10 (vii)
________________________________________________________________________________
ASSET PURCHASE AGREEMENT
By And Between
▇▇▇▇▇▇ HEALTHCARE, INC.
And
CYBEX INTERNATIONAL, INC.
Dated September 30, 1997
________________________________________________________________________________
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is entered into on this 30th day of
September, 1997 by and between ▇▇▇▇▇▇ Healthcare, Inc., a Texas corporation (the
"Buyer"), and CYBEX International, Inc., a New York corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, one segment of Seller's business is the manufacture, distribution,
sales, marketing and service of its isokenetic rehabilitation product line, as
more fully defined in Section 6.1.14 (the "Product Line"); and
WHEREAS, the Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller the Product Line and certain related assets of Seller 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 Of Assets
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 6.1.
1.2 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions set
forth in this Agreement, Seller, at the Closing hereinafter referred to, hereby
agrees to sell, convey, transfer, assign and deliver to Buyer the following
assets of Seller (all such assets being sold hereunder are referred to
collectively herein as the "Assets"):
1.2.1 the tangible personal property of Seller used or useful in the
operation of the Product Line (such as machinery, equipment, tools,
replacement parts, molds and furniture and fixtures) as described on
SCHEDULE 1.2.1 attached hereto but excluding the Inventory (as defined in
Section 1.2.2 hereof) (collectively, the "Tangible Personal Property");
1.2.2 all of Seller's inventories of supplies, raw materials, work-
in-process and finished goods relating to the Product Line as of the
Closing Date, including, without limitation, that which is described on
SCHEDULE 1.2.2 attached hereto (the "Inventory");
1.2.3 (i) Seller's rights to the patents, patent applications,
copyrights, trademarks and service marks (including registrations and
applications therefor), trade names, licenses or sublicenses and written
know-how, trade secrets and other similar proprietary data and the goodwill
associated therewith used or held in connection with the Product Line
(collectively, the "Seller's Intellectual Property") as described on
SCHEDULE 1.2.3, and (ii) Seller's sales
and promotional literature, copies of books, records, files and data
(including customer and supplier lists), copies of contracts and documents
evidencing accounts and contracts receivable and payable, and certain other
records of Seller relating to the Assets or the Product Line (items (i) and
(ii) collectively, the "Intangibles"), as described on SCHEDULE 1.2.3
attached hereto;
1.2.4 the leases, subleases, contracts, contract rights, licenses and
agreements relating to the Assets or the operation of the Product Line as
described on SCHEDULE 1.2.4 attached hereto (collectively, the
"Contracts");
1.2.5 Seller's franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies relating principally to all or any of
the Assets or to the operation of the Product Line as described on SCHEDULE
1.2.5 attached hereto (collectively, the "Business Licenses") to the extent
assignable;
1.2.6 the goodwill and going concern value of the Product Line; and
1.2.7 all of Seller's backlog of orders for products manufactured or
sold by Seller included in the Product Line, which were accepted by Seller
in the ordinary course of business prior to the date hereof and not
invoiced or shipped (or canceled) prior to the date hereof (collectively,
the "Backlog Orders").
1.3 CONSIDERATION. As consideration for the sale of the Assets to Buyer
and for the other covenants and agreements of Seller contained herein, Buyer
agrees to:
1.3.1 pay to Seller the amount of $3,200,000 in cash (the "Cash
Consideration") at Closing by wire transfer on the Closing Date to the
account designated by Seller by written notice delivered to Buyer before
the Closing Date; and
1.3.2 assume only those liabilities of Seller related to the
Contracts and the Outstanding Warranty Obligations subject to the
conditions and limitations as set forth in Section 1.10 (collectively, the
"Assumed Liabilities"). Seller shall be responsible for all other
liabilities of Seller (collectively, the "Retained Liabilities"),
including, without limitation, any product liability relating to products
in the Product Line sold prior to or on the Closing Date, and any sales
taxes which are payable as a result of the consummation of the transactions
contemplated hereby.
1.4 NO OTHER LIABILITIES ASSUMED. Except for the Assumed Liabilities as
described in Section 1.3.2, Buyer shall not assume or be obligated to pay,
perform, or discharge any debt, obligation, expense or liability of Seller,
whether absolute or contingent, and whether known or unknown.
1.5 ALLOCATION OF CONSIDERATION. The total consideration for the Assets,
including the Assumed Liabilities, shall be allocated among the Assets and the
Seller's non-competition agreement pursuant to Article 5 in accordance with
SCHEDULE 1.5. The Buyer and Seller affirm that said allocation is fair and
equitable and that the parties shall adhere to such allocation for the purposes
of all tax returns filed by them on or after the Closing Date.
1.6 CLOSING. Consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of CYBEX
International, Inc., located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
at 10:00 a.m. on September 30, 1997 (the "Closing Date"), unless another time,
place or date is agreed to by the Seller and the Buyer.
1.7 BUYER'S CLOSING DELIVERIES. At the Closing, Buyer shall deliver to
the Seller: (i) the Cash Consideration described in Section 1.3; (ii) a duly
executed copy of each of the Ancillary Agreements (as defined in Section 1.9);
(iii) a duly executed copy of an assignment and assumption agreement pertaining
to the Contracts and the Assumed Liabilities; and (iv) a favorable opinion of
counsel, dated the Closing Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel to the
Buyer, in form and substance satisfactory to the Seller, to the effect that (a)
Buyer has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Texas; (b) this Agreement and the
Ancillary Agreements have been duly authorized, 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 (x) equitable principles of general applicability or (y)
bankruptcy, insolvency, reorganization, fraudulent conveyance or similar laws
affecting the rights of creditors generally; and (c) the execution, delivery and
performance of this Agreement and the Ancillary Agreements by the Buyer, and the
consummation of the transactions contemplated in the Agreement and the Ancillary
Agreements, will not constitute a breach or violation of, or default under, the
Articles of Incorporation or bylaws of the Buyer or any Law applicable to the
Buyer, or violate or conflict with or result in breach of, or constitute a
default under (or an event which, with notice or lapse of time or both, would
constitute a default under), any contract, indenture, loan agreement, order,
decree or instrument known to such counsel to which the Buyer is a party or by
which it or its assets are bound known to such counsel. In rendering such
opinion, such counsel may rely upon certificates of public officials and of
officers of the Buyer as to matters of fact.
1.8 SELLER'S CLOSING DELIVERIES. At the Closing, Seller shall deliver to
the Buyer: (i) a duly executed ▇▇▇▇ of sale relating to the Assets, reasonably
satisfactory in form and substance to Buyer; (ii) a duly executed copy of each
of the Ancillary Agreements (as defined in Section 1.9); (iii) a duly executed
copy of the Forza Release (as defined below); (iv) a duly executed copy of an
assignment and assumption agreement pertaining to the Contracts and the Assumed
Liabilities; (v) any consents necessary pursuant to SCHEDULE 2.2; (vi) all such
other instruments as shall be reasonably requested by the Buyer to vest fully in
the Buyer good and indefeasible title to the Assets, including, but not limited
to, patent and patent license transfers and trademark assignments; and (vii) a
favorable opinion of counsel, dated the Closing Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a
Professional Corporation, counsel to the Seller, in form and substance
satisfactory to the Buyer, to the effect that (a) Seller has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of New York; (b) this Agreement and the Ancillary Agreements
have been duly authorized, executed and delivered by all necessary corporate
actions, and are the legal, valid and binding obligation of the Seller and are
enforceable against the Seller in accordance with their terms, except as the
enforceability may be limited by (x) equitable principles of general
applicability or (y) bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affecting the rights of creditors generally; (c)
Seller is not required to obtain shareholder approval of the consummation of the
transactions contemplated under this Agreement and the Ancillary Agreements
under any applicable Laws; (d) the Forza Release is a full and complete release
of any obligation on the part of Seller or Buyer as successor owner to the
Assets to sell the Assets to Forza or any right by Forza to purchase the Assets
known to such counsel; and (e) the execution, delivery and performance of
this Agreement and the Ancillary Agreements by the Seller, and the consummation
of the transactions contemplated in the Agreement and the Ancillary Agreements,
will not constitute a breach or violation of, or default under, the Articles of
Incorporation or bylaws of the Seller or any Law applicable to the Seller, or
violate or conflict with or result in breach of, or constitute a default under
(or an event which, with notice or lapse of time or both, would constitute a
default under), any contract, indenture, loan agreement, order, decree or
instrument to which the Seller is a party or by which it or its assets are bound
known to such counsel. In rendering such opinion, such counsel may rely upon
certificates of public officials and of officers of the Seller as to matters of
fact.
1.9 ANCILLARY AGREEMENTS. At the Closing, the Buyer and Seller will enter
into the following agreements (collectively with any and all other ancillary
documents or agreements necessary to effect the consummation of the transactions
contemplated herein, the "Ancillary Agreements"):
1.9.1 TRANSITION AGREEMENT. The Buyer and Seller will enter into a
Transition Agreement (the "Transition Agreement") of even date herewith,
and in substantially the form as attached hereto as EXHIBIT A, whereby the
Product Line will continue to be manufactured at the Seller's Ronkonkoma,
New York facility for a period of 60 days following the Closing Date;
1.9.2 DISTRIBUTION AGREEMENTS. The Buyer and Seller will enter into
(a) a Distribution Agreement (the "Buyer Distribution Agreement") of even
date herewith and in substantially the form as attached hereto as EXHIBIT
B, whereby the Buyer will become a non-exclusive distributor of Seller's
fitness equipment in the Territory (as defined therein), and (b) a
Distribution Agreement (the "Seller Distribution Agreement") of even date
herewith and in substantially the form as attached hereto as EXHIBIT C,
whereby the Seller will become a non-exclusive distributor of Buyer's
rehabilitation equipment in the Territory (as defined therein); and
1.9.3 TRADEMARK LICENSE AGREEMENT. The Buyer and Seller will enter
into a Trademark License Agreement (the "Trademark License Agreement:) of
even date herewith, and substantially in the form as attached hereto as
EXHIBIT D, through which the Buyer will obtain the right to use the trade
name and trademark "CYBEX(R)" in connection with the manufacture, sale,
distribution and service of the Product Line.
1.10 OUTSTANDING WARRANTY OBLIGATIONS. Buyer hereby assumes, as of the
Closing Date, all of Seller's Outstanding Warranty Obligations. Buyer further
agrees to respond to and fulfill the Outstanding Warranty Obligations in a
timely manner and in accordance with the terms and provisions of Seller's
standard product warranty (the "Standard Product Warranty," a copy of which is
attached hereto as SCHEDULE 1.10), and the unwritten warranty with regard to the
6000 (the "Unwritten Warranty," a complete description of which is included as
part of SCHEDULE 1.10). In addition, Buyer agrees to continue to provide
replacement parts and/or repair services with respect to the Product Line, at
Buyer's standard rates, following the expiration of any warranty period for a
commercially reasonable length of time. Seller acknowledges that it is
retaining, as a Retained Liability, responsibility with respect to product
liability claims pertaining to products in the Product Line sold prior to the
Closing Date. Buyer agrees to cooperate with Seller with regard to its defense
of any product liability Claims brought against Seller involving products in the
Product Line sold prior to the Closing Date, and Seller agrees to so cooperate
with Buyer concerning Claims brought
against Buyer involving products in the Product Line sold after to the Closing
Date.
1.11 WARRANTY SERVICE AGREEMENT. As a condition precedent to the Buyer's
obligations under this Agreement, the Buyer, on or before the Closing Date,
shall have entered into a new warranty service agreement (the "Warranty Service
Agreement") to replace the Statement of Work to Technical Support Agreement
between Seller and Technology Service Solutions ("TSS") with TSS on terms
acceptable to the Buyer.
1.12 PRODUCT LINE DISTRIBUTORS. As a condition precedent to the Buyer's
obligations under this Agreement, the Buyer, on or before the Closing Date,
shall have entered into new distribution agreements with the current
distributors of the Product Line (the "Product Line Distributors") on terms
acceptable to the Buyer, including, without limitation, Forza Fitness Equipment
Ltd. ("Forza"), Sakai Medical Co., Ltd., and Proxomed ▇▇▇▇ Medizintechnik GMBH.
1.13 FORZA PURCHASE RIGHT RELEASE. As a condition precedent to the Buyer's
obligations under this Agreement, Seller agrees to obtain a complete release of
any right which Forza may have to purchase or acquire the Product Line from
Seller (the "Forza Release"). Seller will obtain and deliver the Forza Release
to Buyer in form and substance reasonably agreeable to Buyer.
1.14 ACCOUNTS RECEIVABLE. Buyer hereby agrees that it will act as Seller's
agent for collection with respect to the accounts receivable attributable to
sales of the Product Line prior to the Closing Date (the "Accounts Receivable")
for a period of 120 days following the Closing Date. Seller shall attach, as
SCHEDULE 1.14 hereto, a complete and accurate list of the Accounts Receivable
that the Buyer shall attempt to collect. Buyer shall remit any such collections
on the Accounts Receivable every second Friday following the Closing Date
accompanied with a detailed ledger of all such collections during that period to
date. On the 150th day following the Closing Date, Buyer shall provide Seller
with its final accounting of the then outstanding Accounts Receivable. Buyer
shall apply any payments to the receivables of each debtor in the order such
receivables were booked. Buyer agrees to use commercially practicable efforts in
collecting the Accounts Receivable; provided, however, that Buyer shall not in
any way be responsible or liable to Seller for any nonpayment of or failure to
collect the Accounts Receivable.
1.15 OFFSET. If Buyer is entitled to indemnification pursuant to the
provisions of Article 4, Buyer at its option shall be entitled to offset the
amount of any such expenses or Claims, respectively, against any payments
otherwise due to Seller under this Agreement or any payments due under the
Trademark License Agreement. The rightful exercise of the right of offset
hereunder shall not constitute a breach or default of any provision requiring
payment of sums so offset, or relieve the party against whom such right of
offset is exercised from performing its obligations thereunder.
1.16 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 all of the Assets, free and clear of all Encumbrances.
ARTICLE 2
Representations And Warranties Of Seller
As material inducements to the execution, delivery and performance of this
Agreement by Buyer, Seller hereby represents and warrants 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 2 to which it relates; Buyer shall be deemed to have
knowledge of all matters described on the Exception Schedule.
2.1 ORGANIZATION AND STANDING. Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the State of New York.
Seller 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. Seller is duly qualified or licensed to do business
and is in good standing as a foreign corporation authorized to do business in
all jurisdictions in which the character of the properties owned or the nature
of the business conducted by it would make such qualification or license
necessary, except where such failure to qualify or license would not have
material adverse effect on either the Seller, its Assets or the operation of the
Product Line. True, correct and complete copies of Seller's Articles of
Incorporation and Bylaws, as each may have been amended, are attached to the
Exception Schedule.
2.2 AUTHORITY. Seller has the absolute and unrestricted right, power,
legal capacity, and authority to enter into, and perform such Seller obligations
under this Agreement and the Ancillary Agreements.
2.3 AGREEMENT AUTHORIZED AND ENFORCEABLE. The execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby has been duly and validly
authorized by all necessary corporate action on the part of the Seller. No
Shareholder approval of the transactions contemplated in this Agreement and the
Ancillary Agreements is required under any Laws to which the Seller is subject.
This Agreement and the Ancillary Agreements constitute valid and binding
obligations of Seller, enforceable against it in accordance with their terms,
except as may be limited by applicable bankruptcy laws, insolvency laws and
other similar laws affecting the rights of creditors generally.
2.4 NO VIOLATIONS OR CONFLICTS. Neither the execution and delivery of
this Agreement and the Ancillary Agreements by Seller nor the consummation of
the transactions contemplated hereby and thereby will: (a) violate or conflict
with any provision of Seller's Articles of Incorporation or Bylaws, as amended
to date; (b) violate or conflict with any provision of any Laws applicable to
the Seller, or its business or 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 the Seller is a party or to
which its assets are subject; (d) result in the creation or imposition of any
Encumbrance of any nature upon or with respect to any of the assets of Seller;
or (e) be an event that would permit any party to terminate any of the
Contracts; provided, that, with respect to clauses (c), (d) and (e), all
required consents are first obtained.
2.5 TITLE TO AND CONDITION OF ASSETS. Seller has and will convey to Buyer
good, indefeasible and marketable title to the Assets, free and clear of any
Encumbrance except liens for current taxes not yet due and payable and except as
set forth in SCHEDULE 2.5 of the Exception Schedule attached hereto. Seller is
in possession of any and all of the Assets which are leased to it from others.
The Assets and the assets and rights transferred or assigned to Buyer pursuant
to the Ancillary Agreements constitute all of the material property, whether
real, personal, mixed, tangible or intangible, that is used in the Product Line
by Seller and that is necessary for the continued conduct of the Product Line as
conducted by Seller prior to the date hereof. SCHEDULE 2.5 of the Exception
Schedule attached hereto contains a description of all of the Assets leased
pursuant to the Contracts, which are the only Assets which are not owned by
Seller. Except for such conditions and defects which do not materially impact on
the conduct of the business related to the Product Line, all of the Assets are
in good condition and in a state of good maintenance and repair, ordinary wear
and tear excepted, and are free from any known defects, except as may be
repaired by routine maintenance.
2.6 TANGIBLE PERSONAL PROPERTY AND INVENTORY. The items listed on
SCHEDULE 1.2.1 attached hereto constitute all of the material personal property
which is used by Seller in connection with the ownership and operation of the
Product Line. SCHEDULE 1.2.2 attached hereto is believed by Seller to be a
materially correct list of all of the Inventory owned or used by Seller in
connection with the ownership and operation of the Product Line. Said SCHEDULE
122 is not based upon a physical inventory count, and was prepared by Seller
consistent with prior practice. Except as disclosed on SCHEDULE 2.5 of the
Exception Schedule attached hereto, no material Tangible Personal Property (i)
is held under any lease, security agreement, conditional sales contract, or
other title retention or security arrangement, or (ii) is located other than in
the possession of Seller. No material items included in the Inventory have been
pledged as collateral or are held by Seller on consignment from others, except
for such Encumbrances as will be released at Closing.
2.7 INTELLECTUAL PROPERTY. The Intellectual Property described on
SCHEDULE 1.2.3 attached hereto and the intellectual property transferred or
licensed to Buyer pursuant to the Ancillary Agreements constitutes all of the
material Intellectual Property owned or licensed by Seller and used in the
Product Line. To Seller's knowledge, Seller owns or possesses licenses to use
all Intellectual Property that is material to or necessary for the continued
conduct of the Product Line. Except as listed on the Exception Schedule, the
Seller's Intellectual Property is owned or licensed by Seller free and clear of
any Encumbrance. Seller has not granted to any other Person any license to use
any of the Seller's Intellectual Property, except for non-exclusive licenses
granted in the normal course of business pursuant to the distribution agreements
listed on Schedules 1.2.4 and 2.8 hereto. To Seller's knowledge, the use of the
Seller's Intellectual Property will not, and the conduct of the Product Line
prior to the date hereof did not, infringe, misappropriate or conflict with the
intellectual property rights of others. Except as indicated on the Exception
Schedule, Seller has not received any notice of infringement, misappropriation,
or conflict with the intellectual property rights of others in connection with
the use by Seller of the Seller's Intellectual Property.
2.8 CONTRACTS. The Contracts contained on SCHEDULE 1.2.4 attached hereto
together with those other contracts, agreements, and other written arrangements
(the "Other Agreements") as listed on SCHEDULE 2.8 attached hereto constitute
all of the material contracts, agreements, and other written arrangements
relating to the Assets or Product Line to which Seller is a party, or by which
the Assets are bound. To Seller's knowledge, each of the Contracts is valid and
in full force and effect. There has not been any material default by Seller, or
to Seller's knowledge, any other party
to any of the Contracts, or any event that with notice or lapse of time or both,
would constitute a material default by Seller, or to Seller's knowledge, any
other party to any of the Contracts. Seller has not received notice that any
party to any of the Contracts intends to cancel or terminate any of the material
Contracts or exercise or not exercise any options that they might have under any
of the Contracts which might have a material adverse effect on the Assets or the
rights under such Contract.
2.9 BUSINESS LICENSES. SCHEDULE 1.2.5 attached hereto, is a schedule of all
material Business Licenses owned by Seller or in which Seller has any rights or
licenses in connection with the Product Line, together with a brief description
of each. Seller is in compliance in all material respects with the terms of the
Business Licenses, except for such violations which, alone or in the aggregate,
do not and will not have a material adverse effect on the ability to conduct the
business associated with the Product Line. None of the Business Licenses have
been, or, to the knowledge of Seller, are threatened to be, revoked, canceled,
suspended or modified.
2.10 LITIGATION. Except as set forth in the Exception Schedule, there is
no suit, action, or legal, administrative, arbitration, or other proceeding or
governmental investigation pending or threatened to which Seller is a party or,
to the knowledge of Seller, might become a party, and which might have a
material adverse effect on the Assets or the Product Line.
2.11 ENVIRONMENTAL MATTERS. Except as described on the Exception Schedule,
none of the current or past operations of the Product Line or the Assets is
being or has been conducted or used in such a manner as to constitute a
violation of any Applicable Environmental Laws, Seller has not received any
notice (whether formal or informal, written or oral) from any entity,
governmental agency or individual regarding any existing, pending or threatened
investigation or inquiry related to violations of any Applicable Environmental
Laws or regarding any claims for remedial obligations or contribution for
removal costs or damages under any Applicable Environmental Laws, and there are
no writs, injunction decrees, orders or judgments outstanding, or lawsuits,
claims, proceedings or investigations pending or threatened relating to the
ownership, use, maintenance or operation of the Assets or the conduct of the
Product Line, nor, to Seller's knowledge, is there any basis for any of the
foregoing. No Hazardous Substances have been or are currently being used by
Seller in its operations in violation of any Applicable Environmental Laws. No
Hazardous Substances are or have ever been situated on or under Seller's
properties, whether owned or leased, or incorporated into any of the Assets in
violation of any Applicable Environmental Laws.
2.12 COMPLIANCE WITH OTHER LAWS. Seller is not in violation of or in
default with respect to, or in alleged violation of or alleged default with
respect to, any other applicable law or any applicable rule, regulation, or any
writ or decree of any court or any governmental commission, board, bureau,
agency, or instrumentality, and Seller is not delinquent with respect to any
report required to be filed with any governmental commission, board, bureau,
agency or instrumentality, except for such violations or delinquencies which,
alone or in the aggregate, do not have a material adverse effect on the ability
to conduct the business associated with the Product Line.
2.13 SOLVENCY. Seller is not now Insolvent, nor will Seller be rendered
Insolvent by the occurrence of the transactions contemplated by this Agreement.
2.14 ERISA PLANS, LABOR ISSUES AND AFFILIATE PAYMENTS. Except as
identified in SCHEDULE 2.14, Seller does not currently sponsor, maintain or
contribute to, and has not at any time sponsored, maintained or contributed to
any employee benefit plan which is or was subject to any
of the provisions 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). Each benefit plan set forth in
SCHEDULE 2.14 hereto (collectively the "Benefit Plans") complies currently, and
has complied in the past, in form and operation, with the applicable provisions
of ERISA, the Code and other applicable Laws. All contributions required to be
made to each Benefit Plan under the terms of such Benefit Plans, ERISA or other
applicable Laws have been timely made. None of the Benefit Plans (i) is a
"multiemployer plan" (as defined in Section 3(37) of ERISA), or (ii)
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provides for medical or other insurance benefits to current or future retired
Employees or former Employees of the Seller (other than as required for group
health plan continuation coverage under Code Section 4980B or applicable state
law). During the five years preceding the Closing Date, (i) no under funded
pension plan subject to Section 412 of the Code has been transferred out of the
Seller and (ii) the Seller has not participated in or contributed to, or had an
obligation to contribute to, any multiemployer plan (as defined in ERISA Section
3(37)) and has no withdrawal liability with respect to any multiemployer plan.
There are no claims or lawsuits which have been asserted, instituted or
threatened against the Assets by the trustees under the Benefit Plans. Seller
has not engaged in any unfair labor practices which could have a material
adverse effect on the Assets or the operations of the Business. Except as
described on the Exception Schedule, (i) Seller has no collective bargaining
agreements with any labor union or other representative of Employees, (ii)
Seller has no pending or threatened, dispute with any of its existing or former
Employees, (iii) there are no labor disputes pending or threatened by Seller's
current or former Employees, and (iv) since January 1, 1997, Seller 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 past practice, regularly scheduled periodic
bonuses and other increases, 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. Seller has complied and will comply with the
Worker Adjustment and Retraining Notification Act ("WARN") with respect to any
Employees which may be terminated or laid off or any "plant closing" which may
occur as a result of the consummation of the transactions contemplated by this
Agreement. The term "Employees" refers to those of Seller's employees whose
principal duties pertain to the manufacture, sale or marketing of the Product
Line.
2.15 OUTSTANDING WARRANTY OBLIGATIONS. Seller's Standard Product Warranty
and the Unwritten Warranty are the only warranties that Seller has given with
respect to the products sold in the Product Line on or before the Closing Date,
and are currently in full force and effect. TSS has performed substantially all
of the third-party warranty obligation work necessary pursuant to the Standard
Product Warranty and the Unwritten Warranty during the last three years up to
and including the Closing Date.
2.16 FDA REGULATIONS. Attached hereto as SCHEDULE 2.16 is a complete list
of any and all warning letters, Form FDA 483s or other correspondence received
by Seller which pertain to the Product Line copies of which have been previously
provided to Buyer. To Seller's knowledge, the Seller is currently in full
compliance with all U.S. Food and Drug Administration ("FDA") regulations
pertaining to the operation of the Product Line, including, without limitation,
the Medical Device Reporting Regulations as specified in 21 C.F.R. (S) 803, and
any FDA registrations or reports are current.
2.17 BROKERS. Neither Seller nor any of its Affiliates has employed any
broker, agent or
finder, or incurred by any liability for any brokerage fees, agent's fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement.
2.18 UNTRUE STATEMENTS. This Agreement and all schedules, documents and
information furnished by Seller or any of its 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, to Seller's knowledge, omit to state any material fact necessary to
make the statements made herein and therein not materially misleading.
ARTICLE 3
Representations And Warranties Of Buyer
As material inducements for the execution, delivery and performance of this
Agreement by Seller, Buyer hereby represents and warrants to Seller that as of
the Closing Date:
3.1 ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas, and has all the
necessary powers to own its business as now owned and operated by it.
3.2 AUTHORITY. Buyer has the absolute and unrestricted right, power,
legal capacity, and authority to enter into, and perform such Buyer obligations
under this Agreement and the Ancillary Agreements.
3.3 AGREEMENTS AUTHORIZED AND ENFORCEABLE. The execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby (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. This Agreement and the
Ancillary Agreements constitute valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their terms, except as may be
limited by applicable bankruptcy laws, insolvency laws and other similar laws
affecting the rights of creditors generally.
3.4 NO VIOLATIONS OR CONFLICTS. Neither the execution and delivery of
this Agreement and the Ancillary Agreements by Buyer nor the consummation of the
transactions contemplated hereby and thereby will: (a) violate or conflict with
any provision of Buyer's Articles of Incorporation or Bylaws, as amended to
date; (b) violate or conflict with any provision of any Laws applicable to the
Buyer, or its business or assets; or (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 the Buyer is a party or to
which its assets are subject.
3.5 BROKERS. Except for its agreement with Principal Financial
Securities, Inc., 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.
3.6 UNTRUE STATEMENTS. This Agreement and all schedules, documents and
information furnished by Buyer or its representatives to Seller and any of 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, to Buyer's knowledge, omit to state any material fact necessary to make
the statements made herein and therein not materially misleading.
ARTICLE 4
Indemnification
4.1 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend and hold
harmless Buyer and its officers, directors, employees, agents and shareholders,
against and with respect to any and all Claims that such indemnitees shall incur
or suffer, which arise, result from or relate to (i) any breach of, or failure
by Seller to perform, any of Seller's representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished to Buyer by Seller under this Agreement ("Breach Claims"),
and (ii) any and all Retained Liabilities of Seller, including, without
limitation, any tax liabilities, with respect to which Seller or any other
Person at any time asserts a Claim therefor against the Buyer ("Liability
Claims"). Unless otherwise indicated, the term "Claims" when used herein
includes Breach Claims, Liability Claims and Warranty Claims (as defined below).
4.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend and hold
harmless Seller and its officers, directors, employees, agents and shareholders,
against and with respect to any and all Claims that such indemnitees shall incur
or suffer, which arise, result from or relate to (i) 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 Seller by Buyer under this Agreement ("Breach Claims"),
and (ii) any and all liabilities of Buyer relating to the Outstanding Warranty
Obligations with respect to which any other Person at any time asserts a Claim
therefor against the Seller ("Warranty Claims").
4.3 INDEMNIFICATION PROCEDURE.
4.3.1 Promptly upon the receipt of notice of any third-party (i.e.,
one who is not a party to this Agreement) Claim, judicial or otherwise,
with respect to any matter as to which indemnification may be claimed under
this Article 4, the indemnified party shall give written notice thereof to
the indemnifying party together with such information respecting such
matter as the indemnifying 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 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 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. 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.
4.3.2 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 4 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 to the indemnifying party of the Claim,
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.
4.3.3 Payments of all amounts owing hereunder with respect to any
Claim shall be made immediately after the settlement between the parties of
the third party Claim.
4.4 INDEMNIFICATION THRESHOLD AND LIMITATIONS. Any request for
indemnification by an indemnified party under the indemnification procedures of
this Article 4 regarding the breach of any representation or warranty under this
Agreement must be asserted by such indemnified party prior to the expiration of
the applicable survival period as set forth in Section 65. Notwithstanding any
provision to the contrary contained in this Agreement, neither Buyer nor Seller
shall make any request for indemnification against the other party for any
Breach Claim under this Agreement until the dollar amount of all losses to such
other party for such Breach Claims suffered after the Closing, shall exceed in
the aggregate the amount of $300,000, and, if such amount is exceeded, Buyer or
Seller, as the case may be, shall be required to pay the entire amount of such
aggregate loss to the other party for all such Breach Claims; provided, however,
that a party's obligation and liability for any and all Breach Claims shall not
exceed in the aggregate an amount equal to the purchase price set forth in
Section 13. Without regard to the above-mentioned $300,000 aggregate Claim
threshold: (i) Seller shall reimburse Buyer for any and all Liability Claims,
and (ii) Buyer shall reimburse Seller for any and all Warranty Claims.
ARTICLE 5
Non-Competition Agreement
As used in this Article 5, any reference to "Buyer" or "Seller" shall mean
and include their respective Affiliates.
5.1 SELLER COVENANT NOT TO COMPETE. For a two-year period beginning on
the Closing Date, Seller shall not directly or indirectly, engage or invest in,
finance, own, manage, operate, control or participate in the ownership,
management, operation or control of, be employed by, associated or in any manner
connected with, render services or advice to, or assist (whether or not for
compensation), any Competing Business (as defined below); provided however, that
this Section 51 shall not preclude the Seller or its Affiliates from (a)
investing in up to an aggregate of 5% of the securities of any enterprise
engaged in a Competing Business (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any United
States national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934, provided that the Seller
and its Affiliates combined do not purchase or hold (directly or indirectly) an
aggregate equity interest of more than 5% in any such enterprise, or (b)
pursuant to Seller's Distributor Agreement.
5.2 COVENANTS NOT TO INTERFERE OR HIRE. For a two-year period beginning
on the Closing Date, neither Seller nor Buyer shall directly or indirectly,
either as principal, agent, independent contractor, consultant, director,
officer, employee, employer, advisor (whether paid or unpaid), stockholder,
partner or in any other individual or representative capacity whatsoever, either
for their own benefit or for the benefit of any other Person, either (i) hire,
attempt to hire, contact or solicit with respect to hiring any employee (not
including independent sales representatives) of the other party hereto as of the
Closing Date, (ii) induce or otherwise counsel, advise or encourage any employee
of the other party as of the Closing Date to leave the employment of that party,
or (iii) induce any distributor, vendor, supplier, representative or agent of or
to the other party to terminate or modify its relationship with that party;
provided, however, that the covenants in this Section shall not prohibit the
Buyer from hiring any of the employees listed on SCHEDULE 52, nor shall the
hiring of any such employees constitute a breach of such covenants.
5.3 NECESSITY AND REASONABLENESS. The parties hereto hereby specifically
acknowledge, agree and represent to each other as a material inducement for
their entering into this Agreement:
5.3.1 the covenants and agreements of the parties in this Article 5
are necessary and essential to the protection of the business which will be
conducted by the parties after the Closing Date, and to enable the parties
to realize and derive all of the benefits, rights and expectations
associated with this Agreement;
5.3.2 Buyer will suffer great loss and irreparable harm if the Seller
directly or indirectly enters into a Competing Business;
5.3.3 the temporal and other restrictions contained in this Article 5
are in all respects reasonable and necessary to protect the business
goodwill, trade secrets, prospects and other business interests of Buyer in
respect of the Seller;
5.3.4 the enforcement of this Agreement in general, and of this
Article 5 in particular, will not work an undue or unfair hardship on
either party or otherwise be oppressive to it, it being specifically
acknowledged and agreed by the Seller that it has other business interests
and opportunities which will provide it adequate means of support if the
provisions of this Article 5 are enforced;
5.3.5 the enforcement of this Agreement in general, and of this
Article 5 in particular, will neither deprive the public of needed goods or
services nor otherwise be injurious to the public; and
5.3.6 good, independent and valuable consideration exists for the
agreement of the parties to be bound by the covenants and agreements
contained in this Article 5.
5.4 ENFORCEMENT. Because of the unique nature of the Assets and the
Product Line, the business to be conducted and further developed by Buyer
therewith, and the confidential and proprietary information relating thereto,
the Seller acknowledges, understands and agrees that Buyer will suffer immediate
and irreparable harm if the Seller or its Affiliates fail to comply with any of
their respective obligations under this Article 5 and that monetary damages will
be inadequate to compensate Buyer for such breach. Accordingly, the Seller
agrees that Buyer shall, in addition to any other remedies available to it at
law or in equity, be entitled to temporary, preliminary, and permanent
injunctive relief and specific performance to enforce the terms of this Article
5 without the necessity of proving inadequacy of legal remedies or irreparable
harm, or posting bond.
ARTICLE 6
Miscellaneous
6.1 CERTAIN DEFINITIONS. As used in this Agreement, each of the following
terms has the meaning ascribed to it in this Section 61:
6.1.1 "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 20% 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.
6.1.2 "Agreement" means and includes this Agreement and the schedules
and exhibits hereto.
6.1.3 "Ancillary Agreements" means the Transition Agreement, the
Buyer
Distribution Agreement, Seller Distribution Agreement and the Trademark
License Agreement, all between the Buyer and Seller and all of even date
herewith, and any and all other ancillary documents or agreements entered
into among or executed by the parties hereto in order to effect the
consummation of the transactions contemplated herein.
6.1.4 "Applicable 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,
including, without limitation (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. (S)(S) 9601 et seq.), as
amended from time to time, including, without limitation, as amended
pursuant to the Superfund Amendments and Reauthorization Act of 1986
("CERCLA"), and regulations promulgated thereunder, (ii) the Resources
Conservation and Recovery Act of 1976 (42 U.S.C. (S)(S) 6901 et seq.), as
amended from time to time ("RCRA"), and regulations promulgated thereunder,
(iii) the Federal Water Pollution Control Act (U.S.C.A. (S) 9601 et seq.),
as amended, and regulations promulgated thereunder, and (iv) any applicable
state laws or regulations relating to the environment.
6.1.5 "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 reasonable
attorneys' fees.
6.1.6 "Competing Business" means any Person who engages in the sale
or distribution of the Product Line or any competing product line in the
geographic area in which Seller conducts Product Line operations as of the
date of this Agreement. Notwithstanding the foregoing, the term "Competing
Business" specifically excludes the current business activities of the
Seller and all natural extensions thereof, other than the manufacture, sale
and marketing of the Product Line.
6.1.7 "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 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.
6.1.8 "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.
6.1.9 "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 Applicable
Environmental Laws.
6.1.10 "Insolvent" means, for any Person or entity, that the sum of
the present fair saleable value of its assets does not and/or will not
exceed its debts and other probable liabilities, and the term "debts"
includes any legal liability, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent, disputed or undisputed or
secured or unsecured.
6.1.11 "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.
6.1.12 "Outstanding Warranty Obligations" means Seller's outstanding
service duties and warranty obligations from time to time arising under
Seller's Standard Product Warranty and Unwritten Warranty, both as attached
hereto as SCHEDULE 110, with respect to the products sold under the Product
Line which were manufactured and/or sold by the Seller on or before the
Closing Date, whether such obligations arise prior to or after the Closing
Date.
6.1.13 "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.
6.1.14 "Product Line" means the manufacture, distribution, sales,
marketing and service of the following isokinetic products: (i) NORM
(extremity testing), (ii) TMC (back testing), (iii) Kinetron (Iso Rehab),
(iv) TEF, 300, ETC. (refurbished equipment), (v) All ORTHOTRON and KT
products, (vi) FITRON, and (vii) UBE.
6.2 PUBLIC ANNOUNCEMENTS. Except as mutually agreed, neither Buyer nor
Seller 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.
6.3 EXPENSES. Except as otherwise explicitly provided in this Agreement,
each of Seller and Buyer shall bear their own respective legal and accounting
fees, and other costs and expenses with respect to the negotiation, execution
and delivery of this Agreement, and consummation of the transactions
contemplated hereby. Buyer hereby agrees to reimburse Seller for all reasonable
direct
expenses, not including any portion of the salary or hourly rates of any
employees for time spent, incurred by Seller as a result of providing any
requested assistance to Buyer in the preparation of Buyers Form 8-K, if any,
which will be filed as a result of the consummation of the transactions
contemplated herein.
6.4 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
below, 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:
If to Buyer:
▇▇▇▇▇▇ Healthcare, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller:
CYBEX International, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
A Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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.
6.5 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, except for those representations
and warranties in Sections 2.2, 2.3, 2.4, 2.5, 3.2, 3.3, 3.4 and 2.7 (with
regard to title), which will survive indefinitely, all representations and
warranties will expire on June 1, 1999.
6.6 KNOWLEDGE, GENDER AND CERTAIN REFERENCES. Unless otherwise provided
for herein, a representation or statement made herein to the knowledge of Seller
or Buyer shall mean the actual knowledge of Seller or Buyer. Unless otherwise
specified, all references herein to days, weeks, months or years shall be to
calendar days, weeks, months or years. Capitalized terms defined in this
Agreement are equally applicable to both their singular and plural forms.
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.
6.7 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
corporate Affiliate, but any such assignment shall not have the effect of
terminating Buyer's duties or obligations as provided herein.
6.8 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, 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.
6.9 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. If a court of competent jurisdiction determines
that the length of time or any other restriction, or portion thereof, set forth
in Article 5 is overly restrictive and unenforceable, the court may reduce or
modify such restrictions to those which it deems reasonable and enforceable
under the circumstances, and the parties agree to request the court to exercise
such power, and, as so reduced or modified, the parties hereto agree that the
restrictions of Article 5 shall remain in full force and effect, shall be
enforceable and shall be enforced.
6.10 AMENDMENT AND ENTIRETY. This Agreement, the Ancillary Agreements, and
any exhibits hereto or thereto, may be amended, modified, or superseded only by
written instrument executed by all parties hereto. This Agreement sets 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 this Agreement shall control. Except as expressly permitted by this
Agreement, the contents of schedules and exhibits hereto shall not be deemed to
negate or modify any representation, warranty, covenant or agreement contained
in this Agreement. Without limiting the generality of the preceding sentence,
any representation, warranty, covenant or other agreement contained in any
document, instrument or agreement delivered pursuant hereto or entered into in
connection herewith is made in addition to, and not in lieu of, any
representation, warranty, covenant or other agreement contained herein.
6.11 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.
6.12 TIME OF ESSENCE. Time is of the essence in the performance of this
Agreement.
6.13 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.
[Signature Page Follows]
In Witness Whereof, this Asset Purchase Agreement is executed and delivered
on and as of the day first above written.
BUYER: SELLER:
▇▇▇▇▇▇ HEALTHCARE, INC. CYBEX INTERNATIONAL, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- -------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President and Chief Executive Officer President
[Exhibits Not Included]
