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EXHIBIT 2.7
INTERIM ADMINISTRATIVE SERVICES AGREEMENT
This INTERIM ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is
made as of December 11, 2000, by and between SYBRON INTERNATIONAL CORPORATION, a
Wisconsin corporation ("Sybron"), and SYBRON DENTAL SPECIALITIES, INC. (formerly
known as "SDS Holding Co."), a Delaware corporation ("SDS").
RECITALS
WHEREAS, pursuant to the Contribution Agreement, Plan and Agreement of
Reorganization and Distribution between the parties dated as of November 28,
2000 (the "Contribution Agreement") and pursuant to certain other agreements of
even date herewith, Sybron is transferring, or will transfer, to SDS, all of the
Dental Assets (as defined in the General Assignment, Assumption and Agreement
regarding Litigation, Claims and Other Liabilities (executed by the parties of
even date herewith);
WHEREAS, after the Effective Date, SDS will operate the Dental Business
as a separate publicly traded company and Sybron will operate the Laboratory
Business (as defined in the Contribution Agreement) as a separate publicly
traded company;
WHEREAS, prior to the Effective Date, Sybron provided various
administrative support services to the Dental Business and the Laboratory
Business;
WHEREAS, after the Effective Date, SDS and Sybron will have a need for
the provision of certain administrative support services, which will have been
assumed by the other party; and
WHEREAS, SDS desires and Sybron is willing to provide certain
administrative support services for SDS's operations for certain specified
interim periods after the Effective Date solely for the purpose of assisting SDS
in the transition, and Sybron desires and SDS is willing to provide certain
other administrative support services for Sybron's operations for certain
specified interim periods after the Effective Date solely for the purpose of
assisting Sybron in the transition.
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained in this Agreement and the other Contribution Documents, the
parties hereto agree as follows:
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1. Services.
(a) Subject to the terms and conditions provided herein,
Sybron shall provide SDS with the following services
(the "Sybron Services") on an interim basis,
consisting of:
(i) "Accounting Services," which shall mean the
accounting services previously provided by
Sybron to the Dental Business;
(ii) "Tax Management Services," which shall mean
the tax management services previously
provided by Sybron to the Dental Business;
(iii) "Legal Services," which shall mean the legal
services previously provided by Sybron to
the Dental Business; and
(iv) "Treasury/Cash Management Services," which
shall mean the treasury and cash management
services previously provided by Sybron to
the Dental Business.
(b) Subject to the terms and conditions provided herein,
SDS shall provide Sybron with "Insurance/Risk
Management Services" on an interim basis, which shall
mean the procurement of property, casualty and
related insurance policies and the administration of
claims and rights, and which shall include, but not
be limited to, the availability of Mr. Stephen
Tomassi for discussion and conferral regarding
matters related to his previous employment with
Sybron.
(c) The "Sybron Services" and the "Insurance/Risk
Management Services" may be referred to herein
collectively as the "Services."
2. Agreement Principles and Guidelines.
(a) By this Agreement, Sybron and SDS seek to implement
the general principle that, with the exceptions noted
herein or in the Contribution Agreement, Sybron will
provide Sybron Services to SDS and the Dental
Business Subsidiaries (as defined in the Contribution
Agreement) on an interim basis in a scope similar to
those provided by Sybron prior to the Effective Date
while it is not reasonably feasible for SDS to
provide such Sybron Services independently for
itself, and SDS will provide Insurance/Risk
Management Services to Sybron and the Laboratory
Business Subsidiaries (as defined in the Contribution
Agreement) on an interim basis in a scope similar to
those previously provided by Sybron prior to the
Effective Date while it is not reasonably feasible
for Sybron to provide such Insurance/Risk Management
Services independently for itself.
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(b) Sybron does not promise, covenant, or agree to
provide a greater level or magnitude of Sybron
Services than those which were previously provided to
the Dental Business by Sybron. SDS acknowledges and
covenants to use reasonable efforts to independently
provide such Sybron Services for itself and its
subsidiaries as soon as reasonably feasible. If
reasonably feasible, SDS will provide such Sybron
Services for itself prior to the term limits set
forth in Section 4 of this Agreement. Each party
hereby acknowledges that the requirement for SDS to
use reasonable efforts to independently provide such
Sybron Services as soon as reasonably feasible is a
material element and condition to this Agreement and
that failure to fully comply with such provision will
give rise to, among other provisions, the termination
rights set forth in Section 4(c) of this Agreement.
Nothing in this Agreement shall be construed to cause
Sybron to become a service bureau or to perform a
Sybron Service which it cannot provide without (i) a
conflict with a third-party contract to which Sybron
or one of its subsidiaries is a party or (ii) a
breach of any third-party contract to which Sybron or
one of its subsidiaries is a party. In no event will
Sybron be responsible for any damages if it is unable
to offer or continue to provide a Sybron Service to
SDS or its subsidiaries pursuant to this paragraph.
(c) SDS does not promise, covenant, or agree to provide a
greater level or magnitude of Insurance/Risk
Management Services than that which was previously
provided to the Laboratory Business by Sybron. Sybron
acknowledges and covenants to use reasonable efforts
to independently provide such Insurance/Risk
Management Services for itself and its subsidiaries
as soon as reasonably feasible. If reasonably
feasible, Sybron will provide such Insurance/Risk
Management Services for itself prior to the term
limits set forth in Section 4 of this Agreement. Each
party hereby acknowledges that the requirement for
Sybron to use reasonable efforts to independently
provide such Insurance/Risk Management Services as
soon as reasonably feasible is a material element and
condition to this Agreement and that failure to fully
comply with such provision will give rise to, among
other provisions, the termination rights set forth in
Section 4(c) of this Agreement. Nothing in this
Agreement shall be construed to cause SDS to become a
service bureau or to perform a Insurance/Risk
Management Services which it cannot provide without
(i) a conflict with a third-party contract to which
SDS or one of its subsidiaries is a party or (ii) a
breach of any third-party contract to which SDS or
one of its subsidiaries is a party. In no event will
SDS be responsible for any damages if it is unable to
offer or continue to provide Insurance/Risk
Management Services to Sybron or its subsidiaries
pursuant to this paragraph.
3. Fees and Additional Charges. The parties agrees to pay the fees
described on Schedule 1 hereto for the Services received.
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(a) Additional Charges. In addition to the charges set
forth on Schedule 1, the parties agree to pay for any
manufacturers, sales, use, excise, personal property,
or any other tax or charge, or duty or assessment
cost, expense, or fee attributable to the execution
or performance of any Service pursuant to this
Agreement, except: (i) any income, franchise, doing
business or similar taxes levied or assessed on or
based on such party's income, capital stock or other
similar base, and (ii) employment taxes with respect
to employees of such party (including, but not
limited to, unemployment taxes, social security taxes
and income tax withholdings). The parties also agree
to pay any fee, expense, or charge associated with
obtaining consents from any third party necessary to
offer any Service under this Agreement. Each party
also agrees to reimburse the other party for its
reasonable out-of-pocket expenses directly
attributable to the provision of Services hereunder.
(b) Terms of Payment. Each party shall pay the other's
fees and any additional charges owed within thirty
(30) days of invoice. Each party shall also pay any
collection fees and reasonable attorneys' fees
incurred by the other party in collecting payment of
the charges and other amounts for which the party is
liable under the terms and conditions of this
Agreement. Without limiting the foregoing, if a party
is more than two months in arrears on any payment,
the other party may terminate this Agreement pursuant
to the provisions of Section 14(d).
4. Term.
(a) This Agreement shall be effective upon the Effective
Date. Subject to the requirement set forth in Section
2 of this Agreement that each party must use
reasonable efforts to independently provide such
Services when reasonably feasible, Sybron shall
perform each of the Sybron Services for a six-month
term and SDS shall perform the Insurance/Risk
Management Services for a six-month term. Each
Service shall have its own six-month term (a "Service
Period"). The early termination, extension, or other
change to any Service Period shall not affect the
term of any other Service Period.
(b) The party providing any Service may, at its sole
discretion, and upon request of the other party at
least thirty (30) days prior to termination of any
Service Period, extend the Service Period for an
additional period not greater than three months. The
Services will then be offered at a rate of up to 200%
of the billing rate in effect at such time.
(c) The party receiving any Service may, at its sole
discretion, terminate the Service upon providing
notice of such termination to the other party.
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(d) SDS may promptly terminate this Agreement upon
written notice to Sybron with cause for any material
breach of this Agreement by Sybron, unless within a
period of fifteen (15) days after written notice
Sybron remedies the breach or proposes a course of
action, reasonably acceptable to SDS to remedy the
breach within a reasonable time. Sybron may promptly
terminate this Agreement upon written notice to SDS
with cause for any material breach of this Agreement
by SDS, unless within a period of fifteen (15) days
after written notice SDS remedies the breach or
proposes a course of action, reasonably acceptable to
Sybron, to remedy the breach within a reasonable
time. This Agreement will terminate automatically (to
the extent permitted by law at the time) in the event
either party files a petition in bankruptcy, becomes
insolvent, makes an assignment for the benefit of
creditors or an arrangement pursuant to any
bankruptcy law, or discontinues its business or has a
receiver appointed for it.
(e) Upon any termination hereunder, each party will
promptly pay any charges or fees owed to the other
party.
5. Subsidiaries. To the extent such Services were previously provided
to subsidiaries of SDS or Sybron, as the case may be, all Services shall be
included as part of the Services provided under this Agreement and shall be
performed in accordance with the terms and conditions of this Agreement. The
parties agree that each is responsible for assuring compliance with the
Agreement by their respective subsidiaries and further agree to be responsible
for the compliance with such subsidiaries' obligations in order to allow the
other party to offer the above described Services.
6. Systems Modification; Amendment of Services. Each party, at its sole
discretion, may modify, amend, enhance, update or provide an appropriate
replacement for any of the software used to provide the Services or any element
of its computer systems (hardware or software) at any time.
7. Responsibility.
(a) General. The parties agree to perform the Services in
a reasonable manner, which is similar to the manner
in which each party provides services for its own
operations, and assumes no other or higher degree of
care. Except as specifically provided herein, neither
party assumes any other obligations as to
performance, timing or quality of the Services
provided under this Agreement; all risks of error are
expressly and solely assumed by the party receiving a
Service, and the party providing the Service shall
not be responsible for loss or damage due to delays
in providing the Services under this Agreement. NO
PARTY WILL IN ANY EVENT BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES INCURRED BY THE
OTHER PARTY INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS OR BUSINESS OPERATION LOSS, REGARDLESS OF
WHETHER THE PARTY WAS ADVISED OF THE POSSIBLE
OCCURRENCE OF SUCH DAMAGES.
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(b) Reliance on the Other Party. In connection with the
foregoing, each party agrees that such party, such
party's subsidiaries, and its and their employees
will have a significant impact on the timing and
quality of the performance of the Services offered.
Each party will provide the Services described in
this Agreement on the basis of information and/or
instructions furnished by the other party. The party
providing a Service shall be entitled to rely upon
any such data, information, or instructions as
provided by the other party. If any error results
from incorrect input supplied by the party receiving
a Service, that party shall be responsible for
discovering and reporting such error and supplying
the information or instruction necessary to correct
such error to the other party. The party providing a
Service may rely upon any instrument, signature,
instruction or telephone call from any employee of
the other party, or an employee of the other party's
subsidiaries, as to Services requested under this
Agreement. In connection with providing such
Services, the party providing the Service shall not
be liable for any action taken or omitted by it in
good faith and believed to have been authorized by
the other party, its subsidiaries, or its or their
employees.
8. Warranties. EXCEPT AS SPECIFICALLY DESCRIBED IN THIS AGREEMENT, EACH
PARTY DISCLAIMS ALL OTHER WARRANTIES, WHETHER WRITTEN, ORAL, EXPRESSED OR
IMPLIED INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
9. Force Majeure. Neither party shall be liable to the other party if
its fulfillment or performance of any terms or provisions of this Agreement is
delayed or prevented by revolution or other civil disorders, wars, act of
enemies, strikes, electrical equipment availability failures, labor disputes,
fires, floods, act of God, federal, state, or municipal action, statute,
ordinance or regulation, or, without limiting the foregoing, any other causes
not within its reasonable control, and which by the exercise of reasonable
diligence it is unable to prevent, whether of the class of causes hereinbefore
enumerated or not. In case of emergency, each party may also select the order,
timeliness, or availability of providing any Services to other party.
10. Employees. All employees of Sybron or its subsidiaries providing
Services under this Agreement to SDS or its subsidiaries will remain employees
of Sybron or its subsidiaries, as the case may be, and all employees of SDS or
its subsidiaries providing Services under this Agreement to Sybron or its
subsidiaries will remain employees of SDS or its subsidiaries or its
subsidiaries, as the case may be.
11. Confidentiality. The parties recognize that the rendering of
Services will be governed by the Confidentiality and Nondisclosure Agreement
entered into by the parties in connection with the transactions contemplated by
the Contribution Agreement, except that the confidentiality requirements of both
parties will survive after termination of the Services under this Agreement,
regardless of the reason for termination. In the event of any dispute concerning
confidentiality, the parties agree to utilize the provisions of Section 12.
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12. Dispute Resolution Procedure. In the event that any dispute or
difference arises between the parties relating to the interpretation or
performance of this Agreement, the parties shall comply with the dispute
resolution procedures prescribed in Article V of the Contribution Agreement.
13. Notices.
All notices and communications required or permitted under this
Agreement shall be in writing and any communication or delivery hereunder shall
be deemed to have been duly made if personally delivered, or if mailed by first
class mail, postage prepaid, or by air express service, with charges prepaid and
addressed as follows:
If to Sybron: Sybron International Corporation
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: General Counsel
If to SDS: Sybron Dental Specialities, Inc.
1717 West Collins Avenue
Orange, California 92867
Attention: General Counsel
Either party may by written notice so delivered to the other, change
the address to which future delivery shall be made.
14. Miscellaneous.
(a) Entire Agreement. This Agreement and the other
Contribution Documents constitute the entire
understanding of the parties hereto with respect to
the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements
and understandings relating to their subject matter;
provided, however, that the specific provisions of
any other agreement between the parties executed and
delivered by the parties in connection with the
closing under the Contribution Agreement shall not be
superseded by this Agreement and to the extent any
such other agreement is in conflict herewith, such
specific agreement shall control.
(b) Assignment. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit
of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder
shall be assigned by either party without the prior
written consent of the other party; except that this
Agreement may be assigned to a parent or subsidiary
of a party, or to a third party acquiring
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substantially all of the assets of a party, without
such prior written consent to such an assignment,
provided that any such third party expressly assumes,
and agrees to be bound by the terms of, this
Agreement, and provided further that the assigning
party shall not be relieved of any of its obligations
hereunder in the event of such an assignment.
(c) No Third Party Beneficiaries. This Agreement is
solely for the benefit of the parties and is not
intended to confer upon any person except the parties
any rights or remedies hereunder. There are no third
party beneficiaries to this Agreement.
(d) Written Amendment and Waiver. This Agreement may not
be altered or amended nor any rights hereunder be
waived, except by an instrument in writing executed
by the party or parties to be charged with the
amendment or waiver.
(e) Limited Amendment or Waiver. No waiver of any term,
provision or condition of this Agreement or failure
to exercise any right, power or remedy or failure to
enforce any provision of this Agreement, in any one
or more instances, shall be deemed to be a further or
continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision
or condition or enforcement right of this Agreement
or deemed to be an impairment of any right, power or
remedy or acquiescence to any breach.
(f) Reformation and Severability. If any provision of
this Agreement shall be held to be invalid,
unenforceable or illegal in any jurisdiction under
any circumstances for any reason, (a) that provision
shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and
legal and preserve the original intent of the
parties, or (b) if that provision cannot be so
reformed, it shall be severed from this Agreement.
The holding shall not affect or impair the validity,
enforceability or legality of the provision in any
other jurisdiction or under any other circumstances.
Neither the holding nor the reformation or severance
shall affect or impair the legality, validity or
enforceability of any other provision of this
Agreement to the extent that the other provision is
not itself actually in conflict with any applicable
law. Upon a determination that any term or provision
is invalid, unenforceable or illegal, the parties
hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the
parties as closely as possible.
(g) Jurisdiction. This Agreement shall be governed and
construed and enforced in accordance with the
internal laws of the State of Wisconsin (without
regard to conflict of law principles) as to all
matters including, without
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limitation, matters of validity, construction,
effect, performance and remedies.
(h) Titles and Headings. All titles and headings have
been inserted solely for the convenience of the
parties and are not intended to be a part of this
Agreement or to affect its meaning or interpretation.
(i) Counterparts. This Agreement, and any other agreement
to be executed in connection herewith, may be
executed in two or more counterparts, each of which
shall be deemed an original, but all of which
together shall constitute one and the same
instrument.
(j) Effectiveness. This Agreement shall become effective
at the Effective Date and may be terminated by Sybron
at any time prior thereto without any liability on
either party's part.
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IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the date first above written by their duly authorized officers.
SYBRON INTERNATIONAL CORPORATION
By: /s/ KENNETH F. YONTZ
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Name: Kenneth F. Yontz
Title: President and Chief Executive Officer
SYBRON DENTAL SPECIALTIES, INC.
By: /s/ FLOYD W. PICKRELL, JR.
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Name: Floyd W. Pickrell, Jr.
Title: President and Chief Executive Officer
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SCHEDULE 1
FEES
1. SDS shall pay Sybron $32,000 per month for the Sybron Services. This
amount consists of $8,000 per month for each of the four Sybron
Services.
2. Sybron shall pay SDS $15,000 per month for the Insurance/Risk
Management Services.