EXHIBIT 10.33
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and
entered into as of the 3rd day of January, 1997 by and among
Trac Medical, Inc., a North Carolina corporation ("Seller"),
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") (▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ are
hereinafter collectively referred to as the "Shareholders"),
and KCI Therapeutic Services, Inc., a Delaware corporation
("Buyer");
W I T N E S S E T H:
WHEREAS, Seller has developed technologies related to
control systems mountable on beds and is engaged in the
marketing and manufacture thereof (the "Business"); and
WHEREAS, Seller and the Shareholders desire to sell,
assign and convey to Buyer, and Buyer desires to purchase
from Seller, the assets of Seller relating to the Trac
ACCESS Device (as hereinafter specifically defined);
NOW, THEREFORE, in consideration of the premises and
mutual covenants and agreements of the parties hereinafter
contained, it is agreed by and between the parties as
follows:
ARTICLE 1
SALE OF ASSETS
1.01 Sale of Assets. Seller hereby agrees that,
subject to the terms, provisions and conditions of this
Agreement, Seller shall transfer, sell, assign, convey and
deliver to Buyer, and Buyer shall purchase from Seller, on
the Closing Date (as hereinafter defined) the Trac ACCESS
Device as described and identified at Schedule 1.01 (the
"Current Embodiment") and other existing or presently
conceived technology related to control systems mountable on
beds (the "Conceptions") (collectively, the "Trac ACCESS
Device"), all of the assets utilized, developed or acquired
by Seller related to the Trac ACCESS Device, all right,
title and interest in all patents, patent applications,
patent rights, inventions, products, product enhancements,
concepts, data, information, source code, government permits
(to the extent such permits are assignable), know how, trade
secrets, trademarks, copyrights, licenses, contractual
rights, causes of action, customer lists, goodwill, vendor
relationships, inventory, business, accounts, parts lists,
and the like, and all other rights related to the
manufacture, sale or use of the Trac ACCESS Device, and all
other assets (i.e. blueprints, tooling, fixtures, testing
devices, etc.) necessary to manufacture and assemble the
Trac ACCESS Device (collectively, the "Assets"). With
respect to the Conceptions, Seller shall (i) transfer to
Buyer such right, title and interest which it has to the
Conceptions at the time of Closing, (ii) not make any
specific representations or warranties with respect to the
Conceptions except as specifically set forth in Section 2.07
hereof and (iii) retain a non-exclusive worldwide license
and right to use the technology underlying the Conceptions
if, and only to the extent, such technology has a non
medical use.
1.02 Purchase Price and Earnout Payment. In
consideration of the transfer, sale, assignment, conveyance
and delivery of the Assets to Buyer as described in Section
1.01 hereof, and subject to the conditions to Closing (as
hereinafter defined) set forth in Article 7 hereto, Buyer
agrees to pay to Seller an aggregate of $1,850,000 (the
"Closing Purchase Price"), payable by means of a wire
transfer in immediately available funds to the bank account
designated by Seller (the "Purchase Price").
(a) Earnout Payment.
(i) In addition to the Closing Purchase
Price to be paid by Buyer at the Closing, Buyer shall
deliver to Seller an earnout payment (the "Earnout
Payments") based on the cumulative number of Units (as
hereinafter defined) sold or leased to third party
purchasers (including any leasing corporation as may exist
or be organized by Buyer) in the first thirty-six (36)
months (or portion thereof) (the "Earnout Period") following
the Closing at the time each of the following hurdles (the
"Hurdles") is reached:
Hurdle - # Units Sold/Leased Earnout Payment
---------------------------- -----------------
5,000 $550,000
10,000 $550,000
15,000 $550,000
20,000 $550,000
30,000 $550,000
40,000 $550,000
50,000 $550,000
(ii) "Units" shall mean the number of Base
Units installed. "Base Unit" shall mean the Current
Embodiment of the Trac ACCESS Device as described on
Schedule 1.01 hereto and any successor product to the Trac
ACCESS Device having a list price which is at least eighty
percent (80%) of the list price of the Current Embodiment
but shall not include units of the Trac ACCESS Device which
are manufactured by Buyer or Seller for use in Buyer's
rental fleet. The parties hereto agree to negotiate in good
faith to determine the treatment of those units of successor
products to the Trac ACCESS Device having a list price which
is equal to or less than eighty percent (80%) of the list
price of the Current Embodiment. Such negotiations shall be
based upon the anticipated list price and gross profit
margin of the successor product when compared to the Current
Embodiment. No successor device shall be treated as a Base
Unit unless it has a gross margin of at least fifty percent
(50%).
(iii) Notwithstanding anything contained
herein to the contrary, those Base Units for which a
purchase order has been received by Buyer at the end of the
Earnout Period but which have not been installed shall be
included in the number of Units for purposes of determining
the Earnout Payments if such Base Units are ultimately
installed within 90 days of the end of the Earnout Period,
provided, however, if such Base Units have not been
installed solely as a result of Buyers failure to supply
Base Units for installation (as a result of a force
majeure event or any other event which is not related to
Seller's breach of a representation or warranty), the
Base Units which Buyer failed to supply will be credited to
Seller for purposes of the Earnout Payment.
(iv) If Buyer shall become obligated to
deliver an Earnout Payment, Buyer shall, within 30 days
of reaching the Hurdle, deliver to Seller $550,000 in cash
by wire transfer in immediately available funds to the bank
account designated by Seller. For purposes of this Section
1.02(c)(iv), a Hurdle shall be deemed to be reached when the
number of Units designated in Section 1.02(c)(i) have been
installed.
(v) Buyer shall provide Seller with a
periodic accounting of the Units, which accounting shall
be limited to the invoice numbers, customer names,
quantities, product catalogue numbers and charge
backs which have been made and reasonable access to
Buyer's records which Seller may request in order to
substantiate any such accounting.
(b) Royalty. In addition to the Closing Purchase
Price to be paid by Buyer at the Closing, Buyer shall pay
Seller royalties in accordance with the Royalty Agreement
by and between Buyer and Seller dated as of the date hereof.
1.03 No Assumption of Liabilities. Buyer does
not and shall not assume or agree to assume, and
shall not acquire or take over, the liabilities and
obligations of Seller or the Shareholders of any nature,
direct, contingent or otherwise, except the obligations (the
"Assumed Liabilities") which arise out of the performance
by Buyer from and after the Effective Date (as hereinafter
defined) of the contracts and accounts set forth on Schedule
1.03 attached hereto and incorporated herein by reference
(the "Contracts and Accounts"). Buyer shall have and assumes
no liabilities, obligations, or responsibilities arising
before or after the Effective Date which arise out of the
activity or inactivity of Seller (including, without
limitation, breach or default) prior to the Effective Date
Without limiting the generality of the foregoing, it is expressly
agreed that Buyer shall have no liability to, for, or in
respect of, any employees of Seller including,
without limitation, accrued payroll, salary, severance,
accrued vacation, accrued sick leave or benefit claims of any
nature, or any withholding or other tax or payment
in respect thereof.
1.04 Closing; Effective Date. The Closing of
the transactions provided for in this Article 1 (the
"Closing") shall take place on January 3, 1997 at
10:00 a.m. at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
L.L.P., Two Hannover Square, Suite 1900, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other place, time and date
as the parties may mutually agree. The date, as thus determined,
on which the Closing is to take place is referred to herein as the
"Closing Date." The transactions hereunder shall be effective as
of 12:01 a.m. on the Closing Date or such other time and date as
the parties may mutually agree. The date, as thus determined, on
which the transactions hereunder shall be effective is referred to
herein as the "Effective Date". Immediately prior to the Closing,
Buyer shall conduct an inventory of the tangible assets. To the
extent that there are tangible assets located at sites other
than Seller's principal place of business, Seller shall provide
Buyer a certificate at Closing which sets forth the identity and
location of such assets.
1.05 Conveyance and Transfer. Seller hereby agrees that, at
the Closing, it will deliver to Buyer: the ▇▇▇▇ of Sale and
Assumption Agreement in the form agreed to by the parties (the
"▇▇▇▇ of Sale and Assumption Agreement") and all other bills of
sale, endorsements, assignments, releases and other good and
sufficient instruments of transfer, assignment and conveyance, in
form satisfactory to Buyer and its counsel, as shall be effective to
convey to Buyer good and marketable title in and to all of the
Assets. Such bills of sale and other instruments of transfer
shall contain covenants of general warranty and all other
documents required to be delivered to Buyer under the provisions
of this Agreement. Simultaneously with such deliveries, Seller will
take all steps necessary to put Buyer in actual possession of the
Assets.
1.06 Further Assurances. Seller and the
Shareholders hereby agree that, from time to time, at
Buyer's request and without further consideration,
they will execute and deliver to Buyer such other
and further instruments of conveyance, assignment and
transfer and take such other action as Buyer may
reasonably require to more effectively convey,
transfer and assign to Buyer, and to put Buyer in
possession of, the Assets.
1.07 Allocation of Sales Price. The
aggregate consideration received by Seller pursuant to
this Agreement shall be allocated as set forth below:
Fixed Assets - $100,000
Inventory - $50,000
Non-Compete - $250,000
Other intangibles
(including goodwill) - remainder of consideration
1.08 Taxes. Except for taxes owed by Buyer as a
result of its use and operation of the Assets, from and
after the Effective Date, Buyer shall have no
liability or responsibility for any income, franchise,
excise, sales, use or other taxes (other than income
taxes based upon or measured by Buyer's net income) or
charges or imposts of any kind relating to or arising
out of the transactions contemplated by this Agreement.
Seller shall be solely responsible for the payment
of sales, transfer and use taxes arising out of the
sale, transfer and assignment of the Assets.
1.09 Deliveries on Closing Date. Subject to the
terms and provisions hereof, on or before the
Closing, Seller shall deliver to Buyer the
originals of any contracts assumed by Buyer and
all other written contracts, books, records and
other data of Seller relating to the Assets or the
Business and performance of services by Seller in
connection therewith. Subject to the confidentiality
provisions of the Non-Competition and Continuity of
Business Dealings Agreement referred to in Section
4.04 hereof to the extent necessary, and for the sole
purpose of, the preparation of its tax returns, Seller
may retain copies of all such documents and data.
1.10 Books and Records. All other books and
records with respect to Seller shall be retained by
Seller and such books and records as relate to the
Assets and the Business shall be open for
inspection and copying upon reasonable notice at
any time during regular business hours for a
period of five (5) years from and after the Effective
Date. Seller agrees that all such books and records
will be kept and maintained or made available at
Seller's corporate office in Raleigh, North Carolina
or such other location as the parties may mutually
agree.
1.11 Right of First Refusal. Seller hereby
grants to Buyer a right of first refusal (the
"Right of First Refusal") to purchase any New
Invention (as hereinafter defined) during the period
beginning on the Effective Date and ending five
years thereafter. "New Inventions" shall mean medical
device inventions conceived by Seller, or which Seller
is entitled to manufacture or market, which are
unrelated to the Trac ACCESS Device. Seller shall
provide Buyer with written notice ("Seller's Notice")
of its intent to enter into any agreement or other
arrangement providing for the sale or disposition of
any New Invention. Buyer may exercise the Right of
First Refusal by notifying Seller, in writing,
within thirty days after Seller's Notice, of
Buyer's agreement to purchase such New Invention on
terms and conditions of substantially equivalent to
such agreement or arrangement.
1.12 Future Development. All rights related
to the manufacture, sale or use of any inventions
related to the Trac ACCESS Device or its
Improvements (as hereinafter defined) will be
assigned to Buyer to the extent such invention is
either conceived or acquired by Seller or its
employees or representatives during the five year
period immediately following the Closing. Seller
agrees to have its employees sign agreements which
provide that inventions conceived during the course of
their employment with Seller belong to Seller.
Seller shall retain a non-exclusive worldwide
license with respect to such inventions if, and only
to the extent, such inventions have a non-medical use.
"Improvements" of the Trac ACCESS Device means: (a)
anything that performs the same general function as
the Trac ACCESS Device or any components of the Trac
ACCESS Device, and (b) anything that, if commercialized,
would infringe upon any rights included in the Assets.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLER AND THE SHAREHOLDERS
Seller and the Shareholders jointly and
severally represent and warrant to Buyer as follows:
2.01 Organization, Power and Subsidiaries of
Seller. Seller is a corporation duly organized,
validly existing and in good standing under the
laws of the State of North Carolina. Seller has
all requisite corporate power and authority to own,
lease and operate its properties and to carry on its
business as now being conducted. Seller has been duly
qualified to do business in all states in which
the nature of its business or the character ofits
properties requires it to be so qualified. Seller
has no subsidiaries. The Shareholders are the
lawful record and beneficial owners of all of the issued
and outstanding shares of capital stock of Seller.
2.02 Authority for Agreement. The execution
and delivery of this Agreement and the performance of
the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate and other
action on the part of Seller and the Shareholders and
assuming the binding and enforceable effect thereof on
Buyer, this Agreement constitutes a valid and legally binding
obligation of Seller and the Shareholders enforceable
against them in accordance with its terms.
2.03 Brokers and Finders. Neither Seller, the
Shareholders nor any of their respective
officers, directors, agents, employees or affiliates
has employed any broker, agent or finder or incurred
any liability for any brokerage fees, agents'
commissions or finders' fees in connection with
the transactions contemplated by this Agreement.
2.04 Good Title; No Encumbrances; Condition
of the Assets. Except as set forth at Schedule 2.04,
Seller is the owner of all right, title and interest
in and to the Assets and is conveying to Buyer good
title to the Assets. Seller has good right, power
and authority to sell, convey and assign the Assets
to Buyer. Except as set forth at Schedule 2.04, none
of the Assets is subject to any mortgage, pledge,
lien, charge, security interest, encumbrance,
restriction, lease, license, easement, liability or
adverse claim of any nature whatsoever, direct or
indirect, whether accrued, absolute, contingent or
otherwise (collectively,"Liens") and except as set forth
at Schedule 2.04, Seller has the unrestricted right
to commercially use all the Assets throughout the
United States without payment or other obligation
to any third party. Upon the Closing, Buyer shall
have the exclusive right to make, use and/or sell the
Trac ACCESS Device which is specifically described
and identified at Schedule 1.01 without infringing
upon the rights of any party. All of the
operating Assets owned, leased or used by Seller are
in good operating condition and repair, ordinary wear
and tear excepted, are suitable for the purposes
used, and are adequate and sufficient for all current
operations of Seller. Except as set forth at
Schedule 2.04, to the knowledge of Seller and
the Shareholders, there have been no safety problems
or defects encountered in relation to the Trac
ACCESS Device and/or components thereof.
2.05 Assets. Set forth on Schedule 2.05 hereto
is an accurate and complete list of the following with
respect to the Business:
(a) All machinery, tools, equipment and
other tangible personal property (other than inventory
and supplies), owned or used by Seller except for
items having a value of less than $50 which do not, in
the aggregate, have a total value of more than $1,000.
(b) All patents, patent applications,
licenses, trademarks, trademark registrations, service
marks, service names, trade names, copyrights and
copyright registrations and applications for any
of the foregoing, wholly or partially owned or held
by Seller or used in the operation of the Business.
(c) All sales agency or distributorship
agreements or franchises or agreements providing for
the services of an independent contractor to which Seller
is a party or by which it is bound as of the Closing Date.
(d) All contracts, agreements, commitments
or licenses relating to patents, trademarks, trade
names, copyrights, inventions, processes, know-how,
formulae or trade secrets to which Seller is a party
or by which it is bound.
(e) All loan agreements, indentures,
mortgages, pledges, conditional sale or title
retention agreements, security agreements, equipment
obligations, guaranties, leases or lease purchase
agreements to which Seller is a party or by which it
is bound and which relate to the Business or encumber
any of the Assets.
(f) All contracts, agreements, commitments
or other understandings or arrangements concerning the
Business to which Seller is a party or by which it
or any of its property is bound or affected.
(g) All collective bargaining
agreements, employment and consulting agreements.
All of the contracts, agreements, leases,
licenses and commitments required to be listed on
Schedule 2.05 hereto (the "Agreements"), are valid and
binding, enforceable in accordance with their respective
terms, in full force and effect and, except as otherwise
specified in Schedule 2.05 hereto, validly assignable
to Buyer without the consent of any other party so that,
after the assignment thereof to Buyer pursuant hereto, Buyer
will be entitled to the full benefits thereof accruing after
Closing. Except as disclosed in Schedule 2.05 hereto, (i)
none of the Agreements has been amended, modified or altered
in any material manner, (ii) to the best of the
Shareholder's knowledge with respect to third party
defaults, there is not under any of the Agreements any
existing default and (iii) no oral or written notice of
termination or indication of an intention to terminate
has been given by any party to any of the Agreements. True and
complete copies of all of the Agreements (together with any and
all amendments thereto) have been delivered to Buyer.
2.06 Inventory. Except as set forth at Schedule 2.06, all
items of Seller's inventory and related supplies
(including raw materials, work-in-process and finished
goods) which are included in the Assets are suitable and usable
for the production or completion of products for sale in the
ordinary course of business as first quality goods at normal ▇▇▇▇-
ups, and none of such items is obsolete or below standard quality.
2.07 Intellectual Property. Except as set forth in Schedule
2.07 hereto, Seller owns or possesses all patents, patent applications,
patent rights, trade secrets, trademarks, copyrights, licenses and
service marks and other proprietary rights necessary to conduct the
Business as presently conducted by Seller (the "Intellectual
Property Rights"). The Current Embodiment does not and the
embodiment described in the patents included in the Assets, if
reduced to practice and commercialized, would not infringe upon any
intellectual property rights or other proprietary rights owned by any
other person or persons, and there is no claim or action by any such
person pending or to the knowledge of Seller threatened with respect
thereto. To the best of the Shareholders' and the Company's actual
knowledge, no other person has good title to or an interest in the
Conceptions and the Conceptions do not infringe on the intellectual
property rights of any third party. All of the trademark registrations,
copyright registrations and patents that are included in the
Assets are valid and enforceable in their entirety in all material
respects, and Seller and the Shareholders are aware of no prior art
more pertinent to the validity of such patents than has already been
disclosed in the prosecution of such patents.
2.08 Litigation. Except as set forth on Schedule 2.08 hereto,
there is no (a) claim, suit, action, arbitration, proceeding,
governmental investigation or other legal or administrative proceeding
(collectively, "Claims") in progress, pending or to the knowledge
of Seller or the Shareholders threatened against or relating to
Seller, the Shareholders or the Business or the transactions
contemplated by this Agreement, nor is there any basis for any such
Claims known to Seller or the Shareholders including, without
limitation, Claims relating to safety problems or defects in
connection with the Trac ACCESS Device and/or components thereof
or (b) order, decree or ruling of any court or administrative
agency to which Seller, the Shareholders or any of their affiliates
is a party or bound, which matters identified at (a) and (b) could
adversely affect Seller, the Business, the Assets or the performance of
the obligations of Seller or the Shareholders hereunder and Seller is
not in default in respect of any such order, decree or ruling.
2.09 No Conflict with Other Instruments. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated will not (a) constitute a default
under, conflict with, result in a right to accelerate, loss of rights
under or a breach of any of the terms, conditions or provisions of,
Seller's organizational documents or any agreement or instrument to
which Seller or any of the Shareholders is now a party, (b) result
in the creation or imposition of any Lien upon the Assets or the
Business or (c) result in the violation of any applicable law,
ordinance, regulation, permit, authorization, decree or order of
any court or other government agency.
2.10 Compliance with Applicable Laws. The
Business has been, and until the Effective Date will
be, conducted in material compliance with all
applicable laws, common law doctrine, ordinances,
regulations, permits, authorizations, decrees and
orders (collectively "laws and regulations"),
including laws and regulations concerning the
environment, occupational health and safety and the
marketing of medical devices, the noncompliance with
which will have a material adverse effect on the
Business or the Assets. Seller has all licenses,
permits, orders, approvals or other authorizations
of governmental, regulatory or administrative agencies
or authorities required to conduct the Business and own
and operate the Assets (the "Permits"), the absence of
which would have a material adverse effect on the Business
or the Assets.
2.11 Insurance. Set forth on Schedule 2.11
hereto is an accurate and complete list of all liability and
other insurance policies insuring Seller or its
properties or interests therein, specifying with
respect to each such policy the name of the
insurer, the risk insured against, the limits of
coverage, the deductible amount (if any), the premium
rate and the date through which coverage will
continue by virtue of premiums already paid. Seller
and the Shareholders have obtained and maintained in
full force and effect insurance to protect them and
the Business against the types of liabilities
customarily insured against by persons in
connection with the operation of similar
practices, and all premiums due on such policies
have been paid. All of such policies are
"occurrence" policies and are not "claims made"
policies.
2.12 Consents. Except as disclosed at
Schedule 2.12, there are no (a) consents or
approvals of any public body or authority, (b)
filings with any public body or authority or (c)
consents or waivers from other parties to the
Agreements or other instruments, that are required
for the lawful consummation of the transactions
contemplated hereby or necessary in order that
the Business can be conducted by Buyer in the same
manner after the Closing as heretofore conducted by Seller.
2.13 Undisclosed Liabilities. Seller does not
have any liability or obligations whether known or
unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or
unliquidated, due or to become due, and ▇▇▇▇▇▇ or
inchoate ("Liabilities") individually or in the
aggregate in excess of $10,000 (including,
without limitation, liabilities or obligations
arising out of claims based on products liability),
and, to the best of the Shareholder's knowledge,
there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against Seller giving rise
to any such liabilities or obligations, except as
set forth in Schedule 2.13 hereto.
2.14 Absence of Changes or Events. Except as set
forth in Schedule 2.14 hereto, since May 1, 1996,
Seller has conducted the Business only in the
ordinary course of business, and Seller has not:
(a) incurred any Liabilities which
individually or in the aggregate have had or might
have a material adverse effect on the Assets or the
Business;
(b) pledged or subjected to any Lien any
of the Assets, other than liens arising by operation
of law to secure payment of ad valorem or personal
property taxes or securing credit facilities which
will not encumber the Assets after Closing;
(c) sold, transferred, leased to
others or otherwise disposed of any of the Assets,
except in the ordinary course of the business of
Seller;
(d) received any notice of termination
of any contract, lease or other agreement, or suffered
any damage, destruction or loss that, individually or
in the aggregate, has had or might have a material
adverse effect on the Assets or the Business;
(e) suffered any event or events,
whether individually or in the aggregate, that has had
or could be reasonably expected by Seller to have
a material adverse effect on the Assets or the Business;
(f) entered into any agreement or
made any commitment to take any of the actions
described in Subsections (a) through (e) inclusive
of this Section 2.14.
2.15 Taxes. All taxes that relate to, arise out of or
impact upon the Business or the Assets, including, without
limitation, income, property, sales, use, franchise, added
value, employees' income withholding, unemployment disability
and social security taxes, imposed by the United States or
by any foreign country or by any state, municipality,
subdivision or instrumentality of the United States or of
any foreign country, or by any other taxing authority
(collectively, "Taxes"), which are due or payable by Seller
and all interest and penalties thereon, whether
disputed or not, have been timely paid in full, all tax returns
required to be filed in connection therewith have been accurately
prepared in all material respects and duly and timely filed, all
deposits required by law to be made by Seller with respect to
employees' income withholding and other taxes have been duly made
and in the case of Taxes for which payment is not yet required, such
Taxes have been adequately accrued for on the Financial
Statements of Seller. Buyer will not after the Closing owe to any
person or entity or be liable for, directly or indirectly, any
Taxes imposed on Seller or the Shareholders. There are no liens
for Taxes (other than for current Taxes not yet due and payable)
upon the Assets.
2.16 Labor and Employment Contracts. Seller has not
(a) been a party to a collective bargaining agreement, (b) had any
organization certified as a bargaining agent on behalf of all or
any portion of Seller's employees, (c) received a demand for
recognition from any union or other organization, (d) had any
attempt made to organize any of Seller's employees, (e) encountered
any labor union organizing activity or (f) encountered any actual
or threatened employee strikes, work stoppages, jurisdictional
disputes, slow-downs or lock-outs. Seller has provided Buyer
a written list of all agreements and understandings, whether written
or oral, between Seller and any of its officers, employees or agents
that contain a non-competition or confidentiality agreement and/or
covenant or any other terms of employment.
2.17 Books and Records. All of the books and records
of Seller are complete and correct in all material respects and have
been adequately maintained in accordance with good business practice
and there have been no transactions involving the Business which
are required to have been set forth therein and which have not
been accurately so set forth.
2.18 Disclosures to Third Parties. Except as set
forth on Schedule 2.18 hereto, neither Seller, the Shareholders nor
any of their respective brokers, representatives, accountants,
attorneys or agents has disclosed any confidential customerlists,
contract terms, pricing information, margin information, trade secrets
or other confidential information to any other person or other entity.
2.19 Disclosure. No representation or warranty made by Seller
or the Shareholders contained in this Agreement nor any exhibit,
schedule, statement or certificate furnished or to be furnished by
Seller or the Shareholders to Buyer or its representatives pursuant
hereto, contains or will contain on the Closing Date any untrue
statement of a material fact, or omits or will omit on the
Closing Date to state any material fact required to make the
statements herein or therein contained not misleading. The
representations and warranties contained in this Article 2 or
elsewhere in this Agreement or any document delivered pursuant
hereto shall not be affected or deemed waived by reason of the fact
that Buyer and/or its representatives knew or should have known
that any such representation or warranty is or might be inaccurate
in any respect provided, however, that Buyer shall inform Seller
at or prior to Closing with respect to any information it has
uncovered in its due diligence which indicates that a representation
or warranty in this Agreement is inaccurate. In the event such breaches
could result in a claim by Buyer for indemnification in excess of
$18,500, Seller's sole remedy shall be to elect not to close the
transaction.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and the
Shareholders as follows:
3.01 Organization; Valid Authorization; Good Standing. Buyer is
a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. Buyer has
all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate and other action on the part of Buyer,
and this Agreement constitutes a valid and legally binding
obligation of Buyer enforceable against it in accordance
with its terms.
3.02 Compliance. The execution and delivery ofthis Agreement
and the consummation of the transactions contemplated hereby by Buyer
will not (a) violate any provision of its charter or bylaws, (b)
violate any material provision of or result in the breach of or entitle
any party to accelerate (whether after the giving of notice or lapse of
time or both) any material obligation under, any mortgage, lien, lease,
contract, license, instrument or any other agreement to which Buyer is
a party, (c) result in the creation or imposition of any material lien,
charge, pledge, security interest or other encumbrance upon any
property of Buyer or (d) violate or conflict with any order, award,
judgment or decree or other material restriction or any law, ordinance
or regulation to which Buyer or its property is subject.
3.03 Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
governmental authority or other person not yet obtained is required
in connection with the execution and delivery of this Agreement by
Buyer or the consummation by Buyer of the transactions contemplated
hereby.
3.04 Brokers. Neither Buyer nor any of its officers, directors,
agents, employees or affiliates has employed any broker, agent or
finder or incurred any liability for any brokerage fees, agents'
commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
3.05 Disclosure. No representation or warranty
made by Buyer contained in this Agreement nor any exhibit, schedule,
statement or certificate furnished or to be furnished by Buyer to
Seller or its representatives in connection herewith or pursuant
hereto, contains or will contain on the Closing Date any untrue
statement of a material fact, or omits or will omit on the Closing
Date to state any material fact required to make the statements
herein or therein contained not misleading. The representations and
warranties contained in this Article 3 or elsewhere in this Agreement
or any document delivered pursuant hereto shall not be affected or deemed
waived by reason of the fact that Seller and/or its representatives knew
or should have known that any such representation or warranty is or
might be inaccurate in any respect.
ARTICLE 4
COVENANTS OF SELLER AND
THE SHAREHOLDERS
4.01 Conduct Prior to Effective Date. Unless
otherwise expressly consented to in writing by Buyer,
from and after the date of this Agreement through the
Effective Date, Seller agrees to (and the Shareholders
agree, jointly and severally, to cause Seller to):
(a) carry on the Business in the ordinary
and usual course as has been conducted since January 1,
1995;
(b) keep and preserve the Assets in
good condition and repair, ordinary wear and tear
excepted;
(c) maintain in full force and effect
insurance comparable in amount and in scope of the
current policies listed on Schedule 2.11 hereto;
(d) to the extent within the control of
Seller, maintain in full force and effect in accordance
with the terms thereof, perform all of its obligations
under and not change any of the material terms under, the
contracts to be assumed by Buyer and all other
agreements, leases and other commitments relating to or
affecting the Assets or the Business;
(e) comply in all material respects with
and perform in all material respects, all obligations and
duties imposed upon it by all federal and state laws and
all rules, regulations and orders imposed by federal
or state governmental authorities;
(f) not dispose of or encumber any of the Assets;
(g) not change its certificate of
incorporation or bylaws or merge or consolidate or
obligate itself to do so with or into any other entity;
and
(h) cause Buyer, its counsel, accountants
and other representatives, to have full access, during
normal business hours, to the properties, books and
records of Seller and will furnish to Buyer and its
representatives during such period all such information
concerning the Assets and the Business as Buyer or its
representatives may reasonably request.
4.02 Use of Names. Seller and the Shareholders agree,
jointly and severally, that they shall not for a period
of ten years from and after the Effective Date, use or
grant any rights to any individual, corporation,
partnership or other entity to use, or otherwise consent
to the use of, any name or ▇▇▇▇ that is deceptively
similar to any of the service marks, trademarks or
trade names of Seller included within the Assets conveyed
hereunder, as a name, trade name, service ▇▇▇▇, trademark
or otherwise. Seller shall have the right to use
tradenames or trademarks owned by Buyer only to the
extent that it is specifically granted the right to do
so under the Distribution and Services Agreement.
Seller shall retain and use its corporate name.
4.03 Advice of Change. Seller and the Shareholders
shall advise Buyer in writing prior to the Effective Date
of any material adverse change in the Business, or
the occurrence of any event which involves any
substantial possibility of any material adverse change in
the Assets, in the condition, financial or otherwise, of
the Business or the Assets or in any of the information
contained in the representations and warranties made in
Article 2 or elsewhere in this Agreement or the schedules
or exhibits hereto that has occurred since the date of this
Agreement.
4.04 Non-Competition and Continuity of
Business Dealings Agreement. In consideration for the
purchase of the Assets hereunder and other good
and valuable consideration, at the Closing, Seller
and the Shareholders shall each execute and
deliver the Non-Competition and Continuity of
Business Dealings Agreement in the form agreed to by
the parties.
4.05 ▇▇▇▇ of Sale and Assumption Agreement. At the
Closing, Seller shall execute and deliver the ▇▇▇▇ of
Sale and Assumption Agreement in the form agreed
to by the parties (the "▇▇▇▇ of Sale and Assumption
Agreement").
4.06 Royalty Agreement. At the Closing, Seller shall
execute and deliver the Royalty Agreement in the form
agreed to by the parties (the "Royalty Agreement").
4.07 Distribution and Services Agreement. At the
Closing, Seller shall execute and deliver the
Distribution and Services Agreement in the form
agreed to by the parties (the "Distribution and
Services Agreement").
4.08 Injunctive Relief. Since Buyer will
be irreparably damaged if the provisions of Section 4.02
are not specifically enforced, Buyer shall be entitled
to an injunction restraining any violation of such
section by Seller or the Shareholders, or any other
appropriate decree of specific performance. Such remedies
shall not be exclusive, shall not be construed to limit the
right for injunctive relief under any other provision of
this Agreement and shall be in addition to any
other remedies which Buyer may have.
4.09 Cooperation. Subject to the terms and conditions
herein provided, Seller and the Shareholders will
each use their best efforts to take, or cause to
be taken, such action, to execute and deliver, or
cause to be executed and delivered, such additional documents
and instruments and to do, or cause to be done, all things
necessary, proper or advisable under the provisions
of this Agreement and under applicable law, to
consummate and make effective all of the transactions
contemplated by this Agreement.
ARTICLE 5
COVENANTS OF BUYER
Buyer covenants and agrees with Seller and
Shareholders as follows:
5.01 Cooperation. Subject to the terms and
conditions herein provided, Buyer will use its best
efforts to take, or cause to be taken, such action, to
execute and deliver, or cause to be executed and delivered,
such additional documents and instruments and to do, or
cause to be done, all things necessary, proper or advisable
under the provisions of this Agreement and under applicable
law to consummate and make effective all of the transactions
contemplated by this Agreement.
5.02 Distribution and Services Agreement. At
the Closing, Buyer shall execute and deliver the Distribution and
Services Agreement.
5.03 Royalty Agreement. At the Closing, Buyer
shall execute and deliver the Royalty Agreement.
5.04 ▇▇▇▇ of Sale and Assumption Agreement. At
the Closing, Buyer shall execute and deliver the ▇▇▇▇ of Sale and
Assumption Agreement.
5.05 Marketing and Distribution. Buyer agrees
that it will use its best efforts to market and
distribute the Trac ACCESS Device in a commercially reasonable manner.
Buyer's obligation under this Section 5.05 is subject to the ongoing
commercial viability and profitability of the Trac ACCESS Device.
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF SELLER
AND THE SHAREHOLDERS
All obligations of Seller and the Shareholders to be discharged
under this Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions, unless waived in writing
by Seller and the Shareholders at any time prior to or at the Closing:
6.01 Representations and Warranties of Buyer. All of the
representations and warranties of Buyer contained in this Agreement
shall be true as of the date of this Agreement in all material
respects. All such representations and warranties shall be deemed to have
been made again as of the Closing Date, and shall be true in all
material respects as of the time of the Closing.
6.02 Covenants and Agreements of Buyer. Buyer shall have
caused all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at
the Closing to be so performed or complied with.
6.03 Distribution and Services Agreement. Buyer shall have
executed and delivered the Distribution and Services Agreement.
6.04 Royalty Agreement. Buyer shall have
executed and delivered the Royalty Agreement.
6.05 Opinion of Counsel. ▇▇▇ & ▇▇▇▇▇
Incorporated, counsel for Buyer shall have delivered
to Seller an opinion, dated the Closing Date, in
the form agreed to by the parties.
6.06 ▇▇▇▇ of Sale and Assumption Agreement.
At the Closing, Seller shall execute and deliver the
▇▇▇▇ of Sale and Assumption Agreement.
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF BUYER
All obligations of Buyer to be discharged under
this Agreement at the Closing are subject to the
fulfillment, prior to or at the Closing, of each
of the following conditions, unless expressly waived
in writing by Buyer at any time prior to or at the
Closing:
7.01 Representations and Warranties of Seller
and the Shareholders. All of the representations and
warranties of Seller and the Shareholders
contained in this Agreement shall be true as of
the date of this Agreement in all material
respects. All of such representations and warranties
shall be deemed to have been made again as of the
Closing Date, and shall be true in all material
respects as of the time of the Closing.
7.02 Covenants and Agreements of Seller and
the Shareholders. Seller and the Shareholders shall
have caused all covenants, agreements and conditions
required by this Agreement to be performed or
complied with by them prior to or at the Closing to
be so performed or complied with.
7.03 Consents. All of the consents necessary
or advisable to transfer the Assets to Buyer and for
Buyer to operate the Business from and after the
Effective Date in the manner owned and operated by
Seller shall have been secured in form reasonably
satisfactory to Buyer.
7.04 Opinion of Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., counsel for Seller and
the Shareholders, shall have delivered to Buyer an
opinion, dated the Closing Date, in the form agreed to
by the parties.
7.05 No Material Adverse Changes. There shall
not have been any material adverse changes to the
Assets or the Business after the date hereof prior to the
Closing.
7.06 Releases. All of the liens, charges,
security interests and encumbrances outstanding on any
of the Assets shall have been terminated and
released prior to or at the Closing.
7.07 Agreements. Seller and the Shareholders shall
have each executed and delivered a Non-
Competition and Continuity of Business Dealings
Agreement, and Seller shall have executed and delivered
the ▇▇▇▇ of Sale and Assumption Agreement, the Royalty
Agreement and the Distribution and Services Agreement.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
8.01 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements
made by Seller and the Shareholders hereunder, except as
they may be fully performed prior to or at the Closing,
shall survive Closing and shall thereafter terminate
and expire on April 30, 1998 and shall be fully
enforceable by Buyer, its successors and assigns,
at law or in equity, against the Shareholders and
Seller, their successors and assigns; provided,
however, that the representations, warranties,
covenants and agreements made in Sections 2.04 (with
respect to title matters), 2.07 (with respect to non
infringement of third party intellectual property
rights and the validity and enforceability of the
patents included in the Assets), 2.08, 2.10, 2.13 and
2.15 shall survive until the expiration of the
applicable statute of limitations (except in respect
to covenants to be performed after Closing which
shall survive in accordance with the terms thereof).
All of the representations, warranties, covenants and
agreements made by Buyer hereunder, except as they
may be fully performed prior to or at the Closing,
shall survive Closing and shall thereafter terminate
and expire on April 30, 1998 except in respect to
covenants to be performed after Closing which shall
survive in accordance with the terms thereof and shall
be fully enforceable by the Shareholders and Seller,
their respective successors and assigns, at law or
in equity, against Buyer and its successors and
assigns. Any representation, warranty, covenant or
agreement scheduled to expire pursuant to this Section
8.01 shall not expire with respect to any claim received
by Seller or the Shareholders prior to the scheduled
expiration date.
8.02 Indemnification by Seller and the
Shareholders. Seller and the Shareholders, jointly and
severally, agree to indemnify and hold Buyer
harmless from all liabilities, damages, losses,
costs, reasonable attorneys' fees and other expenses
(collectively, "Losses") resulting from, arising out
of or incurred with respect to, the falsity of
any representation or the breach of any warranty or
covenant made by Seller or the Shareholders herein
or in accordance herewith or in enforcing any
agreement or indemnity hereunder; provided,
however, that Seller and the Shareholders shall be
obligated to indemnify Buyer only to the extent that
Buyer's Losses exceed $18,500 in the aggregate. Seller
and the Shareholders shall not be required to indemnify
Buyer for amounts in excess of the aggregate of the
payments actually made to Seller under Sections 1.02(a),
(b) and (c) provided, however, that, if Buyer is
entitled to indemnification in excess of the
amounts paid as of a particular date, Buyer may
elect to utilize the Right of Offset provided for
in Section 8.05 with respect to payments to be made
after that date. Except as expressly provided in
Section 1.03, Buyer has not assumed, or agreed to
assume, any liabilities or obligations of any
kind or nature whatsoever of Seller, whether
direct, contingent or otherwise. In connection
therewith, Seller and the Shareholders agree, jointly
and severally, to indemnify and hold Buyer harmless
from all Losses resulting from or arising out of or
incurred in connection with any actual or alleged
liability or obligation of Seller or the
Shareholders not expressly assumed by Buyer.
8.03 Indemnification by Buyer. Buyer agrees
to indemnify and hold Seller and the Shareholders harmless
from all Losses resulting from, arising out of or
incurred with respect to, the falsity of any
representation or the breach of any warranty or
covenant made by Buyer herein or in accordance herewith
or in enforcing any agreement or indemnity hereunder.
Buyer agrees to indemnify and hold Seller and the
Shareholders harmless from all Losses resulting from,
arising out of or incurred in connection with, the Assumed
Liabilities and the operation of the Business after
the Effective Date.
8.04 Notice of Claim. The party
seeking indemnification (the "Indemnified Party")
shall give notice to the party obligated to
indemnify and hold the other harmless (the
"Indemnifying Party") of an event giving rise to the
obligation to indemnify, allow the Indemnifying Party
to assume and conduct the defense of the claim or
action and cooperate with the Indemnifying Party
in the defense thereof. If the Indemnifying Party
wrongfully refuses to assume the defense of the
Indemnified Party, the Indemnifying Party shall
be responsible for all legal and other expenses
incurred by the Indemnified Party in connection
with the investigation or defense of such
claim or action including, without limitation,
expenses incurred in enforcing such obligation to
indemnify.
8.05 Offset. In the event Buyer shall be entitled (a)
to indemnification pursuant to this Article 8 or
(b) any other payments or claims from or against
Seller and/or the Shareholders, Buyer shall have
the right to offset the amount of such claim, debt
or obligation against the amounts owed by Buyer to
Seller pursuant to the provisions of Section 1.02
hereto (the "Right of Offset"). In the event it is
later determined that Buyer is not entitled to a
recovery for the amount offset, Buyer shall repay to
Seller the amount improperly offset plus accrued
interest on such amount at the rate of 10% per annum
from the date that payment would have been due had
such amount not been improperly offset. The Right
of Offset shall in no way limit or impair any other
remedies available to Buyer. Buyer shall not enforce
the Right of Offset unless it has received an opinion
from ▇▇▇ & ▇▇▇▇▇ Incorporated (and delivered a copy
thereof to Seller) that it has the legal right under
this Agreement to effect the Right of Offset. The failure
of Buyer to exercise its Right of Offset shall not affect
its right to indemnification hereunder. To the extent that
the event giving rise to the Right of Offset is curable,
Buyer shall give Seller notice of the event and a
thirty day opportunity to cure, provided, however,
that Buyer need not give such notice prior to
exercising its Right of Offset.
ARTICLE 9
GENERAL
9.01 Notices, Etc. All notices, requests,demands and
other communications hereunder shall be in writing
and, unless otherwise provided herein, shall be deemed
to have been duly given upon delivery in person, by telecopy,
by overnight courier or by certified or registered mail,
return receipt requested, as follows:
If to Seller or any Trac Medical, Inc.
of the sharholders: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
President
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, L.L.P.
Two Hannover Square, Suite 1900
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
If to Buyer: KCI Therapeutic Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇,
General Counsel
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
or at such other address as shall have been furnished to
the other in writing in accordance herewith, except
that such notice of such change shall be effective only
upon receipt.
9.02 Amendments and Waiver. This Agreement may
be amended or modified by, and only by, a written
instrument executed by all the parties hereto. The
terms of this Agreement may be waived by, and
only by, a written instrument executed by the party
against whom such waiver is sought to be enforced.
9.03 Expenses. Except as otherwise expressly
herein provided, each party to this Agreement shall
pay its own expenses (including, without limitation,
the fees and expenses of such party's counsel
incidental to the preparation of and/or consummation
of this Agreement).
9.04 Section and Other Headings. The section and
other headings contained in this Agreement are for
convenience of reference only and shall not in any way
affect the meaning or interpretation of this Agreement.
9.05 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one
and the same
instrument.
9.06 Parties in Interest. This Agreement shall inure
to the benefit of and be binding upon parties
hereto, and their respective successors and assigns.
This Agreement shall not be assigned by any party
hereto without the written consent of the other parties,
except as otherwise expressly permitted herein.
9.07 No Implied Rights or Remedies. Except as
otherwise expressly provided herein, nothing herein
expressed or implied is intended or shall be construed
to confer upon or to give any person, firm, or
corporation, other than the parties hereto and
their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
9.08 Exhibits and Schedules. All exhibits and
schedules referred to herein and attached hereto
are incorporated herein for all purposes.
9.09 Entire Agreement. This Agreement, together with
all exhibits and schedules hereto, embodies the
entire agreement and understanding between the
parties hereto relating to the subject matter hereof
and supersedes any prior agreements and understandings
relating to the subject matter hereof.
9.10 Legal Invalidity. If any part or provision of
this Agreement is or shall be deemed violative of
any applicable laws, rules or regulations, such legal
invalidity shall not void the Agreement or affect the
remaining terms and provisions of this Agreement, and
the Agreement shall be construed and interpreted to
comport with all such laws, rules or regulations to
the maximum extent possible.
9.11 Applicable Law. This Agreement and the rights
and obligations of the parties hereto shall be
construed under and governed by internal laws, and not
the law of conflicts, of the State of Texas.
9.12 Enforcement; Venue; Service of Process. In the
event either party shall seek enforcement of any
covenant, warranty or other term or provision of this
agreement, the party which prevails in such
enforcement proceedings shall be entitled to recover
reasonable attorneys' fees actually incurred by it in
connection therewith. The parties hereto agree that
this Agreement is performable in Bexar County, Texas.
The parties hereto agree that the service of process or
any other papers upon them or any of them by registered
mail at their respective addresses where notices are to
be sent pursuant to this Article 9 hereto shall be
deemed good, proper and effective service upon them.
9.13 Arbitration.
(a) The parties hereto agree that all
disputes, controversies or claims that may arise among
them (including their agents and employees) including,
without limitation, any dispute, controversy or
claim arising out of this Agreement, the Distribution
Services Agreement or the Royalty Agreement, or the
breach, termination or invalidity thereof, shall be
submitted to, and determined by, binding arbitration.
Such arbitration shall be conducted pursuant to the
Commercial Arbitration Rules (the "Rules") then in
effect of the American Arbitration Association, except to
the extent such rules are inconsistent with this
Section 9.13. If the arbitration controversy in the
arbitration exceeds $200,000, exclusive of interest,
attorneys' fees and costs, the arbitration shall be
conducted by a panel of three (3) neutral arbitrators.
Otherwise, the arbitration shall be conducted by a
single neutral arbitrator. The arbitrator(s) shall
be selected pursuant to the Rules. Exclusive venue
for such arbitration shall be in San Antonio, Bexar
County, Texas. The arbitrator(s) shall apply the internal
laws of the State of Texas (without regard to conflict of law
rules) in determining the substance of the dispute,
controversy or claim and shall decide the same in
accordance with applicable usages and terms of
trade. Evidentiary questions shall be governed by the
Federal Rules of Evidence. The arbitrator's award shall
be in writing and shall set forth the findings and
conclusions upon which the arbitrator(s) based the
award. The prevailing party in any such arbitration
shall be entitled to recover its reasonable attorneys'
fees, costs and expenses incurred in connection with the
arbitration. Any award pursuant to such arbitration
shall be final and binding upon the parties, and judgment
on the award may be entered in any federal or state court
sitting or located in Bexar County, Texas, or in any other
court having jurisdiction. The provisions of this Section
9.13 shall survive the termination of this Agreement.
(b) The arbitration shall commence within
thirty (30) days after the arbitrator(s) is selected in
accordance with the provisions of this Section 9.l3. In
fulfilling his or her duties, the arbitrator(s) may
consider such matters as, in the opinion of the
arbitrator(s), are necessary or helpful to render an
appropriate decision. All discovery shall be
expedited, consistent with the nature and
complexity of the claim or dispute and consistent with
the nature and complexity of the claim or dispute and
consistent with fairness and justice. The arbitrator(s)
shall have the power to compel any party to comply with
discovery requests of the other parties and to issue
binding orders relating to any discovery dispute which
shall be enforceable in the same manner as awards.
The arbitrator(s) also shall have the power to impose
sanctions for abuse or frustration of the arbitration
process, including without limitation, the refusal
to comply with orders of the arbitrator(s) relating to
discovery and compliance with subpoenas.
(c) Without limiting the enforceability or
scope of this Section 9.13, the parties to this
Agreement agree that if a controversy or claim between
them arises out of or relates to this Agreement and
results in litigation, the courts of Bexar County,
Texas or the courts of the United States of America
located in Bexar County, Texas shall have jurisdiction
to hear and decide such matter, and such parties
hereby submit to jurisdiction of such courts.
IN WITNESS WHEREOF, the undersigned have duly
executed this Agreement as of the date and year first
above written.
KCI THERAPEUTIC SERVICES, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
___________________________
Title: Vice President
________________________
TRAC MEDICAL, INC.
By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________
Title: President
________________________
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Individually
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇▇▇▇▇▇, Individually
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Individually
SCHEDULE 1.01
The Current Embodiment of the Trac Access Device
is described in the Trac Medical ACCESS Environmental
Control System Manual which is attached hereto and made
a part hereof. Buyer acknowledges that the actual embodiment
of the Trac Access Device may differ slightly from the
descriptions contained in the Manual. The transfer of
the Current Embodiment includes the transfer of all
technology developed in connection with the Current
Embodiment.
The technology being transferred with the Trac
Access Device includes the Infrared Technology.
The following are not included within the
definition of Assets:
1. Bed Exit Sensor Technology
2. Orthotrac
3. Physiotrac
4. ▇▇▇▇▇▇▇▇▇
▇. The Names "Trac" and "Trac Medical, Inc."
6. Surgical Staple Location Technology
7. Accounts Receivable
8. Investments
9. Cash
10. Cash Equivalents
