months thereafter (“Indemnity Period”).


 


25

















 


ARTICLE 10



MISCELLANEOUS


 


10.1                           Further
Assurances.  Each party hereto will
fully cooperate with each other and execute and deliver any and all instruments
and take any and all other actions, after the date hereof and before the
Closing and after the Closing, which may be necessary, proper or advisable, in
good faith, to effectuate or evidence the provisions of this Agreement and the
Other Documents and to consummate the transactions contemplated hereby and
thereby.


 


10.2                           Waiver.  Any failure of Seller to comply with any of
its obligations or agreements herein contained may be waived only in writing by
Purchaser.  Any failure of Purchaser to
comply with any of its obligations or agreements herein contained may be waived
only in writing by Seller.


 


10.3                           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given upon
receipt of: hand delivery; certified or registered mail, return receipt
requested; or facsimile transmission with confirmation of receipt:


 


(a)                                  If
to Seller, to:



VANTAGEMED Corporation

3017 Kilgore Road, Suite 180

Rancho Cordova, CA 95670

Facsimile: XXX-XXX-XXXX

Telephone: XXX-XXX-XXXX

Attention:  Philip Ranger



(with a copy to)




 


(b)                                 If
to Purchaser, to:



MDC Services, Inc.

XXX

XXXXX

Facsimile: XXX-XXX-XXXX

Telephone: XXX-XXX-XXXX

Attention: John M. Simpson


 


26

















 


(with a copy to)



Cummins & Hession, P.C.

415 North LaSalle, Suite 603

Chicago, Illinois 60610

Facsimile:                                            XXX-XXX-XXXX

Telephone:                                    XXX-XXX-XXXX

Attention:  John J. Cummins, Esq.


 


Such names and addresses may be changed by written notice
to each person listed above.


 


10.4                           GOVERNING
LAW AND CONSENT TO JURISDICTION. 
(a)  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS, AND
NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.


 


(b)                                 THE
PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
FOR ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER DOCUMENTS (AS DEFINED HEREIN) OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY, AND AGREES NOT TO COMMENCE ANY ACTION, SUIT OR
PROCEEDING RELATED THERETO EXCEPT IN SUCH COURTS.  SELLER AND PURCHASER FURTHER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY LAWSUIT,
CLAIM OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, (II) IRREVOCABLY AND
UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM AN INCONVENIENT FORUM,
AND (III) COVENANT AND AGREE NOT TO INSTITUTE ANY ACTION OR PROCEEDING IN ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE.


 


10.5                           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.  A facsimile, telecopy or other reproduction of this Agreement may
be executed by one or more parties hereto, and an executed copy of this
Agreement may be delivered by one or more parties hereto by facsimile or
similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes as
of the date first written above.  At the
request of any party hereto, all parties hereto agree to execute an original of
this Agreement as well as any facsimile, telecopy or other reproduction hereof.


 


10.6                           Entire
Agreement.  This Agreement,
including the Exhibits and Schedules hereto and the documents referred to
herein, embodies the entire agreement and understanding of


 


27

















 


the parties hereto in respect of the subject matter contained
herein.  This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter, including without limitation the Letter of Intent, dated
June 2, 2003, between MDC and Seller.


 


10.7                           Amendment
and Modification.  This Agreement
may be amended or modified only by written agreement of the parties hereto.


 


10.8                           Binding
Effect; Benefits.  This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; nothing in this Agreement, express or
implied, is intended to confer on any Person other than the parties hereto and
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.


 


10.9                           Assignability.  This Agreement shall not be assignable by
any party hereto without the prior written consent of the other party except by
operation of law.


 


10.10                     Bulk Sales. The Seller and
the Purchaser hereby agree and acknowledge that compliance with the provisions
of the bulk sales law of the State of North Carolina in connection with the
transactions contemplated by this Agreement is waived.


 


10.11                     Attorneys’ Fees, Prevailing
Parties.  In the event either party seeks
judicial enforcement of its rights under this Agreement, then the prevailing
party in such action shall be entitled to recover its costs incurred in such
action including, but not limited to, reasonable attorneys’ fees.


 


 


[Signature
page follows]


 


28

















 


IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the 19th day of September, 2003.


 


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  VANTAGEMED
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard M.
  Brooks

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard M.
  Brooks

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TREND SIERRA
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Richard M. Brooks

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard M.
  Brooks

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
  MDC SYSTEMS
  & SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John M. Simpson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John M. Simpson

  
	
   

  	
   

  	
  Title:

  	
  PRESIDENT

  
					



 


[Signature
Page to Asset Purchase Agreement]  


 


29

















 


EXHIBIT A


 


 


PROMISSORY NOTE 


 


	
  $50,000.00

  	
   

  	
  Date: September 19, 2003

  



 


 


1.               MDC Services, Inc. (“Borrower”) promises to
pay to VantageMed Corporation (“Lender”), or order, in lawful money of the
United States of America, the principal amount of Fifty Thousand Dollars
($50,000) or so much as may be outstanding on the unpaid outstanding principal
balance.


2.               Interest shall not accrue on this Note.
Borrower shall pay lender at Lender’s address or at such other place as Lender
may designate in writing.


3.               The Borrower shall pay the outstanding
principal in a single payment six months after the date written above.


4.               Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due.


5.               The terms of this Promissory Note may be
amended by written consent of both parties to this agreement.


6.               Borrower will be in default if any of the
following occurs:


a.               Borrower fails to make any payment when due;


b.              Borrower defaults in any promise Borrower has
made to Lender in connection with this Note, or Borrower fails to perform
promptly at the time and manner provided in this Note after 15 days notice and
opportunity to cure;


c.               A receiver is appointed for any part of
Borrower’s property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by borrower or against Borrower under any
bankruptcy or insolvency laws.


7.               Upon default, Lender at its sole discretion
may declare the entire unpaid principal balance on the Note due within 15 days
notice of such default if default is not cured, and then Borrower will pay that
amount. Subject to any limits under applicable law, Borrower


 


30

















 


shall be responsible for, in the event of default, Lender’s reasonable
attorneys’ fees which may now or hereafter be permitted by law and Lender’s
legal expenses whether or not there is a lawsuit, including reasonable
attorneys’ fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction) appeals, and any
anticipated post-judgment collection services. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by Lender
in the State of California. If there is a lawsuit, Borrower agrees upon
Lender’s request to submit to the jurisdiction of the courts of the State of
California. This Note shall be governed by and construed in accordance with the
laws of the State of California.


8.               Lender may delay or forego enforcing any of
its rights or remedied under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, protest and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.


 


PRIOR
TO SIGNING THIS NOTE, BORROWER HAS READ AND UNDERSTOOD ALL OF THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.


 


	
  “Buyer”

  	
   

  	
  “Seller”

  
	
  MDC
  Services, Inc.

  	
   

  	
  VantageMed
  Corporation

  
	
  By:
  John M. Simpson, President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  John M. Simpson

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard M. Brooks

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard
  M. Brooks

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
							



 


31

















 


EXHIBIT
B


 


 


PROMISSORY NOTE 


 


	
  $50,000.00

  	
   

  	
  Date: September 19, 2003

  



 


 


1.               MDC Services, Inc. (“Borrower”) promises to
pay to VantageMed Corporation (“Lender”), or order, in lawful money of the
United States of America, the principal amount of Fifty Thousand Dollars
($50,000) or so much as may be outstanding on the unpaid outstanding principal
balance.


2.               Interest shall not accrue on this Note.
Borrower shall pay lender at Lender’s address or at such other place as Lender
may designate in writing.


3.               The Borrower shall pay the outstanding
principal in a single payment twelve months after the date written above.


4.               Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due.


5.                The terms of this Promissory Note may be
amended by written consent of both parties to this agreement.


6.               Borrower will be in default if any of the
following occurs:


a.               Borrower fails to make any payment when due;


b.              Borrower defaults in any promise Borrower has
made to Lender in connection with this Note, or Borrower fails to perform
promptly at the time and manner provided in this Note after 15 days notice and
opportunity to cure;


c.               A receiver is appointed for any part of
Borrower’s property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by borrower or against Borrower under any
bankruptcy or insolvency laws.


7.               Upon default, Lender at its sole discretion
may declare the entire unpaid principal balance on the Note due within 15 days
notice of such default if default is not cured, and then Borrower will pay that
amount. Subject to any limits under applicable law, Borrower shall be responsible
for, in the event of default, Lender’s reasonable attorneys’ fees which may now
or hereafter be permitted by law and Lender’s legal expenses whether or not
there is a lawsuit, including reasonable attorneys’ fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction) appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the State of California. If there
is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of the State of California. This Note shall be governed
by and construed in accordance with the laws of the State of California.


8.               Lender may delay or forego enforcing any of
its rights or remedied under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, protest


 


32

















 


and notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability.


 


PRIOR
TO SIGNING THIS NOTE, BORROWER HAS READ AND UNDERSTOOD ALL OF THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.


 


 


	
  “Buyer”

  	
   

  	
  “Seller”

  
	
  MDC
  Services, Inc.

  	
   

  	
  VantageMed
  Corporation

  
	
  By:
  John M. Simpson, President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  John M. Simpson

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard M. Brooks

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard
  M. Brooks

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
							



 


33

















 


EXHIBIT
C


 


SECURITY
AGREEMENT


 


 


This SECURITY AGREEMENT is made on this 19th day of September, 2003
between VantageMed Corporation, (“Secured Party”) and MDC Services, Inc.
(“Debtor”).


 


1.               SECURITY INTEREST.    Debtor
grants to Secured Party a security interest in the DentalMate Software and the
customer lists as defined in the Exhibit attached hereto. The Security Interest
shall secure the payment and performance of the Debtor’s promissory notes
attached hereto in Exhibit A in the principal amount of Fifty Thousand
($50,000.00) Dollars.


2.               COVENENTS.    Debtor hereby
warrants and covenants:


a.               The DentalMate Software will be maintained in
full working condition and the Debtors will make every effort to maintain high
quality support to the Customers;


b.              The Debtor will not sell, dispose, or
otherwise transfer the collateral or any interest therein without the prior
written consent of Secured Party, and the Debtor shall keep the collateral free
from unpaid charges (including consultants), taxes, and liens (except liens
placed on assets by Buyer’s financial institutions).


c.               The Debtor shall execute alone or with
Secured Party any Financing Statement or other document or procure any
document, and pay the cost of filing same in all public offices wherever filing
is deemed by Secured Party to be necessary.


d.              Debtor shall maintain insurance at all times
with respect to all collateral against risks of fire, theft,, and other such
risks and in such amounts as Secured Party may require. The policies shall be
payable to both the Secured Party and the Debtor as their interest appear and
shall provide for ten (10) days written notice of cancellation to Secured
Party.


e.               The Debtor shall make all enhancements,
additions, and improvements necessary to maintain any software in good working
order and condition.


3.               DEFAULT.    The Debtor shall
be in default under this Agreement upon the happening of any of the following:


a.               Any misrepresentation in connection with this
Agreement on the part of the Debtor.


b.              Any non-compliance with or non-performance of
the Debtor’s obligations under the Note or this Agreement.


c.               If Debtor is involved in any financial
difficulty as evidenced by


i.                  An assignment for the benefit of creditors,
or


ii.               An attachment or receivership of assets not
dissolved within thirty (30) days, or


iii.            The institution of Bankruptcy proceedings,
whether voluntary or involuntary, which is not dismissed within thirty (30)
days from the date on which it is filed. Upon default and at any time
thereafter, Secured Party


 


34

















 


may declare all obligations secured hereby immediately due and payable
and shall have the remedies of a Secured Party under the Uniform Commercial
Code. Secured Party may require the Debtor to make it available to Secured
Party at a place mutually convenient. No waiver by Secured Party of any default
shall operate as a waiver of any other default or of the same default on a
future occasion. This Agreement shall inure to the benefit of and bind the
heirs, executors, administrators, successors, and assigns of the parties. This
Agreement shall have the effect of an instrument under seal.


 


 


	
  “Buyer”

  	
   

  	
  “Seller”

  
	
  MDC
  Services, Inc.

  	
   

  	
  VantageMed
  Corporation

  
	
  By:
  John M. Simpson, President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  John M. Simpson

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard M. Brooks

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name:

  	
  Richard
  M. Brooks

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
								



 


 


EXHIBIT
D


 


SECURITY
AGREEMENT


 


 


This SECURITY AGREEMENT is made on this 19th day of September, 2003
between VantageMed Corporation, (“Secured Party”) and MDC Services, Inc.
(“Debtor”).


 


4.               SECURITY INTEREST.    Debtor
grants to Secured Party a security interest in the DentalMate Software and the
customer lists as defined in the Exhibit attached hereto. The Security Interest
shall secure the payment and performance of the Debtor’s promissory notes
attached hereto in Exhibit B in the principal amount of Fifty Thousand
($50,000.00) Dollars.


 


35

















 


5.               COVENENTS.    Debtor hereby
warrants and covenants:


a.               The DentalMate Software will be maintained in
full working condition and the Debtors will make every effort to maintain high
quality support to the Customers;


b.              The Debtor will not sell, dispose, or
otherwise transfer the collateral or any interest therein without the prior
written consent of Secured Party, and the Debtor shall keep the collateral free
from unpaid charges (including consultants), taxes, and liens (except liens
placed on assets by Buyer’s financial institutions).


c.               The Debtor shall execute alone or with
Secured Party any Financing Statement or other document or procure any
document, and pay the cost of filing same in all public offices wherever filing
is deemed by Secured Party to be necessary.


d.              Debtor shall maintain insurance at all times
with respect to all collateral against risks of fire, theft,, and other such
risks and in such amounts as Secured Party may require. The policies shall be
payable to both the Secured Party and the Debtor as their interest appear and
shall provide for ten (10) days written notice of cancellation to Secured
Party.


e.               The Debtor shall make all enhancements,
additions, and improvements necessary to maintain any software in good working
order and condition.


6.               DEFAULT.    The Debtor shall
be in default under this Agreement upon the happening of any of the following:


a.               Any misrepresentation in connection with this
Agreement on the part of the Debtor.


b.              Any non-compliance with or non-performance of
the Debtor’s obligations under the Note or this Agreement.


c.               If Debtor is involved in any financial
difficulty as evidenced by


i.                  An assignment for the benefit of creditors,
or


ii.               An attachment or receivership of assets not
dissolved within thirty (30) days, or


iii.            The institution of Bankruptcy proceedings,
whether voluntary or involuntary, which is not dismissed within thirty (30)
days from the date on which it is filed. Upon default and at any time
thereafter, Secured Party may declare all obligations secured hereby
immediately due and payable and shall have the remedies of a Secured Party
under the Uniform Commercial Code. Secured Party may require the Debtor to make
it available to Secured Party at a place mutually convenient. No waiver by
Secured Party of any default shall operate as a waiver of any other default or
of the same default on a future occasion. This Agreement shall inure to the
benefit of and bind the heirs, executors, administrators, successors, and
assigns of the parties. This Agreement shall have the effect of an instrument
under seal.


 


 


	
  “Buyer”

  	
   

  	
  “Seller”

  
	
  MDC
  Services, Inc.

  	
   

  	
  VantageMed
  Corporation

  
	
  By:
  John M. Simpson, President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  John M. Simpson

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard M. Brooks

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name:

  	
  Richard
  M. Brooks

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
								



 


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