Exhibit 2.1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXXX XXXX
XXXXXX XXXXXX,
AND
XXXXXX XXXX
AND
MEDTECH DIAGNOSTICS, INC.
TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE; CONSIDERATION............................................................1
1.1 Purchase and Sale...........................................................................1
1.2 Consideration...............................................................................2
1.3 Payment of Purchase Price...................................................................2
1.4 Closing.....................................................................................2
1.5 Deliveries by Sellers at the Closing........................................................3
1.6 Deliveries by Purchaser at the Closing......................................................3
ARTICLE II COVENANTS, REPRESENTATIONS AND
WARRANTIES OF SELLERS.......................................................................4
2.1 Title to Company Stock......................................................................4
2.2 Organization and Standing...................................................................4
2.3 Organizational Documents and Corporate Records..............................................4
2.4 Binding Effect..............................................................................5
2.5 Capitalization..............................................................................5
2.6 Consents and Approvals; No Violation........................................................5
2.7 Absence of Undisclosed Liabilities..........................................................6
2.8 Financial Statements; Absence of Certain Changes or Events..................................6
2.9 Compliance With Laws and Permits............................................................6
2.10 Litigation and Arbitration..................................................................7
2.11 Brokers.....................................................................................8
2.12 Territorial Restrictions....................................................................8
2.13 Taxes.......................................................................................8
2.14 Contracts..................................................................................10
2.15 Assets; Inventory..........................................................................11
2.16 Environmental and Safety Matters...........................................................11
2.17 Customers, Product Vendors, Suppliers and Sales Representatives............................12
2.18 Outstanding Commitments....................................................................12
2.19 Insurance..................................................................................12
2.20 Employee Benefits..........................................................................13
2.21 Labor Matters; Employees...................................................................14
2.22 Product Liability..........................................................................15
2.23 Real Property..............................................................................15
2.24 Banking Relationships......................................................................15
2.25 Disclosure.................................................................................16
ARTICLE III COVENANTS, REPRESENTATIONS AND WARRANTIES OF
PURCHASER..................................................................................16
3.1 Organization and Standing; Subsidiaries....................................................16
3.2 Authorization..............................................................................16
3.3 Consents and Approvals; No Violation.......................................................16
3.4 Litigation.................................................................................17
3.5 Investment.................................................................................17
3.6 Disclosure.................................................................................17
ARTICLE IV ADDITIONAL COVENANTS.......................................................................17
4.1 Further Assurances; Cooperation............................................................18
4.2 Expenses...................................................................................18
4.3 Cooperation on Tax Matters.................................................................18
4.4 Right of Access and Copies.................................................................18
ARTICLE V SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION............................................................................18
5.1 Survival of Representations and Warranties.................................................18
5.2 Indemnification of Purchaser...............................................................19
5.3 Indemnification of Sellers.................................................................19
5.4 Limitation on Liability....................................................................19
5.5 Assertion of Claims........................................................................20
ARTICLE VI CONDITIONS TO THE CLOSING..................................................................20
6.1 Conditions to Obligations of Purchaser.....................................................20
6.2 Condition to Obligations of Sellers........................................................21
ARTICLE VII MISCELLANEOUS..............................................................................21
7.1 Parties in Interest; No Third-Party Beneficiaries..........................................21
7.2 Exhibits and Schedules.....................................................................21
7.3 Entire Agreement...........................................................................21
7.4 Waiver of Compliance.......................................................................21
7.5 Enforceability.............................................................................22
7.6 Counterparts...............................................................................22
7.7 Publicity..................................................................................22
7.8 Headings...................................................................................22
7.9 Governing Law..............................................................................22
7.10 Notices....................................................................................23
ARTICLE VIII CERTAIN DEFINITIONS........................................................................24
8.1 Definitions................................................................................24
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into on
this 24th day of April, 2000, by and between MedTech Diagnostics, Inc., a
Delaware corporation, with offices located at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxx, Xxx Xxxx 00000 ("Purchaser") and Xxxxxxx Xxxx, an individual residing at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx, an individual
residing at 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, and Xxxxxx Xxxx,
an individual residing at 00 Xxxxxx Xxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx 00000
(collectively hereinafter referred to as the "Sellers"). Certain capitalized
terms used herein shall have the meanings provided in Article VIII hereof.
RECITALS
WHEREAS, Sellers own one hundred percent (100%) of the issued and
outstanding shares of the capital stock (the "Company Stock") of XxxXxxx
Systems, Inc., a Pennsylvania corporation, with offices located at 000 X. Xxxx
Xxxxxx, Xxxxx 0, Xxxxxx, Xxx Xxxx 00000 (the "Company");
WHEREAS, the Company is engaged in the business of providing Internet
consulting and web design and maintenance services for the business to business
market and is a provider of content management and content syndication (the
"Business"); and
WHEREAS, Sellers desire to sell to Purchaser, and Purchaser desires to
purchase from Sellers, one hundred percent (100%) of the Company Stock in the
manner set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE I
PURCHASE AND SALE; CONSIDERATION
1.1 Purchase and Sale.
Upon the terms and subject to the conditions set forth herein,
Sellers agree to sell and transfer to Purchaser, and Purchaser agrees to
purchase from Sellers, on the Closing Date, one hundred percent (100%) of the
Company Stock.
1.2 Consideration.
Purchase Price. The purchase price (the "Purchase Price") for
one hundred percent (100%) of the Company Stock shall be 15,000,000 shares of
the common stock $.00001 par value of MedTech Diagnostics, Inc., without giving
effect to the proposed fifty (50) shares for one (1) share reverse split, (the
"MedTech Stock"), to be issued as follows:
(a) Xxxxxxx Xxxx 7,500,000 shares of the MedTech Stock;
(b) Xxxxxx Xxxxxx 6,000,000 shares of the MedTech Stock; and
(c) Xxxxxx Xxxx 1,500,000 shares of the MedTech Stock.
The MedTech Stock shall be issued to the Sellers, as set forth above,
by the Purchaser and shall bear a restrictive legend indicating that the MedTech
Stock has not been registered pursuant to the Securities Act of 1933 and that
the MedTech Stock may not be resold absent registration under the Securities Act
of 1933 or the availability of an exemption from registration. Additionally, the
Sellers agree that they will not attempt to sell any of the MedTech Stock
without the consent of the Board of Directors of the Purchaser for a period of
two (2) years from the date of this Stock Purchase Agreement.
Board Representation As additional consideration for the
Sellers to enter into this Stock Purchase Agreement the Purchaser agrees to
appoint Xxxxxx Xxxx as a member of the Board of Directors of the Purchaser, such
appointment shall be effective 91 days after the scheduled Special Meeting of
the Stockholders of the Purchaser, which is currently scheduled for May 11,
2000.
1.3 Payment of Purchase Price.
Purchaser shall deliver the Purchase Price at the Closing in
the denominations as follows:
(a) Xxxxxxx Xxxx 7,500,000 shares of the MedTech Stock;
(b) Xxxxxx Xxxxxx 6,000,000 shares of the MedTech Stock; and
(c) Xxxxxx Xxxx 1,500,000 shares of the MedTech Stock.
1.4 Closing.
The Closing shall take place at the offices of Xxxxx X.
Xxxxxxxxx, Esq., 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, at
10:00 a.m., New York time, on April 21, 2000 or such other time, date and place
as the parties may mutually agree (the "Closing Date").
1.5 Deliveries by Sellers at the Closing.
Subject to the conditions set forth herein, at or prior to the
Closing, Sellers shall deliver the following to Purchaser:
(a) Stock certificates representing all of the Company Stock,
accompanied by stock powers (duly endorsed in blank) or other duly executed
instruments of transfer;
(b) Executed employment agreement between Xxxxxxx Xxxx and
the Company, in the form of Exhibit A;
(c) Executed employment agreement between Xxxxxx Xxxxxx and
the
Company, in the form of Exhibit B;
(d) Executed employment agreement between Xxxxxx Xxxx and the
Company, in the form of Exhibit C;
(e) Executed resignations from the officers and directors of
the Company;
(f) An opinion of counsel to Sellers substantially in the
form of Exhibit D; and
(g) The minute book and other corporate or financial records
of the Company.
1.6 Deliveries by Purchaser at the Closing.
Subject to the conditions set forth herein, at or prior to the
Closing, Purchaser shall deliver the following to Sellers:
(a) Executed employment agreement between Xxxxxxx Xxxx and the
Company, in the form of Exhibit A;
(b) Executed employment agreement between Xxxxxx Xxxxxx and
the Company, in the form of Exhibit B;
(c) Executed employment agreement between Xxxxxx Xxxx and
the Company, in the form of Exhibit C; and
(d) The MedTech Stock in the form and denominations set forth
in Sections 1.2 and 1.3 of this Agreement.
ARTICLE II
COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers covenant, represent and warrant to Purchaser as follows:
2.1 Title to Company Stock.
Sellers are the lawful owners of one hundred percent (100%) of
the issued and outstanding Company Stock, and have full power and authority to
transfer all right, title and interest in and to such Company Stock without the
consent of any other person, and the delivery to Purchaser of the certificates
for such Company Stock in the manner contemplated by this Agreement will
transfer to Purchaser good and valid title to such shares, free and clear of any
Encumbrances.
2.2 Organization and Standing.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Pennsylvania. The
Company has all requisite corporate power and authority to own, lease and
operate the properties and assets it now owns, operates and leases and to carry
on its business and operations as currently and heretofore conducted. The
Company is currently doing business in the States of New York and Pennsylvania
only and does not maintain an office or facility or have any employees in any
other jurisdiction. The Company is duly qualified or licensed to do business as
a foreign corporation in all jurisdictions where its failure to be so qualified
would result in any material liability to Purchaser or the Company after the
Closing or have a Material Adverse Effect upon the Business. The Company is not
restricted by any written agreement or understanding with third parties or by
any writs, judgments or orders of any judicial or administrative body from
carrying on the Business anywhere in the world.
(ii) Except as disclosed in Schedule 2.2(b), the Company has
no Subsidiaries and neither owns nor has a right or obligation to acquire any
equity interest (or option therefor) of any corporation, partnership, limited
liability company, business trust or other business or entity. Except as
disclosed in Schedule 2.2(b), the Company neither participates nor has an
interest in any joint venture or collective production, sales or marketing
arrangement or agreement.
2.3 Organizational Documents and Corporate Records.
(a) The Company and/or Sellers have delivered to Purchaser
complete and correct copies of the Articles of Incorporation and Bylaws of the
Company, as currently in effect, including all amendments thereto. The minute
books of the Company have been made available to Purchaser for its inspection
and contain complete and correct records of all meetings, and consents in lieu
of a meeting, of the Company's Board of Directors (and any committees thereof)
and actions of the shareholders held or executed in such period, and such
records accurately reflect all transactions referred to therein. The Company is
not in violation of any of the provisions of its Articles of Incorporation or
Bylaws. The stock books and ledgers of the Company have been made available to
Purchaser for its inspection, and such books and ledgers are complete and
correct in all material respects.
(b) The Sellers have made available to Purchaser all
accounting, corporate and financial books and records which relate to the
Business of the Company, and such books and records are true and complete in all
material respects.
2.4 Binding Effect.
Upon execution and delivery, this Agreement and all such other
documents and agreements to which Sellers are a party will constitute valid and
binding obligations of Sellers and shall be enforceable against Sellers in
accordance with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
general principles of equity.
2.5 Capitalization.
The authorized capital stock of the Company consists of 3,000
shares of voting common stock, with no par value of which 1,500 shares are
issued and 1,500 shares are authorized and unissued. All issued shares are held
by Sellers, as set forth in Schedule 2.5, and all other shares are authorized
and unissued. The Company has no other classes of capital stock authorized or
outstanding. None of the Company's shares of capital stock have been reserved
for any purpose. All shares of outstanding Company Stock are duly authorized,
validly issued, fully paid and nonassessable, were not issued in violation of
any preemptive rights and are free and clear of any Encumbrances. There are no
(i) options, warrants, calls, commitments or rights of any character to purchase
or otherwise acquire from the Company shares of its capital stock of any class,
(ii) outstanding securities of the Company that are convertible into or
exchangeable or exercisable for any other security, (iii) options, warrants or
other rights to purchase from the Company any such convertible or exchangeable
securities, (iv) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance or transfer of any capital
stock of the Company, or (v) options, warrants or rights pursuant to which, in
any of the foregoing cases, the Company is or would be subject or bound.
2.6 Consents and Approvals; No Violation.
Neither the execution and delivery of this Agreement and the
other documents and agreements contemplated hereby, nor the consummation of the
transactions contemplated hereby or thereby, nor compliance with any of the
provisions hereof: (i) conflict with any provision of the Articles of
Incorporation or Bylaws of the Company, (ii) require any consent, waiver,
approval, authorization or Permit of, or filing with or notification to, or any
other action by, any Governmental Authority by the Company or Sellers, (iii)
constitute a material violation of any Law or any restriction imposed by any
Governmental Authority which might be applicable to the Company or Sellers, or
by which the Company Stock, business, properties or assets of the Company or
Sellers may be bound or affected, or (iv) except as set forth on Schedule 2.6,
constitute a violation or breach of, or (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration of any obligation to pay or result in the imposition of any
Encumbrance upon any of its property) under, or conflict with, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Encumbrance,
contract, Permit, order or other instrument or obligation to which the Company
or Sellers are a party or by which any of the Company Stock, business,
properties or assets of the Company or Sellers may be bound or affected.
2.7 Absence of Undisclosed Liabilities.
Except for those Liabilities reflected on the April 5, 2000
Balance Sheet, and except for Liabilities incurred in the ordinary course of
business (such as current payables to vendors, employees and taxing authorities)
following the date of the April 5, 2000 Balance Sheet, Schedule 2.7 sets forth a
true, complete and accurate list of all material Liabilities of the Company as
of the Closing, including all Encumbrances attaching to any of the Company's
assets.
2.8 Financial Statements; Absence of Certain Changes or Events.
(a) Except as set forth on Schedule 2.8(a), the April 5, 2000
Balance Sheet, which is contained in Schedule 2.8(a), and the balance sheets and
income statements of the Company for the year ending December 31, 1999, have
been prepared consistent with past practice, and present fairly, in all material
respects, the financial condition and results of operations of the Company at
such dates or for the periods then ended.
(b) Except as set forth on Schedule 2.8(b) or as consented to
in writing by Purchaser, since April 5, 2000: (i) the Company has operated its
business in the usual and ordinary course consistent with past practice, has not
sold or otherwise disposed of any assets (other than the sale of inventory or
collection of receivables in the ordinary course of its business) in an
aggregate amount in excess of $5,000 and has not declared or paid any dividends
or made any other distributions on its capital stock or repurchased or agreed to
repurchase any of its capital stock; (ii) there has been no material adverse
change in the business, results of operations, assets, liabilities, financial
condition or overall prospects of the Company; (iii) the Company has not
incurred any material damage, destruction or loss, regardless of insurance
coverage, to its owned or leased property or assets; (iv) the Company has used
commercially reasonable efforts to keep in full force and effect adequate
insurance coverage consistent with past practice and maintained and kept its
properties and assets in repair, working order and condition, consistent with
past practice, normal wear and tear excepted; (v) the Company has recorded all
sales and maintained its books of account in accordance with past practice; and
(vi) the Company and Sellers have used their reasonable efforts to preserve
substantially intact the business organizations of the Company, to keep
available the services of the present officers, employees, and consultants of
the Company and to preserve the present relationships of the Company with
customers, suppliers and other persons with which the Company has significant
business relations.
2.9 Compliance With Laws and Permits.
(a) The Business and operations of the Company have been
conducted and are now being conducted in compliance with all applicable Laws and
Orders of all Governmental Authorities having jurisdiction over the Company and
with all Permits relating to any of its properties or applicable to its
Business, except where the failure to so comply would not have a Material
Adverse Effect.
(b) The Company possesses all Permits necessary to own and
operate its property and assets and to conduct its business as it is currently
conducted. Such Permits are valid, subsisting in full force and effect, and the
Company has fulfilled its obligations under each of the Permits; and no event
has occurred or condition or state of facts exists which constitutes or, after
notice or lapse of time or both, would constitute a default or violation under
any of the Permits or would permit revocation or termination of any of the
Permits, except where the failure to so comply would not have a Material Adverse
Effect. No proceeding which might involve the revocation or termination of any
such Permit is pending or, to the knowledge of the Sellers, threatened.
(c) The Company has made all material filings and received all
material approvals relating to the Permits which are necessary in order for the
Company to legally and
validly own and operate its property and assets and to conduct its Business
after the Closing as it is currently and has heretofore been conducted.
2.10 Litigation and Arbitration.
(a) Except as set forth on Schedule 2.10(a), no claim, action,
cause of action, suit, proceeding, inquiry, investigation or Order by or before
any Governmental Authority, administrative body or arbitration or mediation
panel is pending or, to the best of Sellers' knowledge, threatened against the
Company. No order of any Governmental Authority, arbitrator or mediator is
outstanding against the Company, the Company Stock or its business, operations
or assets. Sellers have no knowledge of any fact or circumstance which could
reasonably be expected to result in any other claim, action, cause of action,
suit, proceeding, inquiry, investigation or Order being filed against the
Company that would be reasonably expected to have a Material Adverse Effect.
(b) To the knowledge of Sellers, no claim, action, suit,
proceeding, inquiry or investigation has been instituted which threatens to
restrain or prohibit or otherwise to challenge the legality or validity of the
transactions contemplated by this Agreement or the other documents or agreements
contemplated hereby.
(c) To the knowledge of Sellers, all patents, patent
applications, invention disclosures, technology, intellectual property, trade
names, service marks, trademarks, or copyrights used by the Company are set
forth on Schedule 2.10(c) attached hereto. To the knowledge of Sellers, no
intellectual property owned or used by the Company in the operation of its
Business, including without limitation any intellectual property rights such as
proprietary know-how, trademarks, service marks, copyrights, patents and trade
names, nor any products or services sold by the Company infringes upon the
proprietary rights of others. Neither the Company nor Sellers have received any
notice alleging that the Company has infringed on any other party's intellectual
property rights. The Company has not given any indemnification for infringement
of any other party's intellectual property rights, except for standard clauses
in software licensing agreements. Sellers know of no limitation to the continued
and/or expanded use of any patents, copyrights, technology, trademarks, service
marks, trade names or other intellectual property used in the Business of the
Company.
2.11 Brokers.
Neither the Company nor Sellers have any obligation to pay any
broker, finder, investment banker, financial advisor, attorney or similar fee in
connection with this Agreement or the other documents, agreements or
transactions contemplated hereby.
2.12 Territorial Restrictions.
Except as set forth on Schedule 2.12, the Company is not
restricted by any agreement or understanding with any third party or by any
writs, judgments or orders of any judicial or administrative body from carrying
on or competing with its Business anywhere in the world.
2.13 Taxes
Except as disclosed in Schedule 2.13:
(a) The Company has (i) filed all Tax Returns required to be
filed by any jurisdiction to which it is subject, (ii) paid in full on a timely
basis, including any extensions, all Taxes due and claimed to be due by each
such jurisdiction, subject to audit by the taxing authority of such
jurisdiction, (iii) duly collected or withheld and timely paid, including any
extensions, all Taxes required to be collected from others or deducted and
withheld from any amounts paid to employees or others, and (iv) properly
completed and filed all sales tax exemption certificates for sales where Tax was
not charged. Such Tax Returns accurately and completely set forth all relevant
items and accurately reflect the Tax Liabilities for such periods. No Tax
deficiency or penalty has been asserted or threatened by any such jurisdiction
against the Company. No claim has ever been made by an authority in a
jurisdiction where the Company does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction, nor, to the knowledge of the Company,
its counsel, its representatives, and its tax advisers, is there any factual or
legal basis for any such claim. There is no audit of any Tax Return of the
Company in progress. The Company has not (i) waived any statute of limitations
with respect to Tax obligations or agreed to any extension of time with respect
to a Tax assessment or deficiency, (ii) been a party to any Tax allocation or
sharing agreement, (iii) been a member of an affiliated group filing a
consolidated federal income tax return, nor taken any other action that could
result in Liability for Taxes of an affiliated group under Treas. Reg.
ss.1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise, or (iv) is currently the
beneficiary of any extensions of time within which to file any Tax Return.
(b) The Company has not been a United States real property
holding corporation within the meaning of Code ss.897(c)(2) during the
applicable period specified in Code ss.897(c)(1)(A)(ii).
(c) To the knowledge of the Company, its counsel, its
representatives, and its tax advisers, there is no threatened action, suit,
proceeding, investigation, audit, or claim for or relating to Taxes, there are
no matters under discussion with any Governmental Authorities with respect to
Taxes that could result in a material additional amount of Taxes, and no
Governmental Authority has indicated that it intends to audit any Tax Return of
the Company.
(d) The earliest taxable period of the Company for which the
statute of limitations is still open is the fiscal year ended December 31, 1999
for Pennsylvania state taxes, the fiscal year December 31, 1999 for New York
state taxes and the fiscal year ended December 31, 1999 for federal income
taxes. Schedule 2.13 lists all federal, state, local, and foreign income Tax
Returns filed with respect to the Company for all taxable periods for which the
statute of limitations is still open, and indicates those income Tax Returns
that have been audited and those that are currently the subject of an audit. The
Sellers have delivered to the Purchaser correct and complete copies of all
state, federal, and foreign income tax returns with respect to all taxable
periods ending on or after December 31, 1999, for which the statute of
limitations is still open.
(e) All material Tax elections that have been made by the
Company are shown on Schedule 2.13.
(f) The Company (i) has not consented at any time under
Section 341(f) of the Code to have the provisions of Section 341(f)(2) of the
Code apply to any disposition of any assets, (ii) except as disclosed in the
financial statements of the Company, has not agreed, nor is required, to make
any adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise that will affect the liability of the Company for
Taxes, (iii) has not made an election, or is required, to treat any asset as
owned by another person pursuant to the provisions of Section 168(f) of the Code
or as tax-exempt bond financed property or tax-exempt use property within the
meaning of section 168 of the Code, (iv) has not made any of the foregoing
elections or is required to apply any of the foregoing rules under any
comparable state or local tax provision, or (v) does not own any material assets
that were financed directly or indirectly with, or that directly or indirectly
secure, debt the interest on which is tax-exempt under section 103(a) of the
Code.
(g) The Company has not made or become obligated to make, nor
will the Purchaser or the Company as a result of any event connected with any
transaction contemplated herein and/or any termination of employment related to
such transaction, make or become obligated to make, any "excess parachute
payment," as defined in Section 280G of the Code (without regard to subsection
(b)(4) thereof).
(h) There are no liens for Taxes (other than for current Taxes
that are not yet due and payable or are being contested in good faith) upon the
assets of the Company.
(i) There are no joint ventures, partnerships, or other
arrangements or contracts to which the Company is a party and that could be
treated as a partnership for federal income tax purposes.
(j) The Company does not have and has not had a "permanent
establishment" in any foreign country, as such term is defined in any applicable
Tax treaty or convention between the United States and such foreign country or
has otherwise taken steps that have exposed, or will expose, it to the taxing
jurisdiction of a foreign country.
(k) The transaction contemplated herein, either by itself or
in conjunction with any other transaction that the Company may have entered into
or agreed to, will not give rise to any federal income tax liability under
section 355(e) of the Code for which the Company may in any way be held liable.
2.14 Contracts.
Schedule 2.14 contains an accurate and complete list of all
material plans, arrangements, leases, contracts and agreements (referred to as
"contracts") to which the Company is a party, by which its property is bound or
affecting its business, whether written or oral, express or implied or having
any other legally binding basis, including:
(a) any contract involving commitments to make expenditures,
purchases or sales or any supplier contracts, involving $5,000 or more, except
contracts terminable by the Company on not more than thirty days' notice without
penalty or financial obligation;
(b) any contract relating to any direct or indirect
indebtedness for, or securing repayment of, borrowed money;
(c) any contract directly or indirectly benefitting any
affiliate of the Company or the Sellers;
(d) any collective bargaining, union, employment or consulting
contract; any pension, stock option, bonus, incentive compensation, retirement,
employee stock purchase, stock ownership, profit sharing, fringe benefit,
severance pay, welfare, health, death benefit, disability, dental or any other
employee benefit contract;
(e) any contract containing covenants limiting the freedom of
the Company to compete in any line of business with any person or entity, or in
any territory, except for customary territorial limitations contained in product
authorization agreements with its vendors and suppliers with respect to certain
product lines;
(f) any contract relating to patents, copyrights, trademarks,
service marks trade names or other intellectual property;
(g) any executory contract with any sales agent, manufacturer,
dealer, distributor or licensee of any products sold by the Company involving
payments in excess of $5,000, restricting the rights, operations or business of
the Company or containing a grant of rights to or by the Company;
(h) any tax-sharing contract;
(i) any indemnity or hold-harmless contract;
(j) any contract relating to the lease or sale to or by others
of any real property; and
(k) any other material contract not in the ordinary course.
True, complete and correct copies of all written summaries of all oral contracts
listed on Schedule 2.14 have been made available to Purchaser. Except as
disclosed on Schedule 2.14, to the knowledge of Sellers all such contracts are
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, and are in full force and
effect to the knowledge of Sellers. Neither the Company nor any other party to
any such contract is in material breach or default of its obligations
thereunder, and there exists no event or condition (including the transactions
contemplated by this Agreement) which has resulted or would result in a material
breach or default thereunder upon the giving of notice, the passage of time or
both.
2.15 Assets; Inventory.
(a) The Company has good and marketable title to all of its
assets, free and clear of all Encumbrances of any kind or description, including
any conditional sale or other title retention agreements.
(b) As set forth on the April 5, 2000 Balance Sheet and on
Schedule 2.15, the Company's assets constitute all of the assets used or held
for use by the Company in the conduct of its Business as conducted prior to the
Closing and are in sufficiently good condition and repair to permit the
operation of its Business after the Closing in the same manner as it was
operated prior to the Closing. All of the inventory of the Company reflected on
the April 5, 2000 Balance Sheet or subsequently acquired was acquired, and has
been maintained, in the ordinary course of business and consists substantially
of a quality, quantity and condition usable and saleable in the ordinary course
of business. Except as set forth on Schedule 2.15, none of the inventory in the
possession of the Company is held on consignment, and none of such inventory is
consigned to third parties. The Company is not under any liability or obligation
with respect to the return of inventory in the possession of any third parties.
2.16 Environmental and Safety Matters.
(a) The Company: (i) has obtained all applicable Permits that
are required to be obtained under all applicable federal, state or local laws or
any regulation, code, plan, order, decree, judgment, notice or demand letter
issued, entered, promulgated or approved thereunder ("Environmental Laws")
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic wastes into ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or wastes by the
Company (or its agents) except where the failure to have such a permit would not
have a Material Adverse Effect; (ii) has been and is in material compliance with
all terms and conditions of such required Permits, and has been and is in
material compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in applicable Environmental Laws; (iii) has no knowledge, nor received
notice, of any past or present violations of Environmental Laws or any event,
condition, circumstance, activity, practice, incident, action or plan that is
reasonably likely to interfere with or prevent continued compliance with
Environmental Laws or that could give rise to any common law or statutory
Liability, or otherwise form the basis of any claim, action, suit or proceeding,
against the Company which would reasonably be likely to have a Material Adverse
Effect based on or resulting from the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling, or the emission,
discharge or release into the environment, of any pollutant, contaminant or
hazardous or toxic material or waste; and (iv) has taken all actions necessary
under applicable Environmental Laws to register or give notice with respect to
any products or materials required to be registered or noticed by the Company
(or any of its agents) thereunder (including without limitation pursuant to any
state and local "right to know" Laws).
2.17 Customers, Product Vendors, Suppliers and Sales
Representatives.
(a) The customers, vendors and sales representatives listed on
Schedule 2.17(a) set forth: (i) the ten largest customers (in dollar volume) of
the Company; (ii) the ten largest vendors (in dollar volume) of the Company; and
(iii) all sales representatives of the Company, all for the year period ended
April 5, 2000. Except as described in Schedule 2.17(a), Sellers are not aware of
any existing or anticipated changes since April 5, 2000 in the policies, plans
or financial condition, of such customers, product vendors, suppliers or
sales representatives that will materially and adversely affect the business
of the Company.
(b) Except as disclosed on Schedule 2.17(b), to the knowledge
of Sellers, no customer, product vendor, supplier or sales representative has
reduced, canceled or otherwise terminated its relationship with the Company, or
made any written or oral threat to reduce, cancel or terminate its relationship
with the Company for any reason, including the consummation of the transactions
contemplated hereby. To the knowledge of Sellers, no customer, product vendor,
supplier or sales representative listed in Schedule 2.17(a) intends to cancel or
otherwise terminate its relationship with the Company or to materially decrease
its services or supplies to the Company or its usage of the services or products
of the Company.
2.18 Outstanding Commitments.
The Company is not bound by any commitments for the
performance of services or delivery of products in excess of its ability to
provide such services or deliver such products during the time available to
satisfy such commitments. All outstanding commitments for the performance of
services or delivery of products were made on a basis calculated to produce a
profit under the circumstances prevailing when such commitments were made.
2.19 Insurance.
Schedule 2.19 lists all insurance policies and contracts
(including, without limitation, all life insurance, health insurance, death
benefit and similar policies) currently maintained or maintained by the Company,
Sellers or Sellers' affiliates for the benefit of the Company or with respect to
the business conducted by the Company within the past five (5) years, indicating
the insurer, the types and amounts of coverage, the applicable deductible, the
expiration date, any additional loss payees or additional insureds and the cash
surrender value (if applicable). Schedule 2.19 also lists any claims filed with
respect to such policies within the past 12 (twelve) months, all open claims,
the amounts paid with respect to claims filed and the amounts for each open
claim. All such claims have been timely and properly submitted. Such policies,
with respect to their amounts and types of coverage and limitations as to
deductibles and self-insured retentions, are, to the knowledge of Sellers,
adequate and customary to insure against risks to which the Company or any of
the assets of the Company are normally exposed in the operation of the business
conducted by the Company. Except as set forth on Schedule 2.19, the Company has
not entered into any policy which provides for, and is not otherwise subject to,
any retrospective premium adjustment with respect to any such policies.
2.20 Employee Benefits.
(a) Schedule 2.20(a) lists all Plans maintained or contributed
to by the Company (or any ERISA Affiliate) that provide or have provided
benefits to or for any employee of the Company since the formation of the
Company. The Company has made available to Purchaser copies of: each Plan; all
amendments thereto; all related funding arrangements; all actuarial valuation
reports since the formation of the Company; all Forms 5500 with schedules
thereto for the most recent four years; the most recent determination letter
issued by the Internal Revenue Service for each Pension Plan; and the most
recent summary plan description.
(b) Except as indicated on Schedule 2.20(b) and except as
directly results from the acts or omissions of Purchaser following the Closing,
to the Company's knowledge
(i) each Plan referred to in 2.20(a) and related funding arrangements: are in
form and have been administered in material compliance with all applicable laws,
including, without limitation, ERISA and the Code; (ii) each Pension Plan
referred to in 2.20(a) intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service with
respect to such qualification or has been submitted timely to the Internal
Revenue Service for such a favorable determination; (iii) each trust maintained
in conjunction with a Pension Plan intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the Internal Revenue
Service with respect to the exemption thereof under Section 501(a) of the Code;
(iv) none of the Pension Plans referred to in 2.20(a) or related trusts has
engaged in a transaction that could cause any of them to be liable for a civil
penalty under Section 409 or 502(i) or any other section of ERISA or result in a
tax under Section 4975 or 4976 or any other section of Chapter 43 of Subtitle D
of the Code; (v) all amounts required to be paid by the Company to or pursuant
to each of the Plans referred to in 2.20(a) on or before the Closing Date have
been paid within the time periods required by the Plans or by law; (vi) no
Pension Plan has incurred any "accumulated funding deficiency," as defined in
Section 412 of the Code; and (vii) no "reportable event" within the meaning of
Title IV of ERISA has occurred with respect to any Pension Plan referred to in
2.20(a) subject thereto.
(c) Except as indicated on Schedule 2.20(c), the Company has
never been a participating employer in or otherwise contributed to any
Multiemployer Plan, and except as indicated on Schedule 2.20(c) no employees of
the Company or of any ERISA Affiliate currently participate, or ever have
participated, in any Multi-employer Plan.
(d) To Sellers' knowledge, no liability under Title IV of
ERISA has been incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that is reasonably likely to create
liability under Title IV other than liability for premiums due the PBGC. To
Sellers' knowledge, the PBGC has not instituted proceedings to terminate any
Pension Plan in which the Company or any ERISA Affiliate participates, and no
condition exists to the knowledge of the Company that is reasonably likely to
present a risk that such proceedings will be instituted.
(e) To Sellers' knowledge, each Welfare Plan that provides
medical benefits to employees of the Company or any ERISA Affiliate has been
operated in compliance in all material respects with the requirements of
Sections 601 through 608 of ERISA and Section 4980B of the Code ("COBRA")
relating to the continuation of coverage under certain circumstances in which
coverage would otherwise cease.
(f) Notice of any Plan or Benefit Arrangement required to be
given by the Company to the Department of Labor under Section 2520.104-23 of
Title 29 of the Code of Federal Regulations has been given.
(g) Any Plan maintained by the Company and required to satisfy
the requirements of Section 125, Section 401(a), Section 401(k), Section 409,
Section 501(c)(9), Section 4975(e)(7) and/or Section 4980B of the Code satisfies
such section in all material respects.
(h) Except as indicated on Schedule 2.20(h), to the Company's
knowledge there is no audit which is in process by, or for which notification
has been received from, any
Governmental Authority with respect to any Plan.
2.21 Labor Matters; Employees.
(a) To Sellers' knowledge, the Company is in compliance in all
material respects with all federal, state and local laws respecting employment
and employment practices (including the Americans with Disabilities Act and the
Family and Medical Leave Act), terms and conditions of employment, wages and
hours, and nondiscrimination in employment. The Company has not been charged by
The National Labor Relations Board in any unfair labor practice. To Sellers'
knowledge, no present or former employee of the Company has filed within the
applicable limitations periods or threatened any claim against the Company under
any Law, employment agreement or otherwise, for any reason, including (i) wages
or salary for any period other than the current payroll period, (ii) any
violation of any Law relating to minimum wages or maximum hours of work, or
(iii) any violation of any law relating to age, race, gender, or national origin
discrimination.
(b) To Sellers' knowledge, the Company is not a party to, or
subject to any obligation, liability or commitment with respect to, any written
or oral employment, compensation, consulting, collective bargaining, severance
pay or similar agreement other than the agreements listed on Schedule 2.21.
Schedule 2.21 sets forth a payroll list as of the most recent available date,
showing as of such date each employee of the Company and his or her social
security number, annual salary and date of hire.
(c) Sellers know of no employee who intends to terminate his
or her employment with the Company prior to or following the Closing.
2.22 Product Liability.
The Company has not received notice or written information of
any claim or allegation of death or personal injury, property or economic
damage, any claim for punitive or exemplary damages, any claim for contribution
or indemnification or any claim for injunctive relief in connection with any
product sold or distributed or any service provided by it, except for routine
warranty claims.
2.23 Real Property.
(a) The Company owns no real property. Schedule 2.23(a)
contains a complete listing of all real property leased or otherwise used or
held for use in connection with the Company's Business. The Company has a valid
leasehold interest to all such real property on the terms under which such real
property was leased, free and clear of all Encumbrances, other than taxes and
assessments, if any, both general and special, which are a lien but not yet due
and payable and that do not, individually or in the aggregate, materially
detract from the value of such leasehold interest or materially impair the use
and operation of the real property in carrying on the Company's Business. There
are no Encumbrances that would adversely affect the use of any such real
property by Purchaser after the Closing Date, including, without limitation, in
the operation of the Company's Business, for the same purposes and uses as such
real property has been heretofore used by the Company. No third party has any
right with respect to such real property (whether by option to purchase, land
contract or otherwise).
(b) The lease for the Leased Real Property is in full force
and effect. The Company has heretofore provided to Purchaser complete, true and
correct copies of such leases, including any and all modifications or amendments
thereof and any supplements thereto. All insurance, tax and other payments in
respect of the Leased Real Property due or payable prior to the Closing Date
have been or, as of the Closing Date, will have been paid. There is no material
default with respect to any principal term on the part of any party thereto and
to Sellers' knowledge no event has occurred or failed to occur which, with the
giving of notice, the passage of time or both, would constitute a default by any
party thereto. The lessor under each such lease has not waived, or extended the
time for the performance of, any obligation of the Company. Except as set forth
in Schedule 2.23(a), there are no security deposits or prepaid rent (including
last month's rent in advance) with respect to the Leased Real Property.
2.24 Banking Relationships.
Schedule 2.24 sets forth a true and complete list of each
financial institution with which the Company has an account (giving the account
number therefor) or safe deposit box and the names of the persons authorized at
the date hereof to draw thereon or to have access thereto and all powers of
attorney granted or executed on behalf of the Company.
2.25 Disclosure.
No representation or warranty by Sellers in this Agreement and
no statement by Sellers in any of the other documents or agreements or
previously disclosed to Purchaser contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements made herein or therein, in light of the circumstances under which
they were made, not misleading.
ARTICLE III
COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser covenants, represents and warrants to Sellers as follows:
3.1 Organization and Standing; Subsidiaries.
Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Purchaser has all
requisite corporate power and authority to own, lease and operate the properties
and assets it now owns, operates and leases and to carry on its business and
operations as currently and heretofore conducted, except where the failure to
obtain authorization does not have a material adverse effect on Purchaser.
3.2 Authorization.
Purchaser has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the other
documents and agreements contemplated hereby and to consummate the transactions
contemplated hereby and thereby. All corporate proceedings on the part of
Purchaser that are necessary to execute, deliver and perform this Agreement and
the other documents and agreements contemplated hereby and to
consummate the transactions contemplated hereby and thereby have been duly
authorized and taken. Upon execution, this Agreement and the other documents and
agreements contemplated hereby with respect to which Purchaser is a party have
been duly executed and constitute valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
3.3 Consents and Approvals; No Violation.
All shares of MedTech Stock to be exchanged under this
Agreement have been duly authorized, validly issued, fully paid and
nonassessable, and were not issued in violation of any preemptive rights and are
free and clear of any Encumbrances. Neither the execution and delivery of this
Agreement and the other documents and agreements contemplated hereby, nor the
consummation of the transactions contemplated hereby or thereby, nor compliance
with any of the provisions hereof: (i) conflict with any provision of the
Certificate of Incorporation or the By-Laws of Purchaser; (ii) require any
consent, waiver, approval, authorization or Permit of, or filing with or
notification to, or any other action by, any Governmental Authority by
Purchaser; (iii) constitute a material violation of any Law or any restriction
imposed by any Governmental Authority which is applicable to Purchaser, or by
which any of Purchaser's business, properties or assets may be bound or
affected; or (iv) constitute a material violation of, breach or conflict with,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration of any
obligation to pay or result in the material imposition of any Encumbrance upon
any of its properties) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, Encumbrance, contract, Permit, Order or other
instrument or obligation to which Purchaser is a party or by which any of
Purchaser's business, properties or assets may be bound or affected.
3.4 Litigation.
To the knowledge of Purchaser, no claim, action, suit,
proceeding, inquiry or investigation has been instituted which threatens to
restrain, prohibit or otherwise challenge the legality or validity of the
transactions contemplated by this Agreement or the other documents or agreements
contemplated herein.
3.5 Investment.
Purchaser has acquired the Company Stock for its own account,
for investment and not with a view to, or for the purpose of, the sale or
distribution thereof.
3.6 Disclosure.
No representation or warranty by Purchaser in this Agreement
and no statement by Purchaser in any of the other documents or agreements or
previously disclosed to Sellers contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE IV
ADDITIONAL COVENANTS
4.1 Further Assurances; Cooperation.
The parties shall from time to time after the Closing, upon
the request of any other party and without further consideration, execute,
acknowledge and deliver in proper form any further instruments or documents, and
take such further actions as such other party may reasonably require, to carry
out effectively the intent of this Agreement and the other documents and
agreements contemplated herein.
4.2 Expenses.
Any expenses incurred by the parties in connection with the
negotiation or execution of this Agreement and the other documents and
agreements contemplated herein and the consummation of the transactions
contemplated hereby and thereby, including expenses of accountants, counsel,
brokers, finders, financial advisors and other representatives, shall be paid by
the party incurring such expense.
4.3 Cooperation on Tax Matters.
Purchaser, the Company and Sellers shall cooperate fully, as
and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. No party shall file any Tax Return which
is inconsistent with the express provisions of this Agreement. All Tax Returns
relating to federal or state income or franchise taxes filed after the Closing
affecting Sellers or the Company prior to the Closing shall be submitted to the
Sellers for review at least seven (7) days prior to filing and Purchaser shall
provide Sellers with reasonable access to all of the Company's books and records
with respect thereto. Purchaser and Sellers further agree, upon request, to use
their best efforts to obtain any certificate or other document from any
Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby). Sellers further
agree, upon request, to provide Purchaser with all information that is in
Sellers' possession and that Purchaser may be required to report pursuant to
Section 6043 of the Code and all Treasury Regulations promulgated thereunder.
4.4 Right of Access and Copies.
Purchaser shall make all of the Company's corporate books and
records available to Sellers for inspection and copying for all periods prior to
Closing for as long as any representations and warranties survive.
ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
5.1 Survival of Representations and Warranties.
All representations and warranties of Sellers and Purchaser
contained herein or made pursuant hereto shall survive the Closing and any
investigation at any time made by or on behalf of any party hereto until the
second anniversary of the Closing Date; provided, however, that the
representations and warranties contained in Sections 2.1, 2.4 and 2.5 shall
survive indefinitely, and the representations and warranties contained in
Sections 2.13, 2.15(a), 2.16, 2.20 and 2.22 shall survive until the termination
of the applicable statute of limitation period. Notwithstanding the foregoing,
if a claim with respect to a breach of a representation and warranty is made
within the applicable period in accordance with the provisions hereinafter set
forth, such claim and any related claim may continue to be asserted after such
period. No party shall have liability under this Article V unless the notice
specified in Section 5.5 is given prior to expiration of the period specified in
this Section 5.1
5.2 Indemnification of Purchaser.
Sellers agree to indemnify Purchaser from and against any
Losses incurred by reason of (i) any Liability or obligation of the Company
(including, without limitation, Liabilities and obligations with respect to
environmental, employment, product liability and tax matters), except (a) as
such Liabilities are reflected on the April 5, 2000 Balance Sheet, (b) as such
Liabilities are incurred in the ordinary course of business after the April 5,
2000 Balance Sheet and prior to the Closing Date, (c) Liabilities described in
the Schedules to this Agreement and (d) as such Liabilities arise from the
operation and conduct of the Company and its Business by Purchaser subsequent to
the Closing Date (ii) any breach of any representation, warranty, covenant or
agreement of Sellers contained herein (excluding the representations and
warranties contained in Section 2.1, 2.4, 2.5, 2.13, and 2.15(a) and the
covenants contained in Sections 4.2 and 4.3), and (iii) the breach or inaccuracy
of the representations and warranties set forth in Sections 2.1, 2.4, 2.5, 2.13,
and 2.15(a), or the breach of the covenants set forth in Sections 4.2 and 4.3.
Sellers shall be required to indemnify and hold Purchaser harmless under clauses
(i) and (ii) of this sentence only for Losses arising from a claim for breach
that exceeds $5,000, and only when the aggregate amount of such Losses exceeds
$50,000, in which case Sellers shall indemnify and hold Purchaser harmless only
for the amount of such Losses in excess of the $50,000.
5.3 Indemnification of Sellers.
Purchaser agrees to indemnify Sellers from and against any
Losses incurred by reason of any breach of any representation, warranty,
covenant or agreement of Purchaser contained herein; provided, however, that
Purchaser shall be required to indemnify and hold Sellers harmless only for
Losses arising from a claim for breach that exceeds $5,000 and only when the
aggregate amount of such Losses exceeds $50,000, in which case Purchaser shall
indemnify and hold Sellers harmless only for the amount of Losses in excess of
the $50,000.
5.4 Limitation on Liability.
The maximum liability of Sellers, on the one hand, and
Purchaser, on the other hand, under the foregoing Section 5.2 or 5.3, as
applicable, shall not exceed the Purchase Price. Any claim arising out of this
Agreement, whether asserted as a breach of contract, misrepresentation, breach
of warranty, tort, violation of law or otherwise, shall be brought under and in
accordance with and subject to all of the provisions of this Article V. The
amount to which any indemnified party shall be entitled to hereunder shall be
reduced by (i) any tax benefit
actually realized by such indemnified party and (ii) any insurance proceeds
received by an indemnified party on account of the Claim irrespective of the
party that paid for such insurance; provided the indemnifying party compensates
for any increase in insurance premiums. The parties agree that all
indemnification payments hereunder will be deemed adjustments to the Purchase
Price.
5.5 Assertion of Claims.
(a) The parties shall be free to bring all differences of
interpretation and disputes arising in connection with this Agreement to the
attention of the other at any time without prejudicing their harmonious
relationship and operations hereunder, and the good offices and facilities of
either party shall be available at all times for the prompt and effective
adjustment of any and all such differences, either by mail, telephone or
personal meeting under friendly and courteous circumstances.
(b) If a party claims ("Claiming Party") that it is entitled
to indemnification under this Article, notice of such claim (the "Claim") shall
be given to the party from whom the Claiming Party seeks indemnification (the
"Indemnifying Party"), designating such claim with specificity. The parties
shall negotiate in good faith to determine the validity and the value of the
Claim. If the parties cannot reach an agreement as to the value of the Claim,
then such Claim shall be submitted to a mutually acceptable party for
arbitration in accordance with the Commercial Rules of the American Arbitration
Association, and the decision of such arbitrator shall be final and binding upon
the parties for all arbitration rulings awarding less than One Hundred Thousand
Dollars ($100,000) in damages. To the extent damages awarded pursuant to any
such ruling exceed One Hundred Thousand Dollars ($100,000), such ruling shall be
reviewable by a court with competent jurisdiction. The prevailing party in any
action brought before an arbitrator or any court shall be entitled to recover
all costs, including fees and expenses of counsel.
(c) The Indemnifying Party, upon notice to the Claiming
Party that the Indemnifying Party has assumed responsibility for a Claim
initiated by a third party, shall thereupon have the right to defend, compromise
or settle such Claim, in any manner in which it may determine, in its sole
discretion, provided that the Claiming Party is not subject to any limitation to
its business, damages, costs or expenses as a result of such settlement. Subject
to the provisions of the foregoing sentence, the Claiming Party shall have the
right to retain counsel of its own selection, at its own expense, and to
participate in the defense of such Claim.
ARTICLE VI
CONDITIONS TO THE CLOSING
6.1 Conditions to Obligations of Purchaser.
The obligation of Purchaser to consummate the transactions
contemplated in this Agreement is subject to the following conditions, which
conditions may be waived by Purchaser:
(a) Sellers shall deliver those documents and agreements set
forth in Section 1.5 of this Agreement
6.2 Condition to Obligations of Sellers.
The obligation of Sellers to consummate the transactions
contemplated in this Agreement is subject to the condition, which condition may
be waived by Sellers, that Purchaser shall have delivered those documents and
agreements set forth in Section 1.6 of this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 Parties in Interest; No Third-Party Beneficiaries.
(a) This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, heirs, representatives and permitted assigns. This Agreement and the
rights and obligations of Sellers and Purchaser hereunder may not be assigned by
either of the parties hereto without the prior written consent of the other
Party.
(b) This Agreement is not intended, nor shall it be construed,
to confer any rights or remedies under or by reason of this Agreement upon any
Person except the parties hereto and their heirs, representatives, successors
and permitted assigns.
7.2 Exhibits and Schedules.
All exhibits and schedules attached hereto and referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.
7.3 Entire Agreement.
This Agreement, along with all other exhibits, documents,
schedules, certificates and instruments referred to herein or therein, embodies
the entire agreement and understanding of the parties hereto in respect of the
transactions contemplated by this Agreement. This Agreement supersedes all prior
agreements, arrangements and understandings of the parties with respect to such
transaction.
7.4 Waiver of Compliance.
No amendment, modification, alteration, supplement or waiver
of compliance with any obligation, covenant, agreement, provision or condition
hereof or consent pursuant to this Agreement shall be effective unless evidenced
by an instrument in writing executed by all of the parties hereto, or, in the
case of a waiver, the party against whom enforcement of any waiver is sought.
Any waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement, provision or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
7.5 Enforceability.
If any term, provision, covenant or restriction of this
Agreement or the application thereof to any Person or circumstance should be
held by an administrative agency or court of
competent jurisdiction to be invalid, void or unenforceable, then the remainder
of this Agreement and the application of such term, provision, covenant or
restriction to other Persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by Law. Further, it is
the intent of the parties that if any term, provision, covenant or restriction
of the Agreement should be held to be invalid, void or unenforceable as to any
Person or circumstance, then such term, provision, covenant or restriction shall
be modified to the extent necessary in order to render the same enforceable,
consistent with the expressed objectives of the parties hereto for entering into
this Agreement.
7.6 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
7.7 Publicity.
Purchaser shall have complete control over the content and
timing of any public announcement concerning this Agreement or the transactions
contemplated herein. Sellers shall not make any public announcement concerning
this Agreement or the transactions contemplated herein without first obtaining
the consent of the Purchaser.
7.8 Headings.
The table of contents, article and section headings contained
in this Agreement are for convenience only and shall not control or affect in
any way the meaning or interpretation of the provisions of this Agreement.
7.9 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
7.10 Notices.
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) at the time of delivery, if personally delivered or telecopied
(with confirmation of receipt), (ii) the next day, if delivered by nationally
recognized overnight express service, or (iii) in five (5) days, if sent by
registered or certified mail (postage prepaid, return receipt requested), to the
parties at the following addresses:
(a) If to Purchaser to: MedTech Diagnostics, Inc.
000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Fax Number: (000) 000-0000
with a copy to: Xxxxx X. Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 000000
(b) If to Sellers: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxx
00 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
or to such other address as the Person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
ARTICLE VIII
CERTAIN DEFINITIONS
8.1 Definitions.
For purposes of this Agreement, the following terms shall have
the meanings set forth below (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Agreement" shall have the meaning provided in the
introduction to this Stock Purchase Agreement.
"Benefit Arrangements" shall mean all bonus, incentive
compensation, individual employment contract, consulting contracts, termination,
severance pay, holiday, vacation, termination, severance pay, sick pay, sick
leave, disability, tuition refund, relocation, fringe benefit, collective
bargaining agreements and other policies or practices of the Company providing
employee or executive compensation or benefits to employees, officers or
directors of the Company.
"Business" shall have the meaning provided in the recitals to
this Agreement.
"Claim" shall have the meaning set forth in Section 5.5(b).
"Claiming Party" shall have the meaning set forth in Section
5.5(b).
"Closing" shall mean the consummation of the transactions
contemplated by this Agreement.
"Closing Date" shall have the meaning set forth in Section
1.4.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company" shall have the meaning provided in the recitals to
this Agreement.
"Company Stock" shall have the meaning set forth in the
recitals to this Agreement.
"Encumbrance" shall mean any lien, encumbrance, proxy, voting
trust arrangement, dower rights, pledge, security interest, collateral security
agreement, financing statement (and similar notices) filed with any Governmental
Authority, claim (including any claim as defined in the Code), charge, equities,
mortgage, pledge, burden, occupancy agreement, encroachment, objection, title
defect, option, easement, condition, reservation, covenant, restrictive
covenant, servitude, right-of-way, restriction on transfer of any nature
whatsoever and, for leased property or assets, lien or interest of the lessor or
of any mortgagee of the lessor arising by operation of law or pursuant to the
terms of the lease.
"Environmental Laws" shall have the meaning provided in
Section 2.16(a) hereof.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations
promulgated thereunder.
"ERISA Affiliate" shall mean an entity that would be treated
as a single employer with the Company under Section 414 of the Code.
"Governmental Authority" shall mean any government authority
or political subdivision thereof, whether federal, state, local or foreign, or
any agency, department, commission, board, bureau, court, tribunal, body,
administrative or regulatory authority or instrumentality of any such government
or political subdivision.
"Law" shall mean any law (including common law), rule,
regulation, restriction (including building or zoning code), code, statute,
ordinance, order, writ, injunction, judgment, decree or other requirement of a
Governmental Authority.
"Leased Real Property" shall mean the real property leased by
the Company, all of which is used in the Company's business.
"Liability" shall mean any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated and whether due or to
become due), including any liability for Taxes.
"Losses" shall mean and include all demands, claims, actions,
causes of action, assessments, damages, losses, liabilities, judgments,
settlements, fines, penalties, sanctions, costs and expenses (whether absolute,
accrued, conditional or otherwise), including, without limitation, interest,
penalties, out-of-pocket expenses and reasonable attorneys' fees as incurred,
and all other reasonable costs of investigating and defending third-party claims
as incurred.
"April 5, 2000 Balance Sheet" shall mean the balance sheet of
the Company as of April 5, 2000.
"Material Adverse Effect" shall mean a material adverse effect
on the Company's
Business or financial condition.
"Multiemployer Plan" shall mean a Plan which is a multi-
employer pension plan as defined in Section 3(37)(A) of ERISA.
"Order" shall mean any order, judgment, injunction, award,
decree, writ, rule or similar action of any Governmental Authority.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Pension Plan" shall mean any Plan that is an "employee
benefit pension plan" as such term is defined in Section 3(2) of ERISA.
"Permit" shall mean any franchise, license, certificate,
approval, number, registration, permit, authorization, order or approval of, and
any required registration with, any Governmental Authority.
"Person" shall mean any individual, partnership, firm, trust,
association, corporation, joint venture, joint stock company, unincorporated
organization, Governmental Authority or other entity.
"Plan" shall mean any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation day, dependent care, legal services, educational assistance,
relocation assistance, cafeteria, life, health, accident, disability, workers'
compensation or other insurance, death benefit agreements, severance, separation
or other employee benefit plan, practice, policy or arrangement of any kind,
whether written or oral, including but not limited to an "employee benefit plan"
within the meaning of Section 3(3) of ERISA, which provides compensation or
benefits to employees, officers or directors of the Company.
"Purchase Price" shall have the meaning provided in
Section 1.2.
"Purchaser" shall have the meaning provided in the
introduction to this Agreement.
"Sellers" shall have the meaning provided in the introduction
to this Agreement.
"Subsidiary" shall mean any corporation with respect to which
a specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Tax" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
ss. 59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value-added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim
for refund or information return or statement relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
"Welfare Plans" shall mean all plans which are employee
welfare benefit plans as defined in Section 3(1) of ERISA.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PURCHASER:
ATTEST: MEDTECH DIAGNOSTICS, INC.
By:
---------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxx Date
Title: President
WITNESS: SELLER:
---------------------------- -----------------------------------
Xxxxxxx Xxxx Date
WITNESS: SELLER:
---------------------------- -----------------------------------
Xxxxxx Xxxxxx Date
WITNESS: SELLER:
---------------------------- -----------------------------------
Xxxxxx Xxxx Date
STATE OF NEW YORK )
)ss.
COUNTY OFNEW YORK )
The foregoing instrument was subscribed to, sworn, and acknowledged
before me this ____ day of April, 2000, by Xxxxxx X. Xxxxxxx who stated that he
is president of MedTech
Diagnostics, Inc., and that he acted with full power and authority to accomplish
the purposes of the foregoing Stock Purchase Agreement.
Witness my hand and official seal.
-------------------------
Notary Public
My commission expires: ___________
STATE OF NEW YORK )
)ss.
COUNTY OF )
The foregoing instrument was subscribed to, sworn, and acknowledged
before me this ____ day of April, 2000, by Xxxxxxx Xxxx who stated that he is a
Seller as described in the foregoing Stock Purchase Agreement, and acted with
full power and authority to accomplish the purposes of the foregoing Stock
Purchase Agreement.
Witness my hand and official seal.
--------------------------
Notary Public
My commission expires: _____________
STATE OF NEW YORK )
)ss.
COUNTY OF )
The foregoing instrument was subscribed to, sworn, and acknowledged
before me this ____ day of April, 2000, by Xxxxxx Xxxxxx who stated that he is a
Seller as described in the foregoing Stock Purchase Agreement, and acted with
full power and authority to accomplish the purposes of the foregoing Stock
Purchase Agreement.
Witness my hand and official seal.
-----------------------
Notary Public
My commission expires: _____________
STATE OF )
)ss.
COUNTY OF )
The foregoing instrument was subscribed to, sworn, and acknowledged
before me this ____ day of April, 2000, by Xxxxxx Xxxx who stated that he or she
is a Seller as described in the foregoing Stock Purchase Agreement, and acted
with full power and authority to accomplish the purposes of the foregoing Stock
Purchase Agreement.
Witness my hand and official seal.
--------------------------
Notary Public
My commission expires: _____________
List of Exhibits
Exhibit A - Employment Agreement of Xxxxxxx Xxxx
Exhibit B - Employment Agreement of Xxxxxx Xxxxxx
Exhibit C - Employment Agreement of Xxxxxx Xxxx
Exhibit D - Opinion of Counsel to Sellers
List of Schedules
Schedule 2.2(b) - Subsidiaries, Joint Ventures, Etc.
Schedule 2.5 - Capitalization
Schedule 2.6 - Violations, Breaches, Etc.
Schedule 2.7 - Undisclosed Liabilities
Schedule 2.8(a) - Financial Statements
Schedule 2.8(b) - Operations Not in Ordinary Course
Schedule 2.10(a) - Litigation
Schedule 2.10(c) - Intellectual Property
Schedule 2.12 - Territorial Restrictions
Schedule 2.13 - Tax Matters
Schedule 2.14 - Material Contracts
Schedule 2.15 - Assets, Inventory
Schedule 2.17(a) - Customers, Product Vendors, Suppliers and Sales
Representatives
Schedule 2.17(b) - Termination of Relationships
Schedule 2.19 - Insurance and Claims
Schedule 2.20(a) - Employer Benefits
Schedule 2.20(b) - Administration of Employer Benefits Not in
Compliance With Law
Schedule 2.20(c) - Multiemployer Plans
Schedule 2.20(h) - Audits
Schedule 2.21 - Employee Agreements
Schedule 2.23(a) - Leases
Schedule 2.24 - Banking Relationships
EXHIBIT A
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of April
24, 2000, is entered into between XXXXXXX SYSTEMS, INC., a Pennsylvania
corporation (the "Company"), a wholly owned subsidiary of MEDTECH DIAGNOSTICS,
INC. ("MedTech"), located at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000, and XXXXXXX XXXX residing at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
("Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to employ the Employee and to be
assured of his services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the Company and the Employee hereby
agree as follows:
1. Employment. The Company hereby employs the Employee as
Director of Technology of the Company, and the Employee accepts such employment,
upon the terms and subject to the conditions set forth in this Agreement.
2. Term. The term of this Agreement shall commence on
the date hereof and terminate on April 23, 2002 (the "Term"), subject to earlier
termination pursuant to the provisions of Section 10 hereof.
3. Duties. During the term of this Agreement, the Employee
shall serve as the Director of Technology of the Company and shall perform all
duties commensurate with his position (including, but not limited to, those
heretofore performed by the Employee) and as may be assigned to him by the Board
of Directors of the Company or the Chief Executive Officer of the Company and
subject to the control of the Board of Directors and the Chief Executive Officer
of the Company. The Employee shall devote his full business time and energies to
the business and affairs of the Company and shall use his best efforts, skills
and abilities to promote the interests of the Company and to diligently and
competently perform the duties of his position.
4. Compensation, Benefits, Options and Incentive Bonus.
4.1 Base Salary. During the term of this Agreement, as
compensation for the proper and satisfactory performance of all duties to be
performed by Employee hereunder, the Company shall pay to Employee a base salary
of $65,000.00 per annum for the first year of this Employment Agreement, payable
in equal bi-weekly installments of $2,500.00 each, payable on
the first and fifteenth day of each month, less required deductions for state
and federal withholding tax, Social Security, and other employee taxes. For the
second year of this Employment Agreement Xxxxxxx Xxxx shall receive a raise in
his annual salary, exclusive of bonus and/or participation in MedTech's stock
incentive plan;
4.2 Bonus Compensation. Employee shall be entitled to earn and
receive bonus compensation provided that certain performance goals are achieved
by the Company. Bonuses shall be granted in accordance with a bonus plan to be
adopted by the Company, the terms and conditions of which shall be determined by
the Board of Directors of MedTech in conjunction with Xxxxxxx Xxxx, Xxxxxx Xxxx
and Xxxxxx Xxxxxx, and implemented within 120 days of the execution of this
Employee Agreement.
4.3 Participation in Stock Incentive Plan. Employee shall be
entitled to participate in MedTech's 2000 Stock Incentive Plan.
4.4 Vacation and Sick Leave. Employee shall be entitled to an
aggregate of two (2) weeks of paid vacation per year, and five (5) days of paid
sick leave per year, during the term hereof, prorated for any portion of a year
to the date of termination. The timing and duration of any vacation shall be
subject to the prior written approval of the Company, in its discretion.
4.5 Employee Benefit Plans. At all times during the term of
this Agreement the Employee shall be provided the opportunity to participate in
all health, pension and welfare plans, programs and benefits (the "Plans")
offered generally to all employees of MedTech.
4.6 No Accumulation. The fringe benefits described in this
paragraph accrue on an annual basis, and Employee shall not be entitled to
accumulate unused vacation, sick leave, or other fringe benefits from year to
year, without the prior written consent of the Company. Further, employee shall
not be entitled to receive payments in lieu of any compensation or payment for
or in lieu of said fringe benefits prorated to the date of termination of this
Agreement.
5. Reimbursement of Business Expenses. During the term of this
Agreement, upon submission of proper invoices, receipts or other supporting
documentation satisfactory to the Company and in specific accordance with such
guidelines as may be established from time to time by the Company's Board of
Directors, the Employee shall be reimbursed by the Company for all reasonable
business expenses actually and necessarily incurred by the Employee on behalf of
the Company in connection with the performance of services under this Agreement.
6. Representations.
6.1 Employability. The Employee represents and warrants that
he is not party to, or bound by, any agreement or commitment, or subject to any
restriction, including, but not limited to agreements related to previous
employment containing confidentiality or non-compete covenants, which in the
future may have a possibility of adversely affecting the business of the Company
or the performance by the Employee of his duties under this Agreement.
6.2 Awareness of Certain Employment Regulations. The Employee
represents
and warrants that he is aware that there are laws and regulations that prohibit
discrimination in the workplace based upon, among other things, race, religion,
gender, and national origin such as Title VII of the Civil Rights Act of 1964,
42 U.S.C. Section 2000e et. seq., and similar laws adopted by the states (the
"Discrimination Laws"). Employee represents and warrants that he will abide by
the Discrimination Laws in the performance of his duties under this Agreement.
The Employee, further, represents and warrants that if he becomes aware of any
violation or potential violation of the Discrimination Laws that he will
immediately notify the Company, in writing, of any such violation or potential
violation of the Discrimination Laws.
7. Confidentiality. For purposes of this Section 7, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries.
(a) Confidential Information. The Employee
acknowledges that as a result of his employment with the Company, the Employee
has and will continue to have knowledge of, and access to, proprietary and
confidential information of the Company, including, without limitation, designs,
software, computer code, copyrighted materials, intellectual property,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, financial and marketing information and
the identity of customers and suppliers (collectively, the "Confidential
Information"), and that such information, even though it may be contributed,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense which are the exclusive
property of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose to any person, corporation or other
entity, any of the Confidential Information without the prior written consent of
the Company, except to responsible officers and employees of the Company and
other responsible persons who are in a contractual or fiduciary relationship
with the Company and who have a need for such information for purposes in the
best interests of the Company, and except for such information which is or
becomes of general public knowledge from authorized sources other than the
Employee. The Employee acknowledges that the Company would not enter into this
Agreement without the assurance that all such Confidential Information will be
used for the exclusive benefit of the Company.
(b) Return of Confidential Information. Upon
the termination of Employee's employment with the Company, the Employee shall
promptly deliver to the Company all CD ROMS, floppy disks, hard drives or other
computer storage devices, computers, drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials relating to the
Company's business, including without limitation any materials incorporating
Confidential Information, which are in the Employee's possession or control.
(c) Work for Hire. The Employee will promptly
disclose to the Company all designs, software, computer code, processes,
inventions, improvements, discoveries and other information related in any way
to the business of the Company (collectively "developments") conceived,
developed or acquired by him alone or with others during the term of this
Employment Agreement, whether or not conceived during regular working hours,
through the use of Company time, material or facilities or otherwise. All such
developments shall be
considered work for hire and the Company shall be the sole and exclusive owner
os such developments. Upon request the Employee shall deliver to the Company all
CD ROMS, floppy disks, hard drives or other computer storage devices, computers,
drawings, models or other data and records relating to such developments. In the
event any such developments shall be deemed by the Company to be patentable or
copyrightable, the Employee shall, at the expense of the Company, assist the
Company in obtaining any patents or copyrights thereon and execute all documents
and do all other things necessary or proper to obtain letters patent and
copyrights and to vest the Company with full title thereto.
8. Non-competition. For purposes of this Section 8, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries. The Employee will not
utilize his special knowledge of the business of the Company and his
relationships with customers, suppliers of the Company and others to compete
with the Company. During the Term of this Agreement and for a period of two (2)
years after the expiration or termination of this Agreement (provided, however,
that in the event that this Agreement is terminated prior to the expiration of
the Term, the Employee shall be bound by the provisions of this Section 8 during
the time period that would have remained under the Term, plus a period of two
(2) years thereafter), the Employee shall not engage, directly or indirectly or
have an interest, directly or indirectly, in any geographic area where the
Company at that point in time does business or in which its products or services
are marketed, alone or in association with others, as principal, officer, agent,
employee, director, partner or stockholder (except with respect to his
employment by the Company), or through the investment of capital, lending of
money or property, rendering of services or otherwise, in any business
competitive with or substantially similar to that engaged in by the Company (it
being understood hereby, that the ownership by the Employee of two percent (2%)
or less of the stock of any company listed on a national securities exchange
shall not be deemed a violation of this Section 8). During the same period, the
Employee shall not, and shall not permit any of his employees, agents or others
under his control to, directly or indirectly, on behalf of himself or any other
person, (i) call upon, accept business from, or solicit the business of any
person who is, or who had been at any time during the preceding two (2) years, a
customer of the Company or any successor to the business of the Company, or
otherwise divert or attempt to divert any business from the Company or any such
successor, or (ii) directly or indirectly recruit or otherwise solicit or induce
any person who is an employee of, or otherwise engaged by, the Company or any
successor to the business of the Company to terminate his or her employment or
other relationship with the Company or such successor, or hire any person who
has left the employ of the Company or any such successor during the preceding
two (2) years. The Employee shall not at any time, directly or indirectly, use
or purport to authorize any person to use any name, xxxx, logo, trade dress or
other identifying words or images which are the same as or similar to those used
at any time by the Company in connection with any product or service, whether or
not such use would be in a business competitive with that of the Company.
9. Remedies. The restrictions set forth in Sections 7 and 8
are considered by the parties to be fair and reasonable. The Employee
acknowledges that the restrictions contained in Section 7 and 8 will not prevent
him from earning a livelihood. The Employee further acknowledges that the
Company would be irreparably harmed and that monetary damages would not provide
an adequate remedy in the event of a breach of the provisions of Sections 7 or
8.
Accordingly, the Employee agrees that, in addition to any other remedies
available to the Company, the Company (i) shall be entitled to specific
performance, injunction, and other equitable relief to secure the enforcement of
such provisions, (ii) shall not be required to post bond in connection with
seeking any such equitable remedies, and (iii) shall be entitled to receive
reimbursement from the Employee for all attorneys' fees and expenses incurred by
the Company in enforcing such provisions. If any provisions of Sections 7, 8, or
9 relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may be,
shall be reduced to the maximum which such court deems enforceable. If any
provisions of Sections 7, 8, or 9 other than those described in the preceding
sentence are adjudicated to be invalid or unenforceable, the invalid or
unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which adjudication is made) in such manner as to render them
enforceable and to effectuate as nearly as possible the original intentions and
agreement of the parties.
10. Termination. This Agreement may be terminated prior to the
expiration of the Term set forth in Section 2 upon the occurrence of any of the
events set forth in, and subject to the terms of, this Section 10.
(a) Death. This Agreement will terminate
immediately and automatically upon the death of the Employee.
(b) Disability. This Agreement may be
terminated at the Company's option, immediately upon notice to the Employee, if
the Employee shall suffer a permanent disability. For the purposes of this
Agreement, the term "permanent disability" shall mean the Employee's inability
to perform his duties under this Agreement for a period of ninety (90)
consecutive days due to illness, accident or any other physical or mental
incapacity, as determined by the Board of Directors of the Company. In the event
that a dispute arises with respect to the disability of the Employee, the
parties shall each select a duly licensed medical doctor to make such a
determination. If the two doctors so selected cannot agree on a determination,
they will mutually select a third duly licensed medical doctor and the decision
of the majority of the three doctors will be binding.
(c) Cause. This Agreement may be terminated at
the Company's option, immediately upon notice to the Employee, upon: (1) breach
by the Employee of any material provision of this Agreement; (2) breach by the
Employee of any fiduciary duty to the Company, or any of its affiliates or
subsidiaries; (3) gross negligence or willful misconduct of the Employee in
connection with the performance of his duties under this Agreement; (4)
Employee's failure to perform (i) any of his duties or responsibilities required
pursuant to this Agreement, or (ii) any reasonable directive of the Chief
Executive Officer or Board of Directors of the Company, however, Employee's
refusal to relocate outside of Chemung County, New York and the surrounding
area, including the Ithaca, New York area, shall not be considered a failure to
perform a reasonable directive; (5) fraud, criminal conduct, dishonesty or
embezzlement by the Employee; or (6) Employee's misappropriation for personal
use of any assets (having in excess of nominal value) or business opportunities
of the Company; provided that in any such case with
respect to any such breach that is capable of being cured, the Employee is
afforded a ten (10)-day cure period for such monetary breaches and a thirty
(30)-day cure period for such non-monetary breaches.
(d) Termination by Employee. This Agreement may
be terminated by Employee prior to the expiration of the Term set forth in
Section 2 upon three (3) months written notice to the Company, which notice may
not be given prior to nine (9) months following the date hereof.
(e) Effect of Termination. Upon the termination
of this Agreement pursuant to this Section 10, the Employee shall be entitled to
his Compensation to the date of termination as set forth in this Section 10, and
after such date shall not be entitled to any Compensation, benefits or other
rights granted herein to the Employee.
11. Miscellaneous.
(a) Survival. The provisions of Sections 7, 8,
and 9 shall survive the termination of this Agreement.
(b) Entire Agreement. This Agreement sets forth
the entire understanding of the parties and merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification. This Agreement may not be
modified or terminated orally, and no modification, termination or attempted
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
(d) Waiver. Failure of a party to enforce one
or more of the provisions of this Agreement or to require at any time
performance of any of the obligations hereof shall not be construed to be a
waiver of such provisions by such party nor to in any way affect the validity of
this Agreement or such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.
(e) Successors and Assigns. Neither party shall
have the right to assign this Agreement, or any rights or obligations hereunder,
without the consent of the other party; provided, however, that upon the sale of
all or substantially all of the assets, business and goodwill of the Company to
another company, or upon the merger or consolidation of the Company with another
company, this Agreement shall inure to the benefit of, and be binding upon, both
Employee and the company purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other company were the Company; and
provided, further, that the Company shall have the right to assign this
Agreement to any affiliate or subsidiary of the Company or MedTech. Subject to
the foregoing, this Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their legal representatives, heirs, successors and
assigns.
(f) Communications. All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been given at the time personally delivered or when
mailed in any United States post office enclosed in a registered or certified
postage prepaid envelope and addressed to the addresses set forth below, or to
such other address as any party may specify by notice to the other party;
provided, however, that any notice of change of address shall be effective only
upon receipt.
To the Company: XxxXxxx Systems, Inc.
c/o MedTech Diagnostics, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxx
-----
To the Employee: Mr. Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
(g) Severability. If any provision of this
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity
and enforceability of the other provisions of this Agreement and the provision
held to be invalid or unenforceable shall be enforced as nearly as possible
according to its original terms and intent to eliminate such invalidity or
unenforceability.
(h) Jurisdiction; Venue. This Agreement shall
be subject to the exclusive jurisdiction of the courts of New York County, New
York. Any breach of any provisions of this Agreement shall be deemed to be a
breach occurring in the State of New York by virtue of a failure to perform an
act required to be performed in the State of New York, and the parties
irrevocably and expressly agree to submit to the jurisdiction of the courts of
New York County, New York for the purpose of resolving any disputes among them
relating to this Agreement or the transactions contemplated by this Agreement.
(i) Governing Law. This Agreement is made and
executed and shall be governed by the laws of the State of New York, without
regard to the conflicts of law principles thereof.
(j) No Third-Party Beneficiaries. Each of the
provisions of this Agreement is for the sole and exclusive benefit of the
parties hereto and shall not be deemed for the benefit of any other person or
entity.
IN WITNESS WHEREOF, each of the parties hereto have duly
executed this Agreement as of the date set forth above.
XXXXXXX SYSTEMS, INC.
By:___________________________
Xxxxxx X. Xxxxxxx
Title:
EMPLOYEE
------------------------------
Xxxxxxx Xxxx
AGREED TO AND ACCEPTED WITH
RESPECT TO SECTIONS 4, 7, 8 and 9 ONLY:
MEDTECH DIAGNOSTICS, INC.
By:_______________________________
Xxxxxx X. Xxxxxxx
Title: President
EXHIBIT B
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of April
24, 2000, is entered into between XXXXXXX SYSTEMS, INC., a Pennsylvania
corporation (the "Company"), a wholly owned subsidiary of MEDTECH DIAGNOSTICS,
INC. ("MedTech"), located at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000, and XXXXXX XXXX residing at 00 Xxxxxx Xxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx
00000 ("Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to employ the Employee and to be
assured of his services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the Company and the Employee hereby
agree as follows:
11. Employment. The Company hereby employs the Employee as
Director of Business Development of the Company, and the Employee accepts such
employment, upon the terms and subject to the conditions set forth in this
Agreement.
12. Term. The term of this Agreement shall commence on the
date hereof and
terminate on April 23, 2002 (the "Term"), subject to earlier termination
pursuant to the provisions of Section 10 hereof.
13. Duties. During the term of this Agreement, the Employee
shall serve as the Director of Business Development of the Company and shall
perform all duties commensurate with his position (including, but not limited
to, those heretofore performed by the Employee) and as may be assigned to him by
the Board of Directors of the Company or the Chief Executive Officer of the
Company and subject to the control of the Board of Directors and the Chief
Executive Officer of the Company. The Employee shall devote his full business
time and energies to the business and affairs of the Company and shall use his
best efforts, skills and abilities to promote the interests of the Company and
to diligently and competently perform the duties of his position.
14. Compensation, Benefits, Options and Incentive Bonus.
4.1 Base Salary. During the term of this Agreement, as
compensation for the proper and satisfactory performance of all duties to be
performed by Employee hereunder, the Company shall pay to Employee a base salary
of $60,000.00 per annum for the first year of this Employment Agreement, payable
in equal bi-weekly installments of $2,307.70 each, payable on the first and
fifteenth day of each month, less required deductions for state and federal
withholding tax, Social Security, and other employee taxes. For the second year
of this Employment Agreement Xxxxxx Xxxx shall receive a raise in his annual
salary, exclusive of bonus and/or participation in MedTech's stock incentive
plan;
4.2 Bonus Compensation. Employee shall be entitled to earn and
receive bonus compensation provided that certain performance goals are achieved
by the Company. Bonuses shall be granted in accordance with a bonus plan to be
adopted by the Company, the terms and conditions of which shall be determined by
the Board of Directors of MedTech in conjunction with Xxxxxxx Xxxx, Xxxxxx Xxxx
and Xxxxxx Xxxxxx, and implemented within 120 days of the execution of this
Employee Agreement.
4.3 Participation in Stock Incentive Plan. Employee shall be
entitled to participate in MedTech's 2000 Stock Incentive Plan.
4.4 Vacation and Sick Leave. Employee shall be entitled to an
aggregate of two (2) weeks of paid vacation per year, and five (5) days of paid
sick leave per year, during the term hereof, prorated for any portion of a year
to the date of termination. The timing and duration of any vacation shall be
subject to the prior written approval of the Company, in its discretion.
4.5 Employee Benefit Plans. At all times during the term of
this Agreement the Employee shall be provided the opportunity to participate in
all health, pension and welfare plans, programs and benefits (the "Plans")
offered generally to all employees of MedTech.
4.6 No Accumulation. The fringe benefits described in this
paragraph accrue on an annual basis, and Employee shall not be entitled to
accumulate unused vacation, sick leave, or other fringe benefits from year to
year, without the prior written consent of the Company.
Further, employee shall not be entitled to receive payments in lieu of any
compensation or payment for or in lieu of said fringe benefits prorated to the
date of termination of this Agreement.
15. Reimbursement of Business Expenses. During the term of this
Agreement, upon submission of proper invoices, receipts or other supporting
documentation satisfactory to the Company and in specific accordance with such
guidelines as may be established from time to time by the Company's Board of
Directors, the Employee shall be reimbursed by the Company for all reasonable
business expenses actually and necessarily incurred by the Employee on behalf of
the Company in connection with the performance of services under this Agreement.
16. Representations.
6.1 Employability. The Employee represents and warrants that
he is not party to, or bound by, any agreement or commitment, or subject to any
restriction, including, but not limited to agreements related to previous
employment containing confidentiality or non-compete covenants, which in the
future may have a possibility of adversely affecting the business of the Company
or the performance by the Employee of his duties under this Agreement.
6.2 Awareness of Certain Employment Regulations. The Employee
represents and warrants that he is aware that there are laws and regulations
that prohibit discrimination in the workplace based upon, among other things,
race, religion, gender, and national origin such as Title VII of the Civil
Rights Act of 1964, 42 U.S.C. Section 2000e et. seq., and similar laws adopted
by the states (the "Discrimination Laws"). Employee represents and warrants that
he will abide by the Discrimination Laws in the performance of his duties under
this Agreement. The Employee, further, represents and warrants that if he
becomes aware of any violation or potential violation of the Discrimination Laws
that he will immediately notify the Company, in writing, of any such violation
or potential violation of the Discrimination Laws.
17. Confidentiality. For purposes of this Section 7, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries.
(a) Confidential Information. The Employee
acknowledges that as a result of his employment with the Company, the Employee
has and will continue to have knowledge of, and access to, proprietary and
confidential information of the Company, including, without limitation, designs,
software, computer code, copyrighted materials, intellectual property,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, financial and marketing information and
the identity of customers and suppliers (collectively, the "Confidential
Information"), and that such information, even though it may be contributed,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense which are the exclusive
property of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose to any person, corporation or other
entity, any of the Confidential Information without the prior written consent of
the Company, except to responsible officers and employees of the Company and
other responsible persons who are in a contractual or fiduciary relationship
with the Company and who
have a need for such information for purposes in the best interests of the
Company, and except for such information which is or becomes of general public
knowledge from authorized sources other than the Employee. The Employee
acknowledges that the Company would not enter into this Agreement without the
assurance that all such Confidential Information will be used for the exclusive
benefit of the Company.
(b) Return of Confidential Information. Upon
the termination of Employee's employment with the Company, the Employee shall
promptly deliver to the Company all CD ROMS, floppy disks, hard drives or other
computer storage devices, computers, drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials relating to the
Company's business, including without limitation any materials incorporating
Confidential Information, which are in the Employee's possession or control.
(c) Work for Hire. The Employee will promptly
disclose to the Company all designs, software, computer code, processes,
inventions, improvements, discoveries and other information related in any way
to the business of the Company (collectively "developments") conceived,
developed or acquired by him alone or with others during the term of this
Employment Agreement, whether or not conceived during regular working hours,
through the use of Company time, material or facilities or otherwise. All such
developments shall be considered work for hire and the Company shall be the sole
and exclusive owner os such developments. Upon request the Employee shall
deliver to the Company all CD ROMS, floppy disks, hard drives or other computer
storage devices, computers, drawings, models or other data and records relating
to such developments. In the event any such developments shall be deemed by the
Company to be patentable or copyrightable, the Employee shall, at the expense of
the Company, assist the Company in obtaining any patents or copyrights thereon
and execute all documents and do all other things necessary or proper to obtain
letters patent and copyrights and to vest the Company with full title thereto.
18. Non-competition. For purposes of this Section 8, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries. The Employee will not
utilize his special knowledge of the business of the Company and his
relationships with customers, suppliers of the Company and others to compete
with the Company. During the Term of this Agreement and for a period of two (2)
years after the expiration or termination of this Agreement (provided, however,
that in the event that this Agreement is terminated prior to the expiration of
the Term, the Employee shall be bound by the provisions of this Section 8 during
the time period that would have remained under the Term, plus a period of two
(2) years thereafter), the Employee shall not engage, directly or indirectly or
have an interest, directly or indirectly, in any geographic area where the
Company at that point in time does business or in which its products or services
are marketed, alone or in association with others, as principal, officer, agent,
employee, director, partner or stockholder (except with respect to his
employment by the Company), or through the investment of capital, lending of
money or property, rendering of services or otherwise, in any business
competitive with or substantially similar to that engaged in by the Company (it
being understood hereby, that the ownership by the Employee of two percent (2%)
or less of the stock of any company listed on a national securities exchange
shall not be deemed a violation of this Section 8). During the same period, the
Employee shall not, and shall not permit any of his employees, agents or others
under his control
to, directly or indirectly, on behalf of himself or any other person, (i) call
upon, accept business from, or solicit the business of any person who is, or who
had been at any time during the preceding two (2) years, a customer of the
Company or any successor to the business of the Company, or otherwise divert or
attempt to divert any business from the Company or any such successor, or (ii)
directly or indirectly recruit or otherwise solicit or induce any person who is
an employee of, or otherwise engaged by, the Company or any successor to the
business of the Company to terminate his or her employment or other relationship
with the Company or such successor, or hire any person who has left the employ
of the Company or any such successor during the preceding two (2) years. The
Employee shall not at any time, directly or indirectly, use or purport to
authorize any person to use any name, xxxx, logo, trade dress or other
identifying words or images which are the same as or similar to those used at
any time by the Company in connection with any product or service, whether or
not such use would be in a business competitive with that of the Company.
19. Remedies. The restrictions set forth in Sections 7 and 8
are considered by the parties to be fair and reasonable. The Employee
acknowledges that the restrictions contained in Section 7 and 8 will not prevent
him from earning a livelihood. The Employee further acknowledges that the
Company would be irreparably harmed and that monetary damages would not provide
an adequate remedy in the event of a breach of the provisions of Sections 7 or
8. Accordingly, the Employee agrees that, in addition to any other remedies
available to the Company, the Company (i) shall be entitled to specific
performance, injunction, and other equitable relief to secure the enforcement of
such provisions, (ii) shall not be required to post bond in connection with
seeking any such equitable remedies, and (iii) shall be entitled to receive
reimbursement from the Employee for all attorneys' fees and expenses incurred by
the Company in enforcing such provisions. If any provisions of Sections 7, 8, or
9 relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may be,
shall be reduced to the maximum which such court deems enforceable. If any
provisions of Sections 7, 8, or 9 other than those described in the preceding
sentence are adjudicated to be invalid or unenforceable, the invalid or
unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which adjudication is made) in such manner as to render them
enforceable and to effectuate as nearly as possible the original intentions and
agreement of the parties.
20. Termination. This Agreement may be terminated prior to the
expiration of the Term set forth in Section 2 upon the occurrence of any of the
events set forth in, and subject to the terms of, this Section 10.
(a) Death. This Agreement will terminate
immediately and automatically upon the death of the Employee.
(b) Disability. This Agreement may be
terminated at the Company's option, immediately upon notice to the Employee, if
the Employee shall suffer a permanent disability. For the purposes of this
Agreement, the term "permanent disability" shall mean the Employee's inability
to perform his duties under this Agreement for a period of ninety (90)
consecutive days due to illness, accident or any other physical or mental
incapacity, as determined by the Board of Directors of the Company. In the event
that a dispute arises with respect to the disability of the Employee, the
parties shall each select a duly licensed medical doctor to make such a
determination. If the two doctors so selected cannot agree on a determination,
they will mutually select a third duly licensed medical doctor and the decision
of the majority of the three doctors will be binding.
(c) Cause. This Agreement may be terminated at the
Company's option, immediately upon notice to the Employee, upon: (1) breach by
the Employee of any material provision of this Agreement; (2) breach by the
Employee of any fiduciary duty to the Company, or any of its affiliates or
subsidiaries; (3) gross negligence or willful misconduct of the Employee in
connection with the performance of his duties under this Agreement; (4)
Employee's failure to perform (i) any of his duties or responsibilities required
pursuant to this Agreement, or (ii) any reasonable directive of the Chief
Executive Officer or Board of Directors of the Company; (5) fraud, criminal
conduct, dishonesty or embezzlement by the Employee; or (6) Employee's
misappropriation for personal use of any assets (having in excess of nominal
value) or business opportunities of the Company; provided that in any such case
with respect to any such breach that is capable of being cured, the Employee is
afforded a ten (10)-day cure period for such monetary breaches and a thirty
(30)-day cure period for such non-monetary breaches.
(d) Termination by Employee. This Agreement may
be terminated by Employee prior to the expiration of the Term set forth in
Section 2 upon three (3) months written notice to the Company, which notice may
not be given prior to nine (9) months following the date hereof.
(e) Effect of Termination. Upon the termination
of this Agreement pursuant to this Section 10, the Employee shall be entitled to
his Compensation to the date of termination as set forth in this Section 10, and
after such date shall not be entitled to any Compensation, benefits or other
rights granted herein to the Employee.
11. Miscellaneous.
(a) Survival. The provisions of Sections 7, 8,
and 9 shall survive the termination of this Agreement.
(b) Entire Agreement. This Agreement sets forth
the entire understanding of the parties and merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification. This Agreement may not be
modified or terminated orally, and no modification, termination or attempted
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
(d) Waiver. Failure of a party to enforce one
or more of the provisions of this Agreement or to require at any time
performance of any of the obligations hereof shall not
be construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party's right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to take.
(e) Successors and Assigns. Neither party shall
have the right to assign this Agreement, or any rights or obligations hereunder,
without the consent of the other party; provided, however, that upon the sale of
all or substantially all of the assets, business and goodwill of the Company to
another company, or upon the merger or consolidation of the Company with another
company, this Agreement shall inure to the benefit of, and be binding upon, both
Employee and the company purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other company were the Company; and
provided, further, that the Company shall have the right to assign this
Agreement to any affiliate or subsidiary of the Company or MedTech. Subject to
the foregoing, this Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their legal representatives, heirs, successors and
assigns.
(f) Communications. All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been given at the time personally delivered or when
mailed in any United States post office enclosed in a registered or certified
postage prepaid envelope and addressed to the addresses set forth below, or to
such other address as any party may specify by notice to the other party;
provided, however, that any notice of change of address shall be effective only
upon receipt.
To the Company: XxxXxxx Systems, Inc.
c/o MedTech Diagnostics, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxx
-----
To the Employee: Mr. Xxxxxx Xxxx
00 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
(g) Severability. If any provision of this
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity
and enforceability of the other provisions of this Agreement and the provision
held to be invalid or unenforceable shall be enforced as nearly as possible
according to its original terms and intent to eliminate such invalidity or
unenforceability.
(h) Jurisdiction; Venue. This Agreement shall
be subject to the exclusive jurisdiction of the courts of New York County, New
York. Any breach of any provisions of this Agreement shall be deemed to be a
breach occurring in the State of New York by virtue of a failure to perform an
act required to be performed in the State of New York, and the parties
irrevocably and expressly agree to submit to the jurisdiction of the courts of
New York County, New York for the purpose of resolving any disputes among them
relating to this
Agreement or the transactions contemplated by this Agreement.
(i) Governing Law. This Agreement is made and
executed and shall be governed by the laws of the State of New York, without
regard to the conflicts of law principles thereof.
(j) No Third-Party Beneficiaries. Each of the
provisions of this Agreement is for the sole and exclusive benefit of the
parties hereto and shall not be deemed for the benefit of any other person or
entity.
IN WITNESS WHEREOF, each of the parties hereto have duly
executed this Agreement as of the date set forth above.
XXXXXXX SYSTEMS, INC.
By:___________________________
Xxxxxx X. Xxxxxxx
Title:
EMPLOYEE
------------------------------
Xxxxxx Xxxx
AGREED TO AND ACCEPTED WITH
RESPECT TO SECTIONS 4, 7, 8 and 9 ONLY:
MEDTECH DIAGNOSTICS, INC.
By:_______________________________
Xxxxxx X. Xxxxxxx
Title: President
EXHIBIT C
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of April
24, 2000, is entered into between XXXXXXX SYSTEMS, INC., a Pennsylvania
corporation (the "Company"), a wholly owned subsidiary of MEDTECH DIAGNOSTICS,
INC. ("MedTech"),
located at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, and XXXXXX
XXXXXX residing at 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
("Employee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to employ the Employee and to be
assured of his services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the Company and the Employee hereby
agree as follows:
21. Employment. The Company hereby employs the Employee as
Director of Operations of the Company, and the Employee accepts such employment,
upon the terms and subject to the conditions set forth in this Agreement.
22. Term. The term of this Agreement shall commence on the
date hereof and terminate on April 23, 2002 (the "Term"), subject to earlier
termination pursuant to the provisions of Section 10 hereof.
23. Duties. During the term of this Agreement, the Employee
shall serve as the Director of Operations of the Company and shall perform all
duties commensurate with his position (including, but not limited to, those
heretofore performed by the Employee) and as may be assigned to him by the Board
of Directors of the Company or the Chief Executive Officer of the Company and
subject to the control of the Board of Directors and the Chief Executive Officer
of the Company. The Employee shall devote his full business time and energies to
the business and affairs of the Company and shall use his best efforts, skills
and abilities to promote the interests of the Company and to diligently and
competently perform the duties of his position.
24. Compensation, Benefits, Options and Incentive Bonus.
4.1 Base Salary. During the term of this Agreement, as
compensation for the proper and satisfactory performance of all duties to be
performed by Employee hereunder, the Company shall pay to Employee a base salary
of $45,000.00 per annum for the first year of this Employment Agreement, payable
in equal bi-weekly installments of $1,730.77 each, payable on the first and
fifteenth day of each month, less required deductions for state and federal
withholding tax, Social Security, and other employee taxes. For the second year
of this Employment Agreement Xxxxxx Xxxxxx shall receive a raise in his annual
salary, exclusive of bonus and/or participation in MedTech's stock incentive
plan;
4.2 Bonus Compensation. Employee shall be entitled to earn and
receive bonus compensation provided that certain performance goals are achieved
by the Company. Bonuses shall be granted in accordance with a bonus plan to be
adopted by the Company, the terms and conditions of which shall be determined by
the Board of Directors of MedTech in
conjunction with Xxxxxxx Xxxx, Xxxxxx Xxxx and Xxxxxx Xxxxxx, and implemented
within 120 days of the execution of this Employee Agreement.
4.3 Participation in Stock Incentive Plan. Employee
shall be entitled to participate in MedTech's 2000 Stock Incentive Plan.
4.4 Vacation and Sick Leave. Employee shall be entitled to an
aggregate of two (2) weeks of paid vacation per year, and five (5) days of paid
sick leave per year, during the term hereof, prorated for any portion of a year
to the date of termination. The timing and duration of any vacation shall be
subject to the prior written approval of the Company, in its discretion.
4.5 Employee Benefit Plans. At all times during the term of
this Agreement the Employee shall be provided the opportunity to participate in
all health, pension and welfare plans, programs and benefits (the "Plans")
offered generally to all employees of MedTech.
4.6 No Accumulation. The fringe benefits described in this
paragraph accrue on an annual basis, and Employee shall not be entitled to
accumulate unused vacation, sick leave, or other fringe benefits from year to
year, without the prior written consent of the Company. Further, employee shall
not be entitled to receive payments in lieu of any compensation or payment for
or in lieu of said fringe benefits prorated to the date of termination of this
Agreement.
25. Reimbursement of Business Expenses. During the term of this
Agreement, upon submission of proper invoices, receipts or other supporting
documentation satisfactory to the Company and in specific accordance with such
guidelines as may be established from time to time by the Company's Board of
Directors, the Employee shall be reimbursed by the Company for all reasonable
business expenses actually and necessarily incurred by the Employee on behalf of
the Company in connection with the performance of services under this Agreement.
26. Representations.
6.1 Employability. The Employee represents and warrants that
he is not party to, or bound by, any agreement or commitment, or subject to any
restriction, including, but not limited to agreements related to previous
employment containing confidentiality or non-compete covenants, which in the
future may have a possibility of adversely affecting the business of the Company
or the performance by the Employee of his duties under this Agreement.
6.2 Awareness of Certain Employment Regulations. The Employee
represents and warrants that he is aware that there are laws and regulations
that prohibit discrimination in the workplace based upon, among other things,
race, religion, gender, and national origin such as Title VII of the Civil
Rights Act of 1964, 42 U.S.C. Section 2000e et. seq., and similar laws adopted
by the states (the "Discrimination Laws"). Employee represents and warrants that
he will abide by the Discrimination Laws in the performance of his duties under
this Agreement. The Employee, further, represents and warrants that if he
becomes aware of any violation or potential violation of the Discrimination Laws
that he will immediately notify the Company, in writing, of any such violation
or potential violation of the Discrimination Laws.
27. Confidentiality. For purposes of this Section 7, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries.
(a) Confidential Information. The Employee
acknowledges that as a result of his employment with the Company, the Employee
has and will continue to have knowledge of, and access to, proprietary and
confidential information of the Company, including, without limitation, designs,
software, computer code, copyrighted materials, intellectual property,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, financial and marketing information and
the identity of customers and suppliers (collectively, the "Confidential
Information"), and that such information, even though it may be contributed,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense which are the exclusive
property of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose to any person, corporation or other
entity, any of the Confidential Information without the prior written consent of
the Company, except to responsible officers and employees of the Company and
other responsible persons who are in a contractual or fiduciary relationship
with the Company and who have a need for such information for purposes in the
best interests of the Company, and except for such information which is or
becomes of general public knowledge from authorized sources other than the
Employee. The Employee acknowledges that the Company would not enter into this
Agreement without the assurance that all such Confidential Information will be
used for the exclusive benefit of the Company.
(b) Return of Confidential Information. Upon
the termination of Employee's employment with the Company, the Employee shall
promptly deliver to the Company all CD ROMS, floppy disks, hard drives or other
computer storage devices, computers, drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials relating to the
Company's business, including without limitation any materials incorporating
Confidential Information, which are in the Employee's possession or control.
(c) Work for Hire. The Employee will promptly
disclose to the Company all designs, software, computer code, processes,
inventions, improvements, discoveries and other information related in any way
to the business of the Company (collectively "developments") conceived,
developed or acquired by him alone or with others during the term of this
Employment Agreement, whether or not conceived during regular working hours,
through the use of Company time, material or facilities or otherwise. All such
developments shall be considered work for hire and the Company shall be the sole
and exclusive owner os such developments. Upon request the Employee shall
deliver to the Company all CD ROMS, floppy disks, hard drives or other computer
storage devices, computers, drawings, models or other data and records relating
to such developments. In the event any such developments shall be deemed by the
Company to be patentable or copyrightable, the Employee shall, at the expense of
the Company, assist the Company in obtaining any patents or copyrights thereon
and execute all documents and do all other things necessary or proper to obtain
letters patent and copyrights and to vest the Company with full title thereto.
28. Non-competition. For purposes of this Section 8, all
references to the Company shall be deemed to include MedTech and all of the
Company's and MedTech's affiliates and subsidiaries. The Employee will not
utilize his special knowledge of the business of the Company and his
relationships with customers, suppliers of the Company and others to compete
with the Company. During the Term of this Agreement and for a period of two (2)
years after the expiration or termination of this Agreement (provided, however,
that in the event that this Agreement is terminated prior to the expiration of
the Term, the Employee shall be bound by the provisions of this Section 8 during
the time period that would have remained under the Term, plus a period of two
(2) years thereafter), the Employee shall not engage, directly or indirectly or
have an interest, directly or indirectly, in any geographic area where the
Company at that point in time does business or in which its products or services
are marketed, alone or in association with others, as principal, officer, agent,
employee, director, partner or stockholder (except with respect to his
employment by the Company), or through the investment of capital, lending of
money or property, rendering of services or otherwise, in any business
competitive with or substantially similar to that engaged in by the Company (it
being understood hereby, that the ownership by the Employee of two percent (2%)
or less of the stock of any company listed on a national securities exchange
shall not be deemed a violation of this Section 8). During the same period, the
Employee shall not, and shall not permit any of his employees, agents or others
under his control to, directly or indirectly, on behalf of himself or any other
person, (i) call upon, accept business from, or solicit the business of any
person who is, or who had been at any time during the preceding two (2) years, a
customer of the Company or any successor to the business of the Company, or
otherwise divert or attempt to divert any business from the Company or any such
successor, or (ii) directly or indirectly recruit or otherwise solicit or induce
any person who is an employee of, or otherwise engaged by, the Company or any
successor to the business of the Company to terminate his or her employment or
other relationship with the Company or such successor, or hire any person who
has left the employ of the Company or any such successor during the preceding
two (2) years. The Employee shall not at any time, directly or indirectly, use
or purport to authorize any person to use any name, xxxx, logo, trade dress or
other identifying words or images which are the same as or similar to those used
at any time by the Company in connection with any product or service, whether or
not such use would be in a business competitive with that of the Company.
29. Remedies. The restrictions set forth in Sections 7 and 8
are considered by the parties to be fair and reasonable. The Employee
acknowledges that the restrictions contained in Section 7 and 8 will not prevent
him from earning a livelihood. The Employee further acknowledges that the
Company would be irreparably harmed and that monetary damages would not provide
an adequate remedy in the event of a breach of the provisions of Sections 7 or
8. Accordingly, the Employee agrees that, in addition to any other remedies
available to the Company, the Company (i) shall be entitled to specific
performance, injunction, and other equitable relief to secure the enforcement of
such provisions, (ii) shall not be required to post bond in connection with
seeking any such equitable remedies, and (iii) shall be entitled to receive
reimbursement from the Employee for all attorneys' fees and expenses incurred by
the Company in enforcing such provisions. If any provisions of Sections 7, 8, or
9 relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may be,
shall be
reduced to the maximum which such court deems enforceable. If any provisions of
Sections 7, 8, or 9 other than those described in the preceding sentence are
adjudicated to be invalid or unenforceable, the invalid or unenforceable
provisions shall be deemed amended (with respect only to the jurisdiction in
which adjudication is made) in such manner as to render them enforceable and to
effectuate as nearly as possible the original intentions and agreement of the
parties.
30. Termination. This Agreement may be terminated prior to the
expiration of the Term set forth in Section 2 upon the occurrence of any of the
events set forth in, and subject to the terms of, this Section 10.
(a) Death. This Agreement will terminate
immediately and automatically upon the death of the Employee.
(b) Disability. This Agreement may be
terminated at the Company's option, immediately upon notice to the Employee, if
the Employee shall suffer a permanent disability. For the purposes of this
Agreement, the term "permanent disability" shall mean the Employee's inability
to perform his duties under this Agreement for a period of ninety (90)
consecutive days due to illness, accident or any other physical or mental
incapacity, as determined by the Board of Directors of the Company. In the event
that a dispute arises with respect to the disability of the Employee, the
parties shall each select a duly licensed medical doctor to make such a
determination. If the two doctors so selected cannot agree on a determination,
they will mutually select a third duly licensed medical doctor and the decision
of the majority of the three doctors will be binding.
(c) Cause. This Agreement may be terminated at
the Company's option, immediately upon notice to the Employee, upon: (1) breach
by the Employee of any material provision of this Agreement; (2) breach by the
Employee of any fiduciary duty to the Company, or any of its affiliates or
subsidiaries; (3) gross negligence or willful misconduct of the Employee in
connection with the performance of his duties under this Agreement; (4)
Employee's failure to perform (i) any of his duties or responsibilities required
pursuant to this Agreement, or (ii) any reasonable directive of the Chief
Executive Officer or Board of Directors of the Company; (5) fraud, criminal
conduct, dishonesty or embezzlement by the Employee; or (6) Employee's
misappropriation for personal use of any assets (having in excess of nominal
value) or business opportunities of the Company; provided that in any such case
with respect to any such breach that is capable of being cured, the Employee is
afforded a ten (10)-day cure period for such monetary breaches and a thirty
(30)-day cure period for such non-monetary breaches.
(d) Termination by Employee. This Agreement may
be terminated by Employee prior to the expiration of the Term set forth in
Section 2 upon three (3) months written notice to the Company, which notice may
not be given prior to nine (9) months following the date hereof.
(e) Effect of Termination. Upon the termination
of this Agreement pursuant to this Section 10, the Employee shall be entitled to
his Compensation to the date of termination as set forth in this Section 10, and
after such date shall not be entitled to any
Compensation, benefits or other rights granted herein to the Employee.
11. Miscellaneous.
(a) Survival. The provisions of Sections 7, 8,
and 9 shall survive the termination of this Agreement.
(b) Entire Agreement. This Agreement sets forth
the entire understanding of the parties and merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification. This Agreement may not be
modified or terminated orally, and no modification, termination or attempted
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
(d) Waiver. Failure of a party to enforce one
or more of the provisions of this Agreement or to require at any time
performance of any of the obligations hereof shall not be construed to be a
waiver of such provisions by such party nor to in any way affect the validity of
this Agreement or such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.
(e) Successors and Assigns. Neither party shall
have the right to assign this Agreement, or any rights or obligations hereunder,
without the consent of the other party; provided, however, that upon the sale of
all or substantially all of the assets, business and goodwill of the Company to
another company, or upon the merger or consolidation of the Company with another
company, this Agreement shall inure to the benefit of, and be binding upon, both
Employee and the company purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other company were the Company; and
provided, further, that the Company shall have the right to assign this
Agreement to any affiliate or subsidiary of the Company or MedTech. Subject to
the foregoing, this Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their legal representatives, heirs, successors and
assigns.
(f) Communications. All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been given at the time personally delivered or when
mailed in any United States post office enclosed in a registered or certified
postage prepaid envelope and addressed to the addresses set forth below, or to
such other address as any party may specify by notice to the other party;
provided, however, that any notice of change of address shall be effective only
upon receipt.
To the Company: XxxXxxx Systems, Inc.
c/o MedTech Diagnostics, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxx
-----
To the Employee: Xx. Xxxxxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
(g) Severability. If any provision of this
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity
and enforceability of the other provisions of this Agreement and the provision
held to be invalid or unenforceable shall be enforced as nearly as possible
according to its original terms and intent to eliminate such invalidity or
unenforceability.
(h) Jurisdiction; Venue. This Agreement shall
be subject to the exclusive jurisdiction of the courts of New York County, New
York. Any breach of any provisions of this Agreement shall be deemed to be a
breach occurring in the State of New York by virtue of a failure to perform an
act required to be performed in the State of New York, and the parties
irrevocably and expressly agree to submit to the jurisdiction of the courts of
New York County, New York for the purpose of resolving any disputes among them
relating to this Agreement or the transactions contemplated by this Agreement.
(i) Governing Law. This Agreement is made and
executed and shall be governed by the laws of the State of New York, without
regard to the conflicts of law principles thereof.
(j) No Third-Party Beneficiaries. Each of the
provisions of this Agreement is for the sole and exclusive benefit of the
parties hereto and shall not be deemed for the benefit of any other person or
entity.
IN WITNESS WHEREOF, each of the parties hereto have duly
executed this Agreement as of the date set forth above.
XXXXXXX SYSTEMS, INC.
By:___________________________
Xxxxxx X. Xxxxxxx
Title: President
EMPLOYEE
------------------------------
Xxxxxx Xxxxxx
AGREED TO AND ACCEPTED WITH
RESPECT TO SECTIONS 4, 7, 8 and 9 ONLY:
MEDTECH DIAGNOSTICS, INC.
By:_______________________________
Xxxxxx X. Xxxxxxx
Title: President
Sample Draft - April 19, 2000
EXHIBIT D
April 21, 2000
To: MedTech Diagnostics, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Re: Stock Purchase Agreement by and between Xxxxxxx Xxxx, Xxxxxx
Xxxxxx and Xxxxxx Xxxx and MedTech Diagnostics, Inc. (the
"Stock Purchase Agreement")
------------------------------------------------------------
Gentlemen:
This opinion is furnished to you on behalf of XxxXxxx Systems,
Inc. (the "Company") pursuant to Section 1.5(f) of the Stock Purchase Agreement.
Capitalized terms defined in the Stock Purchase Agreement and not otherwise
defined herein are used herein as therein defined.
We have acted as special counsel to the Sellers in connection
with the preparation, execution and delivery of the Stock Purchase Agreement and
the transactions contemplated thereby.
In that connection, we have examined each of the:
1 Stock Purchase Agreement.
2 The Articles of Incorporation of the Company.
3 The By-Laws of the Company.
4 Certificates of the Secretary of State of the State
of Pennsylvania attesting to the continued corporate existence and good standing
of the Company.
5 Certificates of the Secretary of State of the State
of New York attesting to the authority of the Company to conduct business with
the State of New York.
The documents listed in Items 1 through 5 above are
hereinafter collectively
referred to as the "Documents".
In rendering the opinions set forth herein, we have examined
the originals, or copies certified to our satisfaction, of such other corporate
records of the Company, certificates of public officials and of officers of the
Company, searches undertaken by title and lien search firms, and such
agreements, instruments and other documents, as we have deemed necessary as a
basis for the opinions expressed below. In rendering the opinion set forth in
paragraphs 2 and 7 below, we have relied solely upon a certificate of certain
officers of the Company, a copy of which is attached hereto (the "Officers'
Certificate"). In rendering the opinions set forth herein, we have also relied
upon the representations and warranties of the Sellers in the Stock Purchase
Agreement and upon Secretary's Certificates and other certificates of the
Company.
We have assumed that the Purchaser is duly organized and
validly existing in good standing under applicable law and has full power,
authority and legal right to execute and deliver, and to perform its obligations
under, the Stock Purchase Agreement and the other documents to which it is a
party. We have further assumed that the Purchaser has duly authorized, executed
and delivered the Stock Purchase Agreement and the other documents to which it
is a party and that the Stock Purchase Agreement and the other documents to
which it is a party has been executed in good faith and constitute the legal,
valid and binding obligations of the Purchaser. We have further assumed the
completeness and the conformity to the original documents of all documents
submitted to us as photostatic or facsimile copies, the authenticity of
originals of such documents, and the genuineness of the signatures appearing
thereon.
In addition, we have assumed that (a) none of the Documents
listed or referred to above have been amended, (b) none of the information
contained in any of the documents reviewed by us contains any untrue statement
of a material fact or omits a material fact necessary to make the statements
contained therein not misleading, and (c) no fraud exists with respect to any of
the matters relevant to the opinions hereinafter expressed; provided, however,
to the best of our knowledge we have no reason to believe that any of such
assumptions is incorrect.
Based upon and subject to the foregoing, and subject to the further
qualifications hereinafter set forth, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Pennsylvania. The
Company has all necessary corporate power and corporate authority to own its
properties and assets and to carry on its business in the States of Pennsylvania
and New York.
2. The authorized capital stock of the Company consists solely
of 3,000 shares voting common stock, no par value per share, of which 1500
shares are issued and outstanding. All of the issued and outstanding shares of
capital stock of the Company are validly issued, fully paid and nonassessable
and free and clear of all liens, encumbrances and restrictions on transfer. Each
of the Sellers owns all of the issued and outstanding shares of capital stock
indicated on Schedule 2.5 of the Stock Purchase Agreement as being owned by him
and to our knowledge has the right and power to sell and deliver such shares of
capital stock to Purchaser without violating any agreement by which any of the
Sellers is bound and without the consent of any other person.
To our knowledge, there are no outstanding options, warrants or other rights to
convert any obligation into or otherwise acquire any capital stock of the
Company.
3. The Stock Purchase Agreement has been duly executed and
delivered by each of the Sellers, and constitutes the legal, valid and binding
obligation of each of the Sellers enforceable against each of the Sellers in
accordance with its terms.
4. The Employment Agreements have been duly executed and
delivered by the respective Sellers who are a party thereto and are valid and
binding obligations of each such Seller.
5. Except as set forth in any Schedule to the Stock Purchase
Agreement, neither the execution, delivery and performance by the Sellers of the
Stock Purchase Agreement nor the consummation by the Sellers of the transaction
contemplated thereby (a) violates the Articles of Incorporation or Bylaws of the
Company, (b) to our knowledge conflicts with or results in a breach of, or
constitutes a default under, or results in a violation of, any material
contract, agreement or instrument or order, judgment or decree known to us to
which the Company is subject or by which the Company or any of its assets are
bound, (c) to our knowledge, conflicts with or violates any law, rule or
regulation applicable to the Company, (d) to our knowledge, results, or with the
giving of notice or the passage of time, or both, will result in the
acceleration of any obligation under any agreement, lease instrument or other
restriction to which the Company is a party or by which it is bound.
6. To our knowledge, all authorizations, approvals, permits
and consents of, and all filings, qualifications and registrations with, any
governmental authority or regulatory body of the United States or with the State
of Pennsylvania, necessary or required on the part of the Sellers, or the
Company in connection with the consummation by the Sellers of the transactions
contemplated by the Stock Purchase Agreement to be consummated by each of them
have been duly obtained or made, as the case may be.
7. Except as set forth on Schedule 2.10(a) of the Stock
Purchase Agreement, to our knowledge, there are no litigations, causes of
action, proceedings or governmental investigations pending or threatened against
or relating to the Company or the property or business of the Company before any
court, arbitrator or administrator or governmental agency.
Our opinions expressed herein are subject to the following limitations
and exceptions:
a. The effect of applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally or the exercise of judicial
discretion in accordance with general principles of equity;
b. Limitations imposed by state or federal law or court
decisions upon specific enforceability of any of the remedies, covenants or
other provisions of the Stock Purchase Agreement or upon the availability of
injunctive relief or other equitable remedy;
c. The enforceability under certain circumstances of
provisions expressly or
by implication waiving broadly or vaguely stated rights, unknown future rights,
defenses to obligations or rights granted by law, where such waivers are or may
be determined to be against public policy or prohibited by law;
d. General principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing and the requirement
that parties enforce their rights in a commercially reasonable manner;
e. Limitations as to the remedies available for non-material
violations or breaches of the Stock Purchase Agreement.
f. The discretion of any court of competent jurisdiction in
awarding equitable remedies including, without limitation, specific performance
or injunctive relief.
We are qualified to practice law in the State of New York and
do not purport to be experts on, or to express any opinion herein concerning any
law, other than the laws of the State of New York and the opinions rendered
herein are limited to such laws of the State of New York which, based upon our
experience, are generally applicable to transactions of the type set forth in
the Documents. We have assumed that the governing law with respect to the
agreements is identical to the law of the State of New York. We are opining
herein only as to the effect on the subject transactions of the laws of the
State of New York.
This opinion is rendered solely for your benefit and may not
be relied upon by any other person or entity. This opinion is provided to you as
of the date hereof solely for the purposes of complying with your requirements
in connection with the Stock Purchase Agreement. Without our prior written
consent, this opinion may not be quoted in whole or in part or otherwise
referred to in any report or document furnished to any person or entity. This
opinion is limited to the matters expressly set forth herein, and no opinion is
to be implied or may be inferred beyond the matters expressly so stated. We
disclaim any requirement to update this opinion subsequent to the date hereof or
to advise you of any change in any matter set forth herein.
Very truly yours,
By:_________________________
