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STOCK PURCHASE AGREEMENT
BY AND AMONG
LASERMEDICS, INC.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AND
▇. ▇. (SKIP) ▇▇▇▇▇
DATED MAY 2, 1997
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into on this 2nd day of May, 1997
by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and ▇. ▇.
(Skip) ▇▇▇▇▇ ("▇▇▇▇▇") (▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇ each being referred to
individually as a "Seller" and collectively as the "Sellers"), and Lasermedics,
Inc., a Texas corporation (the "Buyer").
WITNESSETH :
WHEREAS, Med-Quip, Inc., a Georgia corporation ("MQI"), is principally
engaged in the business of selling or distributing certain rehabilitation
related medical equipment and associated materials to chiropractors, physical
therapy clinics, athletic trainers, hospital, school and university physical
therapy departments, athletic teams and other customers (the "Business");
WHEREAS, Sellers collectively own all of the issued and outstanding
capital stock of MQI; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers all of the issued and outstanding capital stock of MQI on the terms
and conditions herein set forth.
NOW, THEREFORE, for and in consideration of the premises, and the mutual
and dependent promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 CERTAIN DEFINITIONS. As used in this Agreement, each parenthetically
capitalized term in the introduction, recitals and other Sections of this
Agreement has the meaning so ascribed to it, and other capitalized terms have
the meaning given them in Section 8.1.
1.2 PURCHASE AND SALE OF MQI STOCK. Subject to the terms and conditions of
this Agreement, at the Closing each Seller agrees to sell and convey to Buyer,
free and clear of all Encumbrances, and Buyer agrees to purchase and accept from
each Seller all shares of MQI Stock owned beneficially or of record by such
Seller. The aggregate purchase price for such shares of MQI Stock shall be
$1,350,000 payable by Buyer at the Closing by the issuance by Buyer of 300,000
shares (the "Shares") of its common stock, par value $.01 per share (the "Common
Stock") to be allocated among them as set forth on Schedule 1.2 hereto.
1.3 CLOSING. Consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of counsel to Buyer,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ at 9:00 a.m.
on May 2, 1997 (the "Closing Date"), unless another time, place or date is
agreed to by the Sellers and the Buyer.
1.4 CLOSING DELIVERIES. At the Closing, (a) Sellers shall deliver to Buyer
duly and validly issued certificate(s) representing all shares of MQI Stock
owned beneficially or of record by them, each such certificate to be duly
endorsed in blank and in good form for transfer, or accompanied by stock powers
duly executed in blank sufficient and in good form to properly transfer such
shares to Buyer, (b) Sellers and Buyer shall have delivered to one another all
other documents, instruments and agreements as required under this Agreement,
and (c) Buyer shall deliver to Sellers the Shares issuable at Closing as
provided in Section 1.2.
1.5 RESIGNATIONS; CONSULTING AGREEMENT. At the Closing, each of the
officers and directors of MQI will resign, and the Buyer will enter into a
Consulting Agreement with ▇▇▇▇▇▇▇ in the form attached hereto as Exhibit A (the
"Consulting Agreement").
1.6 RESTRICTIONS ON RESALE; REGISTRATION RIGHTS. The Shares issued will be
"restricted securities" as that term is defined under the Securities Act of
1933, as amended (the "Securities Act"), and the Sellers may not offer for sale,
sell, transfer, hypothecate, assign, or otherwise dispose of the Shares except
pursuant to an effective and current registration statement under the Securities
Act or a valid exemption therefrom, and the certificates representing the Shares
shall bear a legend setting forth such restrictions in the form presented in
Section 3.4(h). In addition, in the event that the Buyer files a registration
statement pursuant to the Securities Act in connection with an underwritten
public offering of its securities prior to May 2, 1999, the Sellers agree that
they will not offer for sale, sell, transfer, hypothecate, assign, or otherwise
dispose of the Shares for a period beginning on the filing of such registration
statement and ending upon the earlier of (i) 270 days after the effective date
of such registration statement, or (ii) August 2, 1999. The certificates
representing the Shares will bear a legend setting forth such restrictions in
the form presented in Section 3.4(h). At Closing and as part of the
consideration for the purchase and sale of the MQI Stock, the Buyer will enter
into a registration rights agreement with Sellers in the form attached hereto as
Exhibit B (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement, Buyer has granted Seller certain piggyback registration rights
as more fully described therein.
1.7 SUNTRUST LINE OF CREDIT. As soon as practicable after the Closing, the
Buyer will pay off the outstanding balance of the line of credit with SunTrust
Bank, Atlanta, and obtain a release of ▇▇▇▇▇▇▇'▇ personal guarantee. Buyer
further agrees that it will not make any future borrowings under this credit
facility, unless and until Buyer shall have obtained the release of ▇▇▇▇▇▇▇'▇
personal guarantee.
1.8 TAX-FREE REORGANIZATION. The parties hereto intend the transaction to
qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal
Revenue Code. The parties hereto agree to take such actions as are necessary to
qualify for such tax-free treatment.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
As material inducements to the execution, delivery and performance of this
Agreement by Buyer, ▇▇▇▇▇▇▇ hereby represents and warrants to Buyer as follows,
except as otherwise described in the Exception Schedule attached hereto. The
Exception Schedule shall identify each exception by the section number(s) of
this Article 2 to which it relates.
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2.1 ORGANIZATION. MQI is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Georgia. MQI has all
necessary statutory and corporate power and authority to own, operate, and lease
its properties and to carry on its business as now owned or leased and operated
by it. MQI is not, nor is it required to be, qualified to do business under the
laws of any foreign jurisdiction. MQI does not own, directly or indirectly, any
interest or investment (whether debt or equity) in any other Person. True,
correct and complete copies of MQI's Articles of Incorporation and Bylaws, as
each may have been amended, are attached to the Exception Schedule.
2.2 NO VIOLATIONS OR CONFLICTS. Neither the execution and delivery of this
Agreement by any Seller nor the consummation of the transactions contemplated
hereby will: (a) violate or conflict with any provision of MQI's Articles of
Incorporation or Bylaws, as amended to date; (b) violate or conflict with any
provision of any Laws applicable to MQI or its assets; (c) result in a breach
of, or constitute a default (or with notice or lapse of time, or both, result in
a breach of, or constitute a default) under or otherwise give any Person the
right to terminate or accelerate payment under or performance of any note, bond,
loan agreement, contract, lease, license, franchise, permit, trust agreement or
declaration of trust, or other agreement or instrument to which MQI is a party
or to which its assets are subject; or (d) result in the creation or imposition
of any Encumbrance of any nature upon or with respect to any of the assets of
MQI.
2.3 CAPITALIZATION. The authorized capital stock of MQI consists of
100,000 shares of common stock, $.01 par value, of which 15,000 are issued and
outstanding, and 10,000 shares of preferred stock, $.01 par value, of which
10,000 are issued and outstanding. All issued and outstanding shares of MQI
Stock are validly issued, fully paid and non-assessable, and are owned
beneficially and of record by Sellers as set forth on the Exception Schedule. No
shares of MQI Stock have been issued in violation of MQI's Articles of
Incorporation or Bylaws, the preemptive or other rights of any shareholder or
former shareholder of MQI, or of any other Person, or any Laws. Neither Sellers
nor MQI have any liability to any former owner of any of MQI's securities by
reason of any failure by them to comply with any Laws, MQI's Articles of
Incorporation or Bylaws, or any agreements. There are no outstanding
subscriptions, options, rights, warrants, calls, preemptive rights, convertible
securities, or other agreements or commitments of any kind obligating MQI to
sell, convey, issue, transfer from treasury, or otherwise dispose of, any
additional shares of its capital stock of any class, or any other equity or debt
security. Since March 31, 1997, MQI has not declared, set aside, paid or made,
or agreed, arranged or committed to declare, set aside, pay or make any dividend
or other distribution in respect of its capital stock, and has not directly or
indirectly redeemed, purchased or otherwise acquired its capital stock.
2.4 FINANCIAL INFORMATION. MQI has delivered to Buyer its unaudited
financial statements, consisting of a balance sheet as of March 31, 1997, and
income statements for the twelve months ended December 31, 1996 and the three
months ended March 31, 1997, true and correct copies of which will be attached
to the Exception Schedule (such financial statements referenced above are herein
collectively referred to as the "Financial Information"). Except for customary
year-end audit adjustments to unaudited statements, the Financial Information
(a) is in accordance with MQI's books and records, (b) to the knowledge of
▇▇▇▇▇▇▇, has been prepared in accordance with generally accepted accounting
principals consistently applied with prior periods, except that all such
financial statements exclude footnotes, (c) fairly presents and is a true and
complete statement of the financial position of MQI as of and for the periods
indicated, and (d) does not include or omit any material asset or liability
(whether fixed, accrued, contingent or other) the inclusion or omission of
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which renders such financial statements misleading or incomplete. Since March
31, 1997, MQI has not changed any accounting method or practice, or experienced
any material adverse change in its financial condition, operations, assets,
liabilities (fixed, accrued, contingent, or other), revenues, expenses, or
business prospects, or experienced any event or condition that is likely to
result in such a material adverse change in its business or assets.
2.5 TAXES. MQI has timely filed all federal, state, county, local and
other excise, franchise, property, severance, payroll, income, capital stock,
sales and use, fuel and other tax returns for all fiscal years ended on or
before December 31, 1996, and for any periods thereafter for which returns are
due, and all such returns are true and correct in all material respects. MQI has
not filed an extension for any tax return otherwise due. MQI has timely paid all
taxes which are shown on such returns to be due or have been assessed against it
and all taxes, penalties and interest which any Governmental Authority has
proposed or asserted to be owing (except for those being contested in good faith
as set forth on the Exception Schedule). MQI has made all withholding payments
of tax required to be made under all tax Laws. Provisions and accruals for
income taxes, payroll taxes payable, ad valorem property taxes, sales taxes and
all other taxes and governmental charges required to be paid by MQI as of March
31, 1997 have been set forth in the Financial Information and conform in all
material respects with federal income tax principles and are adequate to cover
MQI's liability for all periods before March 31, 1997. There is no pending audit
of MQI, and MQI has not received any oral or written notice of any proposed
audit, by any Governmental Authority. All tax liabilities to which the
properties of MQI may have been subjected have been discharged, except for taxes
assessed but not yet payable. There are no tax Claims presently being asserted
against MQI, and to the knowledge of MQI and ▇▇▇▇▇▇▇ there is no basis for any
such Claim. MQI has not granted any extension to any taxing authority of the
limitation period during which any tax liability may be asserted thereby.
Neither MQI nor ▇▇▇▇▇▇▇ have received notice or have knowledge of any proposal
for increasing the assessed value of any of MQI's properties for tax purposes,
or of any pending proceedings or public improvements which would result in the
levy of any special tax or assessment against any of MQI's properties.
2.6 LIABILITIES. MQI has no liabilities or obligations, whether absolute,
accrued, contingent or otherwise, and neither MQI nor Belcher has any knowledge
of any potential liabilities or obligations of MQI except (a) as reflected or
reserved against in MQI's unaudited March 31, 1997 balance sheet referred in
Section 2.4 above, (b) obligations to perform services or deliver merchandise in
the Ordinary Course of Business that are not delinquent, (c) obligations for
services or goods received by MQI in the Ordinary Course of Business with
respect to which invoices have not been received, and (d) liabilities accrued or
to be accrued through the Closing Date and set forth on the Exception Schedule.
Without limiting the generality of the foregoing, MQI has no liability as a
guarantor, endorser, co-maker, surety, accommodation maker or in any other
capacity for any indebtedness, liability, obligation or commitment of any other
Person.
2.7 DEFAULTS. MQI is not in default under, or in breach or violation of,
and to the knowledge of MQI and ▇▇▇▇▇▇▇ no reason exists and no event has
occurred which, with notice or lapse of time or action by a third party, will
result in a default under, breach or violation of, or conflict with: (a) MQI's
Articles of Incorporation or Bylaws, as amended to date; (b) any lease, license,
permit, Encumbrance, trust agreement or declaration of trust, or other agreement
or instrument to which MQI is a party, or to which any of its assets is subject;
or (c) any Laws applicable to MQI or its business or assets, including, without
limitation, Business Laws, Environmental Laws and Laws respecting labor,
employment and employment practices, except for
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any such defaults, breaches, violations or conflicts which individually or in
the aggregate would not constitute a material adverse effect. MQI has all
permits, certificates, licenses, approvals and other authorizations required in
connection with the operation of its business.
2.8 LITIGATION. There is no lawsuit, action, arbitration, mediation,
administrative proceeding, investigation by a Governmental Authority, or other
legal proceeding pending or, to the knowledge of MQI or ▇▇▇▇▇▇▇, threatened
against ▇▇▇▇▇▇▇ or MQI or affecting their respective assets or financial
condition, and to the knowledge of MQI and ▇▇▇▇▇▇▇, no facts are in existence on
which an action, lawsuit or other legal or administrative proceeding might be
brought. Neither ▇▇▇▇▇▇▇ nor MQI is subject to any court order, writ,
injunction, court decree, settlement agreement, or judgment that contain or
order any ongoing obligations (whether prohibitory or mandatory in nature) on
the part of any of them.
2.9 ADDITIONAL INFORMATION. Attached to the Exception Schedule are true,
complete and correct lists and summaries of the following items, including,
without limitation, a description of all Encumbrances to which any such item is
subject, and MQI and ▇▇▇▇▇▇▇ have delivered to Buyer true, complete and correct
copies of any documents, instruments or agreements referred to below or in such
lists and summaries, or underlying any item described therein:
(A) REAL PROPERTY [SCHEDULE 2.9(A)]. A legal description of all real
property owned or leased by MQI or for which it has an option to purchase,
which schedule includes, with respect to each property, (i) the use to
which such property is put, and (ii) whether such property is owned or
leased and, if leased, the name of the lessor and a copy of any agreement
pursuant to which the property is leased;
(B) INVENTORY, EQUIPMENT, MACHINERY AND FURNITURE [SCHEDULE 2.9(B)].
All of MQI's inventory, equipment, machinery, office equipment and
furniture, indicating such item's location and whether such item is owned
or leased, and if leased, the name of the lessor and copy of the lease and
payment status;
(C) INTELLECTUAL PROPERTY [SCHEDULE 2.9(C)]. All patents,
trademarks, service marks, copyrights and other intellectual property
rights, and applications therefor or registrations thereof, wherever
issued or pending; all trade names, assumed or fictitious names, logos,
labels and other trade rights, whether or not registered, where registered
and where used; all inventions, discoveries, improvements, processes,
formulae, trade secrets, ideas and other knowhow, whether patentable or
not; all shop rights; and all other agreements (including agreements with
MQI's employees) relating in whole or in part to any of the foregoing, and
with respect to each of the foregoing, whether owned, licensed or used by
MQI;
(D) LICENSES AND PERMITS [SCHEDULE 2.9(D)]. All licenses, permits,
franchises, and similar rights relating to MQI's business;
(E) CONTRACTS [SCHEDULE 2.9(E)]. Each contract, agreement or
commitment to which MQI is a party, by which it is bound or to which it or
its properties are subject, which involves at least $10,000 or is not
terminable on fewer than 30 days' notice;
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(F) RECEIVABLES [SCHEDULE 2.9(F)]. All accounts, notes and contracts
receivables of MQI in a 30, 60, 90 and over-90 day aged receivables format
and separately listing all amounts receivable from any Seller or any
Affiliate of a Seller;
(G) PAYABLES [SCHEDULE 2.9(G)]. All accounts and notes payable by
MQI in a 30, 60, 90 and over 90 day aged payables format and separately
listing all amounts payable to any Seller or any Affiliate of a Seller;
(H) INDEBTEDNESS [SCHEDULE 2.9(H)]. All indebtedness owed by MQI or
to which any of its assets are subject, summarizing for each item of
indebtedness the material terms thereof and specifying all assets
collateralizing such indebtedness;
(I) INSURANCE [SCHEDULE 2.9(I)]. All insurance policies or bonds
carried by MQI for its benefit or for the benefit of its employees,
including, without limitation, property, title, casualty, liability,
workers compensation and auto policies, as well as a listing of any
premiums, audit adjustments or retroactive adjustments due or pending on
such policies or any predecessor policies;
(J) PERSONNEL [SCHEDULE 2.9(J)]. The name, current salary or wage
rate, last raise date and amount, current bonus arrangements, last bonus
date and amount, and any other compensation arrangements (excluding
employee insurance and benefit plans described in SCHEDULE 2.9(K)) of each
director, officer and employee of MQI, together with a description of any
licenses held by such person that are germane to MQI's business; the name
and address of any other Person who is authorized to bind MQI
contractually, including, without limitation, independent drivers or
independent contractors, and all written or oral arrangements of MQI with
any employee, agent, consultant or independent contractor, specifically
identifying any arrangement which cannot be terminated on notice of 14 or
fewer days without liability to MQI or that entitles the beneficiary
thereof to receive any compensation continuation or severance payment or
retain any position with MQI;
(K) EMPLOYEE PLANS [SCHEDULE 2.9(K)]. All bonus, incentive
compensation, deferred compensation, profit-sharing, retirement, pension,
welfare, group insurance, death benefit, or other fringe benefit plans,
arrangements or trust agreements of MQI, together with copies of the most
recent reports with respect to such plans, arrangements, or trust
agreements filed with any Governmental Authority; and
(L) BANK ACCOUNTS [SCHEDULE 2.9(L)]. The name, address and contact
person of each bank or other financial institution in which MQI has an
account or safe deposit box, the account number, account name and type of
account, the names of all persons authorized to draw thereon or have
access thereto, and the names of all persons, if any, holding powers of
attorney to act for MQI.
2.10 TITLE TO AND QUIET POSSESSION OF ASSETS. MQI has good and marketable
title to all of its respective assets and interests in assets, whether real,
personal, mixed, tangible or intangible, that are reflected in its balance sheet
as of March 31, 1997, or that have been acquired since March 31, 1997, except
for inventory items sold or consumed in the Ordinary Course of Business after
March 31, 1997. All such assets are free and clear of all Encumbrances except as
set forth in the Exception Schedule. At the Closing Date, MQI will have full,
free and exclusive use and quiet
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enjoyment of its assets, and all rights pertaining thereto except for
Encumbrances disclosed in the Exception Schedule. There are no Persons other
than MQI in possession of any portion of the assets owned or leased by MQI. To
the knowledge of MQI and ▇▇▇▇▇▇▇, there are no condemnations or other takings
planned or proposed by any Government Authority or private party which will
affect the assets owned or used by MQI. To the knowledge of MQI and ▇▇▇▇▇▇▇, the
continued use by MQI of its assets in the same manner previously used by it will
not violate or infringe upon the rights of others. Without limiting the
generality of the foregoing, to the knowledge of MQI and ▇▇▇▇▇▇▇, MQI has the
exclusive right, title and interest in and to any trademarks, service marks,
trade names, and copyrights currently used, and to the knowledge of MQI and
▇▇▇▇▇▇▇, the continued use of any logo, trade name, license, or other intangible
by MQI does not and will not violate or infringe upon the rights of any third
party.
2.11 CONDITION OF ASSETS.
(a) MQI's premises, office equipment, machinery, vehicles,
furnishings and fixtures are in good operating condition and repair
consistent with MQI's normal practices subject only to ordinary wear and
tear. There are no outstanding requirements or recommendations by MQI's
insurers requiring or recommending any repairs or work be done with
respect to MQI's assets or properties.
(b) MQI's accounts receivable are evidenced by valid and enforceable
written invoices, contracts or other agreements. All amounts paid or
collected under such contracts or agreements which are required by
applicable Laws, including the Business Laws, to be deposited in trust or
deposit accounts have been so deposited on a timely basis in accordance
with such Laws. All such trust and deposit accounts have been established,
funded and maintained in accordance with all applicable Laws, including
the Business Laws. Except as set forth in the Exception Schedule, MQI's
accounts receivable are fully collectible without resort to legal
proceedings or collection agencies, and are not subject to any refunds or
other adjustments, or any defenses, rights of set-off, assignments,
Encumbrances, or conditions enforceable by third parties, except to the
extent reserved against in the Financial Information.
(c) MQI's inventories consist of items held for sale of a quality
and quantity usable in the Ordinary Course of Business, and the cost of
such inventories as of March 31, 1997 was $109,143.78 in the aggregate.
(d) All contracts, leases, plans or other arrangements to which MQI
is a party, by which it is bound or to which it or its assets are subject
are in good standing, in full force and effect, comply in all material
respects with applicable Laws, and constitute valid and binding
obligations of the respective parties thereto. To the knowledge of MQI and
▇▇▇▇▇▇▇, no party (other than MQI) to any such contract, lease, plan or
other arrangement is in default thereunder, and no event has occurred
which (with or without notice, lapse of time, or the happening of any
other event) would constitute a default thereunder.
(e) All accounting records, tax records, operating and legal
records, and all other records pertaining to MQI and its business,
properties and affairs, are located at the business office of MQI. No such
records are stored by or in the possession of Sellers or their Affiliates.
MQI's corporate record books (including stock records) are complete,
accurate
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and up to date with all necessary signatures; set forth all meetings and
actions taken by MQI's shareholders and directors, and all transactions
involving MQI's capital stock; and contain all canceled stock
certificates.
2.12 HAZARDOUS SUBSTANCES. During MQI's ownership, lease or use of
property owned, leased or used by it (the "Property"), (a) to the knowledge of
MQI and ▇▇▇▇▇▇▇, the Property is not being and has not been used by MQI for the
storage, treatment, generation, transportation, processing, handling, burial or
disposal of any Hazardous Substance in material violation of any Laws, (b) no
release of a Hazardous Substance has occurred by MQI on or about the property in
quantities which individually or in the aggregate would require reporting to any
Governmental Authority; (c) no underground storage tanks are or have been
located on the Property; (d) there are not and have not been any Hazardous
Substances resulting from MQI's ownership, lease or use of the Property in
concentrations which exceed amounts permitted by applicable Laws on the
Property; (e) all environmental permits and authorizations necessary to the
continued use of the Property by MQI and the operation of the facilities located
thereon by MQI have been obtained, are being complied with, and all fees and
assessments in association therewith have been timely paid; (f) the Property is
not being and has not been used by MQI as a site for burial of sanitary waste or
other non-hazardous waste; (g) the off-site transportation, storage, treatment,
recycling or disposal of Hazardous Substances and non-hazardous substances
existing on, generated or removed from the Property by MQI have been and are in
compliance with applicable Laws; and (h) there are no capital improvements
requiring any expenditures by MQI in order to comply with any current or
proposed Environmental Laws. To the knowledge of MQI and ▇▇▇▇▇▇▇, each of (a)
through (g) of the immediately preceding sentence is true with respect to the
Property prior to its ownership or lease by MQI, and with respect to properties
adjacent to the Property.
2.13 OPERATION OF BUSINESS. MQI is in compliance in all material respects
with all Business Laws applicable to MQI or the Business.
2.14 ERISA PLANS, LABOR ISSUES AND AFFILIATE PAYMENTS.
(a) MQI does not currently sponsor, maintain or contribute to, and
has not at any time sponsored, maintained or contributed to any employee
benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (ERISA")) in which any
of its employees are or were participants (whether or not on an active or
frozen basis) other than those identified on SCHEDULE 2.9(K) (the
"Employee Benefit Plans"). Each of the Employee Benefit Plans can be
terminated or amended at will by MQI. MQI has no collective bargaining
agreements with any labor union or other representative of employees. MQI
has not engaged in any unfair labor practices which could have a material
adverse effect. MQI has no pending or, to the knowledge of MQI or ▇▇▇▇▇▇▇,
threatened, dispute with any of its existing or former employees. Since
March 31, 1997, MQI has not made any payments to any of its Affiliates,
and has not granted or agreed to grant any bonus to any current employee,
any general increase in the rates of salaries or compensation of its
employees or any specific increase to any current employee, except in
accordance with regularly scheduled periodic bonuses and increases
identified on SCHEDULE 2.9(K), and has not provided for any new pension,
retirement or other employee benefits to any of its current employees or
any increases in any existing benefits.
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(b) Each Employee Benefit Plan has been administered and maintained
in compliance with all applicable laws, rules and regulations, except
where the failure to be in compliance would not, individually or in the
aggregate, result in a material adverse effect.
(c) MQI has not received any notice that any Employee Benefit Plan
is currently the subject of an audit, investigation, enforcement action or
other similar proceeding conducted by any state or federal agency.
(d) No pending or, to the knowledge of MQI or ▇▇▇▇▇▇▇, threatened,
claims, suits or other proceedings exist with respect to an Employee
Benefit Plan, other than normal benefit claims filed by participants or
beneficiaries.
(e) MQI has no obligation or commitment to provide medical, dental
or life insurance benefits to or on behalf of any of its employees who may
retire or any of its former employees who have retired, except as may be
required pursuant to the continuation of coverage provisions of Section
4980B of the Code and the applicable provisions of ERISA.
(f) MQI has been and is in compliance with all applicable laws,
rules, regulations and ordinances respecting employment and employment
practices, terms and conditions of employment and wages and hours, except
for any such failures to be in compliance that, individually or in the
aggregate, would not result in a material adverse effect, and MQI is not
liable for any arrears of wages or penalties for failure to comply with
any of the foregoing. To the knowledge of MQI or ▇▇▇▇▇▇▇, MQI has not
engaged in any unfair labor practice or discriminated on the basis of
race, color, religion, sex, national origin, age, disability or handicap
in its employment conditions or practices, and there are no complaints or
racial, color, religious, sex, national origin, age, disability or
handicap discrimination charges or complaints pending or, to the knowledge
of MQI or Belcher, threatened against MQI before any federal, state or
local court, board, department, commission or agency (nor, to the
knowledge of MQI or ▇▇▇▇▇▇▇, does any valid basis therefor exist).
(g) MQI has never been a party to any agreement with any union,
labor organization or collective bargaining unit. No employees of MQI are
represented by any union, labor organization or collective bargaining
unit. To the knowledge of MQI or ▇▇▇▇▇▇▇, none of the employees of MQI has
threatened or organize or join in union, labor organization or collective
bargaining unit.
(h) To the knowledge of MQI or Belcher, all employees of MQI are
citizens of, or are authorized in accordance with federal immigration laws
to be employed in, the United States.
2.15 INSURANCE. MQI has at all times carried insurance which MQI and
▇▇▇▇▇▇▇ believe to be adequate in character and amount and consistent with good
industry practices, with reputable insurers, in respect of its properties,
assets and business and has provided all required performance bonds, and has
complied with all applicable terms and conditions, including payment of
premiums, with respect to such insurance policies and performance bonds. MQI has
received no notification from any insurance carrier denying or disputing any
claim made by MQI, denying or disputing any coverage for any such claim, denying
or disputing the amount of any claim, or regarding the possible cancellation of
or premium increases with respect to any policies. MQI has no claim pending or
9
anticipated against any of the insurance carriers under any of such policies and
there has been no actual or alleged occurrence of any kind which may give rise
to any such claim.
2.16 RELATED-PARTY TRANSACTIONS. Except as set forth on the Exception
Schedule, no employee, officer, or director of MQI or member of his or her
immediate family is indebted to MQI, nor is MQI indebted (or committed to make
loans or extend or guarantee credit) to any of them. No officer or director of
MQI, nor member of his or her immediate family, has any direct or indirect
ownership interest in any firm or corporation with which MQI is affiliated or
with which MQI has a business relationship, or any firm or corporation that
competes with MQI, except Sellers may own stock in publicly traded companies
that may compete with MQI. No member of the immediate family of any employee,
officer or director of MQI is directly or indirectly interested in any material
contract, lease or other agreement of any type (oral or written) with MQI.
2.17 DISTRIBUTIONS. MQI has not made any redemptions or distributions
other than regular, normal dividends prior to the Closing Date.
2.18 BROKERS. Neither MQI, nor any of its Affiliates, has employed any
broker, agent or finder, or incurred any liability for any brokerage fees,
agent's fees, commissions or finder's fees in connection with the transactions
contemplated by this Agreement.
2.19 UNTRUE STATEMENTS. This Agreement and all schedules, documents and
information furnished by Sellers or any of their respective representatives to
Buyer and its representatives pursuant hereto or in connection with the
transactions contemplated by this Agreement do not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements made herein and therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
As material inducements to the execution, delivery and performance of this
Agreement by Buyer, the Sellers hereby severally represent and warrant to Buyer
as follows, except as otherwise described in the attached Exception Schedule
attached hereto. The Exception Schedule shall identify each exception by the
section number(s) of this Article 3 to which it relates.
3.1 AUTHORITY AND CONSENT. Each Seller has the absolute and unrestricted
right, power, legal capacity, and authority to enter into, and perform such
Seller's obligations under this Agreement, and no approval or consent of any
Person is necessary in connection therewith. This Agreement, together with all
other agreements, documents and instruments executed in connection herewith,
constitute valid and legally-binding obligations of each Seller, and are
enforceable against such Seller in accordance with their terms.
10
3.2 NO VIOLATIONS OR CONFLICTS. Neither the execution and delivery of this
Agreement by any Seller nor the consummation of the transactions contemplated
hereby will: (a) violate or conflict with any provision of any Laws applicable
to any of Sellers or their assets; (b) result in a breach of, or constitute a
default (or with notice or lapse of time, or both, result in a breach of, or
constitute a default) under or otherwise give any Person the right to terminate
or accelerate payment under or performance of any note, bond, loan agreement,
contract, lease, license, franchise, permit, trust agreement or declaration of
trust, or other agreement or instrument to which any of Sellers are a party or
to which its assets are subject; or (c) result in the creation or imposition of
any Encumbrance of any nature upon or with respect to any of the assets of
Sellers.
3.3 TITLE TO STOCK. All of the issued and outstanding shares of MQI Stock
are owned beneficially or of record by Sellers. Each Seller holds good, valid
and marketable title to all shares of MQI Stock so owned by him or her, free and
clear of all Encumbrances. Each Seller possesses full authority and legal right
to sell, transfer and assign to Buyer the entire legal and beneficial ownership
of the MQI Stock owned by such Seller, free and clear of all Encumbrances. Upon
transfer to Buyer by Sellers of their MQI Stock, Buyer will own the entire legal
and beneficial interest in such MQI Stock free and clear of all Encumbrances and
subject to no legal, equitable, transfer or other restrictions of any kind,
except transfer restrictions imposed by operation of applicable securities Laws,
and any Encumbrances imposed or created by Buyer. There are no Claims pending
or, to any Seller's knowledge, threatened against MQI or any Seller that concern
or affect title to any of MQI's capital stock, or that seek to compel the
issuance of capital stock or other securities of MQI. Each of the Sellers
acquired their MQI Stock in transactions that fully complied with the provisions
of all applicable Laws.
3.4 INVESTMENT REPRESENTATIONS. Each of Sellers acknowledges, represents
and agrees that:
(a) the Shares have not been and will not be registered under the
Securities Act or registered or qualified under any applicable state
securities laws, and will be "restricted securities" as that term is
defined under Rule 144 promulgated under the Securities Act;
(b) the Shares will be issued in reliance upon exemptions from such
registration or qualification requirements, and the availability of such
exemptions depends in part upon Sellers' bona fide investment intent with
respect to the Shares;
(c) Sellers' acquisition of the Shares will be solely for their own
account for investment, and they are not acquiring the Shares for the
account of any other person or with a view toward resale, assignment,
fractionalization, or distribution thereof;
(d) Sellers shall not offer for sale, sell, transfer, pledge,
hypothecate or otherwise dispose of any of the Shares except in accordance
with the restrictions set forth herein (including Section 1.6 hereof) and
the requirements of Rule 144 promulgated under the Securities Act, or
pursuant to a valid registration statement under the Securities Act;
(e) Sellers have such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks
of an investment in the Shares, and to make an informed investment
decision;
11
(f) Sellers have received from Buyer its Form 10-K for the fiscal
year ended December 31, 1996 and related materials regarding the Buyer;
they have had the opportunity to ask questions of, and receive answers
from Buyer's officers and directors concerning the acquisition of the
Shares and to obtain such other information concerning Buyer and the
Shares, to the extent they possessed the same or could acquire it without
unreasonable effort or expense, as they deemed necessary in connection
with making an informed investment decision;
(g) since the Shares have not been registered under the Securities
Act or applicable state securities laws, Sellers must bear the economic
risk of holding the Shares for an indefinite period of time, and are
capable of bearing such risk; and
(h) each certificate evidencing the Shares will bear a conspicuous
restrictive legend substantially as follows:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS, AND THEY CANNOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE HYPOTHECATED EXCEPT IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
OTHER STATE LAWS OR UPON DELIVERY TO THIS CORPORATION OF AN OPINION
OF LEGAL COUNSEL SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO A STOCK PURCHASE
AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT BOTH BETWEEN THIS
CORPORATION AND CERTAIN PURCHASERS (THE "PURCHASERS"), DATED MAY 2,
1997 (THE "AGREEMENTS"). THE AGREEMENTS PROVIDE, AMONG OTHER THINGS,
THAT IN THE EVENT THIS CORPORATION FILES A REGISTRATION STATEMENT
UNDER THE ACT IN CONNECTION WITH AN UNDERWRITTEN PUBLIC OFFERING ON
OR BEFORE MAY 2, 1999, THE PURCHASERS WILL NOT OFFER FOR SALE, SELL,
TRANSFER, HYPOTHECATE, ASSIGN OR OTHERWISE DISPOSE OF THE SECURITIES
EVIDENCED HEREBY FOR A PERIOD BEGINNING ON THE FILING OF SUCH
REGISTRATION STATEMENT AND ENDING UPON THE EARLIER OF (i) 270 DAYS
AFTER THE EFFECTIVE DATE OF SUCH REGISTRATION STATEMENT OR (ii)
AUGUST 2, 1999. THE CORPORATION WILL FURNISH WITHOUT CHARGE A COPY
OF SUCH AGREEMENTS TO THE RECORD HOLDER OF THIS CERTIFICATE ON
WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
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3.5 RELATED-PARTY TRANSACTIONS. Except as set forth on the Exception
Schedule, none of the Sellers, nor any member of their immediate families is
indebted to MQI, nor is MQI indebted (or committed to make loans or extend or
guarantee credit) to any of them. None of the Sellers has any direct or indirect
ownership interest in any firm or corporation with which MQI is affiliated or
with which MQI has a business relationship, or any firm or corporation that
competes with MQI, except Sellers may own stock in publicly traded companies
that may compete with MQI. No member of the immediate family of any Seller is
directly or indirectly interested in any material contract, lease or other
agreement of any type (oral or written) with MQI.
3.6 CONTINUITY OF INTEREST. There is no plan or intention on the part of
the Sellers to sell, exchange or otherwise dispose of a number of shares of
Buyer's Common Stock received pursuant to this Agreement that would reduce the
Seller's ownership of shares of Buyer's Common Stock received pursuant to this
Agreement in exchange for MQI Stock owned by the Sellers, to a number of shares
having a value, as of the Closing Date, of less than 50% of the value of all
shares of MQI Stock issued and outstanding immediately prior to the Closing
Date. For the purposes of this representation, shares of MQI Stock exchanged for
cash or other property, surrendered by dissenters, or exchanged for cash in lieu
of fractional shares of Buyer's Common Stock will be treated as outstanding MQI
Stock as of the Closing Date. Moreover, shares of MQI Stock and shares of
Buyer's Common Stock held by Sellers and otherwise sold, redeemed or disposed of
prior or subsequent to the Closing Date will be considered in making this
representation.
3.7 BROKERS. Neither Sellers nor any of their respective Affiliates have
employed any broker, agent or finder, or incurred any liability for any
brokerage fees, agent's fees, commissions or finder's fees in connection with
the transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
As material inducements for the execution, delivery and performance of
this Agreement by Sellers, Buyer hereby represents and warrants to Sellers as
follows, except as otherwise described in the attached Exception Schedule
attached hereto. The Exception Schedule shall identify each exception by the
section number(s) of this Article 4 to which it relates.
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of Texas, and has all the necessary powers
to own its business as now owned and operated by it.
4.2 AGREEMENTS AUTHORIZED AND ENFORCEABLE. The execution and delivery of
this Agreement and the Employment Agreement (the "Transaction Documents"), the
issuance of the Shares and the consummation of the transactions contemplated
hereby (i) are within the corporate power and authority of the Buyer, and (ii)
have been duly and validly authorized by all necessary corporate action on the
part of Buyer. Each of the Transaction Documents constitutes a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as may be limited by applicable bankruptcy laws, insolvency laws and
other similar laws affecting the rights of creditors generally.
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4.3 SEC DOCUMENTS. Buyer has made all filings with the United States
Securities and Exchange Commission (the "SEC") that it has been required to make
under the Securities Act and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Buyer shall have attached hereto as SCHEDULE 4.3 its Form
10-K filed for the period ending December 31, 1996. As of December 31, 1996, the
Form 10-K complied in all material respects with the requirements of the
Securities Act and the Exchange Act and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statement therein, in light of the circumstances under
which it was made, not misleading. Further, Buyer hereby covenants and agrees to
file all reports required under the Securities Act or Exchange Act.
4.4 FINANCIAL INFORMATION. To Buyer's knowledge, the financial information
included in the Form 10-K is true and accurate in all material respects and was
prepared in all material respects in accordance with generally accepted
accounting principles ("GAAP"). Except as disclosed on SCHEDULE 4.4 or as
otherwise specifically contemplated by the terms and provisions of this
Agreement, since December 31, 1996, (i) there has been no material adverse
change in the consolidated net worth of the Buyer, (ii) there has been no
physical damage, destruction or loss suffered by Buyer that would, after taking
into account any insurance recoveries payable in respect thereof, have a
material adverse effect on the Buyer, and (iii) no event has occurred and no
condition exists which, individually or in the aggregate, would have a material
adverse effect on this Agreement, the Buyer, or the transactions contemplated by
this Agreement.
4.5 CAPITALIZATION. The authorized capital stock of Buyer consists of
20,000,000 shares of Common Stock, of which 2,793,556 were issued and
outstanding as of December 31, 1996, and 2,500,000 shares of preferred stock,
$.10 par value, none of which are issued and outstanding. All issued and
outstanding shares of the capital stock of Buyer, including the Shares issuable
hereunder, are validly issued, fully paid and non-assessable and free and clear
of all liens, encumbrances and adverse claims other than restrictions on
transfer under this Agreement and applicable federal and state securities laws.
No shares of the capital stock of Buyer have been issued in violation of Buyer's
Articles of Incorporation or Bylaws, the preemptive or other rights of any
shareholder or former shareholder of Buyer, or of any other Person, or any Laws.
Buyer has no liability to any former owner of any of Buyers's securities by
reason of any failure by them to comply with any Laws, Buyer's Articles of
Incorporation or Bylaws, or any agreements. Except as disclosed in the Form 10-K
or the Exception Schedule attached hereto, there are no outstanding
subscriptions, options, rights, warrants, calls, preemptive rights, convertible
securities, or other agreements or commitments of any kind obligating Buyer to
sell, convey, issue, transfer from treasury, or otherwise dispose of, any
additional shares of its capital stock of any class, or any other equity or debt
security. Since December 31, 1996, Buyer has not declared, set aside, paid or
made, or agreed, arranged or committed to declare, set aside, pay or make any
dividend or other distribution in respect of its capital stock, and has not
directly or indirectly redeemed, purchased or otherwise acquired its capital
stock.
4.6 TAX FREE REORGANIZATION. Buyer has not taken any action and does not
know of any fact, agreement, plan or other circumstance that is reasonably
likely to prevent the transaction from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
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4.7 BROKERS. Neither Buyer nor any of its Affiliates have employed any
broker, agent, or finder, or incurred any liability for any brokerage fees,
agent's fees, commissions or finder's fees in connection with the transactions
contemplated herein.
4.8 UNTRUE STATEMENTS. This Agreement and all schedules, documents and
information furnished by Buyer or its representatives to Seller and any of their
respective representatives pursuant hereto or in connection with the
transactions contemplated by this Agreement do not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements made herein and therein not misleading.
ARTICLE 5
INDEMNIFICATION
5.1 INDEMNIFICATION BY SELLERS. In addition to any other remedies
available to Buyer under this Agreement, or at law or in equity, each of Sellers
shall indemnify, defend and hold harmless Buyer, and its officers, directors,
employees, agents and shareholders, against and with respect to any and all
claims, demands, actions, costs, damages, losses, expenses, obligations,
liabilities, recoveries, judgments, settlements, suits, proceedings, or causes
of action, including interest, penalties (including civil and criminal
penalties) and attorneys' fees (collectively, any "Claims") that such
indemnitees shall incur or suffer, which arise, result from or relate to any
breach of, or failure by such Seller to perform, any of such Seller's
representations, warranties, covenants or agreements in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished to Buyer by Sellers
under this Agreement and any claims against MQI by any Seller.
5.2 INDEMNIFICATION BY BUYER. In addition to any other remedies available
to Sellers under this Agreement, or at law or in equity, Buyer shall indemnify,
defend and hold harmless each of Sellers against and with respect to any and all
Claims that such indemnitees shall incur or suffer, which arise, result from or
relate to any breach of, or failure by Buyer to perform, any of its
representations, warranties, covenants or agreements in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished to Sellers by Buyer
under this Agreement.
5.3 INDEMNIFICATION PROCEDURE.
(a) Promptly upon the receipt of notice of any third-party Claim,
judicial or otherwise, with respect to any matter as to which
indemnification may be claimed under this Article 5, the indemnified party
shall give written notice thereof to the indemnifying party together with
such information respecting such matter as the indemnified party shall
then have; PROVIDED HOWEVER, that the failure of the indemnified party to
give notice as provided herein shall not relieve the indemnifying party of
any obligations, to the extent the indemnifying party is not materially
prejudiced thereby. If indemnification is sought with respect to a
third-party (I.E., one who is not a party to this Agreement) Claim
asserted or brought against an indemnified party, the indemnifying party
shall be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party. After such notice from the indemnifying party to such
indemnified party of its election to so assume the defense of such a
third-party Claim, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently
15
incurred by the latter in connection with the defense thereof, other than
reasonable and necessary costs of investigation, unless the indemnifying
party has failed to assume and diligently prosecute the defense of such
third-party Claim and to employ counsel reasonably satisfactory to such
indemnified person. An indemnifying party who elects not to assume the
defense of a third-party Claim shall not be liable for the fees and
expenses of more than one counsel in any single jurisdiction for all
parties indemnified by such indemnifying party with respect to such Claim
or with respect to Claims separate but similar or related in the same
jurisdiction arising out of the same general allegations. Notwithstanding
any of the foregoing to the contrary, the indemnified party will be
entitled to select its own counsel and assume the defense of any action
brought against it if the indemnifying party fails to select counsel
reasonably satisfactory to the indemnified party or if counsel fails to
diligently prosecute, the expenses of such defense to be paid by the
indemnifying party. No indemnifying party shall consent to entry of any
judgment or enter into any settlement with respect to a claim without the
consent of the indemnified party, which consent shall not be unreasonably
withheld; however, consent shall not be required if such entry of judgment
or settlement includes a complete release of the indemnified party. No
indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party, which
consent shall not be unreasonably withheld.
(b) If any party becomes aware of a fact, circumstance, claim,
situation, demand or other matter (other than a third-party Claim) for
which it or any other indemnified party has been indemnified under this
Article 5 and which has resulted or could result in a Claim being owed to
the indemnified party by the indemnifying party, the indemnified party
shall give prompt written notice of the Claim to the indemnifying party,
stating the nature and basis of the Claim and the amount claimed
thereunder, together with supporting information to the Claim, if any. If
the indemnifying party does not notify the indemnified party within 30
days from the date such Claim notice is given that it disputes the Claim,
the amount of the Claim shall conclusively be deemed to be a liability of
the indemnifying party hereunder.
(c) If an indemnified party and an indemnifying party cannot reach
agreement with respect to the validity and amount of any Claim within 30
days after notice thereof is first given, the validity and amount thereof,
as the case may be, shall be finally settled pursuant to the dispute
resolution procedure set forth in Section 8.10 below.
(d) Payments of all amounts owing hereunder with respect to any
Claim shall be made immediately after (i) the settlement between the
parties of the third party Claim, or (ii) the final resolution of the
dispute pursuant to Section 8.10 below.
5.4 INDEMNIFICATION THRESHOLD. Notwithstanding any provision to the
contrary contained in this Agreement, neither Buyer nor Sellers shall make any
Claim against the other party for any breach of representation, warranty,
covenant or agreement under this Agreement until the dollar amount of all loss
to such party for such breaches suffered after the Closing, shall exceed in the
aggregate the amount of $25,000, and, to the extent such amount is exceeded,
Buyer or Sellers, as the case may be, shall be required to pay the amount of
such excess loss to the other party for all such breaches; provided, however,
that any Claim arising out of the UCC-1 security interests referred to on
SCHEDULE 5.4 shall not be subject to the $25,000 indemnification threshold.
16
5.5 PAYMENT IN KIND. Any indemnification obligation of the Sellers under
this Article 5 may be satisfied by payment to the Buyer in the Buyer's Common
Stock valued at $4.50 per share.
ARTICLE 6
OBLIGATIONS PENDING CLOSING DATE
6.1 AGREEMENTS OF BUYER AND THE SELLERS. Except as expressly contemplated
elsewhere in this Agreement, the Buyer and the Sellers agree that from the date
hereof until the Closing Date, the Buyers and the Sellers will and the Sellers
will cause MQI to (and unless otherwise indicated by the context, since March
31, 1997, it has):
(A) MAINTENANCE OF PRESENT BUSINESS. Operate its business only in
the usual, regular, and ordinary manner so as to maintain the goodwill it
now enjoys and, to the extent consistent with such operation, use all
reasonable efforts to preserve intact its present business organization,
keep available the services of its present officers and employees, and
preserve its relationships with customers, suppliers, jobbers,
distributors, and others having business dealings with it;
(B) MAINTENANCE OF PROPERTIES. At its expense, maintain all of its
property and assets in customary repair, order, and condition, reasonable
wear and tear excepted;
(C) MAINTENANCE OF BOOKS AND RECORDS. Maintain its books of account
and records in the usual, regular, and ordinary manner, in accordance with
GAAP applied on a consistent basis;
(D) COMPLIANCE WITH LAW. Duly comply in all material respects with
all laws applicable to it and to the conduct of its business;
(E) INSPECTION. Permit Buyer and its authorized representatives,
during normal business hours, to inspect MQI's records and to consult with
its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties herein made
and the compliance with covenants contained in this Agreement. The Buyer
agrees that, at all times prior to and after the Closing Date, it will and
will cause its representatives to hold all data and information obtained
with respect to MQI, in confidence and further agrees that it will not use
such data or information or disclose the same to others, except to the
extent such data or information either are, or become, published or a
matter of public knowledge through no fault of its own; and
(F) NOTICE OF MATERIAL DEVELOPMENTS. Promptly notify the other party
in writing of any material adverse change in, or any changes which, in the
aggregate, could result in a material adverse change in, the consolidated
financial condition, business or affairs of such party, whether or not
occurring in the Ordinary Course of Business.
6.2 ADDITIONAL AGREEMENTS OF THE SELLERS. Except as expressly contemplated
elsewhere in this Agreement, each of the Sellers agrees that since March 31,
1997, MQI has not, and from the date hereof until the Closing Date, they will
not cause or permit MQI to:
17
(A) PROHIBITION OF CERTAIN EMPLOYMENT CONTRACTS. Enter into any
contracts of employment which cannot be terminated on notice of 30 days or
less or which provide for any severance payments or benefits covering a
period beyond the earlier of the termination date or notice thereof;
(B) PROHIBITION OF CERTAIN LOANS. Incur any borrowings which would
exceed $10,000, in the aggregate, for any purpose except (i) the refunding
of indebtedness now outstanding, (ii) the prepayment by customers of
amounts due or to become due for services rendered or to be rendered in
the future, or (iii) as is otherwise approved in writing by the Buyer;
(C) PROHIBITION OF CERTAIN COMMITMENTS. Enter into commitments of a
capital expenditure nature or incur any contingent liabilities which would
exceed $10,000 in the aggregate except (i) as may be necessary for the
maintenance of existing facilities, machinery and equipment in good
operating condition and repair in the Ordinary Course of Business, or (ii)
as is otherwise approved in writing by the Buyer;
(D) DISPOSAL OF ASSETS. Sell, dispose of, or encumber, any property
or assets, except (i) in the usual and Ordinary Course of Business, (ii)
property or assets which individually have a value of less than $1,000; or
(iii) as may be approved in writing by the Buyer;
(E) MAINTENANCE OF INSURANCE. Discontinue its current level of
insurance; PROVIDED, that if during the period from the date hereof to and
including the Closing Date any of its property or assets are damaged or
destroyed by fire or other casualty, the obligations of the Buyer and the
Sellers under this Agreement shall not be affected thereby, and upon the
Closing Date all proceeds of insurance and claims of every kind arising as
a result of any such damage or destruction shall remain the property of
MQI;
(F) ACQUISITION PROPOSALS. Directly or indirectly (i) solicit,
initiate or encourage any inquiry or Acquisition Proposal from any person
or (ii) participate in any discussions or negotiations regarding, or
furnish to any person other than the Buyer or its representatives any
information with respect to, or otherwise facilitate or encourage any
Acquisition Proposal by any other person. As used herein "Acquisition
Proposal" means any proposal for a merger, consolidation or other business
combination involving MQI or for the acquisition or purchase of any equity
interest in, or a material portion of the assets of, MQI, other than the
transactions with the Buyer and the Sellers contemplated by this
Agreement. MQI shall promptly communicate to the Buyer the terms of any
such written Acquisition Proposals which it may receive or any written
inquiries made to it or any of its directors, officers, representatives or
agents;
(G) NO AMENDMENT TO ARTICLES OF INCORPORATION. Amend its Articles of
Incorporation or merge or consolidate with or into any other corporation
or change in any manner the rights of its common stock or the character of
its business;
(H) NO ISSUANCE, SALE, OR PURCHASE OF SECURITIES. Issue or sell, or
issue options or rights to subscribe to, or enter into any contract or
commitment to issue or sell (upon conversion or otherwise), any shares of
MQI Common Stock, or subdivide or in any way
18
reclassify any shares of MQI Common Stock, or acquire, or agree to
acquire, any shares of MQI Common Stock; or
(I) PROHIBITION ON DIVIDENDS. Declare or pay any dividend on shares
of MQI Common Stock or make any other distribution of assets to the
holders thereof.
6.3 TAX TREATMENT. Each of Buyer and Sellers will use their best efforts
to cause the transaction to qualify as a reorganization under the provisions of
Section 368(a) of the Code. Neither party nor any affiliate shall take any
action that would cause the transaction not to qualify as a reorganization under
Section 368(a).
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. The obligations of
Sellers to consummate and effect the transactions contemplated hereunder shall
be subject to the satisfaction of the following conditions, or to the waiver
thereof by Sellers before the Closing Date:
(A) REPRESENTATIONS AND WARRANTIES OF THE BUYER TRUE AT CLOSING
DATE. The representations and warranties of the Buyer herein contained
shall be, in all material respects, true as of and at the Closing Date
with the same effect as though made at such date, except as affected by
transactions permitted or contemplated by this Agreement; the Buyer shall
have performed and complied, in all material respects, with all covenants
required by this Agreement to be performed or complied with by the Buyer
before the Closing Date; and the Buyer shall have delivered to the Sellers
a certificate, dated the Closing Date and signed by its president to such
effect;
(B) OPINION OF COUNSEL. The Sellers shall have received a favorable
opinion, dated the Closing Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel to
the Buyer, in form and substance satisfactory to the Sellers, to the
effect that (i) Buyer has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Texas;
(ii) this Agreement and the other Transaction Documents have been duly
executed and delivered by, and are the legal, valid and binding obligation
of the Buyer and are enforceable against the Buyer in accordance with
their terms, except as the enforceability may be limited by (a) equitable
principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights
of creditors generally; and (iii) the Shares have been duly authorized and
validly issued and are fully paid and non-assessable. In rendering such
opinion, such counsel may rely upon certificates of public officials and
of officers of the Buyer as to matters of fact;
(C) NO MATERIAL LITIGATION. No suit, action, or other proceeding
shall be pending, or to the Buyer's knowledge, threatened, before any
court or governmental agency in which it will be, or it is, sought to
restrain or prohibit or to obtain damages or provide other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby or which might result in a material adverse change in
the value of the consolidated assets and business of Buyer; and
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(D) CONSENT OF CERTAIN PARTIES IN PRIVITY WITH MQI OR THE SELLERS.
The holders of any material indebtedness of MQI or the Sellers, the
lessors of any material property leased by MQI or the Sellers, and the
other parties to any other material agreements to which MQI or the Sellers
are a party shall, when and to the extent necessary in the reasonable
opinion of the Sellers, have consented to the transaction contemplated
hereby.
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER. The obligation of
the Buyer to consummate and effect the transactions contemplated hereunder shall
be subject to the satisfaction of the following conditions, or to the waiver
thereof by the Buyer before the Closing Date:
(A) REPRESENTATIONS AND WARRANTIES OF SELLERS TRUE AT CLOSING DATE.
The representations and warranties of the Sellers herein contained shall
be, in all material respects, true as of and at the Closing Date with the
same effect as though made at such date, except as affected by
transactions permitted or contemplated by this Agreement; MQI and the
Sellers shall have performed and complied in all material respects, with
all covenants required by this Agreement to be performed or complied with
by them before the Closing Date; and MQI and the Sellers each shall have
delivered to the Buyer a certificate, dated the Closing Date and signed by
each of the Sellers and by MQI's president to such effect;
(B) OPINION OF COUNSEL. The Buyer shall have received a favorable
opinion, dated the Closing Date, from Ellis, Funk, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Dokson, P.C., counsel to the Sellers, in form and substance satisfactory
to the Buyer, to the effect that (i) MQI has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Georgia, (ii) all outstanding shares of the MQI Common Stock have
been validly issued and are fully paid and nonassessable; (iii) this
Agreement and the other Transaction Documents have been duly executed and
delivered by, and are the legal, valid and binding obligation of the
Sellers and are enforceable against the Sellers in accordance with their
terms, except as the enforceability may be limited by (a) equitable
principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights
of creditors generally; and (iv) all issued and outstanding shares of MQI
Stock are owned beneficially or of record by the Sellers. In rendering
such opinion, such counsel may rely upon certificates of public officials
and of officers of MQI or the Sellers as to matters of fact;
(C) NO MATERIAL LITIGATION. No suit, action, or other proceeding
shall be pending, or to the Sellers' knowledge, threatened, before any
court or governmental agency in which it will be, or it is, sought to
restrain or prohibit or to obtain damages or other relief in connection
with this Agreement or the consummation of the transactions contemplated
hereby or which might result in a material adverse change in the value of
the assets and business of the MQI;
(D) CONSENT OF CERTAIN PARTIES IN PRIVITY WITH THE BUYER. The
holders of any material indebtedness of the Buyer, the lessors of any
material property leased by the Buyer, and the other parties to any other
material agreements to which the Buyer is a party shall, when and to the
extent necessary in the reasonable opinion of the Buyer, have consented to
the transactions contemplated hereby including, but not limited to, the
consent of (i) Comerica Bank-Texas, and (ii) Maxxim Medical, Inc.;
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(E) GOODWILL WRITE-OFF. Sellers shall have caused MQI to write off
the goodwill and organization cost for MQI-Florida in the amount of
$187,668, less any accumulated amortization; and
(F) CAPITALIZATION OF NOTES PAYABLE. ▇▇▇▇▇▇▇ (as transferee from the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable Life Insurance Trust) shall have contributed
notes payable by MQI in the amount of $250,000 to the capital of MQI, and
shall have delivered to Buyer such canceled note(s) and confirmation of
transfer in form reasonably acceptable to Buyer.
ARTICLE 8
MISCELLANEOUS
8.1 CERTAIN DEFINITIONS. As used in this Agreement, each of the following
terms has the meaning ascribed to it in this Section 8.1:
(a) "AFFILIATE" when used to indicate a relationship with any
Person, means: (i) any corporation or organization of which such Person is
an officer, director or partner or is directly or indirectly the
beneficial owner of at least 10% of the outstanding shares of any class of
equity securities or financial interest therein; (ii) any trust or other
estate in which such Person has a beneficial interest or as to which such
Person serves as trustee or in any similar fiduciary capacity; or (iii)
any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or is acting as agent on behalf of, or as an officer or director of,
such Person. As used in the definition of Affiliate, the term "control"
(including the terms "controlling," "controlled by" or "under common
control with") means the possession, direct or indirect, of the power to
direct, cause the direction of or influence the management and policies of
a Person, whether through the ownership of voting securities, by contract,
through the holding of a position as a director or officer of such Person,
or otherwise.
(b) "AGREEMENT" means and includes this Agreement and the schedules
and exhibits hereto.
(c) "BUSINESS LAWS" means all Laws relating to establishing, owning,
operating, managing, maintaining, improving or conducting the Business.
(d) "CLAIMS" mean any claims, demands, actions, costs, damages,
losses, expenses, obligations, liabilities, recoveries, judgments,
settlements, suits, proceedings, or causes of action, including interest,
penalties (including civil and criminal penalties) and attorneys' fees.
(e) "ENCUMBRANCE" means and includes (i) any security interest,
mortgage, deed of trust, pledge, lien (including unpaid debts for which a
lien arising under Laws may be asserted if such debts remain unpaid),
encumbrance, charge, defect, option, right of first refusal, preferential
purchase right, proxy or voting trust or agreement, preemptive right,
adverse Claim, equity, power of attorney, equitable interest or servitude,
other right or interest of any other Person, or restriction of any kind,
including but not limited to, any restriction or servitude on the use,
transfer, receipt of income, or other exercise of any
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attributes of ownership, and (ii) any Uniform Commercial Code financing
statement or other public filing, notice, or record that by its terms
purports to evidence or notify interested parties of any of the matters
referred to in clause (i) that has not been terminated or released by
another proper public filing, notice, or record.
(f) "ENVIRONMENTAL LAWS" mean all Laws relating to protection of the
environment, including, without limitation, land use, zoning, health,
chemical use, safety and sanitation Laws, and Laws governing the on or
off-site use, storage, treatment, recycling, generation, transportation,
processing, handling, production or disposal of Hazardous Substances or
sanitary (non-hazardous) substances or waste, including, without
limitation, garbage, refuse or other similar substances.
(g) "GOVERNMENTAL AUTHORITY" means any federal, state, county,
municipal, or other local governmental body, legislature, agency,
commission, board, department, court or other authority, or any
subdivision thereof, or private body exercising any regulatory, judicial
or taxing authority, and includes, without limitation, the Federal Trade
Commission, the Food and Drug Administration, the Environmental Protection
Agency, the Occupational Safety and Health Administration, and the
Internal Revenue Service.
(h) "HAZARDOUS SUBSTANCE" means, without limitation, (i) any
flammable explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam insulations, polychlorinated biphenyls, benzene,
petroleum and petroleum products, methane, or (ii) hazardous materials,
hazardous wastes, biomedical wastes, hazardous or toxic substances or
related materials defined as such in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601 ET SEQ.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901 ET SEQ.), or any other Environmental
Laws.
(i) "LAWS" mean any statute, law, code, ordinance, rule, regulation,
policy, guideline interpretation, order, permit, license, certificate,
writ, judgment, injunction, decree, determination, award or other decision
or directive of, or promulgated, issued or declared by any Governmental
Authority.
(j) "MARKET PRICE" means the average of the closing bid and asked
prices of the Common Stock in the over-the-counter market for the thirty
consecutive trading days ending two days prior to the Closing Date, as
furnished by any NASD member firm selected from time to time by the
Company for such purpose; provided, however, that the Market Price shall
never be less than $4.00 per share, nor more than $5.00 per share.
(k) "MQI STOCK" means the capital stock of Med-Quip, Inc., a Georgia
corporation, authorized by its Articles of Incorporation, as amended.
(l) "ORDINARY COURSE OF BUSINESS" means an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of Business"
only if: (i) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person; (ii) such action is not required to be
authorized by the board of directors of such Person (or by any Person or
group of Persons exercising similar authority); and (iii) such action is
similar in nature and magnitude to actions
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customarily taken, without any authorization by the board of directors (or
by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that
are in the same line of business as such Person.
(m) "PERSON" means an individual, corporation, limited liability
company, partnership, limited partnership, joint venture, joint stock
company, firm, company, syndicate, trust, estate, association,
Governmental Authority, business, organization or any other incorporated
or unincorporated entity.
(n) "SUBSIDIARY," with respect to any Person, shall mean any
corporation of which more than fifty percent of the outstanding voting
securities shall, as of any applicable date of determination, be owned
directly, or indirectly through one or more intermediaries, by that
Person.
8.2 FURTHER ASSURANCES. From time to time, as and when requested by any
party hereto, any other party hereto shall execute and deliver, or cause to be
executed and delivered, such documents and instruments and shall take, or cause
to be taken, such further or other actions as may be reasonably necessary to
effectuate the transactions contemplated hereby, including, without limitation,
the transfer to Buyer of the entire legal and beneficial ownership of the MQI
Stock, free and clear of all Encumbrances.
8.3 PUBLIC ANNOUNCEMENTS. Except as mutually agreed, neither Buyer,
Sellers nor any of their respective Affiliates or agents shall issue any press
release or public announcement regarding the execution of this Agreement or the
transactions contemplated thereby.
8.4 EXPENSES. Each of Sellers and Buyer shall bear their own respective
legal and accounting fees. Except as otherwise explicitly provided in this
Agreement, any other costs and expenses with respect to the negotiation,
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby shall be borne by the respective party incurring such costs
and expenses.
8.5 NOTICES AND WAIVERS. Any notice, instruction, authorization, request,
demand or waiver hereunder shall be in writing, and shall be delivered either by
personal delivery, by telegram, telex, telecopy or similar facsimile means, by
certified or registered mail, return receipt requested, or by courier or
delivery service, addressed to the parties hereto at the address indicated on
Schedule 8.5 attached hereto, or at such other address and number as a party
shall have previously designated by written notice given to the other parties in
the manner hereinabove set forth. Notices shall be deemed given when received,
if sent by facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means);
and when delivered and receipted for (or upon the date of attempted delivery
where delivery is refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail, return receipt
requested.
8.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement shall survive the Closing regardless of
any investigation made by a party hereto and will expire on May 2, 1999, except
for the representations and warranties in Article 3, which shall survive
indefinitely.
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8.7 KNOWLEDGE, GENDER AND CERTAIN REFERENCES. Unless otherwise provided
for herein, a representation or statement made herein to the knowledge of MQI or
Sellers shall mean the actual knowledge of Sellers. Unless otherwise specified,
all references herein to days, weeks, months or years shall be to calendar days,
weeks, months or years. Whenever the context requires, the gender of all words
used herein shall include the masculine, feminine and neuter. References to
Articles or Sections shall be to Articles or Sections of this Agreement unless
otherwise specified. The headings and captions used in this Agreement are solely
for convenient reference and shall not affect the meaning or interpretation of
any article, section or paragraph herein, or this Agreement. The terms "hereof,"
"herein" or "hereunder" shall refer to this Agreement as a whole and not to any
particular article, section or paragraph. The terms "including" or "include" are
used herein in an illustrative sense and not to limit a more general statement.
When computing time periods described by a number of days before or after a
stated date or event, the stated date or date on which the specified event
occurs shall not be counted and the last day of the period shall be counted.
8.8 SUCCESSOR AND ASSIGNS. This Agreement shall bind, inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
permitted assigns, and if an individual, by his executors, administrators, and
beneficiaries of his estate by will or the laws of descent and distribution.
This Agreement and the rights and obligations hereunder shall not be assignable
or delegable by any party; provided, however, that Buyer shall be entitled to
assign its rights and delegate its duties hereunder to any Subsidiary, but any
such assignment shall not have the effect of terminating Buyer's duties or
obligations as provided herein, including the obligation to deliver Common Stock
pursuant to Section 1.4 hereof.
8.9 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and of the United States
applicable in Texas, excluding, however, (i) any provision of such laws that
would render invalid any provision of this Agreement, and (ii) any rule of
conflict-of-laws that would direct or refer the resolution of any issue to the
laws of any other jurisdiction. Each party hereto hereby acknowledges and agrees
that it has consulted legal counsel in connection with the negotiation of this
Agreement and that it has bargaining power equal to that of the other parties
hereto in connection with the negotiation and execution of this Agreement.
Accordingly, the parties hereto agree that the rule that an agreement shall be
construed against the draftsman shall have no application in the construction or
interpretation of this Agreement.
8.10 DISPUTE RESOLUTION. Any dispute or controversy between the parties
hereto arising from or relating to this Agreement or the construction, validity,
interpretation, meaning, performance, non-performance, enforcement, operation or
breach of this Agreement shall be submitted to mediation, and if such mediation
is unsuccessful then to mandatory, final and binding arbitration. Any mediation
or arbitration under this Agreement shall take place pursuant to the following
procedures:
(a) If a dispute or controversy arises either party will request
that Judicial Arbitration and Mediation Service ("JAMS") (or similar
mediation service of a similar national scope if JAMS no longer then
exists) appoint an independent mediator, who shall serve as mediator for
all purposes hereof. The Buyer, on the one hand, and the Sellers as a
group on the other hand, shall each pay an equal proportion of the cost of
the mediator's services, in advance upon request by the mediator or any
party.
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(b) Within 10 days after appointment of the mediator, the mediator
shall schedule a meeting among the parties and the mediator for the
purpose of mediating the dispute. If the parties do not resolve the
dispute within 30 days after appointment of the mediator, the dispute
shall be resolved in arbitration.
(c) Within 15 days after the mediation, the parties shall each name
and appoint their own arbitrator. If either party fails to name and
appoint an arbitrator timely, then an arbitrator shall be appointed for
that party by the Senior United States District Judge for the United
States District Court in Houston, Texas. The two arbitrators so appointed
shall appoint a third arbitrator within 15 days, and if they cannot agree,
the appointment of the third arbitrator will he made by the Senior United
States District Judge for the United States District Court in Houston,
Texas.
(d) Each party shall bear its own arbitration fees, costs and
expenses. The arbitration hearing shall be held in Houston, Texas within
15 days of the appointment of the third arbitrator at a location
designated by a majority of the arbitrators within 10 days of the
appointment of the third arbitrator. The Commercial Arbitration Rules of
the American Arbitration Association, as supplemented hereby, shall apply
to the arbitration. The substantive laws of the State of Texas (excluding
conflict of laws provisions) shall also apply to the arbitration.
(e) The arbitration hearing shall be concluded within 10 days unless
otherwise ordered by a majority of the arbitrators, and the award thereon
shall be made within 15 days after the closing of submission of evidence.
An award rendered by a majority of the arbitrators shall be final and
binding on all parties to the proceeding and non-appealable, and judgment
on the award may be entered by any court of competent jurisdiction.
(f) The parties stipulate that the provisions of this Section 8.10
shall be a complete defense to any suit, action or proceeding instituted
in any federal, state or local court or before any administrative tribunal
with respect to any controversy or dispute arising out of this Agreement
between the parties, and the parties waive any right to have the award of
the arbitrators appealed. The arbitration provisions of this Agreement
shall, with respect to such controversy or dispute, survive the
termination or expiration of this Agreement. Should any party institute
judicial proceedings seeking to avoid the mediation or arbitration
provisions of this Agreement, or should any party in judicial proceedings
successfully contest an arbitration award rendered under this Section
8.10, the other parties shall be entitled to recover reasonable attorney's
fees, costs and expenses associated with the judicial proceedings, with
the amount of attorney's fees, costs and expenses to be determined by the
court. If a party fails to comply with the terms of an arbitration award
made under this Agreement, the other parties shall be entitled to recover
reasonable attorney's fees, costs and expenses incurred in seeking
judicial confirmation of the award, with the amount of attorney's fees,
costs and expenses to be determined by the court. Failure to comply with
the terms of an arbitration award shall include without limitation the
failure to pay the full amount due under an arbitration award within the
time specified in the arbitration award.
(g) In determining any award under this Section 8.10, the
arbitrators may award amounts for special damages, consequential damages,
incidental damages, lost profits, damages for lost business opportunity,
punitive damages or exemplary damages.
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Neither any party hereto nor the arbitrators may disclose the existence or
results of any arbitration hereunder without the prior written consent of the
other parties; nor may any party hereto disclose to any party any confidential
information disclosed by any other party hereto in the course of an arbitration
hereunder without the prior written consent of such other party.
8.11 SEVERABILITY; JUDICIAL MODIFICATION. If any term, provision,
covenant, or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions shall remain in full force and effect and
shall in no way be affected, impaired or invalidated. It is hereby stipulated
and declared to be the intention of the parties that they would have executed
this Agreement had the terms, provisions, covenants and restrictions which may
be hereafter declared invalid, void, or unenforceable not initially been
included herein.
8.12 AMENDMENT AND ENTIRETY. This Agreement, the other Transaction
Documents, and any exhibits hereto or thereto, may be amended, modified, or
superseded only by written instrument executed by all parties hereto. This
Agreement and the other Transaction Documents set forth the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements, arrangements, and understandings
relating to the subject matter hereof. In the event of any conflict or
inconsistency between the provisions of this Agreement and the contents or
provisions of any schedule or exhibit hereto, the provisions of the schedules or
exhibits shall control.
8.13 RIGHTS OF PARTIES. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any Persons other than the parties hereto and their respective
successors and assigns, nor shall any provision give any third Persons any right
of subrogation or action over against any party to this Agreement. Without
limiting the generality of the foregoing, it is expressly understood that this
Agreement does not create any third party beneficiary rights.
8.14 TIME OF ESSENCE. Time is of the essence in the performance of this
Agreement.
8.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by facsimile signature, each of which shall be deemed an
original and all which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Stock Purchase Agreement is executed and
delivered on and as of the day first above written.
LASERMEDICS, INC.
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
SELLERS:
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇. ▇. (SKIP) ▇▇▇▇▇
▇. ▇. (Skip) ▇▇▇▇▇
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