AGREEMENT REGARDING FORECLOSURE
BY AND AMONG
ZNETIX ACQUISITION, L.P.
AND
XXXXXX HEALTHCARE, INC.
MARCH 30, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS................................................ 1
SECTION 1.1. ACCOUNTING TERMS........................................... 1
SECTION 1.2. DEFINED TERMS.............................................. 1
ARTICLE II. PURCHASE, SALE AND DELIVERY................................ 2
SECTION 2.1. FORECLOSURE ASSETS......................................... 2
SECTION 2.2. EXCLUDED ASSETS............................................ 3
SECTION 2.3. PURCHASE PRICE............................................. 4
SECTION 2.4. CLOSING.................................................... 4
SECTION 2.5. CLOSING DELIVERIES......................................... 4
SECTION 2.6. PRORATIONS................................................. 5
SECTION 2.7. ASSIGNMENT OF CONTRACTS AND RIGHTS......................... 5
ARTICLE III. LIABILITIES AND OBLIGATIONS................................ 6
SECTION 3.1. LIABILITIES NOT ASSUMED BY PURCHASER....................... 6
SECTION 3.2. ASSUMED LIABILITIES........................................ 7
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER................ 7
SECTION 4.1. ORGANIZATION AND QUALIFICATION............................. 7
SECTION 4.2. AUTHORITY; NON-CONTRAVENTION; APPROVALS.................... 8
SECTION 4.3. BROKERS AND FINDERS........................................ 8
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF XXXXXX................... 9
SECTION 5.1. ORGANIZATION AND QUALIFICATION............................. 9
SECTION 5.2. AUTHORITY; NON-CONTRAVENTION; APPROVALS.................... 9
SECTION 5.3. LITIGATION................................................. 9
SECTION 5.4. NO VIOLATION OF LAW........................................ 10
SECTION 5.5. TITLE TO ASSETS............................................ 10
SECTION 5.6. BROKERS AND FINDERS........................................ 10
SECTION 5.7. INTELLECTUAL PROPERTY...................................... 10
ARTICLE VI. CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES....... 11
SECTION 6.1. CONFIDENTIALITY............................................ 11
SECTION 6.2. EMPLOYEES.................................................. 11
SECTION 6.3. TAXES...................................................... 13
SECTION 6.4. FURTHER ASSURANCES......................................... 13
SECTION 6.5. EXPENSES AND FEES.......................................... 13
SECTION 6.6. AGREEMENT TO COOPERATE..................................... 14
SECTION 6.7. RECORDS.................................................... 14
SECTION 6.8. ACCOUNTS RECEIVABLE........................................ 14
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PAGE
SECTION 6.9. DELIVERY OF ASSETS......................................... 14
ARTICLE VII. COVENANT NOT TO COMPETE.................................... 14
SECTION 7.1. NON-COMPETE; NON-SOLICITATION.............................. 14
ARTICLE VIII. GENERAL PROVISIONS......................................... 16
SECTION 8.1. SURVIVAL................................................... 16
SECTION 8.2. NOTICES.................................................... 16
SECTION 8.3. INTERPRETATION............................................. 17
SECTION 8.4. MISCELLANEOUS.............................................. 17
SECTION 8.5. GOVERNING LAW.............................................. 17
SECTION 8.6. AMENDMENT.................................................. 17
SECTION 8.7. COUNTERPARTS............................................... 17
SECTION 8.8. PARTIES-IN-INTEREST........................................ 17
SECTION 8.9. VALIDITY................................................... 17
EXHIBITS
Exhibit A Glossary
Exhibit B List of Foreclosure Assets
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT REGARDING FORECLOSURE, dated as of March 30, 2001 (the
"AGREEMENT"), is by and among ZNETIX ACQUISITION, L.P., a Texas limited
partnership ("PURCHASER"), and XXXXXX HEALTHCARE, INC., a Texas corporation
("XXXXXX"). Purchaser and Xxxxxx are each a "PARTY" and, collectively, they are
sometimes referred to as the "PARTIES."
W I T N E S S E T H:
WHEREAS, Purchaser desires to acquire all of Xxxxxx'x right, title and
interest in, other than the Excluded Assets (as defined below), (i) the business
of manufacturing and selling HydraFitness and CYBEX and other products,
including, without limitation, the Upper Body Ergometer ("UBE"), Uppercycle,
Fitron, Kinetron, Norm, Fluidotherapy, Medigel, Tru-Trac and HydraFitness lines
of medical rehabilitation and physical fitness equipment, attachments thereto
and testing instruments, (ii) all inventories of HydraFitness, CYBEX and other
Xxxxxx goods and parts, subassemblies and raw materials used to manufacture
those goods; and (iii) the intellectual property rights associated with any of
the foregoing (collectively, the "BUSINESS").
WHEREAS, Comerica Bank - Texas, a Texas Banking Association ("COMERICA")
has acquired the Foreclosure Assets (as defined below) through a foreclosure
sale under Texas law, which Foreclosure Assets Purchaser shall purchase from
Comerica contemporaneously with the closing of the transactions contemplated by
this Agreement; and
WHEREAS, Xxxxxx is making certain representations and warranties herein as
an inducement to Purchaser to purchase the Foreclosure Assets and thereby reduce
Xxxxxx'x indebtedness to Comerica.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements stated herein, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
covenant and agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
SECTION 1.2. DEFINED TERMS. As used in this Agreement, certain words and
terms have the meanings ascribed to them in the Glossary attached hereto as
EXHIBIT A. Other capitalized terms have the meanings ascribed to them elsewhere
in this Agreement.
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ARTICLE II.
PURCHASE AND DELIVERY OF FORECLOSURE ASSETS
SECTION 2.1. FORECLOSURE ASSETS. Subject to the terms and conditions of a
Xxxx of Sale between the Purchaser and Comerica, at the Closing (as hereinafter
defined), Purchaser shall acquire and purchase from Comerica certain assets in
which Comerica has a security interest, including, without limitation, the
assets set forth on EXHIBIT B hereto, as well as the following:
(a) all machinery, equipment (including manufacturing equipment),
tools and personal property located at Xxxxxx'x Sugar Land facility (including
the equipment, furniture and fixtures located at Xxxxxx'x Sugar Land facility)
(collectively referred to herein as the "EQUIPMENT");
(b) all furniture and fixtures located at Xxxxxx'x facilities in
Belton, Texas (collectively referred to herein as the "FURNITURE AND FIXTURES");
(c) all inventories of CYBEX, HydraFitness and other Xxxxxx products,
wherever located, and including any parts, subassemblies or raw materials that
are used to manufacture the products sold in the Business, that are owned by
Xxxxxx and used in the Business (the "INVENTORIES");
(d) all rights under backorders for Cybex, HydraFitness and other
Xxxxxx products and the right to receive all payments in connection therewith,
excluding any order with respect to Enraf-Nonius, B.V. (the "BACKORDERS");
(e) all of Xxxxxx'x rights, title and interest in intellectual
property associated with the HydraFitness, CYBEX and other Xxxxxx product lines
(collectively referred to herein as the "INTELLECTUAL PROPERTY"), including, but
not limited to:
(i) all United States and foreign patents, trademarks, trade
names, labels and other trade rights, trademark and trade name
registrations, and copyrights and copyright registrations, unexpired as of
the date hereof, all United States and foreign applications pending for any
of the above, all of the foregoing owned in whole or in part by Xxxxxx and
used in the Business ,
(ii) all trade secrets, technical information, data, formulae,
blueprints, drawings, computer servers, computer hardware and software
(except for the QAD management information system software), proprietary
know- how, manufacturing procedures, processes and the like, all of the
foregoing owned by Xxxxxx and used in Xxxxxx'x Business as now conducted,
(iii) the Computer-Assisted Design drawings and schematics for
the CYBEX, HydraFitness and other Xxxxxx product lines, to the extent in
Xxxxxx'x possession (the "HYDRAFITNESS SCHEMATICS"), and
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(iv) all of Xxxxxx'x data used or held for use in connection with
the Business, including, without limitation, Xxxxxx'x isokinetic normative
database (collectively, the "DATA");
(f) all fixtures, tooling, and drawings pertaining to the manufacture
of the hydraulic fitness line for children currently being sold under the "Kids'
Pace" brand (the "KIDS' PACE ASSETS"); and
(g) any other assets that are used in or necessary to the Business,
other than Excluded Assets (the "OTHER ASSETS").
The assets identified on EXHIBIT B, the Equipment, the Furniture and Fixtures,
the Inventories, the Backorders, the Intellectual Property, the Kids' Pace
Assets, and the Other Assets are collectively referred to hereinafter as the
"FORECLOSURE ASSETS". Simultaneously with the delivery of the Foreclosure
Assets, Xxxxxx shall take all additional steps as may be reasonably necessary to
put the Buyer in possession and operating control of the Foreclosure Assets.
SECTION 2.2. EXCLUDED ASSETS. Notwithstanding anything else to the contrary
contained herein, Purchaser is not acquiring (pursuant to this Agreement or
otherwise) any of the following, all of which shall be retained by Xxxxxx
(collectively, the "EXCLUDED ASSETS"):
(a) any real property owned or leased by Xxxxxx or its Affiliates;
(b) all machinery, equipment and fixtures (other than the Furniture
and Fixtures) operated in or located at Xxxxxx'x facility in Belton, Texas;
(c) any assets of Health Career Learning Systems, Inc.;
(d) all products and equipment of Enraf-Nonius, B.V.;
(e) all of Xxxxxx'x accounts, accounts receivable, notes receivable,
or other rights or claims for payment due for goods sold or services rendered;
(f) all claims Xxxxxx may now have or hereinafter have against any
insurance policies;
(g) all claims Xxxxxx may now have or hereinafter have against
management, officers, directors and shareholders arising out of any prior
conduct between Xxxxxx and Comerica;
(h) any claim Xxxxxx may have in any subsidiary or any assets owned
by any subsidiary;
(i) any claims Xxxxxx may have against any European subsidiary or
Affiliate, including, but not limited to, Enraf-Nonius, B.V.;
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(j) any stock or equity or partnership interest owned by Xxxxxx
(including, but not limited to, the stock of Xxxxxx B.V.); and
(k) any contract, lease, license, commitment or other agreement to
which Xxxxxx or any of its Affiliates is a party.
SECTION 2.3. PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, the aggregate purchase price (the "PURCHASE PRICE") for the purchase
of the Foreclosure Assets and the representations, warranties, covenants and
agreements referenced herein shall be equal to NINE HUNDRED THOUSAND DOLLARS
($900,000), which shall be payable as partial payment on outstanding loans from
Comerica to Xxxxxx.
SECTION 2.4. CLOSING. The closing of the purchase and sale (the "CLOSING")
provided for in this Agreement shall take place at the offices of Xxxxx Xxxxxxx
& Xxxx LLP, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx, or any other location mutually
agreeable to the Parties, and shall be effective on the date hereof (the
"CLOSING DATE").
SECTION 2.5. CLOSING DELIVERIES.
(a) At the Closing (except as expressly provided below), Xxxxxx is
delivering to the Purchaser:
(i) a xxxx of sale executed by Comerica transferring the
Foreclosure Assets to Purchaser;
(ii) such deeds, bills of sale and other instruments of sale,
transfer, conveyance, assignment and delivery covering the Foreclosure
Assets or any part thereof, executed by Xxxxxx or other appropriate
parties, as Purchaser has reasonably requested to assure the full and
effective sale, transfer, conveyance, assignment and delivery to Purchaser
of such Foreclosure Assets, free and clear of any rights and claims of
third parties;
(iii) such assignments covering the Intellectual Property or any
part thereof, executed by Xxxxxx or other appropriate parties (including,
without limitation, Comerica, Maxxim Medical Corp., Xxxxx X. Xxxxxxxx, and
Hydra-Gym Athletics, Inc.), as Purchaser has reasonably requested to assure
the full and effective assignment to Purchaser of such Intellectual
Property, free and clear of any rights and claims of third parties, all in
forms sufficient for filing with the United States Patent and Trademark
Office (collectively, the "INTELLECTUAL PROPERTY ASSIGNMENTS");
(iv) certified copies of resolutions duly adopted by the board of
directors of Xxxxxx, authorizing and approving the execution and delivery
of this Agreement, including any exhibits or schedules hereto, and the
consummation of the transactions contemplated herein; and
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(v) such other separate instruments of sale, assignment or
transfer reasonably required by Purchaser.
(b) At the Closing, the Purchaser is delivering to Xxxxxx:
(i) evidence that the Purchase Price has been paid to Comerica;
and
(ii) certified copies of resolutions duly adopted by the general
partner of Purchaser, authorizing and approving the execution and delivery
of this Agreement, including any exhibits or schedules hereto, and the
consummation of the transactions contemplated herein.
SECTION 2.6. PRORATIONS. The operation of Xxxxxx'x business and related
revenue and expenses up to the close of business on the day before the Closing
Date shall be for the account of Xxxxxx and thereafter for the account of
Purchaser, which shall be determined on the accrual basis of accounting.
Expenses, including, but not limited to, utilities, personal property taxes,
rents, and real property taxes shall be prorated between Xxxxxx and Purchaser as
of the close of business on the day before the Closing Date, the proration to be
made and paid, insofar as reasonably possible, on the Closing Date, with
settlement of any remaining items to be made within 60 days following the
Closing Date.
SECTION 2.7. ASSIGNMENT OF CONTRACTS AND RIGHTS.
(a) Except as expressly provided herein, as of the Closing, Xxxxxx is
not assigning to Purchaser any rights, claims or interests in any contracts,
licenses, leases, commitments or other agreements between Xxxxxx and any other
party. Notwithstanding the foregoing, following the date hereof, if the
Purchaser shall determine, in its reasonable discretion, that any such contract,
license, commitment or other agreement should be assigned to the Purchaser for
use in the operation of the Business, Xxxxxx shall use its commercially
reasonable efforts to promptly assign to Purchaser its rights, claims or other
interests in any such agreement.
(b) This Agreement shall not constitute an agreement to assign (now
or at any time hereafter) any claim, contract, license, lease, commitment, sale
or purchase order or any claim or right or any benefit arising thereunder or
resulting therefrom if an attempted transfer or assignment thereof (now or at
any time hereafter), without the consent of a third party thereto, would
constitute a breach thereof or in any way affect the rights of the Purchaser or
of Xxxxxx thereunder. If such consent is not obtained, or if an attempted
transfer, sublease or assignment thereof (now or at any time hereafter) would be
ineffective or would affect the rights of Xxxxxx thereunder so that the
Purchaser would not in fact receive all such rights, the agreements of Xxxxxx to
convey these rights to Purchaser shall remain in full force and effect for so
long after Closing as is necessary to convey those rights, and Xxxxxx will use
its best efforts to convey such rights, and until conveyed, will cooperate with
Purchaser to the extent reasonably practicable to provide for the Purchaser the
benefits under any such claims, contracts, licenses, leases, commitments, sales
or purchase orders or any claim or right or any benefit arising thereunder or
resulting therefrom, including enforcement for the benefit of the Purchaser of
any and all rights of Xxxxxx against a third party thereto arising out of the
breach or cancellation by such third
5
party or otherwise, with costs of litigation, if any, borne solely by the
Purchaser. The Purchaser shall cooperate fully with Xxxxxx to obtain such
releases of Xxxxxx as Xxxxxx reasonably requests (it being understood that a
failure to obtain any such release shall not be required hereby and shall not
excuse Xxxxxx from its obligations hereunder); and any transfer, sublease or
assignment to the Purchaser by Xxxxxx of any property or property rights or any
contract or agreement which shall require the consent or approval of any third
party (now or at any time hereafter), shall be made subject to such consent or
approval being obtained.
ARTICLE III.
LIABILITIES AND OBLIGATIONS
SECTION 3.1. LIABILITIES NOT ASSUMED BY PURCHASER. Subject to SECTION 3.2
hereof, Purchaser is purchasing only the Foreclosure Assets from Comerica, and
does not assume or agree to pay, perform or discharge, and shall not be
responsible for, any commitments, contracts, agreements or obligations or claims
against, or liabilities of, Xxxxxx or its Affiliates whatsoever relating to the
Foreclosure Assets, the Business and/or the operations of the Business,
including, without limitation, the following (collectively, the "EXCLUDED
LIABILITIES"):
(a) any sales, use, income, franchise or other tax or charge, if any,
which may become payable by reason of the sale and transfer of the Foreclosure
Assets under federal law or under the laws of any state, or may be imposed upon
Xxxxxx or its shareholders by reason of receipt of the Purchase Price or relief
from any liability pursuant to this Agreement;
(b) any of the costs and expenses incurred in connection with the
future operations of Xxxxxx, and the costs and expenses of Xxxxxx and its
shareholders incurred in negotiating, entering into and carrying out their
obligations pursuant to this Agreement;
(c) any indebtedness of Xxxxxx incurred in the course of Xxxxxx'x
operations as of the Closing Date;
(d) any commitments arising prior to the Closing Date pursuant to the
Material Contracts;
(e) any Taxes for which Xxxxxx is liable (taking into account the
provisions of SECTION 6.3(A) hereof);
(f) any prepayment penalties or other liabilities related to,
retiring or extinguishing any indebtedness of Xxxxxx;
(g) any liabilities arising out of or in connection with periods or
activity prior to the Closing Date related to OSHA, EEOC, EPA, FDA or any
Governmental Authority, or any violation of law;
(h) any liability or obligation (contingent or otherwise) of Xxxxxx
arising out of any claim, litigation, or proceeding threatened or pending on or
before the Closing Date or any claim, litigation, or proceeding threatened or
initiated after the Closing Date to the extent based
6
on an act or omission of Xxxxxx or any current or former officer, director,
employee, agent or representative of Xxxxxx, or Xxxxxx'x operation of the
Business and/or Foreclosure Assets;
(i) any Environmental Claim and any claims, violations or alleged
violations of Environmental Law, or conditions that could give rise to or relate
to liability under Environmental Laws or similar legal requirements attributable
or relating to the Foreclosure Assets (including, without limitation, the
operation thereof), the Business, Xxxxxx or its Affiliates, including any
liability (including, without limitation, strict liability) arising after the
Closing Date resulting from, caused by or related to any act or omission of a
third party or Xxxxxx or any current or former officer, director, employee,
agent, representative, tenant or invitee of Xxxxxx which occurred on or prior to
the Closing Date, or the continuation of practices or operations with respect to
the Foreclosure Assets, that were occurring or in effect on or prior to the
Closing Date;
(j) any liability arising out of or in connection with Xxxxxx'x
defective products or performance of services or any express or implied warranty
with respect thereto prior to the Closing Date, including, but not limited to,
any claims arising under warranty or service agreements;
(k) any liability or obligation arising out of any employee benefit
plan (as defined in ERISA) and all other similar benefit plans, programs,
arrangements or commitments (whether written or oral) of Xxxxxx;
(l) any contingent or unknown liability of Xxxxxx and/or its
Affiliates;
(m) any liability or obligation under or in connection with or
related to the Excluded Assets or any other assets not included in the
Foreclosure Assets; and
(n) any liability or obligation under or in connection with or
related to the assets of Health Career Learning Systems, Inc.
SECTION 3.2. ASSUMED LIABILITIES. The Purchaser assumes and agrees to pay,
perform and discharge, when due, solely the following debts, liabilities and
obligations of Xxxxxx (collectively, the "ASSUMED LIABILITIES"): all
liabilities, obligations, debts and/or commitments relating to the Foreclosure
Assets which accrue or otherwise relate to the period after the Closing Date.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Xxxxxx as follows:
SECTION 4.1. ORGANIZATION AND QUALIFICATION. Purchaser is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Texas, and has the requisite partnership power and authority to
own, lease and operate its assets and properties and to carry on its business as
it is now being conducted. Purchaser is duly qualified to do business
7
as a foreign entity and is in good standing in each jurisdiction in which the
properties owned, leased, or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified and in good standing would not have, or could not reasonably be
anticipated to have, individually or in the aggregate, a Material Adverse
Effect.
SECTION 4.2. AUTHORITY; NON-CONTRAVENTION; APPROVALS.
(a) Purchaser has full power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery hereof by the other parties hereto,
constitutes a valid and legally binding agreement of Purchaser and is
enforceable against Purchaser in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) general equitable principles.
(b) The execution and delivery of this Agreement by Purchaser, and
the consummation by Purchaser of the transactions contemplated hereby, do not
and will not violate or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Purchaser under any of the
terms, conditions or provisions of (i) the organizational documents of
Purchaser, (ii) any statute, law, ordinance, rule, regulation, judgment, decree,
order, injunction, writ, permit or license of any court or governmental
authority applicable to Purchaser, or any of its respective properties or
assets, or (iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any kind to which Purchaser is now a party or by which Purchaser
or any of its respective properties or assets may be bound or affected.
(c) No declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the execution and delivery of this Agreement by
Purchaser or the consummation by Purchaser of the transactions contemplated
hereby.
SECTION 4.3. BROKERS AND FINDERS. Purchaser has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of Purchaser to pay any finder's fees, brokerage or agent
commissions or other like payments in connection with the transactions
contemplated hereby. There is no claim for payment by the Purchaser of any
investment banking fees, finder's fees, brokerage or agent commissions or other
like payments in connection with the negotiations leading to this Agreement or
the consummation of the transactions contemplated hereby.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx hereby represents and warrants to the Purchaser as follows:
SECTION 5.1. ORGANIZATION AND QUALIFICATION. Xxxxxx is a corporation duly
organized under the laws of Texas and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted.
SECTION 5.2. AUTHORITY; NON-CONTRAVENTION; APPROVALS.
(a) Xxxxxx has full power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been approved by the Board of Directors of Xxxxxx and no other corporate
proceedings on the part of Xxxxxx or its shareholders are necessary to authorize
the execution and delivery of this Agreement or the consummation by Xxxxxx of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Xxxxxx, and assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a valid and legally binding
agreement of Xxxxxx, enforceable against Xxxxxx in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
(b) The execution and delivery of this Agreement by Xxxxxx and, and
the consummation by Xxxxxx of the transactions contemplated hereby, do not and
will not violate or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Xxxxxx under any of the
terms, conditions or provisions of (i) the articles of incorporation or bylaws
of Xxxxxx, or (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any court or governmental
authority applicable to Xxxxxx, or any of its respective properties or assets.
(c) No declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the execution and delivery of this Agreement by
Xxxxxx or the consummation by Xxxxxx of the transactions contemplated hereby.
SECTION 5.3. LITIGATION. Except as disclosed in Xxxxxx'x Form 8-K filed
with the Securities and Exchange Commission ("SEC") on September 1, 2000, there
are no claims, suits, actions, Environmental Claims, inspections, investigations
or proceedings pending or, to the knowledge of Xxxxxx, threatened against,
relating to or affecting the Foreclosure Assets or the Business before any
court, governmental department, commission, agency, instrumentality, authority,
or any mediator or arbitrator and there is no basis for the same. Except as
disclosed in Xxxxxx'x Form 8-K filed with the SEC on September 1, 2000, Xxxxxx
is not subject to any
9
judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality, authority, or any mediator or
arbitrator.
SECTION 5.4. NO VIOLATION OF LAW.
(a) Except as disclosed in Xxxxxx'x Form 8-K filed with the SEC on
September 1, 2000, Xxxxxx is not in violation of and has not been given notice
or been charged with any violation of, any law, statute, order, rule,
regulation, ordinance or judgment (including, without limitation, any applicable
Environmental Law) of any Governmental Authority. Except as disclosed in
Xxxxxx'x Form 8-K filed with the SEC on September 1, 2000, no investigation or
review by any Governmental Authority is pending or threatened, nor has any
Governmental Authority indicated an intention to conduct the same. Except as
disclosed in Xxxxxx'x Form 8-K filed with the SEC on September 1, 2000, Xxxxxx
has all material permits, licenses, franchises, variances, exemptions, orders
and other governmental authorizations, consents and approvals required or
necessary to conduct its business as presently conducted. Except as disclosed in
Xxxxxx'x Form 8-K filed with the SEC on September 1, 2000, Xxxxxx is not in
material violation of the terms of any such permits, licenses, franchises,
variances, exemptions, orders and other governmental authorizations, consents or
approvals effecting the Business.
(b) To Xxxxxx'x knowledge, except as disclosed in Xxxxxx'x Form 8-K
filed with the SEC on September 1, 2000, Xxxxxx is in full compliance with all
U.S. Food and Drug Administration ("FDA") regulations pertaining to the
Business, including, without limitation, the Medical Device Reporting
Regulations, and any and all registrations or reports required by the FDA are
current. Xxxxxx has provided Purchaser with copies of any and all warning
letters or other correspondence from the FDA received by Xxxxxx which pertain to
the Business.
SECTION 5.5. TITLE TO ASSETS. To Xxxxxx'x knowledge, Xxxxxx'x title to all
of the Foreclosure Assets is subject to Comerica's lien on such Foreclosure
Assets, which is senior to any and all other liens (other than two purchase
money liens on two computer servers and related equipment held by Rockford
Rockford), pledges, claims, charges or encumbrances of any nature whatsoever on
or relating to such Foreclosure Assets.
SECTION 5.6. BROKERS AND FINDERS. Xxxxxx has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Xxxxxx to pay any finder's fees, brokerage or agent commissions or
other like payments in connection with the transactions contemplated hereby.
There is no claim for payment by Xxxxxx of any investment banking fees, finder's
fees, brokerage or agent commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
Section 5.7. INTELLECTUAL PROPERTY. Xxxxxx has rights to use, whether
through ownership, licensing or otherwise, all of the Intellectual Property.
Xxxxxx has no knowledge of any infringement by any other Person of any of the
Intellectual Property, and Xxxxxx has not entered into any agreement to
indemnify or hold harmless any other party against any charge of infringement of
any of the Intellectual Property. To Xxxxxx'x knowledge, Xxxxxx has not violated
or infringed, and does not violate or infringe, any intellectual property right
of any other
10
Person, and Xxxxxx has not received any communication alleging that it is
violating or infringing the intellectual property right of any other Person.
Xxxxxx has not been sued for infringing any intellectual property right of
another Person. There is no claim or demand of any Person pertaining to, or any
proceeding which is pending or, to the knowledge of Xxxxxx, threatened, that
challenges the rights of Xxxxxx in respect of any Intellectual Property, or that
claims that any default exists under any Intellectual Property. None of the
Intellectual Property is subject to any outstanding order, ruling, decree,
judgment or stipulation by or with any court, tribunal, arbitrator, or other
Governmental Authority.
ARTICLE VI.
CERTAIN UNDERSTANDINGS AND AGREEMENTS OF THE PARTIES
SECTION 6.1. CONFIDENTIALITY. Without the express written consent of all of
the Parties, each of the Parties agrees to maintain in confidence and not
disclose to any other Person the terms of the transactions contemplated hereby,
other than disclosures required to obtain the approvals for the transactions
contemplated hereby, disclosures to those professionals and advisors who have a
need to know, disclosures of information already available to the public or any
other disclosures required by applicable law. In the event that Purchaser,
Xxxxxx or Shareholders is at any time requested or required (by oral questions,
interrogatories, request for information or documents, subpoena or other similar
process) to disclose any information supplied to it in connection with this
transaction, such Party agrees to provide the other Parties prompt notice of
such request so that an appropriate protective order may be sought and/or such
other Party may waive the first Party's compliance with the terms of this
SECTION 6.1. Notwithstanding anything else to the contrary contained herein, (a)
Xxxxxx shall be permitted (i) to disclose, through a press release subject to
Purchaser's approval (which shall not be unreasonably withheld), Comerica's
foreclosure on the Foreclosure Assets and (ii) to file all reports, schedules,
forms, statements and other documents required to be filed with the SEC, and (b)
Purchaser shall be permitted to disclose the transactions contemplated hereby
and related matters to (i) Znetix's lenders or potential lenders, (ii) potential
sources of equity or (iii) any successor or Affiliate of Znetix.
SECTION 6.2. EMPLOYEES.
(a) Purchaser may, but shall not be obligated to, offer employment to
any of the employees of Xxxxxx involved in the Business. Xxxxxx will not
solicit, or endeavor to solicit, after the Closing Date any employee or
discourage any such person from accepting such employment with Purchaser. Xxxxxx
has not made any representations or promises, oral or written, to any employees
of Xxxxxx concerning employment by Purchaser.
(b) Purchaser shall not be responsible for any costs, obligations or
liabilities which may result from the termination of employment by Xxxxxx of any
employee of the Business not hired by Purchaser as of the first payroll date
after the Closing; PROVIDED, HOWEVER, Purchaser shall be responsible for and
shall assume any and all costs, obligations or liabilities directly related to
the termination by Purchaser of any employee of the Business who is hired by
Purchaser on or after the Closing Date solely to the extent that such costs,
obligations or liabilities relate directly to the period beginning with the
hiring of such employee by Purchaser
11
and ending with such termination by Purchaser. Purchaser makes no representation
with respect to the comparability of Purchaser's employee benefits to those
offered by Xxxxxx. Purchaser specifically disclaims any obligation to remunerate
employees of Xxxxxx who, following the Closing Date, will be employed by
Purchaser, at levels comparable to the aggregate remuneration provided to such
employees while employed by Xxxxxx. Prior to the Closing Date, Xxxxxx shall have
taken all necessary actions to comply with the Worker Adjustment and Retraining
Notification Act (the "WARN ACT") to the extent it is subject to the WARN Act,
and Purchaser shall not have any disclosure or announcement obligations or any
other responsibilities under the WARN Act as a result of the transactions
contemplated by this Agreement.
(c) Xxxxxx shall take such actions as it deems appropriate to
terminate, modify, alter or amend the existing benefit plans or benefit programs
with respect to employees of Xxxxxx involved in the Business due to the
transactions contemplated by this Agreement. Purchaser does not and shall not
assume any of such benefit plans or benefit programs, including, without
limitation, any severance plans of Xxxxxx.
(d) Xxxxxx shall be solely responsible for and shall pay in full to
all of Xxxxxx'x employees all compensation, bonuses and other payments, and all
sick pay, vacation pay, and any other benefits otherwise payable under the
benefit programs, accrued to the Closing for which Xxxxxx is obligated
thereunder, and Xxxxxx shall satisfy all such obligations to such employees.
(e) Xxxxxx will retain responsibility for, and continue to pay, all
hospital, medical, life insurance, disability, supplemental unemployment and all
other welfare plan expenses and benefits for each Xxxxxx employee hired by
Purchaser (and covered dependents) with respect to claims incurred by such
employee or their covered dependents prior to the Closing. Xxxxxx will retain
responsibility for, and continue to pay, any life, health or other welfare
benefits payable to each former employee of Xxxxxx who terminated employment
with Xxxxxx (and their dependents) on or prior to the Closing in respect of
claims incurred on their behalf prior to the Closing. For purposes of this
SECTION 6.2, a claim is deemed incurred when the event that first gave rise to
the claim occurred, notwithstanding the fact that such benefits may be paid at a
subsequent date.
(f) Xxxxxx is responsible for any liabilities that may arise with
respect to application of Section 4980B of the Internal Revenue Code of 1986 or
Part 6 of Subtitle B of Title I of ERISA ("COBRA") with respect to any of its
employees or covered dependents as a result of the transactions contemplated by
this Agreement, as well as for any prior COBRA violations which occurred prior
to Closing. Purchaser is not a successor employer for COBRA purposes.
(g) Purchaser is not, and shall not be deemed to be, a successor
employer to Xxxxxx with respect to any Plans or Benefit Programs; and no plan or
other program adopted or maintained by Purchaser after the Closing is or shall
be deemed to be a "successor plan", as such term is defined in ERISA or the
Code, of any such Plan or Benefit Program.
12
SECTION 6.3. TAXES.
(a) Xxxxxx shall be liable for (i) all Taxes that are imposed on or
incurred by Xxxxxx or its Affiliates, (ii) all Taxes that are imposed on or
incurred with respect to the Foreclosure Assets for any taxable period ending on
or before the Closing Date, (iii) a portion, determined as described below, of
any Taxes that are imposed on or incurred with respect to the Foreclosure Assets
for any taxable period beginning prior to and ending after the Closing Date
("STRADDLE PERIOD") which is allocable to the period ending on or before the
Closing Date, (iv) any Taxes payable as a result of a breach by Xxxxxx of any of
the representations set forth in SECTION 5.6 hereof, and (v) any attorneys' fees
or other costs incurred by Purchaser or its Affiliates in connection with any
payment from Xxxxxx under this SECTION 6.3. The determination of the portion of
any Taxes imposed on or incurred with respect to the Foreclosure Assets for a
Straddle Period which is allocable to the period ending on or before the Closing
Date shall be made, in the case of ad valorem, property or similar Taxes, if
any, which are not measured by or based upon production, or franchise or capital
Taxes which are not measured by or based upon net income, by allocating such
Taxes on a per diem basis, and, in the case of all other Taxes, by assuming that
the period ending on or before the Closing Date constitutes a separate taxable
period and by taking into account the actual taxable events occurring during
such period.
(b) Xxxxxx shall be responsible for the preparation and filing of any
Tax Return relating to the Foreclosure Assets that is originally due on or
before the Closing Date. Purchaser shall be liable for the preparation and
filing of all other Tax Returns that relate to the Foreclosure Assets.
(c) If Xxxxxx, on the one hand, or Purchaser, on the other hand,
receives a refund of any Taxes for which the other is liable, then the Party
receiving such refund shall, within ten days after its receipt, remit it to the
other Party.
(d) Xxxxxx shall be liable for and pay all transfer, sales, use,
gross receipts, stamp, value added, excise, or similar Taxes imposed on or
relating to the sale or transfer of the Foreclosure Assets.
SECTION 6.4. FURTHER ASSURANCES. Xxxxxx and Purchaser shall execute and
deliver to the other, at the Closing or thereafter, any other instrument which
may be requested by the other and which is reasonably appropriate to perfect or
evidence any of the sales, assignments, transfers or conveyances contemplated by
this Agreement or to transfer any Foreclosure Assets identified after the
Closing.
SECTION 6.5. EXPENSES AND FEES. Xxxxxx shall pay all costs and expenses
incurred by Xxxxxx in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, any and all broker's
commissions, employee bonuses and the fees and expenses of Xxxxxx'x attorneys
and accountants, and will make all necessary arrangements so that the Purchaser
will not be charged with any such cost or expense. Purchaser shall pay all costs
and expenses incurred by Purchaser in connection with this Agreement and the
transactions
13
contemplated hereby, including without limitation, the fees and expenses of
their attorneys and accountants.
SECTION 6.6. AGREEMENT TO COOPERATE. Subject to the terms and conditions
herein provided, the Parties hereto shall use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transaction contemplated by this Agreement,
including using its reasonable efforts to obtain all necessary, property or
advisable waivers, consents and approvals under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including using its reasonable efforts to obtain all necessary or
appropriate waivers, consents or approvals of third parties in order to preserve
material contractual relationship of Xxxxxx.
SECTION 6.7. RECORDS. Xxxxxx agrees to provide reasonable access to
Purchaser after Closing to the tax, financial and other books and records
relating to the Business and Foreclosure Assets and retained by Xxxxxx, in
connection with Purchaser's operation of the Business after Closing.
SECTION 6.8. ACCOUNTS RECEIVABLE. From and after the Closing Date, Xxxxxx
and Purchaser each agree to transfer or deliver, promptly after the receipt
thereof, any cash received as payment of accounts receivable due to the other
party for services rendered and sale occurring prior to the Closing, in the case
of Xxxxxx, and subsequent to the Closing, in the case of Purchaser.
SECTION 6.9. DELIVERY OF ASSETS. Xxxxxx hereby acknowledges and agrees that
Purchaser has 60 days from the date hereof to move the Foreclosure Assets from
Xxxxxx'x facilities. During such 60-day period, Xxxxxx shall (a) permit
Purchaser its accountants, counsel, financial advisors, and other
representatives (the "PURCHASER REPRESENTATIVES") to have access to the
Foreclosure Assets and Xxxxxx'x facilities for the purpose of moving or
preparing to move the Foreclosure Assets; (b) maintain, secure and preserve the
Foreclosure Assets in customary repair, order and condition; (c) maintain or
cause to be maintained the insurance policies or risk retention programs (or
policies or programs of substantially the same nature) of Xxxxxx which relate to
the Foreclosure Assets in full force and effect at all times. In addition,
Xxxxxx shall give the Purchaser and Purchaser Representatives full access
throughout such 60-day period to the Foreclosure Assets, shall permit the
Purchaser and Purchaser Representatives to make such inspections of the
Foreclosure Assets as they may require and shall use commercially reasonable
efforts to furnish to the Purchaser and Purchaser Representatives all such
information concerning the Foreclosure Assets as Purchaser may reasonably
request.
ARTICLE VII.
COVENANT NOT TO COMPETE
SECTION 7.1. NON-COMPETE; NON-SOLICITATION.
(a) Xxxxxx agrees that for a period of two years from the Closing
Date, it shall not, and shall cause its Subsidiaries and Affiliates not to,
directly or indirectly:
14
(i) own (other than through ownership of not more than three
percent (3%) of the outstanding shares of a corporation's stock which is
listed on a national securities exchange), manage, operate, control,
consult, advise, be employed by or participate in any business which
manufactures, now or at any time during the two-year period applicable to
this ARTICLE VII, any products (other than the Enraf-Nonius Products) that
compete, directly or indirectly, with the product lines of the Business
(including, but not limited to, the CYBEX, NORM, Kinetron, Fluidotheorapy,
UBE, Fitron and HydraFitness product lines), any attachments or extensions
thereto, any instruments for testing and analysis and designed to work in
tandem with the foregoing product lines, or any improvements or additions
to any of the foregoing products;
(ii) request, suggest or advise any suppliers or customers of
Xxxxxx with respect to the Foreclosure Assets (whether current, previous,
or potential new suppliers or customers), to withdraw or cancel any of
their dealings with Purchaser or the Business or refuse to commence or
continue to have dealings with Purchaser or the Business as the supplier or
customer currently conducts such dealings; or
(iii) solicit, induce or assist in the solicitation or inducement
of any employee in the Business who is employed or retained as an employee
by the Purchaser and employed in the Business within one year of the
Closing Date, to leave the employ of the Purchaser.
The "ENRAF-NONIUS PRODUCTS" shall mean any products developed, designed or
manufactured by Enraf-Nonius, B.V., a wholly-owned subsidiary of Xxxxxx.
Notwithstanding the immediately preceding sentence, the Parties hereby
acknowledge and agree that in no event shall the Enraf-Nonius Products include,
or compete, directly or indirectly, with, the CYBEX, NORM, Kinetron,
Fluidotheorapy, UBE, Fitron and HydraFitness product lines, any attachments or
extensions thereto, any instruments for testing and analysis and designed to
work in tandem with the foregoing product lines, or any improvements or
additions to any of the foregoing products.
(b) It is understood and agreed by the Parties that the rights and
privileges granted to the Purchaser by Xxxxxx under this SECTION 7.1 are of a
special, unique, extraordinary and intellectual character, which gives them
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in any action at law and that a breach by Xxxxxx of any of the
provisions contained in SECTION 7.1 will cause the Purchaser great and
irreparable injury and damage. Xxxxxx hereby expressly agrees that the
Purchaser, and its successors and assigns shall be entitled to the remedies of
injunction, specific performance and other equitable relief to prevent a breach
of such provisions by Xxxxxx. This provision shall not, however, be construed as
a waiver of any of the rights which the Purchaser may otherwise have for damages
and the equitable remedies described above shall not be deemed to be the
exclusive remedies of the Purchaser. Xxxxxx further acknowledges that the
restrictions provided for herein are reasonable and that they are necessary for
the protection of the Purchaser.
(c) If any court determines that any of the provisions of this
SECTION 7.1 are unenforceable because of the duration or scope hereof, such
court shall have the power to reduce
15
the duration or scope of such provisions to the extent necessary to make the
provisions enforceable and, in its reduced form, such provision shall then be
enforceable and shall be enforced.
ARTICLE VIII.
GENERAL PROVISIONS
SECTION 8.1. SURVIVAL. The representations and warranties set forth in this
Agreement and in any certificate or instrument delivered in connection herewith
shall not survive the Closing Date.
SECTION 8.2. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested) or sent via facsimile to
the Parties at the following addresses (or at such other address for a Party as
shall be specified by like notice):
(a) If to Purchaser:
Znetix Acquisitions, L.P.
c/o Znetix, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telecopy: 206/219-1701
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxx & Xxxx LLP
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy: 713/223-3717
(b) if to Xxxxxx:
Xxxxxx Healthcare, Inc.
000 Xxxxxxxxxx Xxxx.
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxx xx Xxxx
Telecopy: 281/276-7038
with a copy (which shall not constitute notice) to:
16
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: 713/228-1331
SECTION 8.3. INTERPRETATION. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the interpretation
of this Agreement. In this Agreement, unless a contrary intention is
specifically set forth, (i) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision and (ii) reference to any
Article or Section means such Article or Section hereof. No provision of this
Agreement shall be interpreted or construed against any Party solely because
such Party or its legal representative drafted such provision.
SECTION 8.4. MISCELLANEOUS. This Agreement (including the documents and
instruments referred to herein and any schedules or exhibits attached hereto)
(a) constitutes the entire agreement and supersedes all other prior agreements
and understandings, both written and oral, among the Parties, or any of them,
with respect to the subject matter hereof and (b) shall not be assigned by
operation of law or otherwise except that Purchaser may assign this Agreement
and all or part of its rights hereunder to Znetix, Inc.
SECTION 8.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE.
SECTION 8.6. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of all of the Parties.
SECTION 8.7. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 8.8. PARTIES-IN-INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each Party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 8.9. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement
effective as of the date first written above.
PURCHASER:
ZNETIX ACQUISITIONS, L.P.
By: Znetix Management, LLC, its general partner
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxx
Manager
XXXXXX:
XXXXXX HEALTHCARE, INC.
By: /s/ Xxx xx Xxxx
-------------------------------------
Xxx xx Xxxx
President and Chief Executive Officer
EXHIBIT A
GLOSSARY
For purposes of this Agreement, the following terms shall have the meaning
specified or referred to below when capitalized (or if not capitalized, unless
the context clearly requires otherwise) when used in this Agreement.
"AFFILIATE(S)" with respect to any Person, means any Person directly or
indirectly controlling, controlled by or under common control with such Person,
and any natural Person who is an officer, director or partner of such Person and
any members of their immediate families living within the same household. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"CODE" means the Internal Revenue Code of 1986, as amended, or any amending
or superseding tax laws of the United States of America.
"ENVIRONMENTAL CLAIM(S)" means any claim; litigation; demand; action; cause
of action; suit; loss; cost, including, but not limited to, attorneys' fees,
diminution in value, and expert's fees; damage; punitive damage; fine, penalty,
expense, liability, criminal liability, strict liability, judgment, governmental
or private investigation and testing; notification of status of being
potentially responsible for clean-up of any facility or for being in violation
or in potential violation of any Requirement of Environmental Law; proceeding;
consent or administrative orders, agreements or decrees; lien; personal injury
or death of any person; or property damage, whether threatened, sought, brought
or imposed, that is related to or that seeks to recover losses, damages, costs,
expenses and/or liabilities related to, or seeks to impose liability for: (i)
improper use or treatment of wetlands, pinelands or other protected land or
wildlife; (ii) noise; (iii) radioactive materials (including naturally occurring
radioactive materials "NORM"; (iv) explosives; (v) pollution, contamination,
preservation, protection, decontamination, remediation or clean- up of the air,
surface water, groundwater, soil or protected lands; (vi) solid, gaseous or
liquid waste generation, handling, discharge, release, threatened release,
treatment, storage, disposal or transportation; (vii) exposure of persons or
property to Materials or Environmental Concern and the effects thereof; (viii)
the release or threatened release (into the indoor or outdoor environment),
generation, extraction, mining, beneficiating, manufacture, processing,
distribution in commerce, use, transfer, transportation, treatment, storage or
disposal of Remediation of Materials of Environmental Concern; (ix) injury to,
death of or threat to the health or safety of any person or persons caused
directly or indirectly by Materials of Environmental Concern; (x) destruction
caused directly or indirectly by Materials of Environmental Concern or the
release or threatened release of any Materials of Environmental Concern of any
property (whether real or personal); (xi) the implementation of spill prevention
and/or disaster plans relating to Material of Environmental Concern; (xiii)
community right-to- know and other disclosure laws; or (xiii) maintaining,
disclosing or reporting information to Governmental Authorities of any other
third person under any Environmental Law. The term,
Exhibit A - Page 1
"Environmental Claim," also includes, without limitation, any losses, damages,
costs, expenses and/or liabilities incurred in testing.
"ENVIRONMENTAL LAW(S)" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, guidance document, order, consent agreement,
order or consent judgment, decree, injunction, requirement or agreement with any
governmental entity or any judicial or administrative decision relating to (x)
the protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or any other
natural resource) or to human health or safety, (y) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, application, production, release or disposal of Materials of
Environmental Concern, in each case as amended from time to time, or (z) health,
worker protection or community's right to know. The term "Environmental Law"
includes, without limitation, (i) the Federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the hazardous and Solid Waste
Amendments thereto), the Federal Solid Waste Disposal Act and the Federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act,
the Federal Safe Drinking Water Act and the Federal Occupational Safety and
Health Act of 1970, each as amended from time to time, and (ii) any common law
or equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of, effects of or exposure to any Materials of
Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means generally accepted accounting principals applied on a
consistent basis.
"GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL AUTHORITIES" means any nation or
government, any state or political subdivision thereof and any agency or entity
exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, government.
"MATERIAL ADVERSE EFFECT" means any event, occurrence, fact, condition,
change, development or effect that is or could reasonably be anticipated to be
materially adverse to the Business.
"MATERIALS OF ENVIRONMENTAL CONCERN" means: (i) those substances included
within the statutory and/or regulatory definitions or listings of "hazardous
substance," "medical waste," "special waste," "hazardous waste," "extremely
hazardous substance," "regulated substance," "solid waste," "hazardous
materials," "sludges," "sewage sludge," or "toxic substances," under any
Environmental Law; (ii) any material, waste or substance which is or contains:
(A) petroleum, oil or a fraction thereof, (B) explosives or (C) radioactive
materials (including
Exhibit A - Page 2
naturally occurring radioactive materials); and (iii) such other substances,
materials, or wastes that are or become classified or regulated as hazardous or
toxic under any applicable federal, state or local law or regulation. To the
extent that the laws or regulations of any applicable state or local
jurisdiction establish a meaning for any term defined herein through reference
to federal Environmental Laws which is broader than the meaning under such
federal Environmental Laws, such broader meaning shall apply.
"PERSON" means any individual, partnership, joint venture, corporation,
limited liability company, association, trust, unincorporated organization,
government or agency or subdivision thereof or any other entity.
"REMEDIATION" means any action necessary to: (i) comply with and ensure
compliance with the Requirements of Environmental Laws and (ii) the taking of
all reasonably necessary precautions to protect against and/or respond to,
remove or remediate or monitor the release or threatened release of Materials of
Environmental Concern at, on, in, about, under, within or near the air, soil,
surface water, groundwater or soil vapor at any Business Facility of Xxxxxx or
any of its Subsidiaries or of any property affected by the business, operations,
acts omissions, or Materials of Environmental Concern of Xxxxxx or any of its
Subsidiaries.
"REQUIREMENT(S) OF ENVIRONMENTAL LAW(S)"means all requirements, conditions,
restrictions or stipulations of Environmental Laws imposed upon or related to
Xxxxxx or any of its Subsidiaries or the assets, Business Facilities and/or the
business of Xxxxxx or any of its Subsidiaries.
"TAXES" shall mean any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross receipts, excise, real
or personal property, sales, withholding, social security, occupation, use,
severance, environmental, license, net worth, payroll, employment, franchise,
transfer and recording taxes, fees and charges, imposed by the IRS or any other
taxing authority (whether domestic or foreign including, without limitation, any
state, county, local or foreign government or any subdivision or taxing agency
thereof (including a United States possession)), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments.
"TAX RETURN(S)" shall mean any report, return, document, declaration or
other information or filing required to be supplied to any taxing authority or
jurisdiction (foreign or domestic) with respect to Taxes, including, without
limitation, information returns and documents (i) with respect to or
accompanying payments of estimated Taxes or (ii) with respect to or accompanying
requests for the extension of time in which to file any such report, return,
document, declaration or other information, including any schedule or attachment
thereto and any amendment thereof.
Exhibit A - Page 3
